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Bienert | Katzman Prevails Before the United States Supreme Court, Reversing The Ninth Circuit, and Holding CFPB’s Structure Unconstitutional

Tue 28th Jul 2020, Blog, Case Successes

On June 29, 2020, the Supreme Court adopted Bienert | Katzman’s arguments and held in Seila Law v. Consumer Financial Protection Bureau that the structure of the Consumer Financial Protection Bureau (“CFPB”) violates constitutional separation of powers by having a single director removable only for cause. Bienert | Katzman represented the prevailing party at the Supreme Court and through all stages of the litigation, spanning several years.

In 2017, as a continuation of litigation arising years earlier, the CFPB issued a civil investigative demand to Bienert | Katzman’s client, a law firm under investigation by the CFPB. Bienert | Katzman objected to the demand on the grounds that the CFPB’s leadership structure violated constitutional separation of powers. The CFPB filed a petition in the United States District Court to enforce the demand. The court granted the petition, and the Ninth Circuit affirmed. Throughout the litigation, Bienert | Katzman continued to dispute the constitutionality of the CFPB.

Bienert | Katzman’s client successfully petitioned the United States Supreme Court to review, and the Court granted the petition. In a decision by Chief Justice Roberts, the Supreme Court agreed with Bienert | Katzman that the CFPB’s structure was unconstitutional. While the Court allowed the CFPB to continue its existence so long as its director is removable by the President at will, it left open the question of whether the CFPB could ratify the civil investigative demand to cure the constitutional defect and remanded to the Ninth Circuit to resolve that issue.

The Supreme Court’s decision is the product of several years of hard-fought litigation by Bienert | Katzman partners Tom Bienert and Tony Bisconti, who identified the constitutional issue early on and relentlessly pursued it administratively, before the trial court, and through appeal before the Ninth Circuit and the Supreme Court. This included obtaining multiple stays of the civil investigative demand before the Ninth Circuit to preserve the issue while seeking Supreme Court review.

A copy of the Supreme Court’s decision in Seila Law v. Consumer Financial Protection Bureau is available here.