Constitutional Limitations on Federal Government Participation in Binding Arbitration ( 1995 )

Constitutional Limitations on Federal Government
Participation in Binding Arbitration
The Appointments Clause does not prohibit the federal government from submitting to binding arbitra­
tion.
N or does any other constitutional provision or doctrine impose a general prohibition against the federal
government entering into binding arbitration, although the Constitution does impose substantial
lim its on the authority of the federal government to enter into binding arbitration in specific cases.
September 7, 1995
M e m o r a n d u m O p in io n f o r t h e A s s o c i a t e A t t o r n e y G e n e r a l
You have asked for our opinion as to whether the Constitution in any way
limits the authority of the federal government to submit to binding arbitration.1
Specifically, you have asked us to explain and expand on advice we issued on
September 19, 1994, in which we confirmed our earlier oral advice that “ the
Office of Legal Counsel no longer takes the view that the Appointments Clause,
U.S. Const, art. II, §2, cl. 2, bars the United States from entering into binding
arbitration.” Memorandum for David Cohen, Director, Commercial Litigation
Branch, Civil Division, from Dawn Johnsen, Deputy Assistant Attorney General,
Office of Legal Counsel, Re: Binding Arbitration (Sept. 19, 1994).2 Below, we
reiterate this conclusion and, pursuant to your request, set forth the reasoning by
which we reached it. In addition, we consider, again pursuant to your request,
the various other constitutional provisions that may be implicated when the federal
government enters into binding arbitration. We conclude that none absolutely bars
the federal government from taking such action. We should point out, however,
that Exec. Order No. 12778 remains in effect. See Civil Justice Reform, 56 Fed.
1 Several com ponents o f the Department o f Justice have submitted comments on the subject of binding arbitration.
See M emorandum for W alter Dellinger, Assistant Attorney General, Office o f Legal Counsel, from Carol DiBattiste,
Director, Executive Office for United States Attorneys, Re: Binding Arbitration Involving the Federal Government
as a Party (M ar. 1, 1995) ( “ EOUSA mem orandum ” ); M emorandum for W alter Dellinger, Assistant Attorney Gen­
eral, O ffice o f Legal Counsel, from Frank W. Hunger, Assistant Attorney General, Civil Division, Re: Constitu­
tionality o f Binding Arbitration Involving the Federal Government as a Party (Feb. 28, 1995) ( “ Civil Division
m em orandum ” ); M emorandum for Walter Dellinger, Assistant Attorney General, Office of Legal Counsel, from
Lois J. Schiffer, Assistant Attorney General, Environment and Natural Resources Division, Re: Binding Arbitration
Involving the Federal Government as a Party (Feb. 24, 1995) ( “ ENRD m emorandum” ).
2 The O ffice o f Legal Counsel has never issued an opinion on the matter. Then Assistant Attorney General for
the O ffice o f Legal Counsel William Barr, however, testified that the Appointments Clause would prohibit the govern-
m ent from entering into binding arbitration unless arbitrators were appointed by one of the methods described in
that Clause, which they typically are not. See Administrative Dispute Resolution Act o f 1989: Hearing Before the
Subcomm. on Oversight o f Gov’t Management o f the Senate Comm, on Governmental Affairs, iO lst Cong. 86 (1989)
(statem ent o f Assistant Attorney General W illiam P. Barr); Administrative Dispute Resolution Act: Hearings on H.R.
2497 Before the Subcomm. on Admin. Law and Gov’t Relations o f the House Comm, on the Judiciary, 101st Cong.
38 (1990) (statem ent o f Assistant Attorney General William P. Barr). In addition, the Civil Division has issued
a m anual entitled Guidance on the Use o f Alternative Dispute Resolution fo r Litigation in the Federal Courts (1992).
That m anual asserted that “ [t]he Government cannot enter into agreements to participate in ‘binding* arbitration.”
Id. at 4. The legal basis cited for this assertion was the Appointments Clause. Id. at 4 & n.8.
208
Constitutional Limitations on Federal Government Participation in Binding Arbitration
Reg. 55,195 (1991). That order forbids litigation counsel for federal agencies from
seeking or agreeing to enter into binding arbitration. Id. § 1(c)(3). Therefore, while
a constitutionally valid statute may compel litigation counsel to enter into binding
arbitration, litigation counsel may not voluntarily agree to binding arbitration.3
I. Background
Neither term in the phrase “ binding arbitration” bears a settled meaning. First,
“ arbitration” may be a very different exercise in different contexts and cases
because there are no universally applicable rules of practice, procedure, or evi­
dence governing the conducting of arbitration. In addition, there is no standard
as to whether arbitration is to be conducted by a single arbitrator or by a panel
of arbitrators or as to the method for selecting the individuals who serve in that
capacity.4 Moreover, arbitration may be voluntary — in that both parties have
agreed to resolve their dispute by this method — or compulsory — in that some
other requirement such as a statute compels the parties to resolve their dispute
by this method. Second, it is not at all clear what exactly is meant by referring
to an arbitration as “ binding.” We take this to mean that judicial review of the
arbitral decision is narrowly limited, as opposed to non-binding arbitration in
which each party remains free to disregard any arbitral ruling. The limitation on
judicial review could take numerous forms. It may mean that there is to be no
review of an arbitral decision. Alternatively, it may mean that an arbitral decision
is reviewable only under a very limited standard, such as fraud by the arbitrator(s)
or arbitrary and capricious decision making. Because of this indeterminacy, it is
3The President’s power is at its lowest ebb where the President issues an executive order that is contrary to
other law. See Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952). For this reason, we doubt that Exec.
O rder No. 12778 is meant to forbid entering into binding arbitration where there is a statutory or other legal obligation
to do so. So, for instance, if the Federal Arbitration Act, 9 U.S.C. §§ 1-6 were to require the enforcement o f a
contractual binding arbitration provision, we would not interpret Exec. Order No. 12778 as attempting to override
this statute.
Because your request focuses on the constitutional issues that might arise in connection with binding arbitration,
we do not regard it as necessary to determine whether, setting aside Exec. Order No. 12778, the executive is author­
ized to enter into binding arbitration as part o f a contract. Nevertheless, we point out that the President and the
executive branch have broad authority to negotiate for o r agree to contractual terms that they view as advancing
the federal governm ent's various interests. In a given case, this authority may stem from the Constitution, the specific
statute authorizing the President or an executive branch official to enter into a contract, or from a broader statutory
authorization. See generally 40 U.S.C. §486; Authority to Issue Executive Order on Government Procurement, 19
Op. O.L.C. 90(1995).
Another threshold inquiry is whether there is a basis for bringing a claim against the government. The United
States is immune from suit except where it consents to be sued. See, e.g.. United States v. Lee, 106 U.S. 196(1882); Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 411-12 (1821). The waiver o f sovereign immunity must be
express. See, e.g., Department o f Energy v. Ohio, 503 U.S. 607 (1992). Moreover, only Congress m ay waive sovereign
immunity; the executive may not waive this immunity, such as through consenting to binding arbitration. See United
States v. Shaw, 309 U.S. 495, 501 (1940). The three most significant statutory waivers of sovereign immunity are
the Administrative Procedures Act, 5 U.S.C. §702, the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680,
and the Tucker Act, 28 U.S.C. §§ 1346(a), 1491. W hether any claim is encompassed within one of these or any
other express waiver o f sovereign immunity depends upon the specific claim asserted.
4Typically, arbitrators either are professional arbitrators or possess some expertise in the subject matter o f the
specific arbitration wherein they act. Throughout this memorandum, we assume that they are selected to arbitrate
particular disputes on a case-by-case basis in the manner o f independent contractors.
209
Opinions o f the Office o f Legal Counsel in Volume 19
not possible to draw many specific conclusions. We are able, however, to offer
generalizations and guidance pertaining to participation by the federal government
in the various forms that binding arbitration may take.
II. The Appointments Clause
A. Whether Arbitrators Are Officers of the United States
To understand why the assertion that the Appointments Clause prohibits the
government from entering into binding arbitration is not well-founded, it is nec­
essary first to examine the requirements of the Appointments Clause itself. The
Appointments Clause provides that
[the President,] shall nominate, and by and with the Advice and
Consent of the Senate, shall appoint Ambassadors, other public
Ministers and Consuls, Judges of the supreme Court, and all other
Officers of the United States, whose Appointments are not herein
otherwise provided for, and which shall be established by Law: but
the Congress may by Law vest the Appointment of such inferior
Officers, as they think proper, in the President alone, in the Courts
of Law, or in the Heads of Departments.
U.S. Const, art. II, §2, cl. 2. The Appointments Clause sets forth the exclusive
mechanisms by which an officer of the United States may be appointed. See
Buckley v. Valeo, 424 U.S. 1, 124-37 (1976) (per curiam). The first issue to be
resolved is, who is an “ officer” within the meaning of the Constitution and there­
fore must be appointed by one o f the methods set out in the Appointments Clause?
Not everyone who performs duties for the federal government is an officer
within the meaning of the Appointments Clause. The requirements of the Appoint­
ments Clause apply only where an individual is appointed to an “ office” within
the federal government. From the early days of the Republic, the concepts of
“ office” and “ officer” have been understood to embrace the ideas of “ tenure,
duration, emolument, and duties.” United States v. Hartwell, 73 U.S. (6 Wall.)
385, 393 (1867). Because Hartwell has long been taken as the leading statement
of the constitutional meaning o f “ officer,” 5 that statement is worth repeating in
full:
5 In an opinion discussing an Appointments Clause issue. Attorney General Robert F. Kennedy referred to Hartwell
as providing the “ classical definition penaining to an officer.” Communications Satellite Corporation, 42 Op. A tt’y
Gen. 165, 169 (1962). Hartwell itself cited several earlier opinions, including United States v. Maurice, 26 F. Cas.
1211 (C.C.D. Va. 1823) (No. 15,747) (M arshall, Circuit Justice), see Hartwell, 73 U.S. at 393 n .f, and in turn
has been cited by num erous subsequent Suprem e Court decisions, mcluding United States v. Germaine, 99 U.S.
508, 511-1 2 (1878), and Aujjfmordt v. Hedden , 137 U.S. 310, 327 (1890). These latter two decisions were cited
with approval by the Court in Buckley, 424 U .S. at 125-26 & n.162.
210
Constitutional Limitations on Federal Government Participation in Binding Arbitration
An office is a public station, or employment, conferred by the
appointment of government. The term embraces the ideas of tenure,
duration, emolument, and duties.
