E.D. Trying To Curb Judges’ Authority in Appeals, Critics Say

By Julie A. Miller — June 06, 1990 8 min read

Washington--Education Department officials are trying to limit the authority of the administrative law judges who hear appeals from state education agencies and school districts accused of using federal funds improperly, critics charge.

Though Administration officials declined to comment on the charge, arguments made by lawyers for the Education and Justice departments in legal proceedings appear to bolster the contention.

The Administration won a victory last week, when a federal district judge here dismissed a suit challenging the Education Department’s assertion of authority over the administrative judges.

The judges were appointed last year, when the department began using a new appeals system created by the Congress in response to complaints that the old Education Appeal Board was a “rubber stamp” for the department’s audit decisions.

The 1988 law, which was vigorously opposed by the department, also restricted the agency’s ability to recover allegedly misspent federal funds from state and local officials. Officials had complained for years that they had been defenseless against department auditors. (See Education Week, June 3, 1987.)

Members of the Congress said at the time the law was drafted--and reiterated in a recent letter to Secretary of Education Lauro F. Cavazos--that their intent was to install judges who would be independent of the rest of the Education Department.

But Administration officials have argued that the judges are simply Education Department employees who cannot overrule other agency officials, and that they cannot force the department to turn over documents demanded by the subject of an audit.

This position was set out in a brief filed by the Justice Department in the case dismissed last week, and in arguments made by an Education Department lawyer in another case.

Michael Brustein, a lawyer who represents defendants in many audit cases and who lobbied for the 1988 law, contended in an interview that the department’s office of general counsel is trying to undermine the judges’ independence.

A source in the judges’ office confirmed that the administrative law judges also view the position taken by the general counsel’s office as a threat to their independence, and that one or more judges might resign if that position is ultimately upheld.

The source added that the office’s physical proximity to those of other Education Department officials creates an “uncomfortable situation.”

The situation has also stirred concern on Capitol Hill.

“We are very concerned that no action be taken either to limit the authority of the ALJ’s or to affect in any way the necessary independence of the judges,” three key members of the Education and Labor Committee said in a May 25 letter to Mr. Cavazos.

They are Representative Augustus F. Hawkins, the California Democrat who is chairman of the committee; Representative Bill Goodling of Pennsylvania, its ranking Republican and the primary sponsor of the audit-reform provisions; and Representative William D. Ford, the Michigan Democrat who is expected to assume the chairmanship when Mr. Hawkins retires later this year.

The letter asked that the judges’ office be moved out of the Education Department building, where they must share a law library with the general counsel’s office.

A Justice Department spokesman said officials there would not elaborate on the arguments made in their brief. A spokesman for the Education Department said that, after talking to several department officials, the agency had also decided not to comment.

The dispute over the judges’ authority surfaced publicly in an audit case against the Alabama Department of Education. The Education Department accuses the Alabama agency of improperly applying some $4.4 million it received under federal education programs.

Mr. Brustein, whose firm represents the state, contends that government documents requested by the defendants will show that their accounting method was approved by officials at the Department of Health and Human Services, who continued to handle such issues for some time after the Education Department was carved out of the old Department of Health, Education, and Welfare in 1980.

Education and Justice Department officials argue, however, that the documents are internal, “deliberative” memoranda that are exempted from disclosure under established legal precedents.

Also, they argue, the documents are protected by the concept of attorney-client privilege, which applies to government agencies and lawyers in their employ.

Administrative Law Judge Daniel R. Shell, who was assigned to the Alabama case, ordered the Education Department to produce the documents so that he could rule on whether they were “privileged.”

According to court documents, the general counsel’s office refused, and Judge Shell, who could not be reached for comment last week, encouraged Alabama’s lawyers to ask a federal judge to enforce the order on his behalf.

In a lengthy brief, the Justice Department argued that the administrative law judges do not have the authority to enforce a subpoena against the Education Department and that the matter is an “intra-agency dispute” between department officials that the Secretary should resolve.

