Seila Law LLC v. Consumer Financial Protection Bureau

Certiorari To The United States Court Of Appeals For The Ninth Circuit

No. 19-7. Argued March 3, 2020--Decided June 29, 2020

In the wake of the 2008 financial crisis, Congress established the Consumer Financial Protection Bureau (CFPB), an independent regulatory agency tasked with ensuring that consumer debt products are safe and transparent. See Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), 124 Stat. 1376. Congress transferred the administration of 18 existing federal statutes to the CFPB, including the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and the Truth in Lending Act; and Congress enacted a new prohibition on unfair and deceptive practices in the consumer-finance sector. 12 U. S. C. §5536(a)(1)(B). In doing so, Congress gave the CFPB extensive rulemaking, enforcement, and adjudicatory powers, including the authority to conduct investigations, issue subpoenas and civil investigative demands, initiate administrative adjudications, prosecute civil actions in federal court, and issue binding decisions in administrative proceedings. The CFPB may seek restitution, disgorgement, injunctive relief, and significant civil penalties for violations of the 19 federal statutes under its purview. So far, the agency has obtained over $11 billion in relief for more than 25 million consumers.

   Unlike traditional independent agencies headed by multimember boards or commissions, the CFPB is led by a single Director, §5491(b)(1), who is appointed by the President with the advice and consent of the Senate, §5491(b)(2), for a five-year term, during which the President may remove the Director only for “inefficiency, neglect of duty, or malfeasance in office,” §§5491(c)(1), (3). The CFPB receives its funding outside the annual appropriations process from the Federal Reserve, which is itself funded outside the appropriations process through bank assessments.

   In 2017, the CFPB issued a civil investigative demand to Seila Law LLC, a California-based law firm that provides debt-related legal services to clients. The civil investigative demand (essentially a subpoena) sought information and documents related to the firm’s business practices. Seila Law asked the CFPB to set aside the demand on the ground that the agency’s leadership by a single Director removable only for cause violated the separation of powers. When the CFPB declined, Seila Law refused to comply with the demand, and the CFPB filed a petition to enforce the demand in District Court. Seila Law renewed its claim that the CFPB’s structure violated the separation of powers, but the District Court disagreed and ordered Seila Law to comply with the demand. The Ninth Circuit affirmed, concluding that Seila Law’s challenge was foreclosed by Humphrey’s Executor v. United States, 295 U. S. 602, and Morrison v. Olson, 487 U. S. 654.

Held: The judgment is vacated and remanded.


June Medical Services L. L. C. et al. v. Russo, Interim Secretary, Louisiana Department of Health and hospitals

Certiorari To The United States Court Of Appeals For The Fifth Circuit

No. 18-1323. Argued March 4, 2020--Decided June 29, 2020 1

Louisiana’s Act 620, which is almost word-for-word identical to the Texas “admitting privileges” law at issue in Whole Woman’s Health v. Hellerstedt, 579 U. S. ___, requires any doctor who performs abortions to hold “active admitting privileges at a hospital . . . located not further than thirty miles from the location at which the abortion is performed or induced,” and defines “active admitting privileges” as being “a member in good standing” of the hospital’s “medical staff . . . with the ability to admit a patient and to provide diagnostic and surgical services to such patient.”

