The Supreme Court has destabilized principles on federal agencies structures and for-cause removal.
When can Congress protect agency heads from at-will removal by, or at the behest of, the President?
Myers v. United States and Humphreys Executor v. United States, two Supreme Court decisions nearing their respective centennials, have long formed a stable basis for assessing the U.S. Congresss power to provide executive branch officials with for-cause removal protections. Such protections typically limit the grounds for removal to inefficiency, neglect of duty, and malfeasance in office, or similar deficiencies.
Under Myers and Humphreys Executor, officials who exercise purely executive functions could not be accorded such protections and must be removable at-will by the President. But officials who exercise quasi-judicial and quasi-legislative functions, particularly as members of multi-member commissions or boards, could be afforded for-cause protection.
In Humphreys Executor, the Supreme Court reasoned that the President could require subservience from officials exercising executive powers, such as a postmaster or federal prosecutor, for which the President had ultimate responsibilitybut not those who exercised the delegated powers assigned to the other branches. Under Humphreys Executor, the U.S. Constitution does not require that agency officials whose jobs involve more than just enforcementsuch as making rules or holding hearingsbe removable at-will by the President, despite being members of the executive branch.
The Supreme Courts 1988 decision in Morrison v. Olson destabilized this foundation a bit, holding that even some purely executive officials, such as individuals appointed as special counsel, could receive for-cause protection when warranted by their functions.
In 2010, Free Enterprise Fund v. Public Company Accounting Oversight Board further destabilized the framework it established in Myers and Humphreys Executor. The question in Free Enterprise centered on the constitutionality of a double level of for-cause protection: Could Congress set up one agency, headed by officials enjoying for-cause protection, that was nested under another agency headed by officials also possessing such protection? The Courts holdingthat Congress could not create more than one level of for-cause insulation between the President and virtually any executive branch officerwas not itself particularly destabilizing. But the majoritys rationale asserted that presidential control over executive branch officials was critical to the Presidents electoral accountability. That reasoning did not bode well for Humphreys Executors continuing validity.
Given the instability of the doctrine and the renewed focus on presidential control over agency officials, the Courts decision this past term in Seila Law v. CFPB was much anticipated.
Seila involved the removal protections Congress gave to the director of the Consumer Financial Protection Bureau (CFPB), an agency that exercises substantial quasi-judicial and quasi-legislative functions. The issue before the Court centered on the viability of the Humphreys Executor framework: Would the insulation the Court affirmed in Humphreys Executor apply even to a solitary agency head, an official freed from operating in a multi-member environment? Or would the Court jettison Humphreys Executor altogether and enshrine the unitary executive theory as constitutional law?
The CFPB case raised these issues in a disturbing context. In creating the CFPB, not only had Congress protected its director with a for-cause removal provision, but Congress had also allowed the director to serve for a five-year term. This structure meant that a President could serve an entire term without gaining an opportunity to replace the CFPBs director with someone more in tune with the Presidents philosophy.
Moreover, the CFPBs budget stems from a source entirely separate from the congressional appropriations process, as the CFPB is funded from bank fees collected by the Federal Reserve. The CFPB also has its own litigating authority, independent of the Attorney General. Substantively, the CFPB possesses broad authority to address issues that are quite controversial and could have broad impacts both on businesses and the general public.
In deciding that the CFPB directors removal protections were unconstitutional, the Supreme Court split along expected ideological lines. The five conservative justices sought to limit Humphreys Executor, with Justice Clarence Thomas, joined by Justice Neil Gorsuch, urging its complete abandonment. The four liberal justices sought to reaffirm what they considered to be Humphreys Executors broad reach.
The Courtwith Chief Justice John Roberts writing for the majoritycited to great effect the CFPBs single-headed agency structure, the directors five-year term, and the CFPBs financial independence and litigating authority as establishing a center of power controlled by one person. This structure, the Court explained, allowed the CFPB director to operate largely independent of the primary tools the political branches may use to control executive branch officialsnamely, the prospect of at-will removal by the President and Congresss appropriations process. But the Court eschewed reliance on such a contextual analysis in setting forth the legal rule upon which it rested its decision.
Under Seila, an executive officer who is the sole head of an agency cannot have for-cause removal protection, even if that officer exercises only quasi-judicial or quasi-legislative functions. Such an officials powers must be cabinedeither by having to work within a multi-member board or commission framework, or by being subject to at-will removal by the President.
In so holding, the Court refused to extend Humphreys Executor beyond the multi-member commission setting. In the majoritys view, such a rule was necessary to ensure that the President would remain politically accountable for the actions of principal officers within the executive branch. As Justice Elena Kagans dissent noted, however, the multi-member commission format complicates presidential control since a single agency director is easier to control than a multi-member commission or board.
