Jack Goldsmith is joined by Professor Aditya Bamzai of the University of Virginia Law School. They discuss the president’s constitutional removal power, whether the president satisfied the statutory “for cause” standard in firing Cook, why that issue is hard, whether Cook’s pre-Fed actions are relevant, whether Cook gets notice and a hearing before firing, and whether a reinstatement remedy is available.
This is an edited transcript of an episode of “Executive Functions Chat.” You can listen to the full conversation by following or subscribing to the show on Substack, Apple, Spotify, or wherever you get your podcasts.
Jack Goldsmith: Good morning. This morning, I’m going to talk to Professor Aditya Bamzai at the University of Virginia Law School about the President’s firing of Lisa Cook, a member of the Federal Reserve Board of Governors. Aditya is an expert on the removal powers of the President, and he’s also an expert on removal in the context of the Federal Reserve, so he’s the perfect person to talk to us about these issues. So I’m just going to briefly go over what happened, but thanks for doing this, Aditya.
Aditya Bamzai: Thanks so much, Jack, for having me. Good morning to you. And you did leave out my most important credential, which is: I was once a civil procedure student in the class of Professor Goldsmith back in the spring of 2002.
I take full credit for all of your success. OK, so Monday the president fired Lisa Cook, a member of the Federal Reserve Board of Governors. The relevant statute, which is 12 U.S. Code § 242, prescribes the term for the governors and says they shall—I’m quoting—“hold office for a term of 14 years unless sooner removed for cause by the President.” And those words, “for cause by the President,” are going to be very important. One big question here is going to be: What counts as a for-cause removal?
Unlike many other removal provisions that are strewn about the U.S. Code and at issue in Supreme Court decisions, this one—I’m going to call it a naked for-cause provision—does not specify any criteria for removal. The standard criteria (and there are many variations) for removal are things like inefficiency, neglect of duty, or malfeasance in office. Those things, by the way, tend to focus on what happens in office that may be relevant.
But those criteria are not present in this removal statute, which is going to be very important. This is a simple, undefined for-cause removal provision.
So Trump claimed to fire Cook for cause. I’m reading the cause was allegedly false statements that she made on two mortgage agreements from 2021, before she became a member of the board. President Trump said that those alleged false statements deprived him of confidence in her integrity and honesty, and that is the cause for removal.
The last thing I’ll say is that even though the president invoked the statute and gave that as his reason—the for-cause provision as his reason for the removal—he also cited Article II of the Constitution. He said he was exercising the powers vested in Article II: both the executive power vested in him and his duty to take care to faithfully execute the law.
So that’s the situation. I want to get into the legal issues here, but can you just start off with a brief primer on presidential removal power—what it’s about, where it comes from?
Absolutely. The first thing I want to say on that is that there’s a lot that could be said, and we could easily have an hour of conversation over that topic alone. This is certainly a disputed issue in which people have differences of opinion. So in giving this very short summary, I’m no doubt dropping things on the floor and not covering the whole—
Sure, of course not. I mean—
Yeah. So look, the question of who’s the head of the executive branch comes up at the Constitutional Convention, and there are proposals to have a multi-headed executive, not just a single head. And then, famously, we come out of the convention with a Constitution that has unity in the executive—one head of the executive branch. What that means exactly—that’s just the form. What it means in substance is the question addressed by these removal debates, as well as the cases.
And the debates start almost immediately. The very first debate about the Constitution that occurs when Congress convenes is over who gets to control the various departments Congress is creating: Foreign Affairs, Treasury, the Department of War. These are the predecessors of the State Department and the Defense Department.
There’s a debate about it, and James Madison famously takes the view that the president has removal authority by virtue of this provision in Article II that vests the executive power in a president, and that Congress could not take that away from the president.
This is removal of executive officers.
Removal of executive officers, exactly. Now, various other members of Congress had different views, and exactly how they line up is certainly still disputed today among people writing on this topic. But that happens in 1789, and then there’s a little bit of a practice that develops, which always comes to the fore when there are big disputes over who controls the executive branch. That typically happens when parties switch power.
When the Democratic-Republicans, with the election of Thomas Jefferson, took over from the Federalists, the question was heavily debated once again in the early 1800s. It was heavily debated when Andrew Jackson took over and fired a whole bunch of people appointed in the prior two or three administrations. It was then heavily debated when Andrew Johnson tried to remove members of the prior Lincoln administration.
At that point, in fact, Congress enacted a statute called the Tenure of Office Act in 1867 that limited Johnson’s ability to control the executive branch. We literally had a moment when Johnson tried to fire the secretary of war, and the secretary said, “You can’t fire me. I’m just sitting here in my office.” And there was real tension between the president and the secretary of war.
All of those debates tend to arise against the backdrop of whether the rule ought to be: The president can remove, or the president has to go to the Senate and get the Senate’s approval before removing an officer.
And that’s because the Senate confirmed the officer.
Exactly. Usually the appointments of these principal officers occurred with the advice and consent of the Senate, and so there was the question of whether you had to go back to the Senate for its consent before engaging in removal. And the Tenure of Office Act essentially said that.
