The Supreme Court appeared concerned on Wednesday that President Donald Trump‘s bid to fire Federal Reserve governor Lisa Cook could water down removal protections for members of the Fed, essentially making them fireable at will.
During arguments in the emergency docket case Trump v. Cook, multiple justices appeared skeptical about Solicitor General D. John Sauer’s assertion that the president’s removal of Cook for cause is largely unreviewable by courts and that she cannot be reinstated by the judiciary.
“Your position that there is no judicial review, no process required, no remedy available, [and a] very low bar for cause, that the president alone determines. That would weaken, if not shatter, the independence of the Federal Reserve,” Justice Brett Kavanaugh said while questioning Sauer.
The issue before the justices on Wednesday was whether Cook should remain in her job at the Fed while her lawsuit challenging the basis of her removal continues progressing through lower courts.
Trump fired Cook in August, citing allegations by Federal Housing Finance Agency Director Bill Pulte that, in 2021, Cook claimed two different homes as her primary residences to secure more generous loan terms. Pulte referred her to the Justice Department for mortgage fraud. A district court ruled in September that Cook could remain in her post while litigating the firing.
One of the central questions at Wednesday’s hearing surrounded what kind of conduct meets the standard of a “for cause” removal, along with whether courts can review the basis for such a firing and, if so, whether courts could ultimately reinstate a fired Fed member.
Kavanaugh noted that if the justices side with Trump, the next president could cite a flimsy “cause” to fire officials who are protected by a “for-cause” removal requirement, and courts would have no way to prevent it, effectively rendering the “for-cause” removal protection useless.
Chief Justice John Roberts also expressed skepticism over Sauer’s assertion that Cook cannot be reinstated by a court, asking why the justices would be hearing her case in the first place if that were true.
“If you are correct that courts do not have authority to reinstate a removed officer, why are we wasting our time wondering if there is ’cause’ or not?” Roberts asked, wondering what the justices could do if they find she was improperly fired. “How is that consistent with the time and energy being spent on determining if there is ’cause’?”
Justice Elena Kagan questioned Sauer on what the point of citing “cause” to remove Cook was if the decision is unreviewable and permanent.
While the justices were skeptical of Sauer’s arguments for allowing Cook to be fired, they were also concerned with the arguments of Paul Clement, who represented Cook before the high court and insisted that conduct that took place before an officer has taken a job is not valid as “cause” to fire him or her. In the Cook case, the 2021 mortgage fraud accusations predate her 2022 appointment and confirmation as a Fed governor.
Justice Samuel Alito grilled Clement on hypothetical instances of misconduct committed before someone was elevated to an office, to which Clement responded that those claims would be better suited for an impeachment process rather than a “for-cause” removal.
In his arguments to the Supreme Court, Clement said Cook deserved sufficient notice of her termination and a hearing for her to present evidence defending herself in order for the termination to be a proper for-cause removal.
Roberts questioned Clement on why Cook needed a full hearing, when their rebuttal to the mortgage fraud allegations is that Cook filled out the disputed forms incorrectly by accident. Multiple justices also grilled Clement on what a proper hearing would look like — whether it would involve an impartial group of people hearing her case or the president having an hour-long meeting with Cook at the White House.
The case is still on the high court’s emergency docket despite being scheduled for arguments before the full Supreme Court, and the justices could rule on it in the coming weeks. Most cases that receive oral arguments before the justices are full merits cases, but the justices chose to hear oral arguments in the Cook case while it is still before them as an emergency application.
Justice Sonia Sotomayor quipped during arguments on Wednesday about the unusual nature of the proceedings, saying, “this whole case is irregular, it started with a Truth Social notice,” referring to Trump’s post firing Cook.
TRUMP’S BATTLE WITH THE FEDERAL RESERVE FACES SUPREME COURT TEST
The case is the latest episode in Trump’s battle with the Fed and its chairman, Jerome Powell. While Trump was away in Switzerland on Wednesday, both Powell and Cook were in the courtroom for Wednesday’s arguments.
The case is the latest instance of the justices reviewing the president’s removal powers. In December, the high court heard arguments in Trump v. Slaughter, which concerns the president’s ability to fire independent agency heads at will, excluding the Fed, which both parties conceded was unique in its structure.
