Seila Law v
Consumer Financial Protection Bureau (2020) Facts of the case The Consumer Financial Protection
Bureau (CFPB) was
investigating Seila Law LLC, a law firm that provides
debt-relief services,
among others. As part of its investigation, the CFPB
issued a civil
investigative demand to Seila Law that requires the firm
to respond to several
interrogatories and requests for documents. Seila Law
refused to comply with
the demand, so the CFPB filed a petition in the district
court to enforce
compliance. The district court granted the petition and
ordered Seila Law to
comply with the CID. Seila Law appealed the district
court’s order on two
grounds, one of which was that the CFPB is
unconstitutionally structured. Specifically, Seila Law argued that
the CFPB’s structure
violates the Constitution’s separation of powers because
it is an independent
agency headed by a single Director who exercises
substantial executive power
but can be removed by the President only for cause. The
Ninth Circuit
disagreed. Question Does the vesting of substantial
executive authority in the
Consumer Financial Protection Bureau, an independent
agency led by a single
director, violate the separation of powers principle?
PLURALITY OPINION BY JOHN G.
ROBERTS, JR. (SUMMARY) The CFPB director’s removal
protection is severable from the
other provisions of the Dodd-Frank Act that establish
the CFPB and define its
authority. The Consumer Financial Protection
Bureau’s leadership by a
single Director removable only for inefficiency,
neglect, or malfeasance
violates the separation of powers, but that provision is
severable from the
Dodd-Frank Act. Chief Justice John Roberts authored the
opinion of the Court. First, Congress may grant for-cause
removal protection to a
multimember body of experts who were balanced along
partisan lines, appointed
to staggered terms, performed only “quasi-legislative”
and “quasi-judicial
functions,” and were said not to exercise any executive
power. Second, Congress
may grant for-cause removal protection to an inferior
officer—the independent
counsel—who had limited duties and no policymaking or
administrative authority. |