Symposium: Does the president have the right to fire the director of the CFPB without cause?

Alan B. Morrison is the Lerner Family Associate Dean for Public Interest & Public Service Law at George Washington University Law School. He filed an amicus brief on behalf of neither party in Seila Law, LLC v. Consumer Financial Protection Bureau.

For many years, supporters of the unitary executive theory have been hoping that the Supreme Court would take on the question of whether Congress can protect the heads of independent federal agencies from removal by the president except for cause, as the court held in Humphrey’s Executor v. United States. That question is now teed up in Seila Law, LLC v. Consumer Financial Protection Bureau, with oral argument set for March 3. Joining the petitioner in attacking the limits on removal are the solicitor general and 20 amici, all arguing that the vesting and take care clauses in Article II override the limits on removal found in the CFPB’s enabling legislation.

There is, however, one major obstacle that should preclude the court from reaching the merits of the constitutional question: the requirement in Article III that there be an actual case or controversy between adverse parties. Because the petitioner and the CFPB now agree that the law is unconstitutional, there is no party on the other side, and the court should dismiss the case for lack of jurisdiction. In addition, the basis of the constitutional argument is Article II and the protection of the power of the president. However, private parties, including the petitioner here, have no standing to object to the removal limitations because if anyone has been injured, it is the president and not the petitioner.

The court has recognized the problem of a lack of adversity between the parties by appointing Paul Clement as an amicus curiae to argue in support of the removal restrictions, but that will not satisfy Article III. The same problem faced the court recently in United States v. Windsor and Hollingsworth v. Perry. In those cases, the federal government and the state of California agreed that the laws being challenged were unconstitutional, and there was no party to either case to defend those laws. In Windsor, the court appointed an amicus to argue that the court could not decide the merits, a position that Chief Justice John Roberts and Justices Antonin Scalia and Clarence Thomas adopted in dissent. The House of Representatives had intervened in the district court, which satisfied Justice Samuel Alito’s Article III concerns, but no one else agreed with him. Justice Anthony Kennedy noted for the majority that the United States had refused to give the plaintiff her tax refund without a decision of the court, and it seemed likely that, if the court did not reach the merits, it might never find a case in which to rule on the Defense of Marriage Act, which affected more than 1,100 laws, including those governing Congress and the judiciary. In the end, Kennedy’s practical concerns (and perhaps his desire to strike down DOMA) enabled him to overcome the Article III barrier.

In Hollingsworth, the challenge was to a California initiative (Prop 8) that precluded the state from recognizing same-sex marriages. When the named defendants declined to support the law, the proponents of the initiative were permitted to intervene and fully defended it in both lower courts. Nonetheless, a majority of the court, in an opinion written by Roberts and joined by Scalia and Justices Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan, ordered the case dismissed because the intervenors did not represent the state and thus had no standing to appeal the judgment of the district court striking down Prop 8. Unlike the situation in Windsor, the constitutional question would not go unanswered, because there were many other states that continued to defend their bans on same-sex marriage. Indeed, such laws were ruled unconstitutional two years later in Obergefell v. Hodges.

This case is even more suspect from an Article III perspective than was Hollingsworth, in which at least the party seeking review had been an intervenor starting at the district court and had a direct connection with the law at issue – even if the court did not find it sufficient. And unlike in Windsor — in which the practicalities of not deciding the issue then would have led to thousands of additional challenges to DOMA, which would all be won by default so long as the government declined to defend the law — in this case no such practical problems stand in the way of a decision on the merits if the president really wants to test this kind of removal restriction. Indeed, President Donald Trump could have fired the CFPB director appointed by President Barack Obama for 10 months after taking office, but he chose not to do so. Although the current CFPB director is a Trump appointee, there are plenty of Obama appointees who hold positions in other agencies for which removal is limited to firing for cause whom Trump could remove tomorrow – if he were willing to take the political heat for doing so. In other words, none of the practical reasons to bend the adversity requirement of Article III present in Windsor exist in this case. What is left is a “friendly” suit, and so the court should dismiss the case by following its own admonition in Muskrat v. United States: Deciding whether a law of Congress is unconstitutional is “the most important and delicate duty of this court,” and is given to it “because the rights of the litigants in justiciable controversies require the court to choose between the fundamental law and a law purporting to be enacted within constitutional authority, but in fact beyond the power delegated to the legislative branch of the government.”

There is a further reason why the lower courts should have dismissed the challenge even before it became a friendly lawsuit. The claim on the merits is that the limitations on removal of the director violate the rights of the president under Article II. Seila Law is not the president, and it has no rights under Article II. The firm has also not been removed from any federal office, nor does it claim the right to remove the director or anyone else from federal office. It has not alleged any harm to its purely private interests from the removal restrictions, and if it had made such allegations, they surely would be dismissed as pure speculation. (See Clapper v. Amnesty International, USA.) The president may have a claim that these restrictions violate his rights, but he has a very simple way to vindicate those rights: He can remove the director or any other officer with similar protections, and there would be no doubt that the removed officer would have standing to challenge the removal as a violation of the applicable statute, and that the president would have standing to challenge that statute as an improper limitation on his constitutional authority under Article II.

The result in this case would be the same whether the court dismissed it on lack of adversity or standing grounds. However, there is a major difference for future challenges to similar restrictions in other federal statutes based on the same Article II theory. Those limits are contained in statutes governing a wide range of federal agencies from the National Labor Relations Board to the Federal Communications Commission to the Securities and Exchange Commission, not to mention administrative law judges at almost every federal agency who this administration also argues should be removable at will. If Seila Law’s theory of standing is upheld, any time that any party objected to a rule or an order of any of these agencies on any basis, it could add a claim based on a removal restriction, which the courts would have to decide. And given the solictor general’s view that it is not just the restrictions applicable to the CFPB director that are unconstitutional, the work of all those agencies would be seriously undermined, even when the merits of their decisions were unaffected by the limits on the removal of the agencies’ members.

Last point: I had filed a short amicus brief at the cert stage raising these two issues, and so Seila Law and the solicitor general were not caught off guard when I filed my merits amicus brief spelling out these arguments in full. Yet they both chose not to reply, even in a footnote. Perhaps they have no response, or perhaps they concluded that the court has decided to rule in their favor, and they saw no need to justify ignoring Article III to allow the majority to do what it already plans to do.