Each summer the Southeastern Association of Law Schools (SEALS) hosts an amazing conference of law professors (some day I will go!), full of great panels and discussion on hot topics and cutting-edge research in law and policy. This year’s conference was no exception.
But this year SEALS added a terrific innovation of providing recaps on many of the panels for the rest of the world to follow along. Caprice Roberts has graciously allowed me to cross-post her recap of the panel concerning the future of independent agencies after the D.C. Circuit’s decision in PHH Corp. v. CFPB. Here is her recap:
Session Summary: The Future of Independent Agencies and Consumer Protection after PHH Corp. v. CFPB
Our panel addressed the D.C. Circuit’s startling ruling in PHH Corp. v. CFPB that the single-head management structure of the Consumer Financial Protection Bureau was unconstitutional. The circuit granted en banc, vacating the ruling. The CFPB’s fate remains unclear. The case raises serious concerns about the role of independent agencies in the administrative state. Here’s a brief summary of our remarks. Overall the panel, moderated by Professor Rebecca Morgan (Stetson), addressed the future of independent agencies from administrative, constitutional, and remedial perspectives.
Professor Mark Bauer (Stetson) discussed the unique origins of the Consumer Financial Protection Bureau, from an essay written by then Harvard law professor Elizabeth Warren, to passing Dodd-Frank in the wake of the 2007 financial crisis. The CFPB’s opponents have worked to attack it in the public eye, limit its jurisdiction, prevent a director from being confirmed, and repeal or substantially revise the organic acts supporting the agency. He also noted that the CFPB handles over 700,000 complaints. It seeks to serve its mission of doing good, while also building grassroots support.
Professor Darren Bush (Houston) emphasized that all this has happened before and will all happen again. Challenges to agency structures are not new. Of course, recent challenges to the SEC’s ALJ structure carry far greater threats to the administrative state in Bandimere,^ but certain judges are opening cans of worms they have not properly contemplated, perhaps ignoring the warnings of judges past. What is happening to the CFPB is not novel. Think about the FTC and Antitrust laws. The SMART Act seeks to curtail antitrust enforcement. They are constantly challenged in court. Why, there’s even an annual bill introduced to turn their building into a museum.
Professor Philip Pucillo (Michigan State) addressed—both approvingly and critically—Judge Kavanaugh’s discussion of history and tradition regarding independent agencies. In criticizing the opinion, he emphasized the insulation from presidential control that Congress, at the time of the founding, extended to various institutions charged with regulating financial matters. He noted that there might be no judge to thank more than Judge Kavanaugh because the opinion actually reinforces the accepted structure of independent agencies given that most are headed by a board or commission.
Professor Creola Johnson (Ohio State) explained that companies are using the D.C. Circuit opinion to attempt to avoid complying with subpoenas issued by the CFPB. Two recent court opinions have correctly upheld the CFPB’s subpoena enforcement power. In the absence of that power, companies like Wells Fargo can use mandatory arbitration clauses to keep consumers out of court and make it impossible to uncover a company’s widespread unlawful practices and hold it accountable.
Professor Caprice Roberts (Savannah) examined the remedies angles of the case. The underlying opinion showed little judicial restraint. The opinion began: “This case is about executive power and individual liberty”—giving little hope for constitutional avoidance, though possible en banc. Once declared unconstitutional, what is the proper remedy? Professor Roberts explained parallels between statutory and contractual interpretation of remedial options: (i) strike the entire Act, (ii) rewrite the Act to render the structural constitutional, or (iii) the “narrower remedy,” per the court, sever and strike only the just cause for removal clause. Is it possible the second option might be more in keeping with congressional intent for the CFPB than the result of the third? Last, she explored remedies alternatives if POTUS terminates an executive official without just cause: injunction, mandamus, back pay, and declaratory judgment.^^
The panel also fielded thoughtful questions posed by Professor Bill Araiza (Brooklyn) regarding the apparent lack of constitutional law grounding in the court’s opinion; John Taylor (West Virginia) on congressional motivation for not following tradition of commission structure; Zak Price (Hastings) on jurisdictional questions, and others. Professor Bush ended the dialogue with insight with how we reached this moment with the case: As he tells his students, what is the best outcome for your client if you’re being annoyed by administrative agency? Kill them constitutionally. If you can’t do that, kill their statute. If you can’t do that, kill their rule. If you can’t do that, kill the adjudication. The basic point: Kill something.
^For examination of ALJs, inferior officer status, and removal provisions, see Linda Jellum & Moses M. Tincher, The Shadow of Free Enterprise: The Unconstitutionality of the Securities & Exchange Commission’s Administrative Law Judges, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2919644.
^^Richard M. Re, Remedying Removal: Mueller and the CFPB Case, http://prawfsblawg.blogs.com/prawfsblawg/2017/06/remedying-removal-mueller-and-the-cfpb-case.html.
- SEALS Workshop on Constitutional Law—Supreme Court Update: Individual Rights, by Corinna Lain
- Session Summary: Discussion Group—The Law of National Security and Foreign Affairs in the Trump Administration, by Steve Vladeck
- Session Summary: Workshop on National Security Law—Discussion Group: Trump’s Executive Actions on Immigration: Travel Ban, Extreme Vetting, Border Surveillance, and Mass Deportation, by Steve Vladeck