Seila Law, LLC v. Consumer Financial Protection Bureau

Summarized by:

  • Court: U.S. Supreme Court Certiorari Granted
  • Area(s) of Law: Constitutional Law
  • Date Filed: October 18, 2019
  • Case #: 19-7
  • Judge(s)/Court Below: 923 F.3d 680 (9th Cir. 2019)
  • Full Text Opinion

Whether the Consumer Financial Protection Bureau’s structure, which vests significant executive power in a single director who the U.S. President can only remove for cause, violates the Constitution’s separation of powers and, if the CFPB’s structure constitutes a violation of the separation of powers, whether the provision deemed unconstitutional can be severed from the Dodd-Frank Act.

The Consumer Financial Protection Bureau (CFPB) issued an investigative demand seeking information from Petitioner related to Petitioner’s potential violation of federal laws. Petitioner objected, asserting that the structure of the CFPB violated the U.S. Constitution’s separation of powers, but the CFPB refused to withdraw its demand. On review of the CFPB’s petition for enforcement, the district court held that the CFPB’s structure did not violate the Constitution’s separation of powers and the Ninth Circuit affirmed after the issuance of a decision by the D.C. Circuit reaching the same holding through separate reasoning. Petitioner argues that the Ninth Circuit improperly held the CFPB’S structure constitutional when it agreed with the D.C. Circuit’s majority opinion, instead of its dissenters. Petitioner bases this argument on the unique structure of the CFPB, which does not allow the President to remove the CFPB’s single director except for cause and Supreme Court precedent recognizing the President’s general authority to remove subordinate officers from duty. Petitioner concludes that the lower courts improperly extended precedent upholding for-cause removal of commissioners performing quasi-legislative or quasi-judicial functions as part of a multi-member commission to the unique structure of the CFPB. While granting certiorari, the Court directed parties to brief and argue the viability of severing 12 U.S.C §5491(c)(3) from the Dodd-Frank Act if the Court finds the structure of the CFPB unconstitutional.

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