CFPB

Post Selia Law, How’s the CFPB Cases Going?

Bureau of Consumer Financial Protection v. Forster & Garbus, LLP

(2:19-cv-02928)

District Court, E.D. New York

APR 26, 2021

March 22, 2021

(VIA ECF)
Honorable Sandra J. Feuerstein The United States District Court
for the Eastern District of New York Long Island Courthouse
100 Federal Plaza Central Islip, NY 11722

Re:    Bureau of Consumer Financial Protection v. Forster & Garbus, LLP, Case No. 2:19-cv-02928-SJF-ARL

Dear Judge Feuerstein:

Clark Hill, PLC represents defendant Forster & Garbus (“F&G”) in this matter. We submit this reply letter memorandum of law in response to Plaintiff Consumer Financial Protection Bureau’s (“CFPB”) letter of March 11, 2021 (“CFPB Letter”) [ECF39].

Essentially, and contrary to the assertion in the CFPB Letter’s second paragraph, F&B does not agree that the Supreme Court in Collins is unlikely to address ratification.

First, as we noted, the ratification question was addressed specifically by the Fifth Circuit in Collins v. Mnuchin, 938 F.3d 553, 562 (5th Cir. Honorable Sandra J. Feuerstein, U.S.D.J. March 22, 2021 2019), cert. granted, 141 S. Ct. 193 (2020); see also F&G’s letter dated March 11, 2021 [ECF38].

The Court cannot address the second question raised in Collins’ petition for certiorari, whether an agency decision must be set aside if rendered when the agency was constitutionally infirm, without deciding the ratification issue.

As further noted, three of the justices at oral argument on December 9, 2020, specifically asked about ratification.

See F&G Letter at 6-8. Justice Gorsuch could not have been clearer:

“But what legally, what constitutionally would prohibit ratification?”

Id. at 7.

The response as equally clear, that this was a fundamental issue under the federal Administrative Procedure Act, 5 U.S.C. § 551 et seq. Inasmuch as the Plaintiff purported to ratify the decision at issue in this case, it is directly affected by a ruling by the Supreme Court on this point.

It is hard to believe that a question that was the focus of questioning by three separate justices would not be addressed one way or the other in the Court’s decision.

Plaintiff also refers to F&G’s Opposition to Plaintiff’s Motion for Reconsideration [ECF33] as an admission that “Collins will not address the specific issue of ratification.” (CFPB Letter at 1).

Plaintiff disingenuously omitted half the sentence and destroyed the context of F&G’s point.

What F&G actually said was

“It is undisputed that Collins will not address the specific issue of ratification, rather Collins will address the broader and more important issue of what is the appropriate remedy when agency action is taken when it had no constitutional authority to do so. Then, and only then, can the issue of whether the Bureau’s ratification is a proper cure to a prior constitutional deficiency.”

[ECF33 AT 4] (emphasis supplied).

This means that ratification is one possible remedy the Court in Collins is considering as part of the broader set of remedies available.

Once that broader question is resolved, of necessity it has direct impact on whether the Plaintiff’s ratification here is a proper cure.

Plaintiff bases most of its argument on the alleged “admission” by F&G that Collins will not address ratification.

It did so by cutting the quotation, referring to part of the sentence and ending it at “ratification,” divorcing it from its context.

[ECF39 at 1].

The Court will note that contrary to the full quotation above, the CFPB added a period after the word “ratification” to make it look as if the sentence ended there. Later, on page 3 of its letter, it claims that F&G merely “suggested” the Collins “might address” the broader issue of remedy.

It is a complete distortion of the point F&G made, namely, that the remedy will be addressed, and that ratification as one specific remedy will not be address on its own.

Given the points made at oral argument, and contrary to the abstract and generic citations that the Court will not decide issues not before it (CFPB Letter at 3-4, ECF39), the issue is very much before the Court and on the mind of at least three justices who commented on it specifically.

The F&G position, that remedies in general and not just ratification specifically, will be addressed, was born out in the Collins brief itself. The issue of ratification is intertwined with what the Court must decide in Collins, as specifically argued by Collins in his brief:

This understanding of the remedies for violations of the President’s removal power is confirmed by Seila Law. In that case, the petitioner raised the CFPB’s unconstitutional structure as a defense to an effort by the agency to enforce a civil investigative demand. After ruling that the petitioner had suffered a redressable injury and that the CFPB was unconstitutionally structured, the Chief Justice went on to address the remedy in a portion of his opinion joined by Justices Alito and Kavanaugh. See 140 S. Ct. at 2207-08. The plurality ultimately decided to remand the case because the Government argued that the civil investigative demand had been “ratified by an Acting Director accountable to the President,” and a remand was necessary to address in the first instance “whether this alleged ratification in fact occurred and whether, if so, it is legally sufficient to cure the constitutional defect in the original demand.” Id. at 2208.

