Case No. 19-1442 | 10th Cir.
March 3, 2021
Preview by Austin Martin, Senior Online Editor
In Carr v. Saul, Willie Carr—an electrician from Tulsa, Oklahoma—challenges the denial of his application for disability benefits from the Social Security Administration (“SSA”) rendered by an administrative law judge (“ALJ”). Carr appealed the ALJ’s decision to federal district court. While appeal was pending, the Supreme Court decided in Lucia v. Securities and Exchange Commission that SEC ALJs are “inferior officers” of the United States under the Appointments Clause of the Constitution. 138 S. Ct. 2044 (2018). Under the Appointments Clause, only the President, a court of law, or a head of department may appoint inferior officers. U.S. Const. art II, § 2, cl. 2. Because the ALJ in Lucia was appointed by SEC staff members, the ALJ lacked authority as an inferior officer, rendering the ALJ’s decision invalid. See Lucia, 138 S. Ct. at 2049, 2055.
At the time Lucia was decided, Social Security ALJs “were selected by agency staff members with no involvement by the Commissioner.” Brief for Petitioners at 8–9, Davis v. Saul, No. 20-105 (U.S. filed Dec. 28, 2020). In response to Lucia, the Acting Commissioner of Social Security issued an order ratifying the existing ALJs’ appointment and directing them to deny any challenges to ALJ authority in prior decisions because of the Commissioner’s ratification. See Brief of Petitioners at 9, Carr v. Saul, No. 19-1442 (U.S. filed Dec. 28, 2020).
Carr argued in district court that the ALJ in his case was unconstitutionally appointed and therefore lacked the authority to deny his claim for benefits. The SSA did not dispute this argument, but instead argued that Carr did not raise the issue in the administrative proceeding, meaning the argument was not preserved for appeal. The district court ruled in favor of Carr, but the Tenth Circuit reversed, holding that Carr forfeited his Appointments Clause challenge by failing to raise it before the ALJ.
Carr asserts that “claimants need not challenge the constitutionality of ALJs’ appointments before the very ALJs charged with adjudicating their benefits claims in order to preserve the issue for judicial review.” Brief of Petitioners at 13, Carr v. Saul. Carr relies on Sims v. Apfel, which held that SSA “[c]laimants who exhaust administrative remedies need not also exhaust issues in a request for review by the Appeals Council in order to preserve judicial review of those issues.” 530 U.S. 103, 112 (2000). Carr argues that Congress only contemplated issue exhaustion in SSA proceedings in one situation: where the SSA initiates proceedings to impose penalties on individuals who knowingly make false statements during benefits determinations. Further, Carr argues that ALJ proceedings are inquisitorial, not adversarial, meaning the ALJs should be able to spot Appointments Clause regardless of whether the parties raise them. Finally, Carr urges the Court to avoid judicially crafted exhaustion requirements in favor of the “Court’s longstanding remedy-exhaustion precedents” allowing for review of constitutional issues not raised in administrative proceedings. Brief of Petitioners at 36, Carr v. Saul.
The government argues that administrative law principles and Appointments Clause precedent weigh in favor of finding that Carr forfeited his objection not raised before the ALJ. Although the Court ordered a new hearing in Lucia to cure the Appointments Clause violation, the government distinguishes Lucia by arguing that a rehearing was available only for “one who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case.” Brief for the Respondent at 16–17, Carr v. Saul, No. 19-1442 (U.S. filed Jan. 27, 2021) (quoting Lucia, 138 S. Ct. at 2055) (emphasis in original). The government also seeks to minimize Carr’s concern about judicially crafted exhaustion and forfeiture rules, arguing that the Court has imposed them in several cases and that the federal courts of appeals have consistently applied forfeiture principles in Social Security cases. See id. at 27, 30.
Carr’s case is combined those of several other petitioners who seek reconsideration of their disability benefits by properly-appointed ALJs after Lucia. While the Court’s decision in this case certainly will impact their claims, the Court also has an opportunity to clarify where it is appropriate for the courts, rather than Congress, to implement prudential exhaustion requirements. This decision could therefore affect a swath of future SSA claimants and general litigation strategy in future cases where claimants pursue SSA benefits.