Trump v. Cook

Majority reasoning

The majority held that when Congress created the Federal Reserve in 1913 and restructured it in 1935, it gave Governors fixed 14-year terms removable only "for cause" — and that this language, under well-established legal rules dating back to 1901 Supreme Court precedents (Reagan v. United States and Shurtleff v. United States), carried with it an implied requirement of notice and a hearing before removal. The Court reasoned that "for cause" is not a rubber stamp for any presidential grievance, but requires a substantial reason genuinely reflecting unfitness for the role — not merely a pretext to install a more agreeable replacement. The Court rejected the Government's argument that the President's removal decision is entirely unreviewable, explaining that courts have always had the authority to determine whether a stated "cause" actually meets the legal standard. The Court also rejected the argument that courts cannot issue a preliminary injunction keeping a removed officer in place, finding that courts of equity have historically protected officers' possession of their offices while legal disputes over their removal are resolved. Finally, the Court upheld the Federal Reserve's independence as constitutionally consistent, tracing a historical tradition of independent central banking from the First and Second Banks of the United States through the modern Federal Reserve.

Dissent reasoning

Justice Thomas argued in dissent that public offices are not "property" that officials can claim a constitutional right to hold, and that the Federal Reserve Act's plain text — which says nothing about notice or a hearing — cannot be read to silently require those procedures; Congress knows how to mandate notice and hearings explicitly, and did so in dozens of other statutes but not here. He further argued that the two cases the majority relies on (Reagan and Shurtleff) are dicta that do not establish a binding rule requiring notice and hearings for "for cause" removals, and that there was no broad judicial consensus on this point when Congress enacted the Federal Reserve Act. Thomas also contended that the Board of Governors exercises substantial executive power and therefore, under Article II of the Constitution, the President must be free to remove its members at will — making the removal restriction itself unconstitutional. He additionally argued that federal courts lacked the authority to grant the injunction at all, because Cook had no congressionally created right of action to enforce the Federal Reserve Act, and because courts of equity have historically been barred from interfering with the removal of public officers. Justice Alito, joined by Justice Gorsuch, agreed the stay should have been granted but objected primarily to the Court's decision to issue a sweeping opinion on novel and underdeveloped legal questions at such an early stage of litigation, arguing the Court should have resolved only the two narrow issues the lower courts actually addressed. Justice Barrett dissented separately, arguing the Court should not have reached the constitutional question about the Federal Reserve's independence at all — since the Government expressly waived it — and that the injunction as written actually bars the President from removing Cook for mortgage fraud under any circumstances, creating a disconnect between the Court's stated reasoning and its actual order.