Presidential Removal

In Trump v. Slaughter, the U.S. Supreme Court made a profound change to the administrative state. The Court ruled that "for cause" removal protections for members of the Federal Trade Commission (FTC) are an unconstitutional infringement on the President's executive powers. Gone is Humphrey's Executor v. United States, the seminal case that upheld limits on the President's authority to remove FTC Commissioners, and nine decades of independent agency leadership with a degree of insulation from Presidential control. The implication of Slaughter for other independent agencies, including the...

The en banc DC Circuit, citing Humphrey's Executor, has vacated the panel's stay of the district court's order restoring the fired MSPB and NLRB members. Especially interesting for financial services given the panel draw in the CFPB injunction appeal -- two of four dissenting judges are on the three-member CFPB panel. The court: "The Supreme Court has repeatedly told the courts of appeals to follow extant Supreme Court precedent unless and until that Court itself changes it or overturns it."

The Justice Department has informed Congress that it views statutory limitations on the President’s power to remove members of multimember agencies to be unconstitutional. In that communication, the Department specifically cited the “for cause” removal provisions applicable to members of the Federal Trade Commission, the National Labor Relations Board, and the Consumer Product Safety Commission. This position, if accepted by the Supreme Court, would have a significant impact on the independence of other multimember agencies, including the Federal Reserve Board (Fed), the Federal Deposit...