Can All American Check Cashing pass the Fifth Circuit and go straight to SCOTUS in its challenge to the CFPB’s constitutionality?

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Rather than wait for a decision from the Fifth Circuit in its interlocutory appeal from the district court’s ruling upholding the CFPB’s constitutionality, All American Check Cashing has filed a Petition for a Writ of Certiorari Before Judgment with the U.S. Supreme Court.  (The Fifth Circuit heard oral argument in March 2019 and last month directed the parties to file letter briefs regarding what action the court should take in light of the en banc Fifth Circuit’s decision in Collins v. Mnuchin that held the FHFA’s structure is unconstitutional.)

All American argues that “there is nothing to be gained by waiting [for the Fifth Circuit’s decision]: The case for the constitutionality of the agency, pro and con, has already been exhaustively explored in the circuit courts in numerous thoughtful opinions, beginning with [the D.C. Circuit’s en banc PHH decision].”  It also argues that its case is a better vehicle than Seila Law to resolve the questions of the CFPB’s constitutionality and the appropriate remedy for actions taken by an unconstitutional agency.  (The briefs on Seila Law’s petition for certiorari have been distributed for the Supreme Court’s October 11 conference.)

All American’s primary argument for why its case is a better vehicle is that, unlike Seila Law, its case “squarely presents” the question of whether, even if the agency’s structure is unconstitutional, former Acting Director Mulvaney’s ratification of the CFPB’s challenged action cured any constitutional defect.  Although the CFPB made the ratification argument in Seila Law, it was not addressed by either the district court or the Ninth Circuit (which both held that the CFPB’s structure is constitutional).  Accordingly, All American contends that if the Supreme Court were to grant certiorari in Seila Law and reverse the Ninth Circuit on the CFPB’s constitutionality, the CFPB could argue on remand that the ruling had no effect on the Ninth Circuit’s judgment (which affirmed the district court’s refusal to set aside the CID) because it was supported by the alternative grounds of ratification.  In addition, All American argues that the Supreme Court “could not cleanly reach the ratification issue in Seila Law even if it wanted to address that question without the benefit of either lower court’s consideration of the matter.”

According to All American, its case would thus allow the Supreme Court to decide not only the CFPB’s constitutionality but “the equally important question of what remedy follows from a structural separation-of-powers violation.”  It argues that severance of the CFPA’s “for cause” removal provision is not an adequate remedy because “the Director’s removal provision cannot be severed without inflating the President’s power relative to Congress and transforming the CFPB into something Congress never would have created.”  More specifically, it asserts that “there is no reason to think that Congress would have given up its own appropriations and oversight powers while granting the President increased power over 18 preexisting federal consumer-protection statutes.  But that is exactly what severing the statute would do.” (emphasis included).

In addition, All American asserts that even assuming the removal provision was severable, that would address the constitutional problem going forward but “would do nothing to ameliorate All American’s past injury from being subject to an enforcement action initiated and prosecuted against it by an unconstitutional agency.” (emphasis included).  All American claims that such injury requires dismissal of the CFPB’s action.  It further argues that actions by an agency that is structured unconstitutionally, as distinguished from “defects in a particular officer’s title,” are null and cannot be ratified.

Finally, All American makes the alternative argument that the Supreme Court should, at a minimum, grant its petition as a companion case to Seila Law in the event it grants that petition.  It states that the Supreme Court “has repeatedly granted certiorari before judgment when, as here, a complementary companion case offers the opportunity to decide all aspects of an important question of constitutional law.”  All American argues that the Supreme Court “should grant both petitions in order to consider the merits and remedies questions together if the Court is not inclined to review All American’s case alone.”

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