MNI INTERVIEW: Cook Could Face Long Odds Before Supreme Court

Federal Reserve Governor Lisa Cook is unlikely to win her case against President Donald Trump at the Supreme Court, whose 6-3 conservative majority has repeatedly sided with the president, George Washington University Law professor and administrative law expert Richard Pierce told MNI. 

"If I were a betting person, I bet that through some combination of those off-ramps enough of the six conservatives jump off the ship, that Cook winds up not being reinstated," he said in an interview Monday. 

An appeals court is considering Trump's effort to fire Cook before the FOMC's Wednesday vote on interest rates. Cook's lawyer argues that any ruling that threatens her attendance at the Fed meeting would "potentially plunge" the Fed's vote "into turmoil" and have "the real potential of impacting domestic and foreign markets".

If the appeals court denies the Justice Department’s request, the president is likely to immediately ask the Supreme Court to intervene.

UNPRECEDENTED

Question one for the Supreme Court is whether the 'for cause' limit on the president's power to remove a Fed governor is constitutional, Pierce said. 

"The Supreme Court has been saying in many somewhat similar circumstances that the vesting clause of Article Two overcomes and renders invalid many statutory limits on the president's power to remove officers," he said. 

"Assuming that the court concludes that it would be appropriate for a court to review the president's decision to remove someone for cause, then you get the interpretation question. What qualifies as 'for cause'? Is a mere accusation of illegal conduct sufficient? Is an allegation of illegal conduct before the person ever took office sufficient? Does it take more than that? Does the person have to be indicted or convicted?"

"None of those are questions that the Supreme Court has ever addressed before in any context," Pierce said. "So, assuming that it upholds as constitutionally valid, the 'for cause' limit, the court is going to have to answer all of those questions about how to review a decision by the President to remove someone for cause. No court has ever done that in the past."

"It is absolutely fresh. There is no law out there," he stressed. (See: MNI: Legal Experts Say Fed's Cook Will Prevail Against Trump) 

BACK PAY ONLY? 

The Supreme Court would also have to decide that the best remedy is for Cook to be reinstated to the Fed, Pierce said. "Even assuming that the Supreme Court reaches the conclusion that mere allegation without more evidence of wrongdoing and prior to taking office is insufficient basis for firing a Fed governor for cause and, hence then the president acted in an unlawful manner in removing Lisa Cook, then the question is, what is the appropriate remedy?"

"Two justices have said that the only remedy that's available is back pay," Pierce said. "When you look at the past cases in which the Supreme Court has determined that a president removed someone when they didn't have the power to do so, that was the only remedy that was requested and the only remedy that was given."

"Of course, what Cook is looking for is the remedy of reinstatement," Pierce said. "If the Supreme Court gets that far in this incredibly complicated decision-making process, then the question is, will there be five or more votes to reinstate her?"

EXPOSED? 

Chief Justice John Roberts last week issued an administrative stay against a lower court ruling that had allowed Rebecca Slaughter to continue in her position as a member of the Federal Trade Commission despite President Trump’s firing of her.

That may leave Fed officials exposed, Pierce said. 

It's "another decision the court made on the emergency docket. It's bizarre because the court basically overruled Humphrey's Executor," Pierce said.