Lisa Cook has filed her lawsuit against President Donald Trump’s attempt to remove her from the Federal Reserve Board of Governors. In her federal court complaint, Cook’s lawyers called Trump’s move “unprecedented and illegal,” arguing that his “unsubstantiated allegation” of mortgage fraud doesn’t meet the legal requirement of showing cause to remove her.
In the complaint filed Thursday in Washington, D.C., they cite the Federal Reserve Act’s mandate that presidents can only remove board members “for cause” prior to the expiration of their term. Cook’s term expires in 2038. She was nominated by then-President Joe Biden.
They also cite the Supreme Court’s recent words on the Federal Reserve’s unique structure, which the justices have suggested gives its members greater protection than members of other agencies whom the court has been letting Trump fire.
As I wrote earlier this week, given the court’s recent signal that it would protect the Federal Reserve to a greater extent than other agencies, Cook’s case will pose a test for the justices when it inevitably reaches them.
Her complaint highlights the significance of how that test is resolved. “The operational independence of the Federal Reserve is vital to its ability to make sound economic decisions, free from the political pressures of an election cycle,” her lawyers wrote, warning that “[i]f markets and the public believe that the central bank is making decisions based on political pressure rather than sound economic data, that confidence erodes.” The next step in Cook’s case could come quickly. Her lawyers moved for a temporary restraining order and requested an emergency hearing. “Without emergency relief,” they wrote, “[federal government] Defendants are now likely to allow an unexpired vacancy to occur for which President Trump has indicated he is ready to fill.” 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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