Federal Law

The Frazzled Sequel: Fifth Circuit Schedule All American for Week of September 21st, 2020 after Selia Law Decision

Fifth-Circuit Panel arranges en banc hearing in Consumer Fin. Prot. Bureau v. All Am. Check Cashing, Inc., No. 18-60302 for week of Sept. 21st, 2020.

LIT UPDATE; 10/6/2020

After scouring the Oral Argument MP3’s, none had been released. The Fifth Circuit responded; Case 18-60302 was not heard on 9/21/20, therefore there is no oral argument recording. The case was removed from the calendar on 9/8/20 and has been placed in abeyance pending a decision in 2 US Supreme Court cases, 19-422 & 19-563. –  Steven T. Mnuchin, Secretary of the Treasury, et al., Petitioners v. Patrick J. Collins, et al.

On June 30, the Fifth Circuit tentatively calendared the case for en banc oral argument during the week of September 21, 2020 and ordered the parties to file supplemental briefs.

Originally Published: July 17, 2020




With the U.S. Supreme Court having ruled in Seila Law that the CFPB’s leadership structure is unconstitutional, two circuit court cases involving the same constitutional challenge that were “on hold” pending the Supreme Court’s decision will now be moving forward. The two cases are RD Legal Funding pending in the Second Circuit and All American Check Cashing pending in the Fifth Circuit.

RD Legal Funding. The underlying case is an enforcement action filed jointly by the CFPB and the New York Attorney General in 2017 in a New York federal district court alleging federal UDAAP and state law claims. The CFPB appealed to the Second Circuit from the district court’s June 2018 decision, as amended by a September 2018 order, in which it ruled that the CFPB’s structure is unconstitutional, struck the entire CFPA (Title X of Dodd-Frank), and dismissed the CFPB from the case. The NYAG appealed from the district court’s dismissal of all of the NYAG’s federal and state law claims, and a subsequent order that dismissed the NYAG’s claims under Dodd-Frank Section 1042 “with prejudice.” (Section 1042 authorizes state attorneys general to initiate lawsuits based on UDAAP violations.)

The CFPB had filed a notice of ratification by former Acting Director Mulvaney with the district court. In its June 2018 decision, the district court stated that the CFPB’s ratification “does not address accurately the constitutional issue raised in this case, which concerns the structure and authority of the CFPB itself, not the authority of an agent to make decisions on the CFPB’s behalf.”

On July 10, 2020, the CFPB filed a declaration with the Second Circuit in which Director Kraninger stated that she has 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. In response, RD Legal filed a letter with the Second Circuit in which it stated that the CFPB has waived the ratification issue because it did not appeal the district court’s ruling on ratification. Alternatively, it argued that the ratification is not effective because Director Kraninger cannot ratify an act that the CFPB could not do at the time such act was done and, in any event, she cannot ratify the enforcement action or appeal because the action would be time-barred and the time to appeal has lapsed.

The Second Circuit can be expected to follow Seila Law and affirm the district court’s ruling that the CFPB’s structure is unconstitutional. However, also following Seila Law, the Second Circuit can be expected to reverse the district court’s ruling striking all of Title X and rule instead that the Dodd-Frank Act’s “for cause” removal provision should be severed. Although the district court considered former Acting Director Mulvaney’s ratification and not Director Kraninger’s ratification, its rationale for rejecting former Acting Director Mulvaney’s ratification would apply equally to Director Kraninger’s ratification. It therefore seems unlikely that the Second Circuit would remand that issue to the district court rather than issue a ruling on ratification.

All American Check Cashing. The underlying case is an enforcement action filed by the CFPB against All American Check Cashing in 2016 in a Mississippi federal district for alleged violations of the CFPA’s UDAAP prohibition. In March 2018, the district court denied All American’s motion for judgment on the pleadings based on the Bureau’s unconstitutionality and ruled that the CFPB’s structure is constitutional. In opposing All American’s motion to certify the case for interlocutory appeal, the CFPB argued that a notice of ratification of the action by former Acting Director Mulvaney cured any constitutional defect and mooted the constitutional issue. The district court did not rule on the CFPB’s ratification argument and in March 2018 granted All American’s motion for interlocutory appeal which the Fifth Circuit agreed to hear.

On March 3, 2020 (the same day that the Supreme Court heard oral argument in Seila Law), a Fifth Circuit panel ruled that the CFPB’s structure is constitutional. On March 20, the Fifth Circuit, on its own motion, entered an order vacating the panel decision and granting rehearing en banc. On June 30, the Fifth Circuit tentatively calendared the case for en banc oral argument during the week of September 21, 2020 and ordered the parties to file supplemental briefs.

Following Seila Law, the en banc Fifth Circuit can be expected to reverse the panel’s ruling that the CFPB’s structure is constitutional and sever the Dodd-Frank Act’s “for cause” removal provision. Because it ruled that the CFPB’s structure is constitutional, the panel did not reach the CFPB’s ratification argument. Assuming the CFPB files a declaration of ratification by Director Kraninger as it did in RD Legal, the en banc Fifth Circuit will have an opportunity to issue a ruling on ratification or could decide to remand that issue to the district court.

In Seila Law, the Supreme Court remanded the case to the Ninth Circuit to consider the CFPB’s argument that former Acting Director Mulvaney had ratified the civil investigative demand issued to Seila Law by the CFPB. As a result, three circuit courts (the Second, Fifth and Ninth Circuits) could now issue rulings on the ratification issue.


“Y’all abandoned our precedents…for personal glory and to settle vendettas…”

Therefore, I look forward to its [Seila’s] likely resolution by the Supreme Court. As my colleagues are aware, my own preference in this specific, post-Collins case would have been to hold our matter several months in abeyance. FN1

* FN1: As I emphasize in my opening sentence, the constitutionality of the CFPB’s removal provision was left open by the Collins majority, notwithstanding the contrary viewpoint expressed by my dissenting colleague. I would also add that there would have been no need for this panel’s intercession had the court chosen to place this case in abeyance until the Supreme Court decides the identical issue that it heard today.

That preference was unpersuasive for reasons I respect and, indeed, I now am confident that views they may choose to elaborate will offer new insights to the Supreme Court. Three circuits have now weighed in on this important question, and the Supreme Court will benefit from those perspectives, as well as the comprehensive and well-reasoned brief of court-appointed amicus curiae. Given the many eloquent voices that have spoken on this question—in majority, concurring, and dissenting opinions—I see little reason to “re-plow the same ground here,” Seila Law, 923 F.3d at 682

“The Burkes would suggest on review of this oral argument, where Ms. Walker was literally incinerated in the first 22 minutes by JPEH, the All American lawyers went back to Washington, took stock of the disastrous oral argument and advised their client that they felt the Fifth Circuit had left counsel, and their case, suffering from first degree burns, and as such they had no skin to lose but they did have a slim chance of a lifesaving skin graft by going direct to the US Supreme Court, thus snubbing the Fifth for their incivility in the oral proceedings and taking all the oxygen out of counsels’ lungs.”

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Laws In Texas is a blog about the Financial Crisis and how the banks and government are colluding against the citizens and homeowners of the State of Texas and relying on a system of #FakeDocs and post-crisis legal precedents, specially created by the Court of Appeals for the Fifth Circuit to foreclose on homeowners around this great State. We are not lawyers. We do not offer legal advice. We are citizens of the State of Texas who have spent a decade in the court system in Texas and have been party to during this period to the good, the bad and the very ugly.

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