As Adam Pulver noted earlier, the Chamber of Commerce won its challenge at the district court level to the CFPB’s determination that discrimination is unfair within the meaning of the CFPB’s UDAAP statute. It is, of course, no coincidence that the Chamber filed the case in Texas, where it was heard by Judge J. Campbell Barker, a Trump nominee. One of the unfortunate aspects of litigation is that judges who wish to reach a particular result in a case have enough interpretive tools to choose from that they can select tools that enable them to reach that result while ignoring methods that point in the other direction, even if those other methods are more useful. I am not saying that that’s what Judge Barker did in this case; I don’t know Judge Barker or anything about how Judge Barker came to the result in the case other than what’s in the written opinion. But I do wonder. The Fifth Circuit, which binds Judge Barker’s court, held the Bureau unconstitutional in the CFSA case (now pending before the Supreme Court), and Judge Barker could have found the Bureau’s actions unconstitutional solely on that ground, or stayed the case pending the Supreme Court’s decision. Instead Judge Barker reached the merits in the case. So much for judicial restraint.
Every school child knows that discrimination is unfair. Such common uses of words find their way into statutory interpretation more formally in the Supreme Court’s use of dictionaries to interpret statutes. The dictionaries say unfair means without prejudice and not equitable. But Judge Barker ignored what the dictionaries say about the meaning of unfairness. Even plaintiffs in the case have used unfairness to mean free from discrimination.
Judge Barker interprets the Dodd-Frank Act’s language giving the Bureau authority to act against unfair, abusive, deceptive and discriminatory acts as meaning that discrimination must be something separate from unfair or else the statute would have said unfair including discrimination. But Congress seems not to have used the words that way. Deceptive conduct is often said to be a subset of unfair conduct but the statute does not say unfair including deception. Indeed, Judge Barker cited a source that specifically says deception is a subset of unfairness, remarks by J. Howard Beales, though the judge did not refer to that statement in his opinion.
Judge Barker concluded that Congress would have been clearer if it had intended to give the Bureau the power to use disparate impact discrimination–though he seems to overlook the fact that Bureau staff disclaim the use of the disparate impact test to determine if conduct is unfair. He cited to the major questions doctrine even though that doctrine is confined to situations in which “an agency claims to discover in a long-extant statute an unheralded power. . . .” But the power here is not a new one; as Luke Herrine has pointed out, federal agencies have been using unfairness powers to reach discrimination for decades. See, e.g., In re Delta Air Lines, Inc., Miscellaneous Economic Orders, 78 C.A.B. 860 (1978). Judge Barker uses the history that supports his position and ignores the history that undermines his ruling.
All in all, a very disappointing decision, though hardly an unexpected one.