Seila Law LLC v. Consumer Financial Protection Bureau

The structure of the Consumer Financial Protection Bureau renders it unconstitutional because it is dominated by a single director and isolated from removal by the president, however, the provisions are severable.

Congress created the Respondent and placed its leadership under a single-director and gave the agency “rulemaking and enforcement powers [that] are coupled with extensive adjudicatory authority.” Respondent conducts civil investigations on private entities, and in 2017, served Petitioner with a civil investigative demand regarding whether Petitioner “engag[ed] in unlawful acts or practices in the advertising, marketing, or sale of debt relief services.” Petitioner argued that Respondent’s single-director structure violated the separation of powers.  In seeking enforcement, Respondent filed a petition to impose the demand in district court. The district court ordered Petitioner to comply, disregarding the separation of powers argument. The Court of Appeals affirmed. The Supreme Court remanded and reasoned that Respondent’s structure, dominated by a single director and isolated from removal by the President, renders the structure unconstitutional.  “[W[hen confronting a constitutional flaw in statute, [the Court] tr[ies] to limit the solution to the problem, severing any problematic portions while leaving the remainder intact.” Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S., 477 508. The Court determined the problematic provisions were severable because they are able to function independently.  Further, the Dodd-Frank Act that created Respondent includes “an express severability clause.” Therefore, the Court found that the removal of the director, severable. REMANDED.