Two Supreme Court decisions on presidential removal powers may shape the future of Puerto Rico’s Financial Oversight and Management Board.
The Supreme Court of the United States (SCOTUS) overturned a 91-year old judicial precedent and decided in opposite manners on two cases— Trump v. Cook, and Trump v. Slaughter— that both dealt with President Donald Trump’s ability to fire government officials for the law required to show cause in order to remove the person from their post.
How lower courts interpret these decisions can also affect the future of the Financial Oversight and Management Board (FOMB).
Both majority decisions were written by Chief Justice John Roberts. For the Trump v. Cook decision Roberts joined fellow conservative Justice Brett Kavanaugh and the three liberal justices, while the Trump v. Slaughter was decided along ideological lines with a 6-3 majority.
In the Trump v Cook case, which has received more media attention, a 5-4 majority decided that Trump didn’t have the power to remove summarily Lisa Cook, a governor of the Board of Governors of the Federal Reserve (Fed).
In August of 2025, members of the Trump cabinet alleged that Cook had committed mortgage fraud prior to becoming a governor. Trump used those allegations to remove Cook from the Board of Governors. Cooks sued under the argument that she had not been given the opportunity to defend herself from the allegations and the courts agreed to put a stay on her removal until the case was decided.
A central point of Roberts’ majority opinion is the independence of the Federal Reserve. The Chief Justice went on for several pages about the history of the Fed and the previous attempts to establish a central bank, dating back to the early days of the republic. Roberts argued for the Fed and even in previous attempts, the government understood the importance that monetary policy was independent from Congress or the President and even noted that this is the first time in the Fed’s 111 year history that a president has attempted to remove a governor.
“The Federal Reserve’s Governors do not serve at the President’s pleasure—they instead serve staggered 14- year terms, and may be removed only ‘for cause,’” wrote Roberts.
The Trump administration argued that the president’s firings, including those for cause, are not subject to judicial review, that the bar to show “cause” is a low one to clear and that she was not entitled to her post while litigation was pending. The Supreme Court rejected all three arguments in the majority opinion.
“To accept any one of those arguments would in effect transform the Federal Reserve’s for-cause protection into at-will employment—an interpretive leap out of step with the statute Congress enacted and our Nation’s tradition of central banking protected from political interference. We therefore deny the Government’s application,” Roberts wrote in the majority opinion.
SCOTUS didn’t completely nullify Trump’s actions. Instead the decision means that Cook can keep her post at the Fed while the case of her firing goes through the regular judicial process.
While the court argued for the independence of the Fed and curbed Trump’s power, in the case of Trump v. Slaughter, SCOTUS overturned the judicial precedent established in 1935 through the Humphrey’s Executor v. United States. At the time, through a unanimous decision, the Supreme Court decided that President Franklin D. Roosevelt could not remove a commissioner of the Federal Trade Commission (FTC) and stated that the president’s removal power is not “illimitable.”
Fast forward to 2026 and the court decided that Trump can in fact remove without cause FTC commissioner Rebeca Slaughter. Contrary to Cook’s firing, Trump did not cite any reason in his letter removing Slaughter from her post. Roberts’ majority opinion focuses on the president’s power to appoint and remove government officials.
The bifurcation of these rulings is not entirely surprising given the interactions of the justices during the oral arguments on both cases. During the oral arguments for the Trump v. Slaughter, Kavanaugh spoke about the need to allow the president to remove government officials so that an outgoing administration cannot impose their agenda on an incoming administration by appointing people that could not be removed. While during the Trump v. Cook arguments, Kavanaugh argued that not putting limits to a president’s power to remove a government official would render any “for cause” clause moot.
The decisions of Trump v. Cook and Trump v. Slaughter are also particularly relevant for the Puerto Rico political landscape. Last August, Trump fired six members of the FOMB without cause despite Promesa, the law that created the FOMB establishing that in order to remove the members before their tenure expired the president needed to present cause. This case is currently at the appellate level. Both the courts and the litigants were waiting on the SCOTUS decision about Trump’s removal abilities. While most pundits were focusing on the Trump v. Cook case to assess the FOMB’s future, because these are divergent opinions, it remains to be seen how the lower courts will interpret SCOTUS’ decision about the tenure of the FOMB members.
