Consum Research v. Consum Prod Sfty
U.S. Court of Appeals for the Fifth Circuit
Consum Research v. Consum Prod Sfty, 91 F.4th 342 (5th Cir. 2024)
Consum Research v. Consum Prod Sfty
Opinion
Case: 22-40328 Document: 00517035671 Page: 1 Date Filed: 01/17/2024
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
____________ FILED
January 17, 2024
No. 22-40328
____________ Lyle W. Cayce
Clerk
Consumers’ Research; By Two, L.P.,
Plaintiffs—Appellees,
versus
Consumer Product Safety Commission,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 6:21-CV-256
______________________________
Before Jones, Dennis, and Willett, Circuit Judges.
Don R. Willett, Circuit Judge:
The Supreme Court in recent years has taken a keen interest in
administrative law—the law that governs the government—reexamining
foundational notions of federal regulatory power.1 In its current Term, for
example, the Court is revisiting so-called Chevron deference, the 40-year-old
1
See, e.g., West Virginia v. Envtl. Prot. Agency, 142 S. Ct. 2587, 2599 (2022) (major- questions doctrine); Gundy v. United States,139 S. Ct. 2116, 2121
(2019) (non-delegation doctrine); Lucia v. S.E.C.,138 S. Ct. 2044, 2049
(2018) (Appointments Clause).
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doctrine under which courts defer to agency interpretations of ambiguous
laws.2
Today’s case may also attract the Court’s interest. It tees up one of
the fiercest (and oldest) fights in administrative law: the Humphrey’s Executor
“exception” to the general “rule” that lets a president remove subordinates
at will.3 In this 1935 New Deal-era precedent, which detractors say dilutes the
president’s constitutional power over the executive branch, the Supreme
Court upheld restrictions on the president’s authority to remove
commissioners of so-called “independent” agencies—those headed by
officers who may only be removed for specified causes.4
The Humphrey’s exception traditionally “has applied only to multi-
member bodies of experts.”5 Sitting en banc, we recently described the
exception like this: Congress’s decision “limiting the President to ‘for cause’
removal is not sufficient to trigger a separation-of-powers violation.”6
Instead, for-cause removal creates a separation-of-powers problem only if it
“combine[s]” with “other independence-promoting mechanisms” that
“work[] together” to “excessively insulate” an independent agency from
presidential control.7
2
Loper Bright Enterprises, Inc. v. Raimondo, 45 F.4th 359, 363(D.C. Cir. 2022), cert. granted,143 S. Ct. 2429
(2023).
3
Seila Law LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct. 2183, 2206 (2020).
4 See Humphrey’s Ex’r v. United States, 295 U.S. 602 (1935).
5
Collins v. Mnuchin, 938 F.3d 553, 587(5th Cir. 2019) (en banc) (“Collins II”), aff’d in part, vacated in part, rev’d in part sub nom. Collins v. Yellen,141 S. Ct. 1761
(2021)).
6
Collins v. Mnuchin, 896 F.3d 640, 667(5th Cir. 2018) (“Collins I”), as reinstated by Collins II,938 F.3d at 588
(citation omitted).
7
Id. at 666–67.
2
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The plaintiffs in this case argue that the Supreme Court recently
upended this framework in Seila Law.8 In their view, that 2020 decision held
that for-cause removal always creates a separation-of-powers violation—at
least if the agency at issue exercises substantial executive power (which
nearly all agencies do). This is so, the plaintiffs argue, even if for-cause
removal is the only structural feature insulating an agency from total
presidential control. We do not read Seila Law so broadly. On the contrary,
and as in Free Enterprise Fund,9 the Supreme Court in Seila Law left the
Humphrey’s Executor exception “in place.”10
The Consumer Product Safety Commission is an independent agency
whose members the President may remove only for cause. Although the
Commission wields what we would today regard as substantial executive
power, in every other respect it is structurally identical to the agency that the
Supreme Court deemed constitutional in Humphrey’s. Yet the district court
concluded that the Commission’s structure is unconstitutional under Seila
Law. We disagree. The Supreme Court expressly “d[id] not revisit
Humphrey’s Executor or any other precedent” in Seila Law.11
As middle-management circuit judges, we must follow binding
precedent, even if that precedent strikes us as out of step with prevailing
Supreme Court sentiment. The logic of Humphrey’s may have been
overtaken, but the decision has not been overruled—at least not yet. Until
that happens, Humphrey’s controls. Accordingly, we REVERSE and
REMAND.
8
140 S. Ct. 2183.
9
Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 483 (2010).
10
Seila Law, 140 S. Ct. at 2198.
11
Id. at 2206.
