The Supreme Court Injects Partisan Politics Into Independent Agencies

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If you think that government experts should be free from political influence, then think again.

Twice this June the Supreme Court ruled that the president could exert more control over regulatory agencies, the government institutions that are as important as they sound boring.

While Congress may write laws, agencies are needed to interpret them, apply them, and fill in their gaps. Take the government's efforts to address lead poisoning. Congress passed a statute in 1971, and since then, a suite of agencies has issued regulations that keep up with the latest science on the problem. Such updating is especially needed in an era of political gridlock. Most climate policy, for example, builds on a 1963 statute that hasn't been amended in nearly 30 years.

Congress initially designed many of these agencies—including the two at issue this term—to stand above the whims of politics. But the court may be on the verge of undoing almost a century's worth of precedent and legal understandings protecting that independence.

More Presidential Control Over Hiring

In one case, the court ruled that administrative judges hired to hear challenges to existing patents were too independent and had to be supervised by a presidential appointee with the power to overturn their decisions.

The judges sit on the Patent Trial and Appeal Board at the United States Patent and Trademark Office--known as the "death squad" because it frequently invalidates patents. Smaller businesses say giants like Apple and Google use the board to squash legitimate competition, while larger companies argue these so-called competitors are infringing on existing patents, and the board is needed to root them out. Often, millions, if not billions, of dollars are at stake.

So, in 2015, when the board's administrative judges declared that the medical device company Arthrex held an invalid patent, Arthrex took aim at not just the board's decision but the board itself.

The company argued that the patent judges held too much power and were too insulated from the president's political influence. This arrangement, the company said, ran afoul of the power the Constitution grants to the president. Either the president should appoint the judges himself or a presidential appointee should supervise them more directly.

The high court agreed. In an opinion by Chief Justice John Roberts, the court ruled that the president did need more control of the judges. That, the court held, would ensure a direct chain of political accountability between the president and the administrative officials beneath him.

But the court didn't give Arthrex everything the company had asked for. Arthrex hoped the court would see a constitutional defect with the patent judges and scrap the whole patent board as a result. Instead, the court preserved the board but reined in the patent judges' independence, granting the presidential appointee who directs the patent office the power to reverse their decisions.

Most administrative judges are already heavily supervised by political appointees, so June's decision may just bring the patent office in line with the status quo. Still, the justices have injected politics into an agency Congress wanted to be nonpartisan. What's more, they have tightened the reins on Congress, limiting its ability to create independent agencies in the future.

More Presidential Control Over Firing

In a second case, the justices again ruled that the president should hold more sway, this time over firing.

In the aftermath of the 2008 financial crisis, Congress set up a new agency to oversee Fannie Mae and Freddie Mac, the quasi-public companies meant to stabilize the mortgage market. Fannie's and Freddie's shareholders alleged that the agency, in its attempts to recoup bail-out money, illegally appropriated billions of dollars from the companies. All this was illegal, they said, because the agency was overly protected from presidential control.

Specifically, the agency had only a single director—as opposed to a committee of directors—and the single director had a term longer than the president's. What's more, the president could only remove the director for cause—meaning corruption, malfeasance, or neglect of duty. But, the shareholders claimed, the president should be able to fire the director for any reason, without cause.

Like Arthrex, the shareholders said this problem infected the agency's decisions—particularly its decision to recoup billions in government money given to Fannie and Freddie to prevent a complete meltdown in the mortgage market during the financial crisis and thereafter.

The justices again agreed only in part. With an opinion by Justice Samuel Alito, a fractured court held the president should be able to remove the director without cause. But the court declined to set aside the director's decisions because he had been appointed constitutionally, namely by the president and confirmed by the Senate.

An Attack on Agencies

The same day the court said the president could fire the agency's director, President Biden did exactly that. And three weeks later, Biden axed the head of the Social Security Administration, also headed by a single director whom President Trump had appointed.

More lawsuits and more firings may lie ahead at other agencies run by a single director, like the Government Accountability Office.

Even more prominent agencies may also be at risk, among them the Securities and Exchange Commission, the Federal Reserve Board, and the Federal Communications Commission. Though these agencies are led by multi-member commissions, not single directors, those commissions have a single chairman who is difficult to replace. Now those chairmen may be in the crosshairs.

June's decision is the latest attack on a New Deal era precedent that protects agency independence. In 1935, a unanimous court held that President Franklin Roosevelt had acted unconstitutionally when he fired William Humphrey, a Federal Trade Commissioner, for political reasons. Humphrey was a conservative holdover from the prior administration who disagreed with Roosevelt's progressive policies. And the court said that under the statute that created the FTC, he could only be fired for cause, meaning misconduct.

The current court has narrowed the scope of this 86-year-old precedent. On top of that, Justices Neil Gorsuch and Clarence Thomas have called for overturning the 1935 decision altogether, and Justice Brett Kavanaugh criticized the decision while a judge on the D.C. Circuit Court of Appeals.

A Scalpel or a Sledgehammer?

Both of June's decisions also raised a question that reaches beyond regulatory agencies. When one provision of a law is unconstitutional, can the court remove the issue with a scalpel and then patch up the problem? Or does the court need to strike down whole portions of the law with a sledgehammer and then undo the government's decisions?

Arthrex corporation, for example, argued that because of a problem with how patent judges are appointed, the court should not just reverse their ruling against Arthrex, but also eliminate the whole board of patent judges. And Fannie's and Freddie's shareholders wanted the court to unwind billions of dollars' worth of agency decisions for want of a single removal provision.

But the court for nearly a century has used a more surgical approach. The justices have presumed that unconstitutionality in one provision does not infect the rest of the law or an agency's decisions. In these two cases, a majority of the court reaffirmed that presumption.

In both cases Justice Neil Gorsuch bucked the trend. He would have reversed the decisions of the patent judges and undone $124 billion worth of bailout decisions aimed at stemming the financial crisis. In other recent cases, Justices Clarence Thomas and Samuel Alito have signed on to Gorsuch's idea. When the court this term upheld the Affordable Care Act, Justice Alito dissented, calling for the court to strike down the law's key provisions because of a problem with just one of them. These three justices may fall short of a majority, but they have planted the seeds for future cases.

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