THE SUPREME COURT CONSIDERS TWO KEY CASES ON WHETHER THE PRESIDENT HAS UNRESTRAINED AUTHORITY TO FIRE AGENCY HEADS IN VIOLATION OF CONGRESSIONAL LIMITS.
As we reported last month, two extraordinarily important cases in the area of administrative law have worked their way up to the Supreme Court. These cases address whether the President can fire agency leaders without cause and in violation of Congressional limits that condition removal on a showing of inefficiency, neglect of duty, or malfeasance. Although these cases may sound legally technical, the Court’s resolution will have a profound impact on the agencies that Congress established to protect Americans from a wide range of threats to their health, safety, and financial well-being. If the Court sides with President Trump and allows these unbridled removals to stand, agencies will lose their independence. That means agency leadership will obey the political impulses of the President rather than working to do what’s best for the American people. Here’s a recap of those cases and some important recent developments.
Trump v. Cook, Case No. 25A312 (S. Ct.). President Trump has taken the extraordinary step of attempting to fire Lisa Cook, a member of the Board of Governors of the Federal Reserve, the single most important financial and economic policy regulator. Cook immediately challenged the removal and prevailed in the D.C. District Court, which held that Cook was likely to show her removal was unlawful because it violated the “for-cause” restriction in the Federal Reserve Act. The court also ruled that the purported termination likely violated Cook’s due process rights to fair notice and an opportunity to be heard. Cook v. Trump, Case No. 25-cv-2903 (JMC) (D.D.C. Sept. 9, 2025). The D.C. Circuit upheld the district court’s stay based on the due process argument. Cook v. Trump, Case No. 25-5326 (D.C. Cir. Sept. 15, 2025).
The Administration applied to the Supreme Court for a stay of the district court’s order and on October 1, the Court “deferred” action on the stay request “pending oral argument in January 2026.” That means that at least until the Supreme Court rules, the Administration’s attempt to remove Cook from the Fed is on hold or “stayed.” The Court instructed the Clerk to establish a briefing schedule for non-parties who have an interest in the case (referred to as amici curiae) and any supplemental briefs from the parties responding to any amici. The briefing is under way and should be completed by November 19. We’ll be watching for an oral argument date to be set.
The briefs filed in the Cook case, along with the Court’s orders and other docket entries, can be obtained by visiting the “docket search” page of the Supreme Court’s website at https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/25a312.html.
Trump v. Slaughter, Case No. 25-332 (S. Ct.). President Trump has also attempted to remove Rebecca Slaughter from her position as a commissioner at the Federal Trade Commission (FTC), an important consumer protection agency. The district court ruled in her favor, preventing her removal. Slaughter v. Trump, Case No. 25 – 909 (LLA) (D.D.C. July 17, 2025). On appeal, the D.C. Circuit, after issuing a brief administrative stay, also sided with Slaughter. It held that the government was highly unlikely to prevail on the merits, given “controlling and directly on point Supreme Court precedent,” specifically Humphrey’s Executor v. United States, 295 U.S. 602 (1935), which upheld for-cause removal restrictions applicable to FTC commissioners. See Slaughter v. Trump, Case No. No. 25-5261 (D.C. Cir. Sept. 2, 2025).
The Administration then applied to the Supreme Court for a stay of the district court’s order. On September 22, 2025, the Court issued the requested stay, with no explanation. It also “granted certiorari before judgment,” meaning that the Court has agreed to review the merits of the case this coming term. The Court recently scheduled oral argument for December 8th.
For access to the briefs and other docket entries in the Slaughter case, go to https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/25-332.html.
IN A POSITIVE STEP, NEVADA FEDERAL COURT HOLDS THAT SPORTS BETTING CONTRACTS ARE NOT EXEMPT FROM STATE OVERSIGHT.
Gambling platforms are exploding as they offer betting on an increasing variety of outcomes, from sporting events to election contests. One early participant in this phenomenon was KalshiEX, LLC (Kalshi), which we profiled in last month’s newsletter. Another member of this expanding group of firms is the North American Derivatives Exchange, Inc., doing business as “Cyprto.com.” Like Kalshi, Crypto.com is an exchange or “designated contract market” licensed by the Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act (CEA). That’s the federal agency that oversees the commodity markets that involve trading in legitimate risk-hedging futures, options, and swaps. Like Kalshi, Crypto.com claims that it isn’t required to comply with any state gaming laws. It insists that state law is preempted or nullified by virtue of a provision in the CEA which it says gives the CFTC exclusive authority over its federally-licensed platform.
Earlier this year, the Nevada Gaming Board ordered Crypto.com to cease and desist offering its event contracts keyed to sporting events, and Cyprto.com responded by filing suit in Nevada federal court to prevent or enjoin the state authorities from pursuing enforcement actions against them. In a striking and positive development, on October 14, 2025, the federal district court in Nevada rejected Crypto.com’s claim that it is exempt from state regulation of its gaming contracts. North American Derivatives Exchange, Inc. v. The State of Nevada, Case No. 2:25-cv-00978-APG-BNW, 2025 WL 2916151 (D. Nev. Oct. 14, 2025).
