Are (Most) Independent Agencies Unconstitutional after Seila Law v. CFPB?

I think maybe they are.

On its face, the Supreme Court’s ruling in Seila Law LLC v. Consumer Financial Protection Bureau looks modest.  The Court (per Chief Justice Roberts, joined by Justices Thomas, Alito, Gorsuch and Kavanaugh) declined to extend the rule of Humphrey’s Executor (approving multimember independent agencies) to agencies such as the CFPB that are headed by a single director.  That sounds a lot like the Chief Justice’s opinion ten years ago in Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U. S. 477 (2010) (declining to extend the rule of Humphrey’s Executor to second-tier independent agencies).  So the longstanding independent agency structure (single tier, mulitmember) isn’t threatened, but new structures giving more power and protection to agencies won’t stand.

But a closer look suggests that Seila lays the groundwork for a larger attack on the agencies.  First, the opinion gives a strong endorsement to the unitary executive.  From the introduction:

Under our Constitution, the “executive Power”—all of it—is “vested in a President,” who must “take Care that the Laws be faithfully executed.” Art. II, §1, cl. 1; id., §3. Because no single person could fulfill that responsibility alone, the Framers expected that the President would rely on subordinate officers for assistance. Ten years ago, in Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U. S. 477 (2010), we reiterated that, “as a general matter,” the Constitution gives the President “the authority to remove those who assist him in carrying out his duties,” id., at 513–514. “Without such power, the President could not be held fully accountable for discharging his own responsibilities; the buck would stop somewhere else.” Id., at 514.

The President’s power to remove—and thus supervise—those who wield executive power on his behalf follows from the text of Article II, was settled by the First Congress, and was confirmed in the landmark decision Myers v. United States, 272 U. S. 52 (1926).

And repeating this point later:

Article II provides that “[t]he executive Power shall be vested in a President,” who must “take Care that the Laws be faithfully executed.” Art. II, §1, cl. 1; id., §3. The entire “executive Power” belongs to the President alone. But because it would be “impossib[le]” for “one man” to perform all the great business of the State,” the Constitution assumes that lesser executive officers will “assist the supreme Magistrate in discharging the duties of his trust.” 30 Writings of George Washington 334 (J. Fitzpatrick ed. 1939).

These lesser officers must remain accountable to the President, whose authority they wield. As Madison explained, “[I]f any power whatsoever is in its nature Executive, it is the power of appointing, overseeing, and controlling those who execute the laws.” 1 Annals of Cong. 463 (1789). That power, in turn, generally includes the ability to remove executive officials, for it is “only the authority that can remove” such officials that they “must fear and, in the performance of [their] functions, obey.” Bowsher, 478 U. S., at 726 (internal quotation marks omitted).

And expanding on the political philosophy behind this structure:

The Executive Branch is a stark departure from [the Constitution’s division of power]. The Framers viewed the legislative power as a special threat to individual liberty, so they divided that power to ensure that “differences of opinion” and the “jarrings of parties” would “promote deliberation and circumspection” and “check excesses in the majority.” See The Federalist No. 70, at 475 (A. Hamilton); see also id., No. 51, at 350. By contrast, the Framers thought it necessary to secure the authority of the Executive so that he could carry out his unique responsibilities. See id., No. 70, at 475–478. As Madison put it, while “the weight of the legislative authority requires that it should be . . . divided, the weakness of the executive may require, on the other hand, that it should be fortified.” Id., No. 51, at 350.

The Framers deemed an energetic executive essential to “the protection of the community against foreign attacks,” “the steady administration of the laws,” “the protection of property,” and “the security of liberty.” Id., No. 70, at 471. Accordingly, they chose not to bog the Executive down with the “habitual feebleness and dilatoriness” that comes with a “diversity of views and opinions.” Id., at 476. Instead, they gave the Executive the “[d]ecision, activity, secrecy, and dispatch” that “characterise the proceedings of one man.” Id., at 472.

To justify and check that authority—unique in our constitutional structure—the Framers made the President the most democratic and politically accountable official in Government. Only the President (along with the Vice President) is elected by the entire Nation. And the President’s
political accountability is enhanced by the solitary nature of the Executive Branch, which provides “a single object for the jealousy and watchfulness of the people.” Id., at 479. The President “cannot delegate ultimate responsibility or the active obligation to supervise that goes with it,” because Article II “makes a single President responsible for the actions of the Executive Branch.” [Free Enterprise Fund, at 496–497]…

The resulting constitutional strategy is straightforward: divide power everywhere except for the Presidency, and render the President directly accountable to the people through regular elections. In that scheme, individual executive officials will still wield significant authority, but that authority remains subject to the ongoing supervision and control of the elected President. Through the President’s oversight, “the chain of dependence [is] preserved,” so that “the lowest officers, the middle grade, and the highest” all “depend, as they ought, on the President, and the President on the community.” 1 Annals of Cong. 499 (J. Madison).

