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09/23/2019

The Battle of the "For Cause" Directors
Michael Ramsey

It seems somewhat likely (as much as these things can be predicted) that the Supreme Court will take up the question whether Congress can require an agency director to be removable by the President only for cause.  At Vox, Ian Millhiser has this post: Trump just asked the Supreme Court to let him fire the CFPB’s head. The implications are enormous.  Despite the doomsday title (actually, the implications really aren't all that enormous), it's a good overview.  Here is the introduction: 

On Tuesday, the Trump administration asked the Supreme Court to hear a lawsuit challenging the leadership structure of the Consumer Financial Protection Bureau (CFPB) — taking the same side as the people suing the government in a major constitutional dispute.

The administration essentially threw in the towel in the challenge to the consumer protection agency started by senator and presidential candidate Elizabeth Warren. As a general rule, the Justice Department has a duty to defend federal laws challenged in court. The administration, however, decided not to defend the law at issue in this case.

With the Justice Department urging the Court to weigh in, it is now very likely that the justices will do so. The policy implications of this suit, Seila Law v. CFPBare unclear. In the narrowest sense, Seila Law is a case about whether a federal agency can be led by a single director that the president cannot remove at will. More broadly, however, the case is the most recent skirmish in a war over what kind of government our Constitution permits.

I joined an amicus brief on behalf of "Separation of Powers Scholars" -- but really, on behalf of originalist separation of powers scholars -- written by Ilan Wurman of Arizona State law school, in support of the challengers.  (I am honored to be among such distinguished company: Steven Calabresi, Michael McConnell, Saikrishna Prakash, Jeremy Rabkin and Michael Rappaport).  Here is the introduction:

The for-cause removal provision respecting the director of the CFPB creates an unprecedented concentration of unsupervised executive power, threatens the separation of powers and democratic accountability, and is unconstitutional. The Constitution vests the executive power in the President of the United States. U.S. Const. art. II, § 1 (“The executive Power shall be vested in a President of the United States of America.”). Whatever else this power includes, at a minimum it includes the power to appoint, control, and remove principal executive officers. To be sure, the Constitution assigns some of this executive power away from the President: Article II, Section 2 gives the Senate a share in the appointment power. But other than the Constitution’s specific assignments away from the President, the executive power of the laws rests with the President. The Take Care Clause supports this structural inference, implying that the President has that species of power—the ability to direct and remove officers—to ensure the faithful execution of the laws. Id. § 3 (“he shall take Care that the Laws be faithfully executed”).

Two important sources confirm that the power to remove executive officers was part of the “executive power.” William Blackstone, whose Commentaries on the Laws of England guided the Framers’ drafting of the Constitution, included within his conception of “the executive power of the laws” the power to conduct prosecutions, to issue proclamations binding on subjects (and, therefore, subordinate officers) as to how the laws are to be executed, and to appoint assistants—strongly suggesting the power to direct and remove subordinate executive officers engaged in the kind of enforcement function at issue in this case. Further, the First Congress concluded that, although not expressly mentioned in the Constitution, this removal power was constitutionally vested in the President because it was part of the executive power—an inference supported by the Take Care Clause. 

At Law and Liberty, John McGinnis discusses a related case: How Originalism Changes Legal Analysis.  Here is the introduction:

In Collins v. Mnuchin, the Fifth Circuit, sitting en banc, advanced the concept of the unitary executive by holding that the structure of the Federal Housing Finance Agency (FHFA) was unconstitutional, because its director did not serve at the pleasure of the President. The opinion is very important for showing how lower court judges should address precedent in tension with their view of the original meaning of the Constitution—in this case, that Article II vests the entire executive power in the President and thus gives him control over agencies exercising executive functions. Led by judges recently appointed by President Trump, the Fifth Circuit is asserting that the original meaning should cabin Supreme Court precedent averse to original meaning. That is, such precedent should control the outcome of a case when it is directly on point, but should be narrowly read. Chief Justice John Roberts is not generally praised by originalists, but here lower court judges are aggressively following his lead in sharply revising precedent [that is] contrary to the original meaning of provisions that establish our separation of powers.

Collins is pretty much the same issue as Seila (although a different agency) and reaches the opposite conclusion -- hence my prediction that the Court might agree to get involved. 

The keys to the "single director" cases such as Seila and Collins are (a) that while there is Supreme Court precedent upholding "for cause" limitations on agency removals, it is only for multi-member boards, not single directors, and (b) the "for cause" single director is a recent and relatively narrow phenomenon.  Thus a ruling against the "for cause" single directors is not actually in itself all that big a deal as a practical matter, but in principle it would be an important declaration that nonoriginalist precedent in this area won't be extended any further.  That's basically what then-judge Kavanaugh said in dissent in an earlier single director case, PHH Corp. v. Consumer Financial Protection Bureau, 881 F.3d 75 (D.C. Cir. 2018).

RELATED: The Wall Street Journal has this editorial on the matter: Administrative State Under Judicial Fire -- Appeals courts brawl over agency power. Will the Justices intervene? (discussing the Collins case and noting "The influx of originalist judges to the federal bench is moving the center of judicial opinion on administrative power.").