LIT EDITORS’ UPDATE
Yesterday, 13th of November, 2019 was the start of President Donald Trumps’ impeachment. However, there was other dastardly deeds being done in Courts between Florida, Georgia, Texas and Louisiana as there was a raft of Orders issued.
As a review, the Burkes (homeowners) have been requesting their case against OCWEN be stayed in the FIFTH circuit while they have Constitutional Challenges with both the State and Federal AG’s. The first Order last week was issued by single Judge Patrick ‘no free houses’ Higginbotham, DENYING the Burkes request to stay.
On Sunday this week, the Burkes filed for a reconsideration of that order and the 3-Panel of JUDGES PATRICK HIGGINBOTHAM, DON WILLETT and LESLIE SOUTHWICK, also DENIED the Burkes reconsideration. (Denied; 13th Nov. 2019)
The Burkes also filed a reconsideration motion to stay the current appeal while the SELIA LAW case (19-7) is pending before the highest court, the US Supreme Court. This was also denied by JUDGE PATRICK HIGGINBOTHAM (and was part of the same ORDER as the Constitutional Challenge denial).
The RECONSIDERATION motion is currently PENDING at the Fifth, and the Burkes assume it was waiting for Judge Marra to release his Order yesterday, 13th November, 2019. Now that has been issued, the Burkes expect a DENIAL of this motion will follow shortly. (It has been DELETED by the appellate court instead, keeping up with the 5th Circuits ‘get innovative re Constitutional Challenges’)
UPDATE; Friday 15th, See Attached Order from Judge Patrick Higginbotham, saying these motions are MOOT. That’s nonsense when the Burkes also found out yesterday after phoning the Justice Dept in Washington that they have NO RECORD of the letter from the Fifth Circuit (19th September, 2019) regarding the “Constitutional Question”. The Burkes filed a motion late yesterday to the 5th Circuit and their answer this morning was just shocking.
The Burkes were intervenor-plaintiffs in the CFPB v. OCWEN case in S.D. Fla (Judge Marra’s court). This intervention was denied and the Burkes appealed to the Eleventh Circuit.
The Burkes recently received a dual order from Judge Beverly B. Martin, wherein she GRANTED 90 day extension of time for the Burkes to file their Initial Brief but DENIED the request to stay the appeal for the same reasons as provided to the Fifth, e.g. the Selia Law case before the US Supreme Court.
The Burkes also submitted a motion for Reconsideration of this DENIAL and at this time, the morning of 14th Nov. 2019, that is also PENDING. The Burkes assume the Eleventh went onto Marra at the District Court for him to pen the contrived ORDER of 13th Nov., 2019 and the DENIAL of the reconsideration will follow shortly. (Yes, Denied on Tuesday, 19th Nov., 2019 as expected).
In summary, reviewing the dates and the timing of the motions, it’s evident that the Fifth and Eleventh Circuit along with S.D. Fla District Court are in cahoots – working out how to stop homeowners from staying the cases before them, which is the right decision in LAW.
However, as we know and is on the record, the Fifth advised the Eleventh when they were formed, to “get innovative and creative” about Constitutional cases.
p.s. Not to confuse y’all, but the Burkes also filed a third motion of reconsideration of the Clerks’ Order denying their Motion for Leave to Supplement the Record and Supplemental Pleading. That motion is also currently pending at the Fifth Circuit as at 14th Nov., 2019. Update; On Monday, 18th Nov. 2019, single Judge “no free houses” Higginbotham DENIED the reconsideration motion.
Really? Judge Marra Says CFPB is Constitutional even when the Watchdog Director Kraninger Admits it is Unconstitutional.
This Cause is before the Court upon Ocwen Financial Corporation, Ocwen Mortgage Servicing, Inc., and Ocwen Loan Servicing LLC’s (collectively “Ocwen” or “Defendants”) “Motion for Reconsideration of Order on Defendants’ Motion to Dismiss (DE 452), Based on Plaintiff’s Subsequent Notice (DE 469) that Defendants’ Motion Was Correct in Arguing the Agency is Unconstitutional,” filed October 3, 2019 (DE 480, “Mot.”). Plaintiff the Consumer Financial Protection Bureau filed a Response on October 31, 2019 (DE 504, “Opp.”). Ocwen filed its Reply on October 7, 2019 (DE 513, “Reply”). The Court has considered the Motion and the filings and is otherwise fully advised in the premises.