That was in 1867, when the Tenure of Office Act was enacted. Johnson was impeached and almost convicted, partly for claims that he violated the Tenure of Office Act in all these proceedings. The act stayed on the books until 1887, when it was repealed at the urging of various presidents who said it hindered management of the executive branch. They argued they could not get officers to perform their duties effectively with the statute in place.
At the same time, in 1887, Congress created what is now conventionally thought of as the first independent agency, the Interstate Commerce Commission. They include in that statute included language saying the president could remove commissioners for “inefficiency, neglect of duty, or malfeasance in office.” That language is now considered the genesis of what we refer to as for-cause provisions.
The ICC statute said inefficiency, neglect of duty, malfeasance in office. The ICC was followed shortly thereafter by another agency, called the Board of General Appraisers in 1890, with similar statutory language.
The Federal Reserve is thought to be the second major independent agency. It was not created until 1913, and it had different language from the earlier boards. As mentioned at the start of our conversation, the Federal Reserve’s statute used “for cause” language instead of what you could call the INM standard—the inefficiency, neglect, malfeasance standard.
So the question is: What does this language mean?
Most of the litigation in the Supreme Court in recent years, and frankly most presidential removal litigation, has involved the constitutional standard. The question has been whether the president must abide by the various for-cause standards Congress imposes, or whether under Article II—under the vesting clause and the take care clause—the president can disregard those statutory standards.
Is it fair to say that has been the thrust of the litigation in the Supreme Court—the constitutional standard?
I think that’s right. Yes.
So if we think about why that might be, one possible explanation is that up until recently, presidents did not tend to fire individuals subject to these standards. In fact, until modern times, there had only been one firing by President Taft—actually two firings, but one episode in 1913—and then another episode with President Nixon in 1969.
So presidents tended not to fire individuals subject to these protections. Most of the litigation instead involved regulated parties, who argued that executive officers subject to that type of removal provision were not being properly supervised by the president. The Court entertained that type of litigation.
That raises a separate question about whether that procedure is appropriate. But assuming it is appropriate, the argument was that the existence of a removal provision limiting the president’s ability to oversee officials is itself unlawful. That tended to tee up the constitutional question, and it did not require the Court to get into the weeds of what the standards meant, since they weren’t being applied to concrete circumstances.
The Court did say things about the standards occasionally, but it didn’t get deep into the weeds.
OK. So if I understand what you just said, basically the constitutional challenges did not arise because presidents were firing people protected by for-cause provisions. They arose because regulated parties brought the challenges.
Before we get to the Federal Reserve issue—why did presidents tend not to invoke these standards? Why did presidents shy away from even using them? I’ve always thought these for-cause standards don’t seem very hard to satisfy, especially since the president gets some deference on judgment. Is there a reason why presidents weren’t aggressive in pushing the limits on these statutory standards?
Well, your guess is as good as mine, Jack. That’s more a question of constitutional politics than of law. Why didn’t presidents claim that someone had failed in their duty enough to provide cause for removal? I can only speculate.
One possibility is that many agencies until modern times—until the CFPB, the FHFA, and the Office of Special Counsel—were multi-member agencies subject to for-cause provisions. Typically members cycled off those boards every one or two years, and usually within a year or two the president gained control of that board regardless of who was on it.
So if a Republican president took office, the board might still start off with a Democratic majority. The president might calculate: either I could fire a member of the opposing party immediately, or I could wait it out, and in a year or two I’ll have control of the board. Then I’ll control the board for four or five years, and who knows if I’ll still be in office then.
So it may have been a cost-benefit calculus based on those considerations.
OK. Let’s get to the Trump firing. President Trump has fired many members of independent agencies since Jan. 20. All of those—I believe, correct me if I’m wrong—starting with Hampton Dellinger at the Office of Special Counsel, and including the NLRB, the Merit Systems Protection Board, and many other for-cause protected agencies.
In those cases, the president asserted his constitutional power to disregard the for-cause provisions and just say: I have Article II power to do this. He fired on that basis. Thus far, he has done very well in the Supreme Court making those constitutional arguments, at least at the interim orders level.
But this time was different. This involved the Federal Reserve. This time the president did not rely solely on his constitutional power, but purported to apply the for-cause standard. He argued that alleged past bad acts called into question Governor Cook’s integrity to continue serving in office.
Why the difference here? Why has the president relied on the statutory standard? Why didn’t he go guns blazing for the constitutional standard?
Right. So a couple of points on that. First, members of the audience may already know this, but there have been a sequence of cases at the Supreme Court—Free Enterprise Fund, Seila Law, Collins v. Yellen—where the Court has embraced a more robust version of the president’s removal authority and said that provisions limiting that authority are unconstitutional.
Now, coming into the Trump administration, there were still some interpretive questions about what those cases meant for various boards. The Trump administration interpreted Seila Law and Collins robustly to justify these firings. So that’s part one—they read those cases to invalidate removal restrictions on these other boards.
Your question is: How about the Federal Reserve Board of Governors? Why treat it differently?
