Will the Supreme Court save the Fed's independence?

Yahoo

28-05-2025

The Federal Reserve has emerged as the 800-pound gorilla in the legal fight over President Trump's firings of agency leaders traditionally independent from the White House.
The Supreme Court's 6-3 conservative majority is increasingly signaling it wants to eviscerate precedent that has protected certain federal agency leaders from at-will termination by the president for nearly a century.
But even as the justices eye the major expansion of presidential power, they are taking great care to shield the Fed, rejecting the notion that the court will imperil the institution's independence.
'The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,' the court stressed in an emergency ruling last week.
Trump has long flirted with firing Fed Chair Jerome Powell over frustration that he has not brought interest rates down quicker.
Last month, Trump said Powell's 'termination cannot come fast enough', only to say days later he has 'no intention' of firing the central banker.
But the White House acknowledges it is studying the issue and Trump keeps ripping into Powell, raising continued speculation about whether he will eventually be canned.
Meanwhile, questions about the Fed's independence are already looming large as the courts grapple with Trump's firings at other independent agencies despite their statutory removal protections.
The terminations are part of an expansive view of presidential power advanced by Trump's White House that would give him near-total control over the executive branch.
On Thursday, the Supreme Court handed Trump a major win in his effort by greenlighting his terminations of Democratic appointees at the National Labor Relations Board (NLRB) and Merit Systems Protection Board (MSPB).
It's the latest sign that the conservative justices may be on their way to overrule Humphrey's Executor v. United States, a 1935 Supreme Court decision that authorized Congress to provide for-cause removal restrictions for various federal agencies.
Already, the conservative justices have limited the precedent's reach in a series of recent cases. But they have yet to formally overrule it.
Many court watchers believe the justices are skeptical of Humphrey's Executor but are hesitant to eliminate the Fed's protections, given the central bank's role in setting monetary policy that at times can be politically unpopular.
Remarkably, the court dedicated one of the four paragraphs in Thursday's order to distinguishing the Fed, suggesting its 'historical tradition' could justify removal protections even if the president has control over other traditionally independent agencies.
In dissent, the court's three liberal justices said the comment was 'out of the blue' and asserted a simpler way to reassure the markets would have been to deny Trump's request.
'I am glad to hear it, and do not doubt the majority's intention to avoid imperiling the Fed,' wrote Justice Elena Kagan, joined by Justice Sonia Sotomayor and Justice Ketanji Brown Jackson.
'But then, today's order poses a puzzle. For the Federal Reserve's independence rests on the same constitutional and analytic foundations as that of the NLRB, MSPB, FTC, FCC, and so on — which is to say it rests largely on Humphrey's,' Kagan continued.
The NLRB and MSPB cases will now return to the U.S. Court of Appeals for the D.C. Circuit. But soon, they could return to the Supreme Court, putting the Fed back in the limelight.
Welcome to , The Hill's weekly courts newsletter, we're Ella Lee and Zach Schonfeld. Email us tips ([e-mail], [e-mail]) or reach out to us on X (@ByEllaLee, @ZachASchonfeld) and Signal (elee.03, zachschonfeld.48). Not already on the list?
Soon after jury selection concluded in President Trump's New York criminal trial last year, a man named Max Azzarello set himself on fire outside the courthouse.
The self-immolation, which resulted in Azzarello's death, set a dramatic and dark tone at the trial's outset but ultimately faded into the background of the historic case.
In New York Times reporter Jonah Bromwich's new book about the trial, 'Dragon on Centre Street,' Azzarello's full story is told for the first time.
Bromwich's book takes readers inside the courtroom for an accurate and compelling account of Trump's seven-week criminal trial, inviting readers behind the curtain of the Times's reporting process on the historic case. He also reveals several newsy nuggets, including how porn actress Stormy Daniels missed her flight to New York and shook up the order of witnesses.
But it is Bromwich's deep reporting of those on the fringe of the trial, like Azzarello, that stands out most.
Azzarello grew up on Long Island. Bromwich detailed how he was interested in civics and 'alternatives to the mainstream,' like socialism or anarchism, and was not upset when Trump was elected in 2016, given his interest in widespread change.
