Amicus Curiae Brief — Seila Law LLC, Petitioner v. Consumer Financial Protection Bureau

i

No. 19-7

In the

Supreme Court of the United States

S EILA L AW LLC ,

Petitioner,

v.

C ONSUMER F INANCIAL P ROTECTION B UREAU ,

Respondent.

On Petition for Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

B RIEF A MICUS C URIAE OF

P ACIFIC L EGAL F OUNDATION

IN S UPPORT OF P ETITIONER

T ODD F. G AZIANO

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 610

Arlington, VA 22201

Phone: (202) 888-6881

Email: TGaziano@pacificlegal.org

O LIVER J. D UNFORD *

*Counsel of Record

Pacific Legal Foundation

930 G Street

Sacramento, California 95814

Phone: (916) 419-7111

Facsimile: (916) 419-7747

Email: ODunford@pacificlegal.org

Counsel for Amicus Curiae Pacific Legal Foundation

i

Q UESTION P RESENTED

Whether the vesting of legislative, executive, and

judicial powers in the Consumer Financial Protection

Bureau, an independent agency led by a single director who cannot be removed except for cause, violates

the separation of powers.

ii

T ABLE OF C ONTENTS

Q UESTION P RESENTED .............................................. i

T ABLE OF C ONTENTS ................................................. ii

T ABLE OF A UTHORITIES ............................................iv

IDENTITY AND

INTEREST OF AMICUS CURIAE ..................................1

INTRODUCTION AND

SUMMARY OF ARGUMENT.........................................2

A RGUMENT ................................................................ 10

I.

T HE CFPB J USTIFIES C ONCERNS A BOUT

C REEPING E NCROACHMENTS .......................... 10

II.

“T HE E XECUTIVE P OWER I S V ESTED I N

“A ” P RESIDENT W HO “S HALL T AKE

C ARE T HAT T HE L AWS B E

F AITHFULLY E XECUTED ” ................................. 13

A. The President—and Only the President—

Is Authorized and Obligated To “take Care

that the Laws be faithfully executed” ............ 14

B. To “Take Care” That the Laws Be

Faithfully Executed, the President Must

Have Agents—Executive-Branch “Officers

of the United States”—Whose Offices

Are Lodged in the Executive Branch ............. 15

1. The Constitution Contemplates

Presidential Assistants ............................. 15

2. Executive Officers Work in

the Executive Branch and

Are Subordinate to the President ............. 16

iii

C. To Faithfully Execute the Laws,

the President Must Have Control Over

His Officers—By Removal, If Necessary ....... 18

D. The President’s Control Over His

Administration Makes the President

Accountable for the Faithful Execution

of the Laws—and Thereby Helps

To Secure Individual Liberty ......................... 20

III. T HE C OURT S HOULD R ECONSIDER

H UMPHREY ’ S E XECUTOR ................................. 22

CONCLUSION ............................................................... 24

iv

TABLE OF AUTHORITIES

CASES

Buckley v. Valeo, 424 U.S. 1 (1976) .......................... 15

CFPB v. Seila Law LLC,

923 F.3d 680 (9th Cir. 2019) .................................. 9

City of Arlington v. FCC,

133 S. Ct. 1863 (2013) ...................................... 7, 13

Commodity Futures Trading Comm’n v.