The employment of the defendant was in the public service of
the United States. He was appointed pursuant to law, and his com­
pensation was fixed by law. Vacating the office of his superior
would not have affected the tenure of his place. His duties were
continuing and permanent, not occasional or temporary. They were
to be such as his superior in office should prescribe.
A government office is different from a government contract. The
latter from its nature is necessarily limited in its duration and spe­
cific in its objects. The terms agreed upon define the rights and
obligations of both parties, and neither may depart from them with­
out the assent of the other.
Id. at 393.
Hartwell and the cases following it specify a number of criteria for identifying
those who must be appointed as constitutional officers, and in some cases it is
not entirely clear which criteria the court considered essential to its decision.
Nevertheless, we believe that from the earliest reported decisions onward, the con­
stitutional requirement has involved at least three necessary components. The
Appointments Clause is implicated only if there is created or an individual is
appointed to (1) a position of employment (2) within the federal government (3)
that is vested with significant authority pursuant to the laws of the United States.
1. A Position o f Employment: The Distinction between Appointees and Inde­
pendent Contractors. An officer’s duties are permanent, continuing, and based
upon responsibilities created through a chain of command rather than by contract.
Underlying an officer is an “ office,” to which the officer must be appointed.
As Chief Justice Marshall, sitting as circuit justice, wrote: “ Although an office
is ‘an employment,’ it does not follow that every employment is an office. A
man may certainly be employed under a contract, express or implied, to do an
act, or perform a service, without becoming an officer.” Maurice, 26 F. Cas.
at 1214. Chief Justice Marshall speaks here of being “ employed under a con­
tract” ; in modem terminology the type of non-officer status he is describing is
usually referred to as that of independent contractor. In Hartwell, this distinction
shows up in the opinion’s attention to the characteristics of the defendant’s
employment being “ continuing and permanent, not occasional or temporary,” as
well as to the suggestion that with respect to an officer, a superior can fix and
then change the specific set of duties, rather than having those duties fixed by
a contract. 73 U.S. at 393.
211
Opinions o f the Office o f Legal Counsel in Volume 19
The Court also addressed the distinction between employees and persons whose
relationship to the government takes some other form in Germaine. There, the
Court considered whether a surgeon appointed by the Commissioner of Pensions
“ ‘to examine applicants for pension, where [the Commissioner] shall deem an
examination . . . necessary,’ ” Germaine, 99 U.S. at 508 (quoting Rev. Stat.
§ 4777), was an officer within the meaning of the Appointments Clause. The sur­
geon in question was ‘‘only to act when called on by the Commissioner of Pen­
sions in some special case” ; furthermore, his only compensation from the govern­
ment was a fee for each examination that he did in fact perform. Id. at 512. The
Court stated that the Appointments Clause applies to “ all persons who can be
said to hold an office under the government,” id. at 510, and, applying Hartwell,
concluded that “ the [surgeon’s] duties are not continuing and permanent and they
are occasional and intermittent.” Id. at 512. The surgeon, therefore, was not an
officer of the United States. Id.6
2. Appointment to a Position within the Federal Government. In addition,
Hartwell and the other major decisions defining “ Officers of the United States”
all reflect the historical understanding that the Appointments Clause speaks only
to positions within the federal government. The Appointments Clause simply is
not implicated when significant authority is devolved upon non-federal actors. In
Hartwell the Court stated that “ [a]n office is a public station, or employment,
conferred by the appointment of government.” 73 U.S. at 393. In holding that
the Appointments Clause applied in that case, the Court stressed that “ [t]he
employment of the defendant was in the public service of the United States.”
Id.; see also Germaine, 99 U.S. at 510 (founders intended appointment pursuant
to the Appointments Clause only for “ persons who can be said to hold an office
under the government about to be established under the Constitution” ). This
means that the delegation of federal authority to state officials can present no
Appointments Clause difficulties, because the individuals serve as state officials
rather than as federal officials.7 It is a conceptual mistake to argue that federal
6 Germaine clearly was discussing the concept o f "o ffic e r” in the constitutional, and not simply a generic, sense:
the alternative basis for the holding was that the surgeon was not an officer because he was appointed by the Commis­
sioner who, as the head o f a bureau w ithin the Interior Department, could not be a “ head o f Department,” with
the authority to appoint officers. Id. at 511.
7 The fram ers appear to have envisioned that state officials would enforce federal law. For exam ple, Madison
wrote,
eventual collection [of certain Federal taxes] under the immediate authority o f the Union, will generally
be made by the officers, and according to the rules, appointed by the several States. Indeed it is extremely
probable that in other instances, . . . the officers o f the States w ill be clothed with the correspondent
authority o f the Union.
212
Constitutional Limitations on Federal Government Participation in Binding Arbitration
laws delegating authority to state officials create federal “ offices,” which are then
filled by (improperly appointed) state officials. Rather, the “ public station, or
employment” has been created by state law; the federal statute simply adds federal
authority to a pre-existing state office.8 Accordingly, the substantiality of the dele­
gated authority is immaterial to the Appointments Clause conclusion.9 An analo­
gous point applies to delegations made to private individuals: the simple assign­
ment of some duties under federal law, even significant ones, does not by itself
pose an Appointments Clause problem.10
In our view, therefore, the lower federal courts have been correct in rejecting
Appointments Clause challenges to the exercise of federally-derived authority by
state officials,11 the District of Columbia City Council,12 qui lam relators under
the False Claims Act,13 and plaintiffs under the citizen suit provisions of the Clean
The Federalist No. 45, at 292 (James Madison) (Clinton Rossiter ed., 1961). The framers also seem to have acted
upon this understanding. The first Judiciary Act, enacted by the first Congress, required state magistrates and justices
of the peace to arrest and detain any criminal offender under the laws o f the United States. Ch. XX, §33, 1 Stat.
73, 91 (1789). This statute, in immaterially modified form, remains in effect. 18 U.S.C. §3041. At least two courts
have interpreted this statute to authorize state and local law enforcement officers to arrest an individual who violates
federal law. See United States v. Bowdach, 561 F.2d 1160 (5th Cir. 1977); Whitlock v. Boyer, 77 Ariz. 334, 271
P.2d 484(1954).
As discussed below, the delegation to private persons or non-federal government officials o f federal-law authority,
sometimes incorrectly analyzed as raising Appointments Clause questions, can raise genuine questions under other
constitutional doctrines, such as the non-delegation doctrine and general separation o f powers principles. Compare
Confederated Tribes o f Sileiz Indians v. United States, 841 F. Supp. 1479, 1486-89 (D. Or. 1994) (appeal pending)
(confusing Appointments Clause with separation o f powers analysis in holding invalid a delegation to a state gov­
ernor) with United States v Ferry County, 511 F. Supp. 546, 552 (E.D. Wash. 1981) (correctly dismissing A ppoint­
ments C lause argument and analyzing delegation to county commissioners under non-delegation doctrine).
8 This should be distinguished from the case where a federal statute creates a federal office— such as membership
on a federal commission that wields significant authority— and requires that a particular state officer occupy that
office. In this instance, Congress has actually created a federal office and sought to fill it, which is the prototype
of an Appointments Clause violation.
9 See Seattle Master Builders Ass’n v. Pacific Northwest Elec. Power & Conservation Planning Council, 786
F.2d 1359, 1365 (9th Cir. 1986) (“ because the Council members do not serve pursuant to federal law ,” it is “ immate­
rial whether they exercise some significant executive or administrative authority over federal activity” ), cert, denied,
479 U.S. 1059(1987).
>0One might also view delegations to private individuals as raising the same considerations as suggested by the
distinction drawn earlier between appointee and independent contractor— so long as the statute does not create such
tenure, duration, emoluments and duties as would be associated with a public office, the individual is not the occupant
of a constitutional office but is, rather, a private party who has assumed or been delegated some federal responsibil­
ities.
n See, e.g., Seattle Master Builders, 786 F.2d at 1364-66. The particular state officials at issue were serving
on an entity created by an interstate compact established with the consent o f Congress, but that fact is not significant
for Appointments Clause purposes. The crucial point was that “ [t]he appointment, salaries and direction” o f the
officials were “ state-derived” : “ the states ultimately empower the [officials] to c an y out their duties.” Id. at 1365.
The Supreme C ourt’s decision in New York v. United States, 505 U.S. 144 (1992), which held that Congress cannot
“ com m andeer” state officials to serve federal regulatory purposes, reinforces this conclusion. W here state officials
do exercise significant authority under or with respect to federal law, they do so as state officials, by the decision
and under the ultimate authority o f the state.
12 See Techworld Dev. Corp. v. D.C. Preservation League, 648 F. Supp. 106, 115-17 (D.D.C. 1986). Though
the court did not fully develop the point, we believe that the District o f Columbia stands on a special footing.
C ongress’s plenary authority to legislate for the District entails authority to establish a municipal government for
the District, the officers o f which are municipal rather than federal officers to whom the Appointments Clause simply
does not apply.
13 We believe that United States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 757-59 (9th Cir. 1993) (rejecting Appoint­
ments Clause challenge to False Claims Act), cert, denied, 510 U.S. 1140 (1994), reached the correct result but
Continued
213
Opinions o f the Office o f Legal Counsel in Volume 19
Water Act.14 The same conclusion should apply to the members of multinational
or international entities who are not appointed to represent the United States.15
3. The Exercise of Significant Authority. Chief Justice Marshall’s observation
that “ [although an office is ‘an employment,’ it does not follow that every
employment is an office,” Maurice, 26 F. Cas. at 1214, points to a third distinc­
tion as well — although not one that was at issue in Maurice itself. An officer
is distinguished from other full-time employees of the federal government by the
extent of authority he or she can properly exercise. As the Court expressed in
Buckley.
We think that the term “ Officers of the United States” as used
in Art. II, defined to include “ all persons who can be said to hold
an office under the government” in United States v. Germaine,
[means] that any appointee exercising significant authority pursuant
to the laws of the United States . . . must . . . be appointed in
the manner prescribed by [the Appointments Clause],
424 U.S. at 125-26 (emphasis added).16 In contrast, “ [e]mployees are lesser func­
tionaries subordinate to officers of the United States.” Id. at 126 n.162.
through an incorrect line o f analysis. See id. at 758 (Clause not violated because o f the relative modesty o f the
authority exercised by the relator). The better Appointments Clause analysis, in our view, is that o f the court in
United States ex rel. Burch v. Piqua Eng' g, Inc., 803 F. Supp. 1 15, 120 (S.D. Ohio 1992), which held that “ because
qui tam [relators] are not officers of the United States, the FCA does not violate the Appointments C lause.” We
disapprove the A ppointm ents Clause analysis and conclusion o f an earlier memorandum o f this Office, Constitu­
tionality o f the Qui Tam Provisions o f the False Claims Act, 13 Op. O.L.C. 207 (1989) (arguing that the qui tam
provisions violate the Appointments Clause).
