Supreme Court Signals It Backs Trump on Firing Agency Heads (1)

The US Supreme Court signaled it’s poised to give the president control over potentially dozens of traditionally independent federal agencies as the court’s dominant conservative wing cast doubt on a 90-year-old precedent.

Hearing arguments in Washington Monday, the justices suggested they will let President Donald Trump permanently remove Rebecca Kelly Slaughter from the Federal Trade Commission despite a law that says commissioners can be fired only for specified reasons. Slaughter’s ouster would leave the consumer-protection agency without any Democratic commissioners.

Regulation opponents are seeking to achieve a long-sought goal by toppling the 1935 Humphrey’s Executor ruling. That decision upheld the FTC job protections and cleared the way for the independent agencies that came to proliferate across the federal government. Reversing Humphrey’s Executor would affect government bodies that oversee labor relations, consumer product safety, transportation safety and employment discrimination.

The court’s outnumbered liberals blasted that prospect. Justice Elena Kagan said the Trump administration’s position would mean “massive, uncontrolled, unchecked power in the hands of the president.”

But the court’s six conservatives said the real concern was Congress’ creation of agencies that exercise executive power but aren’t accountable to the president. “Tomorrow we could have the Labor Commission, the Education Commission, the Environmental Commission, rather than Departments of Interior and so forth,” Justice Neil Gorsuch said.

Although a far-reaching ruling could undercut the independence of the Federal Reserve, conservative Justice Brett Kavanaugh indicated he would reinforce a carveout the court seemed to create for the central bank in May. Kavanaugh said Monday he has “concerns” about undermining the Fed’s independence.

Read More: Fed Independence Risk Troubles Kavanaugh in Trump Firing Fight

The court in May called the Fed a “uniquely structured, quasi-private entity” unlike other independent agencies.

The court next month will consider Trump’s bid to circumvent that shield by firing Fed Governor Lisa Cook for alleged mortgage fraud. Cook denies the allegations.

‘End Run’

Kavanaugh also said he had “real doubts” about a second administration argument that could doom Cook’s bid to stay in the job. The administration contends that federal judges lack the constitutional authority to prevent the removal of executive-branch officials. Kavanaugh said that argument would be an “end run” around the Fed carveout.

Critics say Humphrey’s Executor undermines the separation of powers by leaving powerful executive branch officials unaccountable to the president. The ruling “poses a direct threat to our constitutional structure, and as a result, the liberty of the American people,” US Solicitor General D. John Sauer, the administration’s top Supreme Court lawyer, told the justices.

Defenders of Humphrey’s Executor say the Constitution gives Congress the flexibility to create agencies that rely on expert leadership and are insulated from political pressures. Slaughter’s lawyer, Amit Agarwal, said the FTC’s structure reflected “the considered determination of Congress and the president together that this was the kind of agency that should be insulated from presidential at-will removal.”

The Federal Trade Commission Act says a president can remove commissioners only for “inefficiency, neglect of duty, or malfeasance in office.”

Slaughter attended the argument, alongside former Democratic commissioner Alvaro Bedoya, who was also ousted in March and later resigned. Trump’s FTC chair, Andrew Ferguson, also attended the hearing, seated a few rows behind his former colleagues.

Trump Firings

The Supreme Court’s conservative majority has chipped away at Humphrey’s Executor in recent years. The court ruled in 2020 that the president could fire the director of the Consumer Financial Protection Bureau. More recently, the court let Trump temporarily remove members of the National Labor Relations Board, Merit Systems Protection Board and the Consumer Product Safety Commission.

Although the justices largely avoided direct debate over those firings, Kagan seemed to allude to Trump’s efforts to dismantle the Department of Education.

Moments after Chief Justice John Roberts asked Agarwal whether Congress could create a commission to take over the department’s responsibilities, Kagan rejoined that “the more realistic danger here is that we’ll have an Education Department, as authorized by Congress by law, that won’t have any employees in it.”

But the court’s conservatives cast the case as being about constitutional principles that would outlast Trump.

“One thing history shows is that we can’t anticipate what might happen,” Justice Amy Coney Barrett told Agarwal. “If we decide this case in your favor now, we don’t know what a Congress in 15 or 20 or 30 years might do.”

The case, which the court will decide by July, is Trump v. Slaughter, 25-332.

(Updates with excerpts from argument starting in ninth paragraph.)

--With assistance from Leah Nylen.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Peter Blumberg

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