Administrative law judges might be unconstitutional under the separation of powers because they should be subject to presidentially controlled removal.
In my last several posts (see here for links), I have written about the possibility of constraining the executive branch and regulation through statutory reforms. I have focused on reforms that might be desirable and that might actually be passed by a Republican Congress with a Republican President.
Of course, if one wanted to depart from the constraint of what might actually be enacted in the short term, one could contemplate more radical reforms that might be desirable.
For example, one serious problem with present administrative law is that it allows agencies to adjudicate matters on a case by case basis. These adjudications decide not only matters of law, but also questions of fact. And while these adjudications are subject to judicial review, the factual findings of the agency are reversed only if they lack substantial evidence and the legal findings are reversed only if they fail Chevron deference. Thus, in a retrospective adjudication, agency officials, who are not independent, can decide matters on a case by case basis subject only to limited judicial review.
This arrangement could be reformed by using Article III administrative judges. At present, adjudications ordinarily are conducted by administrative law judges (ALJs) who do not have the constitutional protection of life tenure. Instead of employing ALJs, one could create a new position of administrative judge, who would be an Article III judge possessing life tenure. Significantly, if adjudications were conducted by Article III judges, the Constitution would prohibit their decisions from being reviewed and reversed by the administrative agency. Under current practice, administrative agencies often review and reverse such ALJ decisions.
As a consequence, administrative adjudications conducted by Article III administrative judges would be independent. In such a world, the agency could not use its adjudicatory function to pursue policy. Instead, it would have to employ rules to exercise policy. This would provide agencies with additional incentives to use rules rather than adjudications.
Moreover, one might combine these policy reforms with the elimination of Chevron and Seminole Rock deference, which respectively confer deference on agency interpretations of statutes and rules.
The combination of eliminating such deference along with establishing Article III Administrative Courts would go a long way towards subjecting administrative agencies to a strong version of the rule of law. Yet, it would not prevent the administrative state from operating, because agencies could continue to issue rules and agency adjudications would not crowd the ordinary federal courts, but instead would be in special Article III administrative courts.