High Court Makes High-Stakes Ruling in Federal Reserve Case

The Supreme Court held in a 5‑4 ruling that the president can’t fire members of the Federal Reserve Board of Governors without cause.

The majority held that Trump’s attempted firing of Federal Reserve Board Governor Lisa Cook violated the statutory requirement that the removal be for cause only. The justices determined that Cook was entitled to notice and an opportunity to be heard before her removal, affirming a lower court ruling in Cook’s favor.

Justices heard the case of Trump v. Cook in January. In an October emergency docket ruling, the court ruled that Cook could continue in her job after Trump attempted to oust her, while the justices further considered the matter.

The question in the case is whether a president can fire a member of the Federal Reserve Board of Governors without cause or whether the organization created in 1913 is independent of those executive actions.

Members of the board are appointed by the president and confirmed by the Senate, but Trump’s ouster of Cook marked the first time a president removed a board member.

Critics of the firing say it jeopardizes the independence of the Fed. Supporters of the move have countered that government boards and commissions should be more accountable to elected officials. 

Trump justified the removal based on alleged misstatements made by Cook on mortgage documents. Cook has denied any wrongdoing and contested the firing, saying a board member can only be removed “for cause” under the Federal Reserve Act, which includes due process for the employee. 

The administration argued the president has broad discretion to remove a member of the Federal Reserve Board of Governors, and that the allegations of misstatements on mortgage statements meet the standard.