Welcome back, Deadline: Legal Newsletter readers. Let's talk about power. We're always doing that when we talk about the law, even when we don't realize it. But in this week's newsletter, I'd like to highlight how the Supreme Court majority used its power in an almost comically unconvincing way to further empower President Donald Trump.
The Republican-appointed majority had a problem. A fake problem of its own making, to be sure. It wanted to let the president fire members of independent federal agencies, but it didn't want to spook the financial markets in the process. The faux dilemma arose in a case about labor board members whom Trump sought to remove without cause.
That's illegal. Or at least it used to be. But the government's argument for why Trump could so — in the face of a nearly century-old precedent saying he couldn't — also implicated the independence of the Federal Reserve Board, which the unpredictable president has tilted at. The Fed's independence wasn't directly at issue in this appeal, but the risk of economic chaos loomed large. What's a Roberts Court to do?
The solution, it turned out, was easy: Make something up. The judicial creation came in an unsigned order Thursday on the court's so-called shadow docket (or emergency docket, if one prefers). It was there that the majority granted an urgent bid from the Trump administration, agreeing to lift lower court orders that had stopped the president from firing Gwynne Wilcox and Cathy Harris from the National Labor Relations Board and the Merit Systems Protection Board, respectively.
The majority's unsigned order was only two pages, but it devoted one of its four paragraphs to protecting the Federal Reserve. Responding to Wilcox and Harris' claim that the vitality of removal protections in their case also implicates the Federal Reserve's Board of Governors, the majority said simply: "We disagree."
OK, that's not all it said, but it didn't say much more, and what it did say didn't help. "The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States," it went on. To support that proposition, it cited a footnote — footnote 8 for those playing along at home — from a 2020 case called Seila Law, in what was then the latest instance of the court granting presidents more power over agencies.
The gambit didn't go unnoticed by the dissent from Justice Elena Kagan, who has a knack for plainly exposing shenanigans like these. The Obama appointee said the Federal Reserve caveat came "out of the blue." She appreciated the majority's "intention to avoid imperiling the Fed" but said it still posed "a puzzle." That's because the Federal Reserve's independence rests on the same foundation as agencies such as the NLRB and the MSPB — which, Kagan pointed out, means it rests on that nearly century-old precedent, Humphrey's Executor. The Trump administration wants to overturn the 1935 decision, and the majority's order effectively does so — or at least signals its willingness to do so in a future ruling in this case, which is still being fully litigated in the lower courts.
And about that footnote. The majority cited it for the proposition of the Federal Reserve's unique structure, which, the majority implied, would save it from the president's firing spree that the court was otherwise willing to condone. Joined by her two fellow Democratic appointees in dissent, Kagan pointed out that a review of that footnote "provides no support" for what the majority suggested. The trio charged their colleagues with "making new law on the emergency docket" against the Humphrey's precedent, while creating "a bespoke Federal Reserve exception[.]" If the majority wanted to "reassure the markets," Kagan wrote, "a simpler — and more judicial — approach would have been to deny the President's application for a stay on the continued authority of Humphrey's."
The majority didn't want to do that. It wanted to have it both ways. So it did. A lesson in power from the Roberts Court.
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