Nos. 19-1434, 19-1452, 19-1458
`
`IN THE
`Supreme Court of the United States
`
`
`UNITED STATES OF AMERICA,
`Petitioner,
`
`v.
`
`ARTHREX, INC., et al.,
`Respondents.
`
`
`On Writs of Certiorari to
`the U.S. Court of Appeals
`for the Federal Circuit
`
`
`BRIEF OF THE NEW CIVIL LIBERTIES ALLIANCE
`AS AMICUS CURIAE URGING REVERSAL IN PART AND
`SUPPORTING RESPONDENTS IN 19-1434 AND 19-1452
`
`
`Richard A. Samp
` (Counsel of Record)
`Mark Chenoweth
`Jared McClain
`Margaret A. Little
`New Civil Liberties Alliance
`1225 19th St. NW, Suite 450
`Washington, DC 20036
`(202) 869-5210
`rich.samp@ncla.legal
`
`December 30, 2020
`
`
`
`IN THE
`Supreme Court of the United States
`
`
`UNITED STATES OF AMERICA,
`Petitioner,
`
`v.
`
`ARTHREX, INC., et al.,
`Respondents.
`
`
`On Writs of Certiorari to
`the U.S. Court of Appeals
`for the Federal Circuit
`
`
`BRIEF OF THE NEW CIVIL LIBERTIES ALLIANCE
`AS AMICUS CURIAE URGING REVERSAL IN PART AND
`SUPPORTING RESPONDENTS IN 19-1434 AND 19-1452
`
`
`Richard A. Samp
` (Counsel of Record)
`Mark Chenoweth
`Jared McClain
`Margaret A. Little
`New Civil Liberties Alliance
`1225 19th St. NW, Suite 450
`Washington, DC 20036
`(202) 869-5210
`rich.samp@ncla.legal
`
`December 30, 2020
`
`
`
`
`
`SMITH & NEPHEW, INC., et al.,
`Petitioners,
`
`v.
`
`ARTHREX, INC.,
`Respondent.
`
`
`ARTHREX, INC.,
`Petitioner,
`
`v.
`
`SMITH & NEPHEW, INC., et al.,
`Respondent.
`
`
`
`
`QUESTIONS PRESENTED
`
`1. Whether, for purposes of the Appointments
`Clause, U.S. Const., Art II, § 2, Cl. 2, administrative
`patent judges of the U.S. Patent and Trademark Office
`are principal officers who must be appointed by the
`President with the Senate’s advice and consent, or
`“inferior Officers” whose appointment Congress has
`permissibly vested in a department head.
`
`2. Whether, if administrative patent judges are
`principal officers, the court of appeals properly cured
`any Appointments Clause defect in the current
`statutory scheme prospectively by severing the
`application of 5 U.S.C. § 7513(a) to those judges.
`
`
`
`
`
`iii
`
`TABLE OF CONTENTS
`
`Page
`
`TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . vi
`
`INTERESTS OF AMICUS CURIAE . . . . . . . . . . . . . 1
`
`SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . 2
`
`ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
`
`I.
`
`APJS ARE PRINCIPAL OFFICERS WHO
`MUST BE APPOINTED BY THE PRESIDENT
`WITH THE ADVICE AND CONSENT OF THE
`SENATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
`
`A.
`
`Officers Are Principal Officers
`When, as Here, They
`Issue
`Adjudicative Decisions Not
`Reviewable by Any Superior
`Officer . . . . . . . . . . . . . . . . . . . . . . . . . . 7
`
` 1. Clear Line-Drawing Is Necessary;
`A Multi-Factor Balancing Test
`Provides Congress with Inadequate
`Guidance Regarding the Principal/
`Inferior Distinction . . . . . . . . . . . . . . . 12
`
` 2. Removal Power Is Central to
`Challenges Under the Take-Care
`Clause but of Limited Relevance to
`Appointments Clause Challenges . . . 13
`
`
`
`iv
`
`Page
`
`B.
`
`The Court Should Not Defer to
`Congress’s Alleged Determination
`that APJs Are Inferior Officers . . . . . 18
`
` 1. There Is No “Established Practice”
`of Treating APJs as Inferior
`Officers . . . . . . . . . . . . . . . . . . . . . . . . 19
`
` 2. Judicial Deference to the Other
`Branches’ Constitutional Views Is
`Not Appropriate . . . . . . . . . . . . . . . . . 21
`
`II.