Ocwen moves the Court to reconsider its finding that the Consumer Financial Protection Bureau (“CFPB”) is without constitutional defect and the case is not subject to dismissal on this ground. (Mot. at 2).
Ocwen argues that reconsideration is merited because the CFBP notified the Court of its change in position and that it would no longer defend the constitutionality of its structure. (Mot. at 1); (DE 469, “Notice”).
In the CFPB’s notice to the Court that it has changed its position regarding an argument that it has presented, the Bureau stated “[t]he Bureau’s Director has now determined that she agrees with the Department of Justice that the CFPA’s for-cause removal provision impermissibly infringes on the President’s constitutional obligation to take care that the laws be faithfully executed. Accordingly, the Bureau will no longer defend the constitutionality of that provision.” (Notice at 2).
The CFPB continued, “[i]t remains the Bureau’s position that this case should proceed, however. Accordingly, if the Court were to revisit its earlier decision that the removal provision is constitutional in light of the Bureau’s changed position, it nevertheless should not dismiss this case.” (Notice at 2).
The CFPB noted that the Office of the Solicitor General filed a brief on behalf of the Bureau in support of a petition for a writ of certiorari in Seila Law LLC v. CFPB, No. 19-7 (S. Ct.) (filed Sept. 17, 2019) (OSG Br.) urging the Court to grant certiorari to address the constitutionality of the CFPA’s removal provision, arguing that the provision is unconstitutional, but that the constitutional problem does not affect the validity of the other provisions of the CFPA. (Notice at 2).1
In its Motion for Reconsideration, Ocwen argues “this case should be dismissed because the Bureau ‘lacks authority to bring this enforcement action.’” (Mot. at 1 citing Fed. Election Comm’n v. NRA Political Victory Fund, 6 F.3d 821, 822 (D.C. Cir. 1993); Ryder v. United States, 515 U.S. 177, 182-184 (1995)).
Ocwen argues that the question presented is: what is the proper remedy for the alleged unconstitutional removal provision, which is presented de novo and therefore not subject to deferential reconsiderations standards. (Mot. at 1).
Ocwen suggests the remedy is dismissal with prejudice, not just severability. (Mot. at 1-2). Ocwen supports this assertion by arguing that: 1) “caselaw is settled that when a federal officer is without constitutional authority to act, her actions are void;” and 2) severability “cannot be the only remedy because it does not provide Ocwen with any relief.” (Mot. at 1-2, 7).
The CFPB responds that if the Court chooses to reopen Ocwen’s constitutional challenge, it should defer resolution until after the Supreme Court issued its decision in Selia Law. (Opp. at 2). The CFPB argues that irrespective of the timing2, the Court should reject Ocwen’s request to dismiss the case with prejudice and the case should proceed. (Opp. at 2). The CFPB argues “severance, not dismissal of this action, would provide Defendants with all the relief to which they are entitled.” (Opp. at 2).
I. Standard of Review
“When . . . a motion for reconsideration is served within twenty-eight days of the entry of the order at issue, Federal Rule of Civil Procedure 59(e) applies.” Krstic v. Princess Cruise Lines, Ltd., 706 F. Supp. 2d 1271, 1281 (S.D. Fla. 2010). “Rule 59(e) may not be used ‘to relitigate old matters, raise argument or present evidence that could have been raised prior to the entry of judgment.’” Holt v. United States, 249 F. App’x 753, 756 (11th Cir. 2007) (quoting Michael Linet, Inc. v. Village of Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005)).
It is well established that “motions for reconsideration are disfavored and should be granted only when the movant shows newly discovered evidence, clear error, manifest injustice, or an intervening change in law.” In re Garcia, 2002 WL 32372583, at *1 (S.D. Fla. Nov. 4, 2002). “The motion for reconsideration is not an opportunity for a party to improve upon his arguments or try out new arguments; nor is it properly a forum for a party to vent his dissatisfaction with the Court’s reasoning.” McCoy v. Macon Water Auth., 966 F. Supp. 1209, 1223 (M.D. Ga. 1997).
“Although Rule 59(e) does not set forth any specific criteria, courts have delineated three major grounds justifying reconsideration under Rule 59(e): ‘(1) an intervening change in controlling law; (2) the availability of new evidence; and (3) the need to correct clear error or prevent manifest injustice.’” Krstic, 706 F. Supp. 2d at 1281–82 (quoting Williams v. Cruise Ships Catering & Serv. Int’l, N.V., 320 F. Supp. 2d 1347, 1357–58 (S.D. Fla. 2004)).
