Justices Toy With Punting Legal Issues in Trump’s Bid to Fire Cook

The US Supreme Court grappled with the consequences of potentially issuing a decision that kicks President Donald Trump’s effort to fire Federal Reserve Governor Lisa Cook back to the lower courts without digging into the substance of the dispute.

Several justices raised the possibility of a narrow holding while hearing arguments Wednesday, a demonstration of both the rapid timeline in which the case reached the court and the tricky legal issues the justices said they’re confronting.

Such a scenario would represent a victory for Cook, as well as a rare loss for the Trump administration on the court’s emergency docket, which has grown especially active during Trump’s second term.

Conservative and liberal justices appeared wary of intervening in favor of the administration given some of the potential impact an opinion could have for US monetary policy. Yet even that result would appear to raise the chances of the case returning to the justices on its merits docket.

“The discussion at oral argument about the hazards of doing everything on the emergency docket are brought to life in this case,” said Jane Manners, a Fordham University law professor.

“They’re not excited to write a full-throated merits decision,” she added.

‘Gets Back Here’

Trump’s attempted ouster of Cook represents a key test for the traditional independence of the US central bank.

Trump in August sought to fire Cook over unproven allegations of mortgage fraud. Cook sued, which led to a Washington federal trial court entering a preliminary injunction allowing her to remain in her post amid the litigation.

The administration wants the justices to lift that injunction on grounds the mortgage fraud allegation represents “cause” and that judges can’t reinstate federal officers. That yielded much discussion at the argument Wednesday on the legal standard for “cause” and whether Cook received due process to respond to the claims.

Even so, the justices repeatedly talked about whether they could write a ruling without even touching those matters.

“Do you think that there’s a way at this posture of dealing with this case so that we don’t have to confront the question of exactly what the ‘for cause’ standard means?” Justice Elena Kagan asked.

Justice Brett Kavanaugh offered whether the court could simply “say there was insufficient process and, therefore, we at this juncture deny the government’s application.”

Those approaches, however, raised the prospect of a decision that Chief Justice John Roberts worried would invite a new round of arguments that ends up back at the court. Cook’s lawyer, Paul Clement, also admitted as much.

“That probably maximizes the chances that it gets back here on the merits,” Clement said. “Whereas, if you decided to go a little further and say something substantive, it might bring all of this to an end.”

‘Ammunition’

The Supreme Court is considering the case over Trump’s bid to remove Cook alongside his other efforts to fire commissioners at independent agencies such as the Federal Trade Commission.

While the court appears likely to avoid delving into Trump’s conflict with the Fed, it seems poised to let him terminate at will members of other independent agencies that exercise executive powers.

The court signaled last year that it views the Fed differently from other federal agencies, because of its view that the Fed is a “uniquely structured, quasi-private entity.”

Still, a ruling in the FTC case could be new “ammunition” for Trump to argue his removal powers extend to the Fed, said Jacob Huebert, a lawyer at the conservative New Civil Liberties Alliance. “The president could say, ‘I’m firing her anyway under Article II of the Constitution,’” he said.

The possibility highlights the complex questions the justices face as they prepare rulings in cases that first reached them as the administration asked for emergency relief.

The court typically offers little or no explanation in most of its emergency decisions, but the Fed dispute is different because the justices chose to hear oral arguments.

An exchange between Justice Ketanji Brown Jackson and Clement drove home this point as Jackson noted that because the case was in a preliminary posture, the court didn’t even need to touch the “likelihood of success on the merits.”

“Look, it’s an emergency application. You could deny it without opinion,” Clement, a former US solicitor general, responded. “I mean, that would be a little strange at this juncture.”

A decision in both the FTC and Cook cases are expected by July.