`
`THE FEDERAL CIRCUIT’S REMEDY IS
`UNLAWFUL . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
`
`A.
`
`B.
`
`C.
`
`D.
`
`There Are Significant Judicial Re-
`straints on a Severance Remedy . . . . 23
`
`The Federal Circuit Attempted to
`Remedy the Wrong Issue . . . . . . . . . . 25
`
`Is Unconstitutional
`Severance
`When the Court Must Speculate
`Which of Several Ways Congress
`Might Resolve the Issue . . . . . . . . . . . 27
`
`Severing Removal Protections Is
`I n c o n s i s t e n t w i t h
`t h e
`Congressional Purpose of Inter
`Partes Review . . . . . . . . . . . . . . . . . . . 30
`
`
`
`v
`
`Page
`
`E.
`
`The Federal Circuit’s Remedy Did
`Not Solve the Problem . . . . . . . . . . . . 31
`
`CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
`
`
`
`vi
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases:
`
`Alaska Airlines, Inc. v. Brock,
` 480 U.S. 678 (1987) . . . . . . . . . . . . . . . . . . . . . . . . 23
`Ayotte v. Planned Parenthood of N. New England,
` 546 U.S. 320 (2006) . . . . . . . . . . . . . . . . . . 23, 24, 26
`Bowsher v. Synar,
` 478 U.S. 714 (1986) . . . . . . . . . . . . . . . . . . . . . . . . 25
`Buckley v. Valeo,
` 424 U.S. 1 (1976) (per curiam) . . . . . . . . . . . . . . . . 4
`Caperton v. A.T. Massey Coal Co.,
` 556 U.S. 868 (2007) . . . . . . . . . . . . . . . . . . . . . . . . 22
`Crowell v. Benson,
` 285 U.S. 22 (1932) . . . . . . . . . . . . . . . . . . . . . . . . . . 2
`Dep’t of Transp. v. Ass’n of Am. R.R.s,
` 575 U.S. 43 (2015) . . . . . . . . . . . . . . . . . . . . . . . . . 32
`Edmond v. United States,
` 520 U.S. 651 (1997) . . . . . . . . . . . . . . . . . . . . passim
`El Paso & N.E. Ry. Co. v. Gutierrez,
` 215 U.S. 87 (1909) . . . . . . . . . . . . . . . . . . . . . . . . . 28
`Free Enterprise Fund v.
` Public Co. Accounting Oversight Bd.,
` 561 U.S. 477 (2010) . . . . . . . . . . . . . . . . . 12, 15, 16,
`27, 28, 32
`
`Freytag v. Commissioner,
` 501 U.S. 868 (1991) . . . . . . . . . . . . . . . 10, 11, 19, 21
`Go-Bart Importing Co. v. United States,
` 282 U.S. 344 (1931) . . . . . . . . . . . . . . . . . . . . . . . . 10
`Lucia v. SEC,
` 138 S. Ct. 2044 (2018). . . . . . . . . . . . . . . . . . . 10, 11
`Marbury v. Madison,
` 5 U.S. (1 Cranch) 137 (1803). . . . . . . . . . . . . . . . . 21
`
`
`
`vii
`
`Page(s)
`
`Morrison v. Olson,
` 487 U.S. 654 (1988) . . . . . . . . . . . . . . . . . . . . . . . . 17
`Murphy v. Nat’l Collegiate Athletic Ass’n,
` 138 S. Ct. 1461 (2018). . . . . . . . . . . . . . . . . . . 23, 26
`Myers v. United States,
` 272 U.S. 52 (1926) . . . . . . . . . . . . . . . . . . . . . . . . . 32
`Oil States Energy Servs., LLC v. Greene’s
` Energy Grp., LLC, 138 S. Ct. 1365 (2018) . . . . . . 30
`Randall v. Sorrell,
` 548 U.S. 230 (2006) . . . . . . . . . . . . . . . . . . . . . 24, 29
`SAS Inst., Inc. v. Iancu,
` 138 S. Ct. 1348 (2018). . . . . . . . . . . . . . . . . . . . . . 30
`Seila Law LLC v. CFPB,
` 140 S. Ct. 2183 (2020). . . . . . . . . . . . . . . . 15, 16, 27
`United States v. Booker,
` 543 U.S. 220 (2005) . . . . . . . . . . . . . . . 24, 26, 30, 33
`United States v. Eaton,
` 169 U.S. 331 (1898) . . . . . . . . . . . . . . . . . . . . . . . . 10
`United States v. Jackson,
` 390 U.S. 570 (1968) . . . . . . . . . . . . . . . . . . . . . . . . 28
`United States v. Perkins,
` 116 U.S. 483 (1886) . . . . . . . . . . . . . . . . . . . . . . . . 17
`Ward v. Village of Monroeville,
