In an opinion written by Justice Elena Kagan, the U.S. Supreme Court held in a 7-2 vote that the SEC’s administrative law judges are “Officers of the United States,” subject to the Appointments Clause of the Constitution. The case stemmed from a former investment adviser appealing sanctions brought by an administrative law judge. The SEC and the Court of Appeals for the D.C. Circuit had rejected the former investment adviser’s argument, holding that ALJs are not officers of the United States, but are instead mere employees — officials with lesser responsibilities who are not subject to the Appointments Clause. But the Supreme Court disagreed, comparing ALJs to “special trial judges” (STJs) of the United States Tax Court and finding that the SEC’s ALJs hold a continuing office established by law and exercise the same “significant discretion” when carrying out the same “important functions” as do STJs. In December, the SEC announced that it ratified its prior appointment of its ALJs. The Commissioners’ direct approval was meant to resolve any concerns that administrative proceedings presided over by the ALJs violate the Appointments Clause of the Constitution, the SEC said then. In the current case, the Supreme Court held that the appropriate remedy is a new “hearing before a properly appointed” official or a hearing held by the Commission itself. According to a Law360 article, with the Supreme Court finding ALJs are “inferior officers,” the judges will need to be appointed by the Commission in the future.