“Courts have now determined that President Obama acted unconstitutionally when he recess-appointed Richard Cordray to head the CFPB. Yet, the panel decision in this case, which upheld Cordray’s right to retroactively validate all court actions he undertook while serving as a recess appointee, would render illusory all constitutional limits on a President’s appointment powers.”
—Richard Samp, WLF Chief Counsel
WASHINGTON, DC—Washington Legal Foundation (WLF) today petitioned the U.S. Court of Appeals for the Ninth Circuit to rehear en banc a panel decision that upheld a massive trial-court judgment in an enforcement action that the Consumer Financial Protection Bureau (CFPB) was not authorized to file—because CFPB lacked any validly appointed “officers” at the time it filed and litigated the suit. In a brief filed in CFPB v. Gordon on behalf of its client, defendant Chance Gordon, WLF argues that the suit must be dismissed because the federal courts lack Article III jurisdiction to hear a lawsuit when (as here) federal officials filing the lawsuit were not authorized to file suit (and thus lacked the requisite “standing”).
The issue arises because the U.S. Senate did not confirm Richard Cordray’s appointment as Director of CFPB until July 2013. Before that date, Cordray purported to head the CFPB by virtue of a recess appointment made by President Obama on January 4, 2012. The validity of all actions taken by Cordray during that 18-month period was thrown into serious question when the U.S. Supreme Court ruled in 2014 that the Senate was not in recess on January 4, 2012 and thus that all recess appointment made by President Obama on that day were invalid.
During the 18-month period, CFPB (at Cordray’s behest) litigated an enforcement action against Gordon, based on claims that he engaged in deceptive practices in connection with his provision of mortgage-relief services. Following Cordray’s Senate confirmation, he sought to retroactively ratify all actions he had taken while serving as a recess appointee. WLF’s petition, filed at the Ninth Circuit’s invitation, asks the court to convene an 11-judge en banc panel to determine whether, as WLF asserts, the Constitution does not permit the Executive Branch to evade the consequences of its unauthorized activities by issuing perfunctory “ratification” orders.
Upon filing its petition, WLF issued the following statement by Chief Counsel Richard Samp: “Courts have now determined that President Obama acted unconstitutionally when he recess-appointed Richard Cordray to head the CFPB. Yet, the panel decision in this case, which upheld Cordray’s right to retroactively validate all court actions he undertook while serving as a recess appointee, would render illusory all constitutional limits on a President’s appointment powers. Unless the Ninth Circuit reconsiders its ruling, WLF intends to bring this issue before the U.S. Supreme Court, whose past rulings directly conflict with the panel decision.”
WLF is a free-market, public-interest law firm and policy center that seeks to confine Executive Branch agencies to the exercise of only those powers delegated to them by Congress.