Argument Analysis: Carr v. Saul

Adam Shelton · March 5, 2021

How would you like to lose?

Earlier this week, the Supreme Court heard oral arguments in Carr v. Saul—an administrative law case that asks whether “issue exhaustion” required individuals to raise their Appointments Clause challenge to the appointment of Social Security Administration (SSA) Administrative Law Judges (ALJs) to the ALJs themselves before raising it in federal court. The benefit applicants before the Court didn’t raise their challenge before the ALJs, so the government argued that they were prohibited from later raising the claim in federal court. We at IJ submitted an amicus brief in support of the applicants, arguing that requiring issue exhaustion for a claim like this—a constitutional claim—raised serious constitutional concerns.

So how did oral argument go? Well, as an amicus in the case we hesitate to make predictions (and the pandemic-era serial questioning format can make predictions difficult regardless). But one clue may have come when Justice Kavanaugh asked the attorney for the government: “if you were to lose, what’s your preferred approach?”

As an advocate: gulp.

In answer to the question the Assistant to the Solicitor General, Austin Raynor suggested that a ruling eschewing issue exhaustion would be limited to only this specific situation. That is, he argued that such a ruling should focus on (1) the non-adversarial nature of an SSA proceeding; (2) the fact that there is no regulation requiring exhaustion; (3) that it was a structural constitutional objection; (4) and that there was no direct access “to the agency actor that could remedy the issue.” From the government’s perspective, that would be a nice, narrow rationale limiting a negative ruling to just this case.

But there is another, broader, ground on which the Court can, and should, base its decision: administrative issue exhaustion for constitutional questions is inappropriate. Justice Breyer was the first to bring up such a possibility, observing “that there was a pretty well-established exception to the need to exhaust an issue where it is a constitutional issue.” Our amicus brief explained exactly that, and we explained that requiring issue exhaustion for constitutional claims would raise serious Article III concerns. After all, an issue exhaustion requirement “would in effect position agency judges as the primary adjudicators for constitutional claims,” and “that is not the system that Article III adopts.” Our brief pointed out that the Court has consistently avoided requiring issue exhaustion for constitutional claims.

Responding to Justice Breyer, Mr. Raynor contended that the Court had previously required issue exhaustion for constitutional claims in Richardson v. Perales, a 1971 SSA case. But that gets Richardson entirely wrong, as the relevant discussion from Richardson is not about issue exhaustion at all. In that case, an SSA claimant claimed that the agency’s procedures violated due process because—among other things—he did not have a chance to cross-examine certain witnesses. In response, the Richardson court observed that the claimant in fact could have subpoenaed the witnesses and had simply failed to take advantage of that available procedure. The Court did not hold that it was somehow barred from even reaching the due process claim; to the contrary, the Court reached the due process claim and rejected it on the merits.

If anything, Mr. Raynor’s invocation of Richardson shows how extraordinary it would be to require issue exhaustion for a constitutional claim. In preparation for this argument, the Solicitor General’s Office had months to scour the U.S. Reports for cases in which the Supreme Court previously required issue exhaustion for a constitutional claim. And yet apparently Richardson is the best the government could come up with: a case that does not even apply issue exhaustion at all. The Solicitor General could not find a better case because there is no such case.

At another point in the argument, Mr. Raynor also invoked a line of cases applying the “de facto officer doctrine,” but Mr. Raynor notably did not suggest that those cases apply issue exhaustion doctrine. The de facto officer doctrine goes to the merits of the appointments clause issue; it “confers validity upon acts performed by a person acting under the color of official title even though it is later discovered that the legality of that person’s appointment or election to office is deficient.” Whatever the merits of that argument—and, in that regard, it is notable that the Supreme Court in 1995 acknowledged that the doctrine applied with less force where the defect in the appointment was constitutional rather than statutory—the doctrine is simply irrelevant to the question of whether the Court can even reach the constitutional issue at all.

The de facto officer doctrine is irrelevant at this point in the proceedings, as the Appointments Clause challenge is not actually before the Court. That is, the Court is not currently being asked to determine what the appropriate remedy should be for the admitted Appointments Clause violation. To be sure, if the Justices determine that issue exhaustion does not apply, they can certainly determine the appropriate remedy—and the claimants may not like the answer. But the main question here is whether issue exhaustion is appropriate. In other words, if the Court rules for the government based on the de facto officer doctrine, it would essentially be skipping over the actual question before them to get to a question that only matters once the issue exhaustion question is answered.

There are good reasons for the Court to hold that constitutional questions cannot be waived during proceedings before agency judges. As noted above, requiring administrative issue exhaustion for constitutional questions would raise serious Article III concerns. Article III makes the judiciary the primary adjudicator for constitutional disputes. A hallmark of Article III judges is their independence from the other branches—they serve during good behavior and their salary cannot be reduced. Yet, ALJs do not have, and frankly cannot have, independence. In fact, the constitutional deficiency with the SSA ALJs here is they were too independent.

Additionally, requiring administrative issue exhaustion for constitutional questions would raise due process concerns, especially when, as here, the ALJs are powerless to remedy the alleged constitutional deficiency. The Due Process Clause requires a “meaningful opportunity” to be heard. Yet the application of issue exhaustion in situations like this deprives litigants of a meaningful forum for their constitutional claims. As the ALJs were unable to cure their own unconstitutional appointments (it took an executive order to do that), requiring issue exhaustion here would be little more than requiring an empty gesture to get into a meaningful forum to raise a constitutional claim.

Now all we can do is wait for the opinion—which will come before the end of June (but hopefully much sooner). But there is good reason to be optimistic that the Supreme Court will hold issue exhaustion inapplicable here. It all just depends on, to paraphrase Justice Kavanaugh, how the government will lose.

Adam Shelton is a fellow with IJ’s Center for Judicial Engagement

The amicus brief authored by IJ Senior Attorney Rob Johnson, IJ Senior Attorney & Center for Judicial Engagement Director Anthony Sanders, and Center for Judicial Engagement Fellow Adam Shelton, is available here.