Free Enterprise Fund: Enforcing the Separation of Powers

My last two posts have discussed Free Enterprise Fund. In that case, the Supreme Court took a relatively strict approach to the separation of powers, holding that the removal restrictions on executive officers were unconstitutional and that appointments had to conform to the Constitution’s Appointments Clause. In this post, I briefly discuss the reasons that it was such an important case.

There are two basic approaches to the separation of powers in the Supreme Court. The first is a strict approach that attempts to enforce some basic separation of powers principles. It insists that the text of the Constitution be followed, such as the Appointments Clause. And it insists that the more general clauses in the Constitution that separate powers — in particular, the clauses vesting legislative, executive, judicial power in three distinct entities — should be enforced.

This strict version can itself be divided into two versions — a superstrict version and a moderately strict version. The superstrict version would render the administrative state unconstitutional. It would enforce a strong prohibition on delegating legislative powers to agencies, would require most regulatory adjudications to be conducted by the independent judiciary, and would eliminate independent agencies.

While the Court has not really enforced this superstrict version, it has sometimes enforced the moderately strict version, beginning in 1976 in Buckley v. Valeo. This version strikes down significant departures from the separation of powers. It has struck down legislative vetoes in INS v. Chadha, congressional appointment of executive officers in Buckley v. Valeo, and some adjudication by non-article III judges in Stern v. Marshall. Free Enterprise Fund constituted an important case within this line of cases.

The Court had not previously struck down a restriction on the President’s power to remove executive officers since the New Deal, and so Free Enterprise Fund was an important addition to the moderately strict line of cases. Free Enterprise Fund was also important because it took seriously the Appointments Clause.

This was hardly inevitable. The other version of the separation of powers is the lenient version, which would allow a great number of departures from the separation of powers. Under this version, a few cases might be found to be separation of powers violations, but most would not. It would give free reign not merely to the existing administrative state, but to further departures from the separation of powers. The lenient approach of the dissent in Free Enterprise Fund would have approved the removal restriction.

Thus, the fight at the Supreme Court is whether the Court will enforce the moderately strict version (and thus retain some aspects of the traditional separation of powers) or the lenient version (and largely depart from that traditional approach). Free Enterprise Fund was a 5-4 decision that enforced the moderately strict version, in an area where the Court had not done so in a long time.  It was an important development that should be appreciated.