14 Here, the court phrased its analysis in terms o f separation o f powers, but the challenge to the statute was,
at its core, based on the Appointments C lause. See Chesapeake Bay Found, v. Bethlehem Steel Corp., 652 F. Supp.
620, 624 (D. Md. 1987) (Buckley v. Valeo, 424 U.S. 1 (1976) (per curiam), “ does not stand for the proposition
. . . that private persons may not enforce any federal laws simply because they are not Officers o f the United
States appointed in accordance with Article II o f the C onstitution” ).
15 A t least where these entities are created on an ad hoc o r temporary basis, there is a long historical pedigree
for the argum ent that even the United States representatives need not be appointed in accordance with Article II.
See, e.g., A lexander Hamilton, The Defence No. 37 (Jan. 6, 1796), reprinted in 20 The Papers o f Alexander Hamilton
13, 20 (H arold C. Syrett ed., 1974)-
As to what respects the Commissioners agreed to be appointed [under the Jay Treaty with Great Britain],
they are not in a strict sense OFFICERS. They are arbitrators between the two Countries. Though in
the Constitutions, both o f the U[nited] States and o f most o f the Individual states, a particular mode of
appointing officers is designated, yet in practice it has not been deem ed a violation o f the provision to
appoint C om m issioners or special Agents for special purposes in a different mode.
The traditional view o f the Attorneys G eneral has been that the members o f international commissions hold “ an
office or em ploym ent em anating from the general treaty-making power, and created by it” and the foreign nation(s)
involved and that m embers are not constitutional officers. Office— Compensation, 22 Op. A tt’y Gen. 184, 186 (1898);
see generally Dames & Moore v. Regan, 453 U.S. 654 (1981); Harold H. Bruff, Can Buckley Clear Customs?,
49 W ash. & Lee L. Rev. 1309 (1992); Jim C. Chen, Appointments with Disaster: The Unconstitutionality o f the
Binational Arbitral Review under the United States-Canada Free Trade Agreement, 49 Wash. & Lee L. Rev. 1455(1992); W illiam J. Davey, The Appointments Clause and International Dispute Settlement Mechanisms: A False
Conflict, 49 W ash. & Lee L. Rev. 1315 (1992); Alan B. M orrison, Appointments Clause Problems in the Dispute
Resolution Provisions o f the United States-Canada Free Trade Agreement, 49 Wash. & Lee L. Rev. 1299 (1992).
16 See Appointments in the Department o f Commerce and Labor, 29 Op. A tt’y Gen. 116, 118-19, 122-23 (1911)
(official authorized to perform all the duties o f the Commissioner o f Fisheries, who was appointed by the President
and confirm ed by the Senate, was an officer, scientists, technicians, and superintendent o f mechanical plant in the
214
Constitutional Limitations on Federal Government Participation in Binding Arbitration
The distinction between constitutional officers and other employees is a long­
standing one. See, e.g., Burnap v. United States, 252 U.S. 512, 516—19 (1920)
(landscape architect in the Office of Public Buildings and Grounds was an
employee, not an officer); Second Deputy Comptroller o f the Currency— Appoint­
ment, 26 Op. Att’y Gen. at 628 (Deputy Comptroller of the Currency was “ mani­
festly an officer of the United States” rather than an employee). At an early point,
the Court noted the importance of this distinction for Appointments Clause anal­
ysis. See Germaine, 99 U.S. at 509.17
The Supreme Court relied on the officer/employee distinction in Freytag v.
Commissioner, 501 U.S. 868 (1991). In Freytag, the Court rejected the argument
that special trial judges of the Tax Court are employees rather than officers
because “ they lack authority to enter a final decision” and thus arguably are
mere subordinates of the regular Tax Court judges.18 Id. at 881. The Court put
some weight on the fact that the position of special trial judge, as well as its
duties, salary, and mode of appointment, are specifically established by statute;19
the Court also emphasized that special trial judges “ exercise significant discre­
tion” in carrying out various important functions relating to litigation in the Tax
Court. Id. at 882.
Bureau of Standards were employees rather than officers), Second Deputy Comptroller o f the Currency— Appoint­
ment, 26 Op. A tt'y Gen. 627, 628 (1908) ( “ The officer is distinguished from the employee in the greater importance,
dignity, and independence o f his position” ; official authorized to exercise powers o f the Comptroller o f the Currency
in the absence o f the Comptroller was clearly an officer).
We hasten to note that the exercise o f significant authority alone is not a sufficient condition to characterizing
a position as an office within the meaning o f the Appointments Clause. To be considered a position that must
be filled in conformance with the Appointments Clause, the position must also be one of employment within the
federal government. For a discussion o f this point, see infra section D.B.
17 The status o f certain officials traditionally appointed in modes identical to those designated by the Appointments
Clause is somewhat anomalous. For instance, low-grade military officers have always been appointed by the President
and confirmed by the Senate and understood to be “ Officers o f the United States” in the constitutional sense;
in Weiss v. United States, 510 U.S. 163, 171 (1994), the Supreme Court recently indicated its agreement with that
understanding. It is at least arguable, however, that the authority exercised by second lieutenants and ensigns is
so limited and subordinate that their analogues in the civil sphere clearly would be employees. There are at least
three possible explanations. (1) Congress may make anyone in public service an officer simply by requiring appoint­
ment in one o f the modes designated by the Appointments Clause. The Clause, on this view, mandates officer
status for officials with significant governmental authority but does not restrict the status to such officials. This
apparently was the nineteenth-century view. See, e.g., United States v. Perkins, 116 U S . 483, 484 (1886) (cadet
engineer at the Naval Academy was an officer because “ Congress has by express enactment vested the appointment
of cadet-engineers in the Secretary o f the Navy and when thus appointed they become officers and not em ploye[e]s” ).
(2) Certain officials are constitutional officers because in the early Republic their positions were o f greater relative
significance in the federal government than they are today. C f Buckley, 424 U.S. at 126 (postmasters first class
and clerks o f district courts are officers). (3) Even the lowest ranking military or naval officer is a potential com­
mander of United States armed forces in com bat— and, indeed, is in theory a potential commander o f large military
or naval units by presidential direction or in the event o f catastrophic casualties among his or her superiors.
IBIn fact, as the Court pointed out, the chief judge of the Tax Court can assign special trial judges to render
final decisions in certain types o f cases, a power that the government conceded rendered them, in those circumstances,
“ inferior officers who exercise independent authority.” The Court rejected the argument that special trial judges
could be deemed inferior officers for some purposes and employees for others. Id. at 882.
19 The text o f the Appointments Clause implies that offices in the sense o f the Clause must be established in
the Constitution or by statute. See U.S. Const, art. II, §2, cl. 2 (specifying certain officers and then referring to
“ all other Officers o f the United States, whose Appointments are not herein otherwise provided for, and which
shall be established by Law ” ).
215
Opinions o f the Office o f Legal Counsel in Volume 19
In contrast, as this Office has concluded, the members of a commission that
has purely advisory functions “ need not be officers of the United States” because
they “ possess no enforcement authority or power to bind the Government.” Pro­
posed Commission on Deregulation o f International Ocean Shipping, 7 Op. O.L.C.
202, 202-03 (1983). For that reason, the creation by Congress of presidential
advisory committees composed, in whole or in part, of congressional nominees
or even of members of Congress does not raise Appointments Clause concerns.
Because employees do not wield independent discretion and act only at the
direction of officers, they do not in their own right “ exercis[e] responsibility under
the public laws of the Nation,” Buckley, 424 U.S. at 131.20 Conversely, “ any
appointee” in federal service who “ exercis[es] significant authority pursuant to
the laws of the United States” must be an officer in the constitutional sense and
must be appointed in a manner consistent with the Appointments Clause.21 Id.
at 126.
To recapitulate, one who occupies a position o f employment within the federal
government that carries significant authority pursuant to the laws of the United
States is required to be an officer of the United States, and therefore to be
appointed pursuant to the Appointments Clause. Each one of the italicized terms
signifies an independent condition, all three of which must be met in order for
the position to be subject to the requirements of the Appointments Clause. We
now turn to consideration of whether arbitrators occupy a position of employment
in the federal government and exercise significant federal authority.
4. Arbitrators. It seems beyond dispute that arbitrators exercise significant
authority, at least in the context of binding arbitration involving the federal
government. However, arbitrators retained for purposes of resolving a single case
do not satisfy the remaining necessary conditions. They are manifestly private
actors who are, at most, independent contractors to, rather than employees of,
the federal government. Arbitrators are retained for a single matter, their service
expires at the resolution of that matter, and they fix their own compensation.
Hence, their service does not bear the hallmarks of a constitutional office—
tenure, duration, emoluments, and continuing duties. Consequently, arbitrators do
not occupy a position of employment within the federal government, and it cannot
be said that they are officers of the United States. Because arbitrators are not
officers, the Appointments Clause does not place any requirements or restrictions
on the manner in which they are chosen.
20That an em ployee may not exercise independent discretion does not, o f course, mean that his or her duties
may not encom pass responsibilities requiring the exercise o f judgm ent and discretion under the ultimate control
and supervision o f an officer. In Steele v. United States (No. 2), 267 U.S. 505, 508 (1925), the Supreme Court
noted that a “ deputy marshal is not in th e constitutional sense an officer o f the United States," yet “ is called
upon to exercise great responsibility and d iscretio n " in “ the enforcement o f the peace o f the United States, as
that is em braced in the enforcement of federal law.” But deputy marshals act at the direction o f “ the United States
marshal under whom they serve,” id, who is an officer in the constitutional sense.
21 See Appointment and Removal of Inspectors o f Customs, 4 Op. A tt’y Gen. 162, 164 (1843) (Congress may
not provide for the appointment o f “ any em ploye[e], coming fairly within the defmition o f an inferior officer of
the governm ent,” except by a mode consistent with the Appointments Clause).