There are two possible answers. One relates back to our earlier exchange: political calculus. They may be concerned about how the markets will react to claims of authority over the Federal Reserve. That’s possible. And it is interesting that there was no discernible market reaction the day after the firing occurred.
The second is this case (I think you previously referred to) that was litigated to the Supreme Court, Wilcox versus Trump. And that’s a case in which (if I’m glossing this correctly) it’s happening on the interim orders docket, and so there’s not full explanation of the Court’s perspective. But the Court gives a pretty clear hint that the Trump administration’s interpretation of Seila Law and Collins is probably going to prevail. And I’m just going to hedge a little—probably going to prevail such that members of these other multi-member agencies who are subject to for-cause limits, they’re going to be treated the same way Seila Law treated the CFPB director.
They were talking in particular about the NLRB and the Merit Systems Protection Board there.
Correct. Yeah. But then there’s some language in the opinion. And the language, if I just read it out, is the Court says, well, our treatment of the NLRB and the MSPB does not necessarily implicate the constitutionality of for-cause removal protections for members of the Federal Reserve’s Board of Governors or other members of the Federal Open Market Committee because—and then this is a quote—“the Federal Reserve is a uniquely structured quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” period.
And Justice Kagan, who’s writing a dissent from this opinion, disagrees with this reasoning and says, well, this exception comes out of the blue. And really, the Federal Reserve’s independence rests on the same doctrinal, the same analytical basis as all these other multi-member agencies.
But that’s the state of play. So perhaps, again, there could be like a market-driven perspective on how the administration is approaching this, but there also could be a reading of the Wilcox v. Trump order in the case and them thinking, well, maybe the Federal Reserve will be treated differently.
So I don’t find the first one as persuasive as the second one because it’s not clear to me why the market would react differently to what is seemingly at least slightly aggressive invocation of the for-cause standard—we’ll get to that in a second and see if I’m right—versus a constitutional standard. And I don’t know if the market is as sensitive to that distinction. Maybe the constitutional standard has broader implications for the president’s control over the Fed. Maybe that’s the idea.
The second one seems right to me, or at least more clearly right to me. The Supreme Court was clearly sending a signal, whether it was justified or not, whether it was principled, not at all clear.
I mean, haven’t you written that the Fed as currently constituted really isn’t—and we can’t get too deep into this—but that the Fed as currently constituted really isn’t different from the perspective, in terms of the constitutional removal issues, from other independent agencies. Is that a fair summary of your long article on that?
Well, so if I could answer the question, but actually I’ll zoom out and say what’s intriguing about this paragraph in the Supreme Court’s opinion in Wilcox is that they couldn’t possibly mean that an entity known as the Fed would be subject to some other rule irrespective of what authorities it actually exercised.
And so, for example, what if Congress tomorrow says, you know, Federal Reserve Board of Governors, you have oversight over the CIA and the Department of Defense, and they’re now going to be slotted underneath you. Well, presumably, when we’re talking about treating the Fed in a tradition that dates back to the First and Second Banks, that hypothetical with the Department of Defense being overseen by the Fed is not in that tradition. So presumably the analysis turns on what the Fed’s functions actually are. That’s what I would assume is the proper way to look at this.
And then what those functions are and whether they are in the historical tradition of the First and Second Banks today—well, that’s going to be a disputed question, and it’s going to be a question about drawing the appropriate analogies with the First and Second Banks. And so I think that’s probably, at a high level, the way I would articulate just the issue that’s arising.
Yep. So, I mean, is it fair to say then that it’s a) not clear that the Federal Reserve is like the First and Second Banks of the United States in every relevant particular, and b) even if it was, it’s not completely settled and clear why or how that would matter to the president’s removal authority? Are those two propositions correct?
So I think both propositions are correct.
It seems to me that wouldn’t the right way—assuming you want to look at this historical tradition—wouldn’t the right way to do that be function-by-function, as opposed to just saying, well, this is about the Federal Reserve and it sounds a little bit like the First and Second Banks. So I think that’s correct on your first point.
On the second point, well, it all depends what the Court means by this. Maybe we’ll see further elaboration in some future opinions. But conceivably, the way the Court is looking at this is that the First and Second Banks were in fact private entities. They were corporations created by—or at least I should say their status was a little bit disputed. It’s a little bit unclear. Probably the best way to look at them is that they were private entities—I’ll hedge a little bit there. And so the Court has this language about how the Federal Reserve is quasi-private.
And there are other corporations incorporated by the federal government. People may know about corporations like FINRA or the Horse Inspection Safety Administration. And there’s litigation about those entities and whether they are appropriately private or are exercising government authority. Another famous example would be Amtrak. That was an issue litigated all the way to the Supreme Court.
So this question of when the government can devolve certain functions to a private entity that’s outside political supervision is a broader one than what’s arising here. If that’s the way the Court is looking at this—it’s not entirely clear that’s the way the Court is looking at this—maybe we’ll see some further development on that.
