A Federal Judge has ruled that two NCUA board members were illegally fired by President Trump and has restored their positions on the board.
Judge Amir H. Ali, of the U.S. District Court for the District of Columbia said that Democrats Todd Harper and Tanya Otsuka could only be removed for cause. Trump had fired them without cause.
"The Court declares the terminations of Plaintiffs Todd M. Harper and Tanya F. Otsuka unlawful," the judge ruled. "Harper and Otsuka remain members of the NCUA Board and may be removed by the President prior to the expiration of their terms only for cause."
The judge continued, "In sum, the text and history of the NCUA statute, along with the structure and function of the NCUA Board, confirm Congress restricted the President's power to remove Board members."
Interestingly, the NCUA board is scheduled to meet on July 24. It remains to be seen if additional court action will occur that stays the reinstatement pending a decision on the merits. After they were fire,
After they were fired, Harper and Otsuka immediately filed suit, naming President Donald Trump, Treasury Secretary Scott Bessent, NCUA Chairman Kyle Hauptman and others as defendants. They argued that they could only be fired for cause. "The identical, one-sentence emails sent to both Mr. Harper and Ms. Otsuka at the same time on the same day say nothing about the reasons for the termination, and do not attempt to assert a basis for cause," the two stated.
The two went on to assert that their terminations disregarded the protections that Congress established to preserve the board's independence, and they asked to be reinstated as members of the board.
Judge Ali agreed. He said that when Congress rewrote the law governing the NCUA, it removed language stating that agency leadership served at the pleasure of the president.
"In arguing that Board members nonetheless serve at the pleasure of the President, the government asks this Court to read that language back into the statute even though Congress took it out," the judge wrote.
The Federal Credit Union Act, unlike the Federal Trade Commission Act and the other statutes that govern removal of members or commissioners of other agencies where Trump has fired such members or commissioners without cause, does not contain express language allowing the President to remove such members or commissioners only for good cause.
The judge wrote, "The Court accordingly holds that Congress's for-cause removal restrictions for NCUA Board members do not pose any constitutional problem. And because the government does not dispute that the plaintiffs were terminated without cause, those removals were unlawful."
In contrast, in a case addressing the termination by President Trump of Democrat Rebecca Slaughter as an FTC Commissioner, a three-judge panel of the Circuit Court of Appeals for the District of Columbia put on hold a District Court ruling that restored Slaughter's position on the FTC.
Judge Loren AliKhan, of the U.S. District Court for the District of Columbia had ruled that Slaughter could only be removed for "inefficiency, neglect of duty, or malfeasance in office." The judge used the same reasoning as Judge Ali did in the NCUA case.
The appeals court granted the government's emergency motion to give the court enough time to consider the motion for a stay pending appeal. The panel said that the ruling should not be considered a decision on the merits of the case.
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