So, obit, you seem to probably be in the legal field as you clearly seem to grasp the legal ramifications better than most on each of these decisions. I'm still trying to determine the significance of this filing. Is this "just another filing" or is this one far more significant than most? What are the general ramifications of this filing? Thank you in advance.
The ramification of Treasury's advisory filing to the US District Court for Southern Texas is straightforward. Treasury alerts the court that its former position of support of FHFA's arguments against the Plaintiffs' constitutional claim as found in a footnote in their 2/27/2017 reply memorandum in support of the motion to dismiss has changed. The court is advised that Treasury's position matches the DOJ's (US) position as stated in its US Amicus Brief to the CADC en banc rehearing of the CADC panel ruling. This advisory silences Treasury and leaves FHFA to argue alone against the Plaintiffs Count IV, since the DOJ sees the CFPB structure as unconstitutional. This new position matches, in part, the Plaintiffs' position and partially undermines the Defendants' position. See: 02/27/2017
- Reply Memorandum of the Department of the Treasury and Steven Mnuchin in Support of Their Motion to Dismiss. Note: Treasury did not file a separate and named reply and did not argue directly against the Plaintiffs' constitutional claim as did FHFA. Since the CADC panel ruling is vacated and the advisory is simply a filing and not acted upon by the court, we are to wait to see what impact this has on the Collin's and other cases.
Here is the order of events.
1. There was a legal ruling made on October 11, 2017 by a CADC panel in the PHH Corporation v. CFPB case. The judgment given was that the CFPB structure composed as a single headed, independent agency with a for-cause removal provision applicable to the CFPB director is unconstitutional and that the remedy for this legal flaw is to remove the for-cause removal provision. See CADC panel decision here: http://bit.ly/2dZ8qnu
- page 9-10.
In light of the consistent historical practice under which
independent agencies have been headed by multiple
commissioners or board members, and in light of the threat to
individual liberty posed by a single-Director independent
agency, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore
hold that the CFPB is unconstitutionally structured.
What is the remedy for that constitutional flaw? PHH
contends that the constitutional flaw means that we must shut
down the entire CFPB (if not invalidate the entire Dodd-Frank
Act) until Congress, if it chooses, passes new legislation fixing
the constitutional flaw. But Supreme Court precedent dictates
a narrower remedy. To remedy the constitutional flaw, we
follow the Supreme Court’s precedents, including Free
Enterprise Fund, and simply sever the statute’s
unconstitutional for-cause provision from the remainder of the
statute. Here, that targeted remedy will not affect the ongoing
operations of the CFPB. With the for-cause provision
severed, the President now will have the power to remove the
Director at will, and to supervise and direct the Director. The
CFPB therefore will continue to operate and to perform its
many duties, but will do so as an executive agency akin to other
executive agencies headed by a single person, such as the
Department of Justice and the Department of the Treasury.
Those executive agencies have traditionally been headed by a
single person precisely because the agency head operates
within the Executive Branch chain of command under the
supervision and direction of the President. The President is a
check on and accountable for the actions of those executive
agencies, and the President now will be a check on and
accountable for the actions of the CFPB as well. http://bit.ly/2dZ8qnu - page 9-10
This ruling is not applied to to other similarly structured single-Director, independent agencies - FHFA, SSA and OSC .
2. The above CADC panel judgement (not opinion) is currently vacated in accordance with Circuit Rule 35(d) since there is an ongoing CADC rehearing en banc of that ruling.
(d) Disposition of Petition. A petition for rehearing ordinarily will not be granted, nor will an
opinion or judgment be modified in any significant respect in response to a petition for rehearing, in
the absence of a request by the court for a response to the petition.
A petition for panel rehearing will not be acted upon until action is ready to be taken on any
timely petition for rehearing en banc. If rehearing en banc is granted, the panel’s judgment, but
ordinarily not its opinion, will be vacated, and the petition for panel rehearing may be acted upon without awaiting final termination of the en banc proceeding. Upon termination of the en banc proceeding, a new judgment will be issued. If the en banc court divides evenly, a new judgment affirming the decision under review will be issued. CIRCUIT RULES of the UNITED STATES COURT OF APPEALS for the DISTRICT OF COLUMBIA CIRCUIT - http://bit.ly/2mD2uIO
No further decision has been given. So, currently, there is no legal force to the October 11, 2016 CADC panel ruling. There is only a vacated decision and an ongoing en banc rehearing
3. On February 9, 2017 and March 20, 2017, in the Collins, et al. v FHFA, et al. case in the US District Court in Southern Texas, the Plaintiffs file and argue and reply and argue for the court to render a summary judgment to vacate the Net Worth Sweep because FHFA’s structure violates the separation of powers and is unconstitutional. The PHH Corporation v. CFPB is brought into play, even though the CADC panel judgment is vacated.
- Plaintiffs’ Memorandum of Law in Opposition to Defendants’ Motions to Dismiss and in Support of Plaintiffs’ Motion for Summary Judgment on Constitutional Claim 03/20/2017
- Plaintiffs’ Combined Reply in Support of Their Motion for Summary Judgment…
4. FHFA replies and argues against the Plaintiffs arguments on the constitutional claim on 2/27/2017. See: 02/27/2017
- Memorandum of Defendants Federal Housing Finance Agency as Conservator for Fannie Mae and Freddie Mac and FHFA Director Melvin L. Watt in Opposition to Plaintiffs’ Motion for Summary Judgment and in Support of Defendants’ Cross-motion for Summary Judgment on Constitutional Claim
5. Also on 2/27/2017, Treasury files for a motion to dismiss but Treasury does not make an independent filing that argues against the Plaintiffs' constitutional claim. Instead of Treasury making its own arguments against the Plaintiffs' constitutional claim, Treasury gives a footnote indicating its support of FHFA's arguments against the Plaintiffs' constitutional claim. See: 02/27/2017
- Reply Memorandum of the Department of the Treasury and Steven Mnuchin in Support of Their Motion to Dismiss.
1 Treasury also joins in FHFA’s request that the court dismiss Plaintiffs’ separation-of- powers claim (Count IV) for the reasons provided in FHFA’s Opposition to Plaintiffs’ Motion for Summary Judgment, filed on February 27, 2017. page 2, note 1
Then on March 24, 2017, Treasury reconsiders its position supporting FHFA's arguments by filing an advisory notifying the court that Treasury takes back its admission of support in favor of FHFA's arguments against the Plaintiffs' constitutional claim as found in the note and requests the court to recognize its new stance that is in line with the DOJ's Amicus Brief filed with the CADC en banc rehearing, and to not bring to bear the former position, if and when the consitutional issue is up for consideration. See: 03/24/2017
- Treasury Advisory