- Key takeaway: A majority of Supreme Court Justices appeared willing to undo a nearly century-old precedent underpinning the notion of independent regulatory agencies.
- Expert quote: "Humphrey's must be overruled. It has become a decaying husk with bold and particularly dangerous pretensions. It was grievously wrong when decided and cases [in recent years] have thoroughly eroded its foundations." — Solicitor General John Sauer
- Forward look: How far the court will go in freeing the president's hand to fire independent commissioners is unclear, as is the impact of the Slaughter case on a forthcoming case concerning Federal Reserve Gov. Lisa Cook, whom the Trump administration wants to remove.
WASHINGTON — A majority of Supreme Court justices appeared willing to scrap a 90-year-old precedent upholding the constitutionality of independent regulatory commissions, a move that opponents fear, and the administration hopes, could greatly empower the White House and endanger the independence of the Federal Reserve.
In oral arguments in Trump v. Slaughter held Monday morning, U.S. Solicitor General John Sauer said the 1935 Supreme Court opinion in Humphrey's Executor v. United States represents an "indefensible outlier" in an otherwise plain constitutional charge that all executive power be vested in the president.
"Humphrey's must be overruled," Sauer said. "It has become a decaying husk with bold and particularly dangerous pretensions. It was grievously wrong when decided and cases [in recent years] have thoroughly eroded its foundations."
Amit Agarwal, the attorney representing ousted Federal Trade Commissioner Rebecca Slaughter, argued that Congress has powers as well, including the power to create federal agencies
"Multimember commissions with members enjoying some kind of removal protection have been a part of our story since 1790," Agarwal said. "If petitioners are right, all three branches of government have been wrong from the start. Congress and prior presidents have been wrong to jointly create early founding-era commissions and more than two dozen traditional independent agencies since 1887."
At issue is President Trump's purported termination of Slaughter from the FTC in March. Federal Trade Commission members are protected in statute from removal by the president except for "inefficiency, neglect of duty or malfeasance in office," and Trump made no argument that Slaughter had violated any of those terms.
Slaughter — who was nominated by Trump as an FTC commissioner in 2018 and reappointed by President Biden for a second term in 2023, set to expire in 2029 — sued the president, saying her removal was illegal. A lower court ruled for Slaughter, but the administration filed an appeal with the Supreme Court, which issued a stay of the lower court order in May, which allowed the administration to remove Slaughter from office pending the outcome of her litigation.
The case hinges on Humphrey's Executor, which follows an almost identical set of facts as those presented in Slaughter. William Humphrey was a Republican FTC commissioner who was fired by President Franklin Roosevelt for overtly political reasons, but Roosevelt argued that Article II of the constitution renders the commission's authorities executive and therefore the president's to delegate as they may choose. Humphrey likewise sued the president, arguing that he was wrongly terminated and demanding his seat back and all back pay owed him. While Humphrey himself died during litigation, the Supreme Court ruled in favor of his estate — hence the name Humphrey's Executor — and found that because the FTC wields "quasi-judicial" and "quasi-legislative" powers in addition to executive ones, its authorities cannot be construed as purely executive and therefore subject to absolute presidential control.
Supreme Court Chief Justice John Roberts questioned whether the solution for the court might be to parse apart what authorities wielded by the agencies in question are in fact judicial or legislative and carve those away from the independent agencies and toward the executive.
"There are a lot of agencies in the federal government where it's hard to parse whether it's an executive function they're engaged in or a legislative function," Roberts said. "What are we supposed to do with that, if you're correct?"
Sauer acknowledged that there may be some difficult individual circumstances depending on how broadly the court rules, but said that in many cases the clear delineation of executive power held by regulatory agencies — such as the powers of investigation, rulemaking and enforcement — is not difficult to discern.
"In
Justice Brett Kavanaugh questioned whether a wholesale dismantling of Humphrey's Executor on the order of what the government was proposing would imperil the independence of the Federal Reserve — a concern Kavanaugh said he shares. Sauer said the government "accepts" the
"The Federal Reserve has been described as sui generis," Sauer said. "Any of the issues of removal restriction as a member of the Federal Reserve would raise their own set of unique, distinct issues, as this court said in Wilcox v. Harris. We have not challenged those, either in this case or any other case."
"I think the question that these questions go to is, if you take your logic at face value, it seems to include a great many things," Justice Elena Kagan said. "Once you're down this road, it's a little bit hard to see where you stop."
"It isn't that we have gone down this road — I think the court has been down this road, the country has been down this road, since the decision of 1789," Sauer said.
A number of justices raised the question of whether, if the government's read of the constitution is wrong, Congress would be empowered to reshape plainly executive agencies like the State Department into independent commissions, thus stripping the president of his constitutional authorities. Agarwal said that depends in large part on what powers are in question or what actions are being considered, but said that these issues are routinely negotiated within Congress and between Congress and the White House to a satisfactory conclusion.
"I think that it is probably within the realm of possibility for agencies, and the constraint historically has been that these types of determinations have been made through a process of political accommodation between Congress and the president, and over the course of more than 200 years we have not seen. …" Agarwal replied.
"Sorry to interrupt, but sometimes that accommodation is greater than at other times," Roberts said. "We have situations, let's say, where the Congress, both houses, are controlled by one party and the president is of the same party, and they may decide that the government might be better structured by taking over these entities."
The Supreme Court is also poised to consider a similar case in January concerning Federal Reserve Gov. Lisa Cook. President Trump