` 409 U.S. 57 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . 31
`Wiener v. United States,
` 357 U.S. 349 (1958) . . . . . . . . . . . . . . . . . . . . . . . . 31
`
`Statutes and Constitutional Provisions:
`
`U.S. Const., Art. I, § 1 . . . . . . . . . . . . . . . . . . . . . . . . 6
`
`U.S. Const., Art. II, § 2, cl. 2
` (Appointments Clause) . . . . . . . . . . . . . . . . . passim
`
`
`
`viii
`
`U.S. Const., Art. II, § 3
` (Take Care Clause) . . . . . . . . . . . . . . . . . . 15, 16, 17
`
`Page(s)
`
`Act of Mar. 2, 1861, ch. 88, § 2,
` 12 Stat. 246 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 29
`
`Leahy-Smith America Invents Act (AIA),
` Pub. L. 112-29 (2011) . . . . . . . . . . . . . . . . . . . . . . . 6
`
`Pub. L. No. 93-601, 88 Stat. 1956 (1975) . . . . . 29, 30
`
`5 U.S.C. § 7513(a). . . . . . . . . . . . . . . . . . . . . . 5, 17, 18
`
`10 U.S.C. § 942(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . 29
`
`35 U.S.C. § 3 (1975) . . . . . . . . . . . . . . . . . . . . . . . . . 20
`
`1 Stat. 109 (1790) . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
`
`Miscellaneous:
`
`Philip Hamburger, Chevron Bias,
` 84 Geo. Wash. L. Rev. 1187 (2016). . . . . . . . . . . . 22
`
`Elena Kagan, Presidential Ambition,
` 114 Harv. L. Rev. 2245 (2001) . . . . . . . . . . . . . . . 31
`
`H.R. Rep. No. 93-856 (1974) . . . . . . . . . . . . . . . . . . 20
`
`H.R. Rep. No. 104-784 (1996) . . . . . . . . . . . . . . . . . 30
`
`S. Rep. No. 93-1401 (1974). . . . . . . . . . . . . . . . . . . . 30
`
`
`
`INTERESTS OF AMICUS CURIAE
`
`The New Civil Liberties Alliance (NCLA) is a
`nonpartisan, nonprofit civil-rights organization
`devoted to defending constitutional freedoms from
`violations by the administrative state.1 The “civil
`liberties” of the organization’s name include rights at
`least as old as the U.S. Constitution itself, such as jury
`trial, due process of law, the right to be tried in front of
`an impartial and independent judge, and the right to
`live under laws made by the nation’s elected
`lawmakers
`through constitutionally prescribed
`channels. Yet these self-same rights are also very
`contemporary—and
`in dire need of renewed
`vindi cation—precisely because Congress,
`administrative agencies, and even sometimes the
`courts have neglected them for so long.
`
`NCLA aims to defend civil liberties—primarily
`by asserting constitutional constraints on the
`administrative state. Although Americans still enjoy
`the shell of their Republic, there has developed within
`it a very different sort of government—a type, in fact,
`that the Constitution was designed to prevent. This
`unconstitutional administrative state within the
`Constitution’s United States is the focus of NCLA’s
`concern.
`
`1 Pursuant to Supreme Court Rule 37.6, NCLA states that
`no counsel for a party authored this brief in whole or in part; and
`that no person or entity, other than NCLA and its counsel, made
`a monetary contribution intended to fund the preparation and
`submission of this brief. All parties have consented to the filing.
`
`
`
`2
`
`NCLA is particularly disturbed by the manner
`in which Congress has shifted adjudication of
`important property rights from the judiciary to
`bureaucrats not directly answerable to our elected
`representatives. While the Court once justified the
`administrative adjudication of private rights as
`“prompt, continuous, expert, and inexpensive,”2 this is
`no longer an apt description. Rather, at the U.S.