The clear implication of this language is that absent a “legally sufficient cure,” the civil investigative demand issued by the unconstitutionally insulated CFPB Director would have to be vacated.

Although the Chief Justice only wrote for a plurality on this issue, all nine members of the Court appear to have taken it as a given that a violation of the President’s removal power could justify setting aside an unconstitutionally structured agency’s investigative demand. See id. at 2219 (Thomas, J., dissenting in part); id. at 2245 (Kagan, J., concurring in the judgment with respect to severability).

(Patrick J. COLLINS, et al., Petitioners, v. Steven T. MNUCHIN, Secretary of the Treasury, et al.; Steven T. Mnuchin, Secretary of the Treasury, et al., Petitioners, v. Patrick J. Collins, et al., 2020 WL 5731206 (U.S.), 62-63).

This is the very point that F&G has made. The decision in Collins as to remedies will of necessity inform the issue of the appropriateness of ratification as a remedy Ratification will not be the only remedy likely to be resolved.

As for its second point, regarding whether the Court should issue a stay, the CFPB’s entire premise is that the Supreme Court will not consider the matter.

It is a false premise.

Certainly, F&G cannot guarantee that it will be heard. It can only review the petition for certiorari and the Collins brief and the argument, and suggest that it makes little sense to proceed when, in a finite and foreseeable period of time, the Court is likely to rule and put to rest the immediate issue.

Nothing in the CFPB letter contradicts the standards or conclusions raised by F&G as to why this Court should stay this matter pending the decision in Collins.

Respectfully submitted, CLARK HILL PLC

s/Steven M. Richman/

Steven M. Richman Cc:          Counsel of record through ECF.

CFPB v. Cashcall, Inc.

(18-55407)

Court of Appeals for the Ninth Circuit

APR 26, 2021

A call for supplemental briefs. They’ve both filed. Now we wait for the Ninth’s next move.

Consumer Financial Protection Bureau v. RD Legal Funding LLC

(1:17-cv-00890)

District Court, S.D. New York

APR 26, 2021

UPDATE: June 16, 2021:

RD Legal Funding file a petition at the US Supreme Court.

Counsel for RD, King & Spalding, submit letter to lower court with copy of petition on June 16.

—-

A call for letters. They’ve both filed with CFPB on the attack in a searing reply.  Now we wait for the judge’s next move.

Remember Title X was stricken in the lower court, what will happen now?

Title X of this Act (Dodd-Frank Wall Street Reform and Consumer Protection Act) creates a new Bureau of Consumer Financial Protection within the Federal Reserve Board as a new supervisor for certain financial firms and as a rulemaker and enforcer against unfair, deceptive, abusive, or otherwise prohibited practices relating to most consumer financial products or services.

Consum Fincl Protc Bur v. All Amer Check Cashing, Inc.

(18-60302)

Court of Appeals for the Fifth Circuit

APR 26, 2021

All activity suspended while the Yellen cases (formerly Collins v Mnuchin) are pending at the U.S. Supreme Court and then they have to have oral at Fifth Cir before full en banc panel in Louisiana.

Strike II – You Can’t Have a Fifth Circuit Clerk Filing Your Motions, That’s Void Ab Initio

The Burkes file a motion to strike Hopkins Law’s response as the motion they are objecting to is void ab initio. It was unlawfully filed.

A Motion to Strike Hopkins Law Scandalous Reply is Lodged At The Fifth Circuit

The Pot Calling the Kettle Black; Austin Creditor Rights Lawyers Mark and Shelley Hopkins of Hopkins Law impetuously project their hypocrisy.

A Sanctionable Response From the Scandalous Lawyers at BDF Hopkins

The Burkes Wanted Certain Judges to be Shot.” – admitted liar Attorney Mark Hopkins in open court and “wanted this to end, sooner than later”

Court of Appeals Docket #: 18-55407 Docketed: 03/28/2018
Nature of Suit: 1890 Other Statutory Actions
CFPB v. Cashcall, Inc., et al
Appeal From: U.S. District Court for Central California, Los Angeles
Fee Status: USA – No Fee Req
Case Type Information:
     1) civil
     2) united states
     3) null
Originating Court Information:
     District: 0973-2 : 2:15-cv-07522-JFW-RAO
     Court Reporter: Miranda Algorri, Court Reporter
     Court Reporter: Alberto V. Ortiz, Court Reporter Supervisor
     Court Reporter: Myra Leonor Ponce
     Trial Judge: John F. Walter, District Judge
     Date Filed: 12/16/2013
     Date Order/Judgment:      Date Order/Judgment EOD:      Date NOA Filed:      Date Rec’d COA:
     01/26/2018      01/26/2018      03/27/2018      03/27/2018

