Dem
47
GOP
53
On Wednesday, the U.S. Supreme Court declined to grant Donald Trump's request for an emergency stay of the lower court's order prohibiting Trump from firing Lisa Cook, a member of the Federal Reserve's Board of Governors. Well, they didn't actually decline it because this Court can't bear to tell Trump "no." Instead, the request is "deferred pending oral argument in January 2026." But the practical effect is the same, and is at least an acknowledgment that the Court's immediate intervention is not warranted. So, they have effectively moved this case off the shadow docket and onto a more transparent posture, albeit an irregular one.
We have several more hints that the Supreme Court views Trump's attempt to fire Cook differently than his house-cleaning at other nominally independent boards. In the FTC case brought by Lisa Slaughter, whom Trump fired without cause, the Court granted an emergency stay of the lower court's order reinstating her. This is similar to the Court's stays of district court orders reinstating members of the Merit Systems Protection Board, the Consumer Financial Protection Board and other independent agencies created by Congress. As has been noted, the Court has strongly hinted that it intends to overturn the over 90-year-old precedent, Humphrey's Executor, which affirmed Congress' ability to create agencies with Board members' terms that extend beyond the current administration. The idea was to have some insulation for these personnel from politics to ensure consistency in their work and in how the law is applied. These agencies have quasi-judicial duties and their decisions should be guided by the facts and the law, not by partisan politics. This independence gives the public confidence in the integrity of their work and provides some predictability in the process so people can plan and prepare. But when it comes to the law and politics, this Supreme Court tends to choose politics—consistency is for suckers.
Unlike those other agencies, however, Trump's efforts to remove Lisa Cook have prompted the Court to take a notably different approach, at least so far. Trump fired Cook ostensibly "for cause", though the reason, alleged mortgage "fraud" that predates her time on the Board, seems pretextual, especially given Trump's public comments about his desire to get rid of any members appointed by Joe Biden, as well as evidence that contradicts the allegations. Information has since come out that Cook never claimed any other residence as a primary residence—all the paperwork for a condo in Atlanta lists it as a vacation home or secondary home. Cook sued and a district court kept her in her position, finding that her removal would be unlawful. So, she is currently serving on the Fed board and attended its most recent meeting, where the Fed lowered interest rates. The White House filed an application for an emergency stay of the lower court's order while an appeal is pending and also asked for an administrative stay while the Supreme Court considers the emergency stay. Importantly, the Court did not grant an administrative stay. Instead, it asked for briefing on whether a stay is appropriate and has now scheduled oral argument on that question for January 2026. The Court could still ultimately grant the stay, but given that Trump was asking for intervention before the Fed met last week, the Court didn't give him what he wanted and she remains on the Fed board. It's a small, but significant, and unusual, rejection of Trump's demands. And again, that suggests the Court views the Fed very differently from other agencies.
The pieces of the argument are already in place. The Federal Reserve Act prohibits firing members except "for cause," but the law does not define that term. Solicitor General John Sauer claims that cause is whatever Trump says it is—that it's irrelevant whether the alleged wrongdoing actually occurred. Moreover, he argues that Cook is not entitled to due process other than advance notice of her firing. In other words, she cannot challenge the basis for her firing or prove that it's bogus. For that reason, Sauer argues that Trump has satisfied the for-cause requirement because he fired Cook for the "appearance" of a lack of integrity, not necessarily because the accusations of mortgage fraud are true. This is a very clever approach, because it could allow the Court to say that it doesn't matter if the reason is a pretext—there's been an accusation that paperwork was filled out incorrectly and that casts doubt on Cook's integrity. Since only Governors who are above reproach can serve, Trump had cause to fire her. In this way, the Court could preserve the for cause requirement to remove Fed board members while also holding that Trump satisfied it. This, of course, would open the door to manufacturing other unfounded allegations against unfavored Board members to allow Trump, or any future president, to cashier them at any time. If the Court condones this method and holds that the truth of an accusation is irrelevant, then the for-cause element is meaningless, but it would give Trump the chance to smear members' reputations before letting them go. And yet the Court could presumably still console itself that it was maintaining the independence of the Fed.
Meanwhile, Abbe Lowell, Cook's attorney, is arguing that the Court should not intervene at this stage. He suggests that it would be better to deny the stay request and allow the case to be fully heard before weighing in. His reasoning could resonate with this Court: There is no emergency requiring her immediate ouster—in fact, just the opposite. Because she has continued to serve on the Fed and participated in the most recent meeting, her removal would cause instability in the financial markets and signal that the Fed is no longer independent, something that the Court has signaled sets this Board apart from the others. Crucially, he argues that Cook and the other Governors enjoy not only notice but an opportunity to challenge the alleged basis for termination, so that the for-cause requirement offers meaningful protection. This is the first real test as to whether this Court has the stomach to rule against Trump on something he clearly wants. We'll find out sometime after January 2026. (L)