Independent regulatory commissions
What are Independent Regulatory Commissions?
Independent Regulatory Commissions are federal agencies created by Congress to regulate specific areas of the economy or government activity. Unlike executive departments, they are designed to be insulated from direct political control by the President. This insulation is often achieved by:
Fixed terms for commissioners (usually staggered),
Protection from removal except “for cause,”
Bipartisan membership,
Limited executive control over their decisions.
Purpose: IRCs aim to provide expertise and stability in complex regulatory fields where consistent, non-partisan decision-making is necessary—examples include the Federal Communications Commission (FCC), Securities and Exchange Commission (SEC), and Federal Trade Commission (FTC).
Key Characteristics
Quasi-legislative: They make rules and regulations.
Quasi-judicial: They adjudicate disputes.
Independent: Designed to be free from political interference.
Accountability: Subject to judicial review but often shielded from presidential removal power.
Important Cases About Independent Regulatory Commissions
1. Humphrey’s Executor v. United States (1935)
Citation: 295 U.S. 602
Facts: President Roosevelt tried to remove a Federal Trade Commission commissioner (Humphrey) for political reasons. The FTC Act limited removal to reasons of inefficiency, neglect, or malfeasance.
Issue: Could the President remove an FTC commissioner at will?
Holding: No. The Court held the President cannot remove a commissioner except for cause as defined by statute.
Significance: This case firmly established the doctrine of “for cause” protection for independent commission members, reinforcing their independence from the executive branch.
2. Whitman v. American Trucking Associations, Inc. (2001)
Citation: 531 U.S. 457
Context: Although mainly about delegation (explained earlier), this case involved the EPA, an independent agency.
Issue: Whether EPA's standard-setting under the Clean Air Act violated the nondelegation doctrine.
Holding: Upheld EPA’s authority.
Significance: Confirmed that independent agencies could exercise broad rulemaking authority so long as Congress provides an intelligible principle.
3. Free Enterprise Fund v. Public Company Accounting Oversight Board (2010)
Citation: 561 U.S. 477
Facts: The PCAOB was created as an independent agency with members removable only for cause, but those members were overseen by the SEC, whose commissioners themselves had removal protections.
Issue: Did the double-layered “for cause” removal protections violate separation of powers?
Holding: Yes. The Court held the double layer of removal protection infringed the President’s authority.
Significance: While affirming some independence, the Court limited the extent to which removal protections could insulate agencies from presidential control.
4. Securities and Exchange Commission v. Chenery Corp. (1947) (Chenery I)
Citation: 332 U.S. 194
Facts: The SEC made a decision on a corporate reorganization that was challenged.
Issue: Could the SEC use a rationale in court different from what it used in its decision?
Holding: No. The Court held that the agency’s action must be judged on the grounds it actually relied on.
Significance: Established the principle of “administrative law fairness” and set the framework for judicial review of agency decisions.
5. Securities and Exchange Commission v. Chenery Corp. (1949) (Chenery II)
Citation: 332 U.S. 194 (continued)
Facts: The SEC applied a new rule retroactively.
Issue: Whether the SEC could make decisions based on new grounds if Congress delegated that authority.
Holding: Yes, as long as the agency’s action is supported by the statute and a reasoned explanation.
Significance: Affirmed agency discretion in policymaking within statutory bounds.
6. Morrison v. Olson (1988)
Citation: 487 U.S. 654
Facts: The Ethics in Government Act created an independent counsel removable only for cause by the Attorney General.
Issue: Did this removal protection violate the separation of powers?
Holding: No. The Court upheld the independent counsel’s removal protections as constitutional.
Significance: This case supported the constitutionality of independent counsel and reinforced the idea that some insulation from removal is consistent with separation of powers.
7. Free Enterprise Fund v. PCAOB (2010) (expanded)
Additional points: The Court emphasized that the President must have sufficient control over officers exercising executive power, and layering multiple levels of removal protection risks unaccountable agencies.
Summary of Legal Principles for IRCs:
Independence: Protected via removal only for cause (Humphrey’s Executor).
Limits to Independence: The President must retain some control (Free Enterprise Fund).
Authority: IRCs can engage in rulemaking and adjudication but must provide reasoned decisions (Chenery cases).
Separation of Powers: Some insulation from removal is allowed but cannot entirely block executive control (Morrison, Free Enterprise Fund).
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