Lisa Cook, governor of the US Federal Reserve and governor nominee for US President Joe Biden, during a Senate Banking Committee nomination hearing in Washington, DC, US, on Wednesday, June 21, 2023.
Anna Rose Layden | Bloomberg | Getty Images
Lawyers for Federal Reserve Governor Lisa Cook on Thursday argued that the Supreme Court should reject President Donald Trump’s request that he be allowed to fire her pending the outcome of her lawsuit challenging her removal.
“The President’s stay application asks this Court to act on an emergency basis to eviscerate the independence of the Federal Reserve Board,” Cook’s lawyers wrote in a new filing with the Supreme Court.
Trump has asked the Supreme Court to lift lower court orders that block him from firing Cook while her suit plays out.
The president said in late August that he was firing her because of allegations she committed mortgage fraud by claiming that two separate properties would be her primary residence. She denies those claims of wrongdoing, which relate to properties she owns in Ann Arbor, Michigan, and Atlanta.
Earlier Thursday, a group that included every living former Federal Reserve chair, along with a number of former Treasury secretaries and former chairs of the White House Council of Economic Advisers, urged the Supreme Court to deny Trump’s request to fire Cook for now.
The Supreme Court could at any time rule on Trump’s request.
If the high court allows Trump to remove Cook, it would leave the door open for her to be reinstated once the justices rule on the merits of her lawsuit.
The key question in Cook’s case is whether Trump has legal cause as required by the Federal Reserve Act to fire her.
In their filing Thursday, Cook’s lawyers said that Trump was citing “flimsy, unproven allegations of pre-office wrongdoing — allegations conveniently timed following the President’s criticisms of the Board’s policy decisions.”
Trump had complained for months that the Fed’s board was not cutting interest rates as he wanted. The Fed last week lowered its benchmark overnight lending rate by a quarter percentage point, with Cook participating in that decision.
“This Court should deny the President’s extraordinary application because his arguments defy established precedent and longstanding practice,” Cook’s lawyers said in their filing.
“This litigation has barely begun, and further factfinding could avoid the need for this Court to decide the high-stakes legal issues raised in the President’s application,” her lawyers wrote. “On the merits, this Court is likely to reject each of the President’s legal theories.”
“Specifically, the Court is likely to hold that because Governor Cook is removable only for cause, she is entitled to notice, opportunity for a hearing, and judicial review before she is removed.”
The lawyers wrote that the Supreme Court is “likely” to ultimately ruled that the “for cause” standard provided by the Federal Reserve Act is meaningful protection for a Fed governor, “and is not satisfied by manufactured charges based on conduct that pre-dates her service on the Board.”
“The bottom line is this: Contrary to the President’s boundless assertion of authority, there must be some meaningful check on the President’s ability to remove Governor Cook,” the lawyers wrote. “Otherwise, any president could remove any governor based on any charge of wrongdoing, however flawed. That regime is not what Congress envisioned when it protected the Federal Reserve Board from presidential control.”
