Avoiding independent agency Armageddon.

• Author: Barnett, Kent H.

In Free Enterprise Fund v. Public Company Accounting Oversight Board, the U.S. Supreme Court invalidated Congress's use of two layers of tenure protection to shield Public Company Accounting Oversight Board (PCAOB) members from the President's removal. The SEC could appoint and remove PCAOB members. An implied tenure-protection provision protected the SEC from the President's at-will removal. And a statutory tenure-protection provision protected PCAOB members from the SEC's at-will removal. The Court held that these "tiered" tenure protections between the President and the PCAOB members unconstitutionally impeded the President's removal power because they prevented the President from holding the SEC responsible for PCAOB's actions in the same manner as he could hold the SEC accountable for its other responsibilities. Four justices dissented. They argued that the majority's decision, if applied rationally, would disrupt the independent administrative state by invalidating tiered protections for several independent boards, 1500 ALJs, 210,000 military officers, and numerous civil servants.

This Article proposes that, contrary to the dissent's position, courts can preserve agency independence and the President's removal power without disturbing Free Enterprise Fund or the Court's prior, inconsistent removal-power jurisprudence. The courts should distinguish the various tiered tenure-protection provisions, which fall into weak, intermediate, and strong-protection prototypes. Certain prototype combinations permit the President to have federal officers implement his policy choices. When the President can do so, he retains sufficient removal power, and thus certain prototype combinations are constitutional. Indeed, under my proposed analysis, the tiered-tenure protections for most agencies and officials are permissible. Distinguishing tenure-protection provisions (instead of just counting them) permits courts to provide some coherence to, without disturbing, the Supreme Court's otherwise inconsistent removal-power decisions.

INTRODUCTION

Incoherent. (1) Inconsistent. (2) Ad hoc. (3) Scholars have long derided the United States Supreme Court's jurisprudence concerning the extent of the President's constitutional power to remove officers within independent agencies. (4)

The Court had the opportunity in Free Enterprise Fund v. Public Co. Accounting Oversight Board (FEF) (5) to overrule its prior presidential-removal decisions or otherwise to clarify this area of constitutional and administrative law. Indeed, D.C. Circuit Judge Brett Kavanaugh described the case as "the most important separation-of-powers case regarding the President's appointment and removal powers to reach the courts in the last 20 years." (6) But FEF only complicated matters.

The Court--in an opinion by Chief Justice Roberts and joined by Justices Scalia, Kennedy, Thomas, and Alito--held that the two levels of tenure protection for members of the Public Co. Accounting Oversight Board (PCAOB or the "Board") were unconstitutional. The Court accepted the parties' agreement that Congress had precluded the removal of SEC commissioners except for "inefficiency, neglect of duty, or malfeasance in office." (7) As part of the Sarbanes-Oxley Act of 2002 (SOX), the SEC commissioners, in turn, could appoint Board members and remove them in certain limited instances for willful misconduct or unreasonable failure to enforce certain rules and standards. (8) The Court held that the "two levels of protection from removal for those who ... exercise significant executive power" unconstitutionally limited the President's removal power (9) and "safely encased [agency officials] within a Matryoshka doll of tenure protections." (10) Through two tiers of tenure protections, the President had lost, according to the Court, the ability to hold the SEC accountable for its supervision of the Board to the same extent as he could hold the SEC accountable for all of its other responsibilities. (11)

Justice Breyer and three other justices dissented. He argued that because the President can remove the SEC Commissioners only for certain reasons, any limitations on the commissioners' authority to remove the Board members did not meaningfully impact the President's authority. (12) Justice Breyer then explained that the Court's reasoning, if applied consistently, threatened the independence of numerous other agency officers--including administrative law judges (ALJs) and military officers--protected by two tiers of tenure protection. (13)

