A federal judge rebuked the White House by reinstating an FTC commissioner ousted by President Donald Trump, a move that may become a short-lived obstacle in the administration’s mounting campaign to rein in independent agencies and augment executive authority.
The reinstatement of Democratic Commissioner Rebecca Kelly Slaughter, now temporarily paused, cited the legal shield that has long insulated Federal Trade Commission leaders from at-will firing.
But the Supreme Court has signaled it is keen on revisiting that shield—its 1935 decision in Humphrey’s Executor v. United States—and embracing a resurgent “unitary executive” theory.
“The real issue isn’t whether the president has any control over the FTC,” former FTC Chairman William Kovacic said. “The president has significant tools to influence the FTC. The real issue is, should those be unlimited? Do you need unlimited removal power to give the president adequate influence over the FTC?”
Humphrey’s Prospects
Humphrey’s Executor established that FTC commissioners can’t be removed by the president except “for cause,” and some former FTC officials caution that scrapping 90 years of settled governance would upend a system that has served the public well.
The case for enhancing presidential power over independent agencies is debatable at best, with “no text in the Constitution” mandating it, Andrew Gavil, an Obama-era director of the FTC’s office of policy planning now with Crowell, said.
“At the highest level, it would be norm-busting,” Gavil said of a decision to sacrifice bipartisan decision-making.
Congress has shown little interest in oversight, Gavil added.
The FTC’s structure operates as a “nice middle ground” between a fully independent agency and a mere White House arm, said John Newman, a former FTC deputy director of the bureau of competition and former trial attorney with the DOJ’s antitrust division.
“You’ve got a good democratic check on the FTC inasmuch as the democratically elected president appoints and democratically elected Senate approves commissioners at the same time,” Newman said. “They’re not just physical extensions of the president’s brain.”
Alden Abbott, an FTC general counsel during the first Trump administration, said it’s highly likely the Supreme Court’s conservative majority wouldn’t uphold removal restrictions on FTC commissioners because the agency exercises substantial executive powers today.
He cited the high court’s 2020 Seila Law LLC v. CFPB decision that held the Consumer Financial Protection Bureau’s single director could be removed by the president without cause.
“There’s almost certain to be at least six Supreme Court votes for the proposition that the FTC exercises significant authority and under Seila Law, the president has a right to control its members,” he said. “I’d be flabbergasted if the Supreme Court found that Humphrey’s Executor applied to the FTC today fully and Slaughter could be reinstated.”
In-House Courts
One likely casualty of a Humphrey’s reversal would be the FTC’s in-house adjudication system.
The agency’s authority to conduct trials “will probably disappear” if the commissioners—who serve as judges in the agency’s adjudication mechanism—are subject to dismissal for any reason by the president, Kovacic said.
Stephen Calkins, general counsel of the FTC in the Clinton administration, also worries the FTC’s adjudication power would become moot.
“If the president could fire any commissioner as soon as they were unhappy about how they ruled in an administrative adjudication, how can you do adjudication?” Calkins said. “If the president can fire any commissioner at any time for any reason, you then do really have to say, what’s the point of having a bipartisan agency?”
Calkins added that the wait over Humphrey’s has also sowed “chaos in the legal system” because of countersuits alleging the FTC’s structure is unconstitutional.
In June, for example, a federal judge denied tractor giant
“Any lawsuit by the FTC is met with a claim that the FTC is unconstitutional,” Calkins said. “It has made all litigation right now immensely more difficult and complicated and cumbersome, because these issues are raised all the time, and often in separate cases. “
Unitary Executive
Axinn antitrust lawyer Nick Gaglio said he reads Trump’s dismissal of the FTC commissioners not only as an attack on the FTC and antitrust regulation, but also as a promotion of more expansive executive authority.
“Put the unitary executive ideology aside, and it just seems like a stupid and pointless thing to do,” Gaglio said. “It’s a much bigger picture than the FTC. The FTC is just going to be a little bit worse for wear as a result.”
Abbott said that the push to overturn Humphrey’s is broader than just the FTC.
“It certainly does go beyond the FTC,” he said. Overturning Humphrey’s would “give the president more control in general.”
Capitol Hill
Weakening the FTC also has resonance among some Republican lawmakers on Capitol Hill, who introduced a bill (H.R. 384) to consolidate federal antitrust authority solely within the Justice Department’s antitrust division.
That measure would leave the FTC intact only as a consumer protection agency, but its prospects are uncertain after it was stripped out of Republicans’ budget reconciliation efforts.
Some FTC veterans argue against eliminating the agency’s competition mission. The US’s dual-agency model has historically been a strength, said Newman, now a law professor at the University of Miami who sits on the advisory board of the American Antitrust Institute.
When one antitrust enforcer “goes dark, the other can pick up the slack,” which he said is lost if one person controls both agencies.
Kovacic said although there is some cost or uncertainty from maintaining parallel enforcers, “the net benefits of having the two competition agencies exceed the costs.”
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