`Patent and Trademark Office (PTO) and elsewhere,
`administrative adjudication is often slow, parochial (as
`when administrators are barred from considering
`constitutional objections), and, of course, financially
`burdensome.
`
`In this case, the problems with administrative
`adjudication are exacerbated by a legislative regime
`that permits the appointment of administrative patent
`judges (APJs) in an unconstitutional manner. NCLA
`agrees with the court below that APJs are “principal
`officers” of the United States and thus—under the
`Appointments Clause, U.S. Const., Art. II, § 2, cl.
`2—must be appointed by the President with the
`Senate’s advice and consent. But the court exceeded
`its proper role when it sought to craft a new legislative
`scheme
`that
`it
`thought would comply with
`Appointments Clause requirements. The Constitution
`reserves such legislating to Congress alone.
`
`SUMMARY OF ARGUMENT
`
`This Court’s case law establishes that federal
`officers are principal officers when they are authorized
`
`2 Crowell v. Benson, 285 U.S. 22, 46 (1932).
`
`
`
`3
`
`to issue adjudicative decisions that are not reviewable
`by any superior officer within the Executive Branch.
`The many officers employed by the federal government
`operate in a wide variety of contexts, and it may not
`always be possible to draw a bright line separating
`principal and inferior officers. But at least in the
`context of adjudicative decision-making involving
`private parties, an officer’s authority to issue decisions
`that cannot be reviewed and overturned by an official
`appointed by the President and confirmed by the
`Senate is a sufficient condition (although perhaps not
`a necessary condition) to establish that the officer is a
`principal officer.
`
`Edmond v. United States, 520 U.S. 651 (1997),
`confirms that understanding of the Appointments
`Clause. In determining whether administrative judges
`on the Coast Guard Court of Criminal Appeals were
`principal or inferior officers, Edmond focused on
`whether their work product was “control[led]” by a
`principal officer. The Court held that the judges
`should be deemed “inferior” officers precisely because
`their work was collectively controlled by the Judge
`Advocate General and by principal officers in another
`Executive Branch entity: the Court of Appeals for the
`Armed Forces (an Article I court), which reviews (and
`is empowered to overturn) decisions of the Court of
`Criminal Appeals. Id. at 665.
`
`In sharp contrast, APJs do possess power to
`issue final decisions on behalf of the United States.
`The Board, acting through panels consisting of three
`APJs, routinely
`issues decisions
`invalidating
`previously issued patents. The losing party is
`permitted to appeal—but to a panel of Board members
`
`
`
`4
`
`where non-Presidential appointees will be in the
`majority. Under Edmond, the absence of any
`mechanism within the Executive Branch by which
`principal officers can review and overturn APJ
`decisions means that APJs are deemed principal
`officers of the United States for purposes of the
`Appointments Clause. The three APJs who presided
`over the inter partes proceeding involving Arthrex and
`Smith & Nephew had no authority to rule because they
`were not appointed in the manner prescribed by the
`Appointments Clause for principal officers.
`
`A finding that APJs are principal officers accords
`with the purposes animating the Appointments Clause.
`That Clause is more than a matter of “etiquette or
`protocol”; it is among the significant structural
`safeguards of the constitutional scheme. Buckley v.
`Valeo, 424 U.S. 1, 125 (1976) (per curiam). By vesting
`the President with exclusive power to select the
`principal officers of
`the United States,
`the
`Appointments Clause prevents encroachment by
`Congress on the other branches of government. By
`requiring the President to obtain the Senate’s approval
`for such choices, the Clause curbs abuses of his
`appointment powers and promotes the selection of
`well-qualified individuals for important Executive
`Branch posts. Edmond, 520 U.S. at 659. Requiring
`appointments of APJs to comply with the rigorous
`Appointments Clause requirements ensures the
`selection of highly qualified individuals to posts whose
`holders are empowered
`to
`issue decisions
`(unreviewable within the Executive Branch) affecting
`extremely valuable private-property rights.
