Lexis Nexis - Case Brief

Not a Lexis Advance subscriber? Try it out for free.

Law School Case Brief

Consumer Fin. Prot. Bureau v. Seila Law LLC - 923 F.3d 680 (9th Cir. 2019)

Rule:

Judicial precedent indicates that the for-cause removal restriction protecting the Consumer Financial Protection Bureau's director does not impede the President's ability to perform his constitutional duty to ensure that the laws are faithfully executed.

Facts:

Petitioner Consumer Financial Protection Bureau ("CFPB") initiated an investigation of respondent Seila Law LLC, a law firm that provided a wide range of legal services to its clients, including debt-relief services. The CFPB sought to determine whether Seila Law violated the Telemarketing Sales Rule, 16 C.F.R. pt. 310, in the course of providing debt-relief services to consumers. As part of its investigation, the CFPB issued a civil investigative demand ("CID") to Seila Law that required the firm to respond to seven interrogatories and four requests for documents. After Seila Law refused to comply with the CID, the CFPB filed a petition in federal district court to enforce compliance. The district court granted the petition and ordered Seila Law to comply with the CID, subject to one modification that the CFPB did not contest. Seila Law appealed, arguing that the CFPB was unconstitutionally structured, thereby rendering the CID unlawful. Specifically, Seila Law argued that the CFPB's structure violated the Constitution's separation of powers because it was headed by a single director who exercised substantial executive power but could be removed by the President only for cause. Seila Law also argued that the CFPB lacked statutory authority to issue the CID.

Issue:

Was the CFPB unconstitutionally structured, thereby rendering its CID unlawful?

Answer:

No.

Conclusion:

The court of appeals affirmed the district court's order that granted the CFPB's petition to enforce Seila Law LLC's compliance with the CID. The court rejected the argument that the CFPB was unconstitutionally structured, thereby rendering its CID unlawful, as controlling precedent indicated that the for-cause removal restriction protecting the CFPB's director did not impede the President's ability to perform his constitutional duty to ensure faithful execution of the laws. In addition, the court ruled that CID did not violate 12 U.S.C.S. § 5517(e)(1) because § 5517(e)(3) empowered the CFPB to enforce the Telemarketing Sales Rule, 16 C.F.R. pt. 310, which did not exempt attorneys from its coverage even when engaged in providing legal services. Finally, the court ruled, the CID did not violate 12 U.S.C.S. § 5562(c)(2) as it identified the allegedly illegal conduct under investigation and the provision of law applicable to the alleged violation, which put Seila Law on notice.

Access the full text case Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class