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President Trump is asking the Supreme Court to allow him to fire Lisa D. Cook from the Federal Reserve Board.
"This application involves yet another case of improper judicial interference with the President's removal authority—here, interference with the President's authority to remove members of the Federal Reserve Board of Governors for cause," Solicitor General D. John Sauer wrote. (All of the other firings involve situations where Trump fired Democratic members of governing boards of other federal agencies without cause even though the relevant statutes stated that such members could only be fired for cause. The Administration is arguing in the other cases that "for cause" termination limitations violate the "Separation of Powers" provision in the Constitution.)
Sauer asked the Supreme Court for a stay of a preliminary injunction issued by the U.S. District Court for the District of Columbia that allowed Cook to keep her job and that was upheld by a panel of the U.S. Court of Appeals for the District of Columbia. Sauer also asked for an administrative stay in the case.
As a result of the decisions by the D.C. District Court and the D.C. Circuit Court, Cook was able to attend a meeting of the Federal Open Markets Committee (FOMC) on Sept.16-17. The seven members of the Federal Reserve Board constitute seven of the 15 members of the FOMC. At that meeting, Cook voted with the majority in favor of the decision to lower the federal funds interest rate by 25 basis points.
"The government faces irreparable harm 'from an order allowing a removed officer to continue exercising the executive power' over the President's objection," Sauer wrote.
Trump last month ordered Cook removed from the board, citing an investigation into allegations of mortgage fraud.
The Trump Administration has charged that Cook made false statements on two separate mortgage applications, one for a home in Michigan and the other for a condominium in Georgia (claiming that the property being financed was her principal residence). The applications were filed before Cook was nominated to the Board by President Biden. The administration has referred the case to the Justice Department for investigation of whether Cook should be charged with a crime
The District Court and the D.C. Circuit Court had ruled that the firing was illegal, in part because Cook's mortgage applications occurred before she joined the Fed and also because she was not afforded due process.
However, Sauer said that the President has the power to remove Fed members for cause without restricting the permissible types of cause to things which happened after she became a member of the Board.
"If the President provides no reason at all for removing a member, a court could properly review that decision," Sauer wrote. "But once the President identifies a cause, judicial review must cease."
Cook has never attempted to explain the issues raised in the mortgage applications, according to Sauer.
He said that in removing Cook, the president found specifically that her past conduct impaired her ability to serve.
Sauer said that according to Trump, given Cook's "deceitful and potentially criminal conduct in a financial matter," neither he nor the American people could have the necessary confidence in her.
Sauer also disputed the notion that Cook had a Fifth Amendment property right to her position.
"The Due Process Clause concerns only deprivations of life, liberty, or property; Cook was deprived of none of the these," Sauer wrote.
Sauer said the President notified Cook of the allegations against her and waited five days before removing her. "Having declined to bring any defense to the President's attention or to dispute any material facts, Cook cannot complain about insufficient process," Sauer wrote.
The government also faces irreparable harm "from an order allowing a removed officer to continue exercising executive power" over the President's objection.
If the Supreme Court enters a stay, that might enable the President to potentially fire other members of the Fed for any reason that the President denominates as "cause" without a court being able to disagree with the President.
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