02/12/2021  73  Filed order (JOHN B. OWENS, RYAN D. NELSON and ERIC D. MILLER) The parties are ordered to file briefs, not to exceed 5000 words, discussing (1) whether Director Kraninger could ratify the filing of the Bureau’s enforcement action against CashCall and its filing of a notice of appeal; and (2) what effect, if any, Liu v. SEC, 140 S. Ct. 1936 (2020), has on the Bureau’s authority to seek an award of net revenues as a measure of equitable restitution. Defendants-Appellees shall file their brief within 30 days of the date of this order. Plaintiff-Appellant shall file its brief no later than 30 days after the filing of Defendants-Appellees’ brief. No reply brief shall be permitted absent further order from the court. [12002442] [18-55407, 18-55479] (WL) [Entered: 02/12/2021 02:04 PM]
03/15/2021  74  Submitted (ECF) Supplemental Brief for review. Submitted by Appellees Cashcall, Inc., Delbert Services Corporation, J. Paul Reddam and WS Funding, LLC in 18-55407, Appellants Cashcall, Inc., Delbert Services Corporation, J. Paul Reddam and WS Funding, LLC in 18-55479. Date of service: 03/15/2021. [12041624] [18-55407, 18-55479] (Keller, Jennifer) [Entered: 03/15/2021 03:13 PM]
03/15/2021  75  Filed clerk order: The supplemental brief [74] submitted by appellees/cross-appellants is filed. Within 7 days of the filing of this order, filer is ordered to file 6 copies of the brief in paper format, accompanied by certification (attached to the end of each copy of the brief) that the brief is identical to the version submitted electronically. Cover color: tan. The paper copies shall be submitted to the principal office of the Clerk. [12041761] [18-55407, 18-55479] (LA) [Entered: 03/15/2021 03:59 PM]
04/12/2021  76  Filed (ECF) Appellee Consumer Financial Protection Bureau in 18-55479 Correspondence: request to correct counsel listing. Date of service: 04/12/2021 [12070396] [18-55479, 18-55407] (Friedl, Kevin) [Entered: 04/12/2021 09:56 AM]
04/13/2021  77  Submitted (ECF) Supplemental Brief for review. Submitted by Appellant Consumer Financial Protection Bureau in 18-55407, Appellee Consumer Financial Protection Bureau in 18-55479. Date of service: 04/13/2021. [12072828] [18-55407, 18-55479] (Friedl, Kevin) [Entered: 04/13/2021 02:22 PM]
04/13/2021  78  Filed clerk order: The supplemental brief [77] submitted by Consumer Financial Protection Bureau is filed. Within 7 days of the filing of this order, appellant/cross-appellee is ordered to file 6 copies of the brief in paper format with tan covers, accompanied by certification (attached to the end of each copy of the brief) that the brief is identical to the version submitted electronically. A review of Court records reflects that appellees/cross-appellants Cashcall, Inc., et al. have not filed paper copies of the supplemental [74] as directed by the Court’s order filed on March 15, 2021 [75]. Appellees/cross-appellants Cashcall, Inc., et al. are ordered to file 7 copies of the supplemental brief in paper format with tan covers, accompanied by certification (attached to the end of each copy of the brief) that the brief is identical to the version submitted electronically, for delivery to the Court within 7 days of this order. The paper copies shall be submitted to the principal office of the Clerk. [12072900] [18-55407, 18-55479] (LA) [Entered: 04/13/2021 02:48 PM]
04/13/2021  79 Terminated Reuben Camper Cahn and Jennifer Keller for Consumer Financial Protection Bureau in 18-55479 [12072907] [18-55479, 18-55407] (RL) [Entered: 04/13/2021 02:53 PM]
04/13/2021  80 Added Attorney(s) Jennifer Keller, Reuben Camper Cahn for party(s) Appellee Cashcall, Inc. Appellee WS Funding, LLC Appellee J. Paul Reddam Appellee Delbert Services Corporation, in case 18-55407 Attorney(s) Jennifer Keller, Reuben Camper Cahn for party(s) Appellant WS Funding, LLC Appellant Cashcall, Inc. Appellant J. Paul Reddam Appellant Delbert Services Corporation, in case 18-55479. [12072916] [18-55479, 18-55407] (RL) [Entered: 04/13/2021 02:56 PM]
04/15/2021  81 Received 6 paper copies of Supplemental Brief [74] filed by appellees/cross-appellants. (sent to panel) [12075567] [18-55407, 18-55479] (SD) [Entered: 04/15/2021 11:32 AM]
04/16/2021  82 Received 6 paper copies of Supplemental Brief [77] filed by Consumer Financial Protection Bureau.(sent to panel) [12077508] [18-55407, 18-55479] (SD) [Entered: 04/16/2021 01:55 PM]

