Article II, Section 2, Clause 2:

He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

In the twenty-first century, the Court has applied a somewhat formalist approach to removal cases, invalidating removal protections for Executive Branch officials in three different decisions. In the 2010 case of Free Enterprise Fund v. Public Company Accounting Oversight Board, the Court ruled that two layers of removal protection for an Executive Branch official impermissibly interfered with the President’s powers under Article II of the Constitution.1 In that case, the Court examined the Public Company Accounting Oversight Board (PCAOB or Board), an entity created by the Sarbanes-Oxley Act of 2002 to oversee aspects of the accounting industry.2 The Board’s members were appointed by the Securities and Exchange Commission (SEC) and were subject to the Commission’s oversight when issuing rules and sanctions.3 But the members of the PCAOB could not be removed from office except for good cause shown by the SEC in a formal proceeding.4 Because the President could not remove the SEC Commissioners themselves without cause,5 the Board members were thus insulated by two layers of removal protection.6

The Court’s opinion stressed the importance of accountability for government officers that the Appointments Clause and its concomitant power of removal ensure. The Court acknowledged that it had upheld removal restrictions for the principal officers of independent agencies in Humphrey’s Executor and for certain inferior officers in Morrison, but concluded that the “novel” combination of dual for-cause removal restrictions “tranform[ed]” the independence of the Board in a manner that impaired the President’s duty to execute the law.7 A second layer of removal protection meant that “[n]either the President, nor anyone directly responsible to him, nor even an officer whose conduct he may review only for good cause, has full control of the Board.” 8 Dual for-cause removal protections inhibit the principle of accountability for Executive Branch officers because they infringe on the President’s “ability to execute the laws,” by preventing him from “holding his subordinates accountable for their conduct.” 9 The Court emphasized that the public does not vote for agency officials, but “look[s] to the President to guide the ‘assistants or deputies . . . subject to his superintendence.’” 10 In other words, the President must be able to hold agency officers accountable for their actions, because it is ultimately the President who is accountable to the people for actions of the Executive Branch, rather than Executive Branch officers.11 Because the statute “grant[ed] the Board executive power without the Executive’s oversight,” Congress had “subvert[ed] the President’s ability to ensure that the laws are faithfully executed” in violation of Article II’s vestment of executive power in the President.12

The Court’s turn in the modern era toward a more formalist approach to interpreting the strictures of the Appointments Clause has been applied in two recent cases that further limit Congress’s ability to shape the administrative state. These decisions concluded that an independent agency with a single director insulated from presidential control violated the separation of powers.

In Seila Law LLC v. Consumer Financial Protection Bureau (CFPB), the Supreme Court concluded that Congress could not provide for-cause removal protections for the head of the CFPB, an independent financial regulatory agency led by a single Director.13 The Court described the President’s removal power as “unrestricted,” 14 rejecting the view that Humphrey’s Executor and Morrison “establish a general rule that Congress may impose ‘modest’ restrictions on the President’s removal power.” 15 Instead, “the President’s removal power is the rule, not the exception.” 16 The Court explained that after Free Enterprise Fund, only “two exceptions” to the rule requiring removability remained.17 First, under Humphrey’s Executor, Congress may sometimes “create expert agencies led by a group of principal officers removable by the President only for good cause” if the agency does not exercise substantial executive power.18 In interpreting this 1935 case, the Seila Law Court interpreted Humphrey’s Executor narrowly, saying that this exception permitted for-cause removal protections for “a multimember body of experts, balanced along partisan lines, that performed legislative and judicial functions and was said not to exercise any executive power.” 19 The Court said that the second exception to the President’s removal power allowed at least some removal protections for inferior officers, as in Morrison, if those officers have “limited duties and no policymaking or administrative authority.” 20

The Court concluded in Seila Law that the CFPB Director did not fall within either of these two exceptions.21 The single Director was not a multimember expert body, and, in the view of the Court, could not be considered “a mere legislative or judicial aid.” 22 Rather than performing merely reporting and advisory functions, the CFPB Director exercised executive power, possessing the authority “to promulgate binding rules fleshing out 19 federal statutes, [to] issue final decisions awarding legal and equitable relief in administrative adjudications,” and to seek “daunting monetary penalties” in enforcement actions in federal court.23 Neither could the CFPB Director be considered an inferior officer with limited duties.24 And the Court ruled that it would not recognize a new exception to the President’s removal authority for “an independent agency led by a single Director and vested with significant executive power.” 25 The Court described the CFPB’s structure as “unprecedented” 26 and “incompatible with our constitutional structure,” 27 saying that the agency’s structure violated the Constitution “by vesting significant governmental power in the hands of a single individual accountable to no one.” 28 Consequently, the Court concluded that the provision insulating the Director from removal was unconstitutional, severing the for-cause removal provision from the governing statute.29

