The White House decision to dump Deputy U.S. Solicitor General Andrew L. Frey as its nominee for the D.C. Court of Appeals averted a potential legal crisis.

When the White House announced Friday that it would nominate Georgetown University Law Center professor John Montague Steadman instead of Frey, the D.C. Judicial Nominations Commission was planning to meet and discuss bypassing President Reagan and going directly to Congress with its choice for the appeals court seat.

"There may or may not be a constitutional question of appointment power," said commission chairman Wiley Branton, explaining that he and the other commission members believed that the time allotted to the president to make his choice had run out.

The law gives the president 60 days to submit his nomination to Congress after the commission has given him the names of three prospective judges.

Since Congress had failed to vote on Frey's nomination before adjourning last year, the clock started ticking again in January.

After seven months of operating with only eight judges, the appeals court was getting even more backed up than usual.

"Some on the commission had decided we had no choice but to make a selection," Branton said.