Balkinization: What *are* the legal questions at issue in Trump's purported removal of Lisa Cook from the Federal Reserve Board?

What *are* the legal questions at issue in Trump's purported removal of Lisa Cook from the Federal Reserve Board?

Marty Lederman

Over on bluesky, my fellow blogger Mark Tushnet expressed his "frustration" with what the "progressive commentariat" has said thus far on the legal issues raised by President Trump's purported removal of Lisa Cook from her office as a member of the Board of Governors of the Federal Reserve System. "I can generate between 10 & 20 nonfrivolous legal questions that have to be answered," Mark wrote, "before [one] can answer with some modest confidence the question: Will Lisa Cook exercise authority as a Fed member in the short or long run?" The "commentariat," Mark lamented, has engaged on "almost none" of those questions.

I dunno know about "between 10 and 20," but Mark is right: Trump's action does indeed raise a slew of legal questions, most of which haven't been emphasized or even identified by observers in the past couple of days.

Before describing many of those questions, it's important to note that Trump's action does not raise--not yet, anyway, or at least not directly--the one extremely significant constitutional issue that's been the focus of a great deal of public discussion since Trump's inauguration, namely, whether it's constitutional for Congress to afford the Fed a significant degree of independence from the President by providing (see 12 U.S.C. 242) that the President must have “cause” in order to remove a member. The Supreme Court flagged that issue in its recent ruling in Trump v. Wilcox (No. 24A966) (May 22, 2025), where the majority suggested (unconvincingly) that the Constitution must incorporate some sort of "Fed exception" to the general rule the majority is (also unconvincingly) moving toward, which is that Article II authorizes the President to remove virtually all principal officers "at will," even if a statute purports to confer some form of tenure protection as a means of giving such an officer independence from the President in the exercise of a statutorily conferred delegation of authority.

The Court is aware that if the (mistaken) rationale and underpinnings of its decisions in cases such as Seila Law, Wilcox and Boyle were correct--in particular, if Article II truly did afford the President "all of" the Executive power--it would mean that the President could remove members of the Federal Reserve Board simply because they do not vote as he directs or wishes them to vote on questions of interest rates. The Court realizes how dangerous that would be, and therefore it appears to be casting about for some basis, however unprincipled, for a "Fed exception."

Trump's effort to remove Lisa Cook doesn't (at least not on its face) implicate that constitutional question, because Trump has shrewdly chosen to articulate a reason for firing Cook that's unrelated to her votes on interest rates--he purports to be acting in accord with the statutory requirement of "cause" for the removal--and it's very unlikely DOJ would defend the removal by arguing that the President has an Article II prerogative to remove Fed Governors because of their views on monetary policy, or "at will."

That said, everyone--everyone--understands that Trump would not have removed Cook if she voted in accord with his views about interest rates. Whether the allegations he articulated about her mortgage applications in 2021 are true or not, no one believes that those applications are the true reason for the removal (or, frankly, that Donald Trump would ever remove anyone from office because they were untruthful about something--his own, everyday stock in trade). And therefore, if the Supreme Court ultimately rules for Trump on the nonconstitutional questions that I tick off below in a way that permits him to remove Cook, that would be, in effect, the end of statutorily guaranteed independence of the Federal Reserve, because it wouldn't be difficult for any President to articulate some "cause" for removal of virtually any Fed Governor who doesn't vote to regulate interest rates in accord with the President's preferences.

To be sure, in an ordinary, benign case in which a President removed a Governor for what's genuinely good "cause" and without regard to that officer's decision-making on monetary policy, the Court would likely rule in favor of the President on most, perhaps almost all, of the questions listed below. Stripped of the context of what Trump is doing here, and viewed purely in the abstract, the President would probably have the better view of the law on most (though not all) of those questions.

But this is anything but an ordinary, benign case. And therefore the most important, unresolved question of them all is this one: In answering the questions below, will the Court "exhibit a naiveté from which ordinary citizens are free,” Department of Commerce v. New York (2019), or will it take into account, expressly or not, Trump's manifest objective to circumvent the statute affording independence to the Federal Reserve Board?

OK, with that important context in mind, here's a (partial) list of the important and unresolved legal questions that Trump's purported removal of Cook raises:

1. Assuming for the sake of argument that in 2021, several months before she took office as a federal official, Cook represented in the span of two weeks, to two different credit unions, that she intended to use two different properties as her “primary” or “principal” residence within 60 days; and that she did so in order to secure better loan terms; and (as Trump alleges) that Cook was not being truthful in making one representation or the other (“It is impossible that you intended to honor both [representations].”), would such conduct by Cook in 2021 be sufficient to constitute “cause” for Trump to remove her from office four years later, as that term (“cause”) is used in 12 U.S.C. 242?

2. This is, in some respects, a subset of Question 1: It's probably the case that Congress has conferred at least some degree of discretion upon the President to assess what is "cause" for removal and what's not. But what's the scope of that discretion (is it, for instance, unbounded?), and to what extent could a federal judge, post-Loper Bright, adjudicate whether the President acted within the scope of that discretion on the purely legal question of whether a certain set of facts would, if true, suffice as "cause" for removal?

3.  If the answer to Question 1 is “no, those facts are not sufficient to constitute 'cause,'” and the removal therefore was unlawful, is there any pathway for judicial review of that legal question and, if so, what is it? (Who, for example, would be the proper defendants; could the President be sued; and what relief could be sought?)

4.  If the answer to Question 1 is “yes, that could be 'cause' for removal,” but Trump would not have removed Cook but for her votes on whether to lower interest rates--which is indisputably the case--would that pretext make the removal illegal?

5.  If the answer to Question 1 is “yes” and the answer to Question 4 is “no”—in which case the removal was unlawful—can a federal court assess whether the President’s stated reason was pretextual?

6. Even if the answer to Question 1 is “yes,” does the federal statute (12 U.S.C. 242), and/or the Due Process Clause of the Fifth Amendment, afford Cook a right to a pre-removal hearing of some sort before the President or one of his agents, in which she would have an opportunity to contest whether the alleged facts are true, as the Supreme Court indicated would be the case in Shurtleff v. United States, 189 U.S. 311, 314 (1903)? As far as I know, there's never been any occasion for that question to be asked or answered in the 122 years since Shurtleff. (There was one such presidential pre-removal hearing, in 1912-1913--see No. 7, below--but the statute there expressly required it.)

7.  If the answer to Question 6 is “yes,” what sort of hearing would be legally sufficient? For example, would it be lawful for Trump to use the sort of minimal form of adjudication that President Taft used in 1912-1913 before he removed two members of the Board of General Appraisers? (NB: The statute in that case, unlike the one at issue here, expressly required such a hearing.) Or is more required?

8.  If the answer to Question 6 is “yes, a pre-removal hearing is required,” would a presidential determination of the facts after such a hearing be judicially reviewable and, if so, what would be the courts' standard of review on the factual questions undergirding the President's determination of "cause"?

9. If a court were to hold that the removal was unlawful for any of the reasons suggested above--e.g., (i) that the conduct isn't sufficient to constitute "cause" for removal; (ii) that Trump's stated reason is pretextual and his real reason is prohibited; and/or (iii) that Cook was entitled to a hearing before removal--could the court remedy the unlawful removal by ordering federal officials to treat Cook as the rightful holder of the office, or issue any other forms of relief that would, as a practical matter, allow Cook to continue serving as a Governor?

Posted 5:51 PM by Marty Lederman [link]