Notice & Comment

Civil Regulatory Enforcement as “Conclusive and Preclusive” Presidential Authority at Oral Argument in Trump v. Slaughter, by Eli Nachmany

Last week, the Supreme Court heard oral argument in Trump v. Slaughter—the case involving President Trump’s removal of FTC commissioner Rebecca Slaughter. Slaughter is challenging her removal on the grounds that it violated the Federal Trade Commission Act, which only allows removal of commissioners for certain, specified causes (none of which the President invoked). President Trump contends that the removal protections violate Article II of the Constitution and are, accordingly, invalid.

At oral argument, Slaughter’s attorney (Amit Aggarwal) proposed a novel way for the Court to uphold the removal protections. In her brief before the Court, Slaughter had conceded that the Constitution imposes some “limitations on Congress’s power to regulate the President’s removal authority,” such as where the regulation would restrict the President’s “conclusive and preclusive” authority. Looking to Trump v. United States, Slaughter’s brief allowed that “Congress could not require the President to exercise his commander-in-chief, criminal-prosecution, or treaty-making powers through a multimember agency with removal protections.” The Justices, however, pushed Aggarwal on the negative implication of this statement of the law—and several did not like what they heard.

Chief Justice Roberts, Justice Thomas, Justice Alito, and Justice Kavanaugh all asked whether Congress could convert standard executive-branch agencies, like the Commerce Department and the Environmental Protection Agency, into multi-member commissions with removal protections. Aggarwal argued that Congress could do so for the agencies that do not wield “the President’s conclusive and preclusive powers”—i.e., as the brief states, “his commander-in-chief, criminal-prosecution, or treaty-making powers.” The way that Aggarwal’s rule would cash out in Trump v. Slaughter is that Congress could regulate the removal of FTC commissioners because the FTC—in Aggarwal’s view—engages in none of those functions.

That would leave a large gap: civil regulatory enforcement. Justice Gorsuch in particular seemed taken aback by the argument that one could draw a credible distinction between civil and criminal enforcement for purposes of the President’s removal power. He asked Aggarwal whether, under Slaughter’s proposed rule, “if the government wants to bring a [criminal] misdemeanor [charge], that person has to be reportable to the President, but if the government wants to bring ruinous [civil] fines and penalties and injunctions, that person doesn’t?” I am not surprised that Aggarwal’s civil-criminal distinction had little purchase with Justice Gorsuch. In an article published in the Wake Forest Law Review last year, I highlighted how Justice Gorsuch has developed a distinctive jurisprudence in this area, advocating for a deeper judicial recognition of the audacious civil regulatory power of the federal government. In Justice Gorsuch’s view, doctrines like the rule of lenity and void-for-vagueness review should apply in the civil regulatory context.

Justice Gorsuch’s approach recognizes that the federal government has the capacity to destroy individuals and companies through civil enforcement. Daunting monetary penalties, mandatory orders, and costly civil investigations are commonplace in the modern administrative state. The notion that Congress can carve out the President’s removal power over such functions is one that seems unlikely to thread the needle that Slaughter is attempting to thread in this case. It also appears to be at odds with Seila Law v. CFPB, in which the Court described the CFPB Director’s “power to seek daunting monetary penalties against private parties on behalf of the United States in federal court” as “a quintessentially executive power not considered in Humphrey’s Executor [v. United States].”

One of the questions presented in Slaughter is “[w]hether the statutory removal protections for members of the Federal Trade Commission violate the separation of powers and, if so, whether Humphrey’s Executor v. United States should be overruled.” Humphrey’s Executor was a case decided in 1935, in which the Court held that removal protections for FTC commissioners were constitutional because the agency acted “in part quasi legislatively and in part quasi judicially.” In a recently published Alabama Law Review article, I argue that Humphrey’s Executor no longer governs the question whether the FTC removal protections are constitutional because Congress—in the years since 1935—has endowed the FTC with a broad suite of unmistakably executive powers, including the ability to “bring its own civil actions in federal court to recover financial penalties for violations of its orders and rules,” to say nothing of the consumer protection rulemaking power that Congress has conferred on the agency.

Yet, under Slaughter’s theory, even these powers would not be enough to require presidential removal authority over the FTC. Slaughter’s theory on this score is, importantly, distinct from the reasoning of Humphrey’s Executor itself—a case in which the Supreme Court spoke about the separation of powers in a way that is largely out of step with how the Court talks about it today. Recognizing this distinction, Justice Gorsuch wondered aloud whether Slaughter’s argument constituted “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,” such that Slaughter felt that she needed to “backfill [Humphrey’s Executor] with a better new theory that itself recognizes that we’ve got a problem.”

The Court’s recent caselaw on both presidential removal and administrative law more generally suggests that the Justices are not eager to draw a line between civil and criminal enforcement for purposes of presidential removal authority. Both are avenues that allow the President to exercise significant authority over the American people on behalf of the United States. Consistent with his jurisprudence in other areas, Justice Gorsuch led the way on this point at oral argument. And although Slaughter’s argument on this point is an interesting one, it seems unlikely to pass muster with a majority of the Justices.

Eli Nachmany is an attorney in Washington, D.C., where he practices regulatory litigation. His Alabama Law Review article, “The Original FTC,” was cited by Judge Neomi Rao in her stay-stage dissent at the D.C. Circuit in Trump v. Slaughter, as well as by the United States (in its reply brief) and Senator Eric Schmitt (as amicus) in briefing before the Supreme Court in the case.