Author’s Note: Sometimes “quasi” means “sort of” or, as Merriam-Webster’s would have it, “having some resemblance usually by possession of certain attributes.” And sometimes, “some resemblance” means “not very much.”
On March 18, President Donald Trump fired—or purported to fire—the two Democratic members of the Federal Trade Commission (FTC): Alvaro Bedoya and Rebecca Slaughter. Bedoya promptly tweeted that he’d been “illegally” fired.
The President illegally fired me from my position as a Federal Trade Commissioner, violating the plain language of a statute and clear Supreme Court precedent.
It’s been reported that Slaughter said the same of her own dismissal And now, Bedoya and Slaughter have filed suit in federal court in the District of Columbia, seeking back pay and reinstatement.
FTC Chairman Andrew Ferguson, on the other hand, issued the following (rather terse) statement the same day the (ex) commissioners received notice of their dismissal:
President Donald J. Trump is the head of the executive branch and is vested with all of the executive power in our government. I have no doubts about his constitutional authority to remove Commissioners, which is necessary to ensure democratic accountability for our government. The Federal Trade Commission will continue its tireless work to protect consumers, lower prices, and police anticompetitive behavior.
I wish Commissioners Slaughter and Bedoya well, and I thank them for their service.
This ground has been well-trod in the past week (plus), but I’m still mulling it over and I think that it’s still worthy of discussion.
First, we should acknowledge that Slaughter (and Bedoya) have a point or two. “[T]he plain language of a statute” refers to Section 1 of the FTC Act, the FTC’s establishing statute, which stipulates that:
Any Commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office.
That is, a U.S. president may remove an FTC commissioner for cause, but not, presumably (and according to precedent) at will. As far as I know, the White House did not allege, much less establish, grounds for for-cause dismissal. I doubt that it wanted to.
The “clear Supreme Court precedent” refers to what may be the ur-case for independent agencies, Humphrey’s Executor v. United States (HE), which the Supreme Court decided in 1935. For now, the holding: The limits on the president’s removal power stipulated by Section 1 of the FTC Act are constitutionally permissible, given the structure and function of the FTC.
We’ll get to the details shortly.
If the statute and the precedent are so clear, why is Ferguson writing to endorse the president’s dismissal power?
There’s a story there—indeed, an eminently defensible story—but I’m still puzzling out what’s going on.
For the take of an experienced and accomplished antitrust litigator (and former enforcer), I recommend this Truth on the Market post by Joe Sims. He is surely right about some of what’s going on and, for all I know, all of it.
Whether or not we know the scope of the president’s ambitions, I expect that Sims is right that the White House intends to reshape the regulatory state. At the very least, President Trump and his appointees have said as much; and their interventions in the agencies have been far from few or slight thus far. In particular, on Feb. 18, a full month before the contested dismissals, the White House issued a fact sheet under the heading: “President Donald J. Trump Reins in Independent Agencies to Restore a Government that Answers to the American People.” The fact sheet identified the FTC, along with the Federal Communications Commission (FCC) and the Securities and Exchange Commission (SEC), as among the “[s]o-called independent agencies” that were to be reigned in.
Sims is also right that there’s little short-term policy gain at stake. Ferguson took the helm at the FTC just after the inauguration. And while that left the commission with a temporary 2-2 split along party lines, Ferguson had already assumed the agenda-setting authority of the chairman; he suggested that open cases against America’s largest tech firms would be ongoing; and Mark Meador, nominated to fill the seat vacated by Lina Khan, seemed to be sailing through the confirmation process.
Pushing for a quick confirmation should have been relatively straightforward. That would have led to a 3-2 Republican majority at the FTC. And not incidentally, that majority would have been in addition to Gail Slater’s already having been installed as the head of the U.S. Justice Department (DOJ) Antitrust Division. (Side note: that smooth sailing for Mark Meador’s confirmation might have gotten rougher because of the firings).
Finally, Sims is also right that Humphrey’s Executor is at issue.
