Summarily removing public officers and employees from their positions
PHH Corporation v Consumer Financial Protection Bureau, USCA, District of Columbia Circuit, Docket #15-1177
Except in instances where the appointment and removal process of a public officer or employee is set by federal or state law, it is "black letter law" that the power of appointment implies the power of removal.In such cases the individual is characterized as serving at the pleasure of the appointing authority and thus may be summarily terminated from his or her position, provided, however, such termination is not based on factors that would otherwise constitute unlawful discrimination on the part of the appointing authority or otherwise constitute a violation of the Constitution of the United States or a state's constitution or a federal or state law, rule or regulation. Indeed, some instances an officer or employee "serving at will" may be terminated because of his or her political affiliation.
In the event a public officer or employee is appointed for a fixed term of office, may such an individual be summarily removed from his or her position by the appointing authority? Typically, such an officer or employee may only be removed for cause, after notice and hearing.
In PHH Corp. v Consumer Financial Protection Bureau, the US Circuit Court, District of Columbia Circuit, concluded that a federal administrator appointed for a fixed term of office may only be removed for cause after notice and hearing. The Circuit Court ruled that the structure of the Consumer Financial Protection Bureau [CFPB] is constitutional and that its directorcan be terminated by the President only for cause.
In a split-decision, the majority of the court held, in pertinent part, that:
1. "Congress established the independent CFPB to curb fraud and promote transparency in consumer loans, home mortgages, personal credit cards, and retail banking."
2. "The Supreme Court eighty years ago sustained the constitutionality of the independent Federal Trade Commission, a consumer -protection financial regulator with powers analogous to those of the CFPB."
3. "In doing so, the Supreme Court approved the very means of independence Congress used here: protection of agency leadership from at-will removal by the President. The Court has since reaffirmed and built on that precedent, and Congress has embraced and relied on it in designing independent agencies . We follow that precedent here to hold that the parallel provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act shielding the Director of the CFPB from removal without cause is consistent with Article II."
In the words of the Circuit Court of Appeals:
"Applying binding Supreme Court precedent, we see no constitutional defect in the statute preventing the President from firing the CFPB Director without cause. We thus uphold Congress’s choice."
As NYPPL noted that with respect to summarily terminating the Director of the Federal Bureau of Investigation, federal law provides that:
"(b) Effective with respect to any individual appointment by the Effective date ... after June 1,1973, the term of service of the Director of the Federal Bureau of Investigation shall be ten years [emphasis supplied]. A Director may not serve more than one ten-year term. The provisions of subsections (a) through (c) of section 8335 of title 5, United States Code, shall apply to any individual appointed under this section.".
Removal of a public officer having a fixed term of office is not unknown in New York State. For example, §36 of the State's Public Officer Law provided for the removal of town, village, improvement district or fire district officer by court whereby:
"Any town, village, improvement district or fire district officer, except a justice of the peace, may be removed from office by the supreme court for any misconduct, maladministration, malfeasance or malversation in office. An application for such removal may be made by any citizen resident of such town, village, improvement district or fire district or by the district attorney of the county in which such town, village or district is located, and shall be made to the appellate division of the supreme court held within the judicial department embracing such town, village, improvement district or fire district. Such application shall be made upon notice to such officer of not less than eight days, and a copy of the charges upon which the application will be made must be served with such notice."
Another example: §5.2 of the New York Civil Service Law provides that the New York State Civil Service Commission consists of three Commissioners appointed by the Governor, by and with the advice and consent of the State Senate, "not more than two of whom shall be adherents of the same political party."
The Governor designates one of the members of the Commission to be President of the Commission and "such member shall serve in the capacity of President during the pleasure of the governor." Although the President of the Commission serves in that capacity at the pleasure of the Governor, in the event he or she is removed from the position of President, he or she would revert to his or her position as a member of the Commission for the remainder of his or her six-year term of office.
In all probability the US Supreme Court will be asked to consider the Circuit Court's decision in PHH Corporation v Consumer Financial Protection Bureau.
The decision is posted on the Internet at:
Bruso v County of Clinton, 139 AD3d 1166; City Council of Mount Vernon v Batra, 82 AD3d 1224.