Term: 2019
Docket: 19-7
Seila Law Llc v. Consumer Financial Protection Bureau
- Pro
19-7 SEILA LAW LLC V. CONSUMER FINANCIAL PROTECTION BUREAU DECISION BELOW: 923 F.3d 680 IN ADDITION TO THE QUESTION PRESENTED BY THE PETITION, THE PARTIES ARE DIRECTED TO BRIEF AND ARGUE THE FOLLOWING QUESTION: IF THE CONSUMER FINANCIAL PROTECTION BUREAU IS FOUND UNCONSTITUTIONAL ON THE BASIS OF THE SEPARATION OF POWERS, CAN 12 U.S.C. §5491(c)(3) BE SEVERED FROM THE DODD-FRANK ACT? PAUL D. CLEMENT, ESQUIRE, OF WASHINGTON, D. C., IS INVITED TO BRIEF AND ARGUE THIS CASE, AS AMICUS CURIAE, IN SUPPORT OF THE JUDGMENT BELOW ON THE QUESTION PRESENTED BY THE PETITION. CERT. GRANTED 10/18/2019 QUESTION PRESENTED: Whether the vesting of substantial executive authority in the Consumer Financial Protection Bureau, an independent agency led by a single director, violates the separation of powers. LOWER COURT CASE NUMBER: 17-56324
In the case of Seila Law LLC v. Consumer Financial Protection Bureau (CFPB), 2019, the U.S Supreme Court ruled that the structure of CFPB was unconstitutional due to its director's protection from removal without cause by the president. The court found this violated separation of powers principles as it limited presidential control over executive agencies. However, rather than dismantling CFPB entirely, which was established in response to financial crisis for consumer protection purposes, they decided that this provision could be severed from rest of Dodd-Frank Act which created it. Therefore, while ruling changed how directors can be removed - now at will by President - it did not affect other functions or operations of agency.
In the dissenting opinion for SEILA LAW LLC v. CONSUMER FINANCIAL PROTECTION BUREAU, Justice Elena Kagan, joined by Justices Ginsburg, Breyer and Sotomayor, argued that the majority's decision to invalidate a provision of the Dodd-Frank Act was an unnecessary departure from historical precedent. The dissenters contended that Congress has historically been given wide latitude in creating and structuring administrative agencies. They pointed out that there are many other examples of independent agencies led by single directors who can only be removed for cause - a structure which they believe is constitutional under previous Supreme Court rulings. Furthermore, they expressed concern about potential implications on other regulatory bodies with similar structures or removal protections as CFPB’s director had before this ruling.
