On April 10, 2017, PHH filed its reply brief with the DC Circuit in the en banc rehearing of the PHH v. CFPB case. In its brief, PHH argues that if the Bureau’s single-director-removable-only-for-cause structure is constitutional, then there is essentially no limit to Congress’s authority to divest the President of all executive power. PHH argues: “[I]f Congress can divest the President of power to execute the consumer financial laws, then it may do so for the environmental laws, the criminal laws, or any other law affecting millions of Americans.” According to PHH, “The absence of any discernible limiting principle is a telling indication that the CFPB’s view of the separation of powers is wrong.”
In October 2016, a three-judge panel declared the CFPB’s single-director-removable-only-for-cause structure unconstitutional. The panel remedied that defect by severing the removal-only-for-cause provision from the Dodd-Frank Act so that the President “now has the power to supervise and direct the Director of the CFPB, and may remove the Director at will at any time.” Unsurprisingly, the CFPB has defended the constitutionality of its structure, while PHH continues to argue that the Bureau’s structure violates the constitution’s separation of power doctrine. The DOJ also filed an amicus brief in support of PHH, proposing that the court “sever the provision limiting the President’s authority to remove the CFPB’s Director, not to declare the entire agency and its operations unconstitutional.”
In its opening brief, PHH argued that the DC Circuit should “strike down the CFPB in its entirety.” PHH maintained that strong stance in its reply brief, arguing that the only remedy to the CFPB’s unconstitutional structure is to dismantle the agency altogether. PHH argued that the Bureau’s structure goes to far: “No Supreme Court case condones the CFPB’s historically anomalous combination of power and lack of democratic accountability, and the Constitution forbids it.” PHH argued that the Bureau’s primary constitutional defect is one that cannot be remedied because “the Director’s unaccountability . . . is not a wart to be surgically removed. Congress placed it right at the agency’s heart, and it cannot be removed without changing the nature of what Congress adopted.”
PHH’s reply completes briefing in this en banc appeal process. Oral arguments are set for May 24, with each side being given 30 minutes to argue. The DOJ will also have 10 minutes to present its views during oral argument.