Federal Reserve governor urges Supreme Court to prevent Trump from removing her

Lawyers for Federal Reserve Governor Lisa Cook urged the Supreme Court on Thursday afternoon to allow Cook to remain in office while her challenge to President Donald Trump’s attempt to fire her continues. In a 40-page filing, they told the justices that allowing Trump to remove Cook from office now would “dramatically alter the status quo, ignore centuries of history, and transform the Federal Reserve into a body subservient to the President’s will.”

In 2023, then-President Joe Biden nominated Cook to serve on the seven-member Board of Governors for the Federal Reserve, the country’s central bank. Unlike most federal agencies, the Federal Reserve is an independent government agency that is not funded by Congress through the normal appropriations process; instead, it operates primarily using interest earned on securities that it owns.

The composition of the board itself also reflects Congress’ effort to insulate the agency from outside political influences. Each member of the board is appointed by the president and confirmed by the Senate to serve staggered 14-year terms, a design intended to prevent any one president from “stacking the deck” with his own nominees. And under the Federal Reserve Act, the law creating the bank, the president can only remove members of the board “for cause.”

The dispute began on Aug. 25, when Trump posted screenshots on social media of a letter to Cook firing her. Trump pointed to allegations that Cook committed mortgage fraud in 2021, two years before she joined the board. (In her filing on Thursday, Cook called the allegations “flimsy,” “unproven,” and “conveniently timed following the President’s criticism of the board’s policy decisions”; several media outlets have reported that financial documents may undermine Trump’s contentions.)

A federal judge in Washington, D.C., Jia Cobb, issued an order on Sept. 9 that requires the Federal Reserve to allow Cook to remain in office while her challenge to her firing moves forward. Cobb concluded that Cook was “substantially likely” to show that Trump had violated the Federal Reserve Act when he fired her because the “for cause” requirement does not allow the president to remove a board member for her conduct before she took office. The firing also violated Cook’s constitutional right to fair treatment, Cobb added, because she did not have notice and an opportunity to contest her firing before it occurred.

By a vote of 2-1, the U.S. Court of Appeals for the District of Columbia Circuit rejected the Trump administration’s request to pause Cobb’s order while Cook’s challenge continues. According to the D.C. Circuit, Cook was likely to succeed on her claim that she did not receive all of the procedural protections to which she was entitled under the due process clause of the Constitution before she was fired. The appeals court’s decision allowed Cook to participate in the Federal Reserve’s two-day policy meeting on Sept. 16 and 17, during which the Fed lowered interest rates by a quarter of a point. The rate reduction was the first in nine months; the Federal Reserve’s failure to lower rates until then had prompted Trump to criticize the chair of the Fed, Jerome Powell.

U.S. Solicitor General D. John Sauer came to the Supreme Court on Sept. 18, asking the justices to intervene. He contended that as a senior government official Cook is not entitled to notice and a hearing before she can be fired. “This theory,” he argued, “is untenable and would wreak havoc on sensitive presidential decision-making.” Sauer added that although the “for cause” removal requirement bars the president from firing Cook for “no reason at all, or for policy disagreement,” courts cannot review his decision to fire her as long as the president provides a cause – here, the mortgage fraud allegations. And in any event, Sauer concluded, Cobb did not have the authority to order Trump to reinstate Cook to her position.

Four days after Sauer’s filing in Cook’s case, the court cleared the way for Trump to fire Rebecca Slaughter, a member of the Federal Trade Commission, who by law can only be terminated for “inefficiency, neglect of duty, or malfeasance in office.” The justices also agreed to weigh in more broadly on the president’s power to fire the heads of independent agencies, as they agreed to hear oral arguments in December on whether the removal protections for FTC commissioners conflict with the Constitution’s allocation of powers among the three branches of government and, if so, whether the court should overturn its 1935 decision in Humphrey’s Executor v. United States, which affirmed that Congress can create independent, multi-member agencies (such as the FTC) whose commissioners can only be removed “for cause.”

Cook pushed back on Thursday, calling the Trump administration’s request for emergency relief “premature.” She pointed to the highly expedited schedule in her case and noted that “fundamental flaws in the ‘mortgage fraud’ allegations against” her “have already come to light.” If she did not commit mortgage fraud, Cook suggested, the Supreme Court would not need to weigh in on the scope of the “for cause” removal requirement for Federal Reserve governors.

But in any event, Cook continued, the Supreme Court should leave Cobb’s order in place because the Trump administration is unlikely to be able to show that it can win on the merits – a key factor in determining whether to grant preliminary relief. As an initial matter, Cook told the justices, there are “[c]enturies of precedent” that contradict the administration’s argument that courts cannot review Trump’s decision to fire Cook “for cause.” “The Court’s foundational case,” the 1803 ruling in Marbury v. Madison, she said, makes clear that “whether an officer ‘has a legal right’ to an office is ‘a question examinable in a court.’”

Nor did Trump actually remove Cook “for cause,” she insisted. The “for cause” removal requirement, she said, only allows a president to remove an officer based on the “recognized causes for presidential removal of executive officers at the time the provision was enacted” – a bar that the government cannot meet. “The President’s contrary interpretation of ‘for cause,’” she wrote, “would give him virtual carte blanche authority to fire any governor at any time—and thus would upend the Federal Reserve’s longstanding tradition of independence.”

Finally, Cook argued, her removal was improper because she did not receive the notice and the hearing to which she was entitled under both the removal law and the Constitution. Indeed, she said, the Trump administration did not contest this lack of notice and hearing in the court of appeals.

Cook distinguished her case from those of other independent agency heads, including Slaughter, whose firings the Supreme Court allowed to move forward. Unlike in those cases, she argued, Cobb did not need to “reinstate” her. Cobb “did not need to,” Cook wrote, because Cook “has consistently received her salary and exercised her duties since the purported removal.” “Granting the President relief and altering the status quo would thus essentially prejudge the question of the Federal Reserve Board’s independence, contradicting this Court’s recent reaffirmance of the Board’s unique status.”

Cook’s filing also reflected a new addition to her legal team: Paul Clement, who served as the solicitor general during the George W. Bush administration.