Schor, 478 U.S. 833 (1986) ............................ 11, 12

Decker v. Nw. Envtl. Def. Ctr.,

568 U.S. 597 (2013) ................................................ 2

Dep’t of Transp. v. Ass’n of Am. R.R.,

135 S. Ct. 1225 (2015) .......................... 9, 10, 11, 12

Fletcher v. Peck,

10 U.S. (6 Cranch) 87 (1810) ................................. 3

Free Enterprise Fund v. PCAOB,

561 U.S. 477 (2010) ...................................... passim

FTC v. Ruberoid Co.,

343 U.S. 470 (1952) .............................................. 11

Gloucester Cty. Sch. Bd. v. G.G. ex rel. Grimm,

136 S. Ct. 2442 (2016) ............................................ 1

Gundy v. United States,

139 S. Ct. 2116 (2019) ............................................ 1

v

Humphrey’s Executor v. United States,

295 U.S. 602 (1935) .............................. 9–10, 22–23

I.N.S. v. Chadha, 462 U.S. 919 (1983) ..................... 11

Kisor v. Wilkie, 139 S. Ct. 2400 (2019) ....................... 1

Lucia v. SEC, 138 S. Ct. 2044 (2018) ......................... 1

Marbury v. Madison,

5 U.S. (1 Cranch) 137 (1803) ............................... 10

Metro. Wash. Airports Auth. v. Citizens for

the Abatement of Aircraft Noise, Inc.,

501 U.S. 252 (1991) ................................................ 2

Mistretta v. United States,

488 U.S. 361 (1989) .............................................. 11

Morrison v. Olson, 487 U.S. 654 (1988) ...... 5, 9, 11, 21

Murray’s Lessee v. Hoboken Land &

Improvement Co.,

59 U.S. (18 How.) 272 (1856) ................................. 5

Myers v. United States,

272 U.S. 52 (1926) .................................... 15, 18, 22

N.L.R.B. v. Noel Canning,

134 S. Ct. 2550 (2014) ............................................ 8

Nat’l Ass’n of Mfrs. v. Dep’t of Def.,

138 S. Ct. 617 (2018) .............................................. 1

PHH Corp. v. CFPB,

881 F.3d 75 (D.C. Cir. 2018) ........................ 3, 6, 23

vi

Rapanos v. United States,

547 U.S. 715 (2006) ................................................ 2

Sackett v. EPA, 566 U.S. 120 (2012) ........................... 2

U.S. Army Corps of Eng’rs v. Hawkes

Co., Inc., 136 S. Ct. 1807 (2016) ........................ 1–2

Whitman v. American Trucking Ass’ns, Inc.,

531 U.S. 457 (2001) ................................................ 8

Youngstown Sheet & Tube Co. v. Sawyer,

343 U.S. 579 (1952) .............................................. 10

Federal Constitution

U.S. Const. art. I ....................................................... 23

U.S. Const. art. I, § 1 ............................................. 2, 14

U.S. Const. art. I, § 7 ................................................. 10

U.S. Const. art. II ...................................................... 22

U.S. Const. art. II, § 1 ..................................... 2, 14, 16

U.S. Const. art. II, § 2, cl. 1....................................... 17

U.S. Const. art. II, § 2, cl.2.................................. 10–11

U.S. Const. art. II, § 3 ....................................... passim

U.S. Const. art. III..................................................... 23

U.S. Const. art. III, § 1 ................................................ 2

vii

Federal Statutes

5 U.S.C. § 706(2)(A) ..................................................... 7

5 U.S.C. § 706(E) ......................................................... 7

12 U.S.C. § 5481(12) .................................................... 4

12 U.S.C. § 5481(14) .................................................... 4

12 U.S.C. § 5491(b)(1) ................................................. 6

12 U.S.C. § 5491(b)(2) ................................................. 6

12 U.S.C. § 5491(c)(1) .................................................. 6

12 U.S.C. § 5491(c)(3) .................................................. 6

12 U.S.C. § 5492(a)(10) ............................................... 4

12 U.S.C. § 5497(a)(1) ................................................. 6

12 U.S.C. § 5497(a)(2)(C) ........................................ 6, 7

12 U.S.C. § 5497(a)(4)(E) ............................................ 6

12 U.S.C. § 5531(a) ...................................................... 4

12 U.S.C. § 5531(b) ...................................................... 4

12 U.S.C. § 5563 ...................................................... 5, 7

12 U.S.C. § 5563(b)(4) ................................................. 7

12 U.S.C. § 5564 ...................................................... 5, 7

12 U.S.C. § 5565(a)(2) ................................................. 5

viii

12 U.S.C. § 5581(a)(1)(A) ............................................ 3

12 U.S.C. § 5581(b) ...................................................... 3

Dodd-Frank Wall Street Reform and Consumer

Protection Act, Pub. L. No. 111-203,

