Following the reportedly abrupt dismissal of a Federal Reserve Board governor by President Donald Trump, the dismissed official promptly filed a lawsuit, pushing a federal judge to recognize the complex legal issues involved. The administration claims mortgage fraud allegations against Lisa Cook justify her removal. Cook’s renowned lawyer drew a comparison between Trump and “Humpty Dumpty” while trying to minimize the significance of the criminal charges her client faces.

U.S. District Judge Jia Cobb, a Biden appointee from 2021, initiated Friday’s session by confirming that the Federal Reserve and its legal representative attended as observers, not participants. Cook, also appointed by Biden and having started her 14-year tenure in 2023, is defended by notable attorney Abbe Lowell. Lowell has been involved in high-profile cases, including those of Hunter Biden, Jared Kushner, and New York’s attorney general, Letitia James, who faced similar fraud accusations.

After Lowell stated his intention to request a preliminary injunction by Tuesday, Cobb acknowledged the significance of Cook’s case, stating it deals with unprecedented issues, particularly regarding the board. The judge questioned Lowell’s reasons for seeking a temporary restraining order.

Lowell clarified that the urgency stemmed from uncertainty about whether the Federal Reserve, led by Jerome Powell, would enforce Cook’s dismissal. Despite criminal accusations from Federal Housing Finance Agency Director Bill Pulte submitted to the DOJ, the Fed had not yet acted.

Describing Cook as an “exceptionally skilled economist,” Lowell criticized the basis of Pulte’s charges, highlighting their tentative language, such as “appears” and “potentially.” He argued that President Trump relied on these shaky grounds to justify her dismissal, asserting, “What she did was bad.”

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: Federal Reserve Chairman Jerome Powell takes off his hard hat as President Donald Trump looks at ongoing construction at the Federal Reserve, Thursday, July 24, 2025, in Washington (AP Photo/Julia Demaree Nikhinson).

The judge wanted to know what should be done in a circumstance where, as here, the relevant statute does not define cause. In the government’s view, when cause is not defined, the president has the discretion to remove.

Lowell answered by spelling out Cobb’s “dilemma” and ultimately her “choice” in the case: consider Trump as like Humpty Dumpty — deciding what words mean when he says them and defining “cause” on his own — or look to Supreme Court precedent in Humphrey’s Executor v. United States.

As Law&Crime has explained, Humphrey’s Executor established that “inefficiency, neglect of duty, or malfeasance in office” were the causes for firing an FTC commissioner, as Congress expressly intended to insulate the independent fair competition agency from being unfairly subjected to politicization. In that case, the estate of William Humphrey sued for back pay, successfully arguing that then-President Franklin Delano Roosevelt did not have the power to fire him without cause after policy disagreements.

Lowell and Cook have argued that Trump’s attempted firing of her is not only pretextual — in the sense that the mortgage fraud allegations just happened to come up to force her out — but is also rooted in policy disagreements, as both Cook and Powell have incurred the president’s ire by refusing to lower interest rates. In addition, the allegations related to alleged conduct that predated Cook’s confirmation to the job.

While Lowell did not take the “absolute” and “extreme” position that any conduct before confirmation can’t amount to cause for firing, he did emphasize that there are certain factors that should be taken into consideration in such cases. Some examples: Were the allegations known at the time of the person’s confirmation? What is the nature of the offense and how does it relate to their office? What’s the evidence? What notice of the allegations and due process was given, and does Pulte tweeting out the allegations “at 11 p.m. at night” meet a notice requirement? And did Cook have a real chance to contest the allegations?

Lowell concluded that “whatever it [cause] is, it’s not this” — referring to Pulte’s tweet-storm and claims against Cook over alleged but non-adjudicated mortgage fraud claims. Lowell asserted that the president of the United States — “especially this one” — could have a “bad motive” that would “illuminate there was no cause,” but it might be enough to look at Pulte’s dozens of tweets on the subject.

Norm Eisen, left, and Abbe Lowell, attorneys of Lisa Cook, a governor on the Federal Reserve Board, walk out of the federal courthouse in Washington, Friday, Aug. 29, 2025. (AP Photo/Jose Luis Magana)

A lawyer for the government countered that Trump had the discretion to fire Cook and that his non-policy-disagreement-related determination about cause is either not reviewable by the courts or is, at the very least, subject to great deference. For the DOJ, proper cause calls into question an individual’s fitness to serve, and it is up to the president and his determination to make that judgment, not for the court to question it.

The government then slammed Cook’s brief as noticeably “very careful” in tiptoeing around the elephant in the room and “not to make any representation about what actually happened” as far as allegedly listing multiple houses as her primary residence in documents.

3 strikes and you’re out.

Today, U.S. Federal Housing sent a 2nd Criminal Referral in the matter of Lisa D. Cook, related to a mortgage on a 3rd property and alleged misrepresentations about her properties to the United States Government during her time as Governor of the… pic.twitter.com/TAH68Mia23

— Pulte (@pulte) August 29, 2025

Cobb chimed in to ask a nightmare hypothetical: “What if a stated cause is demonstrably false? That’s still not something anyone can do anything about?”

The DOJ attorney reiterated that to the “extent we’re going to have review at all,” it’s going to be “deferential” to Trump. The lawyer said he just didn’t see the argument that mortgage fraud allegations, for which Cook has still not explained, cannot be cause for removal.

“I just haven’t heard the story Cook wants to share,” the lawyer said, noting that it remains unclear whether the document representations were criminal or negligent, or whether someone else — like a lawyer or accountant — was to blame.

On rebuttal, Lowell repeated that Trump’s use of the word “cause” next to Article II powers doesn’t make it valid and “enough” a reason to fire Cook, particularly against the backdrop of Pulte tweeting and Trump immediately calling for Cook to resign or be fired.

The two-hour hearing ended without any decision on the request for a temporary restraining order.