3
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I
Congress created the Consumer Product Safety Commission to
“protect the public against unreasonable risks of injury associated with
consumer products.”12 The Commission has five members, each of whom
the President must appoint and the Senate must confirm.13 The members
serve staggered, seven-year terms. No more than three of them can “be
affiliated with the same political party.”14 Structurally, these features make
the Commission a mirror image of the Federal Trade Commission (FTC),
an agency whose institutional design the Supreme Court considered in
Humphrey’s Executor v. United States.15 The agencies are twins in another
respect, too: The President may remove a member of the Commission only
for “neglect of duty or malfeasance in office”—that is, only for cause.16
The Commission has the statutory authority to promulgate safety
standards and to ban hazardous products.17 It also has power to launch
administrative proceedings, issue legal and equitable relief, and commence
civil actions in federal court.18 And like other agencies, the Commission must
respond to requests for information (and requests for fee waivers) under the
Freedom of Information Act (FOIA).19 The Commission recently issued a
12
15 U.S.C. 2053(a).
13
Id. § 2053(a).
14
Id. § 2053(c).
15
295 U.S. 602, 619-20 (1935).
16
15 U.S.C. § 2053(a).
17
15 U.S.C. §§ 2056(a), 2057.
18
15 U.S.C. §§ 2064, 2076, 2069(a)–(b), 2071(a).
19
5 U.S.C. §§ 552(a)(4)(A), 552(e)(1)(L).
4
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rule amending its FOIA regulations—increasing the per-page fee for paper
copies by $0.05, and getting rid of duplication fees for electronic copies.20
By Two is a limited partnership that focuses on educational
consulting. It has submitted more than 50 FOIA requests to the
Commission, and it plans to submit more. It has also asked the Commission
for fee waivers under FOIA, and it plans to ask for fee waivers again. In early
2021, Commission staffers denied several of By Two’s requests for
information relating to safety standards for bouncer seats, infant walkers,
toddler carriers, and highchairs. Around the same time, staffers also denied
By Two’s requests for fee waivers for information related to drop-side cribs.
By Two appealed those decisions within the Commission, but the appeals
changed nothing.21
By Two sued the Commission and asserted three “claims.” It styled
the first count as “violation of the separation of powers,” arguing that “the
[C]ommission’s structure violates Article II of the U.S. Constitution”
because the Commission’s members “are removable by the President only
“for [cause].” By Two’s second count, under the Administrative Procedure
Act (APA), argued that the Commission’s recent FOIA rule “must be set
aside because it was promulgated by an unconstitutionally structured
agency.” Building on the first two counts, By Two argued in its third count
(under FOIA itself) that “[t]he Commission is wrongfully withholding
agency records to which [By Two is] entitled by relying upon and enforcing
an invalid FOIA rule promulgated by an unconstitutionally structured
20
See Fees for Production of Records, 86 Fed. Reg. 7499, 7500 (Jan. 29, 2021) (to
be codified at 16 C.F.R. pt. 1015).
21
Plaintiff–Appellant Consumers’ Research submitted similar requests and
received similar responses (albeit concerning different information). Because Consumers’
Research and By Two are similarly situated, the rest of this opinion refers to the Plaintiffs–
Appellants collectively as “By Two.”
5
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agency.” The upshot is that By Two asserted the same legal theory three
times: once each under the Constitution, the APA, and FOIA. By Two
argues that this single theory and these three claims entitle it to, among other
things, “[a] declaration that the Commission’s structure violates Article II of
the Constitution,” “[a]n order setting aside the Commission’s FOIA rule,”
and “[a]n order setting aside the Commission’s denial of Plaintiffs’ FOIA
requests, including the denial of fee waivers.”
A few weeks after it filed suit, By Two moved for “partial summary
judgment granting declaratory relief [under Rule 56(a)]” and for “partial
final judgment [under Rule 54(b)]”—but only as to Count 1. The
Commission opposed the motion, and it moved to dismiss the complaint for
lack of standing, for failure to state a claim, and because the Commission and
the FTC have the same structure under Humphrey’s.
The district court denied the Commission’s motion and granted
partial summary judgment for By Two.22 It held: “(1) the removal restriction
in 15 U.S.C. § 2053(b) violates Article II of the Constitution; (2) [By Two is]
entitled to declaratory judgment to ensure that future FOIA requests are
administered by a Commission accountable to the President; and (3) a partial
final judgment as to Count 1 is proper under Rule 54(b).”23 The district
court’s opinion reasoned that, unlike the FTC in 1935, “the Commission
exercises substantial executive power and therefore does not fall within the
Humphrey’s Executor exception.”24 The court then certified the order as a
final judgment under Rule 54(b). This appeal followed.
22
Consumers’ Rsch. v. Consumer Prod. Safety Comm’n, 592 F. Supp. 3d 568, 591
(E.D. Tex. 2022).
23
Id.
24
Id. at 583–84.
6
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II
The standards of review are well settled. We review summary
judgment de novo, “applying the same standards as the district court.”25 “A
party is entitled to summary judgment ‘if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.’”26 Likewise, “[w]hether the district court completely
disposed of a claim [under Rule 54(b)] is a question we review de novo.”27
III
First, jurisdiction.28 The Commission argues that this crucial element
is doubly lacking. We disagree. By Two’s separation-of-powers claim is
distinct from its APA and FOIA claims (under Rule 54(b)), and By Two has
standing to assert its constitutional claim (under Article III).
A
“When an action presents more than one claim for relief . . . the court
may direct entry of a final judgment as to one or more, but fewer than all,
claims . . . .”29 Rule 54(b)’s requirements are “jurisdictional” on appeal.30
The Commission argues that the district court’s judgment under Rule
54(b) is invalid because By Two’s complaint does not present separate claims
for relief, but instead consists of a single claim phrased three different ways.
