Accusers as Adjudicators in Agency Enforcement Proceedings

Largely because of the U.S. Supreme Court’s 1975 decision in Withrow v. Larkin, the accepted view for decades has been that a federal administrative agency does not violate the Due Process Clause by combining the functions of investigating, charging, and then resolving allegations that a person violated the law.  Many federal agencies have this structure, such as the Securities and Exchange Commission and the Federal Trade Commission.

In 2016, the Supreme Court decided Williams v. Pennsylvania, a judicial disqualification case that, without addressing administrative agencies, nonetheless raises a substantial question about one aspect of the combination of functions at agencies.  The Court held that due process prevented a judge from sitting in a case in which he had participated as a district attorney years earlier.  The operative principle for the decision was that “the Court has determined that an unconstitutional potential for bias exists when the same person serves as both accuser and adjudicator in a case.”

In a recent paper, I discuss whether Williams affects our understanding of Withrow and the established position that a federal agency may charge and adjudicate the same case.  The paper concludes that Williams should supersede Withrow on the need to disqualify a commissioner or agency head from a particular adjudication if the official played a meaningful role in the initiation of proceedings against the defendant.  Voting to approve enforcement charges would be a meaningful role.  The due process cases on disqualification do not seem to permit a compromise on the high standards of impartiality demanded of an agency decision-maker in determining whether a private party committed a violation of law.

That reading of Williams threatens to unsettle standard practices at various agencies, but a closer look at SEC procedures shows that it could accommodate the rule in Williams yet retain the combination of charging and adjudicating at the commission level.  Because of commissioner turnover and quorum rules, SEC officials could continue to bring enforcement cases and review nearly all ALJ decisions while disqualifying individual commissioners under Williams when necessary.

The discussion in my paper is limited to the narrow due process claim applicable to individual agency heads and does not address whether Williams renews constitutional questions about the propriety of combining enforcement and adjudication in one agency.  Williams dealt with the specific circumstances of an individual accuser turned adjudicator.  It did not examine larger institutional questions about whether an agency carries an inherent bias from the combination of functions or whether the Constitution’s structure of separated powers prevents Congress from authorizing a single agency to charge a violation of law and then adjudicate the charge.  Williams may be applied at federal agencies while leaving the legacy of Withrow largely intact.

This post comes to us from Andrew Vollmer, Professor of Law, General Faculty, and Director of the John W. Glynn, Jr. Law & Business Program, at the University of Virginia School of Law. He was Deputy General Counsel of the Securities and Exchange Commission and a partner in the securities enforcement practice of Wilmer Cutler Pickering Hale and Dorr LLP. The post is based on his recent paper, “Accusers as Adjudicators in Agency Enforcement Proceedings,” forthcoming in 52 U. Mich. J.L. Reform and available here.

 

Leave a Reply

Your email address will not be published. Required fields are marked *