Humphrey's Executor v. United States

295 U.S. 602

Case Year: 1935

Case Ruling: 9-0

Opinion Justice: Sutherland

FACTS

In 1914 Congress created the Federal Trade Commission as an independent regulatory agency to enforce antitrust laws and prevent unfair methods of commercial competition. The statute called for the FTC to be staffed by five commissioners appointed by the president and confirmed by the Senate. Not more than three members could be of the same political party, and members were to serve staggered seven-year terms. These provisions were intended to increase the independence of the board and prevent its domination by the incumbent chief executive. The president could remove commissioners, but only for inefficiency, neglect of duty, or malfeasance in office. The commission had the powers of rule making, investigation, and enforcement.

In 1931 President Herbert Hoover named FTC commissioner William E. Humphrey to a second seven-year term, which would expire in 1938. Following his election in 1932, Franklin Roosevelt made every effort to staff the executive branch with people who were committed to his New Deal programs for combating the Great Depression. The president wrote to Humphrey July 25, 1933, asking him to resign from his post on the ground that "the aims and purposes of the Administration with respect to the work of the Commission can be carried out most effectively with personnel of my own selection." When Humphrey did not reply, the president wrote to him August 31: "You will, I know, realize that 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, and, frankly, I think it best for the people of this country that I should have a full confidence." Humphrey then told the president that he would not resign. In his third letter, dated October 7, Roosevelt wrote to Humphrey: "Effective as of this date you are hereby removed from the office of Commissioner of the Federal Trade Commission." The president did not rest his action on any of the statutory grounds for removing a commissioner; rather, he fired Humphrey because he did not approve of his positions on policy matters related to the jurisdiction of the FTC. Humphrey claimed he had been illegally removed.

Humphrey died in February 1934. His executor filed suit in the court of claims on behalf of Humphrey's estate to recover the salary lost between the date of his dismissal and his death. The administration argued on the basis ofMyers v. United States (1926) that the president was free to remove executive officials at will. Humphrey's executor claimed that the law establishing the FTC placed constitutionally valid restraints on the president's discretion to remove officeholders. The court of claims asked the Supreme Court to answer two questions: Did the Federal Trade Commission Act restrict the president's removal power to those grounds cited in the statute? And, if so, is such a restriction constitutional?

 

MR. JUSTICE SUTHERLAND DELIVERED THE OPINION OF THE COURT.

 

First. The question first to be considered is whether, by the provisions of §1 of the Federal Trade Commission Act already quoted, the President's power is limited to removal for the specific causes enumerated therein. . . .

The commission is to be non-partisan; and it must, from the very nature of its duties, act with entire impartiality. It is charged with the enforcement of no policy except the policy of the law. Its duties are neither political nor executive, but predominantly quasi-judicial and quasi-legislative. Like the Interstate Commerce Commission, its members are called upon to exercise the trained judgment of a body of experts "appointed by law and informed by experience."

The legislative reports in both houses of Congress clearly reflect the view that a fixed term was necessary to the effective and fair administration of the law. In the report to the Senate the Senate Committee on Interstate Commerce, in support of the bill which afterwards became the act in question, after referring to the provision fixing the term of office at seven years, so arranged that the membership would not be subject to complete change at any one time. . . .

The debates in both houses demonstrate that the prevailing view was that the commission was not to be "subject to anybody in the government but . . . only to the people of the United States"; free from "political domination or control" or the "probability or possibility of such a thing"; to be "separate and apart from any existing department of the government--not subject to the orders of the President."

More to the same effect appears in the debates, which were long and thorough and contain nothing to the contrary. While the general rule precludes the use of these debates to explain the meaning of the words of the statute, they may be considered as reflecting light upon its general purposes and the evils which it sought to remedy.

Thus, the language of the act, the legislative reports, and the general purposes of the legislation as reflected by the debates, all combine to demonstrate the Congressional intent to create a body of experts who shall gain experience by length of service--a body which shall be independent of executive authority, except in its selection, and free to exercise its judgment without the leave or hindrance of any other official or department of the government. To the accomplishment of these purposes, it is clear that Congress was of opinion that length and certainty of tenure would vitally contribute. And to hold that, nevertheless, the members of the commission continue in office at the mere will of the President, might be to thwart, in large measure, the very ends which Congress sought to realize by definitely fixing the term of office.

We conclude that the intent of the act is to limit the executive power of removal to the causes enumerated, the existence of none of which is claimed here; and we pass to the second question.

