Supreme Court “relist” of CFPB petition for certiorari threatens prolonged legal limbo
The Supreme Court recently had the opportunity to grant the CFPB’s pending petition for certiorari seeking review of the U.S. Court of Appeals for the Fifth Circuit’s holding in Community Financial Services Association of America v. Consumer Financial Protection Bureau. The 5th Circuit found that the agency’s funding structure is unconstitutional, potentially voiding everything the CFPB has done or could do. The Justices considered the petition at their conference this past Friday, but the Court neither granted nor denied the petition. Instead, it “relisted” the petition for consideration at its conference this Friday, February 24.
The Court’s decision functions as a delay and does not necessarily suggest an ultimate denial of the petition. In recent practice, petitions have been relisted before being granted. Practically, this action makes it less likely that the case will be decided this term, leaving the agency, and the rules it issues, in a state of legal limbo for as much as another year or more. The possibility that the case will not be decided during this Supreme Court term may leave the CFPB’s actions subject to successful challenges in federal district courts in states subject to the 5th Circuit decision (Texas, Mississippi and Louisiana).
The CFPB was no doubt hoping to avoid this possible outcome. It filed the petition less than 30 days after the 5th Circuit’s decision and urged the Court to act quickly to decide the case during the current term, which typically ends in late June. In the petition the CFPB explained that the 5th Circuit’s decision would negatively impact the “CFPB’s critical work administering and enforcing consumer financial protection laws … because the decision below vacates a past agency action based on the purported Appropriations Clause violation, the decision threatens the validity of all past CFPB actions as well.” The CFPB argued that refusal to decide the case this term “threatens the ability of the CFPB to function and risks severe market disruption. Delaying review until next term would likely postpone resolution of the critical issues at stake until sometime in late 2023 and more likely 2024.”
The CFPB’s timeline was complicated by the Court’s agreement to extend the briefing schedule on the petition, in part to accommodate briefing on the Community Financial Services Association of America’s conditional cross-petition, which seeks review on other aspects of the 5th Circuit’s decision. The Court’s delay in acting on the CFPB’s petition complicates matters further. It is still possible that the Court could agree to hear the case and set it for expedited briefing so that it can be decided this term, but every indication so far is that the Court is in no hurry to decide this matter, even if it complicates life for the CFPB. Stay tuned. We may get action on the petition by the Court either Friday or next Monday.
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