Kennedy v. Braidwood Management, Inc.

“The text of the Appointments Clause ‘very clearly divides all its officers into two classes’: principal officers and inferior officers.” The Supreme Court, however, has struggled to articulate exactly where the “magic divider” between the two lies. Commentators and lower courts have fared no better. So when the Supreme Court took up Kennedy v. Braidwood Management, Inc. last term, it had an opportunity to lend clarity to this quagmire. In employing a two-prong, removal-and-reversal-focused framework, the Court certainly succeeded in doing so. At the same time, however, the Court left unclear how removal and reversal interact in determining whether an officer is principal or inferior.

At issue in Braidwood was the U.S. Preventive Services Task Force (Task Force). Originally codified in 1999, the Task Force is an “independent” board of “nationally recognized experts in prevention, evidence-based medicine, and primary care.” Its chief responsibility is to review and recommend preventive healthcare services, like counseling services and screening tests. If, after study, the Task Force recommends a preventive service with an “A” or “B” grade, health insurers must cover that service at no additional cost. To protect this science- and health-oriented mission, Congress prescribed that both the Task Force members and their recommendations must be “independent, and to the extent practicable, not subject to political pressure.” However, Congress did not completely insulate the Task Force from political actors; the Secretary of Health and Human Services (HHS Secretary) must delay implementation of approved preventive service requirements for no less than one year and may also issue regulations to “carry out” the provisions of the subchapter in which the aforementioned statutory provisions are found.

Nothing in the U.S. Code precisely states the relative position of the Task Force in the government, but statutes link it to the Agency for Healthcare Research and Quality (AHRQ), the Public Health Service (PHS), and HHS. For starters, AHRQ provides “ongoing administrative, research, and technical support for the operations of the Task Force.” The AHRQ Director also “convene[s]” the Task Force, and no other statute speaks to the appointment or removal of the Task Force members. AHRQ itself sits within PHS, which is housed within HHS (and supervised by the HHS Secretary). That structure derives from Reorganization Plan No. 3 of 1966, which “transferred” from the Surgeon General to the now-HHS Secretary the “functions” of PHS, as well as those of its “officers,” “employees,” and internal “agencies.”

Until 2023, the AHRQ Director appointed the Task Force members. Spying a potential Appointments Clause violation, a collection of small businesses and individuals (collectively, Braidwood) sued in the Northern District of Texas to enjoin enforcement of certain preventive service requirements. Braidwood argued, inter alia, that the Task Force was comprised of principal officers not appointed by the President with Senate confirmation, or, in the alternative, inferior officers not appointed by a department head. Judge O’Connor agreed with the first argument. After holding that the Task Force members were officers, not employees, he concluded that the Task Force was neither a formal part of HHS nor subject to any supervision through AHRQ (or any other agency), making its members principal officers. Though Judge O’Connor also held that the Task Force members were removable at will, this did not disturb his prior conclusion. He thus found the members’ appointments unconstitutional and subsequently vacated all Task Force actions since 2010.

While on appeal, the HHS Secretary ratified the Task Force’s appointments (as inferior officers), so the parties narrowed the dispute to whether the Task Force members were principal or inferior officers, and, in the latter case, whether ratification cured previous constitutional violations. Judge Willett, writing for the Fifth Circuit, noted that the Task Force members had “attributes of both inferior and principal officers” because they were “subject to at-will removal by the HHS Secretary” but their recommendations were “unreviewable” by higher-ranking officers. In resolving this tension, he concluded that the dispositive factor was the “absence of any supervision” over the Task Force and accordingly held that its members were principal officers.¹ He then refused to sever the constitutionally problematic provisions and declared the Task Force’s structure unconstitutional.

The Supreme Court reversed and remanded. Writing for the Court, Justice Kavanaugh² held that the Task Force members were subject to the HHS Secretary’s “supervision and direction,” making them inferior officers. Furthermore, Congress had vested the “power to appoint them” in the HHS Secretary, and the HHS Secretary had appropriately exercised that power, “consistent with the Appointments Clause.”

First, Justice Kavanaugh addressed whether the Task Force members were inferior or principal officers. Because the HHS Secretary “appoints the Task Force members,” and because “no statute restricts” their removal, he wrote, there was “no doubt” that the HHS Secretary could remove them at will. The HHS Secretary could also “combin[e] his at-will removal authority” with the “minimum 1-year” delay applied to all Task Force recommendations to effectively ensure no decision “contrary to his judgment” could “tak[e] effect.” Furthermore, a “collection” of three statutes³ also allowed the HHS Secretary to formally review Task Force recommendations.

Given the “general authority” to remove the Task Force members at will and the “more specific statutory authority” to “review and block” recommendations, Justice Kavanaugh held that precedent “preordain[ed]” the conclusion that the Task Force members were inferior officers. He refused to credit Braidwood’s textual arguments to the contrary, moreover, because doing so would “judicially construct a powerful new independent agency.”

