Bloomberg News President Trump's efforts to unilaterally and radically reduce the workforce at the Consumer Financial Protection Bureau is teeing up a rarely-considered constitutional question: if Congress makes the laws and the president enforces them, can the courts intervene if they think those laws are not being enforced "faithfully?"Appellate judges overseeing the ongoing legal battle between the Trump administration's CFPB and the National Treasury Employees Union raised questions at a hearing this month about whether the president is upholding the laws passed by Congress. Specifically, Article II, Section 3 of the Constitution requires the president to "take care that the Laws be faithfully executed." Some legal scholars say the so-called "take care" clause places a fiduciary responsibility on the president to carry out the laws as Congress intended. But the Trump administration claims the president has wide discretion to implement the law — or not, if he chooses — and there can be no judicial oversight of the executive branch's discrete actions. "What the Trump administration is doing is posing a difficulty to the courts that is breaking some new ground," said Peter M. Shane, distinguished scholar in residence and adjunct professor of law at New York University. "The separation of powers idea, in a general sense, is that Congress makes the law and presidents are supposed to take care that the laws be faithfully executed," Shane said. "That's what [President Trump] is arguably not doing."The appellate panel will rule on whether District Court Judge Amy Berman Jackson erred in issuing an injunction that stopped Russell Vought, the CFPB's acting director, and Mark Paoletta, the bureau's chief legal officer, from firing most of the bureau's employees through a government reduction in force, or RIF. Both hold other jobs in the Trump administration besides their CFPB posts; Vought is the director of the Office of Management and Budget, while Paoletta is OMB's general counsel.The NTEU sued Vought in February, challenging the RIFs under the Administrative Procedure Act, a 1946 law that provides a framework for how agencies create and enforce rules, and what actions can be reviewable by courts. The APA provides judicial review of agency actions with courts able to set aside actions found to be "arbitrary and capricious." Andrew Kent, the Joseph M. McLaughlin chair and professor of law at Fordham School, said there is little case law or litigation around the Take Care Clause. "Courts say that the president has to faithfully execute the law, and if the president thinks the law is unconstitutional or the president doesn't like the policy, he still has to faithfully carry out the law," Kent said. In a recent law article, Kent and his co-authors explored the textual roots of the Take Care Clause, which date to medieval England and the colonial era. He argues that the president has a "fiduciary duty" to enforce the law in good faith and for the public interest.Garrett Epps, a law professor at the University of Oregon, agreed that the Trump administration's actions present a conundrum for the courts. The vast majority of scholars see the Take Care Clause "as a duty," Epps said. "One side claims that he has the power to do whatever he judges the law to be," Epps said. "The other side says, 'No, it's a duty or a limit on what the president does.'" Kent agreed that a president "simply saying I don't like this law, or undermining the law or destroying the law's effectiveness — that's not in the realm of what the president can do." "The executive branch is just straight up saying, 'We don't like this agency, we don't like this law, we don't like the policy," Kent said. "And that's not within the constitutional power of the president." On May 16, the Trump administration defended its decision to fire up to 1,500 CFPB employees in oral arguments before a three-judge panel of the U.S. Court of Appeals for the District of Columbia. Eric McArthur, a Justice Department lawyer, said the president wanted to take the CFPB down to its "statutory studs," and that it requires just 200 employees to run the agency. In defending Trump's actions to gut the CFPB, McArthur claimed there can be no judicial oversight of the president's actions or inactions, which is he said would be akin to launching "a preemptive strike against the possibility that the bureau will fail to perform its statutory duties." "Under Article II, it is the president who is charged with taking care to ensure that the laws are faithfully executed," McArthur said. "And under the APA, courts have no license to engage in general legal oversight of the executive branch's implementation of the law." One of the arguments made by the Justice Department is that the judiciary — through the district court's injunction — is inappropriately intruding on the executive branch's control of the CFPB. "The preliminary injunction directly and substantially harms both defendants and the public interest by thwarting the Executive Branch from carrying out the President's directions at CFPB," wrote Yaakov M. Roth, an acting assistant attorney general, in a brief. "Plaintiffs may disagree with the President's and defendants' assessment about the appropriate size and priorities of CFPB, but such determinations are committed to Article II officials, not Article III judges acting on plaintiffs' policy preferences."Scott Pearson, a partner who leads the consumer financial services practice at Manatt, Phelps & Phillips, said the Trump administration is taking the view that the courts have no role in supervising the executive branch or the day-to-day operations of an agency. "How much do you have to do in order to take care that the laws are faithfully executed?" Pearson said. "Does that mean that you have to have enough staff to make sure that complaints are read the day that they're submitted? Or send the company the complaint 24 hours later? Where do you draw the line?"Moreover, the Dodd Frank Act of 2010 that created the CFPB gives the agency's director "quite a lot of authority over the hiring and firing of employees" and how work at the agency is divided up, Pearson noted. "There is one school of thought that says judges should be very limited in what they do, that it is their job to decide cases and to focus on resolving controversies, as opposed to looking over the shoulder of the administration and telling them how to run the agency," he said. "That's not their job." The CFPB is the primary federal regulator of financial products and services. It has supervisory authority over the largest banks and vast