216
Constitutional Limitations on Federal Government Participation in Binding Arbitration
Auffmordt compels this conclusion. That case involved a statute that entitled
an importer who was dissatisfied with the government’s valuation of dutiable
goods to demand a reappraisement jointly conducted by a general appraiser (a
government employee) and a “ merchant appraiser” appointed by the collector
of customs for the specific case. Despite the fact that the reappraisement decision
was final and binding on both the government and the importer, 157 U.S. at 329,
the Court rejected the argument that the merchant appraiser was an “ inferior
Officer” whose appointment did not accord with the requirements of the Appoint­
ments Clause. In describing the merchant appraiser, the Court said:
He is selected for the special case. He has no general functions,
nor any employment which has any duration as to time, or which
extends over any case further than as he is selected to act in that
particular case. . . . He has no claim or right to be designated,
or to act except as he may be designated. . . . His position is with­
out tenure, duration, continuing emolument, or continuous duties
. . . . Therefore, he is not an ‘officer,’ within the meaning of the
clause.
Id. at 326-27. Not only does Auffmordt compel our conclusion, the contrary posi­
tion— that an independent contractor or non-federal employee who exercises
significant governmental authority must be appointed pursuant to the Appoint­
ments Clause — would be inconsistent with the Germaine and Hartwell cases dis­
cussed above.22
Our conclusion is consistent with the Supreme Court’s classification of the inde­
pendent counsel as an inferior officer in Morrison v. Olson, 487 U.S. 654 (1988).
There the Court observed that “ [i]t is clear that appellant is an ‘officer’ of the
United States, not an ‘employee.’ ” Id. at 671 n.12. Significantly, the lone
authority the Court cited for this proposition was “ Buckley, 424 U.S. at 126, and
n. 162.” Id. At the page cited, the Buckley Court quoted and reaffirmed Germaine,
and in the footnote cited the Court reaffirmed both Germaine and Auffmordt.
Buckley, 424 U.S. at 126 & n.162. This coupled with Morrison's express approval
of Germaine, 487 U.S. at 670, strongly counsel against interpreting Morrison to
have scuttled the Auffmordt and Germaine definition of office, which treats tenure,
duration, emoluments, and continuing duties as necessary conditions.
22ENRD reads Auffmordt and Germaine as limited to “ judgments o f experts on areas within their expertise, as
opposed to policy or legal ju d g m en ts/' ENRD memorandum at 3. Apparently, ENRD’s position is that the negative
inference from the Appointments Clause is to be drawn except where an expert acts within the scope of his or
her expertise. In other words, the Appointments Clause prohibits any private actor from exercising significant
authority, unless the private actor is an expen who exercises significant authority within the scope o f his or her
expertise. While there may be strong policy reasons for wishing to restrict Auffmordt and Germaine in this way,
there is no basis in the Constitution for doing so. The text o f the Appointments Clause makes no reference to,
let alone an exception for, expen action. Furthermore, there is nothing in the Auffmordt or Germaine opinions them ­
selves that supports narrowing them in this way.
217
Opinions o f the Office o f Legal Counsel in Volume 19
We believe that the factors that make it “ clear” that an independent counsel
is an officer of the United States demonstrate that an arbitrator is not. The office
of independent counsel is created by statute. See 28 U.S.C. §§591-599. The inde­
pendent counsel’s compensation is fixed specifically by statute at the rate set forth
at 5 U.S.C. §5315 for level IV of the Senior Executive Service. Id. § 594(b).
All of the others listed as receiving this compensation are in the full-time employ­
ment of the federal government and, insofar as we are aware, are in fact officers
within the meaning of the Appointments Clause. See 5 U.S.C. §5315 (setting com­
pensation for, inter alia, assistant attorneys general). The independent counsel’s
operating and overhead expenses are fixed23 by statute and appropriation. 28
U.S.C. § 594(c) (fixing compensation of attorneys employed by an independent
counsel); id. § 594(1) (providing for administrative support, office space, and travel
expenses). Significantly, Congress is the exclusive source of funding for any oper­
ations undertaken by the independent counsel. In this way, Congress takes some
part in providing an ongoing definition to the office of independent counsel and
may exercise some degree of influence over the independent counsel. Indeed, as
the Court noted, Congress expressly retained oversight authority with respect to
the activities of independent counsels and provided for submission of reports by
independent counsels to congressional oversight committees. Morrison, 487 U.S.
at 664-65. In addition, the independent counsel occupies a position that is formally
within the federal government. That position is, according to the Supreme Court,
within the executive branch chain of command to at least some extent and subject
to oversight and control by the President and guidance of the Attorney General.
Id. at 685-92; 28 U.S.C. § 594(e). The independent counsel also may request and
receive the assistance of the Department of Justice. Id. § 594(d). The independent
counsel thus clearly occupies a position of employment within the federal govern­
ment. In fact, this point was so clear that Congress went out of its way expressly
to provide that the position of independent counsel would be “ separate from and
independent of the Department of Justice” for certain purposes. Id. §594(i).
Arbitrators share none of these material qualities. The position of arbitrator is
not created by a congressional enactment. Arbitrators set their own fee and charge
the client parties, including but not limited to the government, that fee. No appro­
priation is made specifically to support the operations or expenses of arbitrators.24
As a result, an arbitrator’s compensation even for a case involving the government
is not limited to the fee paid by the government and an arbitrator remains free
to turn to other sources for funding of his or her operations and expenses, subject
23By use o f the term “ f ix e d /' we mean to distinguish this schem e— in which Congress sets the independent
counsel’s salary and overhead— from one in which an arbitrator’s fee and overhead are determined by the arbitrator
and passed on to the federal government, even though the government may ultimately pay them from a specific
appropriation.
24 O f course, any fee that the government pays must ultimately come from appropriated funds. Nevertheless, the
fee is paid to an arbitrator not in the m anner o f an em ployee o f the government but rather as a non-government
actor w ho provides services to the government.
218
Constitutional Limitations on Federal Government Participation in Binding Arbitration
of course to conflict of interest and ethical limitations. In addition, arbitrators are
not subject to congressional oversight or to presidential control.
Finally, the statute creating the office of independent counsel also defines the
procedures by which the office may be terminated. Morrison, 487 U.S. at 664.
Arbitrators, by contrast, serve until the matter they are retained to resolve is com­
pleted; there is no statutory process for termination of their “ office.” This vividly
demonstrates that while there is an office underlying the position of independent
counsel, there is no similar office underlying one who acts as an arbitrator; there
is no process for terminating the office of an arbitrator because there is no office
to terminate.
This is not to say that it is impossible for a binding arbitration mechanism to
run afoul of the Appointments Clause. As indicated, arbitrators whose sole or
collective decisions are binding on the government exercise significant authority.
If any such arbitrator were to occupy a position of employment within the federal
government, that arbitrator would be required to be appointed in conformity with
the Appointments Clause. See Freytag, 501 U.S. at 880-82. Thus, if a federal
agency were to conduct binding arbitrations and to employ arbitrators whom it
provided with all relevant attributes of an office, all such arbitrators would be
required to be appointed in conformity with the Appointments Clause.
B. The Appointments Clause as a Bar against Delegations to Private Actors
We do not understand there to be any dispute that arbitrators are private rather
than government actors. See Davey, supra, at 1318 (“ no one would argue that
[arbitrators] are” officers of the United States). Instead, the position that the
Appointments Clause prohibits the government from entering into binding arbitra­
tion rests on a negative inference drawn from the Appointments Clause — specifi­
cally, that only officers of the United States appointed pursuant to the Appoint­
ments Clause may exercise significant federal authority. See, e.g., Civil Division,
U.S. Dep’t of Justice, Guidance on the Use o f Alternative Dispute Resolution fo r
Litigation in the Federal Courts 4 n.8 (1992) (“ Under the Appointments Clause,
[significant governmental] duties may be performed only by ‘Officers of the
United States,’ appointed in the constitutionally prescribed manner.” (citation
omitted)). This negative inference lacks textual support and is contrary to the con­
sistent interpretations of the Clause by the Supreme Court.
By its own terms, the Appointments Clause addresses only the permissible
methods by which officers may be appointed. The term officer has been defined
to mean one who occupies a position of employment within the federal govern­
ment that carries significant authority pursuant to the laws of the United States.
The Appointments Clause’s text says nothing about whether or what limits exist
on the government’s power to devolve authority on private or other non-federal
actors.
219
Opinions o f the Office o f Legal Counsel in Volume 19
Instead, what limits exist on the ability to delegate governmental authority to
private actors are encompassed within the non-delegation doctrine.25 The very
existence of the non-delegation doctrine strongly suggests that looking to the
Appointments Clause for limits on the federal government’s ability to delegate
authority to non-federal actors is a misguided enterprise. If the Appointments
Clause prohibited all delegations of significant federal governmental authority to
non-federal actors, there would be no need for a separate non-delegation doctrine
in that context. While some o f the most notable controversies under the non-dele­
gation doctrine have involved delegations from the federal legislature to the fed­
eral executive, see, e.g., Skinner v. Mid-America Pipeline Co., 490 U.S. 212(1989); Panama Ref. Co. v. Ryan, 293 U.S. 388 (1935), the doctrine has by no
means been limited to this context. The Supreme Court and the lower federal
courts have reviewed the delegation of significant federal governmental authority
to non-federal actors under the non-delegation doctrine. Moreover, the courts,
including the Supreme Court, have upheld such delegations without even hinting
that the Appointments Clause might be implicated. See, e.g., Thomas v. Union
Carbide Agric. Prods. Co., 473 U.S. 568 (1985) (upholding delegation to private
arbitrators); Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 (1940)
(upholding delegation of regulatory authority to private industry group); Kentucky
Horseman’s Benevolent & Protective Ass’n v. Turfway Park Racing Ass’n, 20
F.3d 1406 (6th Cir. 1994) (upholding delegation of regulatory authority to a state
and to private industry group); Nance v. EPA, 645 F.2d 701 (9th Cir. 1981)
(upholding delegation of authority under Clean Air Act to Indian tribe); First
Jersey Sec., Inc. v. Bergen, 605 F.2d 690 (3d Cir. 1979) (upholding delegation
of adjudicative authority to private industry group); Crain v. First Nat’l Bank,
324 F.2d 532, 537 (9th Cir. 1963) (“ While Congress cannot delegate to private
corporations or anyone else the power to enact laws, it may employ them in an
administrative capacity to carry them into effect.” ); cert, denied, 454 U.S. 108(1981); R.H. Johnson & Co. v. SEC, 198 F.2d 690 (2d Cir.) (upholding delegation
of adjudicative authority to private industry group), cert, denied, 344 U.S. 855(1952).26
The Supreme Court’s interpretations of the Appointments Clause actually refute
the negative inference that is sometimes asserted. The Court’s decision in
Auffmordt is especially compelling. There, the Court held that because the mer­
25 The application o f the non-delegation doctrine to binding arbitration is discussed more fully infra at section
W.C.
