Structure of federal agencies
I. INTRODUCTION: WHAT ARE FEDERAL AGENCIES?
Federal agencies are specialized bodies created by a statute or executive order to carry out specific governmental functions. They are a central part of the administrative state and are involved in rulemaking, adjudication, and enforcement of federal laws.
II. STRUCTURE OF FEDERAL AGENCIES
The structure of federal agencies can vary, but they generally fall into two broad categories:
1. Executive Agencies
Located within the executive branch.
Headed by a single administrator (e.g., Secretary of Homeland Security).
Directly accountable to the President.
Examples: Department of Justice (DOJ), Department of Homeland Security (DHS), Environmental Protection Agency (EPA – though technically independent, it behaves like an executive agency).
2. Independent Regulatory Agencies
Created by Congress with statutory independence.
Often headed by multi-member commissions or boards, with fixed terms.
President may not remove members at will (only for cause).
Examples: Federal Trade Commission (FTC), Securities and Exchange Commission (SEC), Federal Communications Commission (FCC).
III. FUNCTIONS OF FEDERAL AGENCIES
Federal agencies have quasi-legislative, quasi-judicial, and executive functions:
Rulemaking: Agencies create binding regulations.
Adjudication: Agencies decide disputes involving regulatory violations.
Enforcement: Agencies investigate and penalize violations.
This delegation of power raises legal and constitutional questions about separation of powers and accountability.
IV. CASE LAW DISCUSSION: STRUCTURE & CONSTITUTIONALITY OF FEDERAL AGENCIES
1. Humphrey’s Executor v. United States, 295 U.S. 602 (1935)
Facts:
President Franklin D. Roosevelt removed a member of the FTC. The issue was whether the President could remove members of an independent agency at will.
Held:
The Supreme Court held that Congress could limit the President’s power to remove commissioners of independent regulatory agencies.
Distinguished between purely executive officers (removable at will) and quasi-legislative/quasi-judicial officers (removable only for cause).
Relevance:
Laid the foundation for independent agency structure.
Upheld insulation from political control for certain federal agencies.
2. Wiener v. United States, 357 U.S. 349 (1958)
Facts:
Involved the removal of a member of the War Claims Commission by the President without cause.
Held:
The Court ruled that Congress intended commissioners to be independent, and thus the President could not remove them at will.
Relevance:
Reinforced limited presidential control over independent agencies.
Highlighted the functional nature of agency roles: quasi-judicial functions demand independence.
3. Morrison v. Olson, 487 U.S. 654 (1988)
Facts:
Challenged the constitutionality of the Independent Counsel provisions of the Ethics in Government Act, including restrictions on presidential removal.
Held:
Upheld the constitutionality of the Independent Counsel.
Said that "good cause" removal restrictions did not violate separation of powers.
The Independent Counsel was an inferior officer, and the structure did not impede executive power excessively.
Relevance:
Confirmed that Congress can impose reasonable limits on removal.
Emphasized functional analysis of agency structure over formalistic lines.
4. Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB), 561 U.S. 477 (2010)
Facts:
The PCAOB was created under the Sarbanes-Oxley Act, and members were insulated from removal by multiple layers of protection (double for-cause removal). This was challenged as unconstitutional.
Held:
The Supreme Court struck down the "dual for-cause" removal protection as unconstitutional.
Ruled that multi-layered removal protections violate the President's control over the executive branch.
However, did not dismantle the agency, only severed the unconstitutional provision.
Relevance:
Important structural case limiting excessive independence of federal agencies.
Upheld unitary executive theory to an extent.
5. Seila Law LLC v. Consumer Financial Protection Bureau (CFPB), 591 U.S. ___ (2020)
Facts:
Challenged the CFPB’s structure — a single director, protected from at-will removal by the President.
Held:
The Supreme Court held that the CFPB’s structure was unconstitutional.
A single director with for-cause removal protection violates separation of powers.
Distinguished this case from Humphrey’s Executor, which dealt with multi-member commissions.
Relevance:
Limited the application of agency independence to multi-member bodies.
Raised questions about the legitimacy of power concentration in a single head.
6. Lucia v. SEC, 585 U.S. ___ (2018)
Facts:
An SEC administrative law judge (ALJ) issued sanctions. The issue was whether ALJs are "officers of the United States" who must be appointed under the Appointments Clause.
Held:
Held that SEC ALJs are “inferior officers”, not mere employees.
Must be appointed by the President, courts, or department heads.
Relevance:
Impacts the structure of adjudicatory functions within agencies.
Ensures that agency personnel with significant authority are properly appointed.
7. National Labor Relations Board (NLRB) v. Noel Canning, 573 U.S. 513 (2014)
Facts:
Questioned the constitutionality of President Obama’s recess appointments to the NLRB.
Held:
The appointments were invalid because the Senate was not actually in recess.
Ruled that appointments to federal agencies must comply with constitutional requirements.
Relevance:
Reinforces checks on executive power in agency appointments.
Affirms that proper procedures must be followed in structuring agencies.
V. COMPARATIVE SUMMARY OF CASES
| Case Name | Key Issue | Court’s Holding | Impact on Structure |
|---|---|---|---|
| Humphrey’s Executor | Removal of FTC commissioner | President can’t remove at will | Established agency independence |
| Wiener | Removal from War Claims Commission | Removal only for cause | Reinforced quasi-judicial independence |
| Morrison v. Olson | Validity of Independent Counsel | Constitutional with limits | Allowed limited removal protection |
| Free Enterprise Fund | Multi-layered removal protection | Unconstitutional | Limited excessive insulation |
| Seila Law | CFPB single-director structure | Unconstitutional | Concentrated power violates structure |
| Lucia v. SEC | Appointment of ALJs | Must follow Appointments Clause | Structural limits on agency adjudicators |
| NLRB v. Noel Canning | Recess appointments | Invalid | Enforced constitutional limits on agency formation |
VI. CONCLUSION
The structure of federal agencies is a complex blend of legislative creation, executive control, and judicial oversight. The Constitution allows delegation of powers to federal agencies, but imposes structural and procedural safeguards to:
Maintain accountability,
Protect separation of powers,
Ensure checks and balances,
Prevent excessive concentration of power.
Through case law, courts have shaped the boundaries of federal agency structure by:
Allowing independence where necessary (e.g., multi-member commissions),
Striking down unconstitutional features (e.g., dual for-cause removal),
Ensuring proper appointment and oversight mechanisms.
These cases demonstrate that while federal agencies are essential to modern governance, they cannot operate outside constitutional bounds.
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