It was the spring of 1935. U.S. President Franklin D. Roosevelt had been in office for just over two years.
In that time, working in lockstep with Congress, Roosevelt rapidly reshaped the structure of the federal government to implement his "New Deal" ideology, with the primary goal of saving the country from the grips of the Great Depression.
On a day that became known as "Black Monday," the Supreme Court issued three major rulings against the president's administration. Roosevelt's unbridled anger at the court's perceived intransigence later escalated into his attempt to pack the court with additional justices.
But before we get there, the cases themselves are worthy of attention. In various ways they each were intended to "restore some balance in government procedures and set it along more orderly and constructive lines," as Marian Cecilina McKenna writes in "Franklin Roosevelt and the Great Constitutional War."
Some of Roosevelt's progressive reforms challenged or limited the role of the U.S. Federal Trade Commission, even as he supported a more aggressive approach to enforcement. The FTC of the time had broad statutory authority but was still a young agency working to find its footing in the rapidly expanding administrative state.
Two new agencies created in the burst of activity at the beginning of Roosevelt's administration, the National Recovery Administration and the Securities and Exchange Commission, absorbed some of the powers that had been left to the FTC.
As the FTC's historical bibliography notes, the commission "often had an antagonistic relation with the NRA," an agency created based on a totally different approach to competition than what was reflected in the FTC's antitrust tradition. For its part, the SEC took over regulatory authority for securities, which at first had fallen with the FTC.
One of the cases decided on Black Monday, Schechter Poultry v. United States, determined the NRA experiment with centrally managed competition policy was unconstitutional.
Meanwhile, consistent with his New Deal goals, the president had big plans for the FTC. He hoped for more aggressive enforcement and took an expansive view of the agency's mission to ensure robust competition and protect consumers.
But the unstoppable force of the Roosevelt administration quickly encountered an immovable object: FTC Commissioner William Humphrey.
Originally appointed by Republican President Calvin Coolidge, Humphrey was an outspoken commissioner who rejected many of the FTC's prior initiatives and sought to reshape its enforcement activities. Though he came in with an aggressive antifraud agenda, his defense of "big business" and hostility to the agency's former policies are what generated headlines at the time.
President Roosevelt repeatedly asked Humphrey to resign. In his most quoted letter to the commissioner, Roosevelt wrote, "I do not feel that your mind and my mind go along together on either the policies or the administering of the Federal Trade Commission."
When Humphrey refused to resign, Roosevelt fired him. But Humphrey continued showing up for work.
The problem for Roosevelt was that Congress had purported to limit the president's authority to fire FTC commissioners when it established the agency via the Federal Trade Commission Act. Statutorily, the president may only remove commissioners for "inefficiency, neglect of duty or malfeasance in office." In dismissing Humphrey, Roosevelt had removed the commissioner for cause but explicitly based on policy disagreements.
This dispute evolved into another Black Monday case, Humphrey's Executor v. United States. Though Humphrey passed away before his position was vindicated, the executor of his estate sued the U.S. government for backpay.
President Roosevelt argued he had broad powers of removal, relying significantly on the favorable earlier decision in Myers v. United States. But unlike the postmaster general's removal in that case, the Supreme Court approached the questions of removal power for an independent agency like the FTC significantly differently.
Perhaps the holding should not have been a total surprise to Roosevelt. Most of the Justices' opinions on the authority of independent agencies had remained static since the Myers decision. Most notably, Justice Brandeis — who was generally considered the biggest fan of the New Deal on the Court — had written a lengthy dissent in the Myers case. In it, Brandeis used a textualist argument to emphasize the interconnectedness of the branches of government and the limits on the president that Congress can create:
"The separation of the powers of government did not make each branch completely autonomous. It left each in some measure dependent upon the others, as it left to each power to exercise, in some respects, functions in their nature executive, legislative and judicial. … The President performs his full constitutional duty if, with the means and instruments provided by Congress and within the limitations prescribed by it, he uses his best endeavors to secure the faithful execution of the laws enacted."
In reality, Roosevelt was outraged by the decision. Though it was largely an academic holding — after all, Humphreys was dead — and overshadowed by the significance of the other Black Monday decisions, Roosevelt was particularly insulted by the conclusion that he had violated constitutional guardrails. As McKenna writes, "This decision, probably more than any other, increased Roosevelt’s animosity toward the Supreme Court."
Fast forward to today.
The Trump administration has begun defending its belief in the strong inherent authority of the executive branch. As part of this, acting Solicitor General Sarah Harris wrote a letter to Senate Democrats explaining that the DOJ "intends to urge the Supreme Court to overrule Humphrey's Executor." As such, the DOJ has decided not to defend government officials who assert they have been improperly dismissed.
So far, the minority commissioners on the FTC have not found themselves directly affected by dismissals, as have other independent agency heads, such as Gwynne Wilcox, the former chair of the National Labor Relations Board.
Nevertheless, FTC Chair Andrew Ferguson told Axios he supports the administration's position: "I agree with every word of the Acting Solicitor General’s letter. Humphrey's Executor was wrongly decided, is deeply anti-democratic, and ought to be overruled."
Axios reports this makes Ferguson "the first head of an independent agency to embrace a controversial legal theory that could dramatically reshape the federal bureaucracy."
In the end, it will no doubt again be up to the Supreme Court to determine the current boundaries between the branches of government and the evolving role of the administrative state.
Please send feedback, updates and history books to cobun@iapp.org.
Cobun Zweifel-Keegan, CIPP/US, CIPM, is the managing director, Washington, D.C., for the IAPP.