But I’ll just say, and then we need to move on, I’ll just say that obviously the Court felt compelled in upholding the president’s removal authority and extending or making more robust Seila Law and Free Enterprise Fund and Collins, in basically giving the nod to the president’s removal authority for multi-member independent agencies. It felt compelled to put down a marker saying the Fed either is different or might be different. And that clearly sends a signal. And it’s quite possible that’s what the Trump administration was responding to.
Can I just say one thing about that? One thing. It’s such an interesting political-economic story. The Court thinks of, hey, your rule about removal would govern the Fed, the Board of Governors and the Open Market Committee, as being what might be described as the reductio—the reductio ad absurdum. Could it really be that the president controls these officers?
And the point I wanted to make is: When the Supreme Court is deciding Humphrey’s Executor, which is the case at stake in this set of litigation about removal protections—it’s the case that says there can be removal protections for quasi-judicial, quasi-legislative entities—the Court doesn’t mention the Fed at all. They don’t say, oh, if we uphold the FDR administration’s removal of FTC commissioners, the reductio would be that the FDR administration could control the Federal Reserve.
Instead, they have a line about how if they were to uphold the FDR removal here, then what that would lead to is quasi-judicial entities like the Interstate Commerce Commission and the Court of Claims being subject to presidential removal. And what’s so interesting: The Interstate Commerce Commission no longer exists. Nobody seems to care about the Federal Trade Commission in particular. And the Court of Claims goes completely unmentioned in any of this litigation as a potential reductio.
So just an illustration of how our perception of the importance of these various entities shifts over time.
It shifts over time for sure. OK. So this is all background basically, because the president did not claim—at least not directly—a constitutional power to remove Cook. He claimed a statutory power to remove Cook. He claimed to be complying with the for-cause provision. And again, I want to emphasize—
Can I stop you right there? Arguably, he claims both, right? Arguably.
Well, fair. I mean, as I mentioned at the outset, he invokes Article II, and he says that he’s exercising his Article II power and the take care power. That’s relevant because some of these old cases say that in interpreting these statutes, those constitutional powers are relevant. So I’m not suggesting that Article II is not in the picture here. I’m just saying this removal was unlike the prior removals that said, we don’t care about the statutory for-cause provision. We have the constitutional power to do it. We can disregard it. He’s not disregarding the statutory provision here, right?
Correct.
He’s applying the statutory provision in light of his constitutional powers. That’s probably the best way to put it.
But this raises the question: What does for-cause mean? And how do we tell? Because what the president has done is not the typical standard for inefficiency, neglect of duty, or malfeasance in office. Those connote things that happen in office. He has invoked a cause that concerns behavior before she entered office—alleged illegality in connection with mortgages. And he’s claimed that because of those actions before, he lacks confidence in her now.
And so the question is: Does that count as for-cause in an undefined for-cause provision? That is the central question in the case. Is that right?
I think that’s fair to say the way it’s been teed up at the moment. Absolutely. That’s the way it’s been teed up at the moment.
They are not, I’m sure, giving up their pure Article II arguments, but they are basically applying, purporting to apply, the for-cause standard in light of the president’s Article II powers.
Which brings me to what I think is the hardest question here: How the heck do we figure out what for-cause means? And what do we look to? What are the precedents? How clear is the law on this? Is the president allowed to look to activity before office to fire someone in office? How do you think about this issue?
Yeah. So I think this is a tricky issue, and before maybe we get into the weeds, I’ll just flag a few overarching conceptual thoughts because I think one point is that there are a bunch of these for-cause style removal restrictions in the U.S. Code, and they’re phrased differently. They’re not all phrased the same way.
So what we’ve already talked about up to this point is the language in the Federal Reserve statute, which just uses the language “for cause.” And we’ve talked about the language in the ICC statute, which used the terms inefficiency, neglect of duty, or malfeasance in office. But there are other types of statutes.
For example, the special counsel statute inserts the word “only,” and it says “only inefficiency, neglect of duty, or malfeasance in office,” which makes you wonder, does the “only” have some sort of additional meaning? Or the tax court statute says you can be removed after notice and an opportunity for public hearing for INM—but no other cause.
And then if you look at the statute involving the PCAOB, which was at stake in the Free Enterprise Fund case, that says the PCAOB members can be removed if they willfully violated provisions of the act, the rules of the board or securities laws, willfully abused authority, or failed to enforce compliance with any such rule, etc., etc.
But the point is: They’re just different ways in which these statutes are phrased. And the question arises: Did Congress really mean for the statutes to work differently in each case, or is there some sort of global perspective on for-cause removal? And are these just different glosses on that—they should all be interpreted the same way?
So one might call that the textualist perspective, and one might call the other the purposivist perspective—they’re getting at purpose here.
So let me just question that, because even a purposivist might think there are different purposes to different language across statutes. It just seems like Congress uses very different terms in very different contexts. We have to at least presume they were getting at something different—that the 18 different formulations didn’t all mean the same thing.
Now, is Congress paying attention? Are they looking carefully at this? Probably not. But even if we were going to be maximal purposivists, I’d still think there’s a distinction between two situations. One: a situation where Congress specifies the criteria for cause—whether exclusive or not, they say inefficiency, malfeasance, neglect of duty, etc. And two: when they just say “for cause” without specification. That seems like a difference worth noting.
