Seila Law v. CFPB: Supreme Court Does Right, Could’ve Done Better



A member of Congress holds a copy of the Constitution in Washington, D.C., June 20, 2017. (Kevin Lamarque/Reuters)

By making the Consumer Financial Protection Bureau accountable to the president, the Supreme Court has done right — but it could’ve done even better.

Is the president the nation’s chief executive? That was the question that lay at the heart of Seila Law LLC. v. Consumer Financial Protection Bureau (CFPB), the decision issued by the Supreme Court yesterday. In concluding that the director of the CFPB must serve at the president’s pleasure, the Court seemingly answered that, yes, the Constitution makes the president the chief executive. But by retaining several erroneous precedents, the Court actually concluded that the president is chief executive . . . except when the Court has previously opined otherwise.

The issue in the case concerned the structure of the Consumer Financial Protection Bureau, an agency charged with both creating and enforcing federal laws related to financial products such as mortgages and credit cards. In creating the agency, Congress aimed to make it truly independent, free of presidential and congressional oversight. The president could remove its director only for inefficiency, neglect of duty, or malfeasance, a notoriously high standard that would preclude removal for such things as misguided prosecutorial policies. Moreover, by granting a permanent appropriation to the CFPB, Congress ensured that future legislators could not exert the leverage it has when it holds an agency’s purse strings. Imagine if police departments had guaranteed budgets and one can better see the drawbacks of inadequate legislative oversight.

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The opinion was the product of Chief Justice John Roberts’s reverence for precedent. Roberts, writing for the Court, discussed why the removal restriction was unconstitutional. He properly concluded that the Constitution grants the president “all the executive power” and that this power includes authority to fire executive officers at will. He also denied that Congress had carte blanche to strip away the removal power. So far, so good.

But there were two pesky Supreme Court opinions that could have been read to sanction this congressional restriction on removal authority. The more recent case, Morrison v. Olson, is perhaps the worst separation-of-powers decision of the modern era. In Morrison, the Court concluded that Congress can, by creating independent counsels, impinge upon executive power as long as it does not prevent the president from carrying out his constitutional tasks. It did so despite the fact that the independent counsel at issue in the case had, in fact, hindered the president’s execution of his constitutional duties. No one who has studied the issue can escape the sense that independent prosecutors usurp governmental power that has always been executive.

The other, older case in the same vein, Humphrey’s Executor, reflected an attempt to limit the powers exercised by Franklin Roosevelt during the Great Depression. The case’s discussion of the agency involved, the Federal Trade Commission, was slipshod and bizarre. What was obviously an executive agency — it enforced a federal statute on private parties — was declared not to be executive, as if a judicial ipse dixit could turn an animal into a vegetable.

Rather than simply overturn these cases in Seila Law, Roberts chose to distinguish them. He considered the factors in these cases, lined them up against those at issue in Seila Law, and concluded that they were different. Not surprisingly, the dissent did the same comparison and argued that the two cases authorized Congress to impose the removal restriction.

But there was little sense in upholding these two previous cases. They were wrong when they were decided and, just as importantly, are inconsistent with the rationale the Court adopted in Seila Law. If what Roberts writes in Seila Law is true — and it is — he must really believe that the two earlier cases were dead wrong. So it’s puzzling that he chose to draw artful, debatable distinctions to evade overturning them.

I suppose this is what courts sometimes do: Rather than overturn old cases, they labor to find fine, almost elusive distinctions to reach conclusions that seem incompatible with prior precedents. But a judge does not truly follow precedent if he draws upon factors that were seen as irrelevant at the time the precedent was issued.

Sometimes a precedent ought to be overturned, with haste. Everyone on the Court has voted to do this while on the federal bench. Why Roberts goes out of his way not to, from time to time, is a mystery. It isn’t as if his gun-shy tendencies earn him public praise; people rightfully sense that the Court too often seizes upon minor factors that mattered little in the previous cases. Everyone can see through the charade.

If he wins the presidency in November, Joe Biden should be able to usher in an executive administration that reflects his law-enforcement priorities, not those of President Trump. There is no reason for the ghosts of administrations past to stick around, thwarting the man or woman in charge of the executive branch. That is now true for the CFPB. But it should be no less true for the Securities and Exchange Commission or the Federal Communications Commission. We have one chief executive, and the Constitution does not sanction the creation of fiefdoms unaccountable to him within the federal government — or, for that matter, of a commission of mini–chief executives in black robes.


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