Supreme Court lets Lisa Cook stay on Federal Reserve board for now, sets January hearing

The Supreme Court has set a January hearing to consider whether President Donald Trump can fire Lisa Cook from the Federal Reserve Board of Governors. In doing so, the court put off deciding immediately whether to let Trump keep her off the board while her lawsuit proceeds against his bid to fire her. That means Cook stays on the board for now, pending further action from the high court.

The high court’s action came in an order Wednesday.

The court’s treatment of this case so far is different from Trump’s moves to fire members of other agencies, which the court’s Republican-appointed majority has approved more quickly. The majority has signaled that it considers the Federal Reserve to be different from other agencies and therefore is entitled to special considerations. How that plays out in Cook’s case should become clearer at the January hearing, with a decision likely to come by early July, by which point all of the term’s cases are typically decided. The justices return to the bench Monday for their next term, which already had several momentous cases scheduled before the court added the hearing in Cook’s significant case.

The Trump administration had appealed to the high court, seeking to lift a district judge’s order that kept Cook on the board as her lawsuit proceeds. Cook called Trump’s attempt to fire her “unprecedented and illegal” and said it threatened Federal Reserve independence. A divided appellate panel declined to lift the judge’s order, over dissent from a Trump appointee.

The administration has claimed that Cook, a Biden appointee, committed mortgage fraud prior to her Senate confirmation to the board seat, which expires in 2038. She has contested the allegation and the lack of process she received in her purported firing. The appellate panel majority stressed the lack of due process when it ruled that she can stay on the board while her suit proceeds.

The Supreme Court’s Republican-appointed majority previously signaled its intention to protect Fed independence, even as the justices have let Trump fire members of other agencies without cause in his second term — hence the president’s pointing to an alleged cause for Cook’s firing. But seeking to limit judicial review of Trump’s reasoning and thus further expand his presidential powers, the U.S. solicitor general wrote to the high court that “once the President identifies a cause, judicial review must cease.”

Opposing the administration’s emergency appeal, Cook’s lawyers wrote that 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. Otherwise, any president could remove any governor based on any charge of wrongdoing, however flawed.” They added that siding with Trump “would sound the death knell for the central-bank independence that has helped make the United States’ economy the strongest in the world.”

Among the outside parties supporting Cook were former top U.S. economic leaders, who urged the justices to reject Trump’s bid for high court intervention. Touting Fed independence based on their experience, they wrote that allowing Cook’s removal while her challenge is pending “would threaten that independence and erode public confidence in the Fed.”

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