This Article does not seek to follow others' quixotic quests to replace all of the Court's removal-power jurisprudence with more principled rationales or to establish the extent of the President's implied removal power. Instead, this Article seeks to uncover a guiding principle that is congruous with the Court's presidential-removal decisions and prevents Justice Breyer's predicted upheaval to independent agencies. (14) To that end, courts should look to the nature of Congress's limitation on the President's removal power, not merely the number of tenure protections. Considering the provisions' language does no violence to the Court's precedent because the Court has either ignored the distinctions among the provisions or expressly reserved the question of what the provisions mean. Such an inquiry provides a rational, consistent basis for limiting FEFs disruption to the administrative state, comports with key themes running through the Court's removal-power decisions, and brings some much needed coherence to the Court's jurisprudence.

The justices most often have referred to limitations on the President's removal power as simply "for cause" limitations. (15) But not all "for cause" provisions are the same. Some, such as the provision that had protected the PCAOB members, permit the President to remove an officer for willful dereliction of specific duties. These provisions comprise the "strong" tenure-protection prototype. Others, such as the implied protection for SEC Commissioners, are less specific and generally permit removal for "inefficiency, neglect of duty, or malfeasance in office." (16) These provisions comprise the "intermediate" tenure-protection prototype. Still others, such as the one that protects administrative law judges and numerous civil servants, permit the President to remove an officer "for good cause." (17) The good cause standard has long permitted, in the federal employment context, removal based on insubordination. (18) This good-cause standard is the "weak" tenure-protection prototype. Unlike the strong and intermediate prototypes, the weak prototype is properly understood to permit the President to have officers implement his policy choices and grant him or her broad discretion for removing an officer.

This Article argues that distinguishing among the "strong," "intermediate," and "weak" tenure-protection provisions provides a justifiable manner to avoid Justice Breyer's doomsday scenario. (19) The Court in FEF held that one tier of intermediate tenure protection followed by a second tier of strong tenure protection impermissibly impeded the President's control over agency decisionmaking. Under neither level could the removing party (whether the President or the SEC Commissioners) remove an officer for refusing to execute the removing party's instruction. But, for example, if Congress imposed only one tier of intermediate tenure protection followed by one tier of weak tenure protection, the President's power to remove would not be sufficiently impeded. After all, if one accepts Humphrey's Executors conclusion that one level of "intermediate cause" removal is permissible (as the majority in FEF did), then a second-tier, weak tenure protection should not change the result. The weak tenure protection allows the first-tier officer to remove the second-tier officer for insubordination and thus does not meaningfully lessen the President's power to hold first-tier officers accountable. The only power that the President loses with a weak tenure protection is the power to arbitrarily remove the officer--a power that, given the Court's decisions, is not entitled to judicial protection. By the same token, the officer still has some tenure protection and very likely discretion, as a practical and political matter, to decide most policy matters. Contrasting the tenure-protection provisions' language permits courts to accept FEF as they find it, while preserving much agency independence.

Part I of this Article examines three key, mutating themes throughout the Court's removal-power jurisprudence: its understanding of the President's power, its functional and formal approaches, and its consideration of how Congress has sought to impede the President's removal power. Part II examines FEF and its effect on the Court's removal-power themes. Part III examines the three prototypes of tenure protections, suggests how they should be interpreted in light of FEF and the Court's understanding of the three key themes, and proposes how courts should rule on the constitutionality of varying prototype combinations. Part IV then applies the analysis from Part III to the independent agencies and officers identified in Justice Breyer's dissenting opinion.

1. KEY THEMES IN REMOVAL-POWER DECISIONS

   As numerous justices of the Court have conceded, the Constitution says nothing expressly about the President's removal power. (20) Indeed, the Framers did not discuss the President's removal powers at the Constitutional Convention. (21) Accordingly, judges and scholars continue to debate the Framers' original understanding of the President's removal powers and how the removal power should be understood in light of modern administrative practice and constitutional design. (22)

   The Court has, however, to varying degrees, developed three themes as part of its removal-power decisions. To understand FEF's significance and how contrasting tenure-protection...