`
`
`
`5
`
`Smith & Nephew argues that the Court should
`defer to supposed determinations by Congress and the
`President that APJs and their predecessors are inferior
`officers. S&N Br. at 43-49. That argument is without
`merit. First, the evidence indicates that the political
`branches have never affirmatively concluded that APJs
`are inferior officers. Indeed, from 1861 to 1975 federal
`law required the predecessors of APJs to be appointed
`by the President with the advice and consent of the
`Senate. More importantly, it is the role of the judiciary
`to determine the meaning of the U.S. Constitution.
`
`Having concluded that the federal statute
`authorizing the appointment of APJs by the Secretary
`of Commerce was unconstitutional, the Federal Circuit
`should have done no more than vacate the Board’s
`order. It should have left to Congress the task of
`fashioning an alternative scheme.
`
`Instead, the Federal Circuit devised a remedy
`designed to permit APJs to continue to conduct inter
`partes
`review proceedings.
`
`It declared
`unconstitutional the application to APJs of Title 5’s
`removal restrictions, 5 U.S.C. § 7513(a), and “severed”
`that application. Pet. App. 29a.
`
`That remedy was unwarranted, for several
`reasons. First, it does not solve the problem identified
`by the court. Even without the tenure protections
`afforded by § 7513(a), decisions issued by APJs will
`remain unreviewable by the Director or any other
`principal officer within the Executive Branch. APJs
`thus retain their status as principal officers under the
`decision below.
`
`
`
`6
`
`Second, the Federal Circuit’s decision to declare
`unconstitutional a federal statute as applied to APJs
`and to “sever” its application—even though the statute
`on its face bears no direct relation to Appointment
`Clause issues—is unprecedented. While the Court has
`on occasion severed an unconstitutional provision from
`a statute as an alternative to declaring the entire
`statute unconstitutional, those decisions were all based
`on a reasonable conclusion that Congress would prefer
`half a loaf to none. But here the Federal Circuit is not
`striking a portion of the Leahy-Smith America Invents
`Act (AIA), Pub. L. 112-29 (2011), in an effort to
`preserve the remainder of the statute. Rather, it seeks
`to preserve the entire AIA by re-writing a federal
`statute adopted decades earlier. There is simply no
`evidence upon which to base a conclusion that
`Congress would have preferred this re-write to the
`many possible alternatives. Because the power to draft
`legislation resides exclusively in Congress, U.S. Const.,
`Art. I, § 1, the Federal Circuit lacked authority to
`engage in its re-write. Indeed, the Federal Circuit’s re-
`write, by depriving APJs of tenure protection,
`undermines Congress’s effort
`to preserve
`the
`independence of those conducting inter partes reviews.
`
`ARGUMENT
`
`I.
`
`APJS ARE PRINCIPAL OFFICERS WHO MUST BE
`APPOINTED BY THE PRESIDENT WITH THE
`ADVICE AND CONSENT OF THE SENATE
`
`The Appointments Clause states, in pertinent
`
`part:
`
`
`
`7
`
`The President ... shall nominate, and by
`and with the Advice and Consent of the
`Senate, shall appoint Ambassadors, other
`public Ministers and Consuls, Judges of
`the supreme Court, and all other Officers
`of the United States, whose Appointments
`are not otherwise provided for, and which
`shall be established by Law; but the
`Congress may by Law vest
`the
`Appointment of such inferior Officers, as
`they may think proper, in the President
`alone, in the Courts of Law, or in the
`Heads of Departments.
`
`U.S. Const., Art. II, § 2, cl. 2. The parties agree that
`APJs are “officers of the United States.” Thus,
`whether the Appointments Clause requires that they
`be appointed by the President with the advice and
`consent of the Senate or, alternatively, also permits
`them to be appointed by the Secretary of Commerce,
`depends on whether they are properly classified as
`principal officers or inferior officers.
`
`A.
`
`Officers Are Principal Officers When,
`as Here, They Issue Adjudicative
`Decisions Not Reviewable by Any
`Superior Officer
`
`The United States and Smith & Nephew assert
`that federal law grants the Director of the PTO
`considerable authority to control the activities of APJs.
`But that authority does not include supervision of the
`most crucial aspect of an administrative law judge’s
`work: the Director indisputably lacks statutory
`authority to review and overturn adjudicative decisions
`
`
`
`8
`
`issued by APJs. Given the absence of such supervisory
`authority, the Federal Circuit correctly held that APJs
`should be classified as principal officers of the United
`States who, under the Appointments Clause, must be
`appointed by the President with the advice and consent
`of the Senate. Tellingly, the United States and Smith
`& Nephew have cited no case in which a court
`classified a government adjudicator as an “inferior
`officer” despite not being subject to such supervisory
`authority.
