Presidential Review: the President’s Statutory Authority Over Independent Agencies

Presidential Review: The President’s Statutory

Authority over Independent Agencies

CASS R. SUNSTEIN* & ADRIAN VERMEULE**

Many presidents have been interested in asserting authority over in-

dependent regulatory agencies such as the Federal Trade Commission,

the Federal Communications Commission, the Nuclear Regulatory

Commission, the Securities and Exchange Commission, and the Federal

Reserve Board. The underlying debates raise large constitutional questions,

above all about the meaning and justif‌ication of the idea of a “unitary exec-

utive.” In the f‌irst instance, however, the President’s authority over inde-

pendent agencies depends not on the Constitution but on a common

statutory phrase, which allows the President to discharge the heads of such

agencies for “ineff‌iciency, neglect of duty, or malfeasance in off‌ice.” This

phrase—the INM standard—is best understood to create a relationship of

presidential review—and a particular remedy for legal delinquency f‌lowing

from that review. It allows the President to discharge members of independ-

ent agencies not only for laziness and torpor (ineff‌iciency) or for corruption

(malfeasance) but also for neglect of their legal duties, which includes egre-

giously erroneous decisions of policy, law, or fact, either repeatedly or on

unusually important matters. Connecting this understanding to the Take

Care Clause, we reject both a minimalist approach, which deprives the

President of any kind of decisionmaking authority over policy made by inde-

pendent agencies, and also a maximalist approach, which would treat the

independent agencies as essentially identical to executive agencies in terms

of presidential oversight authority. This approach has strong implications

for how to understand the President’s supervisory authority over independ-

ent agencies. It suggests that he has such authority insofar as he is attempt-

ing to ensure against “neglect of duty,” but not if he is displacing their

policymaking discretion.

TABLE OF CONTENTS

I. DOES THE PRESIDENT HAVE AUTHORITY OVER INDEPENDENT

REGULATORY AGENCIES? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638

II. INM, WITH AN EMPHASIS ON THE N. . . . . . . . . . . . . . . . . . . . . . . . . . 644

* Robert Walmsley University Professor, Harvard Law School. © 2021, Cass R. Sunstein & Adrian

Vermeule.

** Ralph S. Tyler, Jr. Professor of Constitutional Law, Harvard Law School. We are grateful to

Daphna Renan and Peter Strauss for valuable comments on a previous draft. Thanks too to participants

in a valuable legal theory workshop at Harvard Law School. We are also grateful to Dustin Fire for

superb research assistance.

637

A. THE UNSETTLED MEANING OF THE INM STANDARD . . . . . . . . . . . . . . 644

B. WHAT THE INM STANDARD MEANS. . . . . . . . . . . . . . . . . . . . . . . . . . . 647

C. NEGLECT OF DUTY: THE PRESIDENT AS REVIEWER. . . . . . . . . . . . . . . 649

D. THE STANDARD APPLIED: REMOVAL . . . . . . . . . . . . . . . . . . . . . . . . . . 652

1. Easy Cases: Group One . . . . . . . . . . . . . . . . . . . . . . . . . 652

2. Easy Cases: Group Two . . . . . . . . . . . . . . . . . . . . . . . . . 653

3. Easy Cases: Group Three . . . . . . . . . . . . . . . . . . . . . . . . 654

4. Harder Cases: Group Four . . . . . . . . . . . . . . . . . . . . . . . 654

III. PRESIDENTIAL SUPERVISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 656

A. EXECUTIVE AGENCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657

B. INDEPENDENT AGENCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660

C. ON POLICING LINES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 662

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 664

I. DOES THE PRESIDENT HAVE AUTHORITY OVER INDEPENDENT REGULATORY

AGENCIES?

Does the President have authority over the independent regulatory agencies?

1

May he f‌ire their members?

2

May he control the decisions of the Federal Trade

Commission (FTC), the Nuclear Regulatory Commission (NRC), the Federal

Communications Commission (FCC), the National Labor Relations Board

(NLRB), the Federal Reserve Board, and the Consumer Financial Product

Bureau (CFPB)?

3

These are among the most fundamental questions in American

public law.

Such questions are usually approached as a matter of constitutional law.

4

The

key text is Article II, Section 1, which vests “executive [p]ower” in one person:

1. For present purposes, we understand “independent regulatory agencies” to refer to agencies whose

heads are not subject to at-will discharge by the President. For additional discussion, see generally

Adrian Vermeule, Conventions of Agency Independence, 113 COLUM. L. REV. 1163 (2013).

2. The def‌ining decision, offering a qualif‌ied answer of “no,” is Humphrey’s Executor v. United

States, 295 U.S. 602, 629 (1935). In the same vein are Wiener v. United States, 357 U.S. 349, 356

(1958), and Morrison v. Olson, 487 U.S. 654, 691–92 (1988).

3. See Seila Law LLC v. CFPB, 140 S. Ct. 2183, 2192 (2020) (answering the question of control with

a f‌irm “yes” in the context of the CFPB, as a matter of constitutional law).

4. See id. See generally STEVEN G. CALABRESI & CHRISTOPHER S. YOO, THE UNITARY EXECUTIVE:

PRESIDENTIAL POWER FROM WASHINGTON TO BUSH (2008) (providing constitutional and historical

analysis to the unitary executive theory); Saikrishna Prakash, New Light on the Decision of 1789, 91

CORNELL L. REV. 1021 (2006) (discussing an early legislative construction of the Constitution regarding

executive power).

638 THE GEORGETOWN LAW JOURNAL [Vol. 109:637