In recent decades, “independent” federal agencies have accumulated substantial executive power, including the power to investigate and adjudicate regulatory violations and to enforce severe financial penalties. Yet lower courts still evaluate independent agencies as if they were mere “judicial or legislative aids” from a bygone era. On that basis, courts have wrongly upheld removal protections for the commissioners of these agencies. Now the Supreme Court has an opportunity to abate the “leakage” of executive power to unelected, removal-protected government officials. Doing so will help preserve the Constitution’s separation of powers scheme.

Leachco is an Oklahoma manufacturing business that makes an infant lounger called the “Podster.” The Consumer Product Safety Commission (CPSC) is an agency that Congress created in 1972 to regulate a vast number of consumer products and to enforce its mandates with financial penalties. In 2022, the CPSC began a proceeding against Leachco, claiming that the Podster constitutes a “substantial product hazard.” In response, Leachco sued the agency in federal court and argued that the CPSC Commissioners’ and agency judge’s removal protections were unconstitutional. According to Leachco, the removal protections meant the company was subjected to proceedings before an unconstitutionally structured agency.

But the district court disagreed and rejected Leachco’s motion for a preliminary injunction. The U.S. Court of Appeals for the Tenth Circuit affirmed the lower court, and now Leachco seeks review from the Supreme Court. Cato has filed an amicus brief, with the NFIB Small Business Legal Center and the Buckeye Institute, in support of Leachco’s petition.

Our brief explains that the Constitution “vest[s]” in the President all the “executive Power” and gives him the duty to “take Care that the Laws be faithfully executed.” For the President to fulfill his constitutional responsibilities, he generally must have the authority to remove his principal subordinates.

The Supreme Court has recognized only two exceptions to the presidential removal power. The exception relevant to this case stems from the 1935 case Humphrey’s Executor v. United States, which upheld for-cause removal protections for FTC Commissioners on the ground that the Commissioners “occup[y] no place in the executive department and … exercise[] no part of the executive power.”

But as our brief points out, Humphrey’s Executor rests on shaky footing. The Supreme Court has since acknowledged that the FTC in 1935 did in fact exercise executive power. And in Seila Law LLC v. CFPB (2020), the Court struck down removal protections for an agency director who possessed substantial executive power. The Seila Law Court clarified that the Humphrey’s Executor exception is limited to agencies acting as a “mere legislative or judicial aid.” The Supreme Court has effectively repudiated almost every aspect of Humphrey’s Executor, but it has not yet overruled the case.

Because Humphrey’s Executor has not yet been explicitly overruled, and because the CPSC has the same structure as the FTC, the Tenth Circuit deemed the CPSC Commissioners to be covered by Humphrey’s Executor.

Our brief argues that the Tenth Circuit read Seila Law too narrowly when it held that removal protections are impermissible solely for agencies with single directors. Seila Law categorically held that agencies exercising substantial executive power fall outside the Humphrey’s Executor exception. This important clarification applies just as much to agencies with multiple directors. We also argue that when a company like Leachco is subjected to an illegitimate proceeding by an unconstitutionally structured agency, there is irreparable harm that a court can remedy with a preliminary injunction.

As the Fifth Circuit acknowledged in a recent case involving the CPSC, when it comes to the constitutionality of removal protections for “independent” commissioners, the Supreme Court “has created uncertainty that only it can ultimately alleviate.” This case presents a good vehicle for resolving the uncertainty. The Supreme Court should grant the petition and reverse the Tenth Circuit.