The department maintains agreement that the bureau’s leadership structure is unconstitutional; but states Justice Brett Kavanaugh’s previous written opinion on the issue will prevent full Supreme Court from issuing a ruling.
12/14/2018 14:00
The U.S. Department of Justice (DOJ) says the U.S. Supreme Court should deny a petition from State National Bank of Big Spring, Texas, and other plaintiffs to consider a lawsuit challenging the Bureau of Consumer Financial Protection’s leadership structure.
Following the outcome of PHH Corporation v. Consumer Financial Protection Bureau (also focused on the constitutionality of the bureau’s structure) State National Bank joined plaintiffs Competitive Enterprise Institute (CEI), a nonprofit public policy organization, and 60 Plus Association, a seniors’ advocacy group, in filing a petition with the court to hear the case in September, ACA International previously reported. State National Bank filed a motion for summary judgment with the U.S. District Court for the District of Columbia in November 2015. The main arguments in State National Bank and CEI’s case, in addition to the constitutionality of the bureau’s structure, also focused on the lack of congressional appropriations for the bureau’s budget.
In the PHH Corp. v. CFPB ruling this year, the U.S. Court of Appeals for the D.C. Circuit removed a $109 million penalty against the company. In the same decision, the court ruled that the bureau’s structure is constitutional.
After that ruling, the U.S. District Court for the District of Columbia ruled against the plaintiffs in the State National Bank case—prompting the petition to the U.S. Supreme Court.
The DOJ, according to a brief filed in opposition of the petition this month, maintains that the bureau’s leadership structure “including the for-cause removal restriction on its single director, violates the constitutional separation of powers. That question is important, and it warrants this Court’s review in an appropriate case. This case, however, would be a poor vehicle for considering the constitutionality of the Bureau’s structure because it is unlikely that the question would be considered by the full Court in this case and, even if it were, there is a substantial jurisdictional question that could prevent the Court from reaching the merits of this dispute. Further review of this case is therefore unwarranted.”
In part the DOJ notes that Justice Brett Kavanaugh, previously a judge in the D.C. Circuit Court of Appeals, would have to recuse himself from considering State National Bank’s case because he authored the majority panel opinion in PHH Corp v. CFPB, declaring the bureau unconstitutional.
“Particularly for a question of this magnitude, the court may wish to wait for a vehicle in which all nine justices are likely to participate,” writes Acting Solicitor General Jeffrey Wall in the DOJ’s brief.
Wall also notes that other pending Court of Appeals cases raise similar opposition to the bureau’s leadership structure, such as CFPB v. RD Legal Funding LLC; CFPB v. All American Cash Checking Inc.; and CFPB v. Seila Law LLC.
“One or more of those cases may not present the same obstacles that could impede the full court from considering the merits of this important issue,” Wall writes.
Meanwhile, the recent confirmation of new BCFP Director Kathy Kraninger may also present a challenge or delay of the case. Wall notes that under Acting Director Mick Mulvaney’s leadership, the bureau defended the constitutionality of its structure in lower courts.
“In light of the United States’ position in this case, if the court were to grant the petition for a writ of certiorari, it would be the court’s usual practice to appoint an amicus curiae to defend the judgment of the court of appeals. Before following that approach here, however, the United States respectfully requests a reasonable opportunity for the new Senate-confirmed director of the bureau to determine whether the bureau will seek to defend the court of appeals’ judgment in this court and for the Acting Solicitor General to determine whether he will authorize the bureau to do so,” according to Wall.
Read the complete brief from the Department of Justice here. ACA International will continue to follow this case.
Related Content from ACA International:
D.C. Circuit Court of Appeals Rules in PHH v. CFPB
PHH Corp. Court Case that Sparked Debate on BCFP Constitutionality Comes to an End
Brett Kavanaugh Says Single-Director Structure of BCFP is ‘Issue of Concern’