One of his sisters had worked as a wardrobe assistant on The Celebrity Apprentice, invisible string connecting Azzarello and Trump long before that fateful day outside the courthouse. He was close with his mother, who died in April 2022 after a battle with chronic illness.
In the spring of 2023, he became 'captured by an obsession' that 'almost everyone' in American public life was secretly fascist – Trump, former President Biden, the Clintons, Elon Musk, Whoopi Goldberg and more.
He posted these beliefs on social media 'constantly' but struggled to convince anyone, including his father, Richard, and two sisters. He struggled to be noticed.
Azzarello's online persona laid bare his personal struggles. He described himself as a 'research investigator' on LinkedIn, his bio warning that 'We've got a secret fascism problem.' On Instagram, he'd bombard his followers with his theory.
When he'd talk about his theory, his whole personality – even his voice – would change.
'Max was increasingly in pain,' Bromwich wrote. 'No one would listen to him.'
In August 2023, months after Trump's indictment, Azzarello was arrested several times for disorderly conduct. When his probation ended in April 2024, he made plans to travel to New York, where cameras would be fixed on Trump's trial – and he could finally get his message out.
Minutes after the jury selection process concluded, Azzarello doused himself in liquid from a canister held above his head and lit a flame. He was quickly consumed by the fire.
Bromwich reported that Azzarello's father had turned on MSNBC to see the latest on jury selection. A reporter in front of the courthouse described the spectacle of a man on fire.
'Oh no. Please don't be Max,' Richard Azzarello said to himself before putting the thought out of his mind, Bromwich reported. But about 90 minutes later, he received a 'hysterical' call from one of his daughters.
Want to learn more? Bromwich will appear in conversation with New York Times Washington correspondent Michael Schmidt at Politics & Prose Thursday.
Buried deep in the One Big Beautiful Bill Act — the budget reconciliation bill making its way through Congress — is a provision that could sharply limit district courts' ability to enforce their rulings blocking Trump's policies
The provision instructs that no U.S. court may use appropriated funds to enforce a contempt citation for failure to comply with an injunction or temporary restraining order if 'no security' was given when the injunction or order was issued.
It cites Federal Rule of Civil Procedure 65(c), which requires federal judges to decide whether a bond is needed when an injunction or temporary restraining order is sought.
Usually, judges waive the bond requirement when a plaintiff alleges a constitutional violation by the U.S. government, FindLaw managing editor Joseph Fawbush wrote in a blog post about the provision.
'Otherwise, it could be hard for many plaintiffs to challenge government laws and actions as unconstitutional,' he wrote.
Judges have issued dozens of preliminary injunctions and temporary restraining orders against the Trump administration, oftentimes waiving the bond requirement.
Just last week, U.S. District Judge Myong Joun, an appointee of former President Biden who serves in Boston, did so when he blocked Trump's dismantling of the Education Department.
However, under the new rule, contempt enforcement would not be possible when a judge waives the bond. The orders are enforced by the U.S. Marshals Service, whose funding is appropriated by Congress.
That would render toothless any injunctions or temporary restraining orders issued against the Trump administration where the security requirement was waived, because judges would not be able to enforce contempt rulings if the orders were violated.
The 1,116-page budget reconciliation bill, including the contempt provision, has already passed the House but it has yet to reach the Senate for a vote.
Read Tuesday's full order list here.
IN: Compassionate release
The Supreme Court agreed to take up one of the relists we highlighted in last week's Petition Pile, Fernandez v. United States.
The third time was the charm for Joe Fernandez, who twice before unsuccessfully petitioned the Supreme Court to review his case at earlier stages.
This time, however, the court agreed to take up a question that could shorten Fernandez's life sentence for a murder-for-hire conspiracy to time served.
At issue is the scope of judges' discretion under the compassionate release statute, which allows courts to reduce a defendant's sentence for 'extraordinary and compelling reasons.'
Fernandez was sentenced to life in prison over his role in a 2000 shooting that killed two members of a Mexican drug cartel, who traveled to New York to collect a debt from a drug ringleader.