26 It is theoretically possible that the courts have upheld these delegations because the parties challenging them
have repeatedly failed to raise the Appointments Clause. Compare White v. Massachusetts Council o f Constr.
Employers, 460 U.S. 204 (1983) (upholding residency requirement for public works project against dormant Com­
merce Clause challenge) with United Bldg. and Constr. Trades v. Camden, 465 U.S. 208 (1984) (striking down
residency requirem ent for public svorks projects as violation o f Privileges and Immunities Clause). We would be
reluctant to place the numerous delegations so upheld on such a capricious footing absent a clear indication in
the C ourt’s Appointments Clause jurisprudence. While not all non-delegation litigants have raised Appointments
Clause challenges, som e have and, as we detailed in the preceding section, those challenges consistently have been
rejected.
220
Constitutional Limitations on Federal Government Participation in Binding Arbitration
chant appraiser— who stands formally and functionally in the same position as
an arbitrator in a binding arbitration involving the federal government— was a
private actor, the Appointments Clause did not apply and so upheld the statutory
delegation of arbitral authority to the merchant appraiser. In other words,
Auffmordt held that the Appointments Clause does not prohibit delegating signifi­
cant federal authority to private actors. The Court employed the same reasoning
to reject the Appointments Clause challenges in Germaine and Hartwell.
The argument asserting the negative inference from the Appointments Clause
relies on Buckley. We believe, however, that under its best reading Buckley reflects
and endorses our view that the Appointments Clause simply does not apply to
non-federal actors, and that the negative inference argument misreads the opinion.
First, Buckley cites both Germaine and Auffmordt approvingly. See 424 U.S. at125-26 & n.162. Second, in several of its statements of the definition of “ offi­
cers,” Buckley, sometimes citing Germaine explicitly, says that the term applies
to appointees or appointed officials who exercise significant authority under fed­
eral law, thus recognizing the possibility that non-appointees might sometimes
exercise authority under federal law. See, e.g., id. at 131 (“ Officers” are “ all
appointed officials exercising responsibility under the public laws.” ).
It is true that, at other points in its opinion, the Buckley Court used language
that, taken in isolation, might suggest that the Appointments Clause applies to
persons who, although they do not hold positions in the public service of the
United States, exercise significant authority pursuant to federal law. See id. at
141. However, we think such a reading of Buckley is unwarranted. So understood,
Buckley must be taken to have overruled, sub silentio, Germaine and Auffmordt—
cases upon which it expressly relies in its analysis, see id. at 125-26 & n.162 —
and its repeated quotation of the Germaine defmition of “ officer” as “ all persons
who can be said to hold an office under the government” would make no sense.
Not only does such a reading render Buckley internally inconsistent, it fails to
explain the Supreme Court’s continuing and unqualified citations to and reliance
upon Germaine. See Freytag, 501 U.S. at 881; Morrison, 487 U.S. at 672.
The apparently unlimited language of some passages in Buckley has a simpler
explanation: there was no question that the officials at issue in Buckley held posi­
tions of “ employment” under the federal government, and thus the question of
the inapplicability of the Appointments Clause to persons not employed by the
federal government was not before the Court.27 The post-Buckley Supreme Court
27 The weight o f scholarship that has considered the interplay o f Buckley with Hartwell, Germaine, and Auffmordt
accords with our approach. As one commentator has asserted:
The Buckley Court’s entire analysis is predicated upon its construction o f the appointments clause in the
context o f its ‘cognate’ separation-of-powers provisions. The decision, as in Germaine and the other
appointments clause cases, was concerned with determining the status o f an individual who w as employed
by the United States. The Court’s definition thus was employed to distinguish between classes o f federal
employees; it was not used to distinguish between federal and nonfederal employees. Since the two ques­
tions differ radically, it is hardly surprising that a standard helpful in resolving one leads to absurd results
when applied to the other.
Continued
221
Opinions o f the Office o f Legal Counsel in Volume 19
has often assessed the validity of statutes that would starkly pose Appointments
Clause issues if, in fact, the Court had adopted the position that wielding signifi­
cant authority pursuant to the laws of the United States, without more, requires
appointment in conformity with that Clause. In none of these cases has the Court
even hinted at the existence of an Appointments Clause issue. It is especially
telling that two of these decisions have involved forms of binding arbitration.
See Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568 (1985) (upholding
statutory requirement that registrants under a federal regulatory scheme submit
to binding arbitration conducted by a panel of arbitrators who are not appointed
by one of the methods specified in the Appointments Clause and are subject only
to limited judicial review); Schweiker v. McClure, 456 U.S. 188 (1982) (upholding
submission of dispute to binding, unreviewable determination by a single arbiter
who is a private actor); see also FERC v. Mississippi, 456 U.S. 742 (1982)
(upholding requirement that states enforce federal regulatory scheme relating to
utilities); Lake Carriers’ Ass’n v. Kelley, 456 U.S. 985 (1982) (mem.), a jf g 527
F. Supp. 1114 (E.D. Mich. 1981) (three-judge panel) (upholding statute that
granted states authority to ban sewage emissions from all vessels); Train v.
National Resources Defense Council, Inc., 421 U.S. 60 (1975) (construing provi­
sion of Clean Air Act that gave states authority to devise and enforce plans for
achieving congressionally defined, national air quality standards).28 The Supreme
Court’s decision in Buckley, we conclude, did not modify the long-settled principle
that a person who is not an officer under Hartwell need not be appointed pursuant
to the Appointments Clause.
Prior writings of this Office have read Buckley more broadly as standing for
the proposition disavowed here — that is, that all persons exercising significant
federal authority, by virtue of that fact alone, must be appointed pursuant to the
Appointments Clause. We are aware of four instances in which our disagreement
with this understanding of Buckley would cause us to reach a different conclusion
on the Appointments Clause question presented. See Constitutionality o f Sub­
section 4117(b) o f Enrolled Bill H.R. 5835, the “Omnibus Budget Reconciliation
Act o f 1990," 14 Op. O.L.C. 154, 155 (1990) (statutory scheme under which
congressional delegations and physicians’ organizations of certain states exercise
Dale D. Goble, The Council and the Constitution: An Article on the Constitutionality o f the Northwest Power Plan­
ning Council, 1 J. Hnvtl. L. & Litig. 11, 53 (1986); see also Harold J. Krent, Fragmenting the Unitary Executive:
Congressional Delegations o f Administrative Authority Outside the Federal Government, 85 Nw. U. L. Rev. 62,
7 2 -7 3 n.26 (1990) (w hether one who exercises governmental authority is an officer is determined by looking to
the factors set out in Hartwell, Germaine, and Auffmordt).
28 It is sometimes asserted that the Supreme Court in Bowsher v. Synar, 478 U.S. 714 (1986), adopted the negative
inference from the Appointments Clause. W e see no basis for this proposition. That case simply did not involve
the A ppointm ents Clause. W hile the Court m akes a passing reference to the Appointments Clause, id. at 722-23,
we can find no passage in which the Court even appears to contemplate construing the Appointments Clause. The
question in Bowsher pertained to the limits o n the authority that the Comptroller General could exercise. The Comp­
troller General is appointed by the President and confirmed by the Senate, see 31 U.S.C. §703. This method o f
appointm ent conform s to the letter of the Appointments Clause. See U.S. C onst, art. II, § 2 , cl. 2. We cannot conceive
o f a reasonable reading o f Bowsher as eith er explicitly o r implicitly affirm ing— or, for that matter, rejecting—
the negative inference from the Appointments Clause.
222
Constitutional Limitations on Federal Government Participation in Binding Arbitration
“ significant authority” violates Appointments Clause); Constitutionality o f the
Qui Tam Provisions o f the False Claims Act, 13 Op. O.L.C. 207, 222 (1989)
(provisions of False Claims Act authorizing qui tam suits by private parties violate
Appointments Clause because qui tam relators exercise “ significant governmental
power” ); Representation o f the United States Sentencing Commission in Litiga­
tion, 12 Op. O.L.C. 18, 26-28 (1988) (private party acting as counsel for United
States agency must be appointed pursuant to Appointments Clause); Proposed
Legislation to Establish the National Indian Gaming Commission, 11 Op. O.L.C.
73, 74 (1987) (Appointments Clause problems raised where state and local offi­
cials given authority to waive federal statute). We now disavow the Appointments
Clause holdings of those precedents. To the extent that our reading of Buckley
is inconsistent with the Appointments Clause reasoning of other prior precedents
of this office, that reasoning is superseded. See Common Legislative Encroach­
ments on Executive Branch Authority, 13 Op. O.L.C. 248, 248-49 (1989). We
do not disavow these precedents lightly. These more recent citations, however,
are inconsistent and in some cases irreconcilable with prior opinions of the Attor­
neys General. Moreover, the Supreme Court has not overruled but has reaffirmed
Auffmordt, Hartwell, and Germaine, and we are bound to follow them.
III. The Take Care Clause
It has been suggested that the Take Care Clause prohibits the federal govern­
ment from entering into binding arbitration, because that clause requires all power
exercised by the executive branch to be exercised in a manner that the President
judges to be “ faithful.” This approach forbids the President’s judgment from
being subordinated to the judgment of an arbitrator. This suggestion misconstrues
the Take Care Clause. The Constitution establishes that “ [t]he executive power
shall be vested in a President of the United States of America,” U.S. Const, art.
II, § I, cl. 1; and that the President “ shall take Care that the Laws be faithfully
executed,” id. art. II, §3. The Supreme Court and the Attorneys General have
long interpreted the Take Care Clause as standing for the proposition that the
President has no inherent constitutional authority to suspend the enforcement of
the laws, particularly of statutes. See, e.g., INS v. Chadha, 462 U.S. 919, 953
n.16 (1983); Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524, 609-
13 (1838); The Attorney General’s Duty to Defend and Enforce Constitutionally
Objectionable Legislation, 4A Op. O.L.C. 55, 59 (1980) (opinion of Attorney Gen­
eral Civiletti) (“ The President has no ‘dispensing power.’ ” ). See generally Chris­
topher N. May, Presidential Defiance o f “Unconstitutional” Laws: Reviving the
Royal Prerogative, 21 Hastings Const. L.Q. 865, 869-74 (1994).
