Supreme Court: Lisa Cook Ruling Explained

The Supreme Court on Wednesday made the right move in denying President Trump the immediate power to fire Lisa Cook from the Federal Reserve Board of Governors. Trump v. Cook presents novel legal questions that deserve a full briefing and not a rushed decision on the emergency docket.

Mr. Trump sacked Ms. Cook based on unproven allegations by Federal Housing Finance Agency Director Bill Pulte that she committed mortgage fraud. She denies it and says her removal is unlawful. The Justices will consider the case in January.

The Federal Reserve Act lets a President remove governors “for cause.” But the law doesn’t define the term, unlike other statutes with removal restrictions. The Federal Trade Commission Act mentions “inefficiency, neglect of duty, or malfeasance in office,” for example.

Federal Judge Jia cobb held that the President can’t remove a Fed governor for conduct that preceded her time in office. The judge also ruled that Mr. Trump violated Ms. Cook’s constitutional right to due process. A split D.C. Circuit Court of Appeals panel upheld the injunction based on the second argument without deciding the first.