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The U.S. Supreme Court recently heard oral arguments in Trump v. Cook, involving the issue of whether the President may remove Lisa Cook as a member of the Board of Governors of the Federal Reserve Board. Board Members may be removed "for cause," and the President has cited alleged mortgage fraud as the basis for the removal of Cook as a Board Member.
In September 2025, Judge Jia M. Cobb, with the federal district court for the District of Columbia, issued a preliminary injunction blocking the attempt to remove Cook. While the Trump Administration argued that Cook made false statements on mortgage applications for a home in Michigan and a condominium in Georgia, Judge Cobb held that the Administration had not presented evidence of cause related to Cook's conduct or job performance as a Fed Board member. Significantly Judge Cobb also held that the "for cause" removal provision applicable to Fed Board Members only applies to their behavior while they are a Board Member. With regard to the allegations of mortgage fraud, lawyers for Cook have asserted that reports confirm that Cook properly declared her Michigan home as her principal residence, and that, as part of her mortgage application, she described the property in Georgia as a vacation home.
Judge Cobb also ruled that Cook should have been given notice of and an opportunity to answer the allegations against her before she was terminated. The Trump Administration argued that a post by the President on Truth Social alleging the mortgage fraud provided Cook with the opportunity to respond. She did not respond to the allegations, and the President subsequently sent her a letter stating he was removing her from the Board. Cook then brought the lawsuit challenging her termination.
The Trump Administration promptly filed an appeal with the U.S. Circuit Court of Appeals for the District of Columbia. Six days after the ruling by Judge Cobb, a divided three-judge panel of the D.C. Court of Appeals upheld Judge Cobb's preliminary injunction, finding that Cook's "due process claim is likely to succeed" and that because she "has a property interest in her position, she is entitled to 'some kind' of process before removal."
The Trump Administration then filed an emergency application with the U.S. Supreme Court seeking a stay of the preliminary injunction. The Court allowed Cook to remain on the Fed Board pending the oral arguments before the Court.
At the Court, Solicitor General D. John Sauer argued on behalf of the Trump Administration and former Solicitor General Paul D. Clement argued on behalf of Cook.
While the Trump Administration admitted that the President can't remove a Fed Board Member for policy differences, the main thrust of its position is that (1) the President can remove a Board Member for cause, even for acts before the person was a Board Member, without any formal notice or hearing, (2) the appropriate remedy to challenge the removal would be mandamus, and (3) mandamus is not available to challenge the removal because it was a discretionary act of the President. Thus, the basic position of the Trump Administration is that there is no ability for a court to review if the removal was proper. Justices expressed skepticism about such position, particularly Justice Kagan who stated "[s]o, I mean, when we're talking about the president's removal powers, you're essentially saying that the only remedy[, which is mandamus,] doesn't apply."
Some of the Justices pressed Sauer on whether the President will suffer irreparable harm if Cook is allowed to remain on the Board pending the final outcome of the litigation. When questioning Sauer, Justice Sotomayor stated:
"Explain to me why the president's harm is greater than the public's, greater than the Federal Reserve, who deserves to have people acting that have been in office, and, number three, why we should disrupt, as we said in Wilcox, the disruptive effect of repeated removals and reinstatement of officers.
Why shouldn't we wait until the end of this case, where all the issues are clear and where we make a final decision as to whether she should have been removed or not?"
Justice Jackson did not think the President would suffer irreparable harm, and Justice Barrett also appeared to be skeptical of whether he would suffer such harm.
One of the more interesting exchanges occurred during the questioning of Sauer by Justice Kavanaugh regarding the reason for the "for cause" removal provision, which the Justice stated, "is what protects the independence of the Federal Reserve." After stating that the position argued by the government would establish "a very low bar" for the "for cause" removal of a Board Member, Justice Kavanaugh then engaged in the following questioning:
JUSTICE KAVANAUGH: Let's talk about the real-world downstream effects of this because, if this were set as a precedent, it seems to me, just thinking big picture, what goes around comes around.
All of the current president's appointees would likely be removed for cause on January 20th, 2029, if there's a Democratic President or January 20th, 2033, and then we're really at at-will removal. So what are we doing here?
GENERAL SAUER: Yeah.
JUSTICE KAVANAUGH: What is –you know, we started –that's why I started with what's the purpose of the independence in the for-cause removal. If we accept all these no procedure, no judicial review, no remedy, you know, that's what's going to happen, I think, and then –then where are we?
So do you dispute that that is, you know, the –the real-world effect?
GENERAL SAUER: I cannot predict what future presidents may or may not do, but the argument strikes me as a policy argument –
JUSTICE KAVANAUGH: Well, history is a pretty good guide. Once these tools are unleashed, they are used by both sides and usually more the second time around. And I think that's what –that's what we have to make sure we're –again, that can't drive the decision necessarily. We have to be aware of what we're doing and the consequences of your position for the structure of the government.
Other Justices also appear to be concerned about the ramifications of the case. Significantly, the case has proceeded rapidly through the courts and as noted above, is before the Supreme Court on an emergency application. As a result, the significant legal issues involved have not been thoroughly analyzed, nor have the facts of the case been determined. As a result, the Justices appear to be skeptical about ruling on the substantive issues in view of the limited record and analysis.
The issues include:
- What is cause for purposes of the "for cause" removal
provision?
- Does it mean the INM standard, inefficiency, neglect of duty, or malfeasance in office, used in some statutes; INM plus ineligibility for office by virtue of serving as an officer, director, or stockholder of a bank, banking institution, or trust company, which is prohibited under Section 244 (12 U.S.C. 244); or something else?
- Does it include gross negligence?
- Does the "for cause" removal provision only apply to the behavior of a Board Member while they are on the Board, or does it also apply to pre-tenure behavior?
- Does the "for cause" removal provision, which does
not expressly provide for notice and a hearing, nonetheless require
notice and a hearing?
- If so, what type of notice and hearing?
- Is a preliminary injunction an appropriate remedy to challenge a removal, or is mandamus the only option?
Predicting how the Court will rule based on oral arguments is a cross between reading a cloudy crystal ball and reading tea leaves. Assuming the Justices believe that a preliminary injunction is the appropriate remedy at this point in the case, it appears they are inclined to leave the injunction in place and remand the case to the district court for the development of the facts and analysis of the substantive issues. If so, Cook will be eligible to remain on the Board at least until there is a ruling on the substance of the case.
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