Like Justice Stephen Breyer, many of us have pained looks when thinking about the Supreme Court this week

In a case with implications beyond securities law, the Supreme Court ruled in Lucia v. SEC  last week that an investment adviser convicted of securities fraud by the Securities and Exchange Commission (SEC) was unconstitutionally convicted because the Administrative Law Judge (ALJs) who tried his case was hired rather than appointed in violation of the appointments clause. 

Lucia is not a high-profile case like Tuesday’s decsion in Trump v. Hawaii that upheld the so-called Muslim ban. To some extent the cases may seem contradictary. But the cases can be reconciled in a way that reveals some disturbing truths about the American political system. While Lucia is an important case in its own right, it makes Trump v. Hawaii more understandable.

In January 2017, I wrote about how a companion case to Lucia could potentially wreak havoc with Social Security Disability (SSDI) cases.  Like the SEC, the Social Security Administration appoints administrative law judges to adjudicate social security disability claims. ALJs are government employees who are hired by agency rather than appointed by the President or agency head. The Supreme Court held that since ALJs at the SEC had significant discretion in deciding important matters they were officers for the sake of the appointments clause so they needed to be appointed rather than hired as employees.

SSDI hearings may be distinguishable from SEC hearings in that they are less formal and less adversarial. A parrty challenging the constituionality of SSDI on appointments clause grounds might have a hard time showing they had standing to make a challenge. But other forms of administrative  hearings are more formal and adversarial and involve parties with standing to make challenges.

In Nebraska, the Department of Labor hires ALJs to hear unemployment appeals. In many states, like Iowa, workers’ compensation cases are heard by ALJsthat are hired as civil servants rather than appointed by the Executive. SEC v. Lucia could help employers/insurers to make persuasive appointments clause arguments under state constitutions  that such arrangements are unconstitutional. Employees/plaintiffs have had a recent string of good decisions with state supreme courts challenngng laws they believe harm workers. Employers may decide to press their luck in the states with Lucia case as persuassive authority. The same challenges based on Lucia could conceivably be made about unemployment insurance at a state level.

Finally there was some irony in Lucia. Though ALJs hired by the SEC could only make recommendations to the commission, the court found that the commission usually deferred to the recommendation of the ALJ which was part of the reason why the ALJ was an officer rather than an employee. In Masterpiece Cakeshop an ALJ had decided that bakery had violated Colorado public accommodation laws in refusing to bake a wedding cake for a same-sex marriage. The comments made by the Colorado civil rights commissioner that caused the decision to be reversed by the court were made after the ALJ’s decision.  But in Masterpiece the argument that the commission was probably just deferring to an ALJ decision was absent. But Masterpiece and Lucia can be somewhat reconciled logically as they both show how the Roberts court is skeptical of administrative agencies when they interpret laws and adjudicate disputes.

In his dissent in Lucia, Justice Stephen Breyer stated the Supreme Court threatened to undermine the whole system of administrative adjudication with its decision.  The most high profile of these administrative systems is the Immigration Court which is backlogged with cases. President Trump proposed “solving” the backlog of cases by just doing away with due process altogether in deportation hearings.But if four-flushers and  flim-flam men deserve  due process in administrative hearings, then so do those accused of either entering or living in the United States without authorization.

The skepticism shown by the Roberts court towards admisnisative agencies that regulate the economy was absent the Department of Homeland Security (DHS) and other intelligence agencies in Trump v. Hawaii. Instead the Roberts court was beyond deferential to the Executive branch in a matter they deemed to be “national security.” To those raised during  the Cold War and post-9/11 era such deference to the executive on matters of national security seems natural. But as Justice Sotomayor poitned out in her dissent, the Judiciary, Legislative and Executive are equal branches of the government.

But are the branches of the government are equal when the Executuve commands a massive standing army and massive foreign and domestic intellignece agencies? The power of the Executive in this area is even greater when combined with business interests that former President Dwight Eisenhower described as the military-industrial complex in 1961.  William Jennings Bryan made a similar warning in 1900 in what was called his “Imperalism” speech. The corrosivve effects of the military-industrial complex or empire on our democratic form of government can be seen in how the Roberts court was willing to kow-tow to the Trump administration on matters of “national security” while the corut is more than willing to second guess Congress and administtrative agencies on matters relating to regulation of the economy.