December 21, 2016

No One Has Been Fired by the President for Cause. Richard Cordray Should Not be the First.

Brian Simmonds Marshall, Veronica Meffe

by Brian Simmonds Marshall, Policy Counsel and Veronica Meffe, Legal Fellow; Americans for Financial Reform

No president has removed an appointee for cause. Most presidents have not attempted it and the three times a president has tried to remove an official with for-cause protections—on the ground that the for-cause protection were invalid (not that there was cause for removals)—the courts stopped the president from doing so. Those simple and important facts have been lost amid cries from opponents of strong consumer protection to remove Richard Cordray as Director of the Consumer Financial Protection Bureau (CFPB).

By statute, the president may remove the CFPB’s Director only “for inefficiency, neglect of duty, or malfeasance in office,” the same standard that the Supreme Court held to be constitutional in Humphrey’s Executor (1935). In October, a D.C. Circuit panel ruled that the CFPB Director, as the single-head of an independent agency, could not be so protected. But that decision is now under review by the full D.C. Circuit, which could vacate the panel’s ruling in late December or early January by agreeing to hear further argument in the case.

Assuming the CFPB director’s statutory protections against arbitrary removal remain in effect, history suggests that he will not be removed from office. We reviewed Steven Calabresi and Christopher Yoo's exhaustive history of the removal power, The Unitary Executive, and it does not identify a single for-cause removal in the post-Humphrey’s era.  

In the handful of instances the courts declined to stop a removal, it was because the court held that the official did not enjoy protections against removal. For example, in Martin v. Tobin (9th Cir. 1971) and Morgan v. Tennessee Valley Authority (6th Cir. 1940), the courts of appeals held that the officers in question filled purely executive roles and therefore served at the pleasure of the president. Similarly, in Swan v. Clinton (D.C. Cir. 1996), the court held that the official challenging his removal did not have for-cause protections because his term had already expired. And in that case, despite ruling against Swan, the D.C. Circuit acknowledged that the case was justiciable and the court would have had the power to allow him to serve until his successor was confirmed if his removal were in fact illegal.  

Some commentators have erroneously suggested that the courts may only be able to award backpay rather than stop a removal, relying on two early cases -- Weiner and Humphrey’s Executor -- in which the Supreme Court did not restore an illegally removed official to office. In those cases, the Supreme Court held that the removals were illegal, but there were unique circumstances that made the only relief available the award of backpay. In Weiner v. United States (1958), the War Claims Commission had closed by the time Weiner’s case reached the Supreme Court. And Humphrey’s illegal removal was vindicated by the executor of his estate because Federal Trade Commissioner William E. Humphrey died before the case was decided. Consequently, these cases provide no support for the claim that the courts cannot stop an illegal removal.

Moreover, courts have enjoined illegal removals of officials with for-cause protections. As Brianne Gorod of the Constitutional Accountability Center recently documented, in at least three instances since 1980, the president has been enjoined from executing an illegal removal and the president yielded to the injunction in each instance.

In sum, the courts have authority to stop illegal removals, they have used that authority in the past and there is no history at all of a president successfully removing an officer “for inefficiency, neglect of duty, or malfeasance in office.” Trying to fire the squeaky-clean Richard Cordray, whose agency has returned more than $11 billion to wronged consumers in its first five years of existence, would be unprecedented. The slipshod rationalizations thinly disguising an underlying desire to remove a strong enforcer surely do not justify making him the first official ever to be removed by a president for cause.