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Court reported to reject request of plaintiffs in another case challenging CFPB’s constitutionality for consolidation with PHH

Posted in CFPB Enforcement

According to a Law360 report, the D.C. federal district court has denied the request of the plaintiffs in State National Bank of Big Spring, Texas, et al. v. Lew, et al. to consolidate their case with PHH on appeal to the D.C. Circuit.

In July 2016, the D.C. federal district court rejected the plaintiffs’ attempt in State National Bank of Big Spring to invalidate the actions taken by Director Cordray while he was a recess appointee.  The district court deferred ruling on the plaintiffs’ separation of powers constitutional challenge pending a decision by the D.C. Circuit in PHH.  The D.C. Circuit subsequently ruled in PHH that the CFPB’s single-director-removable-only-for-cause structure is unconstitutional.

The plaintiffs had filed a motion with the district court seeking a status conference to determine how their case “can be most efficiently adjudicated” in light of the CFPB’s petition to the D.C. Circuit for rehearing en banc in PHH.  In their motion, the plaintiffs argued that judicial economy would be served by having the district court enter partial summary judgment in their favor on their claim that the Dodd-Frank Act’s for-cause removal provision is unconstitutional and then certify the partial summary judgment order for interlocutory appeal to the D.C. Circuit.

Although it did not oppose the plaintiffs’ motion for a status conference, the CFPB filed a response opposing certification and urging the court to “continue to hold this case in abeyance until the D.C. Circuit mandate issues in PHH.”  While Law360 reported that the court denied the plaintiffs’ consolidation request on January 17, the district court docket currently indicates only that a status conference was held on that day.