In a 6-3 decision issued yesterday, the Supreme Court held that the President can fire the heads of independent federal agencies without cause, including Commissioners of the Federal Trade Commission (“FTC”). The Court declared unconstitutional the FTC Act’s for-cause removal provision, which permitted the President to fire Commissioners only for “inefficiency, neglect of duty, or malfeasance in office.” The Court reasoned that such limitations on removal are contrary to the separation of powers enshrined in the Constitution. The decision overrules the nearly 100-year-old precedent of Humphrey’s Executor v. United States, which had protected agency heads from removal without cause. While the Court technically left open the decision’s impact on Federal Reserve Board members, it strongly suggested that they may not be subject to the ruling given the Federal Reserve’s “historical tradition” and “unique role” in influencing monetary policy, which historically was not “subject to plenary Presidential control.” The Court’s language—combined with yesterday’s decision in Trump v. Cook, in which the Court rejected President Trump’s attempt to fire Federal Reserve Board member Lisa Cook—suggests that the Court is treating the Federal Reserve differently than other federal agencies for now.
The case arose after President Trump fired the FTC’s two remaining Democratic Commissioners, Rebecca Slaughter and Alvaro Bedoya, asserting that their “continued service on the FTC was inconsistent with his Administration’s priorities.” Writing for the majority, Chief Justice Roberts concluded that because the FTC unquestionably exercises executive power, the Chief Executive must control the agency without limitation on the ability to remove Commissioners.
Practical Impact: A New Landscape for Independent Agencies
The decision’s fallout is already visible at the FTC. Congress designed the FTC to have five commissioners, three from the President’s party and two from the minority, with staggered terms to ensure institutional checks. The Commission is currently down one Republican commissioner and, given the prior termination of Commissioners Slaughter and Bedoya, has recently been led by the two Republican Commissioners only—Chairman Ferguson and Commissioner Meador. The Court’s decision may make it difficult to ensure the statutory requirements for bipartisan Commission membership. One-sided Commissions could reshape agency practice, such as by eliminating dissenting opinions filed by minority Commissioners.
These implications extend far beyond the FTC. As Justice Sotomayor noted in dissent, dozens of independent commissions—such as Federal Energy Regulatory Commission, the Consumer Product Safety Commission, the Chemical Safety Board, the Nuclear Regulatory Commission, and the Merit Systems Protection Board—are now likely to become purely executive agencies, shifting tremendous power into the President’s hands. For businesses and individuals regulated by these agencies, the ramifications are not abstract. As Justice Gorsuch recognized in a concurring opinion, Congress has delegated to independent agencies “vast legislative and judicial powers” and now “the President can effectively exercise all of those powers too.” In short, for clients operating in heavily regulated industries or otherwise facing regulatory scrutiny by federal agencies, the practical reality is that enforcement priorities, rulemaking agendas, and even in-house adjudication outcomes likely will become even more dependent on the priorities of the current presidential administration than in the past.