In a closely watched legal battle, the U.S. Court of Appeals for the District of Columbia Circuit recently upheld a preliminary injunction preventing former President Donald Trump from dismissing Federal Reserve Governor Lisa Cook. The ruling, delivered in a 2-1 decision, emphasized the necessity of adherence to procedural due process under the Constitution. Two judges appointed by President Biden found that Cook was likely to succeed in her challenge, highlighting that the Federal Reserve Act stipulates governors can only be removed “for cause” (JURIST).
The court’s majority opinion underscored that this “for cause” requirement granted Cook a property interest in her position. Such an interest ensures that before removal, the government must provide notice and an opportunity to be heard, rights that were not afforded to Cook according to the court. This requirement aligns with the Due Process Clause of the Constitution, which protects individuals from being deprived of property without due process (Reuters).
Trump removed Cook, accusing her of making false statements on mortgage applications prior to her Federal Reserve tenure. His legal team argued there was no property right requiring a due process hearing, particularly as Cook hadn’t disputed the factual allegations. However, Judge George Katsas, a Trump appointee, dissented, supporting the administration’s stance that public officials do not possess a property interest in their roles.
The decision is particularly significant as it allows Cook to continue participating in Board of Governors meetings, including one scheduled for Tuesday, unless an emergency appeal to the Supreme Court is pursued. This case forms part of a larger context of challenges to Trump’s attempts to remove administrative agency heads during his presidency, reflecting ongoing debates over executive authority and procedural protections (Bloomberg).