Justice Kavanaugh then concluded that Congress had statutorily vested the HHS Secretary with appointment authority in “two steps.” First, lacking a “separate statutory provision specifying who is to appoint” the Task Force, the AHRQ Director’s power to “convene” the Task Force included the power to appoint its members. Second, Congress had “transferred” this power to the HHS Secretary through Reorganization Plan No. 3 of 1966. Justice Kavanaugh also invoked the canon of constitutional avoidance to bolster his reading vis-à-vis Braidwood’s reading, as only the latter would pose constitutional problems. Finally, because the HHS Secretary ratified the Task Force members’ appointments mid-litigation, Justice Kavanaugh deemed them constitutionally appointed.

Justice Thomas dissented.⁴ He began with the question of whether Congress had statutorily vested appointment power in the HHS Secretary, although he expressed his preference to “vacate and remand” to the Fifth Circuit, which had “skipped over” this analysis. Nevertheless, relying upon ordinary and dictionary meanings of “convene,” appointments in surrounding legislation, and the canon of constitutional avoidance,⁵ he argued that Congress failed to “explicit[ly]” provide the AHRQ Director power to appoint the Task Force members. But even if Congress did vest the AHRQ Director with this power, Justice Thomas also disputed that Reorganization Plan No. 3 of 1966 transferred it to the HHS Secretary on four counts: (1) the plan did not “transfer ‘functions’ that did not exist in 1966” (including appointing the Task Force), (2) the “functions” contemplated by the plan did not encompass “the appointment of officers,” (3) the AHRQ Director’s unconstitutional appointment power could not become constitutional by transferring it to the HHS Secretary, and (4) a statute transferring appointment power would “create[] constitutional problems.” He thus rejected the majority’s reasoning as creating an “oblique, two-step theory of vesting” unsupported by statutory text and undermined by the Constitution.

Justice Thomas’s constitutional analysis was straightforward. Because Congress had not explicitly vested the HHS Secretary with appointment power, the President retained the authority to appoint the Task Force members, subject to Senate confirmation. And because the “power to remove follow[ed] the power to appoint,” the removal power was also vested exclusively in the President. Moreover, in Justice Thomas’s view, “[t]he Task Force [was] not part of AHRQ,” so the HHS Secretary could not “meaningfully supervis[e]” it. Thus, he would have held that Congress created the Task Force “subject to the President’s control” but not to that of the HHS Secretary.

Compared to precedent, Braidwood’s focus on removal and reversal authority both narrows and clarifies the principal-inferior test. But how these two supervisory tools interact remains an open question even after Braidwood.

Before Braidwood, the Court had not settled on a particular framework for the principal-inferior test. Modern Appointments Clause jurisprudence began with Edmond v. United States, which concerned judges appointed to the Coast Guard Court of Criminal Appeals (CGCCA). In its analysis, the Court articulated the overarching difference between principal and inferior officers: inferior officers must be “directed and supervised” by a principal officer. The Court noted three methods of such supervision: (1) the Judge Advocate General’s (JAG) “administrative oversight” over the CGCCA, (2) the JAG’s ability to remove a judge “from his judicial assignment without cause,” and (3) the power of the Court of Appeals of the Armed Forces (CAAF) to “review[] every decision” of the CGCCA and thereby prevent the CGCCA from “render[ing] a final decision on behalf of the United State unless permitted” by another executive officer. Relying upon this combination of supervisory authority, the Court held that the CGCCA judges were inferior officers.

The Court spoke again (albeit briefly) in Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB). The PCAOB was a multi-member board within the SEC whose members had for-cause removal protections. Finding these protections unconstitutional, the Court severed them. After doing so, however, the Court had “no hesitation” in concluding that the SEC’s new authority to remove the PCAOB members at will, combined with its “other oversight authority” (including the power to approve and alter rules or sanctions that the PCAOB issued), rendered the PCAOB members inferior officers.

United States v. Arthrex, Inc. was the Court’s most recent foray into the Appointments Clause. In Arthrex, the Court confronted the appointments of Administrative Patent Judges (APJs) who sat on the Patent Trial and Appeal Board (PTAB). The Court noted that the Director of the Patent and Trademark Office (PTO Director) exercised “administrative oversight” over APJs, such as “control[ling] the decision [of] whether to institute [PTAB] review” and “select[ing] the APJs to reconsider the validity of the patent.” But the Court distinguished Edmond and held that APJs functioned as principal officers because, unlike the CGCCA judges, they were only subject to removal for cause, and no other executive officers meaningfully reviewed their decisions. While the Court disclaimed that it was articulating “an exclusive criterion for distinguishing between principal and inferior officers” via this analysis, a plurality went on to declare that the Constitution “forbids” restrictions that “insulate the decisions of APJs from [the PTO Director’s] direction and supervision.”

The Court’s conflicting threads throughout this line of caselaw confused scholars. For example, one analysis of Arthrex found that the test for adjudicative officers’ inferiority was simply whether they were “subject to having their decision overturned by a principal officer.” Another piece of scholarship thought similarly, but broadened its scope to all officers: “whether the officer is a principal or inferior officer is determined by the finality of his decisions.” A third believed a “hierarchy view” of inferiority prevailed over a scope-of-authority view. And a fourth concluded “significance” of the officer’s “duties” was the key distinction between principal and inferior officers.

