Trump asks Supreme Court to let him fire Lisa Cook from Federal Reserve

By John Fritze, CNN

(CNN) — President Donald Trump took his effort to remove a governor from the Federal Reserve to the Supreme Court on Thursday, asking the justices to remove Lisa Cook from the powerful board a day after it cut interest rates for the first time in months.

Trump’s emergency appeal put the issue of Fed independence – a question of monumental significance for the US economy – onto the court’s docket months after the justices appeared to carve out special protections for the agency. On the other hand, Trump’s effort to remove Cook involves new legal theories that may find purchase on the 6-3 conservative court.

If Trump is successful in dismissing Cook, it would mark the first time a Fed governor was fired by a president in the central bank’s 111-year history.

The Federal Reserve cut its benchmark interest rate Wednesday for the first time since December and signaled more cuts are likely this year. Trump has sharply criticized Fed Chair Jerome Powell for keeping rates high, and critics have suggested the administration’s real goal in targeting Cook has been to pressure the agency to act.

“That the Federal Reserve Board plays a uniquely important role in the American economy only heightens the government’s and the public’s interest in ensuring that an ethically compromised member does not continue wielding its vast powers,” the administration said in its emergency appeal.

“Put simply, the president may reasonably determine that interest rates paid by the American people should not be set by a governor who appears to have lied about facts material to the interest rates she secured for herself – and refuses to explain the apparent misrepresentations.”

Trump fired Cook on August 25 after a member of his administration alleged that she had committed mortgage fraud by reporting two different homes as her primary residence – a practice that can yield better loan terms. Other documents have subsequently revealed that Cook sometimes declared the second property as a “vacation home.”

A federal court on September 10 blocked Cook’s dismissal, asserting that Trump had not “identified anything related to Cook’s conduct or job performance as a board member that would indicate that she is harming the board or the public interest.” That ruling was handed down by US District Judge Jia Cobb, nominated to the bench by former President Joe Biden.

The Trump administration quickly appealed to the DC Circuit, which on Monday declined to put Cobb’s ruling on hold.

“Given that Cook has a property interest in her position, she is entitled to ‘some kind’ of process before removal,” two of the appeals court judges reviewing that case wrote in a concurring opinion Monday. “Before this court, the government does not dispute that it provided Cook no meaningful notice or opportunity to respond to the allegations against her.”

US Circuit Judges Bradley Garcia and J. Michelle Childs, both Biden nominees, sided with Cook.

But US Circuit Judge Gregory Katsas, a Trump nominee, dissented.

“The president plainly invoked a cause relating to Cook’s conduct, ability, fitness, or competence,” Katsas wrote. “The allegations against Cook could constitute mortgage fraud if she acted knowingly, and that is a felony offense.”

In its emergency appeal to the Supreme Court on Thursday, the Trump administration described that decision as “yet another case of improper judicial interference with the president’s removal authority. The administration also asked Chief Justice John Roberts for an immediate, short-term “administrative” order that would take Cook off the board while the case is pending at the high court.

And the administration brushed aside arguments that Cook was entitled to some sort of process to refute the allegations before she was dismissed.

“The lower courts’ primary theory is that principal officers are akin to teachers or lower-level civil servants and can thus claim a property interest and an entitlement to notice and a hearing before removal,” US Solicitor General D. John Sauer told the court. “This theory is untenable and would wreak havoc on sensitive presidential decision-making.”

On the one hand, Trump has on his side a string of emergency victories at the Supreme Court, in which the justices have allowed the president to remove the leaders of independent federal agencies at will. But on the other, the court took pains to carve out the Fed from those cases, asserting it had a unique history that underscored the importance of its independence.

But the Cook appeal involves a separate legal question: Who gets to define “cause.” Trump has claimed that Cook’s dismissal was based on the allegations, which he says count as “cause” to justify the firing. The administration has pointed to a 1901 precedent from the Supreme Court to argue that courts should give the executive wide deference to define cause for removal purposes.

Just before the Fed’s meeting this week, Trump appointee Stephen Miran, a White House economic adviser, was sworn in as a new governor. Asked about Miran’s arrival – specifically whether his arrangement of serving as a Fed governor while remaining a White House employee – means anything for Fed independence, Powell said that the agency is “strongly committed to maintaining our independence.”

“And beyond that,” he said, “I really don’t have anything to share.”

Tariffs case scheduled

As in past years, the Supreme Court’s work is increasingly becoming intertwined with Trump. The court separately agreed to hear arguments in a major case involving the president’s use of sweeping global tariffs.

The parties in that case sought an expedited review and, earlier Thursday, the Supreme Court set arguments for November 5 – setting up a significant showdown over the centerpiece of the administration’s economic agenda.

This story has been updated with additional details.

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