The Supreme Court’s decision in Kendall is illuminating. A dispute between
the postmaster general and several contractors had arisen. Congress passed a law
directing the Solicitor of the Department of the Treasury to resolve the dispute
223
Opinions o f the Office o f Legal Counsel in Volume 19
and requiring the postmaster general to pay whatever sum the Solicitor determined
was due. The postmaster general refused to comply with the Solicitor’s decision,
arguing that he “ was alone subject to the direction and control of the President,
with respect to the execution of the duty imposed upon him by this law; and
this right of the President is claimed, as growing out of the obligation imposed
upon him by the constitution, to take care that the laws be faithfully executed.”
37 U.S. at 612. The Court emphatically rejected this argument.29 Instead the Court
ruled that the Congress had waived sovereign immunity and submitted to whatever
resolution the Solicitor ordered. “ The terms of the submission was a matter resting
entirely in the discretion of congress; and if they thought proper to vest such
a power in any one, and especially as the arbitrator was an officer of the govern­
ment, it did not rest with the postmaster general to control congress, or the solic­
itor, in that affair.” Id. at 611 (emphasis added). Thus, Kendall stands for the
proposition that the Executive must comply with the terms of valid statutes and
that if a statute requires the Executive to submit to binding arbitration, the Execu­
tive must do so.
The Take Care Clause itself has no bearing on the question of whether the
Constitution permits the federal government to enter into binding arbitration; in
this context, it simply requires the President to “ take Care” that whatever valid
legal requirements might exist are followed.30 It is necessary to consider the
application of this principle in three situations. First, where a statute or other law
operates to require the government to submit to binding arbitration, the govern­
ment must submit. Kendall, 37 U.S. at 611. Second, where a statute or other law
forbids submission to binding arbitration, such as where it expressly vests discre­
tion in a particular government officer, submission to binding arbitration is forbid­
den. See Establishment of a Labor Relations System fo r Employees o f the Federal
Labor Relations Authority, 4B Op. O.L.C. 709, 715-16 (1980).31 Finally, where
the statutes and other laws are silent, the Take Care Clause simply has nothing
to say about whether the government may submit to binding arbitration.
29 “ This is a doctrine that cannot receive the sanction o f this court. . . . To contend that the obligation imposed
on the President to see the laws faithfully executed, implies a pow er to forbid their execution, is a novel construction
o f the constitution, and entirely inadmissible.” Id.
30 In the above-cited opinion. Attorney G eneral Civiletti did not ignore his power, and indeed obligation, to decline
to enforce o r decline to defend an unconstitutional statute, especially one violating the Constitution’s separation
o f legislative and executive powers. See The Attorney General's Duty to Defend and Enforce Constitutionally
Objectionable Legislation , 4A Op. O.L.C. at 56 (in such a situation, the Attorney General “ would be untrue to
his office if he w ere to do otherwise” ); Presidential Authority to Decline to Execute Unconstitutional Statutes , 18
Op. O.L.C. 199, 199 (1994) (“ there are circumstances in which a President may appropriately decline to enforce
a statute that he view s as unconstitutional” ).
3 ‘ W here a statute vests final decisionmaking authority in an executive branch official, that official must make
the decision and m ay n o t— absent congressional authorization— delegate that authority to another official or to
a private actor such as an arbitrator. See id. This case must be distinguished from the situation where the final
decision o f an executive official is subject to judicial review. Here, the official must make the decision in the first
instance. I f a challenge is subsequently brought, then absent som e specific statutory bar or other legal impediment,
there is nothing in the Take Care Clause th at would prohibit such an official from opting for binding arbitration
rather than adjudication before an Article in court. Currently, Exec. Order No. 12778 imposes an absolute prohibition
on opting for binding arbitration where litigation counsel is not otherwise compelled to submit to it.
224
Constitutional Limitations on Federal Government Participation in Binding Arbitration
IV. Other Article II Issues
In addition to recognizing the mandatory nature of the processes — such as the
Appointments Clause — that the Constitution expressly ordains, the Supreme
Court’s decisions have identified broader structural principles that separate and
limit the powers of the three branches of government. One important principle
is that Congress may not vest itself, its members, or its agents with ‘‘ ‘either
executive power or judicial power,’ ” Metropolitan Wash. Airports Auth. v. Citi­
zens for the Abatement o f Aircraft Noise, Inc., 501 U.S. 252, 274 (1991) (citation
omitted), and that Congress therefore may not intervene in the decision making
necessary to execute the law. Bowsher, 478 U.S. at 733-34; FEC v. NRA Political
Victory Fund, 6 F.3d 821, 827 (D.C. Cir. 1993), af f d on other grounds, 513
U.S. 88(1994).
“ The structure of the Constitution does not permit Congress to execute the laws;
it follows that Congress cannot grant to an officer under its control what it does
not possess.” Bowsher, 478 U.S. at 715, 726. Therefore, any scheme whereby
Congress — whether itself or through one of its committees, members, or agents —
appoints, retains removal authority over, or otherwise exercises any type of con­
tinuing authority over an arbitrator32 violates the constitutional anti-aggrandize­
ment principle. This principle extends to non-voting members. NRA Political Vic­
tory Fund, 6 F.3d at 827. Consequently, we do not believe that Congress could
make one of its members or agents an ex officio non-voting member of an arbitral
panel. Id.Legislation that is consistent with the Constitution’s express procedures and with
the Bowsher principle may nonetheless affect the constitutional separation of
powers by invading the constitutional roles of the executive or judicial branches.
“ [I]n determining whether [such an] Act disrupts the proper balance between the
coordinate branches, the proper inquiry focuses on the extent to which it prevents
the Executive Branch from accomplishing its constitutionally assigned functions.”
Nixon v. Administrator o f Gen. Servs., 433 U.S. 425, 443 (1977); cf. CFTC v.
Schor, 478 U.S. 833, 856-57 (1986) (“ the separation of powers question presented
in this litigation is whether Congress impermissibly undermined . . . the role of
the Judicial Branch” ). An affirmative answer to the question of whether Congress
has prevented the executive or judiciary from accomplishing its functions, further­
more, would not lead inexorably to the judicial invalidation of the statute: in that
case, the Court has stated, it would proceed to “ determine whether that impact
is justified by an overriding need to promote objectives within the constitutional
authority of Congress.” Nixon, 433 U.S. at 443.
32 Buckley and NRA Political Victory Fund establish that Congress violates the anti-aggrandizement principle if
it retains control over any member o f a nonlegislative body, even though a single member cannot alone take any
dispositive action. Thus, in .the arbitration setting, it would not matter for purposes of separation o f powers analysis
that Congress exercises control over only a single member of, for example, a three-member arbitral panel. Such
an arrangement would violate the anti-aggrandizement principle.
225
Opinions o f the Office o f Legal Counsel in Volume 19
In the context of binding arbitration, concerns under this general separation of
powers principle would arise if an arbitral panel were given authority that is con­
stitutionally committed to the executive. For example, the Supreme Court has held
that the President must retain at least some ability to control the exercise of federal
criminal prosecutorial power. See Morrison v. Olson, 487 U.S. 654 (1988). Thus,
we believe the general separation of powers principle would stand as a bar to
vesting an arbitration panel with unreviewable authority to direct or control the
prosecution or conduct of federal litigation by the executive branch’s attorneys.
Where, on the other hand, a dispute over the exercise of executive authority
is submitted to binding arbitration, the general separation of powers principle has
little force. The principle prohibits incursions that “ preventf] the Executive
Branch from accomplishing its constitutionally assigned functions.” Nixon, 433
U.S. at 443 (emphasis added), quoted in Morrison v. Olson, 487 U.S. 654, 695
(1988). The Constitution does not, however, assign to the executive branch exclu­
sive responsibility for resolving disputes over the exercise of its authority. The
very language of Article III providing for federal court jurisdiction over disputes
involving “ the United States” demonstrates that the Constitution does not require
that the authority to resolve such disputes over executive action be vested in the
executive branch itself. Resolution of such disputes by private arbitrators, there­
fore, does not in itself disturb the separation of powers that the Constitution
ordains.
In addition, the Constitution’s text and structure grant the President a number
of powers that are not, as such, subject to the general separation of powers prin­
ciple; examples include the commander in chief and foreign affairs powers. The
President may not be bound to the decision of an arbitrator in the exercise of
these constitutional powers, whether by statute or by purported agreement of the
President. Congress may not, for example, require the President to exercise the
President’s pardon power pursuant to the dictates of an arbitrator. See generally
United States v. Klein, 80 U.S. 128, 148 (1871); Ex Parte Garland, 71 U.S. (4
Wall.) 333, 380 (1866).
V. Article III
Article III of the Constitution, which establishes the federal judicial branch,
places at least some limitations on the ability of the federal government to submit
to binding arbitration. Article III provides that “ [t]he judicial Power of the United
States, shall be vested in one supreme Court, and in such inferior Courts as the
Congress may from time to time ordain and establish.” U.S. Const, art. Ill, § 1.
This “ judicial power” does not refer to all federal adjudications, however. See,
e.g., Freytag, 501 U.S. at 909 (Scalia, J., concurring) (“ there is nothing ‘inherently
judicial’ about ‘adjudication’ ” ). The Supreme Court has long wrestled with the
mandatory scope of the Article III vesting clause — that is, what federal adjudica­
226
Constitutional Limitations on Federal Government Participation in Binding Arbitration
tions must be committed to an Article III tribunal.33 It is clear, however, that
Article III prohibits at least some matters from being submitted to binding arbitra­
tion.
Early on, the Supreme Court settled on a general approach for resolving ques­
tions regarding Article Ill’s scope:
we do not consider congress can either withdraw from judicial cog­
nizance any matter which, from its nature, is the subject of a suit
at the common law, or in equity, or admiralty; nor, on the other
hand, can it bring under the judicial power a matter which, from
its nature, is not a subject for judicial determination. At the same
time there are matters, involving public rights, which may be pre­
sented in such form that the judicial power is capable of acting
on them, and which are susceptible of judicial determination, but
which congress may or may not bring within the cognizance of
the courts of the United States, as it may deem proper.
Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272,
284 (1855). In its generalities, this statement remains an accurate description of
the Court’s approach to Article III: there are three categories of determinations —
those that must be submitted to an Article III tribunal, those that may be submitted
to such a tribunal, and those that may not be submitted to such a tribunal.
