(DCNF)—The Supreme Court seemed unwilling on Wednesday to operate on the president’s timeline for firing Federal Reserve Governor Lisa Cook.
Solicitor General D. John Sauer ran into skepticism from most justices, who didn’t understand the urgency behind President Donald Trump’s request to remove Cook and signaled resistance to deciding major constitutional issues without a complete record.
Trump fired Cook over mortgage fraud allegations in August. A district court judge temporarily reinstated her to the board in September, finding her firing likely did not satisfy the removal “for cause” requirement.
“Is there any reason why this whole matter had to be handled by everybody– by the executive branch, by the district court, by the D.C. circuit – in such a hurried manner?” Justice Samuel Alito asked Sauer. “You began by laying out what you claim to be the factual basis for the ‘for cause’ removal but no court has ever explored those facts. Are the mortgage applications even in the record in this case?”
“I know that the text of the social media post that screenshots the mortgage application is in the record, but I don’t recall if the paperwork itself is in the district court’s record,” Sauer said.
When Trump asked the justices to allow him to fire her, they set the case for oral arguments — but allowed her to stay in the interim. While the justices are still likely to send the case back to the lower courts, Trump wants to keep Cook off the board while litigation continues.
“The American people should not have their interest rates determined by someone who was, at best, grossly negligent in obtaining favorable interest rates for herself,” Sauer argued.
What Is The Process?
The justices probed what kind of notice and hearing should be required to fire an official, questioning why the president would not offer a more exhaustive process than firing her via a social media post.
Justice Brett Kavanaugh worried about the downstream effects of the administration’s position, suggesting it could lead to all of Trump’s own appointees being removed “for cause” on Jan. 20, 2029, if a Democrat takes office.
“Find something and just put that on a piece of paper,” he said. “No judicial review, no process, nothing – you’re done. Again, what are we doing when we have a system that incentives that and leads to that?”
Justice Sonia Sotomayor asked why the court needed to decide the issues based on an emergency application when the president already concedes he cannot fire someone simply for disagreeing with policy issues.
“It’s not as if she’s been incompetent, negligent or committed malfeasance while in office,” Sotomayor said. “This is something pre-office. So keeping her in office is not causing any immediate harm to the agency.”
Another issue the justices faced is whether courts even have the authority to keep fired officials in place.
“If you’re correct that courts do not have the authority to reinstate a removed officer, why are we wasting our time wondering if there’s cause or not?” Justice John Roberts asked Sauer. “It seems to me that if there is any level of cause, and you indicate that there is some level of cause, well, then you can’t be right about the idea that courts can’t order anybody who’s been removed to be reinstated.”
Meaning Of ‘For Cause’
Under the Federal Reserve Act, the president can only remove a member of the Fed’s Board of Governors “for cause,” a requirement in place to preserve the independence of the Fed to set interest rates without political pressure.
When she ordered Cook reinstated in September, Judge Jia Cobb wrote that the best reading of this provision “is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a Governor’s behavior in office and whether they have been faithfully and effectively executing their statutory duties.”
The justices pressed Cook’s attorney, Paul Clement, on the claim that pre-office conduct does not count. Alito posed a hypothetical asking what would happen if videos were disclosed of an official “expressing deep admiration for Hitler or for the Klan” after they took office.
“That’s an official that would be impeached in a heartbeat,” Clement said.
Kavanaugh suggested the simplest way to handle the case might be to “just say there was insufficient process, and therefore we at this juncture deny the government’s application.”
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