One might wonder if the Court makes too much of the distinction between single-headed agencies and multi-member entities. Given the current political polarization, the manner of nominating and confirming officials to multi-member bodies, and the considerable powers that many commission and board chairs hold, some agenciessuch as the Federal Reserve, the Securities and Exchange Commission, and the Federal Communication Commissionappear to be largely run by individual chairpersons of their commissions or boards.
In dissent, Justice Kagan, writing an opinion joined by the other three liberal justices, began with a quite different premise than that embraced by Justice Roberts. She observed that the Court had repeatedly upheld provisions that prevent the President from firing regulatory officials except for cause, cautioning only that Congress could not impede the Presidents performance of his constitutional duties through imposing removal restrictions. Within that broad limit, Justice Kagan asserted, the Court had maintained that Congress could protect from at-will removal the officials it deemed to need some independence from political pressures.
Justice Kagan ultimately concluded that questions of agency design, removal protections, and the balance between the need for independence and political responsiveness are ones most appropriately left to the political branches of government. Justice Kagan is correct that an agencys independence, or lack thereof, depends on a wealth of features, which include removal standards, internal agency procedures and organization, cultural norms and traditions, and even the personal relationships between bureaucrats and politicians.
The majoritys rule governing for-cause protections may well be challenged as naively unsophisticatedas Justice Kagan does by describing it as the Schoolhouse Rock separation of powers theory. One might have also offered the same criticism of Free Enterprises one-level limitation on for-cause protection.
Nevertheless, in the context of the CFPB director, the majority may well have a point. The combination of the directors for-cause protection and lengthy term, as well as the agencys independent budgetary and litigating authority controlled by a single individual, is arguably a disturbing concentration of power.
But what would be the result if the majority relied upon the troubling characteristics of the CFPB and the tenure protection enjoyed by its director to hold that in combination those factors made the agencys structure too independent of the President and Congress?
Such a ruling would have been narrower, based on the specific facts of the case, and perhaps easier to defend against Justice Kagans challenge. But it would also have meant that many arrangements providing for-cause protection might be subject to a functionalist analysis that must account for all of the circumstances, rather than the relatively straightforward formalist rule the majority imposed prohibiting for-cause protection for single-headed agencies.
What is more, none of the CFPBs circumstantial characteristics are entirely unusual, as many independent agencies have some degree of insulation with regard to budgetary and litigation authority. And many other agencies also address controversial subjects that have broad impact.
In Justice Kagans hands, a more holistic approach would create little uncertainty. Virtually any arrangement, outside of those involving military and diplomatic affairs, would pass constitutional muster. But in the hands of the conservative majority, who believe in robust limitations on insulating executive branch officials, cases challenging the constitutionality of agency structures could likely turn on a combination of a myriad of interacting factors. Even after a string of Supreme Court decisions, the outcomes of these challenges would likely remain uncertain.
Indeed, the more holistic approach, in conservative hands, might begin to resemble the administrative law doctrine governing when Congress can assign adjudicatory powers to non-Article-III courts. The precedents underlying that doctrine, as Justice Sandra Day OConnor quite frankly acknowledged in 1986, do not admit of easy synthesis. And perhaps she should have omitted the word easy.
The majoritys rule in Seila, although absolute in its way, leaves questions unanswered. And although the rule may seem simplistic, and perhaps not entirely coherent conceptually, it does set forth a robust limit on Congresss ability to constrain removalan important aspect of presidential controlwithout launching the Court into an era of intrusive review of agency design best left to the political branches of government and to scholars.
The Court, however, does not appear to have finished with its consideration of for-cause removal protections. Within ten days of its decision in Seila Law, the Court granted certiorari in Collins v. Mnuchin and set the case for full briefing and argument. Collins involves a removal provision that affords for-cause protection to the head of the Federal Housing Finance Agency. The statute in question actually uses the term for cause rather than the typical inefficiency, neglect of duty, and malfeasance in office phraseology.
With Collins on its docket, next term the Court may refine the constitutional principles announced in Seila Law or construe the term for cause as used in a statutory removal provision.
Bernard W. Bell is a professor of law and the Herbert Hannoch Scholar at Rutgers Law School.
