Tuesday, February 21, 2017

Court Grants CFPB's Petition for Rehearing in PHH

The D.C. Circuit has vacated its prior order in PHH Corporation v. Consumer Financial Protection Bureau and ordered the matter be reheard en banc.  The parties have been specifically asked to  address the following issues in their briefs:

  • Is the CFPB's structure as a single-Director independent agency consistent with Article II of the Constitution and, if not, is the proper remedy to sever the for-cause provision of the statute?
  • May the court appropriately avoid deciding that constitutional question given the panel's ruling on the statutory issues in this case?
  • If the en banc court, which has also ordered en banc consideration of Lucia v. SEC, concludes in Lucia that the administrative law judge who handled that case was an inferior officer rather than an employee, what is the appropriate disposition of this case?
PHH Corp. v. Consumer Fin. Prot. Bureau, 2017 U.S. App. LEXIS 2733 (D.C. Cir. Feb. 16, 2017).  Briefing is scheduled to begin March 10, 2017 and conclude April 10, 2017.  Argument is scheduled for May 24, 2017.  

The court's order sets aside the prior order of the court which held that the CFPB's structure was unconstitutional because it was an independent agency headed by a single director.  To cure the constitutional flaw, the court severed that for-cause provision and provided the president with power to remove the director at will and to supervise and direct the director.  See generally, PHH Corp. v. Consumer Fin. Prot. Bureau, 839 F.3d 1 (D.C. Cir. 2016).  The matter will be heard by the entire D.C. Circuit (with the exception of Chief Judge Garland), the majority of which were appointed by democratic presidents.

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