But a legal claim is distinct from a legal theory. While a cognizable claim is
25
Texas v. United States, 50 F.4th 498, 521 (5th Cir. 2022).
26
Golden Glow Tanning Salon, Inc. v. City of Columbus, 52 F.4th 974, 977(5th Cir. 2022) (quoting Fed. R. Civ. P. 56); seeid.
(addressing constitutionality); Texas State LULAC v. Elfant,52 F.4th 248, 252
(5th Cir. 2022) (addressing standing).
27
Tetra Techs., Inc. v. Cont’l Ins. Co., 755 F.3d 222, 228 (5th Cir. 2014).
28
See, e.g., Arulnanthy v. Garland, 17 F.4th 586, 592 (5th Cir. 2021).
29
Fed. R. Civ. P. 54(b) (emphases added).
30
Tetra Techs., 755 F.3d at 228.
7
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what opens the courthouse door, a good theory is what lets the plaintiff
emerge a victor. We have previously recognized that a “plaintiff with Article
III standing can maintain a direct claim against government action that
violates the separation of powers.”31 Whether or not By Two has “standing”
(more on that next), its constitutional “claim” is a separate cause of action.
The separation-of-powers claim is thus a sufficient basis for the declaratory
relief that the district court entered.32
The standalone constitutional claim (Count 1) is distinct from the
APA claim (Count 2) and the FOIA claim (Count 3), just as those statutory
claims are themselves distinct. Even without an “articulable standard” for
discerning one claim from another in more complicated cases—for example,
those involving multiple theories of damages—we have no trouble
concluding that the “claim” at issue is distinct enough for Rule 54(b).33
31
Collins II, 938 F.3d at 587(affirming viability of “shareholders’ constitutional claim” (emphasis added)); seeid.
at 587 n.227 (holding that courts have “jurisdiction over declaratory judgment action[s] alleging violation[s] of separation of powers”); see also Free Enter. Fund, 561 U.S. at 491 n.2 (2010) (citing Ex parte Young,209 U.S. 123, 149
(1908)); LaRoque v. Holder,650 F.3d 777, 792
(D.C. Cir. 2011) (“Free Enterprise . . . recognized a
nonstatutory cause of action for . . . declaratory and injunctive relief against the Public
Company Accounting Oversight Board on the grounds that the statute creating the Board
violated the Appointments Clause and impermissibly encroached on the President’s
authority to remove Executive Branch officials.”).
32
Collins II, 938 F.3d at 587.
33
A similar scenario arose in Texas v. United States, 945 F.3d 355, 373 n.11 (5th Cir. 2019). There, the district court entered a final judgment on one claim under Rule 54(b) declaring the Affordable Care Act’s individual mandate unconstitutional. See Texas v. United States,352 F. Supp. 3d 665
, 669–71 (N.D. Tex. 2018). But the district court’s judgment did not reach a separate APA claim—even though that claim itself “presuppose[d]” that the individual mandate was unconstitutional.Id. at 671
. Still, the district court held the claims were “related but distinct.”Id.
We agreed. See Texas,945 F.3d at 373
n.11 (concluding that the “final judgment is only partial because it addresses
only” Count 1 and because “[t]he district court has not yet ruled on the other counts”).
8
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B
The Commission next argues that By Two lacks standing. Wrong
again. “[S]tanding is not dispensed in gross; rather, plaintiffs must
demonstrate standing for each claim that they press and for each form of relief
that they seek.”34 As By Two’s complaint and briefing show, there is only
one claim at issue, and only one form of relief: “a declaratory judgment that
the removal restriction for [the Commission’s members] violates Article II
of the Constitution.” To have standing to assert this claim, By Two “must
show (i) that [it] suffered an injury in fact that is concrete, particularized, and
actual or imminent; (ii) that the injury was likely caused by the
[Commission]; and (iii) that the injury would likely be redressed by judicial
relief.”35 We take each element in turn.
1
“To establish injury in fact, a plaintiff must show that [it] suffered ‘an
invasion of a legally protected interest’ that is ‘concrete and particularized’
and ‘actual or imminent, not conjectural or hypothetical.’”36 We have also
held that “being compelled to participate in an invalid administrative
process” can constitute an injury in fact.37 At least two of our sister circuits
have interpreted that holding to mean that “deprivation of a procedural right
designed to protect a concrete interest is sufficient to establish standing.”38
We agree that this interpretation is analytically correct, because standing
34
TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2208 (2021) (emphases added).
35
Id. at 2203.
36
Spokeo, Inc. v. Robins, 578 U.S. 330, 339(2016) (quoting Lujan v. Defenders of Wildlife,504 U.S. 555, 560
(1992)).
37
Texas v. United States, 497 F.3d 491, 496–97 (5th Cir. 2007).
38
New Mexico v. Dep’t of Interior, 854 F.3d 1207, 1218(10th Cir. 2017); Delaware Dep’t of Nat. Res. & Env’t Control v. FERC,558 F.3d 575, 579
(D.C. Cir. 2009) (similar).
