Seila Law LLC v. Consumer Financial Protection Bureau

40: 576:. Roberts wrote that the three current uses "are modern and contested. And they do not involve regulatory or enforcement authority comparable to that exercised by the CFPB." Roberts also wrote that the CFPB structure "is also incompatible with the structure of the Constitution, which—with the sole exception of the presidency—scrupulously avoids concentrating power in the hands of any single individual." In support of this position, Roberts also cited the 635:

stating that "he best view is that the First Congress 'was deeply divided' on the president's removal power, and 'never squarely addressed' the central issue here." Finally, she questioned why it was relevant that the head of the CFPB was an independent director and not an independent commission, as independent commissions theoretically cause a higher diffusion of executive power than a single director does.

524:. The 5–4 decision ruled that the CFPB structure, with a sole director that could only be terminated for cause, was unconstitutional as it violated the separation of powers. Specifically, the Court held that Article II of the Constitution gives the president the power to remove principal officers at will except for two exceptions recognized under case law. The first exception was based on 587:

from the rest of the statute establishing the agency, and thus "he agency may therefore continue to operate, but its director, in light of our decision, must be removable by the president at will." The Court vacated the lower court's judgement and remanded the case for review. The dissenting justices

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The Court recognized that the president may generally remove officers at will. However, the Court stated there were two exceptions to this rule. First, the president's removal power may be constrained by Congress if the officer in question is a member of an agency that shares similar characteristics

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Having determined that the insulation of the CFPB director did not fall under an established exception, Chief Justice Roberts then looked to see whether the Court should "extend those precedents to ... an independent agency led by a single director and vested with significant executive power." He

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that ran from 2007 to 2009. To be able to promote these regulations, it was determined that the agency needed to be independent, and thus Congress designed the agency to have a single director, selected by the president with confirmation by the Senate, appointed to a five-year term, and who could

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as conferring power to the president. Kagan wrote that to the extent the clause gives the president any power—instead of merely conferring a duty upon them—it is only power to ensure that "the laws are faithfully executed." Kagan also challenged Roberts' characterization of the Decision of 1789,

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became president in 2017, putting the CFPB under scrutiny. Businesses that also shared a dismissive view of the CFPB began to file lawsuits challenging the constitutionality of the CFPB's organizational structure. These lawsuits focused on the for-cause termination statute around the CFPB's

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only be removed for "inefficiency, neglect of duty, or malfeasance in office." Since its establishment, the CFPB has actively gone after banks and other financial service providers that have been determined to be "bad actors", such as when it fined Wells Fargo $ 100 million due to the

542:, the FTC was described as "exercising 'no part of the executive power'" and as "'an administrative body' that performed 'specified duties as a legislative or as a judicial aid." Because the CFPB was dissimilar from that description, the Court held that the exception did not apply. 629:

apparent in the Court's opinion. Kagan challenged the argument presented by the majority stating that "owhere does the text say anything about the president's power to remove subordinate officials at will." She also contested the majority's characterization of Article II's

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which held that Congress could constrain the president's removal power over "inferior officers with limited duties and no policymaking" role. Because the CFPB director was not an inferior officer, the Court held that this exception did not apply.

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related to the Federal Housing Finance Agency (FHFA) that had been established with the same single-administrator position, dismissable only for cause, as the CFPB. In June 2021, the Supreme Court affirmed the Fifth Circuit's decision in light of

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reasoned no. Roberts wrote that the CFPB structure with a single point of leadership that could only be removed for cause "ha no foothold in history or tradition", and had only been used in four other instances: three modern uses for the

1894: 688:"offered a vision of separation of powers" that finally explained Chief Justice Roberts' administrative law jurisprudence. Further, she called the case's new removal test "remarkable both because it changes the law and because of 402:

officials. Most courts that had considered the question found that for-cause removal of the CFPB director was constitutional. However, the Supreme Court's "precedents on for-cause removal a jurisprudential train wreck."

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should be overturned and all "for cause" terminations positions should be considered unconstitutional. Thomas also wrote that he believed there was no need to resolve the severability matter for the case at hand.

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to stand for the proposition that the president's removal power may be constrained by Congress if the officer in question was a member of an agency that shared the same characteristics as the

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Seila, 140 S. Ct. at 2230 (Kagan, J., concurring in part and dissenting in part) (quoting Saikrishna Prakash, New Light on the Decision of 1789, 91 CORNELL L. REV. 1021, 1072 (2006)).

2130: 2122: 2052: 17: 2214: 1730: 1112: 662:"still stand for the proposition that Congress can impose limitations on the president's removal authority for agency heads as long as it does not retain a role for itself?" 426:(CID) to Seila Law, which required Seila Law to produce certain documents. Seila Law declined to comply with the CID and challenged the constitutionality of the CFPB. Judge 356: 277: 1439: 1253: 1977: 1647: 1461: 299: 1159: 1969: 422:

Seila Law LLC (Seila Law), a law firm that provided debt relief services, was under investigation by the CFPB. As part of its investigation, the CFPB issued a

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has been the subject of numerous law review articles. Its use of precedent has perplexed legal scholars. Important questions raised by commentators post-

676:"Is there really a conceptually relevant difference between agencies with one head and those with multiple heads? Is the modern-day FTC now vulnerable?" 2146: 321:. Second, Congress may constrain the president's removal power over "inferior officers with limited duties and no policymaking" role as discussed in 792: 1878: 1590: 673:

are exceptions "to the view that Congress cannot impose limitations on the president's removal authority, what is the scope of these exceptions?"

