Agency Adjudication

Agencies make law in two main ways: rulemaking, which sets general policy, and adjudication, which applies law to particular parties. Federal agencies decide far more cases each year than the federal courts, including Social Security disability appeals, veterans benefits claims, immigration removal cases, labor disputes, and civil enforcement actions. The Administrative Procedure Act of 1946 created a formal process, with an administrative law judge, a hearing, evidence, and a decision on the record, for cases where a statute requires a hearing on the record. Most agency decisions follow less formal procedures set by each agency's own statute.

The Supreme Court has allowed Congress to assign cases involving public rights, such as benefits, licenses, and certain regulatory matters, to agency tribunals rather than to judges with life tenure, as in Crowell v. Benson in 1932. Agency decisions are generally reviewable in federal court, usually under deferential standards for factual findings. Immigration judges, who are employees of the Justice Department's Executive Office for Immigration Review, hear millions of pending cases, and Social Security administrative law judges hold hundreds of thousands of hearings a year.

Recent decisions have narrowed agency adjudication. In Lucia v. SEC in 2018 the Court required agency judges to be properly appointed, in Axon Enterprise v. FTC in 2023 it let parties challenge an agency's structure in federal district court, and in SEC v. Jarkesy in 2024 it held that the Seventh Amendment requires a jury trial when the SEC seeks civil penalties for securities fraud. Supporters of agency adjudication say expert tribunals decide specialized cases quickly and cheaply, while critics say an agency acting as investigator, prosecutor, and judge denies parties a neutral forum.