Raising questions about the jury's verdict and noting his co-conspirators received lower sentences, a federal district judge granted Fernandez's motion for compassionate release.
Fernandez petitioned the Supreme Court after an appeals court reversed the judge's ruling. The appeals court said Fernandez's arguments didn't qualify as 'extraordinary and compelling reasons' because they circumvented the normal process for challenging the validity of a criminal conviction.
The justices will now review the matter, with oral arguments likely to be set for late this year.
OUT: Flat Oak and student's 'two-genders' shirt
Finally, at last!
After relisting Apache Stronghold v. United States a whopping 15 times, the court spoke on Tuesday.
We've covered the backstory in several previous editions, but here's a quick recap: The federal government is preparing to transfer Flat Oak, a sacred Apache religious site, so it can be converted into a copper mine. The petition sought to block the transfer on religious grounds.
The court turned away the petition alongside a 17-page dissent from Justice Neil Gorsuch, who was joined by fellow conservative Justice Clarence Thomas, complete with a map and photo.
Gorsuch, the Supreme Court's staunchest defender of American Indian rights, called the court's refusal 'a grievous mistake' with consequences 'that threaten to reverberate for generations.'
'Just imagine if the government sought to demolish a historic cathedral on so questionable a chain of legal reasoning. I have no doubt that we would find that case worth our time,' Gorsuch wrote.
'Faced with the government's plan to destroy an ancient site of tribal worship, we owe the Apaches no less. They may live far from Washington, D.C., and their history and religious practices may be unfamiliar to many. But that should make no difference.'
Justice Samuel Alito recused from the case, and the duo failed to convince at least two more of their colleagues to take up the dispute.
Separately, the court turned away another petition we highlighted when it was first relisted.
In L.M. v. Town of Middleborough, Massachusetts, the court declined to hear a student's challenge to his school district blocking him from wearing a T-shirt to class that reads, 'There are only two genders.' Thomas and Alito both publicly dissented.
The student claimed the ban violates the Supreme Court's 1969 decision, Tinker v. Des Moines, that famously permitted students to wear to school armbands protesting the Vietnam War. But a lower court rejected the claim.
In a brief, solo dissent, Thomas repeated his longstanding criticism of Tinker but stressed it remains binding precedent that lower courts must follow.
Alito authored a far longer dissent, saying the lower court had distorted the Supreme Court's First Amendment caselaw.
'Just as in Tinker, some of L.M.'s classmates found his speech upsetting,' wrote Alito, joined by Thomas. 'Feeling upset, however, is an unavoidable part of living in our 'often disputatious' society.'
The court has relisted four petitions for the first time, adding to the nine others we've covered in previous editions that remain pending.
The first new relist, Bost v. Illinois State Board of Elections, implicates states that allow mail ballots to be received after Election Day. Republicans have looked to crack down on the practice by suing in court. A lower court rejected such a challenge brought by Rep. Michael Bost (R-Ill.) and two of Trump's electors from Illinois, finding they had no legal standing. Bost and the electors want the Supreme Court to review that finding and revive their case.
In Hamm v. Smith, the justices will return to the death row case of Joseph Clifton Smith. In November, the court sent Smith's case back to a lower court to clarify its ruling surrounding his low IQ test scores and whether they make him ineligible for the death penalty. Days later, the lower court again affirmed he is intellectually disabled and thus ineligible for capital punishment. Alabama's Republican attorney general now seeks the Supreme Court's review, with the Trump administration's backing.
In The GEO Group v. Menocal, the court is asked to wade into a dispute concerning a major government contractor that operates immigration detention facilities. Alejandro Menocal, who was detained in GEO's Aurora, Colo., facility, brought forced labor claims against the company. Government contractors have immunity from damages suits when the contractor was 'lawfully' carrying out work 'authorized and directed' by the government, but a judge ruled GEO's alleged conduct went beyond that so the case could move forward. The company tried to appeal, but the circuit court found the lower ruling isn't immediately appealable, and GEO needs to wait for the trial court proceedings to conclude. GEO now wants the Supreme Court to reverse that ruling and allow the company's immunity appeal to immediately move forward.
