SCOTUS Slaughters Humphrey's Executor – But the Fed ...

Today, the court finally put a stake through the heart of that precedent, and with it, the notion of "independent" agencies with executive powers. In Trump v Slaughter, the 6-3 court ruled that the requirement of "cause" in terminations from such agencies – in this case, the Federal Trade Commission – unconstitutionally intrudes on the legitimate exercise by presidents of executive authority. Chief Justice John Roberts authored the decision, offering a lengthy case for all of the errors that Humphrey's Executor introduced:

Humphrey’s framework, in short, has not withstood the test of time. While Humphrey’s was surely right to focus on “the character of the office” at issue, 295 U. S., at 631, and surely right to say that “purely executive” powers must be controlled by the President, id., at 632, we long ago abandoned the notion that there are some powers that are only partly executive. Forty years have now passed, in fact, since we recognized that the FTC exercises executive power—and did so even in 1935, when Humphrey’s was decided. See Morrison, 487 U. S., at 690, n. 28; id., at 724–725 (Scalia, J., dissenting); see also Seila Law, 591 U. S., at 216, n. 2. And more than 200 years have passed since we recognized that the Constitution “vests the whole executive power in the President” alone. Osborn v. Bank of United States, 9 Wheat. 738, 819 (1824) (Marshall, C. J., for the Court).

At this point, all that is left of Humphrey’s is its observation that an agency that “exercises no part of the executive power” need not fall within the rule of Presidential removal. 295 U. S., at 628; see Mistretta v. United States, 488 U. S. 361, 423–425, and n. 3 (1989) (Scalia, J., dissenting) (explaining that Humphrey’s stands only for the proposition that there would be “no strict constitutional impediment to a ‘branchless’ agency” that exercises “no governmental power”). If Congress wishes to establish independent agencies to assist it with its functions, it may do so. Cf. Buckley, 424 U. S., at 137–138. But it may not foist those agencies upon the President, and thus deprive him of “the executive power vested [in him] by the Constitution”—something Humphrey’s itself never purported to permit. Humphrey’s Executor, 295 U. S., at 628. 

If anything more is left of Humphrey’s, we overrule it. Humphrey’s has for decades been a result in search of a rationale. As we have often said, stare decisis is not an “inexorable command,” Payne v. Tennessee, 501 U. S. 808, 828 (1991), and is at its weakest in constitutional cases, where only we may readily fix our own mistakes, Agostini v. Felton, 521 U. S. 203, 235 (1997). 

In fact, as Roberts goes on to explain, this case demonstrates exactly how bad Humphrey's Executor actually operates in practice. As Roberts points out, no one can actually explain how it applies to federal agencies generally or with any specificity. All federal agencies set up by Congress – with one notable exception – blend legislative and executive power; when does that executive power cross the Humphrey's line? Roberts argues that the ambiguous and ever-morphing boundaries have "undermined the 'rule of law' values that stare decisis exists to secure."

Slaughter trots out a reliance argument, at which Roberts openly scoffs:

All that is left is reliance, upon which Slaughter (and the dissent) rely. Slaughter argues that Congress has relied upon Humphrey’s to create agencies that are “insulated from presidential control.” Brief for Respondent 15; see also post, at 34–40 (SOTOMAYOR, J., dissenting). 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. Independent agencies are insulated “from the President,” “not from politics.” ... 

With these principles in mind, this is not a close case.The FTC’s for-cause removal provision violates the separation of powers. In its present form, the FTC enforces and administers some 80 statutes, which cover almost every facet of our Nation’s economy. The tasks it undertakes are “the very essence of ‘execution’ of the law”—precisely the President’s constitutional role. ... 

The FTC unquestionably exercises executive power, and must therefore be controlled by the Chief Executive, in whom such power is vested. It follows, then, that Slaughter served as the President’s subordinate at the FTC—and that the President was entitled to cut her tenure short. 

Roberts later turned his attention to the dissent, led in this case by Justice Sonia Sotomayor. The dissenters want to sustain Humphrey's Executor but still without any firm direction on its application:

When it comes to its own proposal for how precisely Humphrey’s should work in practice, the dissent says very little. Slaughter, for her part, is left with the vague argument that we should police Congress’s decisions for “reasonableness.” “[I]f Congress reasonably decides that the President should be able to remove some duly appointed officers only for certain causes and through certain processes,” she argues, the courts should respect that decision, and require that the President “discharge his obligations under the Take Care Clause by going through those processes when warranted.” Brief for Respondent 25 (internal quotation marks omitted).

That supposed limiting principle is neither limiting nor much of a principle. On Slaughter’s view (and presumably the dissent’s), Congress could commandeer the Environmental Protection Agency, the Department of Commerce, the Department of Education, the Department of Health and Human Services, most (if not at all) of the Department of Justice, and a number of other agencies besides. Indeed, it is not clear to us why Congress would need to allow the President any say in firings. If it is so “critical” for an agency “to have independence and to act with impartiality free from the suspicion of partisan direction,” Brief for Respondent 22 (alterations and internal quotation marks omitted), then why should the President have a role at all? Certainly those legislators who disagreed with the Decision of 1789 were happy to leave him out. See 1 Annals of Cong. 521 (Rep. Sedgwick) (arguing that Congress may vest the removal power in “the President, the President and Senate, or the Legislature, or any other person whom they might introduce into office, merely for that particular purpose”).

The answer, then as now, is that these officers exercise the President’s power, not their own, and thus must be responsible to him. We do not allow intrusions on Article I nor on Article III. See INS v. Chadha, 462 U. S. 919; Stern v. Marshall, 564 U. S. 462 (2011). We see no reason to allow intrusions on Article II either. 

