One week before the en banc D.C. Circuit is scheduled to hear oral argument regarding the constitutionality of the Consumer Financial Protection Bureau’s (CFPB) structure in CFPB v. PHH, the Ninth Circuit has taken up the issue as well. In an order issued May 17, 2017, the Ninth Circuit granted permission for interlocutory appeal to address the question of whether the CFPB’s structure is unconstitutional and, if it is, what the proper remedy is. The order came in a series of consolidated cases that the CFPB brought against a lead generator and its current and former owners and operators. The district court in those cases, relying on the D.C. Circuit’s panel opinion in PHH, held the agency’s structure unconstitutional, but that the remedy was limited to severing the “for-cause” provision that purports to limit the President’s authority to remove the CFPB Director. The defendants sought interlocutory of appeal of this ruling, contending that the proper remedy for the finding of unconstitutionality was dismissal of the cases against them. In at least two other cases, district courts in the Ninth Circuit have held the agency’s structure constitutional, including one case decided on the same day as the Ninth Circuit’s order. The Ninth Circuit, presumably aware of the pending en banc argument in the D.C. Circuit, has decided to address this issue sooner rather than later by granting interlocutory appeal.
No briefing schedule has been set for the Ninth Circuit case, meaning it is likely that the D.C. Circuit’s en banc ruling will come before any decision in the Ninth Circuit case. That the Ninth Circuit is squarely focused on the constitutional issue makes it more likely that the en banc D.C. Circuit will address that issue as well, rather than deciding the PHH case on narrower grounds. Should the two circuit courts decide the issue differently, the case may be ripe for Supreme Court review. Any such review, however, would almost certainly come after the expiration of CFPB Director Richard Corday’s term in July 2018 – assuming, that is, that the President does not seek to remove him before then should either of these courts hold that he has the authority to do so.