And then things get tricky. Bedoya and Slaughter (and many in their defense) are right about the plain language of the FTC Act. And they are right that, in Humphrey’s Executor, the Court sustained the claims of Humphrey’s executor: namely, that the FTC Act limited the president’s power to remove commissioners at will and that the limitation was constitutionally permissible.
But what was the holding, exactly? In 1935, the Court said this:
We think it plain under the Constitution that illimitable power of removal is not possessed by the President in respect of officers of the character of those just named.
And there’s the oft-recognized rub. The holding depends not just on the plain language of the FTC Act, but on “the character” of the commissioners; that is, on the statutory role being performed by FTC commissioners, as identified by the Court in 1935. While the Court’s opinion is an interesting one, and in many ways pragmatic, there are (at least) colorable arguments that the Court got it wrong in 1935; and there are perhaps stronger arguments still that the “character” in question in 1935 no longer fits the commission (and its commissioners) in 2025.
For an excellent historical account of Humphrey’s time at the FTC, see this 2011 piece by Marc Winerman and William Kovacic (Kovacic is a leading antitrust scholar and former FTC chairman, and Winerman was his advisor and an FTC staff member).
The CliffsNotes version of the case itself is that William Humphrey was an FTC commissioner, initially nominated by Calvin Coolidge in 1925. He was nominated for a second term by Herbert Hoover and confirmed by the Senate in 1931. Humphrey was a decidedly anti-interventionist commissioner and hardly susceptible to policy instruction from President Franklin Roosevelt. Roosevelt—a great supporter of the administrative state, but no fan of agencies independent of himself—asked Humphrey to resign twice, to no avail, in 1933, the first year of FDR’s first term in office. Humphrey declined the invitations. Unhappy to be refused in his requests, Roosevelt wrote a third time (also in 1933) to fire him:
Effective as of this date, you are hereby removed from the office of Commissioner of the Federal Trade Commission.
Humphrey did not go gentle into retirement, although he did go somehow into that good night when he died in February 1934. Still, the executor of his estate sued for back pay—allegedly due from the time of his dismissal to the time of his death—in the Court of Federal Claims, much as Bedoya and Slaughter would do more than 90 years later.
Justice George Sutherland, writing for a unanimous Court (on which also sat Justice Louis Brandeis, a key figure in the FTC’s creation), held in favor of independent agencies and, perhaps equally, against FDR’s dismissal authority. Given the plain language of the statute, we’ll skip over the Court’s discussion of the first question before it: whether that language limited the president’s removal authority to for-cause removal. Deciding that question in the affirmative left the Court with the question of whether the Constitution permitted that limitation on the president’s authority.
And there, the Court’s opinion gets . . . complicated. The Court hangs its opinion on the powers, structure, and function of the FTC circa 1935. The Court then accounts for the approximate fit (or misfit) of the agency’s attributes to the powers assigned in Articles I, II, and III of the Constitution. So, for example, in “making investigations and reports thereon for the information of Congress under [Section] 6,” the FTC was acting “in aid of the legislative power”; and commission actions under Section 7 were deemed to “authorize[ ] the commission to act as a master of chancery under rules prescribed by the Court” and, hence, “as an agency of the judiciary.”
Considered in toto:
To the extent that it exercises any executive function — as distinguished from executive power in the constitutional sense — it does so in the discharge and effectuation of its quasi-legislative or quasi-judicial powers, or as an agency of the legislative or judicial departments of the government.
At one level, there’s something sensible about the Court’s strategy: the question of whether executive control is required by the Constitution (or by independent policy considerations) is partly a question of the functions assigned to the agency that is to be more-or-less independent. In another article, Kovacic and Winerman present a version of the question as an abstract balancing act:
The real questions for those designing a competition agency are how much independence is desirable and what mechanisms will most likely allow effective agency functioning with adequate accountability.
Still, a more-or-less sensible strategy can founder at the tactical level, and there’s a fair bit of juggling and dependence on the term “quasi” as the Court tries to work it all out under a distinction between “executive function” and “executive power in the constitutional sense” that was novel, if not strained, even in 1935. Not 10 years earlier, in Myers, the Court had reflected on “the general subject of the power of executive removal” in holding that statutory limitations on the president’s power to remove a postmaster were unconstitutional.
