The Supreme Court ruled on two cases involving agency leaders, including the Federal Trade Commission (FTC) and the Federal Reserve.
SCOTUS voted 5-4 to deny the administration a stay and sent a lawsuit over President Donald Trump’s firing of Lisa Cook, a Federal Reserve governor appointed by President Joe Biden, back to a lower court.
The decision means Cook can remain in her post as litigation continues.
Cook claims “that the attempted removal was not ‘for cause,’ as required by statute, and that the President had in any event failed to comply with the statute’s (and the Constitution’s) requirement that she receive pretermination process.”
Trump attempted to fire Cook after the Director of the Federal Housing Finance Agency accused her of mortgage fraud.
Trump claimed that Article II and the Federal Reserve Act of 1913 grant him the privilege to make the move.
SCOTUS rejected Trump’s argument, denying him a stay.
The Federal Reserve has a “for cause” protection when it comes to removing a leader.
Courts have ruled that “for cause” means proven misconduct, not allegations.
Cook has only faced allegations of mortgage fraud.
SCOTUS ruled 6-3 to end a precedent that the president set in Humphrey’s Executor v. United States from 1935.
Therefore, Trump had the authority to fire FTC Commissioner Rebecca Slaughter.
Humphrey’s held that “The Federal Trade Commission Act fixes the terms of the Commissioners and provides that any Commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office.”
“Humphrey’s framework has not withstood the test of time,” wrote the majority. “From the start, Humphrey’s was tethered to a highly circumscribed view of the FTC’s role. Humphrey’s by its terms applied only to agencies that occupy ‘no place in the executive department,’ are ‘independent of executive authority,’ and exercise ‘no part of the executive power.’”
I’m glad that SCOTUS pointed out that independent agencies are not independent:
Slaughter relies on reliance. She argues that Congress has relied upon Humphrey’s to create agencies that are “insulated from presidential control.” Brief for Respondent 15. But that is precisely the problem. Despite what Humphrey’s may say, independent agencies are not “independent” in the sense that they are free of the President and thus responsive “only to the people of the United States.” 295 U. S., at 625. Placing the power to administer laws in officers who enjoy “freedom from Presidential oversight (and protection)” does not deliver us to a promised land of technocratic governance—it often results only in an “increased subservience to congressional direction.” FCC v. Fox Television Stations, Inc., 556 U. S. 502, 523 (plurality opinion). Pp. 21–25.
The FTC falls under the authority of the executive branch. It is only “independent” because a cabinet secretary does not oversee the agency.
So where does the FTC fall? The majority explained (emphasis mine):
With these principles in mind, the FTC’s for-cause removal provision violates the separation of powers. In its present form, the FTC enforces and administers some 80 statutes covering almost every facet of the Nation’s economy, and the tasks it undertakes are “the very essence of ‘execution’ of the law.” Bowsher v. Synar, 478 U. S. 714, 733. The FTC has the power to promulgate substantive rules carrying the force of law, investigate businesses and enforce statutes through inhouse adjudications, and file civil suits on behalf of the United States in federal court. The FTC unquestionably exercises executive power and must therefore be controlled by the Chief Executive. Pp. 25–27.
“All the Court does today is recognize what has been clear for a century—that those who fall within the President’s ‘general administrative control’ must be removable by the President at will,” the majority wrote.
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