9
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always requires a “concrete interest.”39 Applying that framework here, By
Two has standing. It asserts the right to be free “from the threat of being
subject to a regulatory scheme and governmental action lacking Article II
oversight.”40 And even beyond that right, which belongs to all citizens, By
Two has a concrete interest in the information and the fee waivers that it
requested (and plans to request again) from the Commission.
The separation-of-powers violation plus By Two’s concrete interest
combine to satisfy the “injury” element of standing. By recognizing that this
combination creates an injury, we tread no further than the Supreme Court’s
separation-of-powers cases have already ventured. For instance, in Free
Enterprise Fund, the accounting firm had a concrete interest in the case
because “[t]he Board inspected the firm, released a report critical of its
auditing procedures, and began a formal investigation.”41 Likewise, in Seila
Law, the plaintiff had a concrete interest because the agency had “issued a
civil investigative demand” and had “directed [the plaintiff] to comply with
the demand.”42 And in Collins v. Yellen, the plaintiffs had a “pocketbook
injury” that was “a prototypical form of injury in fact.”43 All of these cases
involved a plaintiff who alleged both a separation-of-powers violation and
possessed a concrete interest in seeing the violation corrected. So too here.
To see why both a violation and a concrete interest are required in this
context, it helps to consider why neither would be sufficient in isolation.
39
See id.
40
Consumers’ Rsch., 592 F. Supp. 3d at 579.
41
561 U.S. at 487.
42
140 S. Ct. 2183, 2194 (2020).
43
141 S. Ct. at 1779.
10
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Without the concrete-interest requirement, Article III standing would
transform from a threshold that bars some claims against the government to
a welcome mat that plaintiffs barely acknowledge on their way into the federal
courthouse. That is so for at least two reasons. First, discarding the concrete-
interest requirement would be a quick lesson in how trivially easy it is to
flavor ordinary statutory claims with a separation-of-powers mix-in. Second,
every American is subject to a great many regulations. Perhaps too many. But
merely being subject to those regulations, in the abstract, does not create an
injury. If it were otherwise, then it is hard to see how standing to sue for
separation-of-powers violations would be absent in any of the following
hypotheticals (which we take as classic examples of a missing injury):
The Federal Communications Commission (FCC) issues
licenses to amateur radio operators. The agency thus
regulates all citizens (by forbidding them from operating a
ham radio without a license). Even if Bob has no interest in
purchasing and operating a ham radio, does he have
standing to sue?
The National Science Foundation (NSF) gives research
grants. Grantees are subject to the agency’s supervision. If
a researcher receives a grant and proposes to spend the
money appropriately, does she have standing based on the
injury that she sustains merely by being “subject to”
agency oversight?
The Small Business Association (SBA) issues loans.
Sometimes it defers payment obligations. If a business
owner had a loan that was deferred, would he have standing
to sue based on the theory that the deferral decision issued
from an agency that he believes lacks Article II oversight?
Without some separate concrete interest in the outcome of an allegedly
unconstitutional process, the answer for abstract objections to perceived
over-regulation must come from the political realm—not the judicial branch.
11
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On the other hand, without the separate ingredient of a separation-of-
powers violation, then a plaintiff asserting a structural-constitutional claim
would often run aground on the “traceability” and “redressability” elements
of standing. This case shows as much. By Two suffered an injury when the
Commission withheld the information and denied the fee waivers. But it is
not obvious that those informational and monetary injuries are traceable to
the Commission’s structure or that a declaration about the Commission’s
structure would redress them. That’s why both ingredients are necessary: a
separation-of-powers violation plus a concrete interest. Here, both are
present. By Two has therefore alleged a legally cognizable injury.
2
So defined, By Two’s injury is also traceable to the separation-of-
powers violation that it alleges. “[A] litigant challenging governmental action
as void on the basis of the separation of powers is not required to prove that
the Government’s course of conduct would have been different in a
‘counterfactual world’ in which the Government had acted with
constitutional authority.”44 Rather, to determine traceability “[i]n the
specific context of the President’s removal power,” the Supreme Court has
“found it sufficient that the challenger ‘sustains injury’ from an executive
act that allegedly exceeds the official’s authority.”45 The Commission
responds that traceability is absent because By Two chose to file the requests.
But the Supreme Court has rejected that style of argument, holding instead
that “an injury resulting from the application . . . of an unlawful enactment
remains fairly traceable to such application, even if the injury could be
44
Seila Law, 140 S. Ct. at 2196 (alteration adopted) (quoting Free Enter. Fund, 561
U.S. at 512 n.12).
45
Id.
12
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described in some sense as willingly incurred.”46 Because By Two has
sustained an injury, traceability poses no obstacle.