Second, the opinion reads the exceptions to the unitary structure — Humphrey’s Executor and Morrison v. Olson — very narrowly.  As to Humphrey’s Executor:

[T]he contours of the Humphrey’s Executor exception depend upon the characteristics of the agency before the Court. Rightly or wrongly, the Court viewed the FTC (as it existed in 1935) as exercising “no part of the executive power.” [Humphrey’s], at 628. Instead, it was “an administrative body” that performed “specified duties as a legislative or as a judicial aid.” Ibid. It acted “as a legislative agency” in “making investigations and reports” to Congress and “as an agency of the judiciary” in making  recommendations to courts as a master in chancery. Ibid. “To the extent that [the FTC] exercise[d] any executive function[,] as distinguished from executive power in the constitutional sense,” it did so only in the discharge of its “quasi-legislative or quasi-judicial powers.” Ibid. (emphasis added).

This paragraph is a very big deal, because it describes Humphrey’s Executor in a way that doesn’t cover most modern independent agencies (including, as Justice Thomas points out wryly in his separate opinion, the modern FTC itself).  Thomas’ separate opinion (joined by Justice Gorsuch) calls for overruling Humphrey’s Executor, but if you describe Humphrey’s Executor as the Court does in this paragraph, you don’t need to overrule it because it largely lacks force.  I assume that’s why Justice Kavanaugh didn’t join Thomas’ opinion.

And in addition:

We have recognized a second exception for inferior officers [emphasis in the original] in two cases, United States v. Perkins and Morrison v. Olson…

Morrison describes the independent counsel’s status as a subordinate officer as one factor in concluding that the removal provision didn’t unduly limit the President’s power.  But I wouldn’t have said (until now) that subordinate status was essential to the outcome.

Thus, this key summary:

These two exceptions—one for multimember expert agencies that do not wield substantial executive power, and one for inferior officers with limited duties and no policymaking or administrative authority—“represent what up to now have been the outermost constitutional limits of permissible congressional restrictions on the President’s removal power.” PHH, 881 F. 3d, at 196 (Kavanaugh, J., dissenting).

I would think there are quite a few agencies that don’t fit either of these exceptions — that is, their members “wield substantial executive power” and are not “inferior officers with … no policymaking authority.”  True, these are typically multimember agencies.  But the quote above doesn’t say that the Humphrey’s Executor exception applies to multimember agencies.  It says the Humphrey’s Executor exception applies to multimember agencies that do not wield substantial executive power.

It’s also true that the opinion hedges — it repeats several times that the CFPB structure is a “historical anomaly,” or very nearly so.  For example:

“Perhaps the most telling indication of [a] severe constitutional problem” with an executive entity “is [a] lack of historical precedent” to support it. [Free Enterprise Fund], at 505. An agency with a structure like that of the CFPB is almost wholly unprecedented.

And later:

With the exception of the one-year blip for the Comptroller of the Currency, these isolated examples [raised by respondent and the dissent] are modern and contested. And they do not involve regulatory or enforcement authority remotely comparable to that exercised by the CFPB. The CFPB’s single-Director structure is an innovation with no foothold in history or tradition.

The opinion also emphasizes the single-director structure, which concentrates power in a way that multimember agencies do not:

The CFPB’s single-Director structure contravenes [the Framers’] carefully calibrated system by vesting significant governmental power in the hands of a single individual accountable to no one. The Director is neither elected by the people nor meaningfully controlled (through the threat of removal) by someone who is. The Director does not even depend on Congress for annual appropriations. See The Federalist No. 58, at 394 (J. Madison) (describing the “power over the purse” as the “most compleat and effectual weapon” in representing the interests of the people). Yet the Director may unilaterally, without meaningful supervision, issue final regulations, oversee adjudications, set enforcement priorities, initiate prosecutions, and determine what penalties to impose on private parties. With no colleagues to persuade, and no boss or electorate looking over her shoulder, the Director may dictate and enforce policy for a vital segment of the economy affecting millions of Americans.

So most existing mulitmember agencies can argue that unlike the CFPB (a) their structure isn’t novel (at least, since the 1930s) and (b) they don’t have the concentration of power problem.

But if the Court is serious about (a) reading Humphrey’s Executor and Morrison narrowly in the way the opinion describes them and (b) upholding the unitary executive except as compelled by Humphrey’s Executor and Morrison, independent agencies should be worried.  I think that’s the right originalist outcome.