Document ID: ./input/supremecourt_opinions/opinions/17pdf/17-130_4f14.pdf
Page Number: 38.0

4 

LUCIA v. SEC 

SOTOMAYOR, J., dissenting 

§557(b).  The  Commission  can  review  any  initial  decision 
upon  petition  or  on  its  own  initiative.    15  U. S. C.  §78d– 
1(b).  The Commission’s review of an ALJ’s initial decision 
is  de novo.    5  U. S. C.  §557(c).    It  can  “make  any  findings
or conclusions that in its judgment are proper and on the 
basis  of  the  record.”    17  CFR  §201.411(a)  (2017).    The 
Commission  is  also  in  no  way  confined  by  the  record  ini-
tially  developed  by  an  ALJ.  The  Commission  can  accept
evidence  itself  or  refer  a  matter  to  an  ALJ  to  take  addi-
tional  evidence  that  the  Commission  deems  relevant  or 
necessary.  See ibid.; §201.452.  In recent years, the Com-
mission has accepted review in every case in which it was 
sought.  See  R.  Jackson,  Fact  and  Fiction:  The  SEC’s 
Oversight  of  Administrative  Law  Judges  (Mar.  9,  2018),
http://clsbluesky.law.columbia.edu/2018/03/09/fact-and-fiction-
the-secs-oversight-of-administrative-law-judges/ 
last 
visited June 19, 2018).  Even where the Commission does 
not  review  an  ALJ’s  initial  decision,  as  in  cases  in  which 
no party petitions for review and the Commission does not 
act sua sponte, the initial decision still only becomes final
when  the  Commission  enters  a  finality  order.    17  CFR. 
§201.360(d)(2).  And  by  operation  of  law,  every  action
taken by an ALJ “shall, for all purposes, . . . be deemed the 
action of the Commission.”  15 U. S. C. §78d–1(c) (empha-
In  other  words,  Commission  ALJs  do  not 
sis  added). 
exercise  significant  authority  because  they  do  not,  and 
cannot, enter final, binding decisions against the  Govern-
ment or third parties.

(as 

The  majority  concludes  that  this  case  is  controlled  by 
Freytag  v.  Commissioner, 501 U. S. 868 (1991).  See ante, 
at 6.  In Freytag, the Court suggested that the Tax Court’s
special  trial  judges  (STJs)  acted  as  constitutional  officers
even  in  cases  where  they  could  not  enter  final,  binding 
decisions.  In  such  cases,  the  Court  noted,  the  STJs  pre-
sided over adversarial proceedings in which they exercised 
“significant  discretion”  with  respect  to  “important  func-