CFPB Ruling Shows John Roberts Doesn’t Rock the Boat

(Bloomberg Opinion) -- You might think this is a bad historical moment to give the president more power to boss around his subordinates. Chief Justice John Roberts disagrees. In a decision that counts as a modest win for the idea of a “unitary executive,” he has written an opinion for the Supreme Court holding that the president must have the power to fire the director of the Consumer Finance Protection Bureau for any reason.

The court didn’t strike down the CFPB as a whole, thankfully. The bureau can stay in place. And the court didn’t strike down the organizational form of other independent agencies, like the FTC or FCC, which are run by multi-member, bipartisan commissioners. Roberts limited the decision to the CFPB.

Roberts’s moderation here actually echoed his moderation in the Louisiana abortion case handed down today. The CFPB ruling was a moderate decision that conservatives will like, while the abortion decision is a moderate decision that liberals will like.

But both reflected Roberts’s commitment to cautious conservatism in the vein of Edmund Burke. He does not favor rapid change — whatever the court’s other conservatives may want.

In practice, so long as the CFPB is run by a single director, it can’t be independent in the sense of having its leadership insulated from the president. Either Congress will have to re-form the CFPB by creating a multi-member commission, or else the CFPB will cease to be independent.

The stakes of the decision, Seila Law v. CFPB, are particularly high because the case is essentially about whether and how the Constitution allows independent agencies to be shielded from presidential control. That matters when you have a president who has set out to politicize nearly every aspect of decisionmaking, including in areas, like criminal justice, where there is a robust tradition of independence.

The theory of agency independence has always been that there are some areas where we want the government decisionmaker to be protected from partisan, political influence. The commissions created during the New Deal, like the SEC, are archetypal examples.

To Trumpian critics, independent agencies are nests of deep state resistance. To good government advocates, independent agencies are a tool to protect the public from self-interested politicians.

The CFPB was created to be such a good-government entity. The innovation was to create the CFPB with a single director who could only be fired for “inefficiency, neglect of duty, or malfeasance,” rather putting a commission in charge.

There were two main reasons to think that design was constitutional when it was adopted. One was based on a 1935 case, Humphrey’s Executor v. U.S., which went to the Supreme court after President Franklin Roosevelt tried to fire one of the members of the FTC. The court upheld the independence of the FTC, making that case the leading precedent for the creation of independent agencies.

Roberts distinguished the FTC from the CFPB by saying that the FTC directors are a multi-member group appointed to staggered terms to perform functions that the court in 1935 called legislative and judicial, not executive. These distinctions are weak, as Justice Elena Kagan pointed out in her powerful dissent. The functions of the FTC and CFPB aren’t that different — both make policy.

The best inference is that Roberts doesn’t want to upend existing independent agencies. He doesn’t want to overturn the 1935 precedent (although Justices Clarence Thomas and Neil Gorsuch might.)  Roberts just doesn’t want to allow new innovations in agency independence.

The other reason to think the CFPB structure was constitutional is the 1988 independent counsel case, Morrison v. Olson. In that case, the court upheld the independent counsel over an influential dissent by Justice Antonin Scalia. The counsel was certainly exercising executive power. And, as with the CFPB director, there was only one of him.

Again, Roberts didn’t want to overturn precedent. So instead, he distinguished it. He argued that the independent counsel was what the Constitution calls an “inferior officer” — one who can be appointed by the president without the advice and consent of the Senate. The CFPB director, on the other hand, is a “principal officer” — one who exercises significant policymaking authority and requires a Senate confirmation. To this, Kagan rejoined that the logic of the Morrison case did not have to do with the principal/inferior distinction, as Scalia indicated at the time in his dissent.

The key takeaway from the dueling Roberts and Kagan opinions is that they represent the two sides in an ongoing debate between pro-executive formalism and pro-agency pragmatism. In this debate, Roberts is on the conservative side — but not radically so. He doesn’t trust Donald Trump; but he does believe in the conservative ideal of a unitary executive who should have ample control over what his administration does.

Kagan, who herself has a robust view of executive power (she worked in the Clinton White House), nevertheless is a pragmatist before she is an advocate of presidential power. She recognizes that presidents often need to be constrained.

The CFPB decision is a meaningful victory for the unitary executive view. But it isn’t a transformative victory that fundamentally threatens the administrative state. Roberts does not seem to be on board with the hardline conservatives’ impulse to dismantle independent agencies altogether. His Burkean conservatism — if it isn’t broken, don’t change it — is turning out to be the most important force in Supreme Court jurisprudence in 2020.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Feldman is a Bloomberg Opinion columnist and host of the podcast “Deep Background.” He is a professor of law at Harvard University and was a clerk to U.S. Supreme Court Justice David Souter. His books include “The Three Lives of James Madison: Genius, Partisan, President.”

©2020 Bloomberg L.P.