Docket No. EL18-152-003
I concur but write separately to make a few basic points.
SERI has raised a constitutional issue in its request for rehearing with regard to whether the Commission’s administrative law judges (ALJs) are, in fact, constitutional in their method of appointment and powers. I would support the Commission’s rejection of this argument as procedurally barred.[1] A constitutional issue of this magnitude is not one that is appropriate to raise for the first time on rehearing. It should have been raised and fully briefed well before this point in the process and – preferably in my view – set down for oral argument before the full Commission, before any final determination by this Commission would be rendered. For example, during the hearing process, SERI could have requested that the presiding ALJ certify the constitutional issue to the Commission under Rule 714 of the Commission’s Rules of Practice and Procedure.[2] Or, at the very least, SERI could have raised the issue in its brief on exceptions to the Initial Decision before the Commission issued Opinion No. 581. SERI did neither.
Ideally, a constitutional issue of this magnitude should be raised only in a general proceeding where all interested parties can weigh in extensively. As Judge Posner, in his inimitable style, said in Hospital Corporation of America v. Federal Trade Commission:
Hospital Corporation’s argument that the FTC is unconstitutional because its members exercise executive powers (e.g., by filing the complaint in this case) yet can be removed by the President only for cause occupies three pages of its opening brief and one page of its reply brief. Although we are not aficionados of long briefs and wordy arguments, we cannot be forced to consider far-reaching constitutional contentions presented in so off-hand a manner. Hospital Corporation is asking us to adopt a principle that would make every independent federal administrative agency unconstitutional; for the logic of its argument is not limited to the Federal Trade Commission but extends to the Interstate Commerce Commission, the Federal Communications Commission, the Federal Reserve Board, and the other well known, long established federal agencies whose members the President selects but cannot remove (before their terms expire) without cause. Hospital Corporation thus is asking us to decree a fundamental change in the structure of American government. Four pages is not an adequate presentation of the case for this revolutionary result. Brevity may be the soul of wit, but seismic constitutional change is not a laughing matter.[3]
Nevertheless, SERI did raise the constitutional issue on rehearing – albeit in only a few pages buried near the end of its rehearing request. I concur because the fact that SERI has raised the issue on rehearing effectively requires the Commission to answer it fully. Unlike an appellate court, the Commission cannot ignore an argument that is untimely or poorly fleshed out. Given how circuit courts, and particularly the D.C. Circuit, have interpreted the Administrative Procedure Act, we are bound to address all non-frivolous arguments or otherwise risk remand or reversal.[4]
I recognize that the constitutionality of the appointment of officers of independent agencies, and by implication their judicial and quasi-judicial powers, presents a serious and legitimate question, and one that ultimately must be decided by the U.S. Supreme Court, which has already ruled on aspects of this question.[5] It will no doubt expand upon its recent rulings in Seila Law and Lucia when appropriate and timely.[6] And while I concur, I do not necessarily endorse all the arguments contained in the order on rehearing, particularly any claim or insinuation that the action of the Commission last December in reappointing the Commission’s ALJs fully cured any hypothetical constitutional infirmities. That action has never been fully briefed and argued, nor has the Commission ever issued a ruling explaining why that action cured any possible constitutional defects, and this order on rehearing is not the place nor the time to issue a definitive ruling for the reasons I set forth in P 2 above.
For these reasons, I respectfully concur.
[1] See, e.g., Turlock Irrigation Dist., 175 FERC ¶ 61,144, at P 14 (2021) (citations omitted) (“The Commission looks with disfavor on parties raising issues for the first time on rehearing that could have been raised earlier, in part because other parties are not permitted to respond to requests for rehearing.”); Calpine Oneta Power, L.P. v. Am. Elec. Power Serv. Corp., 114 FERC ¶ 61,030, at P 7 (2006) (citing Baltimore Gas & Electric Co., 92 FERC ¶ 61,043, at 61,114 (2000)) (“The Commission looks with disfavor on parties raising new issues on rehearing. Such behavior is disruptive to the administrative process because it has the effect of moving the target for parties seeking a final administrative decision.”).
[2] 18 C.F.R. § 385.714 (2022).
[3] Hospital Corp. of America v. FTC, 807 F. 2d 1381, 1392 (7th Cir. 1986) (citing Hershinow v. Bonamarte, 735 F.2d 264, 266 (7th Cir. 1984); Carducci v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983) (emphases added).
[4] See, e.g., Constellation Mystic Power, LLC v. FERC, 45 F.4th 1028, 1054-55 (D.C. Cir. 2022) (“When an agency does not respond to arguments that do not appear frivolous on their face and could affect the agency’s ultimate disposition, we remand for agency consideration. We do so because the failure to respond meaningfully to objections raised by a party renders the Commission’s decision arbitrary and capricious.”) (cleaned up, internal quotations omitted); see also In re NTE Conn., LLC, 26 F.4th 980, 989 (D.C. Cir. 2022) (quoting PPL Wallingford Energy LLC v. FERC, 419 F.3d 1194, 1198 (D.C. Cir. 2005) (cleaned up)) (“‘An agency’s failure to respond meaningfully to objections raised by a party renders its decision arbitrary and capricious. We have stressed that unless the agency answers objections that on their face seem legitimate, its decision can hardly be classified as reasoned.’”).
[5] See Seila Law LLC v. CFPB, 140 S. Ct. 2183 (2020); see also Lucia v. SEC, 138 S. Ct 2044 (2018).
[6] See, e.g., SEC v. Jarkesy, 143 S. Ct. 2688 (June 30, 2023) (cert. granted).