Sinking And Floating Liquidation

Much of the debate about the removal power focuses on practice after the Constitution was adopted. Of course, there is the so-called Decision of 1789. There is also the Decision of 1790, which created the Sinking Fund Commission. However, in the immediate years after the framing, the Decision of 1789 seemed to take hold. Fast-forward one hundred years, and there was the Decision of 1887, which created the Interstate Commerce Commission (ICC). As the Progressive Era unfolded, Congress began to create more multi-member commissions with removal protections. Myers v. United States found that the President had the absolute power to remove a single executive branch officer, but Humphrey’s Executor upheld tenure protections for FTC commissioners.

How should a court make sense of these competing traditions? For the first century, after ratification the Decision of 1789 seemed to suggest the President’s removal power could not be restricted. For the second century after ratification, the Decision of 1887 seemed to suggest that the President’s removal power could be restricted. But in the past two decades, the 1887 settlement has been eroded, and we are moving closer to the Decision of 1789.

During oral argument in Slaughter v. Trump, Justice Barrett offered a careful consideration of this chronology.

Barrett acknowledged that recent historical work “shows that independent agencies has a longer pedigree than maybe some thought originally.” But she maintained that the Sinking Fund Commission did not really establish a precedent for statutory removal restrictions. It was true that the Vice President and Chief Justice were appointed to the Commission by statute, and the President could not remove them. But the President could remove the other three members of the commission: the Secretary of State, the Secretary of the Treasury, and the Attorney General. Thus, the President could control a majority of the Commission. And in reality, Washington likely expected Alexander Hamilton to make all of the important decisions. Indeed that is exactly what would happen, so Washington had no need to fire anyone. Moreover, the Sinking Fund Commission, as well as the Revolutionary War Debt Commission, had “very, very limited authority.”

Justice Barrett asked Amit Argawal, counsel for Slaughter, to “assume, that I disagree with you about the history.” When Justice Barrett asks counsel to “assume” something, you know what she believes. Rather, Barrett said, the first “statutory removal restriction, like the inefficiency, neglect, malfeasance [standard] appeared in the 1887 with the ICC.”

Justice Barrett then turned to the topic of liquidation:

But let’s say that I think the liquidation argument throughout the 19th century shows that, by the time of the end of the 19th century, up until you get to the ICC, and the emergence of what starts to look like the more modern independent agency, that the government has the better of the argument. 

But let’s say that in 1887 after the ICC and then after the FTC and then after Humphrey’s when there was more the explosion of independent agencies, that –let’s just assume, again for this purpose, that at that point, yes, you do have precedents like Humphrey’s. Humphrey’s clearly is –is, you know, a good case for you. Do you still lose? If I say as of 1887, it was liquidated, it was settled, but then we did have cases and congressional practices that veered from that unbroken law. . . .

But, counsel, if it had the first –I mean, in –in the –the assumptions that I’ve asked you to make, it was liquidated as of 1887. So you think liquidation can kind of get a new restart, like kick-start in 1887?

In short can a liquidated practice become unliquidated? Or to use the imagery of the day, can liquidation sink and later float?

Here, I think a useful precedent to consider is Bruen. Leading up to the Reconstruction Era, the notion of an individual right to keep and bear arms had crystalized. And even if there was not a strong enough case based on original meaning, that right had been liquidated through practice. However, after Reconstruction, that settlement was altered. Jim Crow regimes enacted discriminatory gun control laws. Territories in the Wild West enacted gun free zones. And by the start of the twentieth century, governments enacted handgun carry bans. Indeed, the Sullivan Law from New York was on the books for more than a century by the time Bruen was decided.

In Bruen, Justice Thomas dismissed the relevance of the Jim Crow laws, as well as the laws from the Wild West. But there is some resemblance between the chronology of the Second Amendment and the chronology that Justice Barrett described in Slaughter. The line can be drawn roughly before and after the Progressive Era—when so much of the Constitution was damaged. Was the Second Amendment a case of liquidation followed by unliquidation? Did a liquidated right to bear arms float before the Civil War and sink after the Civil War? And how should courts consider these competing streams of authority?

In Bruen, Justice Barrett expressed concerns about liquidation in her concurrence:

I join the Court’s opinion in full. I write separately to highlight two methodological points that the Court does not resolve. First, the Court does not conclusively determine the manner and circumstances in which postratification practice may bear on the original meaning of the Constitution. Scholars have proposed competing and potentially conflicting frameworks for this analysis, including liquidation, tradition, and precedent.

