"That leaves the question of remedy. Though Col-
lins is not precisely on point, we follow its framework
because, though that case involved an unconstitutional
removal provision, we read its analysis as instructive for
separation-of-powers cases more generally. See Col-
lins, 141 S. Ct. at 1787-88; cf. All Am. Check Cashing, 33
F.4th at 241 (Jones, J., concurring) (finding Collins “in-
apt” for determining a remedy for the Bureau’s “budg-
etary independence”).
Collins clarified a dichotomy between agency actions
that involve “a Government actor’s exercise of power
that the actor did not lawfully possess” and those that
do not. 141 S. Ct. at 1787-88. Examples of the former
include actions taken by an unlawfully appointed official, ... The remedy in those
cases, invalidation of the unlawful actions, flows “di-
rectly from the government actor’s lack of authority to
take the challenged action in the first place.” All Am.
Check Cashing, 33 F.4th at 241 (Jones, J., concurring)."
"Put differently, Congress
plainly (and properly) authorized the Bureau to promul-
gate the Payday Lending Rule, see 12 U.S.C. §§ 5511(a),
5512(b), as discussed supra in II.A-C. But the agency
lacked the wherewithal to exercise that power via con-
stitutionally appropriated funds. Framed that way,
the Bureau’s unconstitutional funding mechanism “[did]
not strip the [Director] of the power to undertake the other responsibilities of his office,” Collins, 141 S. Ct. at
1788 & n.23, but it deprived the Bureau of the lawful
money necessary to fulfill those responsibilities. This
is a distinction with more than a semantical difference,
as it leads us to conclude that, consistent with Collins,
the Plaintiffs are not entitled to per se invalidation of the
Payday Lending Rule, but rather must show that “the
unconstitutional . . . [funding] provision inflicted
harm.” Id. at 1788-89."
..."In
other words, without its unconstitutional funding, the
Bureau lacked any other means to promulgate the rule.
Plaintiffs were thus harmed by the Bureau’s improper
use of unappropriated funds to engage in the rulemak-
ing at issue. "
"Indeed, the Bureau’s unconstitutional
funding structure not only “affected the complained-of
decision,” id. at 1801 (Kagan, J., concurring in part), it literally effected the promulgation of the rule. Plain-
tiffs are therefore entitled to “a rewinding of [the Bu-
reau’s] action.” Id.
In considering other violations of the Constitution’s
separation of powers, the Supreme Court has rewound
the unlawful action by granting a new hearing, see Lucia
v. SEC, 138 S. Ct. 2044, 2055 (2018), or invalidating an
order, see NLRB v. Noel Canning, 573 U.S. 513, 521, 557
(2014); see also 5 U.S.C. § 706(2)(A) (providing that, un-
der the APA, a “reviewing court shall . . . hold un-
lawful and set aside agency action . . . found to be
. . . not in accordance with law”). In like manner, we
conclude that the district court erred in granting sum-
mary judgment to the Bureau and in denying the Plain-
tiffs a summary judgment “holding unlawful, enjoining
and setting aside” the challenged rule. Accordingly,
we render judgment in favor of the Plaintiffs on this
claim and vacate the Payday Lending Rule as the prod-
uct of the Bureau’s unconstitutional funding scheme."
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 21-50826
COMMUNITY FINANCIAL SERVICES ASSOCIATION OF
AMERICA, LIMITED; CONSUMER SERVICE ALLIANCE OF
TEXAS, PLAINTIFFS-APPELLANTS
v.
CONSUMER FINANCIAL PROTECTION BUREAU;
ROHIT CHOPRA, IN HIS OFFICIAL CAPACITY AS
DIRECTOR, CONSUMER FINANCIAL PROTECTION
BUREAU, DEFENDANTS-APPELLEES
[Filed: Oct. 19, 2022]
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:18-CV-295
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