U.S. District Court
Southern District of Mississippi (Northern (Jackson))
CIVIL DOCKET FOR CASE #: 3:16-cv-00356-DPJ-JCG

Consumer Financial Protection Bureau v. All American Check Cashing, Inc. et al
Assigned to: Chief District Judge Daniel P. Jordan, III
Referred to: Magistrate Judge John C. Gargiulo

Case in other court:  USCA, 18-60302

Cause: 28:1331 Fed. Question

Date Filed: 05/11/2016
Jury Demand: Defendant
Nature of Suit: 890 Other Statutory Actions
Jurisdiction: U.S. Government Plaintiff
Plaintiff
Consumer Financial Protection Bureau represented by Emily Hope Mintz-Federal Gov
U. S. CONSUMER FINANCIAL PROTECTION BUREAU
1700 G Street NW
Attn 1625 I-4071A
Washington, DC 20552
202/435-9424
Fax: 202/435-7722
Email: emily.mintz@cfpb.gov
LEAD ATTORNEY
ATTORNEY TO BE NOTICEDChristopher Deal-Federal Gov
CONSUMER FINANCIAL PROTECTION BUREAU
1700 G Street NW
Washington, DC 20552
(202)435-9582
Fax: (202)435-7024
Email: Christopher.Deal@cfpb.gov
ATTORNEY TO BE NOTICEDDaniel David McDonough Abraham-Federal Gov
CONSUMER FINANCIAL PROTECTION BUREAU
1700 G Street NW
Washington, DC 20552
(202)435-7039
Email: daniel.abraham@cfpb.gov
TERMINATED: 01/22/2018
ATTORNEY TO BE NOTICEDEdward Keefe-Federal Gov
CONSUMER FINANCIAL PROTECTION BUREAU
1700 G Street NW
Washington, DC 20552
202/435-9198
Fax: 202/435-7722
Email: edward.keefe@cfpb.gov
TERMINATED: 04/04/2018
ATTORNEY TO BE NOTICEDGregory K. Davis-Federal Gov
U. S. ATTORNEY’S OFFICE – Jackson
501 East Court Street
Suite 4.430
Jackson, MS 39201
601/965-4480
TERMINATED: 06/07/2017Lawrence De-Mille-Wagman-Federal Gov
CONSUMER FINANCIAL PROTECTION BUREAU
1700 G Street NW
Washington, DC 20552
(202)435-7957
Fax: (202)435-7024
Email: lawrence.wagman@cfpb.gov
ATTORNEY TO BE NOTICEDMichael Philip Favretto-Federal Gov
U. S. CONSUMER FINANCIAL PROTECTION BUREAU
1700 G Street NW
Attn 1625 I-4071A
Washington, DC 20552
202/435-7785
Email: michael.favretto@cfpb.gov
ATTORNEY TO BE NOTICEDMitzi Dease Paige-Federal Gov
U. S. ATTORNEY’S OFFICE – Jackson
501 East Court Street
Suite 4.430
Jackson, MS 39201
601/973-2840 965-4480
Fax: 601/965-4409 or 4032
Email: Mitzi.paige@usdoj.gov
TERMINATED: 06/22/2017
ATTORNEY TO BE NOTICEDStephanie C. Brenowitz-Federal Gov
U. S. CONSUMER FINANCIAL PROTECTION BUREAU
1700 G Street NW
Attn 1625 I-4071A
Washington, DC 20552
202/435-9005
Email: stephanie.brenowitz@cfpb.gov
ATTORNEY TO BE NOTICED
V.
Defendant
All American Check Cashing, Inc. represented by Dale Danks , Jr.
DANKS, MILLER & CORY
P. O. Box 1759
213 South Lamar Street (39201)
Jackson, MS 39215-1759
601/957-3101
Fax: 601/957-3160
Email: ddanks@dmclaw.net
LEAD ATTORNEY
ATTORNEY TO BE NOTICEDPeter D. Baskind – PHV
DINKELSPIEL, RASMUSSEN & MINK, PLLC
1669 Kirby Parkway, Suite 106
Memphis, TN 38120
901/754-7770
Fax: 901/756-7772
Email: pbaskind@drmlawmemphis.com
TERMINATED: 08/04/2017
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICEDBentley E. Conner
BENTLEY E. CONNER, ATTORNEY
P O Box 563
Canton, MS 39046-5630
601/859-6306
Fax: 601/859-6307
Email: connerbentleye@bellsouth.net
ATTORNEY TO BE NOTICEDHelgard C. Walker – PHV
GIBSON, DUNN & CRUTCHER, LLP – Washington
1050 Connecticut Avenue, N.W.
3rd Floor
Washington, DC 20036-5306
202/887-3599
Fax: 202/530-9595
Email: hwalker@gibsondunn.com
PRO HAC VICE
ATTORNEY TO BE NOTICEDJoshua Seth Lipshutz – PHV
GIBSON, DUNN & CRUTCHER, LLP – Washington