`
`Edmond contains the Court’s most careful
`explication of the distinction between principal and
`inferior officers of the United States. The Court
`explained that “the term ‘inferior officer’ connotes a
`relationship with some higher-ranking officer or
`officers below the President: whether one is an
`‘inferior’ officer depends on whether he has a superior.”
`Edmond, 520 U.S. at 662. Because the purpose of the
`Appointments Clause
`is “to preserve political
`accountability relative to important Government
`assignments,” the Court concluded that “inferior
`officers” are officers whose work on those assignments
`“is directed and supervised at some level by others who
`were appointed by Presidential nomination with the
`advice and consent of the Senate.” Id. at 663.
`
`Edmond held that judges on the Coast Guard
`Court of Criminal Appeals (an Article I court) were
`properly classified as “inferior officers” and accordingly
`upheld their appointments by the Secretary of
`Transportation. The Court concluded that the work of
`those judges was closely directed and supervised by
`individuals who all had been appointed by the
`President with the Senate’s advice and consent: the
`
`
`
`9
`
`Coast Guard’s Judge Advocate General and the judges
`on the Court of Appeals for the Armed Forces. 520
`U.S. at 664-66.
`
`The Court listed a variety of factors to
`demonstrate that the work of judges on the Coast
`Guard Court of Criminal Appeals was directed and
`supervised by principal officers of the United States.
`Foremost among those factors was the authority of the
`Court of Appeals for the Armed Forces (another Article
`I court) to review “every decision” of the Coast Guard
`Court of Criminal Appeals:
`
`What is significant [about the appellate
`jurisdiction of the Court of Appeals for the
`Armed Forces] is that the judges of the
`Court of Criminal Appeals have no power
`to render a final decision on behalf of the
`United States unless permitted to do so
`by other Executive officers.
`
`Id. at 665. Because, in sharp contrast, APJs are
`authorized to issue final decisions in inter partes
`reviews, and those decisions are not reviewable by the
`Director or any other principal officer, Edmond
`indicates that APJs are principal officers.
`
`NCLA recognizes that federal officers make
`significant decisions in a wide variety of contexts. In
`contexts other than adjudications involving private
`parties, whether a supervising official has the
`authority to immediately countermand those decisions
`may be less decisive in determining whether the officer
`is properly classified as principal or inferior. For
`example, even if a federal officer has final authority to
`
`
`
`10
`
`sign a large purchase contract for the government, the
`long-term consequences may be minimal if the
`purchased goods can later be re-sold. Or if a federal
`officer has unreviewable authority to establish a policy
`binding on his subordinates, that policy can be
`rescinded by a replacement officer. But in the context
`of formal adjudications of the sort handled by APJs, an
`unreviewable decision will almost surely have a highly
`significant and lasting impact on the parties involved.
`For example, even if the Board later repudiates the
`legal analysis underlying the decision to invalidate the
`challenged claims of Arthrex’s ’907 patent, that
`decision will remain
`intact—to Arthrex’s great
`detriment. Under those circumstances, Edmond
`dictates a finding that administrative law judges
`whose decisions are not reviewable by a principal
`officer of the United States are themselves principal
`officers.
`
`Other Appointments Clause decisions of this
`Court are consistent with Edmond. See, e.g., United
`States v. Eaton, 169 U.S. 331 (1898); Go-Bart
`Importing Co. v. United States, 282 U.S. 344, 354
`(1931) (“commissioners” were inferior officers subject
`to control by the district court that appointed them
`because they acted as mere officers of the court “in
`proceedings of which that court had authority to take
`control at any time”).
`
`Smith & Nephew’s reliance on Freytag v.
`Commissioner, 501 U.S. 868 (1991), and Lucia v. SEC,
`138 S. Ct. 2044 (2018), is misplaced. S&N Br. at 24-25,
`36. Freytag and Lucia both held that the officials in
`question were federal “officers,” not mere employees, in
`light of the significant authority they exercised.
`
`
`
`11
`
`Freytag, 501 U.S. at 880-82; Lucia, 138 S. Ct. at 2053.
