On Tuesday, the Trump Administration asked the Supreme Court to hear a lawsuit challenging the leadership structure of the Consumer Financial Protection Bureau (CFPB) — taking the same side as the people suing the government in a major constitutional dispute.
The administration essentially threw in the towel in the challenge to the consumer protection agency started by senator and presidential candidate Elizabeth Warren. As a general rule, the Justice Department has a duty to defend federal laws challenged in court. The administration, however, decided not to defend the law at issue in this case.
With the Justice Department urging the Court to weigh in, it is now very likely that the justices will do so. The policy implications of this suit, Seila Law v. CFPB, are unclear. In the narrowest sense, Seila Law is a case about whether a federal agency can be led by a single director that the president cannot remove at will. More broadly, however, the case is the most recent skirmish in a war over what kind of government our Constitution permits.
Most likely, the Supreme Court will hold that the president may remove the CFPB director. In the short term, that could give a big boost to a future Democratic president — potentially allowing a President Warren to replace Trump’s CFPB director with her own on the first day of her presidency.
But the Court could also go much further. There is a chance — albeit a very small one — that the Supreme Court could strike down the CFPB in its entirety. There’s a somewhat greater chance that the Supreme Court could disallow “independent” agencies in which the leaders of those agencies are protected against removal by the president.
President Trump, in other words, could gain the power to fire members of the Federal Reserve board who refuse to inject steroids into the economy while Trump is running for reelection.
Looming over all of this is an ideological battle over the “unitary executive,” the theory that all executive power in the United States government must be vested in the president, and over the legacy of the late Justice Antonin Scalia.
Most federal agencies are led by a Cabinet secretary or some other senior official who can be fired by the president. By contrast, independent agencies such as the Federal Trade Commission (FTC) or the Federal Communications Commission (FCC) are often led by bipartisan boards whose members serve staggered terms. Often, the members of such boards can only be fired by the president “for cause,” which typically prevents a president from removing a board member simply because they disagree with that board member’s policy views.
The CFPB is unusual. It is led by a single director, not by a board. But that director also is protected from a president who wants to fire them. By law, the president may only remove the CFPB director “for inefficiency, neglect of duty, or malfeasance in office.”
This unusual arrangement enrages many conservatives. Indeed, one particularly conservative federal judge claimed that “consent of the governed is a sham” if the CFPB’s structure is allowed to stand.
To understand why this case inspires such intense feelings, turn back the clock about three decades to the Supreme Court’s 1988 decision in Morrison v. Olson. Morrison involved a federal law, which expired in 1999, that provided for “independent counsels” — a form of special prosecutor that could only be fired by the president for cause.
The Supreme Court upheld the independent prosecutor statute by a lopsided 7 to 1 vote, with Justice Antonin Scalia providing the sole dissenting vote.