Supreme Court Rules Fed Governor Can Keep Her Job
Commentary by Steven Lofchie
In a 5-4 decision, the Supreme Court ruled that Federal Reserve Governor Lisa Cook could remain in office while her legal fight over President Trump's attempt to fire her continues.
Chief Justice John Roberts, writing for the majority, said adopting the administration's position would effectively gut the "for-cause" job protection Congress built into the law to keep it independent from political pressure.
President Trump moved to fire Governor Cook in August over unproven mortgage fraud allegations dating to 2021; she has denied wrongdoing (See previous coverage). In rejecting the President's authority to fire Governor Cook, the Supreme Court agreed with lower courts that the President had made an insufficient demonstration that he had "cause" to remove Governor Cook, and also that Governor Cook had been denied sufficient opportunity to defend her position as a Governor.
Commentary
The majority completely sidestepped an important Fifth Amendment argument raised by President Trump, that Governor Cook was not entitled to a hearing because her position at the Fed did not raise a question of "life, liberty, or property." The majority's due-process holding rested on the statutory notice-and-hearing requirement than on resolving the constitutional property-interest debate. The fight over whether Governor Cook has a "property right" in the Fed seat was not ignored by the dissent: Justice Thomas wrote that Governor Cook "has no property right to hold power on the Board," since "a public office is not property".
Justice Thomas has much the better case. The determination that a person may have a "property interest" in serving as a Federal Reserve Board Governor seems absurd, and it follows that it is likewise absurd that there must be undefined, but apparently unsatisfied, procedures to deny the individual that property interest. A position in the Federal Government is not a property interest akin to an Earldom or a Bishopric.
Whatever one may think of the traditional independence of the Federal Reserve Board, tradition does not justify overriding the Constitution, which does not provide any special status to the Federal Reserve Board.
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