Is that fair?
So I think that’s right. First of all, I tend to agree with you on your overarching point, and I was just flagging that people could have different perspectives on why this language is used differently. But I tend to agree with you that the modern—
What is the argument, just so I understand it, what is the argument that Congress is using this very different language across different statutes but they mean the same thing?
They’re not paying attention. They just use different language, slot it into different statutes. And really what they’re getting at is the same concept, which is some form of for-cause removal. Which then does, of course, raise the question: What do they mean by for-cause removal? Which is the point you’re getting at.
So I tend to agree with you that the language ought to be interpreted. And then your point, I think, is: Well, what about this use of for-cause as opposed to inefficiency, neglect of duty, malfeasance in office? Does that make a difference?
And there, one thing we could turn to is what the Court has said. And the Court had this opinion in 2021, Collins v. Yellen, which involved the removal restriction that governed the director of the FHFA, the Federal Housing Finance Authority. This issue came up because there was a challenge again by a regulated party to the FHFA’s authority to regulate them subject to this removal restriction.
The restriction in that case was a for-cause provision. The Court had previously said in Seila Law this would be a problem if there were an inefficiency, neglect of duty, or malfeasance in office provision. And one of the amici, Professor Aaron Nielson, who was defending the statute in Collins v. Yellen, said, well, for-cause is different from inefficiency, neglect of duty, malfeasance in office, because it allows for additional causes for removal.
And the Court bought that part of the argument. What it said in Collins was, this language appears to give the president more removal authority than other removal provisions reviewed by this Court.
Can I just stop you? I just want to underscore that. Collins v. Yellen, one of the more recent decisions on the merits of removal—maybe the most recent, I can’t remember—says that there’s a difference between what we’re calling a naked for-cause removal provision, and a specified criteria removal provision: inefficiency, neglect of duty, malfeasance, etc.
And it says—and I’m going to reread what you just said—that we acknowledge that a for-cause restriction, a naked for-cause restriction, gives the president more removal authority than other removal provisions we’ve reviewed, these more specific ones. That seems to suggest unambiguously that this Court thinks a naked for-cause removal provision gives the president more discretion than he would otherwise have, as a statutory matter, to remove these officials.
That’s certainly what it says. I think you’re right. That’s what it says.
It also says later though, one paragraph later, it says for-cause does not mean the same thing as at-will. So that means the Court in Collins also thinks that for-cause gives the president broader discretion, but not absolute discretion, to fire. Fair?
I think that that is fair. As a matter of statutory interpretation, the Court is saying “for-cause” has some different meaning from the inefficiency, neglect of duty, and malfeasance standard, but it doesn’t mean at-will.
Yeah. And at-will means you can fire for any reason, anytime.
So, OK. That’s, I think, very helpful in narrowing the question here. But it still raises the question: How do we tell what for-cause means? It means the president has more discretion than under these more specific standards, but not absolute discretion. That’s the statutory matter. We’re not talking about the constitutional issue yet.
And so how do we tell? The specific question is: How do we tell what for-cause means, and does it allow the president to invoke this reason that predated Cook’s becoming a governor?
So I think I agree entirely with the way you’ve set up the issue. We can glean from Collins that there’s more discretion to fire somebody, but exactly what the bounds are is unspecified.
And maybe if I can connect that to the point earlier in our conversation—that’s because it’s all getting teed up in earlier litigation when a regulated party is challenging this provision on constitutional grounds. So there just isn’t a fact pattern where the Court is saying, well, these facts amount to for-cause and these facts don’t amount to for-cause. We don’t see that in these cases about presidential removal.
In fact, at that time everybody was interested in the question of whether disobeying an order would be cause or not. And Collins says it’s true that disobeying an order is generally regarded as cause for removal. So it makes you kind of wonder, well, what does agency independence mean if disobeying an order would count as cause? And what kind of independence the Fed really has in light of the statute?
Let me just say that looking at this more carefully than ever before, it reminds me of Adrian Vermeule’s paper on constitutional conventions, where he said: For those of you who think the Federal Reserve is the most sacrosanct independent agency in the government—not true, at least if you look at what the statutes say.
And that’s my takeaway here. This removal provision for the Fed is a weaker one than some of the other agencies. Isn’t that right? It’s a statutory matter.
That seems plausible. And maybe where you’re going with this is that that raises the question: Why? And I don’t fully know the answer to that. I think we’d have to speculate if we looked back at the timing of the adoption of these provisions.
Yeah, let me just clarify what you said. It raises the question why. I.e., it raises the question why the Federal Reserve, which we view today as this sacrosanct, most independent of agencies, which the Supreme Court went out of its way to try to protect from Article II removal, why would it be protected by a weaker standard giving the president more discretion for removal? That’s the question why, right?
That’s exactly right. Yeah, that was the question I was thinking of. Why is the language different? And so, I mean, again, I’m speculating here. If people know the answer, I’d be very interested.