   In these consolidated cases, five abortion clinics and four abortion providers challenged Act 620 before it was to take effect, alleging that it was unconstitutional because (among other things) it imposed an undue burden on the right of their patients to obtain an abortion. (The plaintiff providers and two additional doctors are referred to as Does 1 through 6.) The plaintiffs asked for a temporary restraining order (TRO), followed by a preliminary injunction to prevent the law from taking effect. The defendant (State) opposed the TRO request but also urged the court not to delay ruling on the preliminary injunction motion, asserting that there was no doubt about the physicians’ standing. Rather than staying the Act’s effective date, the District Court provisionally forbade the State to enforce the Act’s penalties, while directing the plaintiff doctors to continue to seek privileges and to keep the court apprised of their progress. Several months later, after a 6-day bench trial, the District Court declared Act 620 unconstitutional on its face and preliminarily enjoined its enforcement. On remand in light of Whole Woman’s Health, the District Court ruled favorably on the plaintiffs’ request for a permanent injunction on the basis of the record previously developed, finding, among other things, that the law offers no significant health benefit; that conditions on admitting privileges common to hospitals throughout the State have made and will continue to make it impossible for abortion providers to obtain conforming privileges for reasons that have nothing to do with the State’s asserted interests in promoting women’s health and safety; and that this inability places a substantial obstacle in the path of women seeking an abortion. The court concluded that the law imposes an undue burden and is thus unconstitutional. The Fifth Circuit reversed, agreeing with the District Court’s interpretation of the standards that apply to abortion regulations, but disagreeing with nearly every one of the District Court’s factual findings.

Held: The judgment is reversed.


AGENCY FOR INTERNATIONAL DEVELOPMENT et al. v. ALLIANCE FOR OPEN SOCIETY INTERNATIONAL, INC., et al.

Certiorari To The United States Court Of Appeals For The Second Circuit

No. 19-177. Argued May 5, 2020--Decided June 29, 2020

In the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003, as relevant here, Congress limited the funding of American and foreign nongovernmental organizations to those with “a policy explicitly opposing prostitution and sex trafficking.” 22 U. S. C. §7631(f). In 2013, that Policy Requirement, as it is known, was held to be an unconstitutional restraint on free speech when applied to American organizations. Agency for Int’l Development v. Alliance for Open Society Int’l, Inc., 570 U. S. 205. Those American organizations now challenge the requirement’s constitutionality when applied to their legally distinct foreign affiliates. The District Court held that the Government was prohibited from enforcing the requirement against the foreign affiliates, and the Second Circuit affirmed.

Held: Because plaintiffs’ foreign affiliates possess no First Amendment rights, applying the Policy Requirement to them is not unconstitutional. Two bedrock legal principles lead to this conclusion. As a matter of American constitutional law, foreign citizens outside U. S. territory do not possess rights under the U. S. Constitution. See, e.g., Boumediene v. Bush, 553 U. S. 723, 770–771. And as a matter of American corporate law, separately incorporated organizations are separate legal units with distinct legal rights and obligations. See, e.g., Dole Food Co. v. Patrickson, 538 U. S. 468, 474–475. That conclusion corresponds to Congress’s historical practice of conditioning funding to foreign organizations, which helps ensure that U. S. foreign aid serves U. S. interests.

 Plaintiffs’ counterarguments are unpersuasive. First, they claim that because a foreign affiliate’s policy statement may be attributed to them, American organizations themselves possess a First Amendment right against the Policy Requirement’s imposition on their foreign affiliates. First Amendment cases involving speech misattribution between formally distinct speakers, see, e.g., Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, Inc., 515 U. S. 557, 574–575, however, are premised on something missing here: Government compulsion to associate with another entity. Even protecting the free speech rights of only those foreign organizations that are closely identified with American organizations would deviate from the fundamental principle that foreign organizations operating abroad do not possess rights under the U. S. Constitution and enmesh the courts in difficult line-drawing exercises. Second, plaintiffs assert that the Court’s 2013 decision encompassed both American organizations and their foreign affiliates. That decision did not facially invalidate the Act’s funding condition, suggest that the First Amendment requires the Government to exempt plaintiffs’ foreign affiliates or other foreign organizations from the Policy Requirement, or purport to override longstanding constitutional law and corporate law principles. Pp. 3–9.

911 F. 3d 104, reversed.

 Kavanaugh, J., delivered the opinion of the Court, in which Roberts, C. J., and Thomas, Alito, and Gorsuch, JJ., joined. Thomas, J., filed a concurring opinion. Breyer, J., filed a dissenting opinion, in which Ginsburg and Sotomayor, JJ., joined. Kagan, J., took no part in the consideration or decision of the case.