Federal Court in NY joins the Stay with 2nd (also now agreed to stay) and 9th Circuits re CFPB v Selia Law Case Before the US Supreme Court (19-7) resulting in the 5th Cir. and 11th Cir. as the only Circuits causing a split. @SCOTUSblog #lawtwitter #CFPBhttps://t.co/NEuJ8xNYSt pic.twitter.com/ZmXwAFv7dO
— LawsInTexas (@lawsintexasusa) November 7, 2019
“Turning to this Courts recent ruling regarding the #FHFA being “unconstitutional’, this confirms #judge Higginbothams’ Order not only contradicts the precedent of the Supreme Court but this Courts’ own ‘binding precedent’.” #AppellateTwitter #lawtwitter https://t.co/NqCTJqJhof pic.twitter.com/xtfVml2a1v
— LawsInTexas (@lawsintexasusa) November 13, 2019
The Court readopts its prior ruling from the Order Granting in Part and Denying in Part Ocwen’s Motion to Dismiss (DE 452 at 10-11).
The Court is unconvinced that the CFPB’s structure is unconstitutional.
The Court reaffirms that it views the constitutionality of the CFPB in accordance with the reasons enumerated in PHH Corp. v. Consumer Financial Protection Bureau, 881 F.3d 75 (D.C. Cir. 2018) and Consumer Financial Protection Bureau v. Seila Law LLC, 923 F.3d 680, 682 (9th Cir. 2019), cert. granted sub nom. Seila Law LLC v. Consumer Prot. Bureau, No. 19-7, 2019 WL 5281290 (U.S. Oct. 18, 2019).
Ocwen directs the Court to numerous cases where a constitutional infirmity required a prior government action to be declared void; however, the majority3 of those cases involved an improper appointment.
See Fed. Election Comm’n v. NRA Political Victory Fund, 6 F.3d 821, 822 (D.C. Cir. 1993) (“We believe that the Commission lacks authority to bring this enforcement action because its composition violates the Constitution’s separation of powers. Congress exceeded its legislative authority when it placed its agents, the Secretary of the Senate and the Clerk of the House of Representatives, on the independent Commission as non-voting ex officio members.”) (emphasis added); Lucia v. S.E.C., 138 S. Ct. 2044, 2055 (2018) (“This Court has also held that the ‘appropriate’ remedy for an adjudication tainted with an appointments violation is a new ‘hearing before a properly appointed’ official.”)(citation omitted)(emphasis added); Ryder v. United States, 515 U.S. 177, 188, 115 S. Ct. 2031, 2038, 132 L. Ed. 2d 136 (1995) (“Petitioner is entitled to a hearing before a properly appointed panel of that court.”)(emphasis added).
In contrast, the instant constitutional challenge pertains to the removal provision for the CFPB Director, whose removal, for-cause or without-cause, is not being sought by the President currently.
As discussed at length in PHH, there are only three Supreme Court cases that have held a removal provision was unconstitutional, and none of them is applicable to the CFPB’s removal statute.
“[T]he challenged statute imposes no additional layer of particularly onerous protection, per Free Enterprise Fund, nor indeed any other restriction on removal.
And Congress has not given itself authority to participate in the President’s removal decision, which was fatal to the removal mechanisms in Myers and Bowsher.” PHH Corp., 881 F.3d at 93 (citing Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477 (2010); Myers v. United States, 272 U.S. 52 (1926); Bowsher v. Synar, 478 U.S. 714 (1986)).
Moreover, the for-cause removal language is identical to what the Supreme Court upheld as constitutional regarding the protections for the Federal Trade Commission member in Humphrey’s Executor4, and “the Court’s subsequent decision in Morrison seems to preclude drawing a constitutional distinction between multi-member and single-individual leadership structures, since the Court in that case upheld a for-cause removal restriction for a prosecutorial entity headed by a single independent counsel.” Seila Law LLC, 923 F.3d at 684 (emphasis added) (citing Morrison v. Olson, 487 U.S. 654 (1988)).
As further articulated in Selia Law, “we view Humphrey’s Executor and Morrison as controlling here.
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 is of course free to revisit those precedents, but we are not.” Id. (quoting Morrison, 487 U.S. at 691).
