Justice Breyer in his dissent made a case that SEC commissioners are not removable "for cause." In other words, the President has plenary right to remove commissioners. He went on to conclude that this "does not mean it intended to create a dependent, rather than an independent agency."
Instead, he reasoned that agency independence "is a function of several different factors, of which 'for cause' protection is only one." He includes Appendix A, which contains 24 "stand-alone" agencies where the "for cause" restriction on removal is explicitly included in the statute. He also provide Appendix D, which lists 29 departments and other agencies that are not subject to any statutory for cause removal provision "but that do bear certain other indicia of independence."
The "indicia of independence" are six criteria listed in the Appendix. These include:
- (1) whether the agency consists of a multi-member commission; (2) whether its members are required, by statute, to be bipartisan (or nonpartisan); (3) whether eligibility to serve as the agency’s head depends on statutorily defined qualifications; (4) whether the agency has independence in submitting budgetary and other proposals to Congress (thereby bypassing the Office of Management and Budget); (5) whether the agency has authority to appear in court independent of the Depart-ment of Justice, cf. 28 U. S. C. §§516–519; and (6) whether the agency is explicitly classified as “independent” by statute.
But as we go through each, its clear that they indicate independence in some descriptive sense but do not ensure independence from the President. The first factor, a board or commission, is meaningless for purposes of independence if the President can remove all of them at will.
The second factor, bi-partisanship, is typically expressed through a statutory requirement that comissioners of an agency cannot be from the same party, an appointment process that is not a guarantee of bi-partisenship. It is not difficult for the President to find registered democrats who have the views of the typical republican and republicans that have the views of the typical democrat. Moreover, if the commissioners, whatever their party, do not act in the way the President wants, he or she can remove them.
Nor is it clear how the other factors ensure independence. Litigation and budgetary authority theoretically provide some degree of independence but not in practice. If the President can remove the heads of the agency at will, this type of authority can still be controlled by the President.
The dubious nature of the criteria can be seen from some of the entrants on the list in Appendix D. Among the 29 with an "indicia of independence," he includes the CIA. See 50 USC 403. But, as Justice Scalia wrote in his dissent in Freytag v. IRS, 501 US 868, 921 (1991): "The Central Intelligence Agency and the Environmental Protection Agency, for example, though not Cabinet agencies or components of Cabinet agencies, are not 'independent' agencies in the sense of independence from Presidential control." The statute creating the position of director contains no restrictions on removal and it is hard to imagine a position in the Executive Branch that has less independence from the President than the head of the CIA.
Justice Breyer's suggestion that the SEC could remain independent even without for cause restrictions on removal is to say that it could remain as independent as the CIA. That level of independence would be no independence at all. It would result in a very politicized Commission, much more so than now. The securities markets do not need that kind of approach.
Justice Bryer's position had the support of four votes. Where this issue to be raised more directly, one would hope that the full Court would reject his analysis. That remains to be seen.