Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—Trump files emergency application with Supreme Court to overturn Cook removal injunction, (Sep 22, 2025)

By Shashi Kant, BALLB, LLM

The Administration contends that mortgage fraud allegations justify dismissal; Cook maintains she deserves notice and hearing before any removal action.

President Trump and embattled Federal Reserve Board Governor Lisa Cook filed competing briefs at the U.S. Supreme Court over the President’s attempt to remove Cook from her position, with Trump filing an application to stay lower court injunctions that blocked the removal and Cook filing an opposition to any administrative stay. The Trump administration argues that Cook lacks due process protections, and that the President had sufficient cause to remove her based on alleged mortgage fraud; while Cook contends that an administrative stay would disrupt the Fed’s independence and threaten economic stability after she continued serving throughout the litigation.

Background. On Aug. 25, 2025, President Trump posted a letter declaring Cook “hereby removed” from the Fed Board of Governors, citing allegations that she misrepresented her primary residence in mortgage documents signed in 2021, before her appointment to the Fed (Banking and Finance Law Daily, Aug. 26, 2025). The Federal Housing Finance Agency had referred Cook to the Department of Justice for potential prosecution related to allegedly signing inconsistent mortgage agreements for properties in Michigan and Georgia. Cook filed suit on Aug. 28, 2025, alleging violations of the Federal Reserve Act and the Fifth Amendment. The Federal Reserve Act states that governors may be removed only “for cause” by the President. On Sept. 9, 2025, District Judge Jia M. Cobb issued a preliminary injunction blocking Cook’s removal and enjoining Fed Chair Jerome Powell and the Board of Governors from treating Cook as removed (Banking and Finance Law Daily, Sept. 10, 2025). Judge Cobb ruled that the President’s action likely violated the Federal Reserve Act’s “for cause” requirement because it concerned pre-appointment conduct rather than in-office performance. The district court also found that Cook had a property interest in her fourteen-year term and was entitled to notice and an opportunity to respond before removal under the Fifth Amendment’s Due Process Clause.

The Trump administration appealed to the D.C. Circuit and sought an emergency stay of the district court's injunction. On September 15, the D.C. Circuit denied the government’s stay motion in a divided decision (Banking and Finance Law Daily, Sept. 16, 2025). Judge Garcia, writing for the majority and joined by Judge Childs, emphasized due process concerns and found that Cook likely has a protected property interest in her position due to the for-cause removal protection. The majority declined to address the meaning of “for cause” removal in the emergency posture. Judge Katsas dissented, arguing that the district court erred in both its statutory interpretation and due process analysis.

Government’s Supreme Court application. In its stay application filed with the Supreme Court, the Trump administration argued that the lower court decisions “flout many strands of this Court’s precedents, from removal to due process to the equities.” Solicitor General D. John Sauer contended that Cook lacks a Fifth Amendment property interest in her continued service as a Federal Reserve Governor.

The government argued that the lower courts incorrectly treated Cook’s office as property based on employment cases rather than Supreme Court precedent holding that “a public office is not property.” The application stated that Cook’s alleged mortgage misrepresentations constitute “deceitful and potentially criminal conduct in a financial matter” that renders her unfit to serve and demonstrates “gross negligence in financial transactions that calls into question [her] competence and trustworthiness as a financial regulator.” The government also argued that the President’s determination of cause is committed to his “unreviewable discretion” and that the district court lacked authority to order reinstatement as an equitable remedy. The application cited recent Supreme Court cases where the Court stayed preliminary injunctions reinstating removed executive officers.

Cook’s opposition to administrative stay. Cook filed an opposition specifically addressing the President’s request for an immediate administrative stay, arguing that granting such relief would “upend the status quo” because she has continued performing her official duties throughout the litigation, including participating in the Federal Open Market Committee meeting (Banking and Finance Law Daily, Sept. 12, 2025). Cook’s attorneys argued that an administrative stay would “subvert the Federal Reserve’s historical independence and disrupt the American economy.” They contended that Congress has protected the Federal Reserve from “day-to-day presidential control” and that temporarily removing Cook would “threaten our Nation’s economic stability and raise questions about the Federal Reserve’s continued independence.” The response distinguished Cook’s situation from other removal cases by noting that she has maintained uninterrupted access to her office and continued serving, making her case different from officers who were actually removed from their positions. Cook’s filing emphasized the Federal Reserve’s unique structure and independence from presidential policy control.

Amicus brief supporting government. The Separation of Powers Clinic at The Catholic University of America filed an amicus brief supporting the government’s stay application. The brief argued that the “strong default presumption under Article II is that the President can freely remove officials who exercise any executive power.”

The amicus brief contended that the district court erred in limiting “cause” to in-office conduct and in concluding that policy disagreements cannot constitute cause for removal. The brief argued that Cook has no property interest in exercising governmental powers and that any required process would be minimal. The filing warned that requiring extensive hearings could force “needless escalation” by converting personnel decisions into criminal inquiries.

Attorneys: D. John Sauer, U.S. Department of Justice, for Donald J. Trump. Abbe David Lowell (Lowell & Associates) for Lisa D. Cook.

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