124 Stat. 1376 (2010) ......................................... 3, 6

Federal Regulations

12 C.F.R. § 1081.402 ................................................... 5

12 C.F.R. § 1081.402(c) ............................................... 7

12 C.F.R. § 1081.405 ................................................... 5

12 C.F.R. Subpart D .................................................... 5

Miscellaneous

Amar, Akhil Reed, Some Opinions on the Opinion

Clause, 82 Va. L. Rev. 647 (1996) ............. 14, 17, 20

Calabresi, Steven G. & Prakash, Saikrishna B.,

The President’s Power to Execute the Laws,

104 Yale L.J. 541 (1994)............................ 14, 17, 19

The Federalist (J. Cooke ed. 1961).................... passim

Gaziano, Todd F., The Opinions Clause, in

THE HERITAGE GUIDE TO THE CONSTITUTION ........13

Harrison, John, Addition by Subtraction,

92 Va. L. Rev. 1853 (2006) .................................... 16

Kagan, Elena, Presidential Administration,

114 Harv. L. Rev. 2245 (2001) ................................9

ix

Madison, James, 1 Annals of Cong. 462

(June 16, 1789), .................................................... 21

Madison, James, Letter to Thomas Jefferson

(June 30, 1789), in 16 DOCUMENTARY HISTORY OF

THE FIRST FEDERAL CONGRESS (2004) ................... 19

Morris, Gouverneur (July 19, 1787), 2 Farrand,

Records of the Federal Convention of 1787........... 16

Rao, Neomi, A Modest Proprosal: Abolishing Agency

Independence in Free Enterprise Fund v.

PCAOB, 9 Fordham L. Rev. 2541 (2011).............. 21

Rao, Neomi, Removal: Necessary and Sufficient

for Presidential Control,

65 Ala. L. Rev. 1205 (2014) ................................... 16

30 Writings of George Washington

(John C. Fitzpatrick ed., 1939) ............................ 15

1

I DENTITY AND I NTEREST OF A MICUS C URIAE 1

Founded in 1973, PACIFIC LEGAL FOUNDATION is

a nonprofit, tax-exempt corporation organized under

the laws of the state of California for the purpose of

engaging in litigation in matters affecting the public

interest. PLF provides a voice in the courts for Americans who believe in limited government, private

property rights, and individual freedom.

PLF is the most experienced public-interest legal

organization defending the constitutional principle of

separation of powers in the arena of administrative

law. PLF’s attorneys have participated as lead counsel

or counsel for amici in several cases involving the role

of the Judiciary as an independent check on the Executive and Legislative Branches under the Constitution’s Separation of Powers. See, e.g., Kisor v. Wilkie,

139 S. Ct. 2400 (2019) (Auer deference); Gundy v.

United States, 139 S. Ct. 2116 (2019) (non-delegation

doctrine); Nat’l Ass’n of Mfrs. v. Dep’t of Def., 138 S.

Ct. 617 (2018); Lucia v. SEC, 138 S. Ct. 2044 (2018)

(SEC administrative-law judge is “officer of the

United States” under the Appointments Clause);

Gloucester Cty. Sch. Bd. v. G.G. ex rel. Grimm, 136 S.

Ct. 2442 (2016) (Auer deference to agency guidance

letter); U.S. Army Corps of Eng’rs v. Hawkes Co., Inc.,

1 Pursuant to this Court’s Rule 37.2(a), all parties have consented to the filing of this brief. Counsel of record for all parties

received notice at least 10 days prior to the due date of the Amicus Curiae’s intention to file this brief.

Pursuant to Rule 37.6, Amicus Curiae affirms that no counsel for any party authored this brief in whole or in part, and no

counsel or party made a monetary contribution intended to fund

the preparation or submission of this brief. No person other than

Amicus Curiae, its members, or its counsel made a monetary contribution to its preparation or submission.

2

136 S. Ct. 1807 (2016) (judicial review of agency interpretation of Clean Water Act); Sackett v. EPA, 566

U.S. 120 (2012) (same); Decker v. Nw. Envtl. Def. Ctr.,

568 U.S. 597 (2013) (Auer deference to Clean Water

Act regulations); Rapanos v. United States, 547 U.S.

715 (2006) (agency regulations defining “waters of the

United States”).

This case raises core Separation of Powers issues

related to each co-equal branch’s accountability for

the exercise of its powers. PLF offers a discussion of

first principles concerning executive power that

should illuminate the Court’s review.

I NTRODUCTION AND S UMMARY OF A RGUMENT

“The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of

one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very

definition of tyranny.” The Federalist No. 47, at 324

(Madison) (J. Cooke ed., 1961). To prevent tyranny—

that is, “to protect the liberty and security of the governed[,]” Metro. Wash. Airports Auth. v. Citizens for

the Abatement of Aircraft Noise, Inc., 501 U.S. 252,

272 (1991)—the Constitution divides all of the government’s powers into three, distinct branches. U.S.

Const. art. I, § 1; art. II, § 1; art. III, § 1.

