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June 21, 2018

Federal District Court: Elizabeth Warren's Creation, the Consumer Financial Protection Bureau, Is Unconstitutional

Courts have found the law creating the CFPB unconstitutional in that it creates a "Director" running it, who is, in theory, a member of the Executive Branch, but then puts that Director unconstitutionally beyond the reach of the actual Executive, the President, stating that he can only be fired for cause.

One court reviewing this en banc chose to say that part is unconstitutional, but it can be "severed" from the rest of the law, and the law just rewritten by judge's fiat to say the Director can be fired by the president, like any other executive officer, for any reason.

Actually, a clarification: I think the rule is that members of a committee exercising executive power can be made fire-proof (or fireable only for cause), but you can't vest that kind of unfireable power in a singular head, as a Director is.

But one district judge says, "Nah, bro," and finds that that the can-only-be-fired-for-cause provision is part of the heart of the CFPB, and therefore cannot simply be severed/written out of the bill.

As that part is unconstitutional, and cannot be severed from the bill creating the CFPB, the whole law is unconstitutional, and the CFPB is unconstitutional and null and void itself. It strikes the CFPB as a party from the suit (against various defendants, including the NFL), finding it simply has no authority to act at all, in any capacity.

In reaching the question of the constitutionality of Title X of Dodd-Frank, which established the CFPB as an "independent bureau" within the Federal Reserve System, 12 U.S.C. § 5491(a), the Court acknowledges the en banc holding of the Court of Appeals for the District of Columbia Circuit in PHH Corp. v. CFPB, 881 F.3d 75 (D.C. Cir. 2018), upholding the statute. Of course, that decision is not binding on this Court.7

Respectfully, the Court disagrees with the holding of the en
banc court and instead adopts Sections I-IV of Judge Brett
Kavanaugh's dissent (joined in by Senior Circuit Judge A.
Raymond Randolph), where, based on considerations of history,
liberty, and presidential authority, Judge Kavanaugh concluded
that the CFPB "is unconstitutionally structured because it is an
independent agency that exercises substantial executive power
and is headed by a single Director." Id. at 198.

Also most respectfully, the Court disagrees with Section V
of Judge Kavanaugh’s opinion wherein he determined the remedy to
be to "invalidate and sever the for-cause removal provision and
hold that the Director of the CFPB may be supervised, directed,
and removed at will by the President." Id. at 200. Instead,
the Court adopts Section II of Judge Karen LeCraft Henderson's
dissent wherein she opined that "the presumption of severability
is rebutted here. A severability clause 'does not give the
court power to amend' a statute. Nor is it a license to cut out
the 'heart' of a statute. Because section 5491(c)(3) is at the
heart of Title X [Dodd Frank], I would strike Title X in its
entirety." Id. at 163-64 (citations omitted).

Let me digest the next bits: The CFPB argues that because Mick Mulvaney is now the director, but was appointed as a vacancy appointment and therefore can be fired by the President for any reason, that the CFPB is acting constitutionally if only for this brief bit of time, having a constitutional, fireable executive in charge.

The Court points out that Mulvaney can only serve until 2018, at which point the law calls for another unconstitutionally, not-fireable-except-for-cause director to be appointed, which therefore keeps the CFPB in violation of the Constitution.

The CFPB argues that Mulvaney, by currently being the head of the CFPB and not choosing to end this action (which was begun before he assumed the directorship), effectively "ratifies" the actions taken by his predecessor. The argument is that while the previous Director might have been unconstitutional, the current temporary one is, and his presence retroactively fixes the constitutional defects of the CFPB.

Nah, brah, says the Court again. A temporary and temporarily-fireable director does not fix the fundamental unconstitutionality of the Dodd-Frank law which created this unconstitutional agency.

Here, the constitutional issues presented by the structure of the CFPB are not cured by the appointment of Mr. Mulvaney. As Defendants point out, the relevant provisions of the Dodd-Frank Act that render the CFPB's structure unconstitutional remain intact. (Ratification 4.)

Furthermore, Mr. Mulvaney cannot serve past June 22, 2018 (210 days after the vacancy arose), unless the President nominates a new Director, and then
only until the new Director is appointed. Thus, there will
likely be a new Director appointed in the coming months who will
be subject to the for-cause removal provision. Therefore, the
Ratification does not cure the constitutional deficiencies with
the CFPB's structure as the CFPB argues. Accordingly, the Court
rejects the Notice of Ratification (ECF No. 78) to the extent
the CFPB argues that the Ratification renders Defendants'
constitutional arguments moot.

Accordingly, the Court finds that the CFPB "lacks authority
to bring this enforcement action because its composition
violates the Constitution’s separation of powers," and thus the
CFPB's claims are dismissed. Fed. Election Comm’n v. NRA
Political Victory Fund, 6 F.3d 821, 822 (D.C. Cir. 1993).

d. Conclusion

For the foregoing reasons, Defendants' motion (ECF No. 39)
is DENIED. Because Plaintiff Consumer Financial Protection
Bureau is unconstitutionally structured and lacks authority to
bring claims under the CFPA, the Clerk of Court shall terminate
Plaintiff Consumer Financial Protection Bureau as a party to
this action.

Baller move, bruv.

digg this
posted by Ace of Spades at 03:55 PM

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