Read the original:
Revisiting the Constitutionality of Independent Agencies - The Regulatory Review
- FMO & IMO | Financial Independence Group, Inc - December 25th, 2016 [December 25th, 2016]
- financial independence - Good Financial Cents - December 31st, 2016 [December 31st, 2016]
- 8 Secrets to Achieving Financial Independence - January 4th, 2017 [January 4th, 2017]
- COLUMN-Millennial parents still like to tap the Bank of Mom & Dad - Thomson Reuters Foundation - February 7th, 2017 [February 7th, 2017]
- Republicans Move on Financial Deregulation; Fed Finalizes Stress Test Guidance - Lexology (registration) - February 7th, 2017 [February 7th, 2017]
- Millennial parents still like to tap the Bank of Mom & Dad - One ... - One America News Network (press release) - February 7th, 2017 [February 7th, 2017]
- Speaking of Women...Are We Really More Financially Independent Now? - Investopedia - February 7th, 2017 [February 7th, 2017]
- House Dems: Trump wants to put Wall Street first - The Hill - February 7th, 2017 [February 7th, 2017]
- 3 insider tips for achieving financial independence | The Motley Fool ... - Motley Fool UK - February 7th, 2017 [February 7th, 2017]
- The power of financial independence - KXAN.com - February 7th, 2017 [February 7th, 2017]
- Find out if you qualify for free tax preparation and financial advice - wtvr.com - February 7th, 2017 [February 7th, 2017]
- My Turn: Program provides a path out of homelessness - AZCentral.com - February 7th, 2017 [February 7th, 2017]
- Getting To Know You Tuesday: Elliot Dole - Forbes - February 7th, 2017 [February 7th, 2017]
- Millennial Parents Still Like to Tap the Bank of Mom & Dad - WealthManagement.com - February 8th, 2017 [February 8th, 2017]
- How to Prioritize Financial Goals When You Can't Do It All - Inside Higher Ed (blog) - February 8th, 2017 [February 8th, 2017]
- How to Modify Money Management After the Presidential Election - Yahoo Finance - February 10th, 2017 [February 10th, 2017]
- Congress could limit the Fed's independence and hurt the US economy - Washington Post - February 13th, 2017 [February 13th, 2017]
- Court Rejects Order Forcing Parents to Pay Tuition - Inside Higher Ed - February 13th, 2017 [February 13th, 2017]
- Syrian refugee families achieve financial independence in Alliston - Simcoe.com - February 14th, 2017 [February 14th, 2017]
- Sheroes Founder Sairee Chahal ventures for Women's Financial Independence in India's sometimes Suffocating ... - Plunge Daily - February 16th, 2017 [February 16th, 2017]
- Advocates say more women need financial independence: 'We really do need that extra leg up' - Globalnews.ca - February 16th, 2017 [February 16th, 2017]
- Surviving widowhood: Five tips to avoid financial hardship - Cincinnati.com - February 16th, 2017 [February 16th, 2017]
- Q & A with Sr. Maureen Gallagher, setting up financial independence paths for women in Mexico - Global Sisters Report (blog) - February 16th, 2017 [February 16th, 2017]
- The road to financial freedom - ABS-CBN News - February 18th, 2017 [February 18th, 2017]
- Byron Moore: Position, Pace and Power perform like a pro - Monroe News Star - February 18th, 2017 [February 18th, 2017]
- Cash Course - Binghamton University Pipe Dream - February 20th, 2017 [February 20th, 2017]
- Independence Financial Partners - SPECIALIZING IN - February 20th, 2017 [February 20th, 2017]
- 'Financial you' hits all bases, aligns with priorities, values - Lehigh Valley Business - February 20th, 2017 [February 20th, 2017]
- International Financial Reporting Standards - Wikipedia - February 21st, 2017 [February 21st, 2017]
- Opinion: Young adults need an easier path to financial independence - LSU Now - February 23rd, 2017 [February 23rd, 2017]
- Retiring in their 30s. Yep, they're doing it. - Crain's Chicago Business - February 24th, 2017 [February 24th, 2017]
- Successful Boomer Women Offer Financial Advice to Younger ... - Fox Business - February 24th, 2017 [February 24th, 2017]
- 'Thousands' of cancer sufferers forced to borrow money from parents because of financial difficulties caused by illness - The Independent - February 27th, 2017 [February 27th, 2017]
- Independence Contract Drilling, Inc. Reports Financial Results For The Fourth Quarter And Year Ended December 31 ... - PR Newswire (press release) - February 28th, 2017 [February 28th, 2017]
- Another way to measure retirement readiness: Your 'Power Percentage' - USA TODAY - March 1st, 2017 [March 1st, 2017]
- Oran Hall | Young cop seeks financial independence | Business ... - Jamaica Gleaner - March 6th, 2017 [March 6th, 2017]
- International Women's Day - Investing for financial independence - Simple Landlords Insurance (press release) (blog) - March 8th, 2017 [March 8th, 2017]
