Retention Date: July 15, 2021
This emergency message provides guidance to administrative law judges (ALJs) and Appeals Council (AC) members regarding objections and arguments based on a recent Supreme Court decision, Seila Law LLC v. Consumer Financial Protection Bureau, 140 S. Ct. 2183 (2020). This message also provides instructions in the Case Processing and Management System (CPMS) and the Appeals Review Processing System (ARPS) for flagging cases in which claimants or representatives raise such objections or arguments.
On June 29, 2020, the Supreme Court of the United States ruled on the constitutionality of the structure of the Consumer Financial Protection Bureau (CFPB). The Supreme Court held, based on circumstances regarding the CFPB, that the CFPB’s leadership by a single director, removable by the President only for inefficiency, neglect of duty, or malfeasance, violated constitutional separation of powers principles. The Supreme Court further held that the for-cause removal provision was severable from the remainder of the CFPB statute.
At our ALJ hearings and AC levels, although the Supreme Court’s decision did not directly address the Social Security Administration (SSA), some claimants and representatives have raised arguments citing Seila Law to challenge the constitutionality of SSA’s structure or the authority of the agency or adjudicator to act on their claim. Such constitutional contentions, when properly presented in agency proceedings, may be preserved for judicial review. Agency adjudicators facing objections that invoke Seila Law should consider and address whether the claimant wishes to withdraw his or her hearing request and whether the ALJ should disqualify himself or herself. We provide guidance on such issues in this EM.
Please note that some Seila Law objections challenge the ALJ’s appointment, but for reasons different from objections based on the Supreme Court’s decision in Lucia v. Securities and Exchange Commission, 138 S. Ct. 2044 (2018). Because claimants sometimes mention both of these cases, it is important to look at the specific objections to determine their basis. Objections predicated on Seila Law would link arguments about the constitutionality of the ALJ’s appointment to the Social Security Act’s provision regarding removal of the Commissioner. By contrast, Lucia objections are predicated on the Constitution’s Appointments Clause, which vests the power to appoint inferior officers like SEC ALJs in the President, a court of law, or the Department head. Where the objection challenges the adjudicator’s appointment because it was made by someone other than the head of the agency, it is best understood as a Lucia objection. If the claimant is raising a Lucia objection, the ALJ should consult EM-18003 REV 2 for guidance rather than the guidance set forth here, and members of the AC should consult Social Security Ruling (SSR) 19-1p for guidance.
C. What should an adjudicator do if a claimant or representative raises an objection under Seila Law?
|Intended Audience:||All OHO/DARO/OAO|
|Originating Office:||Office of the General Counsel|
|Title:||Important Information Regarding Possible Challenges to the Authority of Administrative Law Judges and Appeals Council Members Pursuant to Seila Law v. CFPB|
|Type:||EM - Emergency Messages|
|Program:||Title II (RSI); Title XVI (SSI)|
|Link To Reference:||See References at the end of this EM.|
1. Challenge Made at the Hearing Level
If a claimant or representative presents an objection invoking Seila Law at the hearing level (whether orally at the hearing, in writing before or after the hearing, or both), the ALJ should consider several questions, set forth below, and document the ALJ’s consideration of these questions in the hearing decision as appropriate.
(1) Is the claimant seeking to withdraw his or her request for a hearing?
(2) Is the claimant asking the presiding ALJ to withdraw from the case in favor of another agency adjudicator?
a. Under 20 C.F.R. §§ 404.957(a) and 416.1457(a), an ALJ may dismiss a request for a hearing at any time before the notice of the hearing decision is mailed, when the claimant withdraws the request orally on the record at the hearing or in writing.
b. The ALJ should consider whether the claimant’s objection seeks to withdraw his or her request for a hearing.
i. If the claimant’s objection expresses an intention to withdraw the request for a hearing, the ALJ should properly develop the request by following the guidance in HALLEX I-2-4-20.
ii. If the claimant’s objection does not express the intention to withdraw the request for a hearing, it would be appropriate to indicate in the hearing decision that, while the claimant objected to the proceeding based on separation of powers principles, the claimant did not ask to withdraw his or her request for a hearing as permitted under 20 C.F.R. § 404.957(a) or §416.1457(a) (or both); that the claimant appeared at the hearing; and that the ALJ accordingly issues a decision on the claim.
(3) Is the claimant objecting to the ALJ’s authority to render an unfavorable decision on the claim (but not to render a favorable decision on the claim)?
a. ALJs have a duty to consider objections to the ALJ presiding in the case. See 20 C.F.R. §§ 404.940, 416.1440. Under the regulations, an ALJ shall not conduct a hearing if he or she is prejudiced or partial with respect to any party or has any interest in the matter pending for decision. See SSR 13-1p. If the ALJ finds withdrawal appropriate, another ALJ will be appointed to conduct the hearing.
b. The ALJ should consider whether the claimant’s objection seeks the ALJ’s disqualification and withdrawal in favor of another agency adjudicator.
i. If a claimant’s objection seeks the presiding ALJ’s disqualification and withdrawal on grounds specific to the presiding ALJ (such as prejudice or partiality), the ALJ shall either address the objection in the decision or withdraw, as appropriate under regulatory guidance. See HALLEX I-2-1-60.
ii. If a claimant’s objection does not seek the presiding ALJ’s disqualification and withdrawal on grounds specific to the presiding ALJ (such as prejudice or partiality), the ALJ should indicate in the hearing decision that the claimant has not challenged the presiding ALJ’s qualifications in a manner that is specific to the presiding ALJ (such as prejudice or partiality), and that the ALJ accordingly conducted the hearing and hereby issues a decision on the claim.
