In Redress: What is the problem?, Alex Joel and I highlighted the issues under the U.S. Constitution associated with meeting the EU’s “independence” and “binding authority” requirements for redress.
The Supreme Court, in Seila Law LLC v. Consumer Financial Protection Bureau, 140 S. Ct. 2183 (2020), was confronted with determining the constitutionality of the for-cause removal restriction where an administrative agency was headed by a single director. The Court held administrative agencies headed by a single director, who is not removable at will by the president, are unconstitutional. However, the Court took special note to carve out two exceptions to this for-cause removal question: (1) the exception for multi-member expert agencies established in Humphrey’s Executor v. United States, 295 U.S. 602 (1935) and (2) the exception for certain “inferior officers” set forth in Morrison v. Olson, 487 U.S. 654 (1988). My fellow research assistant Eleanor Holloway explored Humphrey’ Executor in her blog post FTC as a Model for Independence? This article focuses on Morrison.
Significantly, in Seila Law,Chief Justice Roberts distinguished the Director of the Consumer Fraud Protection Bureau (“CFPB”) from the independent counsel in Morrison on the grounds that the CFPB Director is a “principal officer,” not an “inferior officer.” While the Court ruled the standards in Morrison could not apply to the circumstances in Seila Law, the Court also reaffirmed that although narrow in its applicability, Morrison was still good law regarding “inferior officers.”
In Morrison, the Court examined the independent counsel provision of the Ethics in Government Act of 1978. Under the Act, the Attorney General could appoint an independent counsel who wielded the “full power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department of Justice.” In particular, the Act protected the independent counsel from arbitrary removal: “An independent counsel appointed under this chapter may be removed from office, other than by impeachment and conviction, only by the personal action of the Attorney General and only for good cause, physical disability, mental incapacity, or any other condition that substantially impairs the performance of such independent counsel’s duties.”
In affirming the constitutionality of the independent counsel, the Court determined that independent counsel are “inferior officers” based on matters of tenure, duration, and scope of duties. First, the Court found the independent counsel is subject to removal by high Executive Branch officials. Although the authorizing statute provided the independent counsel with discretionary power, the independent counsel may ultimately be removed for cause by the Attorney General. Next, the Court turned to the independent counsel’s limited scope of duties. The Court found that the Act delegated the power to the independent counsel to perform limited duties, thus restricting its role to only investigate and, if appropriate, prosecute certain federal crimes. The Court similarly found the independent counsel was confined by its limited jurisdiction, only allowing the independent counsel to act within the scope of jurisdiction granted by the Special Division pursuant to a request by the Attorney General. Finally, the Court held the independent counsel’s office is limited in tenure, as it is appointed to a single task and, once complete, is terminated. Justice Scalia’s dissenting opinion challenged the Court’s holding, highlighting two important considerations (1) whether the criminal prosecutorial power is squarely an executive power and (2) whether the Act deprived the executive of exercising their power. Scalia based his dissent on the separation-of-powers doctrine arguing the President must be able to fire at will anyone who is exercising law within the executive.
Parenthetically, it is important to note that although the Independent Counsel provision of the Act expired in 1999, DOJ has issued regulations establishing a “special counsel” position and also restricting the Attorney General’s ability to remove special counsel except for “misconduct, dereliction of duty, incapacity, conflict of interest, or for other good cause, including violation of Departmental policies.” In any event, the principles laid down in Morrison remain relevant in determining the constitutionality of similar provisions mirroring the structure of the independent counsel.
Determining the criteria for independence regarding inferior officers is not as straightforward as it might seem from reading Morrison and Seila Law. Following the Morrison decision, the Court held in Edmond v. United States, 520 U.S. 651 (1997) that determining whether a party is a “principal” or “inferior” officer is not entirely limited to the standard established in Morrison. Justice Scalia, writing for the majority, argued that a party’s inability to satisfy the “limited in tenure” or “limited in jurisdiction” prongs found in Morrison do not expressly prohibit the party from being an “inferior officer.” Scalia instead argued that “‘inferior officers’ are officers whose work is directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.” Scalia noted that the standard set forth in Morrison was never intended to be a definitive test used to determine where the line is between the two types of officers. Rather, the Morrison standard is a useful tool applicable to its narrow case. However, Justice Souter challenged this reasoning as an oversimplification arguing in his concurring opinion that the “mere existence of a ‘superior’ officer is not dispositive.” Souter defended Morrison on the grounds that its analysis was far more thorough extending beyond determining whether the independent counsel was “to some degree ‘inferior’ to the Attorney General.”
Seila Law also cited a 2010 case regarding for-cause removal, Free Enterprise Fund v. Public Co. Accounting Oversight Board, 561 U.S. 477 (2010). While Free Enterprise Fund and Morrison similarly question the boundaries of for-cause removal, the Court in Free Enterprise Fund assessed the constitutionality of a multi-level for-cause removal requirement, whereas, in Morrison, the Court assessed the constitutionality of only one level of protected tenure. Under the Sarbanes-Oxley Act, the Securities and Exchange Commission (“SEC”) oversaw the Public Company Accounting Oversight Board (“PCAOB”), and had the power to remove PCAOB members only for good cause. In turn, the SEC Commissioners could be removed by the President, but only for good cause. The Court found this dual for-cause protection unconstitutional as it effectively prohibited the President from exercising his Article II executive powers by barring him from removing members of the PCAOB, a power statutorily reserved for the Commissioners who similarly enjoyed for-cause removal protections.
In creating a sufficient remedy under the CJEU’s Schrems II standards, the body must be both independent and have binding authority. But can the U.S. government meet these requirements through leveraging existing administrative law and Executive Branch agencies? As suggested by other scholars, this may be the path forward; however, further analysis may be required to determine how a new redress process would fit with the Morrison precedent for establishing independence and binding authority within the Executive Branch.