“Confirmed Judges, Confirmed Fears” is a blog series documenting the harmful impact of President Trump’s judges on Americans’ rights and liberties. Cases in the series can be found by issue and by judge at this link.
Trump Ninth Circuit judges Patrick Bumatay and Lawrence VanDyke tried in dissent to extend even further the Supreme Court’s harmful decision in Seila Law LLC v Consumer Financial Protection Bureau and argued that the court should refuse to allow the CFPB to ratify an investigative demand and thus continue an investigation into deceptive practices. The full Ninth Circuit rejected the dissent and the request to rehear the case in May 2021 in CFPB v Seila Law LLC.
In 2020, as a result of the deciding votes of Trump justices Brett Kavanaugh and Neil Gorsuch, the Supreme Court issued a harmful 5-4 decision that eliminated the independence of CFPB by ruling that Congress could not prevent the President from firing its director without cause. The case before the Court concerned a civil investigative demand issued by CFPB against California law firm Seila Law LLC, in order to help determine whether the firm was committing “unlawful acts and practices” in the “advertising, marketing or sale of debt relief services.” Although the Court essentially restructured the agency by requiring that the President be able to fire its director, it did not invalidate the entire agency or the investigation against Seila Law, but sent the case back to the lower courts to determine whether the investigation and the investigative demand remained valid.
A three-judge panel of the Ninth Circuit, including George W Bush nominee Jack Zouhary, ruled that the investigative demand remained valid because it had been ratified by then-CFPB director Kathleen Kraninger, who did so after the Supreme Court’s decision when it was clear that she could be replaced at will by the President. The full Ninth Circuit denied rehearing.
Trump judge Bumatay, joined by Trump judge VanDyke and several others, harshly dissented. Bumatay began by comparing the situation to the Biblical story of David and Goliath, claiming that David (Seila Law) had won a “victory for his people” but that the Ninth Circuit “resurrects Goliath” (CFPB) “on the battlefield so he can defeat David.” The result, he complained, was that “Goliath still wins” and Seila Law received “no relief from the harms inflicted by an unaccountable and unchecked federal agency.” Attempting to go even further than the 5-4 Supreme Court did, Bumatay asserted that despite the Court’s decision to send the case back on the ratification issue, “no ratification is permissible” because CFPB itself was “unconstitutional,” and there was thus “no agency empowered to enforce the laws at the time of CFPB’s prior actions.”
Putting Bumatay’s rhetoric aside, the Ninth Circuit panel had explained what was wrong with Bumatay’s arguments, which were also raised by the law firm. The panel made clear that the Supreme Court did not “require invalidation of the agency itself,” as Seila Law “had urged.” Instead, the Court severed the part of the law insulating the CFPB director from removal by the President, declared only that part of the law unconstitutional, and specifically sent the case back to determine whether the investigative demand was “validly ratified.” The panel explained that former director Kraninger’s ratification of the investigative demand, at a time when she “knew that the President could remove her with or without cause,” effectively “remedies any constitutional injury” to Seila Law.
The Supreme Court’s decision in the CFPB case was bad enough, making the work of independent agencies “vulnerable to legal challenge.” The dissent by Trump judges Bumatay and VanDyke would have made the bad situation even worse, harming the ability of CFPB to help protect consumers. Although the Ninth Circuit rejected those views in this case, a few more votes could have produced the opposite result. The decision makes clear the importance of promptly confirming Biden nominees to the seats to be filled on the Ninth Circuit, as well as other courts, as part of our fight for our courts.