Bauer v. Kijakazi

1

ARDEN BAUER, Plaintiff, v. KILOLO KIJAKAZI, Acting Commissioner of Social Security, Defendant.

No. 21-CV-2008-KEM

United States District Court, N.D. Iowa, Eastern Division

July 25, 2022

MEMORANDUM OPINION AND ORDER

KELLY K.E. MAHONEY, CHIEF UNITED STATES MAGISTRATE JUDGE.

Table of Contents

I. DISCUSSION

A. Interpretation of the FVRA

1. Did the President direct Berryhill to serve as Acting Commissioner?

2. Did Berryhill's service as Acting Commissioner exceed the FVRA's time limitations?

3. Did the FVRA bar Berryhill from ratifying the ALJ's appointment?

B. Constitutionality of the FVRA

Plaintiff Arden Bauer challenges Nancy Berryhill's July 2018 ratification of the appointment of Social Security ALJs from her position as Acting Commissioner of Social Security. Bauer argues that Berryhill's acting service violated the Federal Vacancies Reform Act of 1978 (FVRA) and the Appointments Clause of the United States Constitution. Bauer raises complex and novel arguments-particularly regarding the Appointments Clause-but I ultimately decline to strike down Berryhill's ratification of the ALJ's appointment here.^[1]

I. DISCUSSION

The Appointments Clause of the United States Constitution governs how ?officers? of the United States are hired (as opposed to employees, who are not subject to any constitutional restrictions).^[2] The Appointments Clause further divides officers into two categories: principal officers and inferior officers.^[3] Principal officers (sometimes referred to by the shorthand PAS officers) must be nominated by the President and confirmed by the Senate; examples include ambassadors, Supreme Court justices, and cabinet secretaries.^[4] Inferior officers may be appointed in the same manner, but if Congress authorizes, they may also be appointed by the President alone, a court of law, or a department head.^[5] Bauer argues that the ALJ?s appointment to that position violated the Appointments Clause. The parties agree that Social Security ALJs are inferior officers who must be appointed by the president, a court of law, or a department head. They disagree on whether the ALJ here was appointed by a valid department head.

For a long time, Social Security ALJs were treated as employees who were not subject to the Appointments Clause. Thus, when the ALJ in this case was originally hired (in 2016 or 2017),^[6] it was not by a department head. Things changed after the Supreme Court held in Lucia v. SEC that Securities and Exchange Commission ALJs are officers under the Appointments Clause (based on reasoning equally applicable to Social Security ALJs).^[7] Shortly thereafter, on July 16, 2018, Nancy Berryhill, purporting to be the Acting Commissioner of the Social Security Administration under the FVRA, ratified the appointments of all Social Security ALJs.^[8] Bauer?s ALJ hearings were held in April and June 2020, after Berryhill?s ratification. Doc. 19.

Bauer raises both statutory and constitutional arguments to Berryhill?s acting service. Bauer argues that the FVRA did not authorize Berryhill to serve as the Acting Commissioner and ratify the ALJ?s appointment. And even if the FVRA authorized Berryhill?s actions, Bauer argues they violated the Appointments Clause. Thus, Bauer argues that because Berryhill?s ratification is invalid under the FVRA or the Appointments Clause, the ALJ was not appointed by a department head as required by the Appointments Clause.

A. Interpretation of the FVRA

Bauer argues that Berryhill?s acting service violated the FVRA for two reasons: (1) the President did not ?direct? Berryhill?s service and (2) at the time she ratified the ALJ?s appointment, Berryhill?s acting service exceeded the FVRA?s time limits. In addition, Bauer argues that even if the FVRA authorized Berryhill?s acting service, the FVRA?s antiratification provision barred Berryhill from ratifying the ALJ?s appointment.

