Left: Federal Reserve Board of Governors member Lisa Cook listens during an open meeting of the Board of Governors at the Federal Reserve, June 25, 2025, in Washington (AP Photo/Mark Schiefelbein, File). Right: President Donald Trump speaks at a hearing of the Religious Liberty Commission at the Museum of the Bible, Monday, Sept. 8, 2025, in Washington (AP Photo/Alex Brandon).
A couple of weeks after a Federal Reserve Board governor sued to block her firing by Donald Trump, Lisa Cook persuaded a federal judge in Washington, D.C., that mortgage fraud allegations stemming from before her time in office do not meet the “for cause” standard for removal.
U.S. District Judge Jia Cobb, a 2021 appointee of President Joe Biden, began her ruling in Cook”s favor by noting the groundbreaking nature of the case — that it is a case of “first impression” — and ended the ruling by pointing out that this is the “first” attempted “‘for cause’ removal of a Federal Reserve Board Governor[.]”
Cook, also a Biden appointee who began her 14-year term in 2023, and her high-profile attorney Abbe Lowell have, at least for now, successfully argued that, regardless of the disputed mortgage fraud allegations, federal law shows that the “best reading of the ‘for cause’ provision is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a Governor’s behavior in office and whether they have been faithfully and effectively executing their statutory duties,” not solely alleged and unadjudicated conduct prior to her confirmation.
“‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office,” Cobb wrote, adding that inefficiency, neglect of duty, and malfeasance in office (INM) generally constitute cause for independent agency firings like this one. “In addition, the Court finds that the removal also likely violated Cook’s procedural rights under the Fifth Amendment’s Due Process Clause. She has also demonstrated irreparable harm from her removal.”
Lowell and Cook had asserted in court filings that the DOJ’s preferred definition of cause — “any articulable justification that the President deems sufficient to warrant removal” — simply “cannot be right,” and neither could the claim that Cook received adequate due process. The judge agreed on both counts, granting Cook a temporary restraining order that the court treated as a preliminary injunction to block the firing for now.
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“The Court finds Cook substantially likely to succeed on at least two of her claims. First, the Court finds Cook likely to succeed on her argument that President Trump violated the Federal Reserve Act because her purported removal did not comply with the statute’s ‘for cause’ requirement,” Cobb said. “Second, the Court finds Cook likely to succeed on her claim that the purported removal deprived her of procedural rights guaranteed by the U.S. Constitution.”
Although the judge said Cook is “likely not correct that ‘for cause'” and the standard of inefficiency, neglect of duty, and malfeasance in office are “perfectly synonymous,” the Trump administration doomed itself by supporting an “any articulable justification” standard.
If the administration’s argument were true, then that would be “tantamount to being able to fire for policy disagreement, which the Government has admitted the President cannot do,” Cobb wrote, before indicating her ruling is not controversial,
“The Government’s argument that a rule that does not take into account pre-confirmation conduct will lead to a parade of horribles also ignores that this is precisely the line that Congress has drawn in dozens of statutes over the past century,” the judge continued. “For the officers that Congress insulated with INM protections, pre-confirmation conduct has never been a basis for removal. The Court is not breaking new ground in interpreting the Federal Reserve Act’s ‘for cause’ provision consistent with this historical landscape.”
In sum, Cobb found that “permissible cause for removal” of Cook and similarly situated officials “extends only to concerns about the Board member’s ability to effectively and faithfully execute their statutory duties, in light of events that have occurred while they are in office.”
In addition, the judge ruled that Trump’s determinations for firing Cook are reviewable by the courts and that the administration’s arguments to the contrary would lead to an “absurd result” because Federal Reserve Board members would essentially be removable at will, even for mere policy disagreement that the DOJ itself has said could not be “cause” for firing:
Finally, taken to its logical conclusion, the Government’s argument leads to an absurd result: While admitting that the President cannot remove an official for policy disagreements, the Government claims that under Reagan, a removal on the grounds of a policy disagreement would nevertheless be unreviewable. This cannot be the case. Such a rule would provide no practical insulation for the members of the Board of Governors. It would mean that the President could, in practice, “remove a member . . . merely because he wanted his own appointees on the” Board of Governors. Here, there is a disagreement between the Parties about the interpretation of a federal statute. The Court is exercising its appropriate role in resolving this dispute.
Next, the judge added in two caveats in footnotes. First she pointed out that the ruling was made without “inquiring into the sufficiency” of the mortgage fraud evidence “presented by President Trump.” Second, Cobb did not reach Cook’s claim that her firing was fueled by pretext. Still, she found that Trump had a “legally impermissible reason for firing Cook” by referring “only to allegations regarding Cook’s conduct before she began serving on the Federal Reserve Board” — conduct that “may have occurred before she was confirmed to her position.”
Nor were both the criminal referral Federal Housing Finance Agency Director Bill Pulte posted on social media and Trump’s immediate call for her to resign adequate notice and opportunity to respond to the allegations before her firing, the judge said, finding Cook “likely did not receive any due process in her removal[.]”
In closing, Cobb refused to grant the Trump administration a stay pending appeal and issued an injunction directing Federal Reserve chair Jerome Powell and the Board of Governors to “allow Cook to continue to operate as a member of the Board for the pendency of this litigation.”
Read the full opinion here.
