SCOTUS poised to side with Trump on FTC firing — a showdown that could topple 90-year precedent

The Supreme Court's conservative majority seemed poised on Monday to allow President Donald Trump to proceed with firing a member of the Federal Trade Commission without cause, in a blockbuster case that could reshape the separation of power within the federal government and topple a 90-year-old court precedent. 

Justices heard nearly three hours of oral arguments in the case, centered on Trump's firing of former Federal Trade Commission (FTC) member Rebecca Slaughter in March without cause. 

Slaughter had sued to challenge her removal, which she argued violated protections afforded to her under Humphrey's Executor, or the 1935 Supreme Court ruling that prohibits certain heads of multi-member, congressionally created federal regulatory agencies from being fired without cause, and only in specific circumstances.

As Monday's oral arguments came to a close, justices for the court's 6-3 conservative majority seemed inclined to allow Trump to proceed with firing Slaughter and to further weaken Humphrey's protections for similarly situated federal employees — though the extent that justices will move to dilute an already watered-down court ruling remains to be seen.

U.S. Solicitor General D. John Sauer, arguing for the Trump administration, urged the Supreme Court to completely overturn Humphrey's Executor, which he assailed as an "indefensible outlier" and a "decaying husk" of a Supreme Court decision that has "not withstood the test of time."

Liberal justices used arguments Monday to voice deep concerns about the consequences of weakening or overturning the 1935 decision, which Justice Sonia Sotomayor warned would give "absolute power" to a U.S. president to remove individuals on a purely partisan basis. 

"You’re asking us to destroy the structure of government, and to take away from Congress its ability to protect its idea that a government is better structured with some agencies that are independent," Sotomayor said in an exchange with U.S. Solicitor General D. John Sauer. 

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"Neither the king, nor parliament, nor prime ministers in England at the time of the [United States' founding], ever had an unqualified removal power," she added.

At one point during arguments, Sauer acknowledged that overturning Humphrey's decision could stand to impact at least a dozen federal agencies, indicating the importance of the case. 

Justices also grilled Sauer and Slaughter's lawyers over their "unitary executive" that would give the president greater power to execute his political and policy agenda.

Justice Neil Gorsuch, for his part, noted that the bigger problem could be allowing the commissions to continue unchanged.

 "I'll put my cards on the table," Gorsuch said. "Maybe it's a recognition that Humphrey's Executor was poorly reasoned, and that there is no such thing in our constitutional order as a fourth branch of government that's quasi-judicial and quasi-legislative."

A decision is expected to be handed down by the end of June.

Lawyers for ousted FTC member Rebecca Slaughter told the court that overturning the 1935 ruling altogether would mean that "everything is on the chopping block" — both for leaders of the FTC and for other multi-member federal agencies created by Congress. 

Other civil servants could also be impacted, they warned.

As arguments drew to a close, it remained unclear how far the justices might go in paring back the protections enshrined in the 1935 court ruling.

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Most conservatives on the court appeared to disagree with the notion that members of Congress should be able to block a president's ability to fire federal commission members — even as they grappled with the risks of completely overturning Humphrey's protections.

Chief Justice John Roberts, whose court has steadily handed a string of victories in recent cases, including cases involving executive branch authority, used his time to question lawyers about modern-day FTC powers, and how they have changed since the court's original ruling on the case nearly 100 years prior. 

Humphrey's was "addressing an agency that had very little, if any, executive power," he said. "And that may be why they were able to attract such a broad support on the court at the time," he added.

Justices Brett Kavanaugh and Amy Coney Barrett also seemed to entertain the notion of further limiting protections for agency heads under that decision, if not axing them altogether, and pressed counsel for the Trump administration on what "limiting" principles might apply. 

Liberal justices on the court appeared skeptical of Sauer’s claim that Trump has the power to fire the heads of independent federal agencies, citing concerns that allowing him to do so here could be a slippery slope that frees the executive to fire other agency heads, or lower-level civil servants. 

"You’re asking us to destroy the structure of government," Sotomayor told Sauer shortly after oral arguments kicked off. "Where else have we so fundamentally altered the structure of government?" 

Justice Elena Kagan echoed the same concerns. "Once you're down this road, it's a little bit hard to see how you stop," she said.  Congress has "given all of that power to these agencies, largely with it in mind that the agencies are not under the control of a single person of the president … And if you take away half of this bargain, you end up with just massive, uncontrolled, unchecked power in the hands of the president," he said.

The case also comes as the high court gears up to hear a case in January centered on Trump's attempt to remove Federal Reserve Governor Lisa Cook. 

The arguments in Monday's case are expected to inform how the court might consider that case in January.

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Slaughter had sued in March over her removal, arguing that it violates Humphey's Executor, and a 1914 law passed by Congress, which shields FTC members from being removed by a president except in circumstances of "inefficiency, neglect of duty, or malfeasance in office."

A federal judge had sided with Slaughter's lawyers in July, agreeing that her firing unlawfully exceeded Trump's executive authorites and ordered her reinstated. The Supreme Court in September stayed that decision temporarily, allowing Trump's firing to remain in effect pending their review.

The Supreme Court's willingness to review the case is a sign that justices might be ready to do away completely with Humphrey's protections, which have already been weakened significantly over the last 20 years. 

Allowing Humphey's to be watered down further, or overturned completely, could allow sitting presidents to wield more authority in ordering the at-will firing of members of other federal regulatory agencies, including the National Labor Relations Board and the Securities and Exchange Commission, among others, and replacing them with individuals of their choosing.

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The six conservative justices on the high court signaled as much when they agreed to review the case earlier this year. Sauer, the solicitor general, had argued in a Supreme Court filing that today's FTC authorities vastly exceed the authorities granted to the commission in 1935. 

"The notion that some agencies that exercise executive power can be sequestered from presidential control seriously offends the Constitution’s structure and the liberties that the separation of powers protects," he said.

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The case, Trump v. Slaughter, is one of four cases the Supreme Court's conservative majority has agreed to review this term that centers on key separation of powers issues, and questions involving the so-called unitary executive theory. 

Critics have cited concerns that the court's decision to take up the cases could eliminate lasting bulwarks in place to protect against the whims of a sitting president, regardless of political party.

It also comes as justices for the Supreme Court's 6-3 conservative majority have grappled with a flurry of similar lawsuits filed this year by other Trump-fired Democratic board members, including Gwynne Wilcox of the National Labor Relations Board (NLRB) and Cathy Harris of the Merit Systems Protection Board (MSPB).

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Since taking office, Trump has signed hundreds of executive orders and ordered sweeping personnel actions that have restructured federal agencies and led to mass layoffs across federal agencies, including leaders that were believed to be insulated from the whims of a sitting president.