Fired by the Trump Administration, several high-ranking federal government officials are now suing the government for unlawful termination. All of these cases cite a unanimous decision in the 1935 Supreme Court case, Humphrey’s Executor.
At first glance, the cases present competing wants: Fired government officials want their jobs back; President Trump simply wants to appoint ranking officials within the executive branch. Courts are asked to weigh the conflicting demands.
But Humphrey’s Executor was decided on other grounds. In that case, President Franklin D. Roosevelt had fired a commissioner of the Federal Trade Commission. Justice Sutherland, writing for the court, averred to Myers v. United States, stating that the President could fire a government official, such as a postmaster, who could only exercise executive branch authority. The postmaster could make no rules and adjudicate no disputes.
Instead, Humphrey’s Executor was decided on the basis that commissioners of the Federal Trade Commission were not strictly Executive Branch officials. The FTC was not an Executive Branch agency as it exercised “quasi-legislative or quasi-judicial powers.” The Court held that the President could not as a consequence fire an FTC commissioner any more than the President could fire a sitting judge or legislator. Moreover, Justice Sutherland opined that Congress could, and did, set limits on the powers of the President to remove commissioners of the Federal Trade Commission as it purely was not an executive branch agency. Such were the rules of the separation of powers.
The Trump Administration and some legal scholars see Humphrey’s Executor as hopelessly flawed in part because the wording “quasi-legislative or quasi-judicial powers” as a description of the FTC is not in the constitution. True enough. But a modified wording of “legislative or judicial powers” to describe the FTC would even more accurately describe the FTC and pose even constitutional concerns.
The failure of the Supreme Court in Humphrey’s Executor is its tacit endorsement of a law that creates an agency that has legislative and judicial powers as well as executive powers. The FTC falls under neither Article I, nor Article II, nor Article III of the constitution. It sits distantly outside the constitution, and the Humphrey’s Executor court, while recognizing a separation of power challenge, limits that challenge to whether the President has the power to remove a sitting commissioner. “Independent agency” is the euphemism attached to such agencies that fall entirely outside the constitution. They are not merely independent of the Executive Branch; they are independent of the constitution. The federal government has many such independent agencies.
If the President cannot remove a high-ranking official from an independent agency under the separation-of-power logic of Humphrey’s Executor, then a President could not remove officials from any federal agency that has some combination of rulemaking authority, executive authority to administer and enforce those rules, and adjudicatory authority to resolve disputes under those rules. Most federal agencies, and practically every if not all cabinet-level agencies, combine the powers of government.
The Major Questions Doctrine in West Virginia v. EPA would not have arisen if the EPA were a purely executive agency with no rulemaking authority. An implementation of Humphrey’s Executor that would limit President’s ability to replace officials in agencies that have some rulemaking authority or some adjudicatory authority would enfeeble the President to replacing government officials only when they resign.
If the Supreme Court were to strike down the precedent of Humphrey’s Executor and were to allow the President to remove officials from these agencies at will, some observers worry about the politicization of these agencies, particularly the Federal Reserve Board. But both before and after Humphrey’s Executor, independent agencies have been subject to strong political influence, particularly from the White House. It would be naive to assume otherwise.
But the political influence of the President on an agency is different from its constitutionality—or its economic efficiency. The President may influence through the power of persuasion an organization such as the Red Cross or Major League Baseball or a state government. It does not follow that the President can remove officials of these organizations. The Federal Reserve Board and other independent agencies will continue to be influenced by the President, whether he has the power to remove officials or not.
The combination of powers in a single agency offends not only the constitution but sound government. Scholars such as Montesquieu identified the problem centuries ago. An agency that combines the powers of government need not write clear and lawful rules because it can enforce any rules it wants, rewriting them as needed and making them up as it goes along. Such an agency may enforce rules as it chooses against whom it chooses. Parties disaffected by bad rules and arbitrary enforcement can expect little justice in an adjudicatory system that wrote the rules and enforced those rules. Sloppiness and ad hockery replace the firm rule of law.
The combination of powers leads to unpredictable federal rules and even less predictable enforcement and adjudication of those rules. Markets are harmed, and we are all the poorer.
The Supreme Court should review and recast Humphrey’s Executor. But the solution should not be limited to deciding whether the President can or cannot remove certain government officials. The solution should be to determine that agencies that combine the powers of government fall outside of the constitution. Agencies independent of the constitution should be brought within the orbit of the constitution.
