Supreme Court Ends Agency “Independence,” Save for the Federal Reserve

Today the Supreme Court issued its long awaited decisions in Trump v. Slaughter and Trump v. Cook, two cases concerning the ability of the President to remove agency officials. The Chief Justice wrote for the Court in both cases, and the results in each case were what was generally expected.

In Slaughter the Court overruled Humphrey’s Executor, and held that the heads of agencies exercising significant executive power must be removable at-will by the President. This means the President can remove members of the Federal Trade Commission and other multi-member agencies previously considered to be “independent agencies.” The vote was 6-3 along ideological lines. Justice Sotomayor wrote the dissent.

In Cook, the Court denied President Trump’s application for a stay preventing him from removing Cook from the Board of the Federal Reserve for cause. In the process, the Court rejected the argument that the President’s allegation of cause was unreviewable and concluded that the statutory requirements for removal were not satisfied. Even though the underlying constitutional question was not presented to the Court, it went on to hold that the for-cause protections for members of the Federal Reserve are constitutional. Tjhe Court split 5-4. The Chief was joined by Justices Sotomayor, Kagan, Kavanaugh, and Jackson. Justices Thomas, Alito and Barrett each authored dissents (with Gorsuch joining Justice Alito). Justice Thomas was alone in arguing that the removal protections for the Federal Reserve are unconstitutional.

Here is the Chief’s summary of the Slaughter opinion:

Nearly 250 years ago, the Framers decided to vest “[t]he executive Power” in one person—”a President of the United States of America.” Art. II, §1, cl. 1. The choice was not made lightly. Within living memory were the “long train of abuses and usurpations” of a King who reigned as “a Tyrant.” Declaration of Independence ¶¶2, 30. Indeed, several delegates to the Constitutional Convention pushed for a multimember council instead of “unity in the Executive magistracy,” which they feared would serve as “the foetus of monarchy.” 1 Records of the Federal Convention of 1787, p. 66 (M. Farrand ed. 1911) (Farrand’s Records) (E. Randolph). But unity won out. Our Constitution’s drafters knew from experience that a “plurality in the executive”—the model in use by most States at the time—not only “diminishe[s]” the “activity, secrecy, and dispatch” necessary to ensure “good government” but “tends to conceal faults and destroy responsibility.” The Federalist No. 70, pp. 423– 424, 427 (C. Rossiter ed. 1961) (A. Hamilton). With just one President in charge, they reasoned, there would be no doubt “on whom the blame or the punishment of a pernicious measure . . . ought really to fall.” Id., at 428.

One hundred years ago, this Court honored the Convention’s choice in the seminal case of Myers v. United States, 272 U. S. 52 (1926). There, we held that the Constitution “grants to the President” the “general administrative control of those  executing the laws, including the power of appointment and removal of executive officers.” Id., at 163–164. Because no one could “execute the laws” “alone and unaided,” Chief Justice Taft explained for the Court, the President must be permitted to “select those who . . . act for him” and “remov[e] those for whom he can not continue to be responsible.” Id., at 117. “[T]o hold otherwise would make it impossible for the President” to fulfill his constitutional obligation “to take care that the laws be faithfully executed.” Id., at 164.

Today we confront one of several regulatory agencies that deviate from this model of Presidential supervision—the Federal Trade Commission (FTC). Since its creation in 1914, the FTC has accumulated vast rulemaking, enforcement, and adjudicatory powers under more than 80 statutes. Not only does it promulgate rules that carry the force of law, but it also enforces those rules against private parties, collecting civil penalties in the billions of dollars. Its powers, however, do not belong to the President or his appointees alone; they instead belong to five Commissioners, each of whom serves for seven years and may be removed by the President only “for inefficiency, neglect of duty, or malfeasance in office.” 38 Stat. 718, 15 U. S. C. §41.

We hold that such protection from removal is contrary to the separation of powers enshrined in the Constitution.

Justice Thomas joined all but Part III-B of the Chief’s opinion, and Justice Gorsuch wrote a solo concurrence.

And here is the Chief’s intro from Cook:

Last August, for the first time in the Federal Reserve’s 111-year history, the President attempted to fire one of its Governors. A few weeks later, a federal court issued an injunction to prevent him from doing so. We decide whether that order should remain in effect pending the conclusion of litigation over the attempted removal.

And his opinion’s conclusion:

As the Government concedes, Congress limited the President’s power to remove Governors for good reason—”[t]o preserve the independence of the Federal Reserve” and to continue the “long tradition” of “monetary policy . . . exercised independent of . . . executive influence.” Tr. of Oral Arg. 48 (statement of the Solicitor General).

Any change in that scheme must come from Congress, not the courts. That is why we cannot accept the Government’s contentions in this case. To do so would allow the President to remove a member of the Federal Reserve at any time, for any reason, without any notice before, and without any judicial check after. That would turn for-cause protection into little more than at-will employment.

To be clear, the ultimate question of whether the President can remove Cook for cause will depend in part on the underlying facts. In this opinion, we have not addressed the facts, as they have yet to be found or analyzed under the relevant legal standards. Rather, we have simply addressed the parties’ arguments about the appropriate legal standards under which the facts must be evaluated.

The application for a stay is denied.

There’s clearly more to unpack in Cook, especially in light of the separate opinions, including concurrences by Kavanaugh and Jackson in addition to the three dissents, each of which has a slightly different focus.