Barrett raised some questions:

To name just a few unsettled questions: How long after ratification may subsequent practice illuminate original public meaning? Cf. McCulloch v. Maryland (1819) (citing practice “introduced at a very early period of our history”). What form must practice take to carry weight in constitutional analysis? See Myers v. United States (1926) (citing a “legislative exposition of the Constitution . . . acquiesced in for a long term of years”). And may practice settle the meaning of individual rights as well as structural provisions? See Baude, Constitutional Liquidation, 71 Stan. L. Rev. 1 (2019) (canvassing arguments). The historical inquiry presented in this case does not require us to answer such questions, which might make a difference in another case.

The last sentence is key. In Bruen, the liquidation question did not make a difference. But in Slaughter it will.

In the Emoluments Clauses litigation, Seth Barrett Tillman and I discussed the  methodology to consider post-ratification history. I wrote about our approach in an essay for the South Texas Law Review, titled Defiance and Surrender. Here is an excerpt:

President Washington and other Founders who were his successors during the Early Republic openly received, accepted, and kept diplomatic gifts and other gifts from foreign governments and their officials without seeking or receiving congressional consent. These early presidents acted as if they were not bound by the Foreign Emoluments Clause.5 However, Presidents Jackson, Tyler, Van Buren, and Lincoln declined to personally accept foreign gifts. These later presidents, other scholars contend, acted as if they were bound the Foreign Emoluments Clause. Courts might take the intuitive position that because all presidents have equal authority, the latter presidents ought to be preferred. The Supreme Court has taught a different lesson: modern practice does not automatically overcome earlier precedents. There is an additional principle that informs this inquiry. When considering competing streams of historical practice by the three branches, courts favor purported defiance over voluntary surrender. Disputed assertions of power by Washington and his successors in the Early Republic are more probative about the scope of the Foreign Emoluments Clause than voluntary acquiescence by Jackson and post-Jackson presidencies.

The question presented in Slaughter is whether Congress can restrict the President’s removal power. With the Decision of 1789, President Washington took no actual action. But the Vice President John Adams, as President of the Senate, broke the tie, and voted against the statute. Thus, it was Congress that rejected the bill with the tenure protections, albeit with the help of the Vice President. As a body, Congress abnegated, or defied its own purported authority to restrict the President’s removal power. Stated differently, Congress voluntarily surrendered to the President’s removal power. In the separation of powers, whether there is defiance of surrender depends on your point of view: when one branch defies, the other will usually surrender. Defiance v. defiance is rare.

One century later, with the Decision of 1887, the dynamics were flipped. Congress defied the President’s claim to an absolute removal power. And the President, by signing the ICC bill, surrendered to Congress’s asserted power to restrict the removal power. Moreover, every subsequent President until Franklin D. Roosevelt surrendered to Congress’s power by not firing commissioners without cause. Roosevelt attempted to defy Congress by firing William Humphrey, but the Supreme Court rejected Roosevelt’s defiance. And from FDR to Biden, no President tried to test that settlement. Trump, by firing Slaughter, has once again tried to defy Congress–and unlike FDR, DJT will likely prevail.

In my view, the earlier precedents demonstrating defiance would prevail over later precedents demonstrating acquiescence. Or, to use Justice Barrett’s framing, the earlier liquidation cannot become unliquidated.

Solicitor General Sauer addressed responded to Justice Barrett during his rebuttal:

Justice Barrett, regarding the question of historical liquidation, we think the case that you ought to look at is Powell against McCormack. It’s very analogous to the sort of historical –what happened in the history here. In that case, Congress, from the time of the Founding until reconstruction, Congress after the Civil War, had interpreted the Constitution to not allow it to refuse to seat a member of Congress other than from the reasons that are set forth explicitly in the Constitution, the Qualifications Clause. The reconstruction Congress changed that and decided not to seat a couple of former members who had too close ties to the Confederacy. And after that, for the next 100 years or so, Congress then started exercising that power, not –not often, but intermittently, to refuse to seat other members.

And this Court said in Powell against McCormack what is decisive there in that board of constitutional interpretation is the liquidation that occurred in –in the 19th century, not the subsequent, again, very lengthy tenure of practice of Congress refusing to do that, and, therefore, it –it held that Congress lacked the power to refuse to seat the Congressman in that case. I mean, that’s very, very compelling here.

I think the framework from Powell, as well as Bruen should control. The earlier-in-time precedents, which demonstrate defiance of Congress’s power, should control over later-in-time precedents where President’s acquiesced to Congress’s power.