A 2-1 panel of the D.C. Circuit Court of Appeals has denied President Donald Trump a stay, blocking him from firing Federal Reserve Governor Lisa Cook.
Judge Brad Garcia and Judge J. Michelle Childs ruled in favor of Cook.
Judge Greg Katsas dissented.
“Given that Cook has a property interest in her position, she is entitled to ‘some kind’ of process before removal,” argued the two judges.
Trump fired Cook on August 26 for allegedly committing mortgage fraud.
Cook sued Trump and Federal Reserve Chairman Jerome Powell to block her firing.
U.S. District Judge Jia Cobb issued a temporary restraining order on September 9, which allowed Cook to stay on the board.
Garcia, who penned the majority opinion, said he agreed with the district court that Cook’s “removal likely violated the Fifth Amendment’s Due Process Clause.”
“The district court issued its preliminary injunction after finding that Cook is likely to succeed on two of her claims: her substantive, statutory claim that she was removed without ’cause’ in violation of the Federal Reserve Act and her procedural claim that she did not receive sufficient process prior to her removal in violation of the Due Process Clause of the Fifth Amendment,” wrote Garcia. “I agree with the court’s conclusion that Cook’s due process claim is likely to succeed.”
Garcia added (I omitted citations):
The Supreme Court and this court have repeatedly held that a public official with “for cause” protection from removal has a constitutionally protected property interest in her position. Under those precedents, Cook has such a property interest because the Federal Reserve Act provides that she may be removed only “for cause.” She therefore may not be removed prior to being provided “some kind” of meaningful notice and opportunity to respond.—But in this singular case the government has pointedly not argued that the President has unfettered removal authority over members of the Federal Reserve System’s Board of Governors. To the contrary, the government concedes that Cook is protected, by statute, from removal except for cause. In due process parlance, that protection—if it does anything at all—provides a “legitimate” and “objective basis for believing” that Cook does not serve at will.
Garcia then slammed the cases Trump’s team used to justify the stay, describing them as out of place. Garcia said the government overread one case, Taylor v. Beckham, because it did not “address the question we face here.”
“Crucially, the case involved nothing akin to a statutory for-cause removal protection: The only argument for a property interest was that the offices in question were ‘both profitable and honorable,'” argued Garcia.
Garcia also said that since Cook has been working despite the firing, the “emergency relief would thus upend, not preserve, the status quo.”
“A stay would itself introduce the possibility of ‘the disruptive effect of the repeated removal and reinstatement’ of Cook during this litigation,” concluded Garcia.
The case is likely to be appealed to the Supreme Court.
[Featured image via Federal Reserve and White House]
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