Sergio M. Marxuach

On June 29, 2026, the Supreme Court issued two removal-power decisions that point in opposite directions. Together, they raise a direct question about the tenure protection of the Financial Oversight and Management Board (“FOMB” or “Board”) for Puerto Rico’s seven appointed members, whom PROMESA permits the President to “remove … only for cause.”

In Trump v. Slaughter, the Court held that the for-cause limitation on the President’s power to remove Commissioners of the Federal Trade Commission is “contrary to the separation of powers enshrined in the Constitution,” effectively overruling Humphrey’s Executor v. United States. 

In Trump v. Cook, decided the same day, the Court declined to permit the immediate removal of Federal Reserve Governor Lisa D. Cook, holding both that she had not received due process and that the Government’s reading would “transform the Federal Reserve’s for-cause protection into at-will employment—an interpretive leap out of step with the statute Congress enacted and our Nation’s tradition of central banking protected from political interference.” 

Neither decision is squarely controlling, because the FOMB is neither the FTC nor the Federal Reserve. By statute the Board “shall not be considered to be a department, agency, establishment, or instrumentality of the Federal Government,” and is instead “an entity within the territorial government.”  The answer must therefore be reached by analogy and, more importantly, through the distinctive Article IV lens the Supreme Court has already applied to this very Board. 

On balance, the for-cause protection in PROMESA § 101(e)(5)(B) is more likely than not to survive Slaughter, but for a reason different from, and stronger than, the FTC-versus-Fed framing. The decisive point is that, in Financial Oversight & Management Board for Puerto Rico v. Aurelius Investment, LLC, the Court held that FOMB members exercise “primarily local” powers and so are not “Officers of the United States,” and Justice Thomas, concurring in the judgment, described them as “Article IV executives” who “do not exercise the national executive power.” 

The removal principle reaffirmed in Slaughter is rooted in Article II’s vesting of “the executive Power” in the President and his duty to “take Care that the Laws be faithfully executed”—as confirmed by the Decision of 1789, historical practice, and the Court’s removal precedents—and it reaches only those who wield the executive power of the United States. Because Aurelius holds that FOMB members do not wield that power, the structural premise of the Slaughter rule is absent, and Congress’s plenary authority over the territories under the Territory Clause supplies an independent basis for the tenure protection. 

This conclusion is quite uncertain: it depends on the durability of Aurelius and on how the majority chooses to characterize a “territorial” Board that administers a federal statute. A reasonable jurist could reach the opposite result by treating the FOMB as functionally indistinguishable from the FTC. 

What is clear is that Puerto Rico enters this legal uncertainty at a critical moment. The Board’s tenure protection is one piece of a larger institutional architecture; and the durability of that architecture matters for everything from debt restructuring to the pace of federal recovery spending. CNE will be monitoring developments closely and will publish updated analysis as the legal landscape evolves.