Will the Supreme Court Rule on CFPB Constitutionality?

Aug 14, 2019 | Federal Regulation, Litigation, News

Seven amicus briefs have been sent to the U.S. Supreme Court supporting a review of Seila Law’s petition for a writ of certiorari, according to Alan S. Kaplinsky, partner with Ballard Spahr LLP. The amicus briefs were filed by several trade associations, a think-tank, and twelve Attorneys General.

More specifically, the briefs were filed by the following entities:

  • U.S. Chamber of Commerce
  • Attorney Generals of Texas, Arkansas, Georgia, Indiana, Kansas, Louisiana, Nebraska, Oklahoma, South Carolina, Tennessee, Utah, and West Virginia
  • Separation of Powers Scholars
  • Pacific Legal Foundation
  • Landmark Legal Foundation
  • Cato Institute
  • Southeastern Legal Foundation and National Federation of Independent Small Business Legal Center

According to Kaplinsky, “All of the briefs argue that the CFPB’s structure is unconstitutional under relevant Supreme Court precedent but do not take a position on what the appropriate remedy should be (i.e. striking all of Title X of Dodd-Frank or only severing the for-cause removal provision).”

Many critics often point out that the federal agency is led by a single director, as opposed to a commission, who is only fireable for-cause, as opposed to at-will. Combined with the fact that the CFPB is not appropriated by Congress gives the federal agency incredible independence from both the White House and Congress.

In the most recent ruling, a panel from the Ninth Circuit said that Supreme Court precedent justifies the current CFPB structure. “In short, we view Humphrey’s Executor and Morrison as controlling here,” said U.S. Circuit Judge Paul J. Watford. “Those cases indicate that the for-cause removal restriction protecting the CFPB’s director does not impede the president’s ability to perform his constitutional duty to ensure that the laws are faithfully executed.”

The Supreme Court only reviews a few cases each year, but the amicus briefs filed for this particular case may increase its chances of being heard.

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