Yesterday Judge Timothy Kelly denied a second request to remove President Trump's pick to lead the Consumer Financial Protection Bureau (CFPB) until a permanent replacement can be nominated and confirmed. The case is Leandra English v. Donald J. Trump et al. in the United States District Court for the District of Columbia.
You can read yesterday's 46-page Memorandum and Order by Judge Kelly here.
The first ruling was on November 28, 2017 when he denied Leandra English's request for a restraining order to bar the President's choice, Mick Mulvaney, from serving as the CFPB’s acting director.
The conflict kicked off on Friday of the Thanksgiving weekend last November, when then Director Richard Cordray announced it would be his last day, and that he was naming his chief of staff, Leandra English, as deputy director. Because of two conflicting laws governing how to fill the vacancy, many claimed it was unclear who was actually in charge. Mulvaney showed up with donuts on Monday following the holiday weekend and began work. Mulvaney quickly made it clear he intended to come to work until the President or a judge said otherwise. Indeed, this is what has happened. As insideARM has reported, quite a few actions have been taken -- most notably, updating the officially stated mission of the CFPB. English has also reportedly been at work, but not in concert with Mulvaney.
In yesterday's ruling Judge Kelly addressed the legal standard required for a preliminary injunction to be granted. He cited:
A preliminary injunction is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” To warrant a preliminary injunction, a plaintiff must establish that (1) she “is likely to succeed on the merits”; (2) she “is likely to suffer irreparable harm in the absence of preliminary relief”; (3) the “balance of equities” tips in her favor; and (4) “an injunction is in the public interest.” The last two factors “merge when the Government is the opposing party.” The plaintiff “bear[s] the burdens of production and persuasion” when moving for a preliminary injunction. (References omitted for readability)
...The purpose of a preliminary injunction “is merely to preserve the relative positions of the parties until a trial on the merits can be held.” When a plaintiff seeks an injunction that would alter the status quo rather than merely preserve it (i.e., a mandatory injunction), some district courts in this Circuit have applied an even higher standard.
Dismissing this, however, he stated that English could not meet the traditional standard, so the Court need not resolve this question of a higher standard.
Judge Kelly proceeded to dismiss all of English's arguments in detail. The upshot is this:
The Court finds that English is not likely to succeed on the merits of her claims, nor is she likely to suffer irreparable harm absent the injunctive relief sought. Moreover, the balance of the equities and the public interest also weigh against granting the relief. Therefore, English has not met the exacting standard to obtain a preliminary injunction.
Legal and grammar geeks (like me) will enjoy the pivotal discussion of "shall" on pages 22-23 of the Memorandum. Kelly writes,
English’s displacement argument relies heavily on Dodd-Frank’s use of the word “shall.” She argues that this word is both “mandatory” and “unqualified,” and creates an unavoidable conflict between Dodd-Frank and the FVRA that must be resolved in favor of Dodd-Frank.
My personal favorite line is this borrowed quote:
“Shall is, in short, a semantic mess..."
“Shall is, in short, a semantic mess. Black’s Law Dictionary records five meanings for the word.” A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts § 11, at 113 (2012) (emphasis in original) ...This is why courts look to the entire statutory context to determine how to construe it ["shall"].
Judge Kelly concludes with this,
There is little question that there is a public interest in clarity here, but it is hard to see how granting English an injunction would bring about more of it. ...The President has designated Mulvaney the CFPB’s acting Director, the CFPB has recognized him as the acting Director, and it is operating with him as the acting Director. Granting English an injunction would not bring about more clarity; it would only serve to muddy the waters. Therefore, the balance of the equities and the public interest weigh against the injunction. ...For all of the above reasons, English’s Motion for a Preliminary Injunction is DENIED.
And so life continues. Will English appeal? Maybe. It seems to me, though, that as a practical matter, the time required for an appeal will approach (or even exceed) the period of Mulvaney's acting directorship, which by law is capped at 210 days. (You may recall that oral arguments in the case of PHH Corp. v. Consumer Financial Protection Bureau took place on May 24, 2017; we still await a decision. And, another case still pending in the D.C. Court of Appeals, ACA International, et al. v. the Federal Communications Commission (FCC) and United States of America, saw oral arguments in October 2016; still no decision there either.)
Meanwhile, as reported by Breitbart News and the Credit Union Times earlier this week, Jeb Hensarling (R-Texas), the soon-to-retire House Financial Services Chairman, endorsed NCUA Chairman J. Mark McWatters to be the next CFPB director. Hensarling himself has been rumored to be on the short list for that job.
As I've recently said, some have speculated that the leadership change at the CFPB might mean that debt collection rules will never see the light of day. I'm not so sure I agree with that. There has certainly been a delay. However if Mulvaney's new mission to "identify and address outdated... regulations" applies to any industry, it is tailor-made for debt collection. With a law enacted in the 1970's and a mass of conflicting court decisions, rules governing this industry need to be simpified, clarified, and modernized.
2018 is going to be an interesting year, one way or the other.