Henry Meier, The Law Office of Henry C. Meier, Esq.
Yesterday, the Supreme Court sent its strongest signal yet that it is prepared to rule that independent agencies, such as the NCUA, are unconstitutional to the extent they limit a President’s authority to remove agency heads except “for cause.”
Trump v. Slaughter involves a challenge by a democratic member of the Federal Trade Commission whom the Trump Administration fired. She claimed that her removal violated federal statute and prevailing caselaw, pursuant to which FTC commissioners can only be removed for cause. An almost identical argument is, of course, being made by former NCUA board members Todd Harper and Tanya Otsuka, following the firing of the two Democrats from the NCUA board.
Yesterday, the Supreme Court made two important rulings. First, it decided to hear the FTC case in the upcoming term. Second, it allowed the Trump Administration to continue to keep Slaughter off the board pending its ruling on the merits. It follows similar rulings by the court in relation to other independent agencies, including the NLRB and the Product Safety Commission, among others.
In deciding to hear the case, the court wants the parties to brief whether the statutory removal protections for members of the Federal Trade Commission violate the separation of powers and, if so, whether Humphrey’s Executor v. United States, 295 U. S. 602 (1935), should be overruled?
In October 1933, President Roosevelt attempted to remove William E. Humphrey, an appointee of the Hoover Administration, from the Federal Trade Commission. Humphrey argued successfully that, under the law passed by Congress creating the Federal Trade Commission, he could only be removed for cause. The Supreme Court agreed, ruling that Congress had the authority to protect agency heads from removal, provided they were not exercising substantial executive power. It is this decision that provides the basis for Harper and Otsuka’s argument that their removal from the board was illegal.
Writing in dissent, Justice Kagan argued that it was a misuse of the court’s emergency docket to uphold the Administration’s removal of the commissioner, pending a decision on the merits. She argued that the President “cannot, under existing precedent, fire the FTC commissioner without cause,” and that he isn’t authorized to do so until the majority reverses Humphrey’s on the merits. She complained that “our emergency docket should never be used, as it has been this year, to permit what our precedent bars. Still more, it should not be used as it has been here, to transfer government authority from Congress to the President.”
In November, the Court of Appeals is scheduled to hear arguments in the NCUA case. It may be several months before the court gives definitive guidance on the constitutionality of the NCUA’s governing structure. The NCUA board has cancelled its October meeting, but Chairman Hauptman has indicated that the NCUA will be holding its annual budget hearing. He also indicated that there was precedent for allowing a single board member to promulgate regulations.