A Democrat who was fired from the Federal Trade Commission by President Trump was reinstated to her position yesterday in an appeals court ruling.
Trump's firing of Commissioner Rebecca Kelly Slaughter violated Supreme Court precedent, said yesterday's ruling from the US Court of Appeals for the District of Columbia Circuit. A District Court judge ruled the same way in July, but Slaughter couldn't get back to work because of an administrative stay that delayed the lower-court ruling from taking effect.
The administrative stay was dissolved in yesterday's appeals court ruling, in which a three-judge panel also ruled 2–1 to deny the US government's motion for a longer-term stay pending appeal. "The government has no likelihood of success on appeal given controlling and directly on point Supreme Court precedent," the panel majority said.
The panel pointed to a 1935 case, Humphrey's Executor v. United States, in which the Supreme Court held that the president can only remove FTC commissioners for inefficiency, neglect of duty, or malfeasance in office. Trump's termination notices sent to Slaughter and Democrat Alvaro Bedoya said, "Your continued service on the FTC is inconsistent with my Administration's priorities. Accordingly, I am removing you from office pursuant to my authority under Article II of the Constitution."
In yesterday's ruling, the panel said:
Specifically, ninety years ago, a unanimous Supreme Court upheld the constitutionality of the Federal Trade Commission Act's for-cause removal protection for Federal Trade Commissioners. Over the ensuing decades—and fully informed of the substantial executive power exercised by the Commission—the Supreme Court has repeatedly and expressly left Humphrey's Executor in place, and so precluded Presidents from removing Commissioners at will. Then just four months ago, the Supreme Court stated that adherence to extant precedent like Humphrey's Executor controls in resolving stay motions. To grant a stay would be to defy the Supreme Court's decisions that bind our judgments. That we will not do.
Back to work, FTC Democrat says
The Slaughter case could end up at the Supreme Court. For now, Slaughter wrote that she would be getting back to work this morning.
"Amid the efforts by the Trump admin to illegally abolish independent agencies, incl[uding] the Federal Reserve, I'm glad the court has recognized that he is not above the law," Slaughter wrote last night after the ruling was issued. "I'm eager to get back first thing tomorrow to the work I was entrusted to do on behalf of the American people."
Trump fired Slaughter along with Bedoya in March, leaving the FTC with only Republican commissioners. They both sued the president, but Bedoya subsequently resigned from the FTC to look for other employment. Bedoya's claims were dismissed as moot in July.
The majority in yesterday's 2–1 panel ruling consisted of Judges Patricia Millett and Cornelia Pillard, both Obama appointees. A dissent was filed by Judge Neomi Rao, a Trump appointee.
"I would grant the government's motion for a stay because the government is likely to prevail on the merits of its challenge, and the Supreme Court has reaffirmed that when a court orders reinstatement of an officer removed by the President, the balance of harms favors the government and warrants a stay," Rao wrote.
Rao said she believes "that Humphrey's Executor should be overruled because it is inconsistent with the Constitution's vesting of all executive power in the President and with more recent Supreme Court decisions." She acknowledged "that only the Supreme Court may overrule its precedents" but argued that staying the district court injunction "does not require this court to claim that Humphrey's Executor has been overruled. Instead, the stay is warranted by the Supreme Court's decisions to stay injunctions ordering the reinstatement of removed officers."
Independent agencies and executive power
Although the 1935 Humphrey's Executor ruling was specifically about the FTC, the Trump administration argues that it shouldn't apply to the current version of the FTC because it exercises significant executive power. Rao agrees with that reasoning.
"While leaving Humphrey's Executor in place, the Supreme Court has explicitly recognized that the 'conclusion that the FTC did not exercise executive power has not withstood the test of time,'" Rao wrote. "The Constitution establishes three departments of the federal government, and the so-called independent agencies are necessarily part of the Executive Branch, not some headless fourth branch. Commissioners of the FTC exercise 'considerable executive power,' and such officers are not entitled to reinstatement while they litigate the lawfulness of their removal."
The Supreme Court previously stayed District Court decisions in cases involving Trump's removal of Democrats from the National Labor Relations Board, the Merit Systems Protection Board, and the Consumer Product Safety Commission. In those stay rulings, "the Supreme Court has withheld judgment on the lawfulness of the President's removals of so-called independent agency heads, focusing instead on the harm to the government from reinstatement," Rao wrote. "That reasoning similarly requires a stay here while the merits of the removal, and the ongoing validity of Humphrey's Executor, continue to be litigated."
The majority disagreed with Rao on how to interpret the Supreme Court's recent decisions. Millett and Pillard said that in the National Labor Relations Board case, the stay order included an "admonition that removal protections already upheld by the Supreme Court remain in full effect unless and until the Supreme Court says otherwise." Lower courts should "stay in their lane and leave to the Supreme Court 'the prerogative of overruling its own decisions,'" they wrote.
The majority also concluded that the FTC's powers have not changed since the 1935 ruling. "As the district court well explained, the present-day Commission exercises the same powers that the Court understood it to have in 1935 when Humphrey's Executor was decided," the judges found.