Additionally, the Court notes that even if the Supreme Court finds the CFPB’s for-cause removal to be unconstitutional, the proper remedy would be severance of 12 U.S.C. § 5491(c)(3), pursuant to 12 U.S.C. § 5302, not dismissal of the CFPB’s case against Ocwen with prejudice.
The United States Court of Appeals for the Fifth Circuit recently held en banc that the for- cause removal protection of the Director of the Federal Housing Finance Authority (“FHFA”), a similarly single-headed agency, was unconstitutional. Collins v. Mnuchin, 938 F.3d 553 (5th Cir. 2019), petition for cert. filed, 2019 WL 4858934 (U.S. Sept. 25, 2019) (No. 19-422), petition for cert. filed, 2019 WL 5593074, (U.S. Oct. 25, 2019) (No. 19-563).
However, after holding the structure was unconstitutional, in addressing the question of appropriate relief, the court noted: “[i]n summary, the Shareholders’ ongoing injury, if indeed there is one, is remedied by a declaration that the ‘for cause’ restriction is declared removed. We go no further.” Id. at 595.
The court explicitly rejected the Shareholders’ requested relief by “declin[ing] to invalidate the Net Worth Sweep or PSPAs,” instead holding “[w]e will not let the Shareholders pick and choose parts of the PSPAs to invalidate when the President had adequate oversight over their adoption and particularly when two different presidents have selected agency heads who have supported the Net Worth Sweep.” Id.
The court explained “[t]he appropriate remedy is the one that fixes the Shareholders’ purported injury.
That is exactly what our declaratory judgment does…… we conclude, given that the majority of the court has found the FHFA unconstitutionally structured, that the appropriate remedy for that finding is to declare the ‘for cause’ provision severed.” Id.
Ocwen has failed to establish any of the grounds that would justify a reconsideration, such as identifying a change in controlling law, new evidence, or clear error. See Krstic, 706 F. Supp. 2d at 1281–82. That the CFPB has shifted its own position does not discharge the Court of its duty to interpret the constitutionality of 12 U.S.C. § 5491(c)(3) independently. See United States v. Windsor, 570 U.S. 744, 760 (2013) (“There are, of course, reasons to hear a case and issue a ruling even when one party is reluctant to prevail in its position.”).
Even assuming arguendo that the CFPB’s structure is found to be unconstitutional, the proper remedy would be severing the unconstitutional removal provision, not dismissal of the case with prejudice.5
The Court readopts its prior ruling from the Order Granting in Part and Denying in Part Ocwen’s Motion to Dismiss (DE 452). Accordingly, it is ORDERED AND ADJUDGED that Ocwen=s Motion for Reconsideration (DE 480) is DENIED.
1 On October 18, 2019, the Supreme Court of the United States granted certiorari to the question “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.” The Court additionally directed the parties to brief and argue “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?” See https://www.supremecourt.gov/qp/19-00007qp.pdf.
2 The CFPB filed its Response prior to the Court issuing a new Scheduling Order (DE 507). The CFPB and Ocwen could not agree on dispositive motion deadlines or a trial date; the CFPB urged the Court to delay dispositive motions and trial until after the Supreme Court decided Selia. (DE 501 at 3-4).
3 The Court is aware of the contrary conclusion in Consumer Fin. Prot. Bureau v. RD Legal Funding, LLC, 332 F. Supp. 3d 729, 785 (S.D.N.Y. 2018) (“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.”) (quoting Fed. Election Comm’n v. NRA Political Victory Fund, 6 F.3d 821, 822 (D.C. Cir. 1993)). The Court rejects that remedy under the circumstances of this case.
4 Humphrey’s Ex’r v. United States, 295 U.S. 602, 632 (1935).
5 See Collins v. Mnuchin, 938 F.3d at 595.
A member of this panel previously denied appellants motion to stay case in #CA5 awaiting a final rule or adjudication on the #constitutional challenges. The panel has considered appellants motion for reconsideration. IT IS ORDERED that the motion is DENIED https://t.co/CmBu335MhG pic.twitter.com/PNu1AmvToy
— LawsInTexas (@lawsintexasusa) November 14, 2019
In 2017, at an event hosted by the Texas Public Policy Foundation, you argued that “[t]he entire existence of this edifice of administrative law is constitutionally suspect,” because “it is not based in the way the Constitution says that law should be made.” pic.twitter.com/sz9OZFkqCj
— LawsInTexas (@lawsintexasusa) November 12, 2019
Jeffrey Epstein Victims in Florida Legal Case where the Government Withheld the terms of the Private “Non-prosecution” agreement with Epstein, Get Zilch from Judge Kenneth Marra
September 16, 2019
WEST PALM BEACH, Fla. (CN) – Two women who say they were victims of Jeffrey Epstein’s underage sex ring lost a decade-long battle in Florida federal court Monday when a judge shot down their demand to punish prosecutors for keeping them in the dark about the wealthy money manager’s favorable plea deal.
