A 2-1 Panel of the D.C. Circuit Makes the Presidency More Muscular

An important case, as the Supreme Court takes up a similar issue next week

This morning, a panel of the D.C. Circuit that split 2-1 ruled that presidents can remove members of the National Labor Relations Board (NLRB) or Merit Systems Protection Board (MSPB) despite the existence of laws that are intended to shield them from removal without cause. That’s precisely what Donald Trump did. This opinion, with Judges Neomi Rao and Gregory Katsas, both Trump appointees, in the majority, blesses it. This case is too important to get lost in the crush of other news, so I’m writing a rare midday post about it, to make sure we focus on this decision.

The case is styled as Harris v.o Bessent, although there are numerous parties involved and the order directly impacts the president’s ability to fire at will. The only good thing to say about this opinion is that it starts off with a clear statement about the court’s decision: “These appeals present the question whether Congress may constitutionally prohibit the President from removing members of the National Labor Relations Board and Merit Systems Protection Board without cause. The district courts upheld the constitutionality of statutory removal protections for members of these boards. We reverse.”

Next comes the deeply unsatisfying explanation: “Under Humphrey’s Executor v. United States … Congress may restrict the President’s ability to remove principal officers who wield only quasi legislative or quasi-judicial powers. But under Seila Law LLC v. Consumer Financial Protection Bureau…Congress may not restrict the President’s ability to remove principal officers who wield substantial executive power.” Humphrey’s Executor is a case we’ve heard a lot about recently because the Supreme Court is considering a case that may lead to reversal or constriction of the longstanding precedent that protected certain appointees from this sort of dismissal. We discussed that case and its significance here if you want a refresher. The pending case is Trump v. Slaughter, which the Supreme Court will hear argument in on Monday. We’ll discuss it in Sunday’s “The Week Ahead” post. Suffice it to say, this opinion may be a preview of how the Court decides Slaughter, which makes it well worth our attention.

So how does the majority on this 2-1 panel justify giving Donald Trump the power to remove at will people he disagrees with or thinks are insufficiently loyal to him personally? The do it like this: “As explained below, the NLRB and MSPB wield substantial powers that are both executive in nature and different from the powers that Humphrey’s Executor deemed to be merely quasi-legislative or quasi-judicial. So, Congress cannot restrict the President’s ability to remove NLRB or MSPB members.”

Judge Florence Pan starts her dissent by explaining why it’s important for some parts of government to retain independence from the White House: “The public is well served when some parts of our government are insulated from the fray of politics. That is because certain government functions are, or should be, nonpartisan.” She offers examples that put some flesh on the bare bones:

• “courts of law and other adjudicators that apply legal standards to facts must be impartial, and their impartiality is protected when the decision-makers do not fear losing their jobs when there is a change in presidential administrations.”

• “some agencies that employ subject matter expertise to address technical regulatory and policy issues, such as the Federal Reserve, are better able to execute their duties and to inspire public confidence in their decisionmaking if they are distanced from political considerations.”

She points to the long history and tradition of these agencies’ existence, at least 138 years, with the Supreme Court signing off on their constitutionality 100 years ago.

The majority tried, without any explanation, to carve out the FED, whose independence is widely regarded as essential to business and financial markets. Judge Pan points out that the rationale they use, becoming the first court in the country to “strike down the independence of a traditional multimember expert agency” applies just as readily to all other entities, including the FED. If the decision stands, it is a sea change in how our government functions. This is the unitary executive theory on steroids, as the Judge explains:

The government asked the court to adopt what Judge Pan calls “an unprecedented interpretation of the Constitution.” She writes that it “would lead to the full politicization of our government and a massive transfer of power to the President.” While the majority doesn’t expressly adopt it, she points out that the approach they take differs in name only. Instead of expressly reversing Humphrey’s Executor (which SCOTUS may still do), they “redefine” its doctrinal hook, whether an agency exercises “substantial executive power” in a way that would not allow for any independent agencies. Judge Pan points out this means that they get to maintain “the appearance of judicial restraint” while permitting the executive branch to continue its takeover of power. Her conclusion in this regard is chilling.

“It paves the way to autocracy” is strong language. Judge Pan, a Biden appointee to the Court of Appeals, was in the 3-0 majority of the D.C. Circuit that ruled against Donald Trump in U.S. v. Trump, the presidential immunity case, and has written against executive branch encroachment on government powers in other cases. She undoubtedly doesn’t use language like that lightly. She concludes her dissent by writing, “Unlike my colleagues, I would decline the government’s invitation to radically reshape our government.”

This case heads next to the Supreme Court, although perhaps if the Court reverses Humprehey’s Executor outright before it gets there, it will become moot. Either way, Judge Pan’s cautionary guidance about the impact of ending quasi independent agencies’ existence while pretending you aren’t doing just that is dangerous for democracy. Agency law practice isn’t particularly sexy, but it is still important and a fix for this predicament can come if Congress passes a law explicitly providing for standards that make it clear that within lawful constitutional constraints, government must work for the people, which means preventing a maximalist view of executive power from taking root. So onward to the midterm elections, whose importance is beginning to overshadow everything else.

We’re in this together,

Joyce