Supreme Court May Overturn Long-Standing Precedent on FTC Commissioner Removal

The Supreme Court’s conservative majority seems inclined to overturn a 90-year-old precedent that currently prevents the president from removing a Federal Trade Commission (FTC) member without just cause. A decision favoring this change could increase presidential influence over the FTC and potentially impact other independent bodies like the Federal Communications Commission.

Rebecca Kelly Slaughter, a former FTC Commissioner and Democrat, filed a lawsuit against former President Donald Trump after he dismissed both Democrats from the commission in March. Her legal argument relies heavily on the 1935 decision in Humphrey’s Executor v. United States, which dictated that the president can only remove FTC commissioners for inefficiency, neglect of duty, or malfeasance.

Chief Justice John Roberts remarked during recent oral arguments that Humphrey’s Executor is now a “dried husk,” even though it remains the main legal basis for Slaughter’s case. Roberts referred to the court’s 2020 ruling in the Seila Law case, noting that it made clear that Humphrey’s Executor no longer reflects the considerable powers of the contemporary FTC.

The 2020 decision in Seila Law determined that the removal protections set by Humphrey’s Executor did not apply to the Consumer Financial Protection Bureau (CFPB), claiming the CFPB holds substantial administrative and enforcement powers unique from those considered in 1935.

The Trump administration posited that Humphrey’s Executor should not apply to today’s FTC due to its significant executive functions. A federal appeals court, however, refuted this by reinstating Slaughter, asserting that the FTC’s powers remain essentially unchanged since 1935. In September, the Supreme Court granted a stay, keeping Slaughter from returning to the FTC until a final decision is made on the matter.

The conservative justices have expressed skepticism towards the independence of agencies like the FTC. Roberts stated, “Humphrey’s Executor was addressing an agency with minimal executive power, which may explain its broad support at the time.”