This week with the oral arguments in Collins v. Mnuchin, we’ll have our first look at how the Supreme Court with its new 6-3 conservative majority might expand the power the president has over independent government agencies and increase the potential for political interference in work those agencies do to protect the health, safety, and welfare of the American people. The case centers on the Federal Housing Finance Agency, which oversees the federal home mortgage programs Fannie Mae and Freddie Mac, and the plaintiffs are challenging the constitutionality of the agency’s leadership structure, a single director appointed by the president (as opposed to a multi-member board) who can’t be fired without cause — a structure some other independent agencies share. If the Court found the removal-for-cause protection unconstitutional, it would make it easier for the president to terminate independent agency heads for insubstantial reasons, hamstringing agencies’ ability to fulfill their missions free from political pressure.
The prognosis isn’t good. In Seila Law v. CFPB last term, the Court struck down the removal-for-cause protection for the head of the Consumer Financial Protection Bureau (CFPB). The majority invoked the unitary executive theory, which holds that the president must have direct control over all aspects of the executive branch. Proponents of the most extreme form of the unitary executive theory believe that statutory requirements that executive branch personnel can only be fired for cause are unconstitutional infringements on the president’s power and violate separation of powers.
Contrary to the majority’s claim in Seila Law, politicization of core government functions does not improve government’s accountability to the American people; in fact, it can threaten the rule of law. Stripping government officials of for-cause removal protection removes insulation from political pressure, in that the president can force them to capitulate to a directive — even if it’s illegal or unethical — or fire them. Insulation from political pressure has helped ensure the evenhanded administration of the law. As the Brennan Center’s bipartisan Task Force on Rule of Law & Democracy has argued, from the Department of Justice to scientific agencies, the rule of law depends on committed, ethical personnel who are able to carry out government functions without undue politicization.
Collins v. Mnuchin
The plaintiffs in Collins v. Mnuchin are former shareholders of Fannie Mae and Freddie Mac. They are claiming that the structure of the Federal Housing Finance Agency (FHFA) is unconstitutional in order to challenge the agency’s authorization of payments to the federal government to compensate for its bailout of Fannie and Freddie during the last financial crisis. Although the lawsuit focuses on removal for cause, Collins doesn’t involve the employment status of an actual director of the FHFA or attempts to fire that person. It is an attack on the legitimacy of the agency based on the existence of the removal-for-cause protection, which the director has had since the agency’s creation by Congress in 2008.
For-cause removal protection for the leaders of independent agencies is a common and longstanding congressional tool to insulate those agencies from political pressure. This requirement prevents the president from firing an independent agency director over mere personal or policy disagreements. When the Supreme Court in Seila Law struck down for-cause removal protection for the director of the CFPB, it left many unanswered questions, including whether or not the decision should apply to other presidential appointees with for-cause removal protection. This Wednesday’s arguments in Collins could shed light on the justices’ thinking.
The Court’s reasoning in Seila Law turned at least in part on the fact that CFPB — like the FHFA in Collins — is led by a single presidentially-appointed director, not a multi-member board appointed by the president. At the same time, the majority telegraphed some ambivalence about a seminal case upholding for-cause removal protection in the case of a multi-member board, Humphrey’s Executor v. United States (1935). Some justices would go even farther — in a concurring opinion joined by Justice Gorsuch, Justice Thomas called for Humphrey’s Executor to be overturned and posited that all independent agencies are unconstitutional.
The Court in Seila Law also focused on the fact that the CFPB administers 19 statutes, “including a broad prohibition on unfair and deceptive practices in a major segment of the U.S. economy.” This vague characterization of the CFPB’s impact on a “major segment” of the economy could potentially apply to the FHFA, as well as dozens of other independent government agencies charged with critical government functions, from regulating securities to ensuring mine safety. The Seila Law majority questioned the constitutional validity of both the CFPB and the FHFA, which were created in response to the Great Recession, and other single-leader agencies at least partly on the grounds that they are all “modern.”
The Utility of Single-Leader Agencies
As with the CFPB, Congress had good reasons to structure the FHFA as it did. In the 85 years since the Supreme Court upheld for-cause removal for the commissioners of the Federal Trade Commission in Humphrey’s Executor, the economy has become more complex, the federal regulatory process has become lengthier and more involved, and the Senate confirmation process has become more fraught. In order to respond with agility and expertise to pressing societal needs, Congress has structured a few modern regulatory agencies with a single Senate-confirmed leader whom the president can’t fire without cause. (In certain situations – such as in the case of agencies that regulate campaign finance law or other election-related issues, when there is a risk of the agency being weaponized by the party in power to persecute its opponents – the Brennan Center has advocated for Congress to employ a multi-member, bipartisan leadership structure.)
The 2009-2013 appointments saga of the National Labor Relations Board underscores the advantages of a single leader structure over a multi-member board. This New Deal era agency is led by six presidential appointees and administers a single statute, primarily by means of formal adjudication, one labor dispute at a time. When Senate Republicans refused to allow the confirmation of President Obama’s nominees to the Board, the Supreme Court issued a series of three decisions invalidating hundreds of cases, representing several years’ worth of the agency’s work, on various grounds — lack of a quorum, improper recess appointments, and an improper acting appointment. To illustrate the human impact of these setbacks, a worker whose employer fired him in retaliation for his union activity was forced to take a nearly 70 percent pay cut and lost his home to foreclosure while waiting over four years for a properly constituted Board to adjudicate his case.
The Dangers of an Expanding Unitary Executive Theory
If the Court invalidates the FHFA’s structure in Collins, it will represent an expansion of the principles announced in Seila Law, to our society’s detriment. According to the unitary executive theory, executive power should be concentrated in the hands of the president, to whom federal agencies should be more responsive. But consolidating executive power by ending for-cause removal for agency heads threatens to undermine the effectiveness of the agencies they lead. Indeed, federal agencies are less able to implement expertise-driven responses to the nation’s problems in an efficient manner if their leaders have to contend with interference driven by political motives rather than the facts.
The unitary executive theory is part of a constellation of legal principles gaining momentum with the Court that are dressed up as ways to improve government but have the perverse effect of making it less functional. The nondelegation doctrine, for example, has been cited by some current justices as a reason for preventing Congress from directing federal agencies to decide “major” policy questions. And several justices have exhibited skepticism of legal doctrines that afford deference to agency expertise, which doctrines have long served as the basis for upholding agency regulations.
It remains to be seen, in this case and future cases, whether the Supreme Court will begin to embrace the interpretation of the unitary executive theory that proponents of the theory in the Trump administration have expounded — namely, that the president should have the ability to fire not only agency leaders but all federal employees for any reason or no reason at all. For instance, the acting head of the Office of Personnel Management — the federal government’s human resources agency — questions the constitutionality of civil service protections, which have existed for nearly 150 years and shield career government employees from politically motivated firings. Reflecting this view, President Trump recently issued an executive order eliminating for-cause removal protection for potentially hundreds of thousands of civil service positions, giving teeth to his threats to fire National Institute of Allergy and Infectious Diseases Director Anthony Fauci.
The consequences for the federal government of an expanded unitary executive theory would be significant: high turnover, low competence, and less expertise, all of which serve the interests of opponents of regulation more than those of an administration seeking to protect consumers, public health, worker safety, and the environment. If the Supreme Court continues down its current path, we could soon have a government more inclined to serve partisan interests than the public interest when it comes to pivotal issues affecting Americans’ everyday lives, while the economic, health, and environmental challenges facing this country become more multifaceted and complex.