1495: 928: 328:. The Court declined to extend the exceptions to "an independent agency led by a single director and vested with significant executive power." 887: 2229: 631: 441:, the circuit panel affirmed the district court's ruling, and agreed that the Supreme Court's prior decisions upholding for-cause removal in 395: 852: 1797: 684:

should be viewed not as anti-pragmatic formalism but as pragmatic posturing." In contrast, Professor Lisa Schultz Bressman believed that

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it changes the law: it lets the structure of the agency determine the degree of presidential control over its principal officers."

302:. Handed down on June 29, 2020, the Court's 5–4 decision created a new test to determine when Congress may limit the power of the 2204: 2028: 557: 526: 399: 315: 2219: 1431: 504:

on October 18, 2019, and heard oral argument on March 3, 2020. The Court issued its decision on June 29, 2020. Chief Justice

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Kagan (concurring in the judgment with respect to severability and dissenting in part), joined by Ginsburg, Breyer, Sotomayor

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leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers.

463:(2018), in which the Circuit found that the structure of the CFPB was constitutional. The courts opinion arguably created a 383:

and as a sign of government overreach. In the years after it was established, Republicans gained control of the Senate, and

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that the FHFA directorship position's termination allowance was unconstitutional but otherwise left the FHFA in place.

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Professor Edward Cantu wrote that "onsistent with how the Court has always approached separation-of-powers decisions,

373: 380: 364: 367:-led Congress. It was designed to protect consumers and promote regulations to prevent similar events such as the 2138: 1576: 1070: 704: 414:

was unusual, as the CFPB declined to defend the constitutionality of its own structure before the Supreme Court.

1805: 565: 561: 478: 303: 1671: 1655: 1663: 307: 915:"Constitutionalizing Consumer Financial Protection: The Case for the Consumer Financial Protection Bureau" 1961: 1481: 394:

challenge to the separation of powers, because it places a limit—imposed by Congress—on the president's

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because while the Ninth Circuit and DC Circuit had held the CFPB's structure to be constitutional, the

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Consumer Financial Protection Bureau v. Community Financial Services Association of America, Limited

2012: 2004: 1679: 1639: 1160:"With Chief in Charge, SCOTUS Strikes Down Louisiana Abortion Law and Eliminates CFPB Independence" 1052: 1030: 759: 696: 596:

Justice Thomas wrote a partial concurrence joined by Justice Gorsuch, adding that he believed that

535: 119: 914: 2036: 1789: 1781: 1746: 1254:"Supreme Court leaves consumer regulator standing but backs president's ability to fire director" 875: 1405: 842: 2020: 1945: 1902: 1843: 1722: 1687: 714:

Subsequent to the decision, the Supreme Court agreed to review the Fifth Circuit's decision in

298:(CFPB), with a single director who could only be removed from office "for cause", violated the 1356: 955: 1568: 1535: 1075: 83: 1560: 1824: 919: 711:

state legislation presented special concerns regarding accountability for its leadership.

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The majority opinion has also been written about as an example of a case based on the

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from the statute that established the CFPB, allowing the CFPB to continue to operate.

2068: 2044: 1164: 547: 322: 2087: 1886: 1773: 1406:"What Seila Law Says About Chief Justice Roberts' View of the Administrative State" 577: 427: 348: 1937: 1296:

Seila, 140 S. Ct. at 2236 (Kagan, J., concurring in part and dissenting in part).

626: 622: 521: 509: 368: 222: 202: 178: 618: 481:—an agency that had a director who was structurally similar to CFPB's—was not. 190: 2198: 1337:, 140 S. Ct. at 2228 (Kagan, J., concurring in part and dissenting in part). 464: 1496:"U.S. Supreme Court bolsters presidential power over housing finance agency" 1851: 1462:"U.S. Supreme Court to Weigh Shareholder Suit Over Fannie Mae, Freddie Mac" 956:"Of Angels, Pins, and For-Cause Removal: A Requiem for the Passive Virtues" 584: 517: 513: 505: 384: 360: 332: 239:

Roberts (Parts I, II, and III), joined by Thomas, Alito, Gorsuch, Kavanaugh

214: 198: 170: 793:"Supreme Court Gives President Power To Fire Key Independent Agency Chief" 583:

The Court also held that the statutes around the director of the CFPB was

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directorship position. For-cause removal of agency executives presents a

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Sitaraman, Ganesh (2020). "The Political Economy of the Removal Power".

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The second exception to the president's at-will removal power came from

1551: 1107: 940: 899: 843:"Supreme Court Lifts Limits on Trump's Power to Fire Consumer Watchdog" 496: 103: 1385:

Cantu, Edward (2021). "Seila Law as Separation-of-Powers Posturing".

876:"Consumer News: Consumer Financial Protection Bureau Reverses Course" 625:. The Kagan dissent struck a functionalist tone in contrast with the 1311:"Seila Law as an Ex Post, Static Conception of Separation of Powers" 1013:

United States District Court for the Central District of California

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United States District Court for the Central District of California

1103:"Case File: Seila Law LLC v. Consumer Financial Protection Bureau" 982:"Supreme Court Wrestles with Constitutional Challenge to the CFPB" 1465: 451: 134: 39: 1598: 707:

issues. In particular, he suggested that the CFPB's power to

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Duncheon, Timothy G.; L. Revesz, Richard (August 27, 2020).

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Dodd–Frank Wall Street Reform and Consumer Protection Act

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Dodd–Frank Wall Street Reform and Consumer Protection Act

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DiResta, Anthony E.; Haller, David L. (March 20, 2020).

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were "controlling." It also referred approvingly to the

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The Court also held that the directorship position was

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United States Supreme Court cases of the Roberts Court

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Seila Law LLC v. Consumer Financial Protection Bureau

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