Lower courts also disagreed about the appropriate test. For example, the D.C. Circuit held that Arthrex did not “‘clearly dictate’ a departure from [a] prior decision” that relied on three factors: “degree of oversight, removability, and final decision-making authority.” On the other hand, the Fifth Circuit in Braidwood considered two factors: “an officer’s removability” and “the extent to which the Task Force’s work can be supervised by a higher-ranking executive official” (the latter of which primarily involved decision-review). And in another case, the Third Circuit concluded that “[o]fficers with unreviewable authority are principal officers” without considering removability (thereby applying a one-factor test).

By embracing the removal-and-reversal analysis for determining inferior officer status, Braidwood clarified things markedly. Although Braidwood purported to fit comfortably within precedent, the Court departed somewhat from it by disregarding administrative oversight and considering only two prongs: (1) the HHS Secretary’s “general authority to remove Task Force members at will” and (2) his “more specific statutory authority to review and block their recommendations before they take effect.” The Court recharacterized precedent accordingly, focusing primarily on the removal and reversal powers. General administrative oversight authority, which featured prominently in both Edmond and Arthrex, is not even present in the Braidwood principal-inferior calculus. Indeed, the only capacity in which the administrative oversight of the Task Force appeared was in the dispute over whether the Task Force was part of PHS for statutory interpretation purposes.

This clarification is a welcome development for courts and scholars who have struggled post-Arthrex. The Court clarified that finality alone is not determinative, as the Third Circuit thought, but also eliminated the nebulous degree-of-oversight factor on which the D.C. Circuit had relied. In short, Braidwood established a more rigid, yet narrowed, framework for the principal-inferior test.

Thus far, only one case has applied Braidwood’s Appointment Clause analysis: Manis v. United States Department of Agriculture.⁶ Manis applied Braidwood to a new situation: whether a Judicial Officer in the Department of Agriculture was an unconstitutionally appointed principal officer. In his thorough treatment of the principal-inferior dispute, Judge Osteen Jr.⁷ read Braidwood to focus the analysis on removal and reversal authority. While he did briefly go on to discuss “other methods of ‘supervision and direction,’” he explicitly stated that the removal and reversal prongs were “dispositive.” And in his concluding paragraph of that subsection of his opinion, he eschewed other considerations and relied solely on the Secretary of Agriculture’s authority to remove a Judicial Officer at will and to review his decisions, even characterizing the issue as “straightforward” on these grounds. Manis thus supports the view that the Court has narrowed the test solely to removal and reversal authority.

But while it thus appears clear which two factors distinguish principal and inferior officers, it is unclear what the relationship is between those factors. One possibility is that removal and reversal powers operate as independent on-off switches, something like the following:

	At-Will Removal	Anything Else
Full Reversal Authority	Constitutional (Braidwood)	Constitutional (Arthrex)
Anything Else	?	Unconstitutional (Arthrex)

There is some support for the independent, on-off-switch view. For example, in Arthrex, after the Court held the PTO Director’s lack of both removal and review authority over the APJs unconstitutional, the plurality’s remedy allowed the PTO Director to “reach his own decision” without constraints, suggesting plenary review authority was necessary to render the structure constitutional.⁸ Furthermore, in summarizing Braidwood, the Eleventh Circuit in Walmart, Inc. v. Chief Administrative Law Judge of the Office of the Chief Administrative Hearing Officer seemed to think that the Supreme Court deemed reversal and removal authorities as “independent” of each other.

But there is also support for an interrelated, sliding-scale approach, in which courts jointly consider the removal and reversal authorities. For example, in Braidwood, the Court explained that the removal and reversal authorities were “mutually reinforcing means” of supervision and direction. The Court also noted that “at-will removal provides the [HHS] Secretary with a means of ensuring that no recommendation that he disapproves will take effect,” perhaps hinting at an interrelationship between the two authorities. And Arthrex characterized the test set out in Edmond as a more holistic “appraisal of how much power an officer exercises free from control by a superior.”

Neither view is so pragmatically dominant as to be the clear choice either. An on-off switch, like most bright-line rules, would likely be simpler for courts to administer and provide Congress with more clarity in structuring the government. On the other hand, a sliding-scale approach may better reflect the variety of ways Congress can confer removal and reversal powers. For example, the Court indicated in Collins v. Yellen that removal “for cause” confers more removal authority than removal for “inefficiency, neglect of duty, or malfeasance in office.” And in Edmond, the CAAF landed between no authority and complete authority to review the CGCCA’s findings (specifically, the CAAF would not “reevaluate the facts” if the record contained “some competent evidence” to support the result).

To hazard a guess, this Court’s formalist preferences in administrative law indicate that the Court would likely prefer an on-off switch to a sliding-scale approach. But ultimately, neither its precedent nor pragmatism definitively resolves which view should prevail. To be clear, however, this uncertainty surrounding the relationship of the two prongs is less a criticism of Braidwood and more an observation for future Appointments Clause jurisprudence. Even with the uncertainty, Braidwood’s two-prong analysis still represents a significant step toward a clearer framework for distinguishing between principal and inferior officers where the Court’s precedents failed (or declined) to do so before.