The statement in Murray’s Lessee, however, has been taken further to establish
a so-called public rights doctrine. Under that doctrine, all federal adjudication
would be required to be conducted in an Article in forum except adjudication
involving a public right.34 Public rights adjudication could presumably take what­
ever form Congress prescribed. Use of this doctrine reached its highwater mark
in Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982)
(plurality opinion), which defined public rights as “ matters arising ‘between the
Government and persons subject to its authority in connection with the perform­
ance of the constitutional functions of the executive or legislative departments’ ”
and private rights as “ ‘the liability of one individual to another under the law
as defined.’ ” Id. at 67-68, 69-70 (quoting Crowell v. Benson, 285 U.S. 22, 50,
51 (1932)); see Thomas, 473 U.S. at 585 (characterizing Northern Pipeline).
More recently the Court has eschewed the public rights doctrine as set forth
in Northern Pipeline. The Court no longer accepts either the proposition that all
federal adjudications of private disputes must be submitted to an Article III tri­
33 Congress may, however, have power to decline to provide for any federal adjudication o f som e matters. See
generally Henry M. Hart, Jr., The Power o f Congress to Limit the Jurisdiction o f Federal Courts: An Exercise
in Dialectic, 66 Harv. L. Rev. 1362 (1953). If Congress has such a power, one notable exception would be the
Supreme C ourt's original jurisdiction, which we do not believe that Congress could eliminate. See U.S. Const, art.
HI, § 2 , cl. 2.
34 The genera] rule did not apply to courts for the territories or the District o f Columbia, which arguably perform
federal adjudication, or to the courts martial. Northern Pipeline Constr. Co., 458 U.S. at 64-70.
227
Opinions o f the Office o f Legal Counsel in Volume 19
bunal or that Article III has no force in cases between the government and an
individual. Thomas, 473 U.S. at 585-86. The Supreme Court dismissed the public
rights doctrine approach35 as formalistic and admonished that “ practical attention
to substance rather than doctrinaire reliance on formal categories should inform
application of Article III.” Id. at 587 (construing Crowell v. Benson, 285 U.S.
22 (1932)). The Court has thus directed that “ the constitutionality of a given
delegation of adjudicative functions to a non-Article III body . . . be assessed
by reference to the purposes underlying the requirements of Article III.” Schor,
478 U.S. at 847. The Court has identified two such purposes: the first is to fulfill
a separation of powers interest— protecting the role of an independent judiciary—
while the second is to protect an individual right— the right to have claims
decided by judges who are free of domination by other branches. Id. at 848.36
Under the separation of powers rubric, the Court has resisted adopting a for­
malistic approach in favor of one that looks to the actual effects on the constitu­
tional role of the Article III judiciary. The most significant factor is whether the
adjudication involves a subject matter that is part of or closely intertwined with
a public regulatory scheme. We consider the implications of the purposes of
Article III first in the context of a statute that mandates binding arbitration and
then in the context of consensual submission to binding arbitration.37
A. Statutorily Mandated Binding Arbitration
1. Separation o f Powers. The separation of powers purpose served by Article
III, Section 1 was explained in Schor: that vesting clause “ safeguards the role
of the Judicial Branch in our tripartite system by barring congressional attempts
‘to transfer jurisdiction [to non-Article III tribunals] for the purpose of emascu­
35 W hile the Court has abandoned the public rights doctrine , it occasionally uses the term “ public rights** as
a shorthand reference to matters that need not be vested in an Article III tribunal, particularly in the context of
the Seventh Am endm ent. See, e.g., Granfinanciera, SA . v. Nordberg, 492 U.S. 33 (1989); Schor, 478 U.S. at 853( “ this C ourt has rejected any attempt to m ake determinative for Article lH purposes the distinction between public
rights and private rights” ).
36 For the purposes o f this inquuy. Article HI also defines the scope o f another individual right, the Seventh
A m endm ent right to a jury trial. If an adjudication may be vested in a non-Article in tribunal, the Seventh Amend­
ment does not prohibit non-jury fact-finding:
[T]f [an] action must be tried under th e auspices o f an Article III court, then the Seventh Amendment
affords the parties a right to a jury trial whenever the cause o f action is legal in nature. Conversely, if
C ongress m ay assign the adjudication o f a statutory cause o f action to a non-Article III tribunal, then
the Seventh A m endm ent poses no independent bar to the adjudication o f that action by a nonjury factfinder.
Granfinanciera, 492 U.S. at 63-64.
37 The EN R D m emorandum refers to a third category— court-ordered binding arbitration. We believe that a court
m ay order binding arbitration only if it is specifically authorized to do so. W hen Congress expressly commits jurisdic­
tion to resolve cases o f a particular type to the Article m judiciary, the Article m judiciary may not rewrite the
jurisdictional statute to provide for final resolution by some other agent— any more than the executive may refuse
to carry out a valid statutory duty. Cf. Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50(1982); Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952); In re United States, 816 F.2d 1083 (6th
Cir. 1987). If a statute grants a court authority to order binding arbitration, the scheme is properly analyzed as
an exam ple o f statutorily mandated binding arbitration. See, e.g., 28 U.S.C. §§651-658 (authorizing federal district
courts to refer m atters to arbitration), 28 U .S.C. §§631, 636 (authorizing appointment of and establishing powers
o f U nited States M agistrate Judges).
228
Constitutional Limitations on Federal Government Participation in Binding Arbitration
lating’ constitutional courts and thereby preventing ‘the encroachment or
aggrandizement of one branch at the expense of the other.’ ” Id. at 850 (quoting,
respectively, National Ins. Co. v. Tidewater Co., 337 U.S. 582, 644 (1949) (Vin­
son, C.J., dissenting), and Buckley v. Valeo, 424 U.S. 1, 122 (1976) (per curiam)).
In reviewing assertions that a particular delegation to a non-Article III tribunal
violates Article III, the Court applies a general separation of powers principle;
that is, the Court looks to whether the practical effect of a delegation outside
Article III is to undermine “ the constitutionally assigned role of the federal
judiciary.” Schor, 478 U.S. at 851; see Thomas, 473 U.S. at 590 (looking to
whether a delegation outside Article III “ threatens the independent role of the
Judiciary in our constitutional scheme” ).
It is not possible to draw a broad conclusion regarding the validity of statutory
schemes that mandate binding arbitration, except to observe that some conceivable
schemes would not violate Article HI while other schemes could. See Thomas,
473 U.S. at 594. The Court has listed three factors that it will examine to deter­
mine whether a particular adjudication by a non-Article III tribunal, such as an
arbitration panel, impermissibly undermines the constitutional role of the judiciary.
The Court looks first to the extent to which essential attributes of judicial power
are reserved to Article III courts and the extent to which the non-Article HI forum
exercises the range of jurisdiction and powers normally vested in Article III courts;
second to the origin and importance of the right to be adjudicated; and third to
the concerns that drove Congress to place adjudication outside Article III. Schor,
478 U.S. at 851.
The first factor focuses on whether the subject matter entrusted to the non-
Article III tribunal is restricted to a “ particularized area of [the] law” or instead
is relatively broad-ranging. Id. at 852. The more broad-ranging the tribunal’s
authority, the greater the likelihood of an Article III conflict. Where a tribunal
has a particularized jurisdiction, however, granting the tribunal authority to enter­
tain additional matters in the nature of counterclaims is unlikely to yield an
impermissibly broad jurisdiction. Broadening the scope to reach pendant and
ancillary claims would raise serious concerns. Id. Also relevant is the range of
remedies that the tribunal is empowered to issue. The closer that range approxi­
mates the full range that might be issued by an Article III tribunal, the more
suspect the non-Article in tribunal appears. Most significantly, this factor requires
examination of the standard under which the determination of an arbitration panel
is reviewable. Id. at 853. In Thomas the statute that mandated binding arbitration
permitted judicial review only for “ fraud, misconduct, or misrepresentation.” 473
U.S. at 592. The Court held that this limited review “ preserves the ‘appropriate
exercise of the judicial function’ ” because it “ protects against arbitrators who
abuse or exceed their powers or willfully misconstrue their mandate under the
governing law.” Id. (quoting Crowell v. Benson, 285 U.S. 22, 54 (1932)).
229
Opinions o f the Office o f Legal Counsel in Volume 19
The second factor is the nature and importance of the right to be adjudicated
by the non-Article III tribunal. First and foremost, the Supreme Court has stated
that any attempt by Congress or the Executive to vest the final adjudication of
questions of constitutional law outside Article III courts38 would raise serious
constitutional concerns, see Thomas, 473 U.S. at 592, although we acknowledge
that the Court has never resolved this question. In any event, this is not to say
that constitutional claims may not ever be submitted to arbitration as an initial
matter. See, e.g., Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984). Rather, the
serious constitutional concerns that the Court has raised are avoided only if matters
of constitutional law must ultimately be subject to judicial review even if the
matter may not have initially been submitted to an Article III tribunal.39 To avoid
ruling unnecessarily on the difficult constitutional question, the Supreme Court
has required that Congress’s intent to preclude judicial review of constitutional
claims be clear before the Court will entertain the validity of such preclusion.
See, e.g., Webster v. Doe, 486 U.S. 592 (1988); Weinberger v. Salfi, 422 U.S.
749 (1975); Johnson v. Robison, 415 U.S. 361, 373-74 (1974). Without such clear
congressional intent, a statute that simply purports to prohibit judicial review will
not prohibit judicial review of constitutional questions.40
In addition to constitutional issues, there are other rights the Court views as
being “ at the ‘core’ of matters normally reserved to Article III courts.” Schor,
478 U.S. at 853. This category was set forth as far back as Murray’s Lessee and
includes “ suit[s] at common law, or in equity, or admiralty,” Murray’s Lessee,
59 U.S. at 284, as well as claims of a “ state-law character,” see Northern Pipe­
line, 458 U.S. at 100. Because these matters historically have been perceived to
lie at the core of Article HI, attempts to withdraw them from “ judicial cog­
nizance” are subject to “ searching” scrutiny. Schor, 478 U.S. at 854. The Court,
however, has rejected the contention that Article III works a blanket proscription
on entrusting the resolution of such matters to non-Article III tribunals. See id.
at 853 (separation of powers principles do not support “ according] the state law
character of a claim talismanic power in Article III inquiries” ). Instead, we are
to examine the specific adjudication vested outside Article III, focusing on whether
“ Congress has . . . attempted to withdraw from judicial cognizance” the deter­
380 f course, som e constitutional issues m ay arise that are not justiciable by an Article III court. See, e.g., Gold-
water v. Carter, 444 U.S. 996 (1979). This does not mean that no government actor wiJl make a determination
based on constitutional interpretation as to how to proceed. We would not, however, regard this as an "adjudication."