Myers was distinguishable in various ways, as the Court noted (distinct cases always are) but what of it? It’s not entirely clear that the express fixed terms of office in the FTC Act or the Court’s interpretation of congressional intent (probably correct, pace difficulties in the notion of congressional intent) had all that much to do with the scope of the executive power set forth in Article II (which says nothing expressly about removal powers).
Of course, that was then and this is now. The FTC Act has been amended numerous times since 1935. Notable amendments include, inter alia, the 1938 amendments that added a prohibition against unfair or deceptive acts or practices in commerce—the FTC’s UDAP authority—to Section 5; the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act of 1975, which included consumer-protection rulemaking processes; 1980 amendments that imposed various limitations on the FTC, including significant process restraints on UDAP rulemaking that, in the views of many, had run amok; and the 1994 amendments, which codified the FTC’s “unfairness statement” and imposed a sort of cost-benefit analysis on FTC UDAP enforcement, such that conduct could not be deemed unfair unless it (1) caused substantial consumer injury, (2) not easily avoidable by consumers themselves, and (3) not offset by countervailing benefits to competition or consumers.
In addition to general “Mag-Moss” rulemaking, the FTC has adopted numerous regulations under acts of Congress that charge the agency with narrower, more focused regulation. These include, for example, the Fair Credit Reporting Act, the Fair Package and Labeling Act, the Fur Products Labeling Act, the Children’s Online Privacy Protection Act of 1998, and the Fairness to Contact Lens Consumers Act.
The FTC of 2025 still conducts research and investigations, and it can still advise federal courts, the Congress, and other policymakers. Today’s FTC also brings complaints alleging both antitrust and consumer-protection violations internally in its own administrative process (and it decides such cases, issuing opinions and orders internally, with those decisions appealable to federal courts of appeal, but standing on their own otherwise). The FTC can also bring complaints in federal court. Violations of the FTC Act can result in various equitable remedies and, in certain cases, civil penalties.
It can issue subpoenas (under Sections 9 and 20 of the FTC Act) and other forms of compulsory process, including civil investigative demands (CIDs). It promulgates and enforces consumer-protection regulations, both under its very broad consumer-protection authority (UDAP) and under special statutes, as mentioned above. These include narrow, domain-specific amendments to the FTC Act. Moreover, violations of FTC regulations are subject to civil penalties.
It has claimed broad competition-rulemaking authority under Section 6 of the FTC Act, although that claim is in dispute, and the FTC’s only competition rule was stayed by a decision of the 5th U.S. Circuit Court of Appeals.
As antitrust and admin law scholar Daniel Crane wrote in “Debunking Humphrey’s Executor”:
At the end of a one- hundred-year natural experiment, the Commission bears almost no resemblance to the Progressive-technocratic vision articulated by the Court. The Commission is not politically independent, uniquely expert, or principally legislative or adjudicative. Rather, it is essentially a law enforcement agency be- holden to the will of Congress.
In sum:
The upshot is that the FTC has essentially become the executive agency that the Humphrey’s Executor Court denied it was. The FTC functions primarily by enforcing the antitrust and consumer protection laws as a plaintiff, no more expert than the executive branch agencies doing the same thing. The principal structural difference from the executive branch agencies is that the FTC is beholden to Congress rather than to the President.
Not a few scholars agree (not a few, but not all—for dueling perspectives in the Harvard Law Review, compare Aditya Bamzai and Saikrishna Bangalore Prakash with Noah Rosenblum and Andrea Scoseria Katz). Moreover, empirical studies of independent agencies that examine their independence, and their expertise relative to (other) executive agencies, bear Crane out (see here and here). If the question turns, in the end, on whether the FTC routinely carries out executive functions, just as incontrovertibly executive agencies do (just as Cabinet-level agencies do), then Crane’s observation seems uncontroversial.