a. Governing regulations provide that the ALJ shall look fully into the issues at a hearing, and, based on a preponderance of the evidence offered at the hearing or otherwise included in the record, issue a written decision giving the findings of fact and the reasons for the decision. 20 C.F.R. §§ 404.944, 404.953(a), 416.1444, 416.1453(a).
b. If a claimant’s objection expresses a view that, because of separation of powers principles, the ALJ lacks authority to deny the claim, it would be appropriate for the ALJ to indicate in the hearing decision that regulations governing the ALJ’s duties and responsibilities require the ALJ to decide a claim, whether favorably or unfavorably, based on the evidence of record.
2. Challenge Made at the Appeals Council (AC) Level
If a claimant presents a challenge or objection invoking Seila Law at the Appeals Council (AC) level, the AC should generally consider the same questions outlined above, and adhere to the same general guidance, in considering and responding to the claimant’s request for review. For example, governing regulations allow claimants to argue to the AC that the ALJ improperly denied a request for recusal. See 20 C.F.R. §§ 404.940, 416.1440.
The objection may be directed to AC members and argue that alleged issues with regard to the Commissioner render AC actions invalid or, more generally, that no one in the agency has power to act on the claim. In considering objections alleging a lack of authority or power to act, it would be appropriate for the AC to indicate whether the objection makes sense in the context of a request for it to act by granting review. The AC should grant review where warranted by governing regulations in light of the case record. See 20 C.F.R. §§ 404.970; 416.1470.
D. How should we process claims in which claimants or representatives raise Seila Law issues?
If a claimant or representative raises an issue based on Seila Law principles, Office of Hearings Operations (OHO) and Office of Appellate Operations (OAO) staff will flag the case in CPMS or ARPS, respectively, by adding the case characteristic “SEIL,” which appears in both systems under the “Other” case characteristic type.
ALJs who receive Seila Law objections will notify hearing office management. Hearing office management will either add the SEIL case characteristic in CPMS or delegate to staff to do so.
Once the SEIL case characteristic is added to a CPMS record for an electronic claim(s) file, the characteristic will automatically populate if an ARPS record is subsequently created. However, for paper claim(s) files, staff must manually add the SEIL case characteristic in both CPMS and ARPS.
All OHO and OAO staff are responsible for ensuring that the SEIL case characteristic is reflected in CPMS or ARPS, respectively, and must add it if it is missing. For example, an OHO decision writer will look for the SEIL case characteristic in CPMS and add the necessary language as stated in sub-subsections C.1. and C.2. above. Similarly, an OAO analyst will add the SEIL case characteristic in ARPS if it is missing and any adjudicator or branch chief who encounters an unmarked Seila case should take the same action.
Aside from following the instructions provided in subsection C above and adding the SEIL case characteristic, all OHO and OAO adjudicators and staff will continue processing claims using current policies and business processes without discussing or making any findings related to the Seila Law issue.
OHO adjudicators and staff, please direct all questions to your hearing office management chain. OAO adjudicators and staff, please direct all question to the Executive Director’s office.
HALLEX I-1-1-55 Request for Review Before the Appeals Council
HALLEX I-2-1-60 Disqualification of an Administrative Law Judge Assigned to a Case
HALLEX I-2-2-1 Issues
HALLEX I-2-2-10 Notice of Issues
HALLEX I-2-2-20 Objection to the Issues
HALLEX I-2-4-5 Dismissing a Request for Hearing
HALLEX I-2-4-20 Claimant Asks to Withdraw Request for Hearing
HALLEX I-2-6-1 Hearings – General
HALLEX I-2-6-76 Arguments by the Claimant or Appointed Representative
HALLEX I-2-8-19 Oral Decisions on the Record (Bench Decisions)
HALLEX I-2-8-20 Decision Writing Instructions
HALLEX I-2-8-25 Writing the Decision
HALLEX I-2-8-45 Case Processing and Management System Case Routing
HALLEX I-3-1-2 Receipt of Request for Review
HALLEX I-3-1-10 Initial Screening — General
HALLEX I-3-2-1 Overview – Analyst Actions on Requests for Review
HALLEX I-3-2-24 Handling Information Submitted or Associated in a Claim(s) File About a Person Other Than a Party to the Proceeding
HALLEX I-3-2-25 Allegations of Unfairness, Prejudice, Partiality, Bias, Misconduct, or Discrimination by Administrative Law Judges
HALLEX I-3-2-51 Claimant Asks to Withdraw or Dismissal Criteria Present After Court Remand
HALLEX I-3-3-1 Bases for Appeals Council Grant Review Action
HALLEX I-3-4-3 Party Requests Dismissal
HALLEX I-3-5-15 Consideration of Legal Arguments or Contentions
HALLEX I-4-8-55 Processing Cases in Which Claimant Asks to Withdraw When Claim Is Before the Appeals Council or the Administrative Law Judge Issued a Dismissal or a Recommended Dismissal
Because Seila Law objections contest the agency’s power to act, if the AC receives such objections only after it has issued a decision or denied a request for review, it is not necessary to reopen the claim to address the objections.
EM-21002 - Important Information Regarding Possible Challenges to the Authority of Administrative Law Judges and Appeals Council Members Pursuant to Seila Law v. CFPB - 01/15/2021