CFPB urges court for final judgment in order to appeal constitutionality determination
On August 10, the CFPB submitted a request to the U.S. District Court for the Southern District of New York for a pre-motion conference to discuss approval to file a motion requesting entry of final judgment with respect to the court’s June decision, which would allow the Bureau to appeal that decision. As previously covered by InfoBytes, the court had terminated the CFPB as a party to an action with the New York Attorney General’s office (NYAG) against a New Jersey-based finance company and its affiliates (defendants), concluding that the CFPB’s organizational structure is unconstitutional and therefore, the agency lacks authority to bring claims under the Consumer Financial Protection Act (CFPA). The court determined that the NYAG, however, had plausibly alleged claims under the CFPA and New York law and had the independent authority to pursue those claims.
In its letter, the CFPB argues that the conditions of Rule 54(b) are met because (i) there are multiple parties still involved in the litigation; (ii) the court’s decision as to the Bureau’s claims is final; and (iii) there is no just reason for delay. Moreover, the CFPB argues that allowing the NYAG to proceed with claims under the CFPA without the Bureau’s “statutorily-assigned right to participate in CFPA claims brought by state regulators” would result in hardship or injustice that could be alleviated by an immediate appeal. Additionally, the CFPB asserts that the issues to be appealed—the constitutionality of the Bureau’s structure and whether the for-cause removal provision is severable from the rest of the CFPA—are separable from the issues that remain to be decided between the NYAG and the defendants.
In response to the Bureau’s letter, the NYAG argued that, regardless of the court’s decision under Rule 54(b), the court should not stay the case and should resolve all of its claims. The defendants responded that they do not oppose the Bureau’s Rule 54(b) request but believe NYAG’s claims should be stayed during the pendency of the Bureau’s appeal, arguing that the Bureau implied this in their request. The Bureau subsequently denied any implication that the NYAG’s claims should be stayed.