And it seems likely that the Supreme Court is poised to agree. The Court’s 2020 decision in Seila Law narrows Humphrey’s Executor, although distinguishing it based partly on special features of the Consumer Financial Protection Bureau (CFPB)—including, not least, that the CFPB is headed by a single director. Contra the distinctions is the majority’s observation that “the CFPB Director is hardly a mere legislative or judicial aid,” as the CFPB has the authority to promulgate binding regulations under numerous federal statutes, to issue decisions awarding legal and equitable remedies in administrative proceedings, and to seek monetary penalties against private parties in federal court.
The Court could easily make the same observations of today’s FTC. Not incidentally, the majority observes that the Humphrey’s Executor Court’s “conclusion that the FTC did not exercise executive power has not withstood the test of time.”
At least three justices sitting on the court have said that they would overrule Humphrey’s Executor outright. Concurring in part and dissenting in part with the majority’s Seila Law opinion, Justice Clarence Thomas, joined by Justice Neil Gorsuch, left no room for doubt:
The decision in Humphrey’s Executor poses a direct threat to our constitutional structure and, as a result, the liberty of the American people. The Court concludes that it is not strictly necessary for us to overrule that decision. … But with today’s decision, the Court has repudiated almost every aspect of Humphrey’s Executor. In a future case, I would repudiate what is left of this erroneous precedent.
Justice Brett Kavanaugh, when sitting on the U.S. Court of Appeals for the D.C. Circuit, at least hinted that he would do the same.
Whether a majority of today’s Court would overrule Humphrey’s Executor outright is unclear, but it might. In any case, it seems dubious that the Court would uphold the opinion’s application to the FTC of 2025. And, for what it’s worth, the DOJ has announced that it does not intend to defend Humphrey’s Executor in court.
Certainly, the president retains some authority over the commission, not least in the president’s power to nominate commissioners and to designate any sitting commissioner the chair at will (thus retaining the ability to strip the chair of the agenda setting and other process authorities that make the chair first among “equals”).
True political independence may have been a bit of a unicorn in any case—that is, a pointy-headed chimera. As Kovacic and Winerman observed, “independence … cannot mean complete isolation from political process.” Rather, independence (and dependence) come in degrees. Further, they note that, while the FTC’s statutory design may diminish executive oversight, it leaves considerable room for congressional oversight via appropriations and—in practice, not infrequent—amendments to the FTC Act. Room for oversight and “legislative rent-seeking.”
That congressional oversight is unlikely to impress the Supreme Court, if the Court’s opinion in Free Enterprise Fund is any indication:
Congress’s “plenary control over the salary, duties, and even existence of executive offices” makes “Presidential oversight” more critical—not less—as the “[o]nly” tool to “counter [Congress’s] influence.”
When he was FTC chairman, Kovacic was fond of saying that there was much to be gleaned from the physical architecture of Pennsylvania Avenue, with the main DOJ building a third of the way from the White House to the Capitol, and the FTC sitting a third of the way from the Capitol to the White House.
But influence and oversight depend partly on who wields them, and how. FTC headquarters sits, for the moment, where it always has, but recent FTC leadership has all but erased the notion of the agency’s independence from the White House.
There are Ferguson’s recent endorsements of executive authority, as mentioned above. But the sea change seemed to come with Lina Khan’s ascent to the chair’s position, which immediately followed her Senate confirmation as a commissioner. Khan and former Assistant U.S. Attorney General Jonathan Kanter seemed routinely, if not daily, to sing from the same “whole of government” hymnal of former President Joe Biden’s “Promoting Competition in the American Economy” executive order (widely rumored to have been drafted by Tim Wu).
Not incidentally, that order established the White House Competition Council “within the office of the President,” and stipulated that the chair of the FTC would be invited to participate, which she did.
Kovacic and Winerman consider the question of oversight to be partly a matter of policy and politics, and not just constitutional construction—a matter involving “tradeoffs between independence and accountability.” At the policy level, at least, we would do well to consider those tradeoffs, whatever we expect of the courts.
And wherever we think that countervailing policy considerations do—or should—fall on net, it seems to me that we’d do well to consider what’s lost when we lose the degree of independence seemingly enjoyed by the FTC until, say, 2021. For the 30 to 40 years preceding, the agency had been significantly—by no means wholly—independent from both Congress and the White House.
