Trump Sued by Democratic FTC Commissioners for Their Firings (1)

The two Democratic members of the US Federal Trade Commission fired by President Donald Trump sued to be reinstated, setting up a challenge to a 90-year-old Supreme Court case limiting the White House’s authority over independent agencies — including the Federal Reserve.

Rebecca Kelly Slaughter and Alvaro Bedoya argue their March 18 terminations from the agency were illegal under federal law. In a complaint filed Thursday in Washington, DC, federal court, they are also seeking a ruling that they can only be fired for cause.

“The president’s action is indefensible under governing law,” Slaughter and Bedoya said in their complaint, which names Trump, FTC Chairman Andrew Ferguson, Commissioner Melissa Holyoak and the agency’s executive director, David Robbins, as defendants.

Bedoya and Slaughter’s suit would give the high court a direct opportunity to reconsider a 1935 Supreme Court case which upheld job protections Congress created to shield FTC commissioners from being fired, except in cases of “neglect or malfeasance.” The decision, known as Humphrey’s Executor, underpins the independent agencies that now proliferate across the federal government.

A White House spokesperson didn’t immediately respond to a request for comment. The White House has previously said it would defend the firings all the way to the Supreme Court.

Stop Defending

The Trump administration has argued that the high court’s decision was wrongly decided and in February said it would stop defending protections against firings in court. If Trump is ultimately vindicated, that could jeopardize appointees leading other agencies including the Fed Chair Jerome Powell, who has been a target of criticism from Trump.

“There is no legal difference between Jerome Powell and me,” Slaughter said last week on Bloomberg TV in reference to the Fed chair. “If the president can legally remove me, he can legally remove Jerome Powell.”

Read More: FTC Firings Are Set to Test If Jerome Powell Can Be Fired Too

Trump told Bedoya and Slaughter in a March 18 email that their “continued service on the FTC is inconsistent with my administration’s priorities. Accordingly, I am removing you from office.” Ferguson issued a statement the same day defending the president’s decision as supported by the US Constitution.

Slaughter and Bedoya contend the firings place the agency’s actions at the political whims of the president, and since being fired have publicly questioned whether Trump will interfere in their cases at the behest of companies under scrutiny. The lawsuit includes a list of actions the FTC has taken in the last several years against some of the world’s largest companies, including Amazon.com Inc. and Meta Platforms Inc.

Bedoya was nominated by former President Joe Biden and joined the FTC in May 2022, serving a term that was set to expire next year. Slaughter arrived in 2018 during the first Trump administration, and was later confirmed to a second term extending through September 2029.

Bipartisan Manner

The commission has historically carried out its consumer protection and antitrust enforcement duties in a bipartisan manner, though panel votes on some high-profile lawsuits break along party lines. That changed under Biden administration Chair Lina Khan, who had a more acrimonious relationship with her Republican colleagues as she pursued an aggressive antitrust agenda. At the end of her tenure, Ferguson at times dissented against Khan’s actions even when he agreed with the substance of her views.

In dozens of lawsuits over the past several years, conservative groups have sought to strike down legal protections against commission firings. In 2020, the Supreme Court ruled that the president could fire the director of the Consumer Financial Protection Bureau.

Business and anti-regulatory groups have pushed the court to go further, arguing that the Constitution gives the president authority to fire the leaders of multimember commissions that perform executive branch functions. So far, the Supreme Court has turned away various cases involving other independent agencies.

The Trump administration has already fired several Democratic commissioners from independent agencies, including the chair of the National Labor Relations Board, those on the Equal Employment Opportunity Commission and members of an intelligence review board created in the wake of the Sept. 11 terror attacks, the Privacy and Civil Liberties Oversight Board.

Several of those firings have led to lawsuits. Former NLRB chair Gwynne Wilcox sued over her removal and a federal court ordered her reinstated. The Justice Department is appealing.

Among the lawyers representing Slaughter and Bedoya is Amit Agarwal, who served as solicitor general of Florida under the state’s then-attorney general Pam Bondi, who is now Trump’s US attorney general. Agarwal was an attorney for the 2024 presidential campaigns of both Biden and Kamala Harris and also clerked for conservative Supreme Court Justice Samuel Alito.

(Updates with more background on the case.)

To contact the reporters on this story:
Josh Sisco in San Francisco at jsisco6@bloomberg.net;
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Peter Blumberg, Peter Jeffrey

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