`But in neither case was the Court asked to distinguish
`between principal and inferior officers.
`
`In Lucia, that distinction made no difference
`because the official in question (an SEC administrative
`law judge) had been appointed in compliance with
`neither the Appointments Clause requirements for
`principal officers nor the requirements for inferior
`officers. The Court simply noted that no party asserted
`that the ALJ was a principal officer and that the
`principal/inferior distinction was “not at issue here.”
`138 S. Ct. at 2051 n.3. Freytag sided with the
`petitioner (who argued that “special trial judges” in the
`Tax Court were “inferior officers”) and against the
`United States (which argued that the judges were mere
`employees) without ever addressing whether they
`might actually be principal officers.3
`
`Moreover, the relevant statutes in those two
`cases made clear that adjudicative decisions of the
`officials in question were subject to review by principal
`officers. The Court said so explicitly in Lucia. 138 S.
`Ct. at 2049. Because the officers’ decisions were
`subject to further review within the Executive
`Department, nothing
`in Freytag or Lucia
`is
`inconsistent with Edmond’s holding that the existence
`of such review authority is a necessary condition for
`
`3 The Court ultimately upheld the constitutionality of the
`judges’ appointments, concluding (contrary to the petitioners’
`contention) that the appointments had been made by “Courts of
`Law” within the meaning of the Appointments Clause. 501 U.S.
`at 888-91.
`
`
`
`12
`
`determining that a federal adjudicative officer is an
`“inferior officer.”
`
`Free Enterprise Fund v. Public Co. Accounting
`Oversight Bd., 561 U.S. 477 (2010), fully supports
`Edmond’s holding. The Court held there that members
`of the Public Company Accounting Oversight Board
`(PCAOB) were inferior officers “whose appointments
`Congress may permissibly vest in a
`‘Head of
`Department’” based in considerable part on the Court’s
`finding that the SEC exercised significant “oversight
`authority” over the PCAOB, 561 U.S. at 510, including
`authority to “direct the [PCAOB]’s daily exercise of
`prosecutorial discretion.” Id. at 504. The Court held
`separately that a statute restricting the SEC’s
`authority to remove PCAOB members violated
`separation-of-powers principles. Id. at 492-508. After
`severing the removal restriction from the relevant
`statute, the Court cited the SEC’s newly recognized at-
`will removal authority as an additional reason for
`concluding that PCAOB members were inferior
`officers. Id. at 510. But the Court gave no indication
`that an “inferior officer” classification would have been
`warranted based on the at-will removal authority
`alone.
`
`1.
`
`Clear Line-Drawing Is Necessary;
`A Multi-Factor Balancing Test
`Provides Congress with Inadequate
`Guidance Regarding the Principal/
`Inferior Distinction
`
`Smith & Nephew contends that determining
`whether an official is properly classified as an inferior
`officer—that is, her authority is too significant to
`
`
`
`13
`
`permit an “employee” classification but not sufficiently
`significant
`to
`require a
`“principal officer”
`classification—is “necessarily pragmatic and context
`specific” and precludes the establishment of any bright-
`line rules. S&N Br. at 31.4 It further contends that
`Edmond endorsed
`this pragmatic approach,
`recognizing it “as a virtue, not a vice.” Id. at 23, 31.
`
`That description of Edmond is wrong on both
`counts. Edmond did not endorse a multi-factor test for
`determining an officer’s proper classification. To be
`sure, the Court noted that its past decisions “have not
`set forth an exclusive criterion for distinguishing
`between principal and inferior officers for Appoint-
`ments Clause purposes,” and it listed a number of
`factors that those decisions relied on in making that
`distinction. Edmond, 520 U.S. at 661. But the Court
`never suggested that all of those factors must be taken
`into account when attempting to distinguish the two
`categories of officers. On the contrary, Edmond made
`clear that the most significant factor in deciding the
`classification question is whether the official has
`“power to render a final decision on behalf of the
`United States unless permitted to do so by other
`Executive officers.” 510 U.S. at 655. An official
`authorized to issue adjudicative decisions may be
`subject to a variety of controls imposed by other
`Executive officers, but those controls do not change the
`
`4 The United States urges a similar approach, arguing that
`“no particular form of control” is indispensable for an official to be
`deemed an inferior officer and that the Court should examine “the
`cumulative effect of superior officers’ various means of supervision
`to determine whether a particular official is subject to sufficient
`control by Senate-confirmed officers.” U.S. Br. at 13.
