In the travails of the leadership of the Consumer Financial Protection Bureau (CFPB), wherein a judge declared the leadership structure of the CFPB unconstitutional as the director cannot be fired, the CFPB has appealed and now the Trump Administration’s Department of Justice has disowned the Obama’s argument while managing to take … both sides of the argument. Deepak Gupta and Jonathan Taylor of the Take Care blog have the uptake. First, a summary of the first opinion:
It is this “for cause” removal provision that is now under attack in the courts. In October 2016, in PHH v. CFPB (an appeal from an enforcement action against a mortgage lender), a panel of the D.C. Circuit held that the for-cause provision, coupled with the agency’s single-director leadership, violates the constitutional separation of powers. Writing for himself and one other colleague, Judge Kavanaugh reasoned that the CFPB director is insufficiently accountable to the president because he is not removable at will. Never mind that many other hugely important federal agencies are led by those also removable only for cause (the Federal Communications Commission, the Securities and Exchange Commission, the Federal Trade Commission, the National Labor Relations Board, and the Federal Energy Regulatory Commission, to name five). And never mind that the Supreme Court has expressly upheld the constitutionality of those agencies.
To Judge Kavanaugh, the critical constitutional distinction is that those agencies are led by more than one person, whereas the CFPB is not. His opinion claims that this distinction is grounded in the need to safeguard liberty and in what he calls the “deep values of the Constitution.”
Deepak and Jonathan think that’s irrelevant. And now on to the fun part:
What does the Trump DOJ think about the constitutionality of these agencies? We don’t have to speculate. It filed a brief on February 27 supporting the constitutionality of the Federal Housing Finance Agency. That brief adopted the reasons given in the FHFA’s brief, filed the same day, which describes the separation-of-powers challenge (the one based on Judge Kavanaugh’s opinion in PHH) as “wholly without merit.” Here’s a taste:
It is long settled that Congress is not prohibited from creating independent agencies run by officers removable only for cause. … It is also beyond dispute that Congress may structure agencies to be headed by a single officer. Plaintiffs’ position in this case is that those two aspects are somehow mutually exclusive, i.e., that Congress is forbidden from attaching removal protection to an office unless that office will share leadership with a number of other officers also having removal protection. No authority supports that novel and illogical thesis, and it finds no purchase in the principles that animate separation-of-powers jurisprudence.
The same Justice Department lawyer (Chad Readler, the acting head of the Civil Division) signed both this brief and the PHH brief—within the space of a few weeks. Although Readler later filed an “advisory” in the FHFA case saying that DOJ “does not urge reliance” on the separations-of-powers argument it had adopted earlier, he did not disavow that argument.
The upshot is that the Trump DOJ’s brief in PHH achieves a truly remarkable trifecta: It stands opposite not only another part of the executive branch and a previous administration, but also itself.
Given this extraordinary contradiction in DOJ’s position, which reveals that even Trump’s own lawyers are alarmed at the implications of the unprecedented position they’re advancing in the CFPB litigation, what happens next?
I, too, cannot fathom why the number of officers, so long as it’s more than zero, can possibly matter in the context of the Constitution, and, for that matter, common sense.
But I think the larger picture is to ask what’s driving the DoJ to take these opposing positions. While I won’t delude myself to think that the DoJ is unitary at even the best of times, the contradictions here may be indicative of a deeper sickness in the department, where a false doctrine (from the viewpoint of the government) may have been introduced. We need to remember that Government regulates the rest of society in the interests of justice – not the interest of profits.
