Petition Filed for U.S. Supreme Court to Review Case re Constitutionality of BCFP Structure

The question of whether the Bureau of Consumer Financial Protection's (BCFP or Bureau) structure is constitutional may be going up to the U.S. Supreme Court. On September 6, 2018, a petition for writ of certioriari -- in other words, a request for the nation's highest court to hear a case -- has been filed in the case of State National Bank of Big Spring, Et Al. v. Steven Mnuchin, et al., appealed from the D.C. Circuit Court of Appeals.

The underlying case from the United States District Court for the District of Columbia dealt with two main issues: the constitutionality of the BCFP's structure and the recess appointment of the BCFP's former director Richard Cordray. The main argument regarding the Bureau's constitutionality revolved around the separation of powers. At the time the district court reviewed this matter in July 2016, the PHH Corp. v. Consumer Financial Protection Bureau case was on appeal before the D.C. Circuit with the same argument, so the district court deferred judgment until the D.C. Circuitruled on the issue.

It appears that all parties involved wanted to fast-track this case to the U.S. Supreme Court. Once the PHH decision was published, the parties jointly moved for judgment in the district court case in order to promptly appeal. Less than a month after the matter reached the D.C. Circuit Court of Appeals, the parties filed a joint motion to affirm the district court decision without prejudicing the right to appeal the matter the the U.S. Supreme Court. The D.C. Circuit granted this motion on June 8, 2018.

The petition for writ of certiorari challenges the "for cause" requirement of removing the Bureau's director as well as challenging the funding of the Bureau.

insideARM Perspective

With cases challenging the Bureau's constitutionality popping up throughout the country, it was only a matter of time before the issue came knocking at the U.S. Supreme Court's door. While the D.C. Circuit's PHH decision found that the Bureau's structure is consitutional, the Southern District of New York recently came to an opposite conclusion.

A petition for writ of certiorari does not necessarily mean the Supreme Court will hear the case. It is only a request for the court to hear the case. As the final avenue for appealing both federal appellate court and state supreme court decisions, the U.S. Supreme Court receives thousands of petitions for writ of certiorari each year. Only a small portion of these petitions are granted. However, the uniqueness of this case might strike an interest with the Supreme Court. Since the crux of the matter is the constitutionality of a federal agency and there is a jurisdictional split in decsison, the Supreme Court is uniquely situated to make the final decision on the issue. This might improve the chances of Supreme Court granting the petition, which means we may soon get the final answer on this issue.