1050 Connecticut Avenue, N.W.
3rd Floor
Washington, DC 20036-5306
202/955-8217
Fax: 202/530-9614
Email: jlipshutz@gibsondunn.com
PRO HAC VICE
ATTORNEY TO BE NOTICEDKenneth C. Miller
DANKS, MILLER & CORY
P. O. Box 1759
213 South Lamar Street (39201)
Jackson, MS 39215-1759
601/957-3101
Fax: 601/957-3160
Email: km@dmclaw.net
ATTORNEY TO BE NOTICEDLochlan Francis Shelfer – PHV
GIBSON, DUNN & CRUTCHER, LLP – Washington
1050 Connecticut Avenue, N.W.
3rd Floor
Washington, DC 20036-5306
202/887-3641
Fax: 202/831-6016
Email: lshelfer@gibsondunn.com
PRO HAC VICE
ATTORNEY TO BE NOTICEDMegan B. Ross
DINKELSPIEL, RASMUSSEN & MINK, PLLC
1669 Kirby Parkway, Suite 106
Memphis, TN 38120
901/754-7770
Fax: 901/756-7772
Email: mross@drmlawmemphis.com (Inactive)
TERMINATED: 01/13/2017
ATTORNEY TO BE NOTICEDMichael Verdier Cory , Jr.
DANKS, MILLER & CORY
P. O. Box 1759
213 South Lamar Street (39201)
Jackson, MS 39215-1759
601/957-3101
Fax: 601/957-3160
Email: mc@dmclaw.net
ATTORNEY TO BE NOTICEDRobin H. Rasmussen
DINKELSPIEL, RASMUSSEN & MINK, PLLC
1669 Kirby Parkway, Suite 106
Memphis, TN 38120
901/754-7770
Fax: 901/756-7772
Email: rrasmussen@drmlawmemphis.com
TERMINATED: 08/04/2017
ATTORNEY TO BE NOTICEDTheodore B. Olson – PHV
GIBSON, DUNN & CRUTCHER, LLP – Washington
1050 Connecticut Avenue, N.W.
3rd Floor
Washington, DC 20036-5306
202/955-8668
Fax: 202/530-9575
Email: tolson@gibsondunn.com
PRO HAC VICE
ATTORNEY TO BE NOTICED
Defendant
Mid-State Finance, Inc. represented by Dale Danks , Jr.
(See above for address)
LEAD ATTORNEY
ATTORNEY TO BE NOTICEDPeter D. Baskind – PHV
(See above for address)
TERMINATED: 08/04/2017
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICEDBentley E. Conner
(See above for address)
ATTORNEY TO BE NOTICEDHelgard C. Walker – PHV
(See above for address)
PRO HAC VICE
ATTORNEY TO BE NOTICEDJoshua Seth Lipshutz – PHV
(See above for address)
PRO HAC VICE
ATTORNEY TO BE NOTICEDKenneth C. Miller
(See above for address)
ATTORNEY TO BE NOTICEDLochlan Francis Shelfer – PHV
(See above for address)
PRO HAC VICE
ATTORNEY TO BE NOTICEDMegan B. Ross
(See above for address)
TERMINATED: 01/13/2017
ATTORNEY TO BE NOTICEDMichael Verdier Cory , Jr.
(See above for address)
ATTORNEY TO BE NOTICEDRobin H. Rasmussen
(See above for address)
TERMINATED: 08/04/2017
ATTORNEY TO BE NOTICEDTheodore B. Olson – PHV
(See above for address)
PRO HAC VICE
ATTORNEY TO BE NOTICED
Defendant
Michael E. Gray
Individually
represented by Dale Danks , Jr.
(See above for address)
LEAD ATTORNEY
ATTORNEY TO BE NOTICEDPeter D. Baskind – PHV
(See above for address)
TERMINATED: 08/04/2017
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICEDBentley E. Conner
(See above for address)
ATTORNEY TO BE NOTICEDHelgard C. Walker – PHV
(See above for address)
PRO HAC VICE
ATTORNEY TO BE NOTICEDJoshua Seth Lipshutz – PHV
(See above for address)
PRO HAC VICE
ATTORNEY TO BE NOTICEDKenneth C. Miller
(See above for address)
ATTORNEY TO BE NOTICEDLochlan Francis Shelfer – PHV
(See above for address)
PRO HAC VICE
ATTORNEY TO BE NOTICEDMegan B. Ross
(See above for address)
TERMINATED: 01/13/2017
ATTORNEY TO BE NOTICEDMichael Verdier Cory , Jr.
(See above for address)
ATTORNEY TO BE NOTICEDRobin H. Rasmussen
(See above for address)
TERMINATED: 08/04/2017
ATTORNEY TO BE NOTICEDTheodore B. Olson – PHV
(See above for address)
PRO HAC VICE
ATTORNEY TO BE NOTICED