I would, too. Look, we’re speculating because—and this is something else I just want to interject—anyone, in my judgment, who says this is clear and easy one way or the other either has not read all of these cases or is not being completely candid. Because the truth is we haven’t had a lot of cases interpreting what for-cause means. And this is a highly unusual case in a highly unusual context. And so I just want to emphasize what you just said, that we’re trying to figure this out ourselves.
Absolutely. I’m always trying to learn more. In this instance, we talked earlier about how these agencies were created. And we have the ICC that first introduces the inefficiency, neglect of duty, malfeasance in office standard in 1887, which is then used in another board, the Board of General Appraisers, I think, in 1890.
And so there are these two boards that have the INM standard when the Federal Reserve was created in 1913. And so it kind of raises the question: Why didn’t they just put the INM standard in the Federal Reserve statute?
Speculation could be that they thought of these two boards, the Board of General Appraisers and the ICC, as performing some sort of judicial-style functions. They looked like little mini courts sitting within the executive branch. The Federal Reserve seemed different, and so they just kind of thought of these boards as a little bit different. (Now, that’s pure speculation on my part.)
Another data point is that in the year before the Federal Reserve was created, 1913 or thereabouts, Congress first codified a standard for the civil service. And that was a cause standard at that time. So maybe just the term “cause” was floating around in the minds of members of Congress and was introduced into the statute.
Be that as it may, we now have that in the Federal Reserve statute. And I don’t know if those nuggets about how the ICC statute would have been thought differently or the—well, actually, let me take that back. The civil service statute, arguably, if we are looking for how to interpret this term “for cause,” could we look to how the civil service provisions have been interpreted? How the language “cause” has been interpreted in that context?
Because that is a statute where the removals are not occurring in these high-profile ways by the president and not resulting in Supreme Court opinions. But there may just be case law down in the weeds on what the meaning of “cause” is that may come to the front in the litigation sure to emerge from the removal here under the Federal Reserve standard.
OK. Let me move to a different issue, and that is … so, we don’t know what the for-cause removal provision permits. I mean, I think it’s fair to say that we can’t really say with a lot of confidence, except to say that it gives the president more discretion than these more specific ones.
Can I just actually add one other thing on the substance here? The substance being the meaning of the term “cause.” So, it seems to me like one body of law the Court could turn to in order to interpret the term “cause” would be Supreme Court opinions like Collins v. Yellen to tell you this is what we think cause means. Another body would be lower court cases interpreting “cause” in different contexts, like the civil service rules.
Third would be potentially practice. And as I mentioned, there actually just is very little practice here. And the very little practice includes, remarkably, President Taft removing two members of the Board of General Appraisers on his very last day in office for cause, after having conducted some sort of hearing on the question of whether there was cause.
And the reason I mentioned it is because this is one episode where there are, in fact, on the record, statements about what the president thought “cause” would mean. And that includes, in the case of one of these members of the Board of General Appraisers, that they abused their office. But it includes, in the case of the other, well, this is a person who brought disrepute to the board by having some personal failings.
And so, that conceivably—it would just depend on how the Court wants to treat those types of internal executive branch precedents. Are they going to have any authority whatsoever in determining what “cause” means?
I mean, they’ll be relevant because there’s just not a lot of legal materials to work with here, right?
Potentially, for that reason. But it raises a broader question of, like, do we care at all?
Yeah, I agree. OK, let’s turn to procedure. There’s an argument here, and I’m sure that Cook will make it—Cook’s attorneys will make it—that before she can be fired, she must receive notice and an opportunity to be heard. Can you tell us about this argument, where it comes from, how it might work?
Yeah. So, there’s a series of cases that predate the Supreme Court’s kind of 20th century major cases on the constitutional law of removal that you might describe generally as cases that are seeking to duck the constitutional question. At least, that’s the impression I have when I read them. They’re really trying to dance around the constitutional question until Chief Justice Taft in Myers v. United States in 1926 says, no, I got to answer this—and then he doesn’t.
And he answers it with a canon.
Yeah, with like hundreds of pages. So, there’s a series of cases, including one from 1903 called Shurtleff v. United States. And this is the case in which, again, we’re dealing with this entity, the Board of General Appraisers, and the president has sought to fire one of the members of this board. And the statute says, well, the members of the Board of General Appraisers can be removed for inefficiency, neglect of duty, or malfeasance in office.
It doesn’t say in so many words that they can only be removed for those three causes. And the way the Court interprets this language is it says, well, they can be removed for those causes or any others—or any others, really. And then that makes you wonder, and the Court seems to be confronting this, well, if in fact they could be removed for any others, then why do we have the statute that specifies three causes?
And the Court says, well, we have the statute that specifies three causes because what Congress really wanted to convey is that if in fact one of these three causes is at issue, then the only way in which the president can remove the individual is after conducting—giving some notice and opportunity to challenge to the individual who’s being removed. So there’s a case, Shurtleff, that’s on the books that’s arising in this strange posture, or like before the Court is really confronting a big constitutional issue. And query whether the statutory analysis is correct. But it’s reading into a silent statute the requirement that you provide some sort of notice.
