The Trump administration on Wednesday appealed a federal judge’s ruling that Federal Reserve Board member Lisa Cook can remain in her position during the legal fight over President Trump’s attempt to fire her.
U.S. District Judge Jia Cobb issued a temporary restraining order late Tuesday that bars Ms. Cook’s removal and enjoins the Fed or its chairman, Jerome H. Powell, from carrying out any attempt by Mr. Trump to oust her.
Judge Cobb, a Biden appointee, said the case covers new legal ground and she wants more time to figure out all the intricacies of firing a member of the independent agency.
But she said at first blush, Mr. Trump’s reasons for removing her — questions about past homeownership practices — doesn’t meet the “for cause” standard set in the law.
“The best reading of the ‘for cause’ provision is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a governor’s behavior in office and whether they have been faithfully and effectively executing their statutory duties,” she said.
That would preclude “conduct that occurred before they began in office,” she said. Judge Cobb also said Mr. Trump likely violated her due process rights in his quick dismissal of Ms. Cook.
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“This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” said Abbe Lowell, Ms. Cook’s lawyer. “Allowing the president to unlawfully remove Gov. Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law.”
Mr. Trump could appeal the ruling as he attempts to shape the Fed to his liking.
Ms. Cook is the latest in a string of Trump firings at so-called independent agencies, which were set up by Congress to be somewhat insulated from presidential politics.
A federal appeals court on Wednesday blocked another of those firings, Mr. Trump’s attempt to oust Shira Perlmutter as head of the U.S. Copyright Office, which is part of the Library of Congress.
In a 2-1 decision, the Circuit Court of Appeals for the District of Columbia said the Copyright Office is outside of the president’s usual firing powers because it is a part of the Legislative Branch. And besides, wrote Judge Florence Pan, Mr. Trump seems to have fired Ms. Perlmutter because he disagreed with her conclusions in a report on artificial intelligence.
“If those facts are proven true, that would be a grave intrusion by the president into the constitutional powers of a coordinate branch of government,” Judge Pan, a Biden appointee, wrote in a decision joined by another Biden appointee.
Judge Justin Walker, a Trump appointee, dissented. He said the Copyright Office exercises executive powers, so it seems that the president should retain firing authority.
He said the Supreme Court has signaled an openness to that argument.
Ms. Cook’s case also will go to the appeals court in Washington.
Her case is also different from the other Trump firings in that the president said he was booting her for cause, based on allegations of past mortgage fraud.
A federal housing finance regulator, Bill Pulte, pointed to documents showing Ms. Cook in 2021 listed properties in Michigan and Georgia as her primary residences.
Ms. Cook hasn’t fully explained why she listed both as primary residences, but in a lawsuit, she argued she never intended to commit fraud and the allegations are a pretext for Mr. Trump to stock the Fed with allies.
Ms. Cook’s removal and replacement, alongside confirmation of a pending governor nominee, would give the White House a Trump-appointed majority on the Fed board as he seeks lower interest rates from central bankers.
Mr. Trump says lower rates are warranted and would give borrowers better terms and juice the economy.
He’s railed against Mr. Powell as “too late” in making critical decisions.
The Fed is expected to cut rates by at least 25 basis points, or 0.25%, at its meeting this month due to a slowdown in hiring.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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