 

Date Filed # Docket Text
03/20/2020 248 USCA ORDER granting rehearing en banc on the court’s own motion; reopening case. (Attachments: # 1 Cover Letter)(ND) (Entered: 03/20/2020)
Case Query

19-20267 Burke v. Ocwen Loan Servicing

 

Associated Case Short Title Type Start End Status
20-20209 Burke v. Hopkins Consolidated 03/30/2021 closed

 

Originating Case Lead Case Filed Execution Date Judgment NOA Originating Judge Court Reporter
4:18-CV-4544 12/03/2018 04/18/2019 Mathis, Ebonee S.
4:18-CV-4544 12/03/2018 04/18/2019 Hittner, David

 

Party Party Type Terminated from Case Attorney
Burke, Joanna Plaintiff-Appellant
Burke, John Plaintiff-Appellant
Ocwen Loan Servicing, L.L.C. Defendant-Appellee Hopkins,Shelley Luan
Hopkins,Mark D.

 

Attorney Party Type(s) Represented Representation End
Hopkins, Mark D. Defendant-Appellee
Hopkins, Shelley Luan Defendant-Appellee

RD Legal Funding asks SCOTUS to decide if CFPB can ratify pre-Seila Law actions

June 25, 2021

RD Legal Funding has filed a petition for a writ of certiorari in the U.S. Supreme Court that asks the Court to decide whether the CFPB can ratify actions taken when it was unconstitutionally structured.

A New York federal district court had dismissed the enforcement action against RD Legal filed jointly by the CFPB and New York Attorney General, ruling that the CFPB’s structure was unconstitutional and that the proper remedy for the constitutional violation was to invalidate Title X in its entirety because the for-cause removal provision was not severable from Title X.  Having invalidated Title X, the district court also determined that there was no longer a statutory basis for the NYAG to bring its federal claims and therefore dismissed such claims for lack of federal jurisdiction.

RD Legal appealed to the U.S. Court of Appeals for the Second Circuit.  While the appeal was pending, the Supreme Court ruled in Seila Law that the CFPB’s structure was unconstitutional because the Dodd-Frank Act provision allowing the President to only remove the CFPB Director “for cause” violated the separation of powers in the U.S. Constitution.  The Supreme Court also ruled that the unconstitutional provision was severable.  Thereafter, the CFPB filed a declaration with the Second Circuit in which former Director Kraninger stated that she had ratified the Bureau’s decisions to file the enforcement action against RD Legal and to appeal from the district court’s dismissal of the action.

Based on the Supreme Court’s Seila Law decision, the Second Circuit issued a summary order that affirmed the district court’s holding that the Dodd-Frank Act’s for-cause removal provision was unconstitutional, reversed its holding that the provision was not severable, and remanded the case to the district court to consider the validity of former Director Kraninger’s ratification of the CFPB’s enforcement action.  The Second Circuit’s order vacated the district court’s judgment dismissing the underlying enforcement action.

RD Legal’s certiorari petition presents the following two questions:

  • Whether ratification is an appropriate remedy for the constitutional violation identified in Seila Law.
  • Whether, after Seila Law found the CFPB’s structure unconstitutional, the CFPB could ratify its enforcement action and appeal to the Second Circuit after the time for doing either had run.

In its petition, RD Legal argues that the ratification of the CFPB’s enforcement action by former Director Kraninger was ineffective because, as an agent of the CFPB, she could not ratify an act that the CFPB, as principal, could not take at the time such act was done due to its unconstitutional structure.  Alternatively, RD Legal argues that even if ratification of an action taken while unconstitutionally structured was possible, former Director Kraninger could not ratify the enforcement action against RD Legal more than three years after it was brought or ratify the appeal more than two years after the CFPB filed its notice of appeal.

Seila Law is also expected to ask the Supreme Court to decide whether former Director Kraninger could ratify actions taken by the CFPB while it was unconstitutionally structured.  After the Supreme Court agreed with Seila Law that the CFPB’s structure was unconstitutional and remanded the case for further consideration, a unanimous Ninth Circuit panel ruled that the civil investigative demand (CID) issued to Seila Law was validly ratified by former Director Kraninger and affirmed the district court’s decision granting the CFPB’s petition to enforce the CID.  Following a sua sponte request from a Ninth Circuit judge for a vote on whether to rehear the case en banc, a majority of the non-recused Ninth Circuit active judges voted against en banc reconsideration and rehearing en banc was denied.  However, four judges joined in an opinion dissenting from the denial.  Seila Law then filed a motion for a stay of the mandate in which it asserted that for the reasons given by the dissenters, “there is a reasonable chance that the Supreme Court will grant certiorari in this case.”  The Ninth Circuit has granted Seila Law’s stay motion pending its filing of a certiorari petition in the Supreme Court.

