The specific legal issue before the Supreme Court in Trump v. Cook was whether to leave in place a district court’s injunction that prevents President Trump from removing Lisa Cook from her position on the Federal Reserve’s Board of Governors. Today the Supreme Court ruled by a vote of 5 to 4 to leave that injunction in place. In the process, Chief Justice Roberts’s majority opinion (joined by Justice Kavanaugh and the three liberal justices) decided some important issues. I’ll quickly summarize the major ones here:
1. The statutory “for cause” restriction on the president’s ability to remove Federal Reserve board members is constitutional. (Slip op. at 22-24.) The government didn’t challenge the constitutionality of the restriction in this litigation, but Justice Thomas in dissent does. So that provides the Chief the occasion to disagree with Thomas on this important issue. The Chief’s discussion is very brief. Here’s the key passage:
What matters is that the Federal Reserve remains “consistent with the principles that underpin” the First and Second Banks—namely, that monetary policy should not be subject to political interference. In our view, the Federal Reserve maintains the “balance struck by the founding generation” under “modern circumstances.”
2. The statutory “for cause” restriction does not mean, as the government contends, any concern the President may have about a person’s “conduct, ability, fitness, or competence.” It also is not, as Cook contends, a shorthand for the specific causes set forth in other statutes—inefficiency, neglect of duty, malfeasance, and ineligibility. Rather:
[W]e need not fully demarcate the contours of ‘cause’ today. For present purposes, it is sufficient to observe that any definition of ‘cause’ in this context must reflect the Federal Reserve’s unique historical status and role…. Not only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design.
That counsels a substantial threshold for “cause.” It is true, of course, that “cause” cannot be reduced to a precise set of rules, and some close calls are inevitable. Whether “cause” for removal exists in any given situation will depend, at least in part, on the seriousness of the alleged misconduct, and the extent of any nexus that may exist to the Governor’s professional duties. The key issue is whether “[t]he cause assigned” truly “impl[ies] an unfitness for the place”—or whether it simply represents an effort to secure a “more congenial” replacement.
(Slip op. at 11-15.)
3. Trump failed to afford Cook the procedural protections to which she was (implicitly) entitled by statute. Cook was entitled to notice and some opportunity to respond prior to her termination. That doesn’t mean that she is entitled to an audience with the president or to a full-blown judicial trial. A written submission may suffice. (Slip op. at 17-19.)
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So what this means going forward, as I understand it, is that, after affording Cook the opportunity to respond to his charges, Trump may again purport to remove Cook. Upon Cook’s challenge to that removal, a reviewing court would need to decide whether Trump’s stated basis for removal reflects Cook’s unfitness for office.