powers to regulate 18 consumer protection laws including the federal prohibition against "unfair, deceptive and abusive acts and practices." District court allegations Kate Judge, the Harvey J. Goldschmid professor of law at Columbia Law School, said that District Court Judge Amy Berman Jackson ran into problems getting truthful answers from the Justice Department about whether legally-required work is being done at the CFPB. But the Trump administration appeared to present conflicting facts, which the union claimed was an effort to mislead the courts. "The judiciary tends to defer to the DOJ's characterization of the underlying facts, and they trust the attorneys to be forthcoming," Judge said. "One of the challenges is either the Justice Department doesn't have a clear account of the underlying facts or their account of the facts is inconsistent. And this is putting the judiciary in an incredibly difficult position in a host of cases."The NTEU argued that the Trump administration has been illegally stripping the CFPB of its functions, piece by piece, while falsely telling the court that legally-mandated duties are being performed. The union alleges that Vought hatched a plan in February to fire 90% of the agency's employees — and then created a record after-the-fact, specifically for the district court, claiming there was no formal policy to conduct a RIF. "What's striking in this case is that the [Justice Department] is not even arguing anything special about executive power," said Epps. "And it's becoming clear to the judges that this administration does not regard itself as obligated to tell the truth to the courts."The union maintains that Vought's actions, taken together, amount to an effort to eliminate the agency, which can only be done by an act of Congress. The NTEU detailed in court documents how Vought hatched a plan to eliminate whole offices, divisions and units, and fire all employees, which was only stopped by the union's lawsuit. In February, Vought closed the bureau's Washington, D.C., headquarters, cancelled more than 100 contracts, fired 200 temporary employees and halted all enforcement and supervisory functions. Those actions, which the CFPB later claimed in court documents was part of the normal presidential transition process, were the first of a two-part plan to fire all the bureau's employees and shut down the agency completely."If DOJ attorneys can come into court and mischaracterize events, it could make a mockery of the judicial process and foreclose the opportunity for judicial review precisely in the circumstances when it is warranted and otherwise justified," Judge said.The Trump administration has been sued 269 times in just five months, with many of the lawsuits involving the president's power to hire and fire civil servants — including members of independent agencies. Last month, in a separate case, a district court judge blocked the Trump administration from dismantling the Education Department and ordered 2,000 employees of that agency be rehired. In May, the Supreme Court ordered two fired members of the National Labor Relations Board and Merit Systems Protection Board to remain off the job pending resolution of their suit against the administration. Nixon and "non-reviewability"The Justice Department is claiming that courts have limited power to review actions taken at the discretion of the executive branch. Yet the Take Care Clause was cited by District Court Judges Gregory Katsas and Naomi Rao — both Trump appointees — during the May 16 hearing in the NTEU case, suggesting that the CFPB's union had an Article II claim.Judge Katsas mentioned the Take Care Clause in oral arguments, telling the union's lawyer, Jennifer Bennett: "Your claim is they are not going to do a bunch of things that the statute requires them to do [like] just run the agency. And therefore, they're violating the Take Care Clause."Meanwhile, Judge Rao questioned whether the CFPB had passed a law or policy to eliminate the agency. Without a formal policy, she stated: "Maybe it's a violation of the Take Care Clause."Rao asked whether the NTEU's case was akin to a 1971 landmark Supreme Court decision in Swann v. Charlotte-Mecklenburg Board of Education, in which the Nixon administration refused to enforce mandatory busing laws. Kent cited a separate case, Adams v. Richardson from 1973, in which the DC Circuit ruled that an agency had not adequately enforced Title VI of the Civil Rights Act of 1964."You cannot categorically decline to enforce a statute," said Kent. "That's why they raised the busing issue in the CFPB case."Another case that provides a framework for understanding the limits of presidential power is a 1952 Supreme Court decision in Youngstown Sheet & Tube Co. v. Sawyer that found President Truman lacked the authority to seize steel mills during the Korean War to prevent a labor strike because the action was not authorized by Congress or the Constitution. McArthur told the three-judge panel that CFPB employees must bring their claims to the Merit Systems Protection Board, which adjudicates removals and suspensions of civil service employees. But in February, Trump fired two Democratic members of the MSPB. A majority of Supreme Court justices ruled in an unsigned order in May that the president could remove the officials "because the Constitution vests the executive power in the president."Since the hearing, CFPB employees are expecting RIF notices will be sent again when the DC Circuit panel releases its opinion. Currently, CFPB employees are being paid not to work but have been told to be in "work-ready" mode. In May, the CFPB published "FAQs about separating from the CFPB," on Beam, the bureau's internal message system, according to a CFPB employee who asked to remain anonymous for fear of retribution. The panel has been put in a difficult position because the Take Care Clause has historically not been viewed as a "justicially enforceable obligation," Shane said. "Constitutionally, what the president is supposed to be doing is make sure that agencies enforce the law faithful to the statues that have assigned them, and the duties these agencies have are duties assigned by Congress," Shane said. "A decision to simply not enforce the statute at all is a violation of the APA."If your view of the world is that the president can take everything over himself, the implication is that when an agency does something, it is dependent on the president not taking it over and letting him do something, and that's what Trump thinks he's allowed to do," Shane continued. "And that's turning the Constitution upside down."
