On the Supreme Court’s Horizon: Presidential Power

By Emmett McGroarty

The Supreme Court has decided to hear a case with significant implications regarding the powers of the presidency. The case, Seila Law LLC v. Consumer Financial Protection Bureau, concerns the power of the president to remove the director of the Consumer Financial Protection Bureau (CFPB).

The salient facts are straightforward. Through the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress established CFPB and vested it with immense powers, including the enforcement of nineteen federal consumer protection statutes. It housed CFPB within the Federal Reserve System as an “independent bureau” and placed it under the leadership of a single director appointed by the President and confirmed by the Senate. The petitioner is a law firm that provides a variety of legal services to consumers and is the target of a CFPB civil investigation. CFPB demanded certain records from petitioner, and petitioner objected asserting that the CFPB structure violated the Constitution’s separation of powers doctrine. The question being presented to the Court is whether Congress can create an independent agency that is headed by a single person—as opposed to a board or commission—who is removable only for cause.

Petitioner’s case rests on Article II of the Constitution providing, at Section 1, that “[t]he executive Power shall be vested in a President of the Unites States of America” and, at Section 3, that the President “shall take Care that the Laws be faithfully executed.”  In this regard, the Supreme Court recently noted:

The Constitution that makes the President accountable to the people for executing the laws also gives him the power to do so. That power includes, as a general matter, the authority to remove those who assist him in carrying out his duties. Without such power, the President could not be held fully accountable for discharging his own responsibilities . . . .

Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477, 513-14 (2010).

Seila did not arise in isolation. It is the byproduct of the progressive ideology that took root in the late 19^th and early 20^th centuries. In particular, social scientists optimistically proclaimed that the “science of administration” could solve society’s great ills if they were given sufficient authority and resources.

From the progressive viewpoint, the problem is that the Constitution does not leave room for such experts to wield the necessary power. It created cumbersome checks and balances that make each branch deferential to the defined powers of the other branches, and it enshrined the protection of individual rights as a paramount concern. Both of these facets impaired the efficiency of the expert. Work-arounds to the Constitution were needed.

One such work-around was the creation of the independent agency. Under that scheme, experts would be insulated from accountability and would have the leeway to make the ostensibly

correct decisions. Congress would delegate to the executive broad powers that would often include swaths of legislative, judicial, and executive power. Most important, the expert would be insulated from the office of the president; in particular, the president would not have direct supervision over the agency and would be unable to fire agency heads except for cause. From 1887 through 2010, Congress created at least twenty-five major independent agencies (with well over half having been created after 1966).

In Humphrey’s Executor v. United States, 295 U.S. 602 (1935), the Supreme Court upheld the creation of independent agencies. The Court reasoned that Congress had intended the Federal Trade Commission to be “wholly disconnected from the executive department” and to be in part quasi-legislative and in part quasi-judicial. The Court further reasoned that, given that the FTC’s duties were not “purely” executive, Congress could properly insulate its leadership from the presidency. Legal theorists rationalized that the end-runs of the Constitution’s checks and balances were mitigated by statutory or de facto constructs that protected liberty.

CFPB’s authorizing legislation adds a further wrinkle. Unlike other independent agencies, it is headed by a single director—not a board or commission—making the director even more powerful vis-a-vis the President and the departure from the Constitution even more radical than the Court’s decision in Humphrey’s Executor.

Seila Law promises to be an intriguing decision. Will the Court invalidate CFPB’s authorizing legislation on the grounds that it impermissibly puts an independent agency under the control of a single person? If so, will it declare the whole statue unconstitutional, or simply sever the offending provision? Will it issue a more robust decision that limits or overturns the rule in Humphrey’s Executor on the grounds that even that violates the Constitutional design of a unitary Executive?  The decision could profoundly other agencies as well as the relationship between the people and their government.