1. Did the President direct Berryhill to serve as Acting Commissioner?

The Commissioner of Social Security heads the Social Security Administration. The parties agree that the Commissioner is a ?Head[] of Department[]? and principal officer under the Appointments Clause who must be appointed by the President and confirmed by the Senate.^[9] When such a person ?dies, resigns, or is otherwise unable to perform the functions and duties of the office,? the FVRA sets out who may ?perform the functions and duties of the vacant office temporarily in an acting capacity, subject to? certain time limits.^[10]

The ?who? is set out in 5 U.S.C. § 3345. The FVRA provides (1) that the ?first assistant . . . shall? serve in an acting capacity, or (2) that ?the President (and only the President) may direct? certain people to serve in an acting capacity, including an officer or employee of the agency.^[11]

On January 20, 2017, former Acting Commissioner Carolyn Colvin resigned in conjunction with the inauguration of President Trump.^[12] Colvin had become the Acting Commissioner by nature of her position as the Deputy Commissioner, the ?first assistant? to the Commissioner.^[13] Her resignation left vacancies in both the Commissioner and Deputy Commissioner positions. Berryhill, as the Deputy Commissioner for Operations,^[14] was next in line to serve as Acting Commissioner under former President Obama?s December 2016 memorandum providing an order of succession for Social Security officials to serve as Acting Commissioners under the FVRA.^[15]

Bauer argues that because President Trump did not issue the succession memo, he did not ?direct? Berryhill?s service under the FVRA. The Government argues that the succession memo remained in effect unless and until President Trump revoked it. I agree. Executive orders, another form of presidential directive, remain in effect through different presidencies (until they are replaced, modified, or revoked or they lapse by their terms).^[16] The President?s power to issue executive orders comes from Article II of the Constitution, which generally vests executive power in the President.^[17] This executive power includes the power to oversee executive agencies like the Social Security Administration^[18] and is the same basis for the President?s ability to issue the succession memo here. I have found nothing indicating that presidential memoranda are treated differently than executive orders in terms of when they lose effect.

Accordingly, I agree with the Government that President Trump ?directed? Berryhill?s service as Acting Commissioner by nature of the succession memo issued by President Obama that was still in effect at the time of Colvin?s resignation.

2. Did Berryhill?s service as Acting Commissioner exceed the FVRA?s time limitations?

Berryhill purported to become Acting Commissioner on January 20, 2017, by nature of the succession memo and Colvin?s resignation as Acting Commissioner.

Berryhill continued to use the ?Acting Commissioner? title until March 6, 2018, when the United States Government Accountability Office (GAO) issued a report indicating that Berryhill?s acting service violated the time limits set out in the FVRA.^[19] The report indicated that the FVRA generally limits acting service to 210 days but that for vacancies during a presidential transition, ?that time period is extended to 300 days after the vacancy occurs? or after the inauguration date, whichever is later.^[20] Thus, the report concluded that Berryhill?s acting service ended on November 16, 2017, 300 days after both Colvin?s resignation and President Trump?s inauguration.^[21] The report stated that going forward, Berryhill could not use the title Acting Commissioner, although she could perform ?the delegable functions and duties of the Commissioner position.?^[22]

Berryhill continued to lead the Social Security Administration using the title ?Deputy Commissioner for Operations, performing the duties and functions not reserved to the Commissioner of Social Security.?^[23] No one served as Acting Commissioner until President Trump nominated Andrew Saul as the Commissioner of Social Security on April 17, 2018.^[24] Following Saul?s nomination, Berryhill purportedly resumed serving as Acting Commissioner under a provision of the FVRA that authorizes acting service while a nomination is pending. Berryhill ratified the appointment of the Social Security ALJs on July 16, 2018, while Saul?s nomination was first pending.^[25]

Section 3346 sets out time limits for acting service under the FVRA:

(a) Except in the case of a vacancy caused by sickness, the person serving as an acting officer as described under section 3345 may serve in the office?

(1) for no longer than 210 days beginning on the date the vacancy occurs; or

(2) subject to subsection (b), once a first or second nomination for the office is submitted to the Senate, from the date of such nomination for the period that the nomination is pending in the Senate.

(b)(1) If the first nomination for the office is rejected by the Senate, withdrawn, or returned to the President by the Senate, the person may continue to serve as the acting officer for no more than 210 days after the date of such rejection, withdrawal, or return.

(2) Notwithstanding paragraph (1), if a second nomination for the office is submitted to the Senate after the rejection, withdrawal, or return of the first nomination, the person serving as the acting officer may continue to serve?

(A) until the second nomination is confirmed; or

(B) for no more than 210 days after the second nomination is rejected, withdrawn, or returned.^[26]

As noted by the GAO, a special rule applies to vacancies during presidential transitions:

(a) In this section, the term ?transitional inauguration day means the date on which any person swears or affirms the oath of office as President, if

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