3
Redressability follows. In a suit seeking to vindicate the President’s
removal power, when both injury and traceability are present, the plaintiff
“[is] entitled to declaratory relief sufficient to ensure that the . . .
requirements and . . . standards to which [it is] subject will be enforced only
by a constitutional agency accountable to the Executive.”47 In other words,
“when . . . a [removal] provision violates the separation of powers,” the
violation “inflicts a ‘here-and-now’ injury. . . that can be remedied by a
court.”48 That is exactly what happened here: By Two asked for (and
received) a judgment declaring that “the Commission’s structure violates
Article II of the Constitution.” That declaration directly redresses the
separation-of-powers injury that By Two alleges.49
Because By Two has alleged an injury-in-fact that is traceable to the
Commission’s unconstitutional structure and that is redressable by a
favorable decision from this court, it has established its Article III standing to
assert the separation-of-powers violation as an independent claim.
IV
On the merits, we cannot agree that the Commission’s structure
violates the prevailing iteration of the removal doctrine as the Supreme Court
has articulated it.
46
Fed. Election Comm’n v. Cruz, 142 S. Ct. 1638, 1647 (2022) (collecting cases).
47
Free Enter. Fund, 561 U.S. at 513.
48
Seila Law, 140 S. Ct. at 2196(quoting Bowsher v. Synar,478 U.S. 714
, 727 n.5
(1986)).
49
See id.
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This is not to say that the doctrine is clear. And perhaps clarity will
remain a mere aspiration so long as the doctrine’s foundation includes a
decision proclaiming that the FTC “exercises no part of the executive
power.”50 Still, the Supreme Court, while it has limited Humphrey’s, has not
yet overruled it. Nor, of course, can we.51 Instead, our role in the judicial
architecture requires us only to map—not adjust—the borders of the so-
called “Humphrey’s Executor exception.”52 As best we can gather, the
Supreme Court has not yet limited that decision to the FTC alone. Rather,
so far as we can tell, the exception still protects any “traditional independent
agency headed by a multimember board”—and thus still protects the
Commission.53
Whatever else it may be, the Commission’s structure is not a
“historical anomaly,” is not a recent “innovation,” and is not lacking at least
some “foothold in history or tradition.”54 For those reasons, too, we
conclude that the Supreme Court’s still-on-the-books precedent supports
the Commission’s structure. If it were otherwise, then the FCC, the NSF,
the SBA, and dozens of other agencies would all be unconstitutionally
structured. The Supreme Court has not yet directly embraced that
conclusion. Even so, By Two’s contrary arguments do not rely on any single
premise that we can confidently label faulty. This impasse arises because the
50
Humphrey’s Ex’r, 295 U.S. at 628.
51
See Illumina, Inc. v. Federal Trade Comm’n, 88 F.4th 1036, 1047(5th Cir. 2023) (“[W]hether the FTC’s authority has changed so fundamentally as to render Humphrey’s Executor no longer binding is for the Supreme Court, not us, to answer.” (citing Lefebure v. D’Aquila,15 F.4th 650, 660
(5th Cir. 2021)).
52
Seila Law, 140 S. Ct. at 2198.
53
Id. at 2193; seeid. at 2192
(similar), 2211 (opinion of Roberts, C.J.)
(suggesting that Congress could “remedy” a constitutionally “defect[ive]” single-member
agency by “converting [it] into a multimember agency”).
54
Id. at 2202.
14
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holding of Humphrey’s is still “in place” even though its reasoning “has not
withstood the test of time.”55 Resolving that dilemma is beyond our
authority. The holding from Humphrey’s controls, the holding authorizes the
Commission’s structure, and the holding requires us to reverse the district
court’s judgment.
A
The Humphrey’s Executor exception “permitted Congress to give for-
cause removal protections to a multimember body of experts, balanced along
partisan lines, that performed legislative and judicial functions and was said
not to exercise any executive power.”56 Free Enterprise Fund left that
exception “in place,” and Seila Law did the same—the Court there even
noted that it did not “revisit Humphrey’s Executor or any other precedent.”57
So, while the Court has more than once “declined to extend” Humphrey’s,
the exception itself has persevered, apparently in stasis.58
“[T]he contours of the Humphrey’s Executor exception depend upon
the characteristics of the agency before the Court.”59 In Humphrey’s, the
Court “identified several organizational features that helped explain its
characterization of the FTC as non-executive,”60—
Composed of five members—no more than three from the
same political party—the Board was designed to be “non-
partisan” and to “act with entire impartiality.” The FTC’s
duties were “neither political nor executive,” but instead
55
Id. at 2198, 2198 n.2.
56
Id. at 2199.
57
Id. at 2198, 2206.
58
Id. at 2198.
59
Id. (emphasis added).
60
Id. (emphasis added).
15
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called for “the trained judgment of a body of experts”
“informed by experience.” And the Commissioners’
staggered, seven-year terms enabled the agency to accumulate
technical expertise and avoid a “complete change” in
leadership “at any one time.”61
The parties here agree that the Commission shares each of these
characteristics, save one: By Two says that the Commission does exercise
executive power and thus falls outside the Humphrey’s exception. This
argument requires us to consider the role of “executive power” in the
Supreme Court’s removal doctrine. But to do that is to board a train of
thought that seems almost predestined for incoherence.
