Fed Takeover, Judge Firings, Erosion Of Guards Against Autocracy: Judge Lays Out Stakes Of Trump Agency Takeover

While the conservative judges on Friday tried to find a way to overturn Supreme Court precedent before the Court itself gets a chance to do it, the sole liberal on a three-judge appeals court panel used the hearing to lay bare the ramifications of President Trump’s attempt to take over independent agencies.

“Your position is: We’re not allowed to have independent agencies in this country even if they can be beneficial, like the Federal Reserve,” Judge Florence Pan said to the DOJ’s Harry Graver, adding: “Can you explain why that’s a good way to run a government?”

Trump had fired members of the National Labor Relations Board and Merit Systems Protection Board at the beginning of his term, a couple of whom filed lawsuits that will likely determine whether independent agencies can continue to have protections from at-will firing. The Supreme Court has been steadily hacking away at those protections, and if they clear the way for Trump to fire these members too, the entire executive branch — including agencies whose independence have long been considered sacrosanct, like the Federal Reserve — will be under Trump’s direct power. 

Pan, a Biden appointee, pushed Graver on whether administrative law judges could be fired at will under his hypothetical new world order, and admonished him for evading her questions about whether the leaders of the Federal Reserve could be axed at Trump’s will.

“If a president is running for reelection, he would like the Fed to lower interest rates to goose the economy and he pressures the Fed to do so and the Fed says no, he could fire the Fed and all the governors — and that enhances liberty?” she asked incredulously. 

The Trump appointees on the panel, Judges Justin Walker and Greg Katsas, were carrying out different missions. Walker has already ruled in favor of the Trump administration for these firings as part of a different panel. He wrote then that Humphrey’s Executor, the Supreme Court precedent that protects members of certain independent agencies from being fired, is a “benched quarterback” and would construe its power so narrowly as to overturn it in essence. 

Katsas, a former deputy White House counsel under Trump, took a more measured tone. While clearly amenable to the government’s arguments, he struggled more with how to greenlight the firings while Humphrey’s Executor is still good law. 

“The only thing you’re willing to definitively put in the Humphrey’s bucket is some board that runs the Kennedy Center or something,” Katsas said skeptically to the DOJ’s attorney, asking if that’s really a “plausible” reading of the Supreme Court case that explicitly preserved Humphrey’s Executor as good precedent. 

All of these cases are really just overture. The fired board members have been reinstated for brief stints while the litigation unwinds, but the lower court action is just, as one judge put it, a “speed bump” on the way to the Supreme Court. 

That some conservative judges have been willing to at least temporarily permit the firings is a helpful metric to show how far right they’ve moved; this case should be open and shut on the lower levels, while Supreme Court precedent still protects these board members from at-will firing.

But the administration has been (candidly) trudging through the lower courts as necessary hurdles to get before the Supreme Court, where it’s betting that enough of the bench’s right wing is ready to overturn the last substantive independent agency protection. 

“Separation of powers is…supposed to prevent autocracy and the question is, why are these more than 30 agencies — which were designed by Congress to be independent — why do we need to move them under the control of the executive? Pan asked.