Federal Reserve Gov. Lisa Cook’s lawsuit over Donald Trump’s attempt to fire her is hours old, but it’s already slated for a speedy reckoning.
Shortly after its filing, U.S. District Judge Jia Cobb scheduled a hearing to take place on Friday morning at 10 a.m. Eastern Time.
In a Substack Live this morning, Legal AF’s Michael Popok and I broke down the broad outlines of the case, which you can watch in the video at the top of this newsletter.
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“The President’s effort to terminate a Senate-confirmed Federal Reserve Board member is a broadside attack on the century-old independence of the Federal Reserve System,” Cook’s attorney Abbe Lowell wrote in a memo seeking a temporary restraining order. “As one editorial described, it represents a blatant ‘grab for power in defiance of the nation’s laws, and if it succeeds, it will be to the detriment of the nation’s interests.’”
Trump has long tried to attack the independence of the Federal Reserve, insulting its chair Jerome Powell as a “moron” and a “knucklehead,” but he has stopped short of what some commentators have described as the “nuclear option” against the U.S. central bank. Instead, Trump purported to fire Cook “for cause” by accusing her of mortgage fraud, through his Federal Housing Finance Agency director Bill Pulte.
In the Substack Live video above, national trial lawyer and Legal AF co-founder Michael Popok notes that Trump “has gotten a little bit of the taste of blood” to purge the Federal Reserve following the resignation of Gov. Adriana Kugler earlier this month. Trump pounced on Cook fell shortly after that in the name of combatting possible mortgage fraud.
Cook’s lawsuit denounces those “unsubstantiated” allegations, and she has not been charged with wrongdoing.
“Governor Cook will succeed at showing irreparable harm, as President Trump’s unprecedented actions threaten her Senate-confirmed position on the Board, and her ability to fulfill her duty to promote maximum employment and price stability,” her memo states. “Finally, the equities and public interest both weigh in favor of keeping Governor Cook in her position, as her purported firing would jeopardize the independence of the Federal Reserve, and ultimately, the stability of our nation’s financial system.”
Blasting Pulte’s criminal referral as a “thinly-veiled pretext,” Cook’s attorneys pointed out that Trump hedged his allegations as “potential” wrongdoing — and noted that Trump floated more indirect but similar insinuations against Powell over the “$2.5 billion renovation” of the Federal Reserve building.
“Here, however, the President has pointed to nothing more than an unsubstantiated allegation in a general referral letter sent by Director Pulte — no investigation, no evidence, not even a formal charge to support his allegations,” the memo notes. “Remarkably, the President and Director Pulte have not even asserted unambiguously that Governor Cook actually committed a crime. Director Pulte’s referral to the Department of Justice states only that Governor Cook ‘potentially’ committed mortgage fraud.”
“This cannot suffice,” it continues.
The memo hints at possible legal defenses if Trump’s Justice Department were to pursue charges, noting that the administration did not allege that Cook benefited from any “clerical error” — or that such an error was “intentional.”
“Even if Governor Cook had committed the infractions that the President alleges — which she did not — the President would lack ‘cause’ to remove her under 12 U.S.C. § 242,” the memo says,
Tomorrow morning’s hearing will be accessible remotely via Judge Cobb’s public dial-in line.
Follow the case docket here.
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