Is Humphrey’s Executor the Next SCOTUS Decision to Fall?
This case law update was written by Emily A. Shandruk, an Associate Attorney at the law firm of Shaw Bransford & Roth, where she joined in January 2024. Ms. Shandruk contributes her extensive experience in state and federal litigation to the firm, showcasing her prowess in authoring dispositive motions and coordinating discovery in complex federal litigation.
Earlier this month, the Supreme Court heard oral argument in Loper Bright Enterprises v. Raimondo, a case with the potential to overrule the 40-year holding in Chevron v. Natural Resources Defense Council requiring courts to defer to an agency’s interpretation of ambiguous statutes. FEDagent published a case law update on Loper Bright Enterprises in May 2023, found here.
As the Supreme Court wrapped up oral argument in Loper Bright Enterprises, the 5th Circuit Court of Appeals issued an opinion inviting the Supreme Court to reconsider yet another foundational notion of federal agency regulatory power–the President’s power to remove his appointees and the Humphrey’s Executor exception to the general rule that allows the President to remove subordinates at will. The Supreme Court’s 1935 decision in Humphrey’s Executor allowed Congress to grant for-cause protection to a “multimember body of experts” appointed by the President that did not perform any executive power. Put simply, the Court found that the President’s power to remove officers at will was confined to purely executive officers.
The case at hand, Consumers’ Research v. Consumer Product Safety Commission, involves the Consumer Product Safety Commission (“CPSC”), an independent agency created by Congress to protect the public from risks associated with consumer products. The CPSC has five members who are appointed by the President and confirmed by the Senate, serve staggered, seven-year terms, and by federal statute are removable by the President only for cause. Importantly, these features make the CPSC a “mirror image” of the Federal Trade Commission (“FTC”), the agency at issue in the 1935 case of Humphrey’s Executor.
In relevant part, appellee By Two sued the CPSC to challenge its recently issued rule amending its FOIA regulations to increase the per-page fee for paper copies by $0.05. By Two claimed that the CPSC’s statutory structure violated separation of powers principles because the Congressional statute creating the CPSC makes CPSC’s members removable by the President only “for cause.” By Two moved for summary judgment on this count. The district court ruled in favor of By Two, finding that the statutory removal restriction on CPSC members violated the President’s removal authority under Article II of the Constitution because the CPSC exercises “substantial executive power” and falls outside of the Humphrey’s Executor exception.
The 5th Circuit Court of Appeals reversed the district court’s judgment, holding that it was bound by the Court’s 1935 decision in Humphrey’s Executor to find that the statutory for-cause removal restrictions on the CPSC were constitutional. The Court of Appeals began their analysis by acknowledging that a recent Supreme Court decision in Seila Law cast doubt on the constitutionality of agencies like the CPSC. The Seila Law Court refused to extend Congressional limits on the Presidential removal authority for officers who wield “significant executive power.”
With this ruling in mind, the Court of Appeals determined that the CPSC “exercises substantial executive power.” But, the Court of Appeals found this was insufficient to remove the CPSC from the Humphrey’s Executor exception. The Court of Appeals then highlighted the structural and historical differences between the CPSC and the agencies at issue in Seila Law and other recent Supreme Court decisions. Unlike those other agencies, the CPSC (1) does not lack historical precedent and is a traditional independent agency; (2) is run by a multimember board, as opposed to being run a single agency head; and (3) has a staggered appointment schedule that gives the President an opportunity to shape the CPSC’s leadership. The Court of Appeals concluded that because of these characteristics, the CPSC does not have a novel structure that is unconstitutional under Seila Law.
Because the CPSC’s characteristics are identical to the FTC’s structure (analyzed in Humphrey’s Executor), the Court of Appeals found that CPSC’s statutory structure was constitutional, even though it exercised substantial executive power. The Court of Appeals acknowledged that even though this decision may be “in tension” with the Supreme Court’s recent precedent, lower courts are bound to follow Supreme Court case law which “directly controls” the issue. Since the CPSC is structurally identical to the FTC’s structure, and the Seila Law expressly did not revisit Humphrey’s Executor, the Court of Appeals held that the CPSC’s statutory structure was constitutional.
On its face, the decision in Consumers’ Research v. Consumer Product Safety Commission represents a lower court dutifully applying a 1935 Supreme Court precedent given the current Supreme Court’s recent years re-examining the constitutionality of federal regulatory powers granted by Congressional statutes. But the dicta makes clear that the Court of Appeals perceives a conflict in Supreme Court precedent and invites, if not encourages, the Supreme Court to address this conflict. This encouragement could not be any clearer:
“As middle-management circuit judges, we must follow binding precedent, even if that precedent strikes us as out of step with prevailing Supreme Court sentiment. The logic of Humphrey's may have been overtaken, but the decision has not been overruled—at least not yet. Until that happens, Humphrey's controls.”
The impact of this ruling – and any future Supreme Court ruling on this issue – is unclear. If the Court overrules Humphrey’s Executor in light of Seila Law, the future of statutory for-cause protection of Presidential appointees in agencies like the CPSC and FTC hangs in the balance. We will continue to monitor any developments on this issue.
Find the full case here:Consumers’ Research v. Consumer Product Safety Commission
