Senior United States District Judge of the United States District Court for the Southern District of New York, sitting at Manhattan, has ruled the structure of the Consumer Financial Protection Bureau to be unconstitutional, thus dismissing them as plaintiffs in a lawsuit.
It was a small part of a much larger ruling denying motions to dismiss by the defendants in the case.
The above is the link to Preska’s ruling. The relevant part of her ruling starts at page 99 of 104.
Judge Preska relies on the dissents of United States Circuit Judges Henderson and Kavanaugh to an en banc decision of the DC Circuit to uphold the structure of the CFPB. Because the SDNY is in the Second Circuit, decisions of the DC Circuit are not binding upon the SDNY. However, Preska is free to rely on either a decision or dissent of another Circuit Court and in this case, she has relied upon dissents from the DC Circuit.
The above is the link to the en banc DC Circuit decision. It is a lengthy PDF. It starts off with the Opinion of the Court by United States Circuit Judge Nina Pillard. The Henderson dissent starts at about page 122 of the PDF file. The Kavanaugh dissent starts at about page 174 of the PDF file and continues to about 4 pages from the end of the document. A dissent by Judge Randolph covers the last 4 pages, but Judge Preska did not cite that dissent. She did cite both the Henderson and Kavanaugh dissents.
Essentially the crux of the issue is that the Director of the CFPB has tremendous power and discretion, but is removable only for cause, not at will. I agree with Judge Preska’s ruling and the dissenters on the DC Circuit. The CFPB director should be able to be fired by the President at will and until that change is made by Congress, the CFPB should be put on ice. Judge Preska’s ruling effectively puts the CFPB on ice for the time being.