Shortly thereafter, in Collins v. Yellen, the Supreme Court ruled that the structure of the Federal Housing Finance Agency (FHFA) violated the Constitution’s separation of powers.30 Like the CFPB, the FHFA is headed by a single Director whom, under the statute establishing the agency, the President could remove only for cause.31 The Collins Court considered Seila Law to be “all but dispositive” of the constitutional question, reasoning that differences in the “nature and breadth” of the agencies’ respective regulatory authorities did not justify the constraint on the President’s removal power.32 The Court remanded the case for the lower courts to decide whether the challengers—shareholders of FHFA-regulated entities—were actually harmed by the existence of the statutory removal protection.33

Footnotes

1

See 561 U.S. 477, 484 (2010).

2

15 U.S.C. §§ 7211–20.

3

Id. § 7217.

4

Free Enter. Fund, 561 U.S. at 486.

5

SEC Commissioners do not actually have an explicit statutory removal protection, but both parties agreed and the Court decided the case with the understanding that the Commissioners nonetheless may not be removed by the President except for the standard enunciated in Humphrey’s Executor, 295 U.S. 602 (1935). Id. at 487.

6

Id. at 495–98.

7

Id. at 496.

8

Id.

9

Id.

10

Id. at 497–98 (quoting The Federalist No. 72 (Alexander Hamilton)).

11

Id. at 499 ( “The growth of the Executive Branch, which now wields vast power and touches almost every aspect of daily life, heightens the concern that it may slip from the Executive’s control, and thus from that of the people.” ).

12

Id. at 498.

13

No. 19-7, slip op. at 2–3 (U.S. June 29, 2020). This case also involved questions of standing. Id. at 9. Among other arguments, a court-appointed amicus curiae claimed that “a litigant wishing to challenge an executive act on the basis of the President’s removal power must show that the challenged act would not have been taken if the responsible official had been subject to the President’s control.” Id. The Court rejected the idea that such a challenger has to prove this type of counterfactual, finding it sufficient to demonstrate an injury “from an executive act that allegedly exceeds the official’s authority.” Id. at 10.

14

Id. at 2.

15

Id. at 26. The court-appointed amicus curiae argued that the Court’s precedent established that Congress may generally limit the President’s removal power, with two exceptions: (1) “Congress may not reserve a role for itself in individual removal decisions” ; and (2) Congress may not completely eliminate the President’s removal power. Id. at 26–27.

16

Id. at 27.

17

Id. at 13.

18

Id. at 2, 15–16. The Court said its decision in Wiener also fell within this exception. Id. at 15 (discussing Wiener v. United States, 357 U.S. 349 (1958).

19

Id. at 15 (emphasis added). The Court stressed that “[r]ightly or wrongly, the Court viewed the [Federal Trade Commission ('FTC')] (as it existed in 1935) as exercising ‘no part of the executive power.’” Id. at 14 (quoting Humphrey’s Ex’r v. United States, 295 U.S. 602, 628 (1935). However, the Court also said that this conclusion has not withstood the test of time, and that the powers of the FTC—even as they existed in 1935—are now considered executive. Id. at 14 n.2.

20

Id. at 16. This principle also extended to Perkins. Id. at 15 (discussing United States v. Perkins, 116 U.S. 483 (1886).

21

Id. at 16–18.

22

Id.

23

Id. at 17.

24

Id.

25

Id. at 18.

26

Id. The Court acknowledged that there were four other relatively recent historical examples of Congress providing good-cause tenure to principal officers leading an agency, but dismissed these examples as also being controversial. Id. at 18–21 (discussing the Comptroller of the Currency, Office of the Special Counsel, Social Security Administration, and Federal Housing Finance Agency).

27

Id. at 21.

28

Id. at 23. The Court noted that the Executive Branch is the only branch led by a unitary head, and that the President’s power is checked through democratic and political accountability. Id. at 22–23. Individual Executive Branch officials may still wield significant authority, but that authority remains subject to the ongoing supervision and control of the elected President. Id. at 23.

29

Id. at 30–33 (plurality opinion); id. at 1 (Kagan, J., concurring in the judgment with respect to severability and dissenting in part).

30

No. 19-422, slip op. at 26–32 (U.S. June 23, 2021).

31

12 U.S.C. § 4512(b)(2).

32

Collins, slip op. at 26–29.

33

Id. at 36.