The ratification question is also before the Fifth Circuit in All American Check Cashing.  In March 2020, the Fifth Circuit, on its own motion, entered an order vacating the panel’s ruling that the CFPB’s structure was constitutional and granting rehearing en banc.

The Fifth Circuit then tentatively calendared the case for en banc oral argument during the week of September 21, 2020 and ordered the parties to file supplemental briefs.  However, on September 9, 2020, after the parties filed their supplemental briefs, the Fifth Circuit issued a directive putting the case on hold until the U.S. Supreme Court issued its decision in Collins v Mnuchin.  In its decision issued earlier this week, the Supreme Court agreed with the en banc Fifth Circuit’s decision in Collins that held the FHFA’s structure is unconstitutional because the Housing and Economic Recovery Act of 2008 only allows the President to remove the FHFA’s Director “for cause.”

Case Query

 

18-60302 CFPB v. All American Check Cashing

 

Associated Case Short Title Type Start End Status
17-20364 Collins v. Mnuchin Related 04/30/2018 closed

 

Originating Case Lead Case Filed Execution Date Judgment NOA Originating Judge Court Reporter
3:16-CV-356 05/11/2016 04/24/2018 Barbour, William H. Jr.

 

Party Party Type Terminated from Case Attorney
Consumer Financial Protection Bureau Plaintiff-Appellee DeMille-Wagman,Lawrence W.
Deal,Christopher J.
All American Check Cashing, Incorporated Defendant-Appellant Christiansen,Jeremy Max
Conner,Bentley Edd
Danks,Dale Jr.
Lipshutz,Joshua Seth
Olson,Theodore
Shelfer,Lochlan Francis
Walker,Helgard Clarice
Cory,Michael Verdier Jr.
Schulman,Max
Mid-State Finance, Incorporated Defendant-Appellant Christiansen,Jeremy Max
Conner,Bentley Edd
Danks,Dale Jr.
Lipshutz,Joshua Seth
Olson,Theodore
Shelfer,Lochlan Francis
Walker,Helgard Clarice
Cory,Michael Verdier Jr.
Schulman,Max
Gray, Michael E Defendant-Appellant Christiansen,Jeremy Max
Conner,Bentley Edd
Danks,Dale Jr.
Lipshutz,Joshua Seth
Olson,Theodore
Shelfer,Lochlan Francis
Walker,Helgard Clarice
Cory,Michael Verdier Jr.
Schulman,Max

 

Attorney Party Type(s) Represented Representation End
DeMille-Wagman, Lawrence W. Plaintiff-Appellee
Nelson, Scott Lawrence
Olson, Theodore Defendant-Appellant
Danks, Dale Jr. Defendant-Appellant
Zieve, Allison M.
Conner, Bentley Edd Defendant-Appellant
Cory, Michael Verdier Jr. Defendant-Appellant
Shapiro, Ilya
Walker, Helgard Clarice Defendant-Appellant
Keller, Scott A. 09/12/2018
Hawkins, Kyle Douglas 07/11/2019
Hawkins, Kyle Douglas 02/01/2021
Stone, Judd Edward II
Wurman, Ilan
Wydra, Elizabeth
Lipshutz, Joshua Seth Defendant-Appellant
Pincus, Andrew John
Waring, Matthew A. 09/06/2019
Christiansen, Jeremy Max Defendant-Appellant
Shelfer, Lochlan Francis Defendant-Appellant
Deal, Christopher J. Plaintiff-Appellee
Dunford, Oliver J.
Dunford, Oliver J. 10/01/2019
Gottridge, Marc
Gottridge, Marc 04/29/2019
Wuertz, Allison Michele
Watterson, Colin Michael
Bayne, Jeffrey Michael
Mapes, Katharine M.
Hammoud, Fadwa A. 07/11/2019
Schulman, Max Defendant-Appellant 06/14/2021
General Docket
United States Court of Appeals for the Fifth Circuit
Court of Appeals Docket #: 18-60302 Docketed: 04/24/2018
Nature of Suit: 2890 Other Statutory Actions
CFPB v. All American Check Cashing
Appeal From: Southern District of Mississippi, Jackson
Fee Status: Fee Paid
Case Type Information:
     1) United States Civil
     2) United States
     3)
Originating Court Information:
     District: 0538-3 : 3:16-CV-356
     Originating Judge: William H. Barbour, Jr., U.S. District Judge
     Date Filed: 05/11/2016
     Date NOA Filed:      Date Rec’d COA:
     04/24/2018      04/24/2018