So does this put an end to the notion of federal agencies independent of presidents? Yes – when it comes to executive jurisdiction. That brings us to the other attempt by Trump to fire Lisa Cook from the board of governors at the Federal Reserve, using the same claim to authority. The Supreme Court, again led by Roberts, delivered on its earlier warning. This is not an application of Humphrey's Executor but a recognition of the very different structure and jurisdiction of the Fed. In his 5-4 ruling, Roberts blocked Trump from firing Cook and any other board members, at first over a debate about whether "cause" is necessary, but more generally that the Fed does actually operate with independence. From the summary:

The protection from removal enjoyed by Governors of the Federal Reserve is consistent with the Constitution. The Founders knew from experience the calamities that could arise from even the “suspicion” of political manipulation of monetary policy. Report on a National Bank (Dec. 13, 1790), in 7 Papers of Alexander Hamilton 305, 331. So when they established the First Bank of the United States, they guaranteed its independence from Presidential control, and their successors did the same for the Second Bank. That enabled both banks to serve as the “great regulating wheel” of the early American financial system. E. Lomazoff, Reconstructing the National Bank Controversy 53.

The Federal Reserve follows in this tradition, with a similar degree of independence from Presidential control. What matters is that the Federal Reserve remains consistent with the principles that underpin the First and Second Banks—namely, that monetary policy should not be subject to political interference. In the Court’s view, the Federal Reserve maintains the balance struck by the founding generation under modern circumstances. 

As Roberts warned in Wilcox, the court views the Fed much differently than it does the FTC and other subordinate agencies within the executive branch. For one thing, the Fed does not exercise the kind of prosecutorial powers that regulatory agencies need and which obviously extend from presidential authority. As Thomas notes, they do have authority to bar people from the banking system, but those restrictions get enforced through other agencies. Although none of the justices discuss this in detail, the Fed's main purpose is to conduct monetary policy, which is Congress' jurisdiction under Article I rather than an executive function under Article II. That alone would allow Congress to set the terms for removals at the Fed, since the power exercised by the Fed is primarily legislative.

It is interesting, though, to see Roberts use the reliance argument here while rejecting it in Slaughter. It's a defensible position, but one can't help but raise an eyebrow at the difference, especially when the court released the two decisions simultaneously. We'll get to that point in a moment.

Also interesting: This ruling does not necessarily end the case against Cook. This is a preliminary decision that allows Cook to pursue challenges to her dismissal. The lower courts stayed her removal, and Trump had sought to reverse that decision. Justice Alito points that out and criticizes the court for dragging out the process:

Of course, parties may appropriately seek (and courts may appropriately grant) stays early in a litigation. No court, including this Court, should sit on its hands when interim relief is appropriate. But this does not mean that the Court must reach out to opine on each issue that could conceivably arise in a case’s future. Here, the incipiency of this case and the complexity of the issues that it presents counseled in favor of a light touch by this Court, regardless of whether we granted or denied the application. To that end, the Court should have resolved the President’s application shortly after we received it. And in doing so, we should have focused on the few issues that the courts addressed below. If a majority had desired, we could have issued a statement explaining our decision. That is exactly how we have handled nearly all our stay applications in recent years.

Had we adhered to this well-worn path and decided this application in October, the parties could have continued litigating this case in the lower courts. See, e.g., Doe v. Mills, No. 21A83 (Oct. 19, 2021) (Breyer, J., in chambers) (denying stay without prejudice to reapply after the lower court issues a final decision). By now, the District Court might well have granted summary judgment for one of the parties ...

As the majority and JUSTICE THOMAS apparently agree, the District Court erred in holding that removal “for cause” means removal only for “events that have occurred while [the officer is] in office.” 804 F. Supp. 3d, at 30; see ante, at 11–15; ante, at 14–16 (dissenting opinion). And as JUSTICE THOMAS and Judge Katsas have explained, Cook lacks a private property interest in her seat on the Board of Governors. See ante, at 14; Order 16a–19a (Katsas, J., dissenting). Thus, the President’s attempt to remove her could not have violated the Due Process Clause. See American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U. S. 40, 59 (1999) (“Only after finding the deprivation of a protected interest do we look to see if the [defendant’s] procedures comport with due process”).

Because the courts below resolved these two issues incorrectly, I would conclude that the President has shown a likelihood that we would reverse at this preliminary stage, leaving all other issues to be developed on remand in the first instance.

In other words, Roberts et al jumped the gun and went directly to the merits of the underlying termination. Why? It seems very curious that the court released this decision at the same moment as it released Slaughter and the end of the Humphrey's Executor precedent. This looks very much like the court attempting to manage the public reaction to Slaughter and to send a stronger message to Trump than it did in Wilcox, which Trump clearly ignored. Given the usual reluctance of the Supreme Court to leap ahead of the process, this choice seems very deliberate as a political balancing act – which is not terribly surprising coming from Roberts.

That's not to say that the court would have reached a different conclusion at the end of that process. However, as Alito and Thomas both point out, Trump did allege cause against Cook, and this action comes before allegations of fraud against Cook even entered the trial record to test that cause. Roberts short-circuited the review, and the only reason for doing that would be an out-of-character decision to leap to the conclusion of a case or to soften the political blowback for the Slaughter decision and the affirmation of the unitary executive doctrine. Or, perhaps, to pre-empt Trump from firing Jerome Powell, who has decided to remain on the Board of Governors. I'd bet on the latter two.