For Kovacic and Winerman, it is most important to shield “the exercise of law enforcement authority” from the political branches of government—which means both Congress and the White House. And there they combine both determinations to pursue defendants (or not) and the conduct of enforcement investigations—paradigmatically executive functions—as well as the resolution of cases (or analogous proceedings), which call to mind judicial functions.
There’s no doubt that removal power could impede the established degree of independence—and greatly—but that depends partly on norms, the agencies, and the president. Longstanding norms at the DOJ substantially cabined the influence of the White House with both civil and criminal matters, removal powers notwithstanding. And, of course, we can observe obeisance to the White House absent removal power.
Other things may be lost. As many have observed, dissents can inform future commissions, as well as the courts. More than that, the possibility of dissents—including vigorous dissents—can lend credence to unanimous decisions of a bipartisan commission, much as joint FTC/DOJ advocacies and guidance can lend credence to the content of those advocacies and guidance (commonly to the good, if not always, as in the case of the 2023 merger guidelines).
Desiring such credence can, in turn, condition top-down input from the commission at various stages in the enforcement mission and the investigation and reporting missions of the agencies—the recently-diminished “Part 3 wall” notwithstanding. Of course, accommodating various commissioner perspectives can politicize agency decisions just as easily as it can strengthen them, but my own sense is that this has tended to enhance, rather than diminish, the quality of the agency’s output.
Perhaps the strongest argument for a strong version of independence might be attached to the original—pre-FTC Act—conception of the agency as an expert source for legislators, the courts, and others, rather than an enforcement body. One might imagine a sort of hybrid of the Bureau of Economics and the Office of Policy Planning. But there, too, one sees effective research expertise carried out by executive agencies, and not just “independent” ones. Moreover, the particular and longstanding excellence of the Bureau of Economics may be orthogonal to the constitutional debate.
As for expertise, there is no doubt that we’ve seen first-rate practitioners and scholars appointed to the FTC. I served under a good number of them. At the same time, it’s easy enough to observe the large number of appointees coming from Hill staff positions. These, too, may be highly intelligent lawyers and economists (overwhelmingly, they are lawyers), but that is not to say that these political appointees offer a rare level of expertise in general. The expertise and experience lie chiefly with the commission’s staff, not the commission itself.
Personally, I think that Termination Tuesday was, on balance, a shame; that is, it seems to me unfortunate as a matter of practice, if not as a matter of political or constitutional principle. And for the most part (at least, for a long time), the odd statutory structure of the FTC seemed to work in practice. Indeed, it seemed to work pretty well.
And if we’re concerned about changes in the structure and function of the FTC, we might be equally—or even more—concerned about changes to the structure and function (and power) of the executive, which seems to have enjoyed not just a spate but centuries of congressional acquiescence, as the executive steadily arrogated more power to itself.
Still, accountability without removal powers seems a nagging problem, at least while an agency wields real enforcement power. The FTC is not simply (merely or not) a judicial body, and it’s difficult to square real and substantial political and law-enforcement power with an agency whose leadership cannot be removed by either the president or the Congress (not aside from the power of Congress to eliminate the commission by repeal or radical recission of the FTC Act).
And for all of the many statutory functions of the FTC, it is mainly an enforcement agency. Even now, the courts have no ability to review settlements—agreements between the agency and defendants—in administrative litigation. And neither does the Congress or the president. And such settlements are many. Indeed, they constitute nearly the whole of the FTC’s oft-lauded privacy “jurisprudence.”
We can reasonably predict that accountability is likely to be a sticking point for the Court, which quoted Free Enterprise Fund in Seila Law:
“One can have a government that functions without being ruled by functionaries, and a government that benefits from expertise without being ruled by experts.” … While “[n]o one doubts Congress’s power to create a vast and varied federal bureaucracy,” the expansion of that bureaucracy into new territories the Framers could scarcely have imagined only sharpens our duty to ensure that the Executive Branch is overseen by a President accountable to the people. (internal citations omitted)
