SCOTUS Oral Argument Preview: Do We Really Want More Vindictive And Incompetent Federal Agencies?
Today the Supreme Court will hear oral argument in Trump v. Slaughter, which presents the question whether the statutory prohibition on presidential removal of a Federal Trade Commissioner except for good cause is constitutional. The federal district court said it is and thus enjoined the defendants from giving effect to President Trump's purported firing of FTC Commissioner Rebecca Slaughter without cause. The D.C. Circuit then declined to stay the injunction, because, as that court explained, "ninety years ago, a unanimous Supreme Court upheld the constitutionality of the Federal Trade Commission Act’s for-cause removal protection for Federal Trade Commissioners. See Humphrey’s Executor v. United States."
The outcome of the case is thus essentially a foregone conclusion, right? Yes, but in the wrong direction. The Supreme Court has twice signaled that it intends to use the Slaughter case to overrule Humphrey's. In its per curiam opinion in May, in Trump v. Wilcox, the Court granted a stay of lower court rulings that had, in reliance on Humphrey's, enjoined presidential removal without cause of members of the National Labor Relations Board and the Merit Systems Protection Board. Without even citing Humphrey's, the Wilcox Court characterized the permissible limits on the president's removal power in such narrow terms as to make clear that the ninety-year-old precedent is ripe for overruling. Then, in September, SCOTUS stayed the injunction in Slaughter itself and placed the case on its merits docket. Neither the Wilcox opinion nor the Slaughter stay makes much sense unless a majority of the Roberts Court is planning to overrule Humphrey's.
To be sure, the Solicitor General has also argued that even if the president's removal of independent agency officials without the required statutory good cause is unlawful, courts lack the power to order their continuation in office. I think that argument is badly mistaken, as I and six other scholars contend in an amicus brief we have filed in Slaughter. The gist of our argument is that federal courts, and before them, English courts, have long had and exercised the power to issue injunctive relief, including to keep government officials in office. The power was assumed in Marbury v. Madison and exercised in various other cases, including Vitarelli v. Seaton (1959). Thus, even applying a strictly historical test to determine the scope of federal remedial authority for unlawful removal of federal officials, the Solicitor General is wrong. His position on the remedial question, if accepted, would also make a mockery of statutory removal protection.
That matters because in Wilcox the Supreme Court signaled that it thinks it can distinguish good-cause removal protection for members of the Federal Reserve Board of Governors (constitutionally permissible) from good-cause removal protection for members of other independent agencies and commissions (constitutionally impermissible). The Court doubled down on that signal when, in early October and in contrast to its action in Slaughter, it did not stay the lower court rulings enjoining the dismissal of Lisa Cook from the Fed. But if the SG is right in Slaughter that federal courts cannot order the reinstatement or continuation in office of wrongly dismissed officers, then that means that even if the Court finds that Cook's ostensible for-cause dismissal was pretextual or otherwise unlawful, it will be powerless to provide a remedy. The Court's ability to preserve Fed independence--which it evidently wants to preserve--would be severely undermined.
I have previously expressed my view that the Court's effort to distinguish the Fed from other independent agencies is ineffective. What the Court said in Wilcox was this: "The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States." As authority for that proposition, Wilcox cited a footnote from the Court's prior decision in Seila Law v. Consumer Financial Protection Burea (CFPB). But the cited footnote contains no actual historical evidence. It merely assumes that the dissent's recitation of a long history of independence for financial regulators is valid but says that even if so, the CFPB falls outside that history because of how it is structured. If, as I expect, the Court overrules Humphrey's in Slaughter but once again purports to distinguish the Fed, I'll be grateful, even though the distinctions the Court will likely draw will be unpersuasive. Still, better an unpersuasive SCOTUS effort to preserve Fed independence than a ruling that invites our reckless economic ignoramus of a president to spur hyper-inflation.
The real reason to save the Fed is, as I've just indicated, that Fed independence is essential to ensuring that a feckless executive doesn't use monetary policy in a way that provides a short-term boost to the economy but creates grave dangers in the medium term. In other words, the real reason to preserve the Fed is that politicians--and especially the current president--cannot be trusted with monetary policy because the risk of self-dealing is too great.
Professor Buchanan and I argued nearly a decade ago in a Cornell Law Review article, that a sensible removal power jurisprudence would focus on whether some policy area presents a substantial risk that direct political control will result in not merely sub-optimal decisions but self-dealing. In that article, we analogized the need for Fed independence with respect to monetary policy to the need for judicial independence with respect to cases involving the government. We did not attempt to provide a comprehensive account of the policy areas where decision making by officials independent of direct political control is warranted.
In our article on Fed independence, Prof Buchanan and I said that creation of an independent agency should require more than the mere risk that politically accountable actors will make bad decisions--because that risk is present in every policy area. A risk of self-dealing, not merely bad or shortsighted decision making, we said, must exist.
Recently, I have softened in that view, chastened by the realization that a sufficiently shameless grifter of a president can turn every federal agency into an instrument of self-dealing. A pliant FCC Chair can threaten critical media with license revocations; the FTC can threaten mergers and acquisitions involving those same media companies to exert leverage; the Director of the Federal Housing Finance Agency can selectively reveal mortgage discrepancies to target political enemies; the Department of Justice can be turned against those same enemies; etc.
Accordingly, there may be no agency for which a good case for independence rooted in self-dealing risk cannot be made.
Meanwhile, recent events at the Department of Health and Human Services--the dismissal of key decision makers with actual medical knowledge and their replacement with conspiracy-theory-touting cranks whose policy choices will lead to thousands of preventable cases of hepatitis B and other infections--should breathe new life into the oldest justification for politically independent agencies and personnel: expertise.
Should but probably won't.
At least one Justice has, just this year, expressed the kind of contempt for expertise that characterizes the MAGA/MAHA crowd. In his concurrence in United States v. Skrmetti, Justice Thomas included a two-paragraph rant against "so-called experts," "alleged experts," "those who hold themselves out as experts," and "the expert class."
Justice Thomas spoke only for himself in Skrmetti, but that hardly means that the Court's other conservative members will be concerned by the corruption and incompetence that currently characterize so much of the executive branch. Rather, one can expect today's oral argument to focus on the original meaning of Article II's vesting clause ("The executive power shall be vested in a President"). The SG argues that it entails the so-called unitary executive theory. Slaughter's brief, in contrast, points to "ample historical evidence that Congress ha[s] authority to create multimember agencies whose members the President [can] not remove at will." It also invokes stare decisis.
Those are the legal stakes on which the Justices are likely to focus and that are likely to figure in the opinion that issues from the Court. Based on Wilcox and the decision to stay the D.C. Circuit's decision in Slaughter itself, I expect the government to win. The puzzle is why.
Given the Court's mental gymnastics to carve an exception for the Fed from the impending overruling of Humphrey's Executor, it's clear that the Court's conservatives care about the implications of giving the president carte blanche to run monetary policy. The mystery is why they want to give any president--especially the current one--carte blanche to run those agencies of the federal government that Congress has designated as independent in the same corrupt or incompetent fashion that he uses to run those agencies headed by the lackeys and lunatics who serve at his pleasure.