This case presents the Court with a unique and

dangerous concentration of the federal government’s

legislative, executive, and judicial powers in a single,

“independent” agency; an agency headed by a lone

“Director” empowered with vast executive discretion

but protected from removal except for cause; an

agency whose actions enjoy an unprecedented free-

3

dom from oversight by the government’s constitutionally vested powers. The combination of authority, discretion, and impunity in this independent power all

but guarantees arbitrary governance. This is, therefore, “a case about executive power and individual liberty.” PHH Corp. v. CFPB, 881 F.3d 75, 164 (D.C. Cir.

2018) (Kavanaugh, J., dissenting). The Court should

grant the petition to determine whether this independent power can be squared with the Constitution’s

Separation of Powers.

1. A description of the CFPB’s powers and independence demonstrates the importance of the question presented.

Created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111203, 124 Stat. 1376 (2010), the Consumer Financial

Protection Bureau (CFPB or Bureau) and its lone Director were given vast powers—legislative, executive,

and judicial—along with substantial protections

against interference by the three constitutional powers of government. As then-Judge Kavanaugh noted,

with the exception of the President, the CFPB Director “enjoys more unilateral authority than any other

official in any of the three branches of the U.S. Government.” PHH Corp., 881 F.3d at 166 (Kavanaugh,

J., dissenting).

a. Legislative Power. The CFPB is authorized to

make laws, i.e., generally applicable rules for the government of society. Fletcher v. Peck, 10 U.S. (6

Cranch) 87, 136 (1810). The CFPB may “prescribe

rules or issue orders or guidelines pursuant to” 19 different consumer-protection laws, including the Fair

Debt Collection Practices Act and the Truth in Lending Act, all previously administered by seven separate

4

agencies. 12 U.S.C. §§ 5481(12), 5581(a)(1)(A),

5581(b). See also id. § 5481(14) (The term “Federal

consumer financial law” includes “any rule or order

prescribed by the Bureau under [U.S. Code, Title 12],

an enumerated consumer law [see § 5481(12)], or pursuant to the authorities transferred under subtitles F

and H.”); and § 5531(b) (authorizing the CFPB to prescribe rules “identifying” unlawful, unfair, deceptive,

or abusive consumer transactions, products, or services).

The Bureau was given vast discretion to determine

how it may enact these generally applicable rules, and

it is not limited to the formal rulemaking process. See

12 U.S.C. § 5492(a)(10) (The CFPB is authorized to

“establish the general policies of the [CFPB] with respect to all executive and administrative functions,”

including “implementing the Federal consumer financial laws through rules, orders, guidance, interpretations, statements of policy, examinations, and enforcement actions.”). Perhaps most troubling, this power

allows the CFPB to use administrative-enforcement

actions (which, as noted below, are subject to deferential judicial review), not only to enforce existing rules,

but also to establish new policies—that is, to punish

conduct that was, before an enforcement action, perfectly legal. See id. (The CFPB may “implement[] the

Federal consumer financial laws through . . . enforcement actions.”) (emphasis added).

b. Executive Power. The CFPB is authorized to

exercise the traditional executive function of enforcing

the law, namely, challenging “unfair, deceptive, or

abusive act[s] or practice[s].” 12 U.S.C. § 5531(a). See

U.S. Const. art. II, § 3 (obliging the President to “take

Care” that the laws are faithfully executed, through

5

subordinates when necessary); Morrison v. Olson, 487

U.S. 654, 706 (1988) (Scalia, J., dissenting) (“Governmental investigation and prosecution of crimes is a

quintessentially executive function.”) (citations omitted). But the CFPB’s executive authority includes

complete discretion to initiate enforcement actions in

either federal court or administrative forums (along

with, as noted above, the power to adopt the rules to

be enforced, and, as noted below, the power to adjudicate administrative actions). 12 U.S.C. §§ 5563, 5564.

c. Judicial Power. Under the Constitution, the

judicial power is the power to resolve cases and controversies involving those “matter[s] which, from

[their] nature[s], [are] the subject[s] of [] suit[s] at the

common law, or in equity, or admiralty[.]” Murray’s

Lessee v. Hoboken Land & Improvement Co., 59 U.S.

