Supreme Court Allows Lisa Cook To Remain at Fed as She Fights Firing by Trump

The Supreme Court is handing a loss to President Trump in his effort to fire Federal Reserve Governor Lisa Cook.In a 5-4 decision, a majority of the justices agreed with two lower courts that blocked the president from having Ms. Cook immediately removed as her lawsuit over her dismissal works its way through the courts. Chief Justice John Roberts, Justice Brett Kavanaugh and the three liberal justices, Elena Kagan, Sonia Sotomayor, and Ketanji Jackson Brown, were in the majority.The Trump administration presented several arguments to the court, including the assertion that the firing was not judicially reviewable, and that even if the government did not show cause to remove Ms. Cook, she was not entitled to remain in office.“To accept any one of those arguments would in effect transform the Federal Reserve’s for-cause protection into at-will employment — an interpretive leap out of step with the statute Congress enacted and our Nation’s tradition of central banking protected from political interference,” Chief Justice Roberts wrote.After rejecting the government’s arguments “we need not fully demarcate the contours of ’cause’ today. For present purposes, it is sufficient to observe that any definition of ’cause’ in this context must reflect the Federal Reserve’s unique historical status and role,” Chief Justice Roberts added.In a concurring opinion, Justice Kavanaugh stated that the court confirmed the “longstanding historical practice and understanding that the Federal Reserve is an independent agency whose Governors enjoy for-cause removal protection.”“Today’s interim ruling does not decide whether the President may lawfully remove Governor Cook for cause,” Justice Kavanaugh wrote. “The ultimate decision about whether the President may remove Governor Cook for cause will largely depend on the facts regarding the Governor’s actions. And those facts have yet to be determined.”“Apparent mortgage fraud was a ’cause’ to remove Cook,” Justice Clarence Thomas wrote in a dissent. “And, the statute authorizing the President to remove Cook for ’cause’ says nothing about notice or a hearing, so it does not require notice and a hearing.”Mr. Trump and his administration have accused Ms. Cook of committing mortgage fraud, citing documents related to two properties Ms. Cook allegedly claimed as primary residences. Some documents show that she claimed one residence as a vacation home and the other as her primary residence.“The Cook Lawsuit, having to do with her suitability in sitting on the Board of the Federal Reserve, was sent back by the Supreme Court on a strictly procedural basis, we will take appropriate action immediately to make sure that someone who has committed wrongdoing will not be making vital decisions concerning the Welfare of the United States of America!” President Trump wrote in a reaction posted on his Truth Social account.Lawyers for Ms. Cook told the high court that removing her from her post “would threaten our Nation’s economic stability and raise questions about the Federal Reserve’s continued independence.”Ms. Cook, who was confirmed by the Senate for her seat, said in a filing that her removal could risk “shock waves in the financial markets that could not easily be undone.”In a statement after the ruling was handed down, Ms. Cook remarked that her removal “was never about mortgage documents signed years before I became a Federal Reserve governor. It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people.”The Department of Justice, in its appeal to the Supreme Court, accused the lower court jurists of committing “improper judicial interference with the President’s removal authority.”The DOJ argued that Ms. Cook’s contention and the lower court’s finding that she is entitled to civil service protections is not reconcilable with the president’s removal authority. “This theory is untenable and would wreak havoc on sensitive presidential decision-making,” the attorneys write. “The lower court’s due-process theory would invite judicial micromanagement of the President’s exercise of his core Article II powers — even where, as here, courts have no authority to review the substance of the President’s ultimate decision.”The U.S. Court of Appeals for the District of Columbia Circuit ruled that it would not remove Ms. Cook because the court believes that she has not been given the proper amount of time to respond to the presidency’s accusations. “In this court, the government does not dispute that it failed to provide Cook with even minimal process — that is, notice of the allegation against her and a meaningful opportunity to respond — before she was purportedly removed,” Judge Brad Garcia, who was nominated to the bench by President Biden, wrote for the majority. “The district court thus preliminarily enjoined Cook’s removal based, in part, on its conclusion that her removal likely violated the Fifth Amendment’s Due Process Clause. That conclusion is correct,” the appeals court found. Citing Mr. Trump’s vast powers as president, justice department lawyers argued that judges had no right to review his firing of Ms. Cook at all. In their appeal to the appellate court from the district court, government lawyers argued that federal statute is vague enough to allow Mr. Trump to remove Ms. Cook, so long as he identifies some reason other than a policy disagreement.Ms. Cook has not been charged or convicted in connection with the mortgages. Federal Housing Finance Agency’s Director, William Pulte, first accused Ms. Cook of mortgage fraud. After the Supreme Court decision he reacted on X, stating “As I have repeatedly said, I believe Lisa Cook will be indicted for mortgage fraud.”

Supreme Court Allows Lisa Cook To Remain at Fed as She Fights Firing by Trump

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