39 We do not mean to indicate that a party may never waive a constitutional claim or be b aned from asserting
a constitutional claim for procedural reasons such as failure to exhaust a statutory remedy, mcluding submission
to arbitration.
40 The Supreme Court has held questions relating only to “ the interpretation or application o f a particular provision
o f [a] statute to a particular set o f facts** are not themselves constitutional questions and that Congress may bar
judicial review o f such claims. See Robison, 415 U.S. at 367. The courts have been vigilant in rejecting attempts
by litigants to characterize as constitutional claim s, especially under the Due Process Clause, what are in fact chal­
lenges to “ the interpretation o r application o f a particular provision o f [a] statute to a particular set o f facts."
Id.; see, e.g., Sugrue v. Derwinski, 26 F.3d 8, 11 (2d Cir. 1994) (holding claimants cannot obtain judicial review
o f “ benefits determinations merely because those challenges are cloaked in constitutional term s” ), cert, denied,
515 U.S. 1102(1995).
230
Constitutional Limitations on Federal Government Participation in Binding Arbitration
mination of these core claims. Id. at 854. Here, we will look to the scope of
the non-Article III tribunal’s jurisdiction over core Article III claims, the extent
to which the scope of that jurisdiction is tailored to “ valid and specific legislative
necessities,” and the extent to which determinations made by the non-Article III
tribunal are subject to Article III review. Id. at 855.
On the other hand, when Congress creates rights outside Article I ll’s core, most
of the matters that arise in connection with these rights can be “ conclusively
determined by the Executive and Legislative Branches.” Thomas, 473 U.S. at 569,
589. The prototype of such non-core matters are rights created by statute as part
of or intertwined with a complicated regulatory scheme. See Schor, 478 U.S. at
853-54; Thomas, A12> U.S. at 589-90. Where this is the case, “ the danger of
[Congress or the executive] encroaching on the judicial powers is reduced.” Id.
at 589. Statutes mandating binding arbitration to resolve disputes that arise in
connection with these rights are unlikely to contravene Article III. That is not
to say that such schemes cannot run afoul of Article III. But see Gordon G. Young,
Public Rights and the Federal Judicial Power: From Murray’s Lessee through
Crowell to Schor, 35 Buff. L. Rev. 765, 792, 842 n.360 (1986). While the
Supreme Court has observed that the threat of encroachment is “ reduced,” in
such circumstances, it has rejected the contention that Article III has no force
in these cases. See Thomas, 473 U.S. at 589.
The third factor, the purpose underlying the departure from Article III adjudica­
tion, has little independent force. That factor looks to whether Congress has
attempted to “ emasculate” the judiciary by enacting a particular binding arbitra­
tion requirement. Thus, Article III prohibits Congress from “ creat[ing] a phalanx
of non-Article III tribunals equipped to handle the entire business of the Article
III courts without any Article III supervision or control.” Schor, 478 U.S. at 855.
Absent such a purpose, however, this factor alone would not limit Congress’s
authority to enact a mandatory binding arbitration scheme. See Thomas, 473 U.S.
at 590; Crowell, 285 U.S. at 46.
The factors listed above should not be considered in isolation from one another.
See, e.g., Thomas, 473 U.S. at 592 (holding limit on judicial review permissible
“ in the circumstances” of that statutory scheme). For instance, the limited review
upheld in Thomas applied to adjudication of a right that was “ closely integrated
into a public regulatory scheme.” Id. at 594. If the right at issue had been closer
to the core with which Article III is particularly concerned, such limited review
might not have been approved. All of this is by way of demonstration that Article
in does not draw bright lines and so does not permit more specific guidance
than we have set forth. Whether a particular statutory scheme impermissibly
231
Opinions o f the Office o f Legal Counsel in Volume 19
undermines the constitutional role of the judiciary can only be determined by
reviewing the facts and context of each such scheme.41
2. Individual Rights. Article III also safeguards the right of litigants to have
claims decided by “ judges who are free from potential domination by other
branches of government.” Schor, 478 U.S. at 848. It is doubtful that the govern­
ment possesses this individual right.42 Even if it does, this individual right may
be waived. See id. at 850-51; Thomas, 473 U.S. at 592-93. Where Congress
enacts a statute that requires the government to submit to binding arbitration, that
statute — as in the context of sovereign immunity — acts as a waiver of whatever
right the government might have to litigate in an Article III tribunal. The extent
to which private litigants may be statutorily compelled to submit to binding
arbitration is beyond the scope of the present inquiry.43
B. Consensual Binding Arbitration
Where there is no statute requiring parties to enter into binding arbitration, the
parties may nevertheless agree to do so. The same may be said of the government
when it is a party. Absent a statute to the contrary and assuming the availability
of authority to effect any remedy that might result from the arbitration, we per­
ceive no broad constitutional prohibition on the government entering into binding
arbitration. Such arrangements, however, are still technically subject to scrutiny
for conformity to the purposes underlying Article III. See Schor, 478 U.S. at 850-
51 (separation of powers violation may occur even though parties have consented).
It is difficult to see how the executive— litigating on behalf of the government—
impermissibly undermines the role of the judicial branch by agreeing to resolve
a particular dispute through binding arbitration. See Thomas, 473 U.S. at 591(danger of encroachment is at a minimum where parties consent to arbitration).44
As to Article I ll’s purpose of safeguarding the individual right to independent
adjudication, it is sufficient, where the parties consent, if the agreement preserves
Article HI review of constitutional issues and permits an Article III tribunal to
41 As the Supreme Court instructed in Schor, "d u e regard must be given in each case to the unique aspects
o f the congressional plan at issue and its practical consequences in light o f the larger concerns that underlie Article
E L ” 478 U.S. at 857.
42 G overnm ental interests are generally view ed under the heading of separation of powers. The assertion that Con­
gress im perm issibly invades the executive by compelling the executive to subm it to binding arbitration, for example,
is in essence an argument that Congress has violated the separation o f powers. We assessed these arguments in
sections III and IV.
43 W e note that in Thomas, the Court seem ed to indicate that private parties could be required to submit to binding
arbitration as long as the arbitration process satisfied the requirements o f due process. 473 U.S. at 592-93. The
C ourt had no occasion to define the specific requirements o f due process in the binding arbitration context because
the parties had w aived their due process objections. In addition, a requirement that private parties submit to binding
arbitration could not be imposed in such a way as to work an unconstitutional condition. See Martin H. Redish,
Legislative Courts, Administrative Agencies, and the Northern Pipeline Decision, 1983 Duke L.J. 197, 212-14; see
also Thomas, 473 U.S. at 596 n .l (Brennan, J., concurring).
44 If, how ever, the executive branch w ere to adopt and pursue a policy o f entering into binding arbitration in
a system atic m anner designed to undermine the judiciary's constitutional role, a serious constitutional question would
arise.
232
Constitutional Limitations on Federal Government Participation in Binding Arbitration
review the arbitrators’ determinations for fraud, misconduct, or misrepresentation.
Id. at 592. Such agreements should also describe the scope and nature of the
remedy that may be imposed and care should be taken to insure that statutory
authority exists to effect the potential remedy.
C. The Non-Delegation Doctrine
The previous discussion demonstrates that, at least in some instances, a non-
Article III tribunal may conduct federal adjudication. It might still be contended
that the constitutional non-delegation doctrine prohibits federal arbitral power from
being vested in private actors. The Supreme Court’s decisions in Auffmordt and
Kendall, however, strongly implied that there is no per se proscription on placing
arbitral authority in private actors. We view the Supreme Court’s opinion in
Thomas as finally rejecting the argument that the Constitution prohibits the delega­
tion of adjudicative authority in a private party. In Thomas the Court found no
particular relevance in the fact that the adjudication was to be performed by
“ civilian arbitrators, selected by agreement of the parties” as long as the cir­
cumstances do not indicate that this mechanism would “ diminish the likelihood
of impartial decisionmaking, free from political influence.” 473 U.S. at 590. As
with all delegations, there must be standards to guide the determination of the
recipient of the delegated adjudicative authority, but this is not an exacting require­
ment. See id. at 593; see generally Yakus v. United States, 321 U.S. 414 (1944).
As long as these two criteria— impartiality and discemable standards — are
present, the non-delegation doctrine does not represent a blanket prohibition of
final and binding resolution of a dispute by private actors.
VI. Due Process
The Due Process Clause, U.S. Const, amend. V, does not prohibit the final
resolution of claims, including claims involving the government, through binding
arbitration. For instance, claims for reimbursement through Part B of the Medicare
program, 42 U.S.C. §§ 1395j to 1395w-4, are subject to the final and unreviewable
determination of a hearing officer who is hired by the insurance carrier with which
the federal government contracts for administration of the program. See United
States v. Erika, Inc. 456 U.S. 201 (1982). The Supreme Court rejected the conten­
tion “ that due process requires an additional administrative or judicial review by
a Government rather than a carrier-appointed hearing officer.” Schweiker, 456
U.S. at 198 (1982). The Due Process Clause does not establish bright-line require­
ments or prohibitions; rather, “ due process is flexible and calls for such procedural
protections as the particular situation demands.” Morrissey v. Brewer, 408 U.S.
471,481 (1972).
233
Opinions o f the Office o f Legal Counsel in Volume 19
Whether an arbitrator with authority to issue a final, binding decision may be
a private actor or must be a government official, or whether any other facet of
an arbitration proceeding is consistent with the Due Process Clause, is determined
by reference to three relevant factors. Those factors are: the private interest that
will be affected by the official action; the risk of erroneous deprivation through
the procedures used and the probable value of additional or substitute safeguards;
and the government’s interest, including the function involved and the fiscal and
administrative burdens that the additional or substitute procedural requirement
would entail. See Schweiker, 456 U.S. at 198-200; Matthews v. Eldridge, 424
U.S. 319, 335 (1976). The precise requirements of these factors will vary
depending on the facts and circumstances of each specific arbitration. While they
may in some instance combine to require that a final, binding decision be vested
in a government official, Schweiker stands for the proposition that the Due Process
Clause does not per se prohibit vesting such a decision in a private actor.
VII. Conclusion
We reaffirm our conclusion that the Appointments Clause does not prohibit the
federal government from submitting to binding arbitration. In addition, we do not
view any other constitutional provision or doctrine as imposing a general prohibi­
tion against the federal government entering into binding arbitration. Nevertheless,
we do recognize that the Constitution imposes substantial limits on the authority
of the federal government to enter into binding arbitration in specific cases.
WALTER DELLINGER
Assistant Attorney General
Office of Legal Counsel
234