Accusers as Adjudicators in Agency Enforcement Proceedings

Largely because of the Supreme Court’s 1975 decision in Withrow v. Larkin, the accepted view for decades has been that a federal administrative agency does not violate the Due Process Clause by combining the functions of investigating, charging, and then resolving allegations that a person violated the law. Many federal agencies have this structure, such as the Securities and Exchange Commission (SEC) and the Federal Trade Commission.

In 2016, the Supreme Court decided Williams v. Pennsylvania, a judicial disqualification case that, without addressing administrative agencies, nonetheless raises a substantial question about one aspect of the combination of functions at agencies. The Court held that due process prevented a judge from sitting in a case in which he had participated as district attorney years earlier. The operative principle for the decision was that “the Court has determined that an unconstitutional potential for bias exists when the same person serves as both accuser and adjudicator in a case.”

This Article concludes that the reasoning of Williams should supersede Withrow on the need to disqualify a specific commissioner or agency head from participating in a particular adjudication if the agency official played a meaningful role, such as voting to approve enforcement charges, in the process leading to the agency’s initiation of proceedings against the defendant. Voting to approve enforcement charges would be a meaningful role. The due process cases do not permit a compromise on the high standards of impartiality demanded of a final agency decision maker in an adjudication to determine whether a private party committed a violation of law.

That reading of Williams threatens to unsettle standard practices at various agencies, but a closer look at the procedures of the SEC shows that it would be able to accommodate the rule in Williams yet retain the combination of charging and adjudicating at the Commission level. Because of turnover of Commissioners and quorum rules, the SEC could continue to have the agency leaders bring enforcement cases and review nearly all administrative law judge decisions while disqualifying individual Commissioners under Williams when necessary.