- Game of Thrones gave financial independence to actor Conleth Hill - Bollywood Life - March 8th, 2017 [March 8th, 2017]
- How to Leverage Your Small Business for Financial Success - Kiplinger Personal Finance - March 9th, 2017 [March 9th, 2017]
- A Struggle Back to Financial Independence After a Brain Injury - The Good Men Project - March 9th, 2017 [March 9th, 2017]
- Ten favorite personal-finance books - Christian Science Monitor - March 11th, 2017 [March 11th, 2017]
- Five facts about financial independence - finder.com.au - April 8th, 2017 [April 8th, 2017]
- Regulatory reform leads to financial independence - Argus Leader - Sioux Falls Argus Leader - April 8th, 2017 [April 8th, 2017]
- Mayor Berke's Council For Women Takes On Predatory Lending - The Chattanoogan - June 6th, 2017 [June 6th, 2017]
- Mayor's Council For Women Invites Public To Financial Independence Hearing On Monday - The Chattanoogan - June 6th, 2017 [June 6th, 2017]
- How I Reached Financial Independence By Age 40 - The Dough Roller - June 6th, 2017 [June 6th, 2017]
- Berz: High-interest loans can hamper financial independence - Chattanooga Times Free Press - June 6th, 2017 [June 6th, 2017]
- Financial tips, resources for college grads - WTOP - June 6th, 2017 [June 6th, 2017]
- Public invited to hearing on financial independence, high-interest lending - Nooga.com - June 6th, 2017 [June 6th, 2017]
- Financial Independence | Tardus | Retire Early | Wealth - June 6th, 2017 [June 6th, 2017]
- How to become financially independent in 5 years - Jun. 6, 2017 - CNNMoney - June 7th, 2017 [June 7th, 2017]
- House Republicans Vote to Strip Away Post-Financial Crisis Safeguards - Roll Call - June 8th, 2017 [June 8th, 2017]
- Auditor Independence Definition from Financial Times Lexicon - June 8th, 2017 [June 8th, 2017]
- Top 5 tips to achieve financial independence | Mpumalanga News - Mpumalanga News - June 11th, 2017 [June 11th, 2017]
- Two 6% dividends to help you achieve financial independence ... - AOL UK - June 11th, 2017 [June 11th, 2017]
- Sun Life kicks off Financial Independence Month with beautifully crafted short films - ABS-CBN News - June 13th, 2017 [June 13th, 2017]
- How to become financially independent in 5 years - CNNMoney - June 13th, 2017 [June 13th, 2017]
- Achieve financial independence with stocks by following this one ... - AOL UK - June 17th, 2017 [June 17th, 2017]
- I'll pursue financial independence for judiciary - Akuffo - GhanaWeb - June 20th, 2017 [June 20th, 2017]
- Baker awarded Helping Hands grant - Columbia Daily Tribune - June 22nd, 2017 [June 22nd, 2017]
- Baker awarded Helping Hands grant - Devil's Lake Daily Journal - June 23rd, 2017 [June 23rd, 2017]
- Porter's Five Forces can help you achieve financial independence ... - AOL UK - June 24th, 2017 [June 24th, 2017]
- You can achieve financial independence easily by using buckets ... - AOL UK - June 24th, 2017 [June 24th, 2017]
- You can achieve financial independence easily by using buckets ... - Motley Fool UK - June 26th, 2017 [June 26th, 2017]
- Greater savings options for feds draw praise, while move to cut their retirement looms - Washington Post - June 26th, 2017 [June 26th, 2017]
- Alabama one of the least financially independent states in the country - Birmingham Business Journal - June 26th, 2017 [June 26th, 2017]
- JL Collins' Tips for Achieving Financial Independence - The Dough Roller - June 26th, 2017 [June 26th, 2017]
- 3 steps to become wealthier and more successful - Ladders - June 27th, 2017 [June 27th, 2017]
- These 5% dividend yields could help you win financial independence - AOL UK - June 30th, 2017 [June 30th, 2017]
- Celebrating Independence - Jewish Link of New Jersey - June 30th, 2017 [June 30th, 2017]
- The easy way to financial independence - AOL UK Money - AOL.co.uk - AOL UK - July 2nd, 2017 [July 2nd, 2017]
- 5 powerful steps towards financial independence and retiring early ... - AOL UK - July 3rd, 2017 [July 3rd, 2017]
- Independence Financial Group - July 3rd, 2017 [July 3rd, 2017]
- Gain Financial Independence Attend a FREE Educational Event - FOX31 Denver - July 14th, 2017 [July 14th, 2017]
- CNNMoney readers react: She retired at 28 with $2.25 million - Aug ... - CNNMoney - August 6th, 2017 [August 6th, 2017]
- How to retire early with financial independence in 3 steps - NBC2 News - August 6th, 2017 [August 6th, 2017]
- Could this miner help you secure financial independence faster than ... - AOL UK - August 24th, 2017 [August 24th, 2017]
- Solutions 4 Financial Independence: 8/22/17 - WDTV - August 24th, 2017 [August 24th, 2017]
- The 7 Stages of Financial Independence | Radical Personal ... - July 30th, 2018 [July 30th, 2018]
- Financial Independence - August 3rd, 2018 [August 3rd, 2018]