Earlier this month, the United States Court of Appeals for the D.C. Circuit ruled President Trump’s removal of Democrat commissioners from the Federal Trade Commission (FTC) was unlawful. In a 2-1 decision, the panel held that the case was squarely controlled by Supreme Court precedent in Humphrey’s Executor. The D.C. Circuit decision upheld the district court’s ruling in July and sets the stage for the Supreme Court to determine whether to uphold or overrule long-standing precedent regarding removal protections for “independent” executive agencies.
On Monday, Chief Justice John Roberts granted the Trump administration’s request and stayed the D.C. Circuit’s decision pending further orders from Roberts or the Supreme Court, which effectively removes Rebecca Slaughter (again) from her role as an FTC commissioner. The stay order directs Slaughter to respond to the administration’s appeal by September 15. During her brief reinstatement, Slaughter dissented from several FTC actions.
Supreme Court Likely to Decide Scope of Administrative Agencies’ Independence
As we previously discussed, the Trump administration has fired individuals from administrative agencies that historically enjoyed protections against at-will removal, such as the National Labor Relations Board (NLRB), Merit Systems Protection Board (MSPB), and Consumer Product Safety Commission (CPSC). In all three cases, the lower courts had ruled those removals unlawful according to the governing statutes and Supreme Court precedent.
In May, the Supreme Court stepped in and stayed the NLRB and MSPB decisions pending litigation, allowing the removals to take effect. Then in July, the Supreme Court allowed the CSPC removals to take effect and cited to its interim order in the NLRB/MSPB decision, reiterating that “our judgment that the Government faces greater risk of harm from an order allowing a removed officer to continue exercising the executive power than a wrongfully removed officer faces from being unable to perform her statutory duty.”
Humphrey’s Executor on the Chopping Block?
In the FTC case, the D.C. Circuit acknowledged the Supreme Court’s stay orders permitting those removals pending litigation but distinguished them from the FTC, as those cases “presented the never-before-decided question of whether Humphrey’s Executor should be extended to the statutes providing for-cause removal protection to those officials.” In contrast, Humphrey’s Executor specifically addressed and upheld the FTC’s removal protections. Thus, the D.C. Circuit determined it was bound by Humphrey’s Executor until the Supreme Court expressly overrules the 1935 precedent.
While the Supreme Court has so far avoided ruling on the agency removal cases on the merits, the FTC’s case is almost certain to force the justices to decide whether Humphrey’s Executor remains good law. Overruling Humphrey’s Executor would be an unprecedented shift in the balance of power between the president and the administrative state.
