PHH Says U.S. Hasn’t Made Case for Rehearing by Full D.C. Circuit

By Chris Bruce

PHH Corp. said a federal appeals court in Washington shouldn’t rehear an October ruling that said the Consumer Financial Protection Bureau’s leadership framework violates the Constitution ( PHH Corp. v. Consumer Fin. Prot. Bureau , D.C. Cir., No. 15-cv-01177, supplemental response 1/27/17 ).

The Jan. 27 filing in the U.S. Court of Appeals for the District of Columbia Circuit said the government hasn’t made its case for a review by the D.C. Circuit’s full complement of judges.

The October ruling by two judges on a three-judge D.C. Circuit panel said the CFPB’s structure violates the separation of powers, and a recent filing by the government urged the full D.C. Circuit to review that decision.

But the government’s filing doesn’t really confront the panel’s holding, PHH’s lawyers told the court. “The panel applied the governing standard and reached the unavoidable conclusion that the CFPB’s structure violates the Constitution’s separation of powers,” they said. “Although the United States would have preferred that the panel take a (supposedly) different path in reaching that conclusion, it never challenges the panel’s ultimate result.”

The filing came one day after Sen. Sherrod Brown (D-Ohio) and Rep. Maxine Waters (D-Calif.) moved to intervene in the PHH case. They said the new administration will try to remove Cordray, or that it will make no effort to defend the CFPB’s status as an independent agency as established by the Dodd-Frank Act.

“Movants now seek to intervene in this litigation because recent events have made it clear that their interests in preserving the leadership structure they voted for may no longer be adequately represented by the new Administration,” Brown and Waters said in their motion.

The lawmakers are represented by Elizabeth B. Wydra, Brianne J. Gorod, Brian R. Frazelle, and Simon Lazarus of the Constitutional Accountability Center in Washington.

PHH is represented by Theodore B. Olson and Helgi C. Walker of Gibson Dunn & Crutcher in Washington, Mitchel H. Kider, David M. Souders, Sandra B. Vipond, and Michael S. Trabon of Weiner Brodsky Kider in Washington, and Thomas M. Hefferon and William M. Jay of Goodwin Procter in Washington.

To contact the reporter on this story: Chris Bruce in Washington at cbruce@bna.com

To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com

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