Court rules that Cook must have due process before being fired for cause
In a highly anticipated ruling on Monday, the US Supreme Court voted 5-4 to reject the Trump Administration's bid to stay a lower federal court ruling that prevented the president from firing Fed governor Lisa Cook while her lawsuit challenging her termination continues.
The Supreme Court did not say that Trump couldn't eventually fire Cook, but that she had the right to due process that had not yet been satisfied.
Chief Justice John Roberts wrote the majority opinion and made clear what Monday's ruling meant, and what it didn't.
"As the Government concedes, Congress limited the President’s power to remove Governors for good reason—'[t]o preserve the independence of the Federal Reserve' and to continue the 'long tradition' of “monetary policy ... exercised independent of ... executive influence,'" Roberts wrote. "Any change in that scheme must come from Congress, not the courts. That is why we cannot accept the Government’s contentions in this case. To do so would allow the President to remove a member of the Federal Reserve at any time, for any reason, without any notice before, and without any judicial check after.
"That would turn for-cause protection into little more than at-will employment. To be clear, the ultimate question of whether the President can remove Cook for cause will depend in part on the underlying facts. In this opinion, we have not addressed the facts, as they have yet to be found or analyzed under the relevant legal standards. Rather, we have simply addressed the parties’ arguments about the appropriate legal standards under which the facts must be evaluated."
Fed independence in focus
Kenneth Katkin, law professor at Northern Kentucky University’s Chase College of Law, predicted that the court would likely side with Cook when speaking with Mortgage Professional America in late 2025.
“If you want an independent Fed, then you want the Fed governors to have certain kinds of legal protections against pressure from the president,” Katkin said. "That's been the understanding for as long as we've had the Fed, but Trump is fundamentally challenging that. If the Supreme Court rules in favor of Trump, then they will be saying that the concept of Fed independence is over, that we won't have that anymore."
Roberts made clear in a concurring opinion separate from the majority of the court opinion that the ruling doesn’t mean that Cook couldn’t be fired later on.
“Today’s interim ruling does not decide whether the President may lawfully remove Governor Cook for cause,” Roberts wrote. “The ultimate decision about whether the President may remove Governor Cook for cause will largely depend on the facts regarding the Governor’s actions. And those facts have yet to be determined.
“The Court’s opinion today simply settles some of the legal and procedural ground rules under which the Executive Branch may determine and assess the facts and courts may then ‘assess the validity and sufficiency’ of any asserted grounds for removal.”
Humphrey’s Executor overturned
In a separate ruling, the Supreme Court in a 6-3 vote overturned a 91-year-old ruling that limited the president’s power to fire members of independent agencies. This case concerned Federal Trade Commission member Rebecca Slaughter, who Trump fired in March 2025.
“In Humphrey's Executor v. United States, 295 U.S. 602 (1935), the Court drew a distinction between ‘executive’ officers like the Secretary of War or a postmaster, who could be fired by the President under the Myers precedent, versus ‘quasi-legislative’ or ‘quasi-judicial’ officers of multi-member ‘independent’ federal agencies like the Federal Trade Commission,” Katkin said. “The Court held that the latter may be removed only with procedures consistent with statutory conditions enacted by Congress. Thus, the President could not fire a member of a multi-member ‘independent’ board or commission solely for political reasons.”
However, Roberts noted in his concurrent opinion that this ruling shouldn’t bring Fed independence in question.
“We should not leave open the question whether the Federal Reserve can remain an independent agency in the wake of Slaughter,” Roberts wrote. “After Slaughter, there is a clear choice: Either the Federal Reserve may remain independent (with the Governors removable for cause, not at will), or it may not.
“Leaving that question open would create significant uncertainty about whether the Court might soon eliminate the Federal Reserve’s independence and thereby expose the Federal Reserve to political influences and jeopardize the efficacy of US monetary policy.”
He said the ramifications of even the perception of a loss of independence would be catastrophic.
“Even temporary uncertainty about the status of the Federal Reserve could spark political upheaval, including confusion about whether the President could immediately remove multiple Governors at will, as well as turmoil in the US and world economies,” Roberts said. “I would not go down that road. I would not risk destabilizing the US economy just so that we can further mull over an issue that, in various permutations. , we have been thinking about for many years.
“In my view, in light of that historical practice and precedent, the Federal Reserve may continue as an independent agency after Slaughter. If the Federal Reserve’s for-cause removal protections are to be eliminated, that change must occur through the legislative process. In short, like the Court, I see no good reason here to unsettle a critical constitutional question that has long been settled, and that should remain settled.”
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