But I want to ask you two questions about that, because it seems to me it could arguably cut the other way. Shurtleff said that you get notice when Congress provides reasons for the termination. And there were reasons—it was a specified list of causes. And it seemed to suggest that that wouldn’t be the case for things that weren’t listed as specified causes. So I can imagine Shurtleff by itself cutting the other way in this case and being argued for there being no notice required in the Fed context.
That’s the first point. Second point, I think that Humphrey’s Executor distinguished Shurtleff on the ground that the Court in Humphrey’s Executor is itself not a precedent—it’s in great repute among the majority of the Supreme Court right now—but it distinguished Shurtleff on the ground that the entity there had unlimited tenure as opposed to a limited tenure here in the Federal Reserve, and that the president’s powers had to be more robust there. And that whole analysis in Shurtleff might have been limited to, and distinguished by, the fact that it was an unlimited-tenure agency.
Seems to me those two points make Shurtleff—if that’s the right way to pronounce it—have uncertain impact here.
What do you think?
I think that’s right. I mean, I agree with you. I think that this is going to be part of the debate. So, first of all, we might just want to say that we actually don’t know the full facts of whether some sort of notice and opportunity was provided—or at least I don’t, just in this instance.
You mean here?
Here, in this fact pattern. We don’t know.
You mean in the current fact pattern?
Correct.
It doesn’t seem like there’s notice and opportunity.
You may be right, although the reason I’m hedging is that I just truly do not know.
Yeah, I don’t know either, obviously.
And that does raise the question of what notice and opportunity means—whether it just means, hey, we sent you these documents and we didn’t hear back from you in a week. I don’t—I just truly do not know.
So that goes to the point of we don’t—you know, Shurtleff said there had to be notice and opportunity, but we don’t know what that means. It might mean you get to come talk to the president and make your case, and then he gets to rule. We just don’t know, right?
I think that’s right. So I didn’t mean to kind of make that the big focus, because I think your two points about how Shurtleff could conceivably be different, just in its reasoning, are completely valid ones. And the first one was that Shurtleff is, again, in this pre-Myers posture, looking at a statute that says that the individual can be removed for inefficiency, neglect of duty, malfeasance. And the Court says, well, there must be other reasons as well—that Congress couldn’t have meant that these are the only three reasons. So there must be other reasons.
But then what’s the meaning of the statute? It requires some sort of notice. Well, in a statute that’s restricting removal to for-cause, you kind of don’t have to engage in that interpretive dance. So then it makes you wonder, do we read in the notice when the statute is silent on this point?
And going back to our earlier discussion, there are statutes that, on their face, require notice. So this gets to the textual-purpose point, which is: Do we make something of the fact that there’s no notice on the face of the statute?
Well, the second point that you make, which also seems right to me, is that Humphrey’s distinguishes Shurtleff on the ground that Shurtleff did not have a term-of-years provision in that statute at the time. And the Board of Governors provision has a term of years. So we’ll see what happens. There are going to be all these arguments in the air, I think.
OK, let me move to a final issue. And this is, or just maybe a penultimate issue. This is the question of remedy. Cook is going to sue. And the question is, what remedy can she get? Can she get an injunction enjoining the president from firing her? Or is she limited to seeking back pay?
Justice Gorsuch—I think it was a concurrence, maybe it was a dissent, I can’t remember—in the first interim order in the Trump 2.0, in the Bessent case involving Hampton Dellinger’s removal from the Office of Special Counsel, pointed out that an injunction might not be available in this context to enjoin the president to reinstate someone. And that back pay may be the only remedy, which would not be very helpful to her here in terms of staying on the board.
And he also mentioned the remedy of quo warranto, if that’s the right way to pronounce it, which is a writ that allows, I think, the Court to decide which of two claimants get to hold a particular office. That might be an available writ here.
Do you have any thoughts on whether there’s an effective remedy here for Cook to get her office back and how the Court might think about that issue?
So, I think what I would say is that this is another huge can of worms that the Court has not fully grappled with. And so there’s a lot that could be said. Let me start with just the cases that the Court has decided so far.
It just so happens that in cases like Myers and Humphrey’s Executor, both Myers and Humphrey—obviously, because it’s Humphrey’s Executor—are no longer there. So the only remedy possible would be some sort of back pay to the estate. There’s no reinstatement that’s really at stake.
They didn’t even seek reinstatement.
Well, I think Humphrey might have been alive at the time the litigation started and so sought reinstatement, but he died by the time it reached the Supreme Court. So the only possible remedy at that point is some sort of money damages, back pay–style remedy.
Another removal case that arises in the 1950s involves an entity, the War Claims Commission, that just doesn’t exist. This is the Wiener case. It doesn’t exist by the time the case is being litigated. So the question of reinstatement, again, doesn’t arise.
And all the modern cases are cases by regulated parties where nobody’s seeking a remedy of reinstatement. They’re challenging the agency and saying it’s improperly constituted because it can’t be overseen.