(18 How.) 272, 284 (1856). Therefore, when the CFPB

chooses to enforce consumer-financial laws administratively, the CFPB exercises (in addition to the executive and legislative powers) the judicial power. An

administrative-enforcement action is prosecuted by

the CFPB, under rules adopted by the CFPB (12

C.F.R. Subpart D (Decisions and Appeals)), and before

the CFPB itself, rather than before a neutral, Article

III judge and jury. 12 U.S.C. § 5563.

At the end of an initial administrative adjudication, a CFPB-appointed hearing officer issues a recommended decision, which includes findings of fact

and conclusions of law. 12 C.F.R. § 1081.402. Review

of a recommended decision goes to the CFPB Director

for a final decision. Id. §§ 1081.402, 1081.405. And the

Bureau has broad powers to order legal and equitable

relief. 12 U.S.C. § 5565(a)(2).

6

d. An Independent Branch of Government. In

addition to the nature and scope of the CFPB’s powers, Dodd-Frank insulates the Bureau and its actions

to an unmatched degree from Legislative, Executive,

and Judicial Branch review.

i. Congress purported to grant the CFPB with unprecedented independence from the President, i.e.,

from the head of the Executive Branch. The CFPB is

led by a single “Director,” 12 U.S.C. § 5491(b)(1), who

is appointed by the President, with the advice and

consent of the Senate, to a five-year term, id.

§§ 5491(b)(2), (c)(1). But the Director may not be removed by the President, except “for inefficiency, neglect of duty, or malfeasance in office[]” (id.

§ 5491(c)(3))—that is, except for cause. And “[n]o independent agency exercising substantial executive

authority has ever been headed by a single person.”

PHH Corp., 881 F.3d at 165 (Kavanaugh, J., dissenting).

ii. The CFPB is also largely free of congressional

oversight. Most significantly, the CFPB’s budget does

not go through Office of Management and Budget review, 12 U.S.C. § 5497(a)(4)(E), and it is not submitted

to Congress for annual appropriations subject to the

relative priorities of the President and Congress, id.

§ 5497(a)(2)(C). Instead, the CFPB Director—alone—

sets the agency’s budget; and its funds come not from

Congress (pursuant to an appropriations bill signed

into law by the President), but from the Federal Reserve, which “shall transfer” to the CFPB funds in

“the amount [up to 12 percent of the Federal Reserve’s

operating budget] determined by the [CFPB] Director

to be reasonably necessary” to administer the consumer-protection laws. Id. § 5497(a)(1) (emphasis

7

added). These funding decisions are effectively unreviewable. See id. § 5497(a)(2)(C) (“[T]he funds derived

from the Federal Reserve System pursuant to this

subsection shall not be subject to review by the Committees on Appropriations of the House of Representatives and the Senate.”).

iii. Finally, judicial review of a CFPB administrative-enforcement action2 is allowed only after the protracted administrative processes discussed above (12

U.S.C. § 5563(b)(4); 12 C.F.R. § 1081.402(c)), and the

judiciary’s independence is burdened by a deferential

standard of review. Courts are limited to determining

whether the CFPB proceedings were—aside from the

lack of a neutral, Article III judge—“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” or, inter alia, “unsupported by substantial evidence . . . .” 5 U.S.C. § 706(2)(A), (E).

2. Thus, while “modern administrative agencies”

like the CFPB perhaps “fit most comfortably within

the Executive Branch, as a practical matter they exercise” all three powers of government. City of Arlington v. FCC, 133 S. Ct. 1863, 1878 (2013) (Roberts, C.J.,

dissenting). Nor is the “accumulation of these powers

in the same hands . . . an occasional or isolated exception to the constitutional plan; it is a central feature

of modern American government.” Id. at 1879.

2 As noted above, the CFPB may, at its sole discretion, initiate charges in federal court rather than in an administrative-enforcement proceeding. 12 U.S.C. §§ 5563, 5564. But Chevron and

Auer deference would still apply; and, precisely because agencies

control the administrative process and enjoy judicial deference,

agencies are incentivized to proceed in administrative forums.

8

No government agency enjoys the combination of

CFPB’s powers, discretion, and freedom from oversight, all of which reveal the CFPB to be an especially

egregious example of an “independent” federal

power—an aberration in the tripartite government established by the Constitution, which vests all of the

government’s power in only three branches. See The

Federalist No. 47, at 324 (Madison) (identifying the

three “legislative, executive, and judiciary” powers as

“all” of the government’s powers).

