Monday, November 27, 2017

Much Ado About Anything?

Marty Lederman

Yesterday, I explained why I think that, although the question is perhaps a close or difficult one, there is significant reason to doubt that President Trump has the authority to appoint OMB Director Mick Mulvaney to be acting Director of the Consumer Financial Protection Board (CFPB) in the wake of Director Richard Cordray’s resignation, as long as there is a Deputy Director available—as  there is now—to fill that acting role.  As you may have heard, the current Deputy Director, Leandra English, last night sued the President and Mulvaney, seeking a declaration that she, not Mulvaney, is the lawful Director of the CFPB.

Although the question of who runs the CFPB is obviously of enormous significance, and although I also think that English probably has the better view on the merits of the Mulvaney appointment question, I am also skeptical whether this heated debate is worth the attention it is receiving, for even if English wins her suit (something that is by no means certain), the President has at least one way, and possibly two ways, of ensuring that she will not be acting Director for very long.  

First is the obvious one:  Trump could—and should—simply appoint a new Director forthwith, preferably someone who does not share Mulvaney’s views that the CFPB is a “sad, sick joke” that should not exist.  The Senate then could and should carefully consider the nomination.  All of which is to say that the “interim” position as acting Director could be short-lived, regardless of who is entitled to exercise it.

Second, it is likely—although perhaps not certain—that Trump could in the meantime resolve the dispute about the acting Director by using his power of removal.  How he would do so, however, might be a bit tricky.  (The following thoughts are a bit tentative, and uncertain. If anyone knows of any relevant precedents on these removal questions, please let me know, thanks.)

He could, for example, try to remove English from her position as acting Director.  (Whether the President can remove the CFPB Director without cause is currently the subject of an en banc proceeding in the U.S. Court of Appeals for the D.C. Circuit.  But whatever the answer to that question might be, as far as I know OLC is correct (see pp. 6-7) that the statute does not afford an acting Director “for cause” removal protection—that is to say, the President can remove her “at will.”) 

The potential trouble with this possibility, however, is that as long as English remains Deputy Director, the Dodd-Frank law I discussed yesterday would appear to afford her the authority to act as Director, too, and thereby preclude the President from appointing someone else as acting Director pursuant to the Vacancies Reform Act of 1998 (assuming, of course, that English is correct about the interrelationship of Dodd-Frank and the VRA).

Therefore, the more likely way that Trump might try to secure Mulvaney’s appointment would be to remove English from her office as Deputy Director—which would automatically also remove her authority to be acting Director. 

There would be a legal wrinkle with respect to this tactic, too, however:  The ordinary presumption is that Congress has assigned the removal power to the officer who is authorized to make the appointment in the first place, i.e., that the removal authority is incident to the appointment authority.  See, e.g., Ex parte Hennen, 38 U.S. (13 Pet.) 230, 259-60 (1839); accord PCAOB v. FEF, 561 U.S. 477, 493 (2010).  This explains why Richard Nixon did not try to personally remove Archibald Cox (or, for that matter, Leon Jaworski), and (as I have explained) why Donald Trump cannot fire Special Counsel Robert Mueller.  And Dodd-Frank assigned the CFPB Director—not the President—the authority to appoint the Deputy Director (which is what happened—Cordray appointed English).  The removal power, therefore, ordinarily would belong to the CFPB Director, as well—not to President Trump.

The problem here, of course, is that the Deputy Director herself (I am assuming here) is now acting as the Director.  The logic of the Hennan presumption, therefore, would be that only Leandra English, as acting Director, could remove English herself from her office as Deputy Director.  And that would be absurd.  (Imagine, for instance, a case in which there is clear cause for her removal—a case of graft, or accepting a bribe.  Congress can’t possibly have intended, in such a case, that the only person who could remove English would be English herself.)  Therefore, this might well be a situation in which the Hennan presumption is rebutted, and it would be fair to assume Congress intended the President himself to have the power to remove the Deputy Director when she is also the acting Director. 

If this is correct—and offhand, I don’t see any other plausible alternative “reading” of the removal authority—then Trump can simply remove English from the office of Deputy Director (which I do not believe is protected by any “for cause” removal standard), which would automatically eliminate her authority to act as Director.

And then, because the Dodd-Frank designation of the Deputy Director to be acting Director could not be implemented (as there’d be no Deputy to step into the interim role), presumably the provisions of the VRA would kick back in, and the President could appoint Mulvaney.

As I said at the outset, however, all these machinations, and the litigation, really ought to be beside the point, because the proper way of replacing Richard Cordray would be for the President to expeditiously appoint his successor, by and with the advice and consent of the Senate.

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