So the case law on this is very sparse. And that itself is—we can say more than just that itself, because we have to step back and think about what are the broader principles at stake. And it turns out, and you’re probably more expert on this than I am, there is this deep question of constitutional law, federal courts, about whether courts can enjoin the president.
Mississippi v. Johnson.
And Franklin v. Massachusetts.
Franklin v. Massachusetts, yep.
And in the modern era.
And these are, in my mind, under-theorized cases, to put it mildly.
Completely, completely.
And so, not at the Supreme Court, but when this particular issue was teed up at the lower court level in the D.D.C. and the D.C. Circuit in the early 1990s, those courts said, all right, well, you know what? We actually can remedy this with a reinstatement-style order. We won’t enjoin the president. We’ll just enjoin everybody else in the executive branch and tell them to treat these individuals as though they still hold the office.
I didn’t know about these cases. That’s really interesting.
So it’s a very interesting injunction. And then the lower courts in our cases that have been arising in the second Trump administration have been relying on those cases and similar logic. So when they have been providing some sort of remedy of reinstatement, they’ve technically not been enjoining the president but enjoining everybody else in the executive branch, which actually does lead to this kind of strange question of how to enforce those injunctions.
I mean, what if they cut off the removed officer’s computer services or email? What if they change the locks to the door? Does the injunction mean, well, you’ve got to change the locks back? Or you’ve got to provide them email? You’ve got to provide them appropriate staff to conduct their duties?
So I think these injunctions are really quite challenging to implement, and we’ll see what happens.
I think the Court will do everything in its power to avoid answering the question whether the president can be enjoined.
Yeah. Well, and I wanted to say a second thing on the question of remedy, because that is, this question that we’ve just been discussing is a question of constitutional law. Can you enjoin the president? Can you replace this injunction of the president with an injunction of the entirety of the executive branch? That’s a very deep question.
There’s a second question that’s at stake here, and I think it’s a really interesting one. And that is that these statutes that we’re dealing with, like the for-cause removal provision for the Federal Reserve, they are enacted at a time—say 1913—when the backdrop law of remedies arguably would not have allowed an individual who’s been removed to sue in equity in order to retain their office.
In some of the cases that Justice Gorsuch is citing in his opinion, there are cases about this topic, about how you can’t use equity in order to regain a lost office. Equity only protects property rights, and this is part of equity law circa 1900. Circa—it changes over time.
The point is, that’s the backdrop against which the Federal Reserve statute is enacted. And one wonders, are those remedies baked into the statute? Or, as the law of equity perhaps changes—and I’m thinking now of the “new property” cases or other cases involving whether you can seek reinstatement, there are late 20th century cases—does the law of remedies with respect to the Federal Reserve statute enacted in 1913 change at the same time?
And the question essentially is that it’s entirely possible that the people who enacted the Federal Reserve statute in 1913 never thought you could get a remedy of reinstatement because they thought just the law of equity wouldn’t require it, and the statute itself just doesn’t say anything, to my knowledge, about this remedy. And so then it’s a question of, like, what does the background law permit?
Yeah, what did the background law permit? What, if anything, can we tell about what Congress was thinking about whether it wanted to incorporate equitable principles at the time or whether it was just going to assume that the Court’s equitable principles as they’ve been developing would continue to develop?
I mean, we just—you need to do a lot of legal work to figure that out, I think, and the related questions. And I think it’s just fair to say that it seems to me, based on as much as I’ve learned, that it’s not at all obvious how the Court’s going to come down on this. Although I suspect they’re going to hesitate before ordering the president to reinstate someone, even if the firing was illegal. But I might be wrong about that.
Do you have any thoughts about that—just like end-of-the-day thoughts about how hard that would be for the Court to do?
Well, so I agree with you that it’s certainly an issue with which the Court would have to grapple. It’s not like something that’s totally obvious. We haven’t even touched upon mandamus and quo warranto issues, which are also wrapped up in this question of constitutional and what does the statute mean—is it incorporating those remedies? So I think it’s challenging.
What would the Court do? Well, look, I’ll just leave you with this thought, which is that outside of this deep set of questions of Article II, president, who controls the executive branch, we have a body of employment law, and people are routinely, regrettably, let go from their jobs. And questions arise about what kind of remedy you can seek, whether that be damages or some sort of reinstatement remedy. And it’s just typically thought in the context of employment law that reinstatement would be a disfavored remedy, because it would be tough for—at least on some occasions—for the employer and the employee to work together.
So it’s a disfavored remedy. And I just leave you with the thought that, how does that body of employment law factor into this context where, boy, would it be tough for the president and somebody who’s reinstated to be at loggerheads for the next two, three, four years?
Yeah, I’m sure that that will factor into the Court’s assessment of that.
OK, I think that’s a great place to stop. I just want to point out that you are dressed in a suit because you are about to teach. And I’m grateful that you took the time this morning to talk to me about this. I am not in a suit because I’m on my last few days of vacation because my classes don’t start until next week. But thank you very much. That was very elucidating, very grateful.
Always an honor. Thanks so much, Jack.
Take care.
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