To start, Humphrey’s distinguished an agency’s “executive power in
the constitutional sense” from its “discharge and effectuation of its quasi
legislative or quasi judicial power.” But our court has since recognized that
Seila Law “cast[] doubt on the existence of wholly non-executive, quasi-
legislative or quasi-judicial agency powers altogether.”62 If Humphrey’s
descriptions are no longer apt, what words replace them? Was everything the
FTC did in 1935 part of its “executive power,” or rather part of its
“executive function,” or does the correct description lie somewhere in
between? The answers do not leap forward. Still, under any modern
conception, the Commission unquestionably does exercise executive power.
Even so, it is hard to tell how much of that power is required before an
agency loses protection under the Humphrey’s exception. Does the agency
lose protection if it exercises “any executive power”?63 Or can the agency
61
Id. at 2198–99.
62
Jarkesy v. Sec. & Exch. Comm’n, 34 F.4th 446, 465 n.19 (5th Cir. 2022) cert. granted, SEC v. Jarkesy, No. 22-859,2023 WL 4278448
(U.S. June 30, 2023).
63
Seila Law, 140 S. Ct. at 2199 (emphasis added).
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claim the exception so long as it “do[es] not wield substantial executive
power”?64 Or should we instead be looking for “significant executive
power”?65 All three descriptions come from Seila Law.66 Nor did the Court
use “substantial” and “significant” merely as examples of an agency that
exercises “any” executive power. Just the opposite: The Court described the
exception itself as an exception “for multimember expert agencies that do not
wield substantial executive power.”67 In any event, we agree with By Two
that the Commission’s power is substantial.
Having concluded that the Commission exercises substantial
executive power (in the modern sense), we must next consider whether that
characteristic—standing alone—removes the Commission from the
Humphrey’s exception. We conclude that it does not, for three reasons.
First, unlike the agencies at issue in Seila Law and Free Enterprise
Fund, the Commission’s structure does not require us to confront a
historically unprecedented situation. “Perhaps the most telling indication of
a severe constitutional problem with an executive entity is a lack of historical
precedent to support it.”68 In other words, historical pedigree matters. By
Two does not argue that the Commission lacks historical precedent. Quite
the opposite. “[A]lthough nearly identical language governs the removal of
some two-dozen multimember independent agencies,”69 By Two’s counsel
64
Id. at 2200 (emphasis added).
65
Id. at 2201 (emphasis added).
66
In a similar vein, our recent decision in Jarkesy v. SEC used Seila Law’s “any
executive power” quote, but we also referred to “substantial executive functions” and to
“sufficiently important executive functions.” 34 F.4th at 464 n.19.
67
Seila Law, 140 S. Ct. at 2199–200 (emphasis added).
68
Id. at 2201 (alterations adopted) (internal quotation marks omitted) (citing Free
Enterprise Fund, 561 U.S. at 505).
69
Id. at 2206.
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could identify at oral argument only two that would survive its theory
unscathed: “the U.S. Sentencing Commission, and the U.S. Commission on
Civil Rights.”70 By Two emphasizes that this case is only about the
Commission. But the Supreme Court has told us to decide the case by
comparing this Commission to others. Doing that shows that the Commission
has history on its side. It is a prototypical “traditional independent agency,
run by a multimember board.”71 As such, we must count history in the
Commission’s favor, even though the Commission exercises substantial
executive power.
Second, the Commission does not share the defining feature that the
Supreme Court in Seila Law relied on to hold the CFPB unconstitutional.
There, the Court said that “[t]he CFPB’s single-Director structure
contravenes [the Constitution’s] carefully calibrated system by vesting
significant governmental power in the hands of a single individual accountable
to no one.”72 But here, of course, the Commission has a multimember board.
It is true that the CFPB Director also exercised substantial executive power
and that such power was a predicate for the Court’s holding. But we
understand the holding itself as applying only to agencies whose leadership
rests solely with a single individual. Remember: Seila Law expressly “d[id]
not revisit Humphrey’s Executor.”73 Indeed, the Supreme Court noted that
“the contours of the Humphrey’s Executor exception depend upon the
characteristics of the agency before the Court.”74 If the exception applied
70
See https://www.ca5.uscourts.gov/OralArgRecordings/22/22-40328_3-6-
2023.mp3 (at 22:25).
71
Seila Law, 140 S. Ct. at 2192.
72
Id. at 2203 (emphases added).
73
Id. at 2206.
74
Id. at 2198.
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only to the FTC, this statement would make little sense. Thus, we view Seila
Law’s holding as reaching only “single-Director” agencies—not agencies
that are identical to the FTC in every respect other than their name.75
Third, the Commission also does not have any of the features that
combined to make the CFPB’s structure “even more problematic” in Seila
Law.76 Unlike the CFPB, the Commissioners’ staggered appointment
schedule means that each President does “have an[] opportunity to shape [the
Commission’s] leadership and thereby influence its activities.”77 Further,
the Commission does not “recei[ve] funds outside the appropriations
process.”78 Thus, the President can “influence” the Commission’s activities
via the budgetary process.79 Accordingly, we cannot conclude that the
Commission “is an innovation with no foothold in history or tradition.”80
In other words, the Commission fits squarely within what our en banc
court described just a few years ago as “the recognized exception for
independent agencies” whose leadership consists of a “multi-member
bod[y] of experts.”81 Seila Law did not upend that exception, but rather
“found ‘compelling reasons not to extend [it] to the novel context of an
independent agency led by a single Director.’”82 Because the Commission’s
structure is not novel, Seila Law does not apply. That dooms By Two’s
argument. Our en banc court has already held that for-cause protection is
75
Id. at 2202.
