On March 18, President Trump fired both Democratic Commissioners of the Federal Trade Commission (Alvaro Bedoya and Rebecca Kelly Slaughter) setting up an inevitable legal fight over core presidential powers and the legitimacy and constitutionality of “independent” regulatory agencies.

This decision leaves the FTC at 2 active commissioners (Republican Chair Andrew Ferguson and Republican Melissa Holyoak) with one pending nomination (Republican Mark Meador). Meador’s vote before the full Senate is thought to be slated for Monday, March 24, as he has already overcome the Senate Commerce Committee with a 20-8 vote. The firings were not unexpected, yet it did catch some off guard as there would be three Republicans to outvote both Democrats on any administration priorities. However, the message sent here goes much deeper.

On February 18, President Trump signed Executive Order 14215 Ensuring Accountability for All Agencies. The writing was then immediately on the wall as the Order begins,

“The Constitution vests all executive power in the President and charges him with faithfully executing the laws.  Since it would be impossible for the President to single-handedly perform all the executive business of the Federal Government, the Constitution also provides for subordinate officers to assist the President in his executive duties.  In the exercise of their often-considerable authority, these executive branch officials remain subject to the President’s ongoing supervision and control.  The President in turn is regularly elected by and accountable to the American people.  This is one of the structural safeguards, along with the separation of powers between the executive and legislative branches, regular elections for the Congress, and an independent judiciary whose judges are appointed by the President by and with the advice and consent of the Senate, by which the Framers created a Government accountable to the American people.

‍

However, previous administrations have allowed so-called “independent regulatory agencies” to operate with minimal Presidential supervision.  These regulatory agencies currently exercise substantial executive authority without sufficient accountability to the President, and through him, to the American people.  Moreover, these regulatory agencies have been permitted to promulgate significant regulations without review by the President.

‍

These practices undermine such regulatory agencies’ accountability to the American people and prevent a unified and coherent execution of Federal law.  For the Federal Government to be truly accountable to the American people, officials who wield vast executive power must be supervised and controlled by the people’s elected President.

‍

Therefore, in order to improve the administration of the executive branch and to increase regulatory officials’ accountability to the American people, it shall be the policy of the executive branch to ensure Presidential supervision and control of the entire executive branch.  Moreover, all executive departments and agencies, including so-called independent agencies, shall submit for review all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA) within the Executive Office of the President before publication in the Federal Register.”

So what does this mean and what do the recent FTC firings, in particular, tell us?

Let’s briefly start from the beginning. In 1933 President FDR (a Democrat I might add) was dissatisfied with FTC Commissioner William Humphrey and his implementation of the New Deal. As a result, FDR fired Humphrey. Humphrey sued that the firing was unlawful as the FTC Act states, “Any commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office.” Section 1 FTC Act.

In the now well-known administrative law case known as Humphrey’s Executor, the United States Supreme Court ruled that the FTC Act was constitutional and that the U.S. Constitution did not grant the President “illimitable powers of removal,” meaning there are restrictions. The Supreme Court significantly limited the decision of Myers v. United States (1926) written by then Chief Justice (and former President) William Howard Taft that found that the President had the right to remove officers who were “units of the executive department.” The Humphrey’s Court differentiated this and stated that the FTC (and now many more regulatory agencies) were different because Congress created these bodies to perform “quasi-legislative and quasi-judicial” functions.

Perhaps that was the case in 1935 while regulatory bodies like the FTC and SEC were in their infancy, but any company or individual that has found themselves remotely close to the regulatory crosshairs in the 21st century fully understand that there is nothing quasi about these powers anymore.

President Trump has begun his mission to overturn Humphrey’s Executor and perhaps even destroy the FTC and the basis of the administrative state. Many will becry due to their dissatisfaction or otherwise for President Trump, but this is a fight worth having regardless of which side of the aisle one finds themselves. The fourth head of Medusa needs to be severed so that the powers may be returned to the People, otherwise the prosperity that is American innovation and capitalism will be turned to stone by those answerable to no one. Can there be abuse in granting a President such executive powers? Absolutely. But the Constitution grants the President such powers and it’s the duty of the other branches to check it and the People to vote. The issue can go both ways depending on who is in power, but it’s critical to remain consistent.

One thing is for certain, if you have had any dealings with the administrative state, you are well aware of what it has become. If you have not, then perhaps this message has not fully set in.

Nonetheless, the FTC may continue to operate with two Commissioners as the FTC adopted an amendment in 2005. The rule states, “A majority of the members of the Commission in office and not recused from participating in a matter [by virtue of certain ethical items listed in 18 U.S.C 208] constitutes a quorum for the transaction of business in that matter.” The FTC operated with two Commissioners in the last days of the Obama Administration, so this is not unchartered waters.

President Trump has no legal requirement to fill the empty seats, so if Meador is confirmed or not and whether Bedoya or Slaughter are reinstated or replaced, the FTC may conduct business as usual. Antitrust remains the core focus with consumer protection being thrown in. This is not a relaxed FTC, despite these firings, as many may presume.

Both Bedoya and Slaughter have already stated they will sue. They will likely win at the lower courts because Humphrey’s Executor remains the law of the land, and there’s not much wiggle room for lower courts to overturn Supreme Court precedent. If we can be certain of one thing, it's that we have a massive shakeup of the administrative state and constitutional landscape of regulatory agencies underway.