U.S. District Judge Norma Holloway Johnson was to hear arguments on the subpoena issue last week. But the day before the scheduled hearing, she signed an order dismissing the case.

A clerk for Judge Johnson confirmed that she did not append an explanation of her decision to the order.

“The course of events represents a significant setback to the audit-resolution process envisioned by the Congress,” Mr. Brustein said. “The court’s action allows the Department of Education to ignore a lawfully issued subpoena and returns the audit resolution to the unfair advantages which the department took with litigants under the Education Appeal Board.”

Mr. Brustein noted that it was impossible to tell whether Judge Johnson based her decision on procedural or substantive grounds.

In addition to arguing that Judge Shell had overstepped his authority, and that the documents are indeed privileged, the Justice Department contended that it is improper for a party to the underlying audit dispute to represent the law judge in the subpoena action.

Further, the Justice Department argued that Alabama incorrectly sued a particular lawyer rather than the Education Department as a whole, and that the issue would be properly raised only in appealing the law judge’s ultimate decision on the case to the Secretary and then to federal courts.

Mr. Brustein said Alabama would appeal the dismissal in appellate court and initiate “other administrative proceedings” before Judge Shell.

Whatever the outcome of the case, it raises fundamental questions about the status of the Education Department’s administrative law judges.

The audit-reform provisions of the Hawkins-Stafford Elementary and Secondary School Improvement Act, which created the office, specify the judges’ qualifications and give them the authority to conduct hearings under the Administrative Procedures Act. That law addresses generally the authority of law judges, who are used by many agencies.

The education law also specifically gives the Education Department judges the power to set trial procedures, rule on the sufficiency of the department’s initial decision, decide whether a third party can participate in a case, determine the appropriate proportion of misspent funds to be recovered, and “apply to the appropriate court” to enforce subpoenas.

It states that the judges are department employees and that the Secretary will review their decisions.

However, neither the Hawkins-Stafford Act nor the Administrative Procedures Act specifies the degree of independence from the department that the judges are to have, and interested parties disagree on the correct interpretation of the statutes and relevant legal precedents.

In the lawmakers’ letter, they said they had “envisioned independent judges developing expertise in education law,” adding: “Simple justice dictates that the accuser of a violation of a law should not also act as judge or have influence over the judge.”

The Justice Department argued in the Alabama case, however, that the Attorney General “is empowered by federal statute to supervise and conduct all litigation involving the United States,” and other federal officials cannot enter legal battles without his permission unless specifically authorized to do so by another statute.

The Justice Department brief contends that an administrative judge “is an employee of the federal executive department or agency by which he is employed, and he is bound by all rules promulgated by that department or agency.”

Education Department lawyers have made similar arguments in this case and in at least one other, an audit dispute involving a Vermont district’s bilingual-education program.

In that case, a department lawyer contended last fall that Judge Shell was required to grant a requested postponement under regulations drafted by the department to implement the Hawkins-Stafford Act, and that he had no more authority than any other employee to declare a rule invalid.

Judge Shell concluded, however, that the rule was invalid because it was not based directly on the Hawkins-Stafford Act and because it improperly constricted the authority to regulate judicial procedures given law judges under the Administrative Procedures Act.

Judge Shell’s decision on the request--which he granted--argues that legal precedent has “held that offices of administrative law judges are, by their judicial independence, separated from the agency in which they serve so as to be considered authorities of their own.”

The Congress may ultimately have the last word.

Aides to the Education and Labor Committee said that no immediate legislative action is planned, but that intervention is likely if the department succeeds in significantly limiting the administrative law judges’ authority.

“Right now we are trying to clarify our intent for the department,” an aide to Mr. Hawkins said. “If the problem continues, we’ll want to hold hearings, get this all out in the open, and figure out how to really solve it.”

A version of this article appeared in the June 06, 1990 edition of Education Week as E.D. Trying To Curb Judges’ Authority in Appeals, Critics Say