On January 12, 2018, the U.S. Supreme Court agreed to review the constitutionality of the SEC’s appointment of its in-house administrative law judges (“ALJs” for short).

As we’ve discussed previously on the blog, a trip to SCOTUS seemed inevitable after the 10th Circuit handed down its decision in Bandimere, concluding that the SEC ALJs were “inferior officers” who had to be appointed in compliance with the Appointments Clause of the Constitution. That decision directly conflicted with an earlier decision handed down by the D.C. Circuit (Lucia), which made the opposite finding.

SCOTUS’s ruling will have an immediate impact on those who are or have been the subject of an ALJ proceeding. In November, the SEC attempted to head off this issue in cases that were still pending before the ALJ or on appeal from the ALJ to the SEC. First, the SEC complied with the Constitution and formally appointed the ALJs. Simultaneously, it issued an order remanding all cases back to the (now Constitutionally appointed) ALJs, asking those judges to review the evidence and either modify or ratify their prior rulings. That process is still underway.

What remains to be seen is whether this Constitutional band-aid will have the intended effect. If SCOTUS rules against the SEC, what will that mean for respondents in these still-pending cases? What will it mean for respondents, like the Petitioner in Lucia, whose case is final?

Equally interestingly, how far will this spread? The Constitutional issue raised here has called into question other in-house judges, including those who oversee cases brought before the Federal Energy Regulatory Commission and the Environmental Protection Agency.

Oral arguments in the case are expected to being as soon as April, with a decision predicted in late June. This should be interesting!