76
Id. at 2204.
77
Id.
78
Id.
79
Id.
80
Id. at 2202.
81
Collins II, 938 F.3d at 587–88.
82
Collins v. Yellen, 141 S. Ct. at 1783(quoting Seila Law,140 S. Ct. at 2199
).
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“not sufficient to trigger a separation-of-powers violation.”83 Rather, for-
cause removal violates the constitution only when it “combine[s]” with
“other independence-promoting mechanisms” that “work[] together” to
“excessively insulate” an agency from the President’s control.84 Yet By Two
has not even attempted to identify any such additional “mechanisms,” and
its attacks on the Commission’s structure therefore fail.85
B
By Two argues that our analysis should have ended above, when we
concluded that the Commission wields substantial executive power. Our
view of Seila Law is not so thin. Rather, as we see it, By Two’s argument—
although free from any logical error—gives too much weight to the words
“substantial executive power” but not enough weight to the separate factors
that we just discussed. If that is a strange conclusion, the oddity follows,
respectfully, from the Supreme Court’s removal doctrine, not from our
application of it.86
Seila Law “cast[] doubt” on the constitutionality of agencies like the
Commission.87 But the Supreme Court’s “decisions remain binding
83
Collins I, 896 F.3d at 667.
84
Id. at 666–67.
85
Id. at 667.
86
As Judge Jones correctly observes, “The Supreme Court has created
uncertainty that only it can ultimately alleviate.” Post, at 1. A panel of this court also
recently agreed that “although the FTC’s powers may have changed since Humphrey’s
Executor was decided, the question of whether the FTC’s authority has changed so
fundamentally as to render Humphrey’s Excecutor no longer binding is for the Supreme
Court, not us, to answer.” Illumina, 88 F.4th at 1047 (5th Cir. 2023). If precedent compels
us to uphold the constitutionality of the FTC’s removal restrictions today, even when that
agency’s “powers may have changed since” 1935, precedent also compels us to uphold the
removal restrictions of a structurally identical agency.
87
Jarkesy, 34 F.4th at 465 n.19.
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precedent until [it] see[s] fit to reconsider them, regardless of whether
subsequent cases have raised doubts about their continuing vitality.”88
Indeed, the Supreme Court has repeatedly warned that “lower court[s]
should follow the case which directly controls, leaving to this Court the
prerogative of overruling its own decisions.”89 “This is true even if the lower
court thinks the precedent is in tension with some other line of decisions.”90
Under these rules, Humphrey’s still protects the Commission.
V
We agree with the panel decision that recently distilled the relevant
portion of Seila Law to a simple rule: “[P]rincipal officers may retain for-
cause protection when they act as part of an expert board.”91 The distillate
was dicta, and therefore non-binding, but it is also accurate. Seila Law
referred a few times to “a traditional independent agency, run [or “headed”]
by a multimember board.”92 These references were neither approving nor
condemning.93 In making them, the Court expressly “d[id] not revisit
Humphrey’s Executor or any other precedent.”94 Instead, the Court
88
Bosse v. Oklahoma, 580 U.S. 1, 3(2016) (quoting Hohn v. United States,524 U.S. 236
, 252–253 (1998)).
89
Mallory v. Norfolk S. Ry. Co., 600 U.S. 122, 136 (2023) (quoting Rodriguez de Quijas v. Shearson/ Am. Express, Inc.,490 U.S. 477, 484
(1989)).
90
Id.
91
Jarkesy, 34 F.4th at 463.
92
Seila Law, 140 S. Ct. at 2192, 93.
93
Part IV of the Seila Law opinion does impliedly approve the Commission’s
structure, arguing that “Congress [could] pursu[e] alternative responses to the
[separation-of-powers] problem—for example, converting the CFPB into a multimember
agency.” Id. at 2211. We cannot accept that Chief Justice Roberts would direct Congress to pursue a plainly unconstitutional “response[].” But in this portion of the opinion, he was writing only for himself and two other Justices. Seeid.
at 2187–90.
94
Seila Law, 140 S. Ct. at 2199.
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confirmed only that “the constitutionality of the CFPB Director’s insulation
from removal cannot be settled by Humphrey’s Executor or Morrison [v. Olson]
alone.”95 But here, Humphrey’s does settle the question. Only the Supreme
Court has power to reconsider that New Deal-era precedent—perhaps
reaffirming it, overruling it, or narrowing it—and at least so far, it hasn’t.
We REVERSE the district court’s judgment and REMAND for
further proceedings.
95
Id. at 2201.
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Edith H. Jones, Circuit Judge, concurring in part and dissenting
in part:
I am pleased to concur in the sections of Judge Willett’s opinion that
uphold our appellate jurisdiction and plaintiffs’ standing to sue. With some
trepidation, in recognition of his careful exegesis of Seila Law as it applies to
this case, I respectfully dissent. The Supreme Court has created uncertainty
that only it can ultimately alleviate.
