Yesterday, President Trump nominated Judge Brett Kavanaugh for a seat on the United States Supreme Court. As Professor Jonathan Adler notes, Judge Kavanaugh’s opinions on the D.C. Circuit Court of Appeals (where he currently sits) have influenced the Supreme Court in a number of cases. Indeed, the high Court has more than a few times adopted the reasoning from Judge Kavanaugh’s dissenting opinions—particularly in the area of Administrative Law.
Also yesterday, by coincidence, PLF filed a friend-of-the-court brief in an administrative-law case in the Fifth Circuit Court of Appeals, and our brief relies on one of Judge Kavanaugh’s dissenting opinions.
At issue in the Fifth Circuit is whether the structure of the Consumer Financial Protection Bureau (CFPB)—an “independent” administrative agency, led by a single, powerful “Director” who may not be removed from office by the president except “for cause”—violates the Constitution’s Separation of Powers.
Created in response to the Great Recession, the CFPB was given vast powers to interpret and enforce nineteen separate consumer-protection laws, as well as the authority to impose significant penalties. While those powers are concerning enough, the more immediate constitutional problems arise because of the CFPB’s “independence” from the President. As we explain in our brief, he Constitution created three—and only three—branches in the federal government; and all power exercised by the government must be carried out through one of those three branches. The CFPB, however, was designed to be insulated from the other branches. (As an aside, Sen. Elizabeth Warren, the key person behind the CFPB’s creation, laments the CFPB’s insulation from Congressional oversight—now that the agency is no longer under the control of a Democratic-appointed director. The lack of accountability is perhaps the most dangerous aspect of the modern Administrative State.)
The key issue, as noted above, is whether the CFPB’s unprecedented scope of “independence” runs afoul of the Constitution’s Separation of Powers doctrine.
According to the Supreme Court, “[s]ince 1789, the Constitution has been understood to empower the President to keep these officers accountable—by removing them from office, if necessary.” But the Court has held that “Congress can, under certain circumstances, create independent agencies run by principal officers appointed by the President, whom the President may not remove at will but only for good cause.”
So what’s the problem? It appears that Congress may create “independent” agencies and provide for-cause protections against the removal of the agency leaders. As a matter of original meaning, however, it is highly doubtful whether Congress can create an “independent” agency in the first place. If the government’s power can be exercised only through one of the three branches of government, then all (executive-branch) agencies that help the president carry out the executive functions of the government must be within the Executive Branch and subject to the president’s control. An “independent” agency—that is, an agency that is independent of the three branches of government—is therefore unconstitutional.
But even under the Supreme Court’s jurisprudence concerning “independent” agencies, the CFPB is an anomaly. As Judge Kavanaugh explains, before the CFPB, “[n]o independent agency exercising substantial executive authority has ever been headed by a single person.” Previously, Judge Kavanaugh continued, to “mitigate the risk to individual liberty,  independent agencies have been headed by multiple commissioners or board members.” Never before has the Supreme Court approved of for-cause removal protection for an agency structured like the CFPB.
Judge Kavanaugh thus gets to the crux of the issue—the protection of individual liberty. And it is this issue that we emphasize.
The Supreme Court has consistently reaffirmed the central purpose of the separation powers is “to protect the liberty and security of the governed.” That protection depends on limiting power to those branches. Here’s how that rule works with respect to the Executive Branch:
Our friend-of-the-court brief discusses these principles and concludes that the CFPB’s structure—headed by a lone Director, appointed for a five-year term, and immune from presidential removal except for cause—violates these principles. We therefore encourage the court to hold that the structure of the CFPB violates the Constitution’s Separation of Powers.
We expect this issue to eventually reach the Supreme Court, where Justice Kavanaugh will be waiting.