`
`
`
`14
`
`official’s principal-officer status if, as here, those
`controls do not permit Executive Branch review of the
`official’s adjudicative decisions.
`
`Nor can Smith & Nephew’s proposed holistic
`approach plausibly be viewed as a virtue. When
`adopting legislation governing the appointment of
`federal officials, Congress needs a high degree of
`assurance that the legislation satisfies Appointments
`Clause requirements. Otherwise, Congress may
`incorrectly guess that a category of officials is properly
`categorized as inferior—and thereby create a risk that
`a court will later determine that the officials are
`principal officers and declare invalid large swaths of
`Executive Branch action.
`
`Adopting bright-line ex ante rules would
`eliminate that ex post risk. One appropriate bright-
`line rule is the one adopted by Edmond: a federal
`official with authority to adjudicate matters involving
`private parties is a principal officer unless Congress
`subjects the official’s adjudicative decisions to review
`by others who were appointed by Presidential
`nomination with the advice and consent of the Senate.
`NCLA is not suggesting that those superior officials
`must actually, or even often, exercise their review
`authority. After all, when adopting legislation,
`Congress has no way of knowing how frequently
`Executive Branch officials will exercise review
`authority. It is enough, if Congress wishes to bypass
`Presidential appointment and Senate confirmation, to
`specify
`that all decisions by administrative
`adjudicators be subject to review by principal officers
`within the Executive Branch.
`
`
`
`15
`
`2.
`
`to
`Is Central
`Removal Power
`Challenges Under the Take-Care
`Clause but of Limited Relevance to
`Appointments Clause Challenges
`
`The Federal Circuit correctly determined that
`APJs are principal officers who must be appointed by
`the President with the advice and consent of the
`Senate. But it placed undue emphasis on APJs’ tenure
`protection in reaching that determination and erred
`when it concluded that APJs could be transformed into
`inferior officers by removing that protection.
`
`The appeals court’s focus on removal power may
`have been a product of the Court’s recent decisions
`invoking Article II’s Take Care Clause, U.S. Const.,
`Art. II, § 3, to declare that certain congressionally
`imposed removal restrictions violated the separation of
`powers. See, e.g., Seila Law LLC v. CFPB, 140 S. Ct.
`2183 (2020); Free Enterprise Fund, 561 U.S. at 492-
`508. But the Appointments Clause serves somewhat
`different constitutional interests from those served by
`the Take Care Clause. Both clauses are designed to
`prevent congressional encroachment on Executive
`Branch functions. But the Appointments Clause is
`also designed in part to ensure that: (1) the President
`is directly involved with the selection of the most
`significant Executive Branch officials
`(thereby
`ensuring that he can be held accountable for the
`actions of those officials); and (2) the Senate can block
`appointment of an unqualified individual to a
`significant post (thus ensuring Senators’ accountability
`if they fail to prevent such appointments).
`
`
`
`16
`
`In contrast, the Take Care Clause prevents
`diffusion of executive power by requiring that all
`Executive Branch officials be ultimately answerable to
`the President. Legislation that unduly restricts
`Presidential oversight violates the Take Care Clause
`by “subvert[ing] the President’s ability to ensure that
`the laws are faithfully executed—as well as the public’s
`ability to pass judgment on his efforts.” Free
`Enterprise Fund, 561 U.S. at 498. Both Free Enterprise
`Fund and Seila Law struck down removal restrictions
`on those grounds.
`
`While removal restrictions are highly relevant in
`Take Care Clause challenges to federal legislation,
`they are far less relevant to Appointments Clause
`challenges. The latter focus on whether the challenged
`legislation adequately guards against appointment of
`unqualified appointees, not on whether the legislation
`prevents the President
`from removing under-
`performing appointees. To be sure, depriving a federal
`employee of tenure protection increases the ability of
`higher-level officials to direct and supervise his
`work—and thus may make it marginally less likely
`that the employee should be classified as a principal
`officer of the United States. But there is often a reverse
`correlation between tenure protection and high
`government rank. For example, no one contends that
`the heads of executive departments could or should be
`granted tenure protection, yet all such officials
`undoubtedly qualify as principal officers
`for
`Appointments Clau
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