Trump Gives Agency Heads Power to Hire In-House Judges

(Bloomberg) -- President Donald Trump, seeking to head off some of the turmoil from a recent Supreme Court decision, issued an order Tuesday empowering the heads of federal agencies to directly appoint judges who decide cases ranging from Wall Street sanctions to environmental disputes.

The Supreme Court undermined the authority of administrative law judges last month by ruling that they are constitutional officers, potentially casting doubt on whether some of their appointments were properly handled and opening up hundreds of cases to potential legal challenges.

The Supreme Court ruling pertained to the Securities and Exchange Commission, a top financial regulator that is one of dozens of federal agencies that use the in-house judges to rule on internal trials and disputes. Now, many other cases may have to be reconsidered because of improperly hired judges, said James Sherk, a special assistant to the president for domestic policy.

“We’re already aware of hundreds of these challenges being brought,” Sherk told reporters Tuesday.

Trump’s order grants agency chiefs greater leeway to choose judges, which could also allow them to ratify currently sitting judges at the Social Security Administration, Department of Health and Human Services, Department of Labor and several other agencies -- including a number of financial regulators. Still, the Supreme Court decision leaves many of the administrative law judges’ past decisions in jeopardy.

The high court said administrative law judges must be appointed by the president or heads of agencies, not hired as ordinary government workers. Trump’s order discards a complex Office of Personnel Management selection process and establishes a new employment status that allows agencies to appoint judges much like they now hire federal attorneys.

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