Second. To support its contention that the removal provision of §1, as we have just construed it, is an unconstitutional interference with the executive power of the President, the government's chief reliance is Myers v. United States. That case has been so recently decided, and the prevailing and dissenting opinions so fully review the general subject of the power of executive removal, that further discussion would add little to the value of the wealth of material there collected. These opinions examine at length the historical, legislative and judicial data bearing upon the question, beginning with what is called "the decision of 1789" in the first Congress and coming down almost to the day when the opinions were delivered. . . . Nevertheless, the narrow point actually decided was only that the President had power to remove a postmaster of the first class, without the advice and consent of the Senate as required by act of Congress. In the course of the opinion of the court, expressions occur which tend to sustain the government's contention, but these are beyond the point involved and, therefore, do not come within the rule of stare decisis. In so far as they are out of harmony with the views here set forth, these expressions are disapproved. . . .

The office of a postmaster is so essentially unlike the office now involved that the decision in the Myers case cannot be accepted as controlling our decision here. A postmaster is an executive officer restricted to the performance of executive functions. He is charged with no duty at all related to either the legislative or judicial power. The actual decision in theMyers case finds support in the theory that such an officer is merely one of the units in the executive department and, hence, inherently subject to the exclusive and illimitable power of removal by the Chief Executive, whose subordinate and aid he is. Putting aside dicta, which may be followed if sufficiently persuasive but which are not controlling, the necessary reach of the decision goes far enough to include all purely executive officers. It goes no farther;--much less does it include an officer who occupies no place in the executive department and who exercises no part of the executive power vested by the Constitution in the President.

The Federal Trade Commission is an administrative body created by Congress to carry into effect legislative policies embodied in the statute in accordance with the legislative standard therein prescribed, and to perform other specified duties as a legislative or as a judicial aid. Such a body cannot in any proper sense be characterized as an arm or an eye of the executive. Its duties are performed without executive leave and, in the contemplation of the statute, must be free from executive control. In administering the provisions of the statute in respect of "unfair methods of competition"--that is to say in filling in and administering the details embodied by that general standard--the commission acts in part quasi-legislatively and in part quasi-judicially. In making investigations and reports thereon for the information of Congress under §6, in aid of the legislative power, it acts as a legislative agency. Under §7, which authorizes the commission to act as a master in chancery under rules prescribed by the court, it acts as an agency of the judiciary. To the extent that it exercises any executive function--as distinguished from executive power in the constitutional sense--it does so in the discharge and effectuation of its quasi-legislative or quasi-judicial powers, or as an agency of the legislative or judicial departments of the government. . . .

We think it plain under the Constitution that illimitable power of removal is not possessed by the President in respect of officers of the character of those just named. The authority of Congress, in creating quasi-legislative or quasi-judicial agencies, to require them to act in discharge of their duties independently of executive control cannot well be doubted; and that authority includes, as an appropriate incident, power to fix the period during which they shall continue in office, and to forbid their removal except for cause in the meantime. For it is quite evident that one who holds his office only during the pleasure of another, cannot be depended upon to maintain an attitude of independence against the latter's will.

The fundamental necessity of maintaining each of the three general departments of government entirely free from the control or coercive influence, direct or indirect, of either of the others, has often been stressed and is hardly open to serious question. So much is implied in the very fact of the separation of the powers of these departments by the Constitution; and in the rule which recognizes their essential co-equality. The sound application of a principle that makes one master in his own house precludes him from imposing his control in the house of another who is master there. . . .

The power of removal here claimed for the President falls within this principle, since its coercive influence threatens the independence of a commission, which is not only wholly disconnected from the executive department, but which, as already fully appears, was created by Congress as a means of carrying into operation legislative and judi-cial powers, and as an agency of the legislative and judicial departments. . . .

The result of what we now have said is this: Whether the power of the President to remove an officer shall prevail over the authority of Congress to condition the power by fixing a definite term and precluding a removal except for cause, will depend upon the character of the office; the Myers decision, affirming the power of the President alone to make the removal, is confined to purely executive officers; and as to officers of the kind here under consideration, we hold that no removal can be made during the prescribed term for which the officer is appointed, except for one or more of the causes named in the applicable statute.

To the extent that, between the decision in the Myers case, which sustains the unrestrictable power of the President to remove purely executive officers, and our present decision that such power does not extend to an office such as that here involved, there shall remain a field of doubt, we leave such cases as may fall within it for future consideration and determination as they may arise.