On October 11, the Court of Appeals for the D.C. Circuit held
that the Consumer Financial Protection Board (CFPB), as currently structured
and as operated in practice, is unconstitutional. Deservedly, the decision,
received considerable attention, for as Judge Brett Kavanaugh declared in the
opinion’s opening sentence: “This is a case about executive power and
individual liberty.”
Judge Kavanaugh’s opinion warrants close attention not only
by those interested in the fate of the CFPB, but by FCC-watchers as well. This
is because of what the opinion says about the way the FCC, as one of the
so-called independent agencies, is intended to operate in order to be
constitutional.
In short, the D.C. Circuit held that the CFPB is
unconstitutionally structured because its single Director, Richard Cordray, is
not accountable to the President because he cannot be terminated at the
pleasure of the President. Judge Kavanaugh proclaimed that Director Cordray,
operating as a one-person “independent” regulator, enjoys “more unilateral
authority than any other officer in any of the three branches of the U.S.
Government, other than the President.” As the court emphasized, Article II of
the Constitution “lodged full responsibility for the executive power in the
President of the United States, who is elected and accountable to the people.” To
save the entire CFPB from being thrown out lock-stock-and-barrel as
unconstitutional, the court held that Mr. Cordray must be made accountable to
the President by submitting to the President’s supervision and, like other
officers in the executive branch, by serving at the President’s pleasure.
I’ve long held the view that the FCC and other independent
agencies, with their blend of quasi-legislative, quasi-executive, and
quasi-judicial powers, and with their commissioners subject to removal by the
President only for cause rather than at will, occupy a shaky position in our
tripartite constitutional regime. And, like Judge Kavanaugh, I have observed
many times that “the independent agencies collectively constitute, in effect, a
headless fourth branch of the U.S. Government.”
But, for present purposes, I don’t want to argue about the
constitutionality of the independent agencies like the FCC. That question, at
least for now, has been settled by the Supreme Court’s landmark decision in Humphrey’s Executor v. United States
(1935), when the Court upheld the constitutionality of the Federal Trade
Commission.
Instead, I want to highlight what Judge Kavanaugh, in the
D.C. Circuit opinion, said about the independent agencies by way of
distinguishing them from the unconstitutional structure and operation of the
Consumer Financial Protection Board. First, he pointed out that, to mitigate the
risk to individual liberty from unchecked power, “the independent agencies,
although not checked by the President, have historically been headed by multiple commissioners, directors, or
board members who act as checks on one another.”
To put a fine point on it, Judge Kavanaugh declared: “In
other words, to help preserve individual liberty under Article II, the heads of
executive agencies are accountable to and checked by the President, and
the heads of independent agencies, although not accountable to or
checked by the President, are at least
accountable to and checked by their fellow commissioners or board members.”
(Last emphasis supplied.)
Second, Judge Kavanaugh observed, quoting Humphrey’s Executor, that each
independent agency traditionally has been established as a “body of experts
appointed by law and informed by experience.”
Third, Judge Kavanaugh emphasized that the Humphrey’s Executor Court found it
significant that the FTC was intended to be “non-partisan” and to “act with
entire impartiality.”
So, here’s the important point for purposes of thinking
things through: All of the characteristics recited above, considered separately
and collectively – that is, a non-partisan
multi-member body of experts informed by experience, acting with entire
impartiality, and serving as a check upon each other – presumably were
crucial to the Supreme Court’s finding that independent agencies like the FCC
and FTC are constitutional.
It might surprise you to learn that I don’t intend here to
lay out a case suggesting that, over the last couple of years, at times the FCC
has departed in significant ways from adherence to the criteria that led the Humphrey’s Executor Court to sustain the
constitutionality of agencies like the FCC – even though I do think such a case
can be made. You can engage in that exercise as a mind game yourself if you
wish.
Instead, the point I want to emphasize now, in thinking
things through, is that the more the FCC deviates from the Humphrey’s Executor criteria,
the less constitutional support it enjoys for its actions. In other words, the
more the FCC deviates from the Humphrey’s
Executor criteria, the more the agency’s constitutional veneer, as part of
the “headless fourth branch” of government, wears thin.
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