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Bienert | Katzman Questions Constitutionality of the Consumer Financial Protection Bureau Before The Ninth Circuit

Mon 14th Jan 2019, Blogs

Representing a law firm in a civil investigation by the Consumer Financial Protection Bureau (“CFPB”), Bienert | Katzman has challenged the constitutionality of the CFPB’s structure.  As part of the underlying investigation, the CFPB issued a civil investigative demand (“CID”), a form of administrative subpoena, seeking information and documents related to law firm’s practice. 

Tom Bienert and Tony Bisconti  of Bienert | Katzman argued before the District Court that the CID is unenforceable because the CFPB’s single-Director structure, combined with the for-cause removal limitation and massive consolidation of executive powers, violates Article II of the Constitution and the powers conferred to the President.  Bienert | Katzman successfully secured a stay of the District Court’s order enforcing the CID in order to allow for an appeal to the Ninth Circuit.

During oral argument before the Ninth Circuit, Mr. Bisconti argued that the novelty of the CFPB’s structure and powers violate Article II’s imposition of a duty on the President to take due care that the laws are faithfully executed under Supreme Court precedent.  Mr. Bisconti also asserted that no lesser remedy would suffice other than to strike down the CFPB in its entirety. 

Judge Kouhary, sitting on the panel by designation, questioned the CFPB’s counsel why the agency’s combination of “power that is massive in scope, concentrated in a single person and unaccountable to the president” did not raise separation of powers concerns.  Likewise, Judge Watford expressed concern with the CFPB’s for-cause removal provision, and noted that the Ninth Circuit “obviously won’t be the last word on this.”

The case is Consumer Financial Protection Bureau v. Seila Law, LLC, No. 17-56324 and is currently under submission before the Ninth Circuit Court of Appeals.  Read more about this at https://www.law360.com/publicpolicy/articles/1116965/cfpb-defends-constitutionality-in-9th-circ-oral-args