U.S. District Judge Kenneth Marra denied nearly every request for relief filed by the two women, who say they were lured to Epstein’s Palm Beach mansion for sexual favors in their early teens.
The women had sued the Department of Justice for allegedly concealing the details of Epstein’s plea deal from them during negotiations with his high-priced lawyer Jay Lefkowitz in 2007.
Under that deal, Epstein avoided federal prosecution and pleaded guilty to a state charge of soliciting underage prostitution. The investment tycoon, accused of engaging in sexual activity with more than 30 underage girls, served little more than a year in prison. He was granted a work-release during his prison term, allowing him to leave his cell for most of the day to spend time in a West Palm Beach office.
The Florida lawsuit argued that prosecutors’ disregard for victims during plea-deal negotiations violated the Crime Victims’ Rights Act. The plaintiffs asked for a slew of remedies: compensation from the government, sealed documents from the criminal case and a court order that would largely void the purported sweetheart deal.
In February, Marra wrote that prosecutors violated the Act and that the government “spent untold hours negotiating the terms and implications of the [non-prosecution agreement] with Epstein’s attorneys,” while “scant information was shared with victims.”
But in his opinion handed down Monday, the judge noted that the Act specifically bars actions for monetary damages against the government even when prosecutors trample on victims’ rights.
The Crime Victims’ Rights Act reads: “Nothing in this chapter shall be construed to authorize a cause of action for damages.”
As for the plaintiffs’ request to toss out the plea deal, Marra found that Epstein’s death in August rendered the matter moot.
Epstein died by an apparent suicide, hanging himself in New York City’s Metropolitan Correctional Center where he was held after he had been arrested on new sex trafficking charges. New York federal prosecutors brought those charges in July on the heels of national media coverage focused on now-resigned Labor Secretary Alexander Acosta’s role in the controversial Florida plea deal during his stint as a prosecutor with the Southern District of Florida.
In the aftermath of Epstein’s death, the two Florida plaintiffs argued that the plea deal should still be torn up, as it contained provisions that shielded Epstein’s alleged co-conspirators from prosecution.
Marra had some sympathetic words, but declined to honor the victims’ request.
“The question of the validity of the non-prosecution provisions … as they relate to the alleged co-conspirators will have to be litigated with their participation if any prosecution against them is ever brought. Any decision by this Court on that question is meaningless without their participation in this proceeding,” the judge wrote in his Monday order.
Marra appeared unswayed by the victims’ argument that the alleged co-conspirators – assistants who allegedly helped Epstein bring teenagers to his mansion – had 10 years in which they could have intervened in the lawsuit but never stepped in to attempt to protect their rights under the non-prosecution agreement.
“Despite Petitioners having demonstrated the Government violated their rights under the CVRA, in the end they are not receiving much, if any, of the relief they sought,” Marra conceded.
“They may take solace, however, in the fact that this litigation has brought national attention to the Crime Victims’ Rights Act and the importance of victims in the criminal justice system,” he added. “And rulings which were rendered during the course of this litigation likely played some role, however small it may have been, in the initiation of criminal charges against Mr. Epstein in the Southern District of New York and that office’s continuing investigation of others who may have been complicit with him.”
The plaintiffs’ attorneys insisted the decade-long litigation was not in vain.
“Of course, this is not the ending we had hoped for, but the enormous progression of victims’ rights through this case will ensure that violations like this never happen again in this country,” lawyer Bradley Edwards said in a statement. “For that, the fight was worth it.”
As part of the litigation, the Department of Justice pledged to retrain its staff in the Southern District of Florida on victims’ rights. It also offered to hold a meeting where victims can publicly air their statements about Epstein and grievances about the Department’s mistreatment of them.
Marra maintained that he does not have jurisdiction to force Acosta to attend.