Seila Law LLC v. Consumer Financial Protection Bureau

591 U.S. 197, 140 S. Ct. 2183, 207 L. Ed. 2d 494
Supreme Court of the United States·Decided June 29, 2020·No. 19-7·Published·Cited by 661 cases

Opinion

B

Neither Humphrey's Executor nor Morrison resolves whether the CFPB Director's insulation from removal is constitutional. Start with Humphrey's Executor. Unlike the New Deal-era FTC upheld there, the CFPB is led by a single Director who cannot be described as a "body of experts" and cannot be considered "non-partisan" in the same sense as a group of officials drawn from both sides of the aisle. 295 U.S. at 624 , 55 S.Ct. 869 . Moreover, while the staggered terms of the FTC Commissioners prevented complete turnovers in agency leadership and guaranteed that there would always be some Commissioners who had accrued significant expertise, the CFPB's single-Director structure and five-year term guarantee abrupt shifts in agency leadership and with it the loss of accumulated expertise.

In addition, the CFPB Director is hardly a mere legislative or judicial aid. Instead of making reports and recommendations to Congress, as the 1935 FTC did, the Director possesses the authority to promulgate binding rules fleshing out 19 federal statutes, including a broad prohibition on unfair and deceptive practices in a major segment of the U. S. economy. And instead of submitting recommended dispositions to an Article III court, the Director may unilaterally issue final decisions awarding legal and equitable relief in administrative adjudications. Finally, the Director's enforcement authority includes the power to seek daunting monetary penalties against private parties on behalf of the United States in federal court-a quintessentially executive power not considered in Humphrey's Executor . 4

The logic of Morrison also does not apply. Everyone agrees the CFPB Director is not an inferior officer, and her duties are far from limited. Unlike the independent counsel, who lacked policymaking or administrative authority, the Director has the sole responsibility to administer 19 separate consumer-protection statutes that cover everything from credit cards and car payments to mortgages and student loans. It is true that the independent counsel in Morrison was empowered to initiate criminal investigations and prosecutions, and in that respect wielded core executive power. But that power, while significant, was trained inward to high-ranking Governmental actors identified by others, and was confined to a specified matter in which the Department of Justice had a potential conflict of interest. By contrast, the CFPB Director has the authority to bring the coercive power of the state to bear on millions of private citizens and businesses, imposing even billion-dollar *2201 penalties through administrative adjudications and civil actions.

In light of these differences, the constitutionality of the CFPB Director's insulation from removal cannot be settled by Humphrey's Executor or Morrison alone.

C

The question instead is whether to extend those precedents to the "new situation" before us, namely an independent agency led by a single Director and vested with significant executive power. Free Enterprise Fund , 561 U.S., at 483 , 130 S.Ct. 3138 . We decline to do so. Such an agency has no basis in history and no place in our constitutional structure.

"Perhaps the most telling indication of [a] severe constitutional problem" with an executive entity "is [a] lack of historical precedent" to support it. Id., at 505 , 130 S.Ct. 3138 (internal quotation marks omitted). An agency with a structure like that of the CFPB is almost wholly unprecedented.

After years of litigating the agency's constitutionality, the Courts of Appeals, parties, and amici have identified "only a handful of isolated" incidents in which Congress has provided good-cause tenure to principal officers who wield power alone rather than as members of a board or commission. Ibid. "[T]hese few scattered examples"-four to be exact-shed little light. NLRB v. Noel Canning , 573 U.S. 513 , 538, 134 S.Ct. 2550 , 189 L.Ed.2d 538 (2014).

First, the CFPB's defenders point to the Comptroller of the Currency, who enjoyed removal protection for one year during the Civil War. That example has rightly been dismissed as an aberration. It was "adopted without discussion" during the heat of the Civil War and abandoned before it could be "tested by executive or judicial inquiry." Myers , 272 U.S., at 165 , 47 S.Ct. 21 . (At the time, the Comptroller may also have been an inferior officer, given that he labored "under the general direction of the Secretary of the Treasury." Ch. 58, 12 Stat. 665 .) 5

Second, the supporters of the CFPB point to the Office of the Special Counsel (OSC), which has been headed by a single officer since 1978. 6 But this first enduring single-leader office, created nearly 200 years after the Constitution was ratified, drew a contemporaneous constitutional objection from the Office of Legal Counsel under President Carter and a subsequent veto on constitutional grounds by President Reagan. See Memorandum Opinion for the General Counsel, Civil Service Commission, 2 Op. OLC 120 , 122 (1978); Public Papers of the Presidents, Ronald Reagan, Vol. II, Oct. 26, 1988, pp. 1391-1392 (1991). 7 In any event, the OSC exercises

Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197, 140 S. Ct. 2183, 207 L. Ed. 2d 494 (2020).

591 U.S. 197 (Seila Law LLC v. Consumer Financial Protection Bureau) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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