The court held that Crypto.com’s event contracts were not “swaps” at all. It therefore concluded that Cyprto.com’s contracts were not covered by the preemption language in the CEA, which only applies to swaps and futures (and futures were not at issue). It reasoned that under the CEA, swaps by definition involve contracts providing for payment “that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event,” not the outcome of the event. As the court explained:
According to Crypto’s self-certification, it is not offering event contracts on, for example, whether the Kentucky Derby (the event) will take place (occur, not occur, or extent of occurrence) but on who will win it (the outcome). Crypto’s self-certified contracts therefore are not “swaps” within the CFTC’s exclusive jurisdiction.
Id. at *9.
Although the court didn’t have to address the scope of the preemption language in the statute—since Crypto.com’s contracts didn’t fall under that provision in the first place—it nevertheless made clear that preemption is a matter of congressional intent, and Congress never intended gaming to be conducted on designated contract markets:
“Pre-emption fundamentally is a question of congressional intent.” Eng. v. Gen. Elec. Co., 496 U.S. 72, 78-79 (1990). Congress did not intend for gaming to be conducted on DCMs, and it defined swaps and enacted the special rule to achieve this intent. Thus, based on the statutory language and Congressional intent, Crypto’s contracts on the outcome of live events are not “swaps” that fall within the CFTC’s exclusive jurisdiction in 7 U.S.C. § 2(a)(1)(A).
North American at *11-12.
Finally, the court also weighed in on the relative harms at stake. It observed that “[a]llowing Crypto to offer sports wagers guised as swaps on its exchange unfettered by state regulation imposes substantial hardships on the [state] defendants, who are statutorily charged with the “dut[y] to preserve public confidence and trust in licensed gaming.” State Gaming Control Bd. v. Breen, 661 P.2d 1309, 1310 (Nev. 1983) (citing Nev. Rev. Stat. § 463.0129(1)(c)). And with respect to the public interest, it explained that “the public has an interest in ensuring that unlicensed sports wagering does not occur on CFTC-designated exchanges, as that would be contrary to the CEA, congressional intent, CFTC regulations, and Nevada law.” North American at *11.
The decision comes on the heels of another win for the public interest in a Maryland district court. In August, that court ruled at least preliminarily that Congress never intended to preempt state gaming laws in this context. KalshiEX LLC v. Martin, Case No. 25-cv-1283-ABA, 2025 WL 2194908 (D. Md. Aug. 1, 2025). Kalshi has appealed to the Fourth Circuit, with briefing to proceed this Fall. Kalshi v. Flaherty, Case No. 25-1892 (4th Cir.).
As Better Markets has argued in multiple amicus briefs challenging Kalshi’s related attempt to offer election gambling on election contracts, the proliferation of unregulated gambling platforms poses multiple threats. In the sports gaming context, it means state protections for those who are underage or struggling with gambling addiction are stripped away. It also means that the CFTC, already overburdened with the oversight of the legitimate derivatives markets, is further taxed and distracted. Finally, it undermines core principles of law that limit the scope of preemption and preserve the authority of the states to protect their citizens. The Nevada court’s decision, along with the ruling from the Maryland court, promises to help neutralize these threats.
IN ANOTHER POSITIVE DEVLEOPMENT, THE SEC’S RULE UPDATING TRADING PRICE INCREMENTS AND FEES IS UPHELD BY THE D.C. CIRCUIT.
For years, members of the securities industry have routinely challenged the SEC’s rules in court, and they have often met with success. The result has been the judicial nullification of important rules that are necessary to help keep our securities markets fair and transparent. However, in a win for the SEC, investors, and the markets, the D.C. Circuit recently upheld an important SEC rule that updates the way stocks are traded, as Better Markets urged in its amicus brief. CBOE Global Markets, Inc v. SEC, Case No. 24-1350, 2025 WL 2908059 (Oct. 14, 2025).
The rule reduced the minimum pricing increment that governs stock trading and it also lowered the fees that exchanges can charge for access to their platforms. The court rightly rejected the industry’s two attacks on the rule. It held first, as we argued in our amicus brief, that the SEC had clear and ample authority under the securities laws to issue the rule. Id. at *3-6. It then rejected claims that the SEC impermissibly changed its position about the fees after its earlier pilot project was struck down. As the court explained, the SEC provided good reasons for the rule and took all the relevant data into account. Id. at *6 et seq. And the court appropriately clarified the interpretation of the Supreme Court’s anti-agency decision in Loper Bright, observing that Congress can and does “‘confer discretionary authority on agencies,’ including the authority to draw lines when lines must be drawn.” Id. at *11. This is a strong affirmation of the principle that agencies like the SEC must have appropriate discretion when implementing Congress’s broad mandates in the public interest.
The Court’s decision means savings for investors and more efficient markets for the benefit of companies and the economy. Reducing the “tick sizes” or pricing increments for stock quotes means more trading, more liquidity, and better prices for investors. And reducing the fees that exchanges can charge for access will help investors save trading costs and receive fairer treatment from the brokers who route their orders for execution. While the rule made seemingly small adjustments to fees, in fractions of a cent, the money adds up, especially for institutional investors that manage the 401(k)s and pension funds of millions of everyday Americans. The multiple benefits of the rule, which Better Markets highlighted in its amicus brief, are now preserved with the Court’s ruling.
