Lisa Cook launched a lawsuit this week that’s destined for the Supreme Court, where a ruling could affect the fate of the Federal Reserve’s independence and thus the fate of the U.S. economy. Though the case is just getting underway, one of the precedents already cited by Donald Trump likely rings a bell from his first term: the travel ban case.
The administration points to that 2018 case, Trump v. Hawaii, for the general proposition that courts have limited power to inspect the president’s motives. That’s relevant to Cook’s case because Trump claims he’s firing her “for cause,” over alleged mortgage fraud that allegedly took place prior to the Biden nominee’s Senate confirmation.
Cook, who hasn’t been charged with any crime, was confirmed to the Federal Reserve board for a term that expires in 2038. Federal law requires cause for premature removal, but the law doesn’t define what sort of cause is required, nor does it specify a procedure for determining such cause. The issue is legally unprecedented, in addition to carrying immense practical consequences.
Ahead of a hearing Friday in Washington, Cook’s lawyers called the mortgage allegations “pretextual” and said they were raised by Trump “to effectuate her prompt removal and vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve.”
Responding with its own filing ahead of Friday’s hearing, the administration cited Trump v. Hawaii in writing, “Insofar as Dr. Cook seeks a ruling that the President’s stated rationale was pretext, the Court should decline ‘to probe the sincerity of the [president’s] stated justifications’ for an action when the President has identified a facially permissible basis for it.”
The administration’s lawyer likewise cited the 5-4 ruling during Friday’s hearing before U.S. District Judge Jia Cobb, when the Biden appointee asked what sort of inquiry can take place regarding Trump’s for-cause claim. Cobb has yet to rule on how the Cook case will proceed in the short term. Whatever she decides won’t likely be the last word. Similarly, this might not be the last we hear of the case that affirmed the president’s broad discretion on immigration. It could figure in deciding the breadth of his discretion in this latest crucial context, too. Subscribe to the Deadline: Legal Newsletter for expert analysis on the top legal stories of the week, including updates from the Supreme Court and developments in the Trump administration’s legal cases.
Jordan Rubin is the Deadline: Legal Blog writer. He was a prosecutor for the New York County District Attorney’s Office in Manhattan and is the author of “Bizarro," a book about the secret war on synthetic drugs. Before he joined MS NOW, he was a legal reporter for Bloomberg Law.
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