In a 5-4 decision, the U.S. Supreme Court rejected President Trump’s attempt to stay, or delay, an injunction at least temporarily blocking his firing of Federal Reserve Board of Governors member and Michigan State University economist Lisa Cook last year.
“The government has not shown that it is likely to prevail on the legal arguments advanced in its stay application,” Chief Justice John Roberts wrote in the opinion delivered Monday, June 29. “Acceptance of the government’s position would in effect transform the Federal Reserve’s for-cause protection into at-will employment — an interpretive leap out of step with the statute Congress enacted and our nation’s tradition of central banking protected from political interference.”
Roberts and Justice Brett Kavanaugh, both members of the court’s conservative coalition, joined liberal Justices Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson in the decision. Conservative Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett dissented.
“The court’s decision is incorrect,” Thomas wrote in a dissent, saying in his estimation Trump had cause enough to remove Cook under the federal law. “Any other result would violate Article II of the Constitution, under which the president may remove executive officers at will.”
Trump, in an oblique message posted on his Truth Social site, said his administration will take action to prevent Cook from continuing in her role on the Board of Governors, though it was by no means clear what he meant, as the court’s decision means her lawsuit to overturn her purported firing continues in court with her on the job.
“The Cook Lawsuit, having to do with her suitability in sitting on the Board of the Federal Reserve, was sent back by the Supreme Court on a strictly procedural basis, we will take appropriate action immediately to make sure that someone who has committed wrongdoing will not be making vital decisions concerning the Welfare of the United States of America! Thank you for your attention to this matter. President DONALD J. TRUMP” the president wrote.
While a majority of the court narrowly said Cook, the first Black woman to serve on the Board of Governors, can continue to do so while her case challenging Trump’s purported firing moves forward, it also determined in a separate case that Trump has the power to remove officials at other independent agencies whose “activities fall well within the heartland of executive power.” That second case involved Rebecca Slaughter, a Democratic appointee to the Federal Trade Commission, whose continued employment, Trump said, was “inconsistent” with his administration’s priorities.
Roberts and the other conservative justices agreed in that decision; the liberal justices did not. But in the Cook decision, Roberts made clear that the Federal Reserve Board of Governors, which sits atop a congressionally mandated, independent bank system that helps set fiscal policy for the nation and respond to economic crises, has been historically insulated from political interference.
Cook, who was nominated in 2022 to fill the remainder of a term and then nominated to and confirmed for a full 14-year term ending in 2038 by then-President Joe Biden, was the first Federal Reserve governor to face firing by a president in the Board of Governors’ 111-year history.
By law, a Federal Reserve governor can be removed only for cause, without specifically defining what constitutes cause.
Last summer, as Trump was ratcheting up pressure on then-Federal Reserve Chairman Jerome Powell to resign and for the board to lower interest rates, a Trump ally, Federal Housing Finance Agency head (and now acting director of national intelligence) Bill Pulte, claimed Cook had previously, before joining the board, “falsified bank documents and property records” on two homes, one in Michigan and another in Georgia, by claiming each would be her principal residence.
Almost immediately, Trump insisted Cook resign, and, when she did not do so, a few days later, purported to fire her, accusing her of “deceitful and potentially criminal conduct.” Cook refused to step down and sued − her lawyer, Abbe Lowell, noting that cause is limited to actions taken while in the office in question, not before, and arguing Cook was never given a chance to respond to Pulte’s suggestion she committed mortgage fraud, which she denied.
A judge issued an injunction blocking Trump’s firing of Cook, allowing her to remain in the office while the case continued. When the Justice Department asked that court, and then an appellate court, to grant a stay of that injunction, both refused. And while the Supreme Court had overruled lower courts in providing such stays earlier in cases involving Trump’s removal of federal officials, in this case it held off, pending hearing from both sides.
On June 29, it issued its opinion.
“This was never about mortgage documents signed years before I became a Federal Reserve governor,” Cook said in response to the ruling. “It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people. That is the most fundamental obligation of a Federal Reserve governor.”
“Today’s ruling affirms a principle that has underpinned sound economic stewardship for generations: that the Federal Reserve must make all its policy decisions guided by evidence and independent judgment, free from political interference. This bedrock principle has guided the Federal Reserve since its founding,” she continued.
Pulte posted on social media platform X, “As I have repeatedly said, I believe Lisa Cook will be indicted for mortgage fraud.”
In the majority decision, Roberts said the court did not have to decide at this juncture what constitutes “cause” in allowing a president to fire a Federal Reserve board member, saying whatever the standard is, it’s not as broad as Trump would have it or as narrow as Cook’s lawyers would. But he believed that whatever it was, Cook enjoyed enough of a likelihood of success in her case to permit the injunction on her removal to remain in place for now.
“Congress could of course afford the president the power to remove Federal Reserve governors at will. Or Congress could exempt the president’s removal of governors for cause from judicial review. But Congress has done neither,” he wrote.
Contact Todd Spangler: tspangler@freepress.com. Follow him on X @tsspangler.
(This story has been updated with additional information.)
This article originally appeared on Detroit Free Press: Supreme Court rules against Trump, upholds stay of Lisa Cook firing
Reporting by Todd Spangler, Detroit Free Press / Detroit Free Press
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By Todd Spangler, Detroit Free Press | USA TODAY Network
