Supreme Court Signals Support for Upholding Trump’s FTC Firing

Conservative justices discussed the expansion of federal bureaucracy since Humphrey’s Executor, a unanimous 1935 SCOTUS decision that found President Franklin Roosevelt’s removal of FTC Commissioner William Humphrey to be unjustified (see 2502200060). The current 6-3 conservative majority has indicated that the court is willing to back Trump’s firings at the Consumer Product Safety Commission, the National Labor Relations Board and the Merit Systems Protection Board.

Chief Justice John Roberts said Monday that SCOTUS' 2020 decision in Seila Law made clear that Humphrey’s Executor is a “dried husk of whatever people used to think it was,” given how the FTC’s authority has evolved since 1935. The authority described in Humphrey's has “nothing to do with what the FTC looks like today.”

Justice Brett Kavanaugh said a decision in favor of Trump wouldn’t threaten the existence of these agencies -- as argued by Slaughter’s team and its supporters -- only define how and when agency chiefs can be removed by the president. If Slaughter loses on the merits, he argued, the proper remedy would be to strike the FTC Act provision stating that commissioners can be removed only for “inefficiency, neglect of duty, or malfeasance in office.”

Ruling for Trump would mean that the entire government moves toward greater democratic accountability because agency leaders would have to answer to a democratically elected president, said U.S. Solicitor General John Sauer. The Humphrey’s finding that federal agencies can wield quasi-legislative and quasi-judicial powers hasn’t “withstood the test of time,” he said, calling the decision a “decaying husk.” He noted that Justice Clarence Thomas in Seila called Humphrey's and its impacts a threat to constitutional structure and the liberty of American citizens. SCOTUS found in Seila that the expansion of the federal bureaucracy heightens the court’s duty to ensure that the executive branch is “overseen by a president accountable to the people,” said Sauer.

Liberal justices said a decision in Trump's favor would result in a fundamental shift in how agencies like the FTC are structured. “You’re asking us to destroy the structure of government” and eliminate Congress’ ability to protect multi-member, independent agencies, Justice Sonia Sotomayor told Sauer. It would result in “absolute power of the president.”

Justice Ketanji Brown Jackson suggested that Congress should determine how and why agency heads can be removed by the president, noting that Congress is also accountable to the American people through democratic elections.

Congress can find “reasonable” solutions on issues related to an agency’s authorities, argued Amit Agarwal, an attorney for Slaughter. If DOJ is right, then all three branches of government have been wrong from the country’s founding, he said, adding that a legislative solution is far better than abandoning much of the foundation on which modern governance is structured.

Justice Neil Gorsuch said he would be voting to overturn Humphrey's Executor. The solution, he suggested, could be to “reinvigorate” the long-dormant Intelligible Principle Doctrine and clarify that Congress can’t delegate its legislative authority to federal agencies. Sauer disagreed, saying the easiest remedy would be to remove the firing protections in the FTC Act.

Justice Elena Kagan said the court should be mindful of the immediate effects of a decision for Trump. It's a “realistic danger” that the U.S. would have, for example, a Department of Education that's authorized by Congress but without any employees because they were eliminated.

Agarwal said Kagan is “absolutely right” that there are “competing dangers here.” It makes sense to weigh the “real-world dangers that we know are a virtual certainty” resulting from adopting DOJ’s theory.