Marketing Firm Targeted by CFPB Says Case Cost Justifies Appeal

By Chris Bruce

A marketing company sued by the Consumer Financial Protection Bureau says its potential exposure to $1.7 billion in damages justifies a mid-case appeal of a recent ruling to the U.S. Court of Appeals for the Ninth Circuit ( Cons. Fin. Protection Bureau v. D & D Marketing, Inc. , 9th Cir., 17-cv-80049, motion to file reply 4/19/17 ).

At issue in the attempted appeal by Burbank, Calif.-based D&D Marketing Inc. is whether the CFPB can continue its lawsuit against D&D Marketing even though the judge hearing the case has already said the CFPB is unconstitutionally structured.

The company says that if it loses in the district court, it would have to obtain a bond that it can’t afford if it wants to appeal. That means its only real access to the Ninth Circuit in this case is an interlocutory appeal - one it said makes sense given the enormous amounts at stake. “If a defendant’s ten-figure exposure does not justify interlocutory review, it is hard to imagine what does,” D&D Marketing said in an attachment to a motion filed in the Ninth Circuit April 19 (emphasis in original).

D&D Marketing buys and sells consumer loan information. The latest skirmish between the company and the CFPB followed a decision by the district court that said that even though the CFPB is unconstitutionally structured, the agency can continue its suit against D&D Marketing. At that point, D&D Marketing filed a petition for an interlocutory appeal to the Ninth Circuit. The CFPB April 10 filed a brief in opposition to the petition, in part citing an antitrust case that said such appeals are appropriate only to avoid “protracted and expensive litigation.”

Now, D&D Marketing wants to respond and has asked the Ninth Circuit for permission to add to its to its arguments. The cost of this case, the company said, supports its request for the interlocutory appeal. According to D&D Marketing, the CFPB’s lawsuit exposes D&D Marketing to more than $1.7 billion in damages.

Original Remedy Challenged

According to D&D Marketing, its potential financial exposure is part of the CFPB’s strategy. “Realizing that D&D cannot possibly bond a ten-figure judgment in a post-judgment appeal, the Bureau’s real goal is to maximize its leverage to coerce a settlement based on D&D’s mere exposure to such a crushing judgment,” it said.

The Ninth Circuit hasn’t yet ruled on whether the company made add its new argument, nor whether it will allow the interlocutory appeal..

In the underlying case, the U.S. District Court for the Central District of California in November said the CFPB is unconstitutionally structured, but allowed the agency to press its case against D&D Marketing. Even so, the district court March 21 certified to the Ninth Circuit a question about the proper remedy in the case. In its November ruling, the district court said the proper remedy is to sever from the Dodd-Frank Act the unconstitutional limits on the removal of the CFPB director. However, D&D Marketing says the proper remedy to hold the CFPB unconstitutional and to dismissal the CFPB’s case against D&D Marketing.

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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