CFPB Moves to Block Appeal of Constitutional Question

By Chris Bruce

The Consumer Financial Protection Bureau March 6 urged a federal judge to block a potential appeal on what the CFPB may do if found to be unconstitutional ( Cons. Fin. Protection Bureau v. Fomichev , C.D. Cal., 16-cv-02724, response filed 3/6/17 ).

Dmitry Fomichev, the defendant in an enforcement case brought by the CFPB, wants the U.S. Court of Appeals for the Ninth Circuit to review a November decision that said the bureau is unconstitutionally structured but that allowed the CFPB to continue its case against him.

The interlocutory appeal, if allowed, could take up questions in the wake of an October panel ruling by the D.C. Circuit that’s being scrutinized by the D.C. Circuit’s full court. The panel said the CFPB’s leadership structure violates the U.S. Constitution but that the agency may continue its work.

In its March 6 filing, the CFPB urged Judge Philip S. Gutierrez of the U.S. District Court for the Central District of California not to certify questions teed up by Fomichev.

According to the CFPB, Fomichev’s bid for an appeal effort assumes that the Ninth Circuit also would find the CFPB’s structure unconstitutional and likely would fail, anyway. “Courts have uniformly allowed the Bureau to continue to pursue its enforcement actions despite any possible constitutional infirmity,” the March 6 filing said.

Enforcement Claims Proceed

The filing is the latest move in the CFPB’s April 2016 suit against Fomichev, founder of a company that sells consumer loan information. The CFPB alleged unfair and abusive acts and practices by the company, and it said Fomichev provided “substantial assistance.”

In November, Gutierrez agreed with Fomichev that the CFPB is unconstitutionally structured, citing the D.C. Circuit panel’s decision involving PHH Corp. Even so, Gutierrez allowed the case to proceed and denied relief to Fomichev, who wants to send that dispute to the Ninth Circuit.

Fomichev wants two questions certified for review: “What is the proper remedy for this constitutional defect given the court’s holding that the Bureau is unconstitutionally structured? 2) Whether a party is barred from advancing an as-applied challenge to the constitutionality of a statute, based on the premise that the statute is not vague on its face, where a novel interpretation of the statute may encourage its discriminatory enforcement?”

Fomichev also has asked Gutierrez to consolidate his case with two others — Cons. Fin. Protection Bureau v. Gasparyan, C.D. Cal., No. 16-cv-02725, also filed in April 2016, and Cons. Fin. Protection Bureau v. D and D Marketing, C.D. Cal., No. 15-cv-09692, the first case in the trio, which was brought in December 2015.

According to Fomichev, all three cases arise from the same allegations and involve the same legal parties and claims.

Meanwhile, the U.S. Chamber of Commerce March 6 said it plans to file a friend-of-the-court brief in the PHH case in the D.C. Circuit. The constitutional issues in the PHH case, the filing said, “are of great importance” to businesses regulated by the CFPB.

Fomichev is represented by Steven B. Soltman and Thomas J. Rittenburg of Soltman Levitt Flaherty and Wattles in Thousand Oaks, Calif., and Raffi Kassabian of Reed Smith in Los Angeles.

To contact the reporter on this story: Chris Bruce in Washington at

To contact the editor responsible for this story: Michael Ferullo at

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