As Chevron deference’s blot on administrative law is revisited in the Supreme Court, the Fifth Circuit recently grappled with another troublesome precedent with profound separation-of-powers consequences. Humphrey’s Executor v. United States (1935) was a New Deal–era decision that upheld restrictions on presidential power to remove commissioners of ostensibly independent agencies. They could not be removed by the president at will, but only for cause. The precedent has been understood to apply in the context of multimember bodies of experts which had legislative and judicial, but not executive, power. At the time, that was the nature of the agency involved in the case, the Federal Trade Commission (FTC).
In the decades after Humphrey’s Executor, the Progressive model of ceding government power to unelected bureaucrats who were largely unaccountable to the president led to the gargantuan virtual fourth branch of government that exists today. The Supreme Court’s recent separation-of-powers cases presented the justices opportunities to chip away at this constitutionally aberrational paradigm. In Seila Law LLC v. Consumer Financial Protection Bureau (2020), the Supreme Court held unconstitutional the structure of the Consumer Financial Protection Bureau, an independent agency under a single director who possessed vast executive power and who was removable by the president only for cause. Applying the same principle, the Court found in Collins v. Yellen (2021) that it violated the separation of powers to limit the president’s authority to remove the director of the Federal Housing Finance Agency with a “for cause” restriction.
In the case before the Fifth Circuit, the structure of the Consumer Product Safety Commission (CPSC) was challenged by By Two, an educational consulting partnership. The CPSC is a multimember agency, as was the FTC in Humphrey’s Executor, but unlike that agency in 1935, it exercises substantial executive power. By Two’s claims—alleging violations of Article II of the Constitution, the Administrative Procedure Act, and the Freedom of Information Act—were all based on the theory that the CPSC was an unconstitutionally structured agency.
The district court agreed that the removal restriction violates Article II of the Constitution. A majority of the Fifth Circuit panel reversed last week in a muddled opinion written by Judge Don Willett. The opinion explicitly declined to say that Humphrey’s Executor advanced a “clear” doctrine regarding presidential removal and would not “confidently label faulty” the premises of By Two’s rejected arguments. Quoting the Supreme Court’s opinion in Seila Law, Willett admitted that Humphrey’s Executor’s “reasoning ‘has not withstood the test of time.’” “Resolving that dilemma is beyond our authority,” however. Since the Court did not explicitly overrule Humphrey’s Executor, the panel majority would not invalidate the CPSC structure. Joining Willett’s opinion was Judge James Dennis, a Clinton appointee.
What about the substantial executive authority wielded by the agency, in contrast to the 1935 FTC? Willett attempted to “consider the role of ‘executive power’ in the Supreme Court’s removal doctrine,” even though “to do that is to board a train of thought that seems almost predestined for incoherence.” Unfortunately, he rode that train into a muddle of reasons to sidestep the challenge to the CPSC: The multimember governing structure of the agency had “historical pedigree;” it did not have the single-director structure that was troublesome in Seila Law; and it did not have other features that made the CFPB problematical, such as a non-staggered appointment schedule that could prevent some presidents from shaping the agency or the receipt of funds outside the appropriations process.
Willett wrote that he did not want to “adjust the borders” of Humphrey’s Executor, but Judge Edith Jones in dissent called him out for doing precisely that. The 1935 decision described the FTC as “exercis[ing] no part of the executive power vested by the Constitution in the President.” Jones pinpointed the majority’s error:
[A]pplying law to a new set of facts does not adjust a legal rule’s borders. Indeed, a decision holding the CPSC’s structure unconstitutional would sit comfortably side-by-side with Humphrey’s Executor. If anything, Judge Willett’s writing expands the borders of Humphrey’s Executor by extending the rule from agencies that do not exercise executive power to those that do. [emphasis Jones’]
Willett’s essential conclusion, succinctly summarized by Jones, was “that the CPSC’s multimember structure alone permits for-cause removal,” but “[t]hat cannot be the case if the Humphrey’s Executor rule requires multi-member agencies also not exercise executive power.” Jones’ opinion provides a rationale for the Supreme Court to overrule Humphrey’s Executor as outmoded. The “new set of facts” she referenced—that “unlike the 1935 FTC, the CPSC does exercise executive power”—counseled “different results.” Most modern federal agencies no longer follow that 1935 paradigm.
Hopefully the Court will ultimately overrule Humphrey’s Executor in this case, Consumers’ Research v. Consumer Product Safety Commission. In the meantime, however, Judge Willett should not have expanded an eroding Supreme Court precedent that fails to protect the separation of powers, and Judge Jones deserves credit for the stand she took in dissent.