The final relist, Hencely v. Fluor Corporation, also concerns government contractors. Former U.S. Army Specialist Winston Hencely, who was critically injured in 2016 by a suicide bomber at Bagram Airfield in Afghanistan, is seeking to revive his lawsuit against the defense contractor that employed the bomber. An Army investigation found the contractor breached its contract with the Army and the breach contributed to the attack. Hencely attempted to sue under South Carolina state law, but an appeals court held that his claims are preempted by federal law. Hencely says the justices should take up the case to resolve a split among the lower courts about how to interpret a 1988 Supreme Court decision on the issue.
Former Rep. George Santos (R-N.Y.) has appeared to delete his X account. Much of Santos' recent content concerned his upcoming 7.25-year prison sentence, including a Monday post suggesting he was giving up on seeking a pardon from Trump. Santos said friends who had agreed to help with a pardon are no longer doing so and that 'I will not spend the last 61 days I have of life scrambling on how to get past a bunch of guard dogs.'
Congratulations to Kyle Fraser, who was crowned last week as the winner of 'Survivor' 48. Fans know that Fraser won the $1 million prize just before returning home to marry his then-fiancé and fellow attorney, Maggie Turner. What you may not know is that Turner is one of the attorneys representing a group of U.S. Institute of Peace employees suing the Trump administration for attempting to dismantle the agency.
Lawyers in Sean 'Diddy' Combs's federal sex trafficking and racketeering trial keep calling the rapper by his nicknames in their questioning, drawing admonishment from the judge, AP's Mike Sisak reports. Combs's indictment listed off several nicknames: Puff Daddy, P. Diddy, Diddy, PD and Love. But this reference was to 'Puff.'
Today
Nancy Marks, ex-Rep. George Santos's (R-N.Y.) former campaign treasurer, is set to be sentenced after pleading guilty to conspiring with the then-candidate to fraudulently inflate his campaign finance reports.
Thursday
The Supreme Court will announce opinions.
A federal judge in New York is set to hold a preliminary injunction hearing in a challenge to the Department of Government Efficiency (DOGE)'s access to Office of Personnel Management (OPM) systems.
A Massachusetts federal judge is set to hold a preliminary injunction hearing in Harvard's challenge to the revocation of its certificate that allows it to enroll international students.
Another New York federal judge is set to hold a hearing over a motion to dismiss a Columbia University student's challenge to Immigration and Customs Enforcement's (ICE) efforts to deport people based on their pro-Palestinian views.
A trial is set to begin in Texas in an American Civil Liberties Union (ACLU) challenge to Trump's invocation of the Alien Enemies Act on behalf of one Venezuelan woman.
A federal judge in California is set to hold a noncompliance hearing in a challenge to the administration's decision to end temporary protected status (TPS) for Venezuelans and Haitians.
Friday
Closing arguments are scheduled in Google's search antitrust trial in Washington, D.C.
Monday
The Supreme Court will announce orders.
Tuesday
A Virginia federal judge is set to hold a preliminary injunction hearing in a challenge to the administration's efforts to scrub references to race and gender from Department of Defense Education Activity libraries brought by 12 minors with an active-duty parent enrolled in the program.
The New York Times's Jessica Silver-Greenberg, Matthew Goldstein, Maggie Haberman and Michael S. Schmidt: Trump Allies Look to Benefit From Pro Bono Promises by Elite Law Firms
BBC's Andy Verity: Rate 'rigging' traders say they were scapegoated – now the Supreme Court will decide
Reuters's Sara Merken: Trouble with AI 'hallucinations' spreads to big law firms
David Lat's 'Original Jurisdiction': SCOTUS Clerk Hiring Watch: OT 2025 And Beyond
The Wall Street Journal's Erin Mulvaney and C. Ryan Barber: Top Paul Weiss Litigators Leave to Start Their Own Firm
We'll be back next Wednesday with additional reporting and insights. In the meantime, keep up with our coverage here.
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