After many months and multiple rounds of supplemental briefing in the wake of the Supreme Court’s decisions in Seila Law v. CFPB (2020) and Collins v. Yellen (2021), the en banc Fifth Circuit in CFPB v. All American Check Cashing finally decided—well, nothing. According to the 3-page, unsigned per curiam opinion issued by the court, the Supreme Court’s decision in Seila Law already said everything necessary to decide the “pure question of law” posed by the appeal: whether the tenure protection conferred on the CFPB’s director by the Dodd-Frank Act was unconstitutional. Seila Law, of course, held that the statutory provision preventing the President from firing the CFPB director without cause was unconstitutional, but severable, nearly two years ago. The Firth Circuit concluded that that holding required it to answer the “pure question” before it by vacating the district court’s pre-Seila Law holding that the CFPB’s structure was constitutional but allowing the CFPB to proceed with the enforcement action that gave rise to the appeal—subject to any further defenses (including constitutional challenges) the defendant, All American Check Cashing, might assert. The court “place[d] no limitation on the matters that [the district] court may consider” and “express[ed] no view on the actions it should take in accordance with this opinion or otherwise.”
Five “concurring” judges, including Judge Edith Jones and three of the court’s Trump appointees, disagreed with the court’s disposition of the appeal and would have held the CFPB’s structure unconstitutional for another reason not addressed in Seila Law—the “budgetary independence” the CFPB enjoys under statutory provisions funding it through the Federal Reserve rather than annual appropriations. Those judges would have also held that the separation-of-powers violation they saw in the CFPB’s funding mechanism required dismissal of the CFPB’s enforcement action because, in their view, the CFPB lacked authority to do anything requiring the expenditure of funds—that is, anything at all.
The majority said nothing about the concurring judges’ constitutional theory other than that it was outside the scope of the issues before the court on All American’s interlocutory appeal. The concurring judges disagreed with that, too, but nonetheless chose not to label their opinions dissents—perhaps to give the views they expressed more traction in the lower courts.
The bottom line is that, 22 months after the Supreme Court decided Seila Law, the Fifth Circuit did what its per curiam opinion suggests it could and should have done almost immediately in light of Seila Law’s holding. And now the district court will have to consider the concurring judges’ theory, which will undoubtedly give rise to another appeal—and, very likely, one or two petitions for certiorari (one now, and, if it doesn’t succeed, another after the next round of appeals).
Why did the court take so long to do so little? In the immediate aftermath of Seila Law, the question whether its constitutional holding might require dismissal of the CFPB’s enforcement action in All American was at least a debatable one. But before the Fifth Circuit could resolve it in light of the supplemental briefs filed by the parties to address Seila Law, the Supreme Court decided Collins, which left little if anything of the argument that the tenure protection held unconstitutional in Seila Law required courts to invalidate actions taken by the agency before Seila Law struck down and severed the tenure provision.
Nonetheless, the appellant in All American continued to argue in its post-Collins supplemental brief that Collins somehow left room for the argument that a CFPB enforcement action initiated before Seila Law had to be dismissed. Not even the five concurring judges in the Fifth Circuit appeared to give that argument any credence (see pp. 41-43 of Judge Jones’s opinion).
As for the argument that did interest the concurring judges, All American relegated it to a two-page throwaway section of its supplemental brief, to which the CFPB responded in a similarly abbreviated fashion. Although All American devoted more space to the argument in its supplemental reply, it appears likely that the en banc court as a whole may have felt that the relatively cursory briefing of the issue (and the rejection of the argument by all other courts that have addressed the issue so far) counseled leaving it for another day.
The result is that after nearly two years, the can has been kicked down the road, with nothing to show for that time except a concurring opinion that will serve as a roadmap for further challenges to the CFPB’s authority.
