The Supreme Court granted a motion by the Justice Department to stay a lower court order blocking the administration from firing two Democratic board members of multi-member independent agencies. The Court said in its order that the proceedings would not affect the independent status of the Federal Reserve Board.
In an unsigned
The order held that, when considering whether the fired officials should be allowed to continue at their posts or
The order also held that the government was likely to be successful in its assertion that the NLRB and MSPB wield "considerable executive power" and thus are subject to removal under Article II of the constitution, which the order said vests executive power with the president alone. However, the court responded to an argument by the plaintiffs that allowing their removal would imperil the independence of members of the Federal Reserve Board by saying that the circumstances surrounding that agency's charter are manifestly different.
"Respondents … contend that arguments in this case necessarily implicate the constitutionality of for-cause removal protections for members of the Federal Reserve's Board of Governors or other members of the Federal Open Market Committee," the order said. "We disagree. The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States."
Three justices — Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson — joined a dissent to the order, which was authored by Justice Kagan. In their dissent, the justices said that a 1935 ruling in Humphrey's Executor v. United States — which reversed then-president Franklin Roosevelt's move to fire a Republican member of the Federal Trade Commission, upholding Congress' for-cause protections from removal — has undergirded a sensible effort by Congress to assign certain executive functions to bipartisan panels of experts free from political pressure. That model has since been applied to dozens of agencies, including the Federal Reserve.
"Congress created them all, though at different times, out of one basic vision. It thought that in certain spheres of government, a group of knowledgeable people from both parties — none of whom a President could remove without cause — would make decisions likely to advance the long-term public good," Kagan wrote. "And that congressional judgment, Humphrey's makes clear, creates no conflict with the Constitution."
Kagan added that under Humphrey's Executor, the government's case is straightforward — the president has no right to relief under the law because the law grants him no such relief and the law has been found constitutional for nearly a century. She went on to argue that the court's decision to grant the administration's emergency motion to remove the fired officials — which she described as "nothing short of extraordinary" — is in itself a ruling to overturn Humphrey's Executor, which is an action that should only by taken after a full hearing of the merits, not in an emergency docket order.
"It is one thing to grant relief in that way when doing so vindicates established legal rights, which somehow the courts below have disregarded. It is a wholly different thing to skip the usual appellate process when issuing an order that itself changes the law," Kagan wrote. "And nowhere is short-circuiting our deliberative process less appropriate than when the ruling requested would disrespect — by either overturning or narrowing — one of this Court's longstanding precedents, like our nearly century-old Humphrey's decision."
The DC Circuit Court held oral arguments on the merits of the case on May 16. The Supreme Court will likely be petitioned to take up the case after the appeals court rules on the merits of the case.
