Harper v. Bessent and Trump v. Slaughter: An Update

Most of us are aware of the ongoing Harper v. Bessent lawsuit which resulted when President Trump removed Todd Harper and Tanya Otsuka from the NCUA Board, leaving Kyle Hauptman as the sole remaining board member. But what many may not realize is that the Supreme Court case Trump v. Slaughter could heavily influence how the Harper litigation is resolved. Today's blog is going to briefly discuss both of these cases and provide an update on their current statuses.

Trump v. Slaughter (Docket for 25-332)

The Slaughter case arose after President Trump removed Federal Trade Commission (FTC) Commissioner Rebecca Slaughter without cause. Commissioner Alvaro Bedoya was also removed but is not a party to the case. The case will address the following questions: "(1) Whether the statutory removal protections for members of the Federal Trade Commission violate the separation of powers and, if so, whether Humphrey's Executor v. United States, 295 U. S. 602 (1935), should be overruled. (2) Whether a federal court may prevent a person's removal from public office, either through relief at equity or at law."

As indicated above, the outcome of this case could potentially overrule a nearly century-old precedent from a 1935 Supreme Court decision. In Humphrey's Executor v. United States, the Court held that Congress could create independent, bipartisan commissions and that presidents cannot remove members of those commissions without cause. In Humphrey's Executor, the Court noted that "[t]he Federal Trade Commission Act fixes the terms of the Commissioners and provides that any Commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office." Specifically, the Court held that "Congress intended to restrict the power of removal to one or more of those causes."

In their brief, Slaughter maintains that Humphrey's Executor remains valid law and that for cause removal protections do not impermissibly interfere with presidential duties. Slaughter argues that "all three branches of government have long approved multimember agencies whose members are protected from at-will removal." On the other hand, the President argues that the FTC's statutory "for cause" removal protections restrict the President's constitutional authority and maintains that Article II authorizes the President to remove FTC members at will.

Ultimately, the Slaughter case has the potential to significantly reshape long-standing Supreme Court precedent and greatly expand the executive branch's authority over federal agencies. Essentially, it could expand a president's power by allowing the firing of leaders of independent agencies at will. Our understanding of "independent" agencies could be completely upended if the Supreme Court overturns Humphrey's Executor.

Current Status of Trump v. Slaughter

The Supreme Court is scheduled to hear oral argument in Trump v. Slaughter next Monday, December 8, 2025. That makes a decision likely by June 2026, which would, in turn, provide Supreme Court guidance relevant to the NCUA case. America's Credit Unions will be closely tracking the oral argument and will provide insights following the hearing. It is widely anticipated that the Supreme Court will be critical of and is likely to overturn Humphrey's Executor.

Harper v. Bessent (Docket for 25-367)

The Harper case arose after Todd Harper and Tanya Otsuka filed a lawsuit when President Trump removed them in April 2025, leaving Kyle Hauptman as the sole board member. Harper and Otsuka argue that their removal was unlawful and contrary to congressional intent. They were briefly reinstated to the board in July, then removed after an appeals court granted an emergency administrative stay. Additionally, Harper/Otsuka asked the Supreme Court to review the case by filing a petition for a writ of certiorari even though the case is still pending before the D.C. Circuit.

So, why is this case important? As we mentioned in a previous America's Credit Unions compliance blog:

"Under the FCUA, for the NCUA Board to conduct official business, the Act requires a quorum of the Board. The FCUA defines a quorum as, "[a] majority of the Board..." NCUA has recently announced that a single board member constitutes a quorum when there are no other board members. Historically, there is precedent for a single board member running the NCUA. During the Bush Administration, former Chairman Dennis Dollar acted as a sole Board Member. Notably, former Chairman Dollar did not approve or rescind any rulemaking during his tenure as sole NCUA Board member. Further, current NCUA regulation requires at least two board members to act and approve new rulemakings." (See: section 791.2 of NCUA's regulations).

Overall, Harper and Otsuka claim their removal violates the Federal Credit Union Act since they were dismissed without cause, while the government claims the Federal Credit Union Act contains no specific language restricting the president's removal authority.

Relatedly, on Thursday, May 22nd, the Supreme Court issued a preliminary ruling in the Trump v. Wilcox case. Similar to the Harper case, the Wilcox case centers around President Trump's removal of two board members of two different independent agencies. The Wilcox case also challenges Humphrey's Executor. However, unlike the Harper case, the Wilcox case is more similar to the Slaughter case in that both of the statutes for the National Labor Relations Board (NLRB) and Merit Systems Protection Board (MSPB) have "for cause" removal provisions. Notably, in their preliminary ruling, the Supreme Court touched on the question of the Federal Reserve's independence. In the preliminary ruling, the Supreme Court stated that:

"... respondents Gwynne Wilcox and Cathy Harris contend that arguments in this case necessarily implicate the constitutionality of for-cause removal protections for members of the Federal Reserve's Board of Governors or other members of the Federal Open Market Committee. See Response of Wilcox in Opposition to App. for Stay 2−3, 27−28; Response of Harris in Opposition to App. for Stay 3, 5−6, 16−17, 36, 40. We disagree. The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States. See Seila Law, 591 U. S., at 222, n. 8."

As noted in our previous compliance blog (here), it "should be noted that this preliminary ruling was issued through [the Supreme Court's] emergency docket. The merits of the case are still being decided, though this will likely work its way up to the [Supreme Court] for an ultimate and final decision."

Current Status of Harper v. Bessent

The D.C. Circuit Court of Appeals suspended oral argument, which was originally scheduled for November 21st, and paused the case pending the Supreme Court's review of the Slaughter case. On Monday, November 24th, the Supreme Court's Order List stated that "[t]he petition for a writ of certiorari before judgment is denied" with respect to the Harper v. Bessent case. As previously noted, the eventual ruling in the Slaughter case will play a critical role in shaping how Harper v. Bessent is ultimately decided.

As always, America's Credit Unions will be sure to keep its members apprised of any developments.