To be sure, the general rule is that, “[i]f a precedent of this Court has
direct application in a case, yet appears to rest on reasons rejected in some
other line of decisions, the Court of Appeals should follow the case which
directly controls, leaving to this Court the prerogative of overruling its own
decisions.” Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477,
484,109 S. Ct. 1917
, 1921–22 (1989). Naturally, though, one decision does not overrule another if “two precedents sit comfortably side by side.” Mallory v. Norfolk S. Ry. Co.,600 U.S. 122
, 137,143 S. Ct. 2028
, 2038 (2023).
The rule established in Humphrey’s Executor is directly on point here.
But contrary to what Judge Willett suggests, if this court holds that the CPSC
violates the separation-of-powers, it will disturb neither the rule nor the
holding of Humphrey’s Executor.
Facts are called facts for a reason. The facts in Humphrey’s Executor
have never changed. In Seila Law, the Court translated those facts for modern
eyes. The Court explained:
Rightly or wrongly, the Court viewed the FTC (as it existed in
1935) as exercising “no part of the executive power.”
[Humphrey’s Executor], at 628, 55 S. Ct. 869. Instead, it was
“an administrative body” that performed “specified duties as
a legislative or as a judicial aid.” Ibid. It acted “as a legislative
agency” in “making investigations and reports” to Congress
and “as an agency of the judiciary” in making
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recommendations to courts as a master in chancery. Ibid. “To
the extent that [the FTC] exercise[d] any executive function[,]
as distinguished from executive power in the constitutional
sense,” it did so only in the discharge of its “quasi-legislative
or quasi-judicial powers.” Ibid. (emphasis added).
Seila Law LLC v. CFPB, 591 U.S. –––, 140 S. Ct. 2183, 2198(2020). With that translation, the Humphrey’s Executor exception makes more sense. It “permitted Congress to give for-cause removal protections to a multimember body of experts, balanced along partisan lines, that performed legislative and judicial functions and was said not to exercise any executive power.”Id. at 2199
(emphasis added).
In 1935, the FTC satisfied the Court’s test for insulation from at-will
removal because it did not exercise any executive power. No doubt the FTC
has evolved significantly over time. Justice Thomas noted that “Humphrey’s
Executor does not even satisfy its own exception.” Id. at 2218 (Thomas, J.,
concurring in part). That precise question is not before this court.
But unlike the 1935 FTC, the CPSC does exercise executive power.
Different facts often mean different results. The CPSC is not limited to
duties as a legislative or judicial aid such as “making investigations and
reports” to Congress or “making recommendations to courts as a master in
chancery.” Id. at 2198. Rather, it promulgates regulations, adjudicates various matters, imposes heavy penalties for violations of its charging statutes, and commences civil actions in federal court seeking injunctive relief and monetary penalties. Plainly, these are all executive powers. See Bowsher v. Synar,478 U.S. 714, 733
,106 S. Ct. 3181, 3191
(1986) (Regulating is an exercise of executive power); City of Arlington,569 U.S. 290
, 304 n.4,133 S. Ct. 1863
, 1873 n.4 (quoting Art. II, § 1, cl. 1) (Adjudications “take
‘legislative’ and ‘judicial’ forms, but they are exercises of—indeed, under
our constitutional structure they must be exercises of—the ‘executive
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Power.’”); Seila Law, 140 S. Ct. at 2200 (The power to seek “daunting
monetary penalties . . . on behalf of the United States in federal court” is a
“quintessentially executive power not considered in Humphrey’s Executor.”).
Judge Willett writes that holding the CPSC’s structure violates the
separation-of-powers would “adjust the borders” of the Humphrey’s Executor
exception. But applying law to a new set of facts does not adjust a legal rule’s
borders. Indeed, a decision holding the CPSC’s structure unconstitutional
would sit comfortably side-by-side with Humphrey’s Executor. If anything,
Judge Willett’s writing expands the borders of Humphrey’s Executor by
extending the rule from agencies that do not exercise executive power to those
that do.
Judge Willett’s opinion makes two final points. First, “it is hard to
tell how much of that [executive] power is required before an agency loses
protection under the Humphrey’s exception.” He notes that sometimes the
Supreme Court mentions “substantial”, “significant”, and “any” when
describing “executive power” in Humphrey’s Executor. But it is best to go to
the primary source. Humphrey’s Executor itself described the FTC as
“exercis[ing] no part of the executive power vested by the Constitution in the
President.” Humphrey’s Executor, 295 U.S. 602, 628,55 S. Ct. 869, 874
(emphasis added). Either way, Judge Willett acknowledges that the CPSC
exercises substantial power. Second, Judge Willett argues, essentially, that
the CPSC’s multimember structure alone permits for-cause removal. That
cannot be the case if the Humphrey’s Executor rule requires multi-member
agencies also not exercise executive power.
To faithfully adhere to the rule set forth in Humphrey’s Executor, I
think that CPSC members’ for-cause removal protection violates the
constitutional separation-of-powers so long as they also exercise executive
power. I respectfully dissent.
25
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