D.C. Circuit Court Confirms Mulvaney’s Appointment as Acting Director of the CFPB

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The U.S. District Court for D.C. has again ruled that President Trump had the authority to appoint an acting Director to the CFPB upon the resignation of Richard Cordray under the authority of the Federal Vacancies Reform Act of 1998 (the “FVRA”).

The default rule of the FVRA is that when there is a vacancy of an office requiring Presidential appointment and Senate confirmation (“a PAS officer”) the officer’s “first assistant” takes over as acting officer.  However, the FVRA also provides that the President may override the default rule by appointing a different officer or employee within the same agency, or a PAS officer from a different agency, who may serve as acting Director for up to 210 days.

Before his resignation from the CFPB, Richard Cordray appointed Leandra English (“English”) as Deputy Director, with the intent that at his resignation she would serve as acting Director per the Dodd-Frank Act, which states that the Deputy Director of the CFPB shall serve as acting Director in the absence or unavailability of the Director.  However, immediately upon his resignation, President Trump appointed John Michael Mulvaney (“Mulvaney”) to serve as acting Director.

In response, English filed an initial lawsuit and a temporary restraining order (“TRO”) in November against both President Trump and Mulvaney in an attempt to bar the President from appointing any acting Director and require that he withdraw Mulvaney’s appointment.  The D.C. District Court denied the TRO motion on the grounds that it claimed English had not shown a likelihood of success on the merits and failed to meet the prerequisites for emergency relief.

Upon those rulings, English filed an amended complaint and moved for a preliminary injunction seeking similar relief.  In her complaint, English asserted that the Dodd-Frank Act’s provision regarding the succession of the CFPB Director displaces the President’s authority to appoint under the FVRA.  The opposition claimed, however, that the FVRA is not displaced by Dodd-Frank, and is an available option for the President to fill an open Director position.

The Court here pointed out that in a case against the government, in order for a preliminary injunction to be granted, a plaintiff must establish that (1) she is likely to succeed on the merits; (2) that she is likely to suffer irreparable harm in the absence of preliminary relief; and (3) that the balance of equities tips her favor and an injunction is in the public interest.

The Court found that English did not meet the exacting standard to obtain a preliminary injunction because, according to the Court, English was not likely to succeed on the merits of her claims, she is unlikely to suffer irreparable harm absent the injunctive relief, and the balance of equities and the public interest weighed against granting such relief.

Ms. English appealed, requesting expedited treatment.  On January 23, 2018, the U.S. Court of Appeals for the District of Columbia Circuit granted Ms. English’s request for an expedited appeal.  Ms. English’s appeal brief is due January 30, 2018.  The Government’s response is due February 23, 2018.  And Ms. English’s reply brief is due March 6, 2018.  A decision on oral argument will likely be made at some point after the briefing is complete.

More information on the complaint and its history can be found here:

https://dlbjbjzgnk95t.cloudfront.net/1001000/1001030/cfpb.pdf.

https://www.thewbkfirm.com/uncategorized/message-wbk-managing-partner-mitch-kider-leadership-changes-cfpb.

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