Trump Administration Asks Supreme Court To Allow President To Fire FTC Member Without Cause

The Supreme Court should abandon a 90-year-old precedent and decide that President Trump should be permitted to fire Rebecca Slaughter from the Federal Trade Commission without cause, Solicitor General D. John Sauer told the Court on December 8 during oral arguments.

"I think broad delegations to unaccountable independent agencies raise enormous constitutional and real-world problems for individual liberty," Justice Brett Kavanaugh, said. Although, as we address below, Justice Kavanaugh expressed concern about the implications for the Federal Reserve Board if the Court determines that a President can fire an FTC Commissioner without cause.

Justice Sonia Sotomayor said that the Trump Administration is "asking us to destroy the structure of government and to take away from Congress its ability to protect its idea that the government is better structured with some agencies that are independent."

After being dismissed from the FTC without cause earlier this year, Alvaro Bedoya and Slaughter promptly filed suit, contending that their dismissals were illegal since the FTC is supposed to be an independent agency.

They said that Trump's decision was in direct violation of federal law, citing the 1935 Supreme Court ruling, Humphrey's Executor, in which the court upheld the constitutionality of the for-cause removal standard applicable to FTC commissioners. (Bedoya subsequently resigned from the commission and no longer is part of the suit.)

Trump has attempted to fire Democrats from several other boards and commissions, including the National Labor Relations Board, the Merit Systems Protection Board, and the National Credit Union Administration. Several of the ousted board and commission members have likewise filed suit.

Judge Loren AliKhan of the U.S. District Court of the District of Columbia ruled that Slaughter had been illegally fired, as did two of the judges on the U.S. Court of Appeals for the District of Columbia's three-judge panel. However, Chief Justice John Roberts issued a stay of the appellate court's order.

In 1935, in Humphrey's the Court ruled that FTC members could only be fired for cause. Attorneys for Slaughter cited that precedent in arguing that she could only be removed for cause.

However, Chief Justice John Roberts said that a great deal of time has passed since that decision. He referred to Humphrey's as a "dried husk," adding that the current FTC bears little resemblance to the FTC that existed when Humphrey's was decided.

Humphrey's was "addressing an agency that had very little, if any executive power," Roberts added.

Arguing on behalf of the Trump Administration, Sauer said that Humphrey's was "grievously wrong when decided." He said that the decision insulates the commission from political accountability.

Sauer said that Trump should be permitted to fire Slaughter since the FTC now exercises some executive powers. "All executive power is vested in the President," he said. He added, "The President is going to have all the executive power that the constitution dictates."

In response, Slaughter's attorney, Amit Agarwal, said Slaughter's firing was not legal. "The President's constitutional duty to execute the law does not give him the power to violate that law with impunity," he told the court.

He added that the Administration fired Slaughter "without cause in violation of the FTC Act as authoritatively construed by this Court."

Agarwal said the FTC case has broad implications for other independent agencies.

He said that if an FTC member can be removed without cause, "everything would be on the chopping bloc."

Justice Ketanji Brown Jackson seemingly agreed, having previously said to General Sauer, "[Y]ou're asking us to ask the question with respect to each agency, what are they doing. That's the necessary result of the argument that you're making in this case. And I guess my point is one way to avoid these difficult line-drawing problems would be to let Congress decide." She later added that an agency that exercises some executive functions is not necessarily an executive agency.

The Justices presented tough questions to both Sauer and Agarwal, with many focusing on what factors distinguish an executive agency fully subject to the control of the President from an independent agency that is less subject to the control of the President. There were no good answers.

With regard to the Federal Reserve Board, in questioning Sauer, Justice Kavanaugh stated "can I ask you about the Federal Reserve. The other side says that your position would undermine the independence of the Federal Reserve and they have concerns about that, and I share those concerns." He then asked Sauer how he would distinguish the Fed from agencies such as the FTC.

Sauer responded that the Court has previously observed "that the Federal Reserve is a quasi-private uniquely structured entity that follows a distinct historical tradition of the First and Second Banks of the United States." Sauer added that the Fed "has been described as sui generis." That is not a clear path for distinguishing the Fed from agencies such as the FTC.

Many news organizations have predicted that the Supreme Court will rule in favor of the Trump Administration. While it appears that the Justices are concerned about the implications on other federal agencies, particularly the Fed, of a ruling that a President may fire an FTC Commissioner without cause, it does appear that the Court is heading for such a ruling.

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