Politics

Lawyer Defending CFPB Cites Coronavirus to Fend off Presidential Oversight

U.S. Supreme Court Chief Justice John Roberts and Supreme Court Justice Elena Kagan / Getty Images

A lawyer invoked the coronavirus outbreak before the Supreme Court Tuesday as he argued that Congress can restrict the president's power to fire senior government officials.

Attorney Paul Clement, defending the structure of the Consumer Financial Protection Bureau (CFPB), said Congress can legitimately insulate executive branch agencies from political influence, citing the Centers for Disease Control and the coronavirus as an illustration. Seila Law LLC, challenging the structure of the CFPB, is arguing that Dodd-Frank, the 2010 law that established the agency, violates the Constitution by constraining the ability of presidents to fire the head of the agency.

"In the current situation, you see people are trying to make a political football out of dealing with a pandemic disease," Clement said. "So maybe Congress decides: You know what makes sense, let's have the head of CDC be protected by for-cause removal because that'll make sure people get good advice and it doesn't become political."

"That is the kind of sensible decision that Congress has been making for over 100 years," he added.

The CFPB is the brainchild of Democratic presidential candidate Sen. Elizabeth Warren (D., Mass.). Its director, unlike other senior government officials, may only be removed for "inefficiency, neglect of duty or malfeasance in office," according to Dodd-Frank. The Ninth U.S. Circuit Court of Appeals ruled for the CFPB, prompting Seila Law to appeal to the Supreme Court. The Court appointed Clement to argue on the agency's behalf after the Trump administration refused to defend the removal provision. Solicitor General Noel Francisco said the removal requirement undermines the president's authority to dismiss senior government officials.

"By vesting the executive power in the President alone, the Constitution ensures that all exercises of this great power of the government are ultimately subject to the will of the people," the administration's brief reads. "The statutory restriction on the President's authority to remove the CFPB Director contravenes this basic principle."

Kannon Shanmugam represented Seila Law before the justices Tuesday. Shanmugam said there is no historical precedent for the removal restriction at issue.

"Never before in American history has Congress given so much executive power to a single individual who does not answer to the president," Shanmugam said.

The conservative justices broadly agreed the removal restriction is a problem. Justice Brett Kavanaugh said the director's five-year tenure puts the removal issue in sharp relief. The legislation could create a situation, he said, in which an incumbent president is saddled with the previous administration's director and "will not be able to supervise or direct that person, even if that president has a wildly different conception of consumer financial protection."

Chief Justice John Roberts drew attention to the CFPB's funding rules, asking if they exacerbate the constitutional questions. Unlike most agencies, the bureau does not have its budget set by Congress. Instead, the Federal Reserve finances CFPB operations. In that sense, Roberts said, the CFPB director is even more powerful than the president, who largely depends on congressional appropriations.

"They don't even have to go to Congress to get their money," Roberts said. "Isn't that something that we should factor into the substantive question on [the director's] removability?"

Clement said that the case can be dismissed on technical grounds. He argued Seila Law, a California-based firm, does not have standing to challenge the removal clause. He said that justices have only reviewed restrictions on the president's removal powers when the president himself attempts to fire executive officials.

Justice Elena Kagan said the Constitution says very little about removal restrictions or the organization of the government in general. Instead, the Constitution leaves Congress "to decide which institutions of governance and which modes of governance are best to promote liberty and to serve the public interest."

The Justice Department generally defends federal statutes in court, unless no reasonable argument can be made in their favor. Justice Ruth Bader Ginsburg criticized Francisco for refusing to defend the agency. Justice Samuel Alito countered that the Department of Justice similarly refused to defend the Defense of Marriage Act (DoMA) in court under the Obama administration.

The justices said little about what should happen to other sections of Dodd-Frank if the removal restriction is struck down and gave little indication as to how the Court would rule. A decision in the case, No. 19-7 Seila Law v. Consumer Financial Protection Bureau, is expected by June.