09/17/2020 Open Document COURT ORDER that the motion of appellants for leave to file a supplemental en banc reply brief is GRANTED [9401543-2]. [18-60302] (MCS) [Entered: 09/17/2020 02:28 PM]
09/17/2020 Open Document SUPPLEMENTAL EN BANC REPLY BRIEF FILED by All American Check Cashing, Incorporated, Mr. Michael E Gray and Mid-State Finance, Incorporated
Date of service: 09/16/2020. 22 Paper Copies of Brief due on 09/22/2020 for Appellants All American Check Cashing, Incorporated, Michael E Gray and Mid-State Finance, Incorporated. [18-60302] (MCS) [Entered: 09/17/2020 02:38 PM]
09/21/2020 Paper copies of Supplemental Reply Brief filed by Appellants All American Check Cashing, Incorporated, Mid-State Finance, Incorporated and Mr. Michael E Gray in 18-60302 received. Paper copies match electronic version of document? Yes # of Copies Provided: 22. Paper Copies of Brief due deadline satisfied. [18-60302] (DMS) [Entered: 09/23/2020 09:53 AM]
01/29/2021 Open Document LETTER filed Attorney Kyle Hawkins advised he is no longer participating in this case and attorney Judd E. Stone, III will be substituted for him. [18-60302]
REVIEWED AND/OR EDITED – The original text prior to review appeared as follows: LETTER filed by Amici Curiae State of Arkansas, State of Georgia, State of Texas, Mr. Paul R. LePage, State of Indiana, State of Kansas, State of Louisiana, State of Nebraska, State of Oklahoma, State of South Carolina, State of Tennessee, State of Utah and State of West Virginia Notice of withdrawal of counsel. Date of Service: 01/29/2021 via email – Attorney for Amici Curiae: Bayne, Dunford, Gottridge, Hawkins, Mapes, Nelson, Pincus, Shapiro, Watterson, Wuertz, Wurman, Wydra, Zieve; Attorney for Appellants: Christiansen, Conner, Cory, Danks, Lipshutz, Olson, Schulman, Shelfer, Walker; Attorney for Appellees: Deal, DeMille-Wagman [18-60302] (Kyle Douglas Hawkins ) [Entered: 01/29/2021 09:34 AM]
01/29/2021 Open Document APPEARANCE FORM for the court’s review. Lead Counsel? Yes. [18-60302] (Judd Edward Stone II) [Entered: 01/29/2021 01:05 PM]
02/01/2021 APPEARANCE FORM FILED by Attorney(s) Judd Edward Stone II for party(s) Amicus Curiae State of Nebraska Amicus Curiae State of South Carolina Amicus Curiae State of Tennessee Amicus Curiae State of Louisiana Amicus Curiae State of Kansas Amicus Curiae State of Georgia Amicus Curiae State of Utah Amicus Curiae State of Texas Amicus Curiae Paul R. LePage Amicus Curiae State of Oklahoma Amicus Curiae State of Indiana Amicus Curiae State of West Virginia Amicus Curiae State of Arkansas, in case 18-60302 [18-60302] (MCS) [Entered: 02/01/2021 01:56 PM]
02/01/2021 ATTORNEY NOT PARTICIPATING. Kyle D. Hawkins is designated as inactive in this case. Reason:he is no longer participating in this case and attorney Judd E. Stone, III is substituted for him. [18-60302] (MCS) [Entered: 02/01/2021 02:02 PM]
06/14/2021 Open Document LETTER filed by Appellants All American Check Cashing, Incorporated, Mr. Michael E Gray and Mid-State Finance, Incorporated Attorney Max Schulman is withdrawing his appearance.. Date of Service: 06/14/2021 via email – Attorney for Amici Curiae: Bayne, Dunford, Gottridge, Mapes, Nelson, Pincus, Shapiro, Stone, Watterson, Wuertz, Wurman, Wydra, Zieve; Attorney for Appellants: Christiansen, Conner, Cory, Danks, Lipshutz, Olson, Schulman, Shelfer, Walker; Attorney for Appellees: Deal, DeMille-Wagman [18-60302] (Max Schulman ) [Entered: 06/14/2021 11:49 AM]
06/14/2021 ATTORNEY NOT PARTICIPATING. Max Schulman is designated as inactive in this case. Reason:he is leaving his empoyment with the law firm. [18-60302] (MCS) [Entered: 06/14/2021 02:54 PM]
06/24/2021 Open Document COURT DIRECTIVE ISSUED requesting appellants and appellee file supplemental letter briefs to be filed by 1:00pm on 7/2/2021. [9604180-2] A/Pet Supplemental Brief due on 07/02/2021 for Appellants All American Check Cashing, Incorporated, Michael E Gray and Mid-State Finance, Incorporated.. E/Res Supplemental Brief due on 07/02/2021 for Appellee Consumer Financial Protection Bureau.. [18-60302] (MCS) [Entered: 06/24/2021 08:48 AM]

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