3. It is this Court’s duty to police the Constitution’s

separation of powers. Whitman v. American Trucking

Ass’ns, Inc., 531 U.S. 457, 473 (2001). See also

N.L.R.B. v. Noel Canning, 134 S. Ct. 2550, 2593 (2014)

(Scalia, J., concurring in the judgment) (“[P]olicing the

‘enduring structure’ of constitutional government

when the political branches fail to do so is ‘one of the

most vital functions of this Court.’”) (quoting Public

Citizen v. Department of Justice, 491 U.S. 440, 468

(1989) (Kennedy, J., concurring in judgment)).

The Court should grant the petition to determine

whether the concentration of executive, legislative,

and judicial powers in a single agency violates the

Constitution’s Separation of Powers. Three points in

particular support review.

First, the Constitution established a government

of only three branches, each given certain exclusive

powers (with, to be sure, some overlap). But nothing

in the Constitution authorizes the concentration of all

three powers in any one of the three branches, to say

nothing of an independent, “fourth” branch.

9

Second, while perhaps fitting “most comfortably”

within the Executive Branch, the CFPB enjoys virtually unfettered discretion within that branch, and its

powerful Director is safe from removal by the President except for cause. This arrangement dangerously

reduces the President’s accountability and incentivizes arbitrary government. This case therefore implicates core constitutional principles related to the liberty and security of the people and the people’s ability

to hold government responsible for its actions. See

Dep’t of Transp. v. Ass’n of Am. R.R., 135 S. Ct. 1225,

1234 (2015) (Alito, J., concurring) (“Liberty requires

accountability.”); Elena Kagan, Presidential Administration, 114 Harv. L. Rev. 2245, 2332 (2001) (“The

lines of responsibility should be stark and clear, so

that the exercise of power can be comprehensible,

transparent to the gaze of the citizen subject to it.”)

(internal quotation marks and citation omitted).

Third, the combination of CFPB’s exercise of all

three powers of government and its protection from

review by those constitutional powers, was perhaps

inevitable. In Humphrey’s Executor v. United States,

this Court upheld a for-cause removal restriction because the agency in question exercised “predominantly” “quasi legislative” and “quasi judicial” powers.

295 U.S. 602, 624 (1935). While the Court retreated

from that rationale,3 Congress has, since 1935, created numerous independent agencies that exercise

3 See Morrison, 487 U.S. at 689 (The Court “undoubtedly did

rely on the terms ‘quasi-legislative’ and ‘quasi-judicial’” in

Humphrey’s Executor, but now the question whether a removal

restriction is permissible does not turn on an agency official’s

“purely executive” status.). See also CFPB v. Seila Law LLC, 923

F.3d 680, 683–84 (9th Cir. 2019) [Pet. App. 3a–6a] (discussing

Humphrey’s Executor and Morrison).

10

legislative and judicial (and, of course, executive) powers and has protected agency heads from presidential

removal. To fully address the serious constitutional

problems raised by the CFPB’s structure and powers,

the Court should reconsider its holding in Humphrey’s

Executor.

A RGUMENT

I.

T HE CFPB J USTIFIES C ONCERNS A BOUT

C REEPING E NCROACHMENTS

The Constitution established a government of divided powers to protect liberty. The Legislature is

vested with the power to establish law—that is, to establish “generally applicable rules” adopted “only

through the constitutionally prescribed process.”

Ass’n of Am. R.R., 135 S. Ct. at 1246 (Thomas, J., concurring in the judgment). The Executive Branch is

obligated to administer and enforce duly enacted law.

See Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S.

579, 587 (1952) (“In the framework of our Constitution, the President’s power to see that the laws are

faithfully executed refutes the idea that he is to be a

lawmaker.”). And the power to resolve cases or controversies concerning the meaning and application of the

law is vested exclusively in the Judicial Branch. See

Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803)

(“It is emphatically the province and duty of the judicial department to say what the law is.”).

The Constitution identifies only a few exceptions

to these general grants of power—e.g., the President

is vested with a defined power in the legislative process (U.S. Const. art. I, § 7); and the Senate is vested

with a role in the appointment process (id. art. II, § 2,

11

cl. 2). Thus, while the branches may not be “‘hermetically’ sealed from one another,” the Constitution

“sought to divide the delegated powers” into “three defined categories,” and those powers “are functionally

identifiable.” I.N.S. v. Chadha, 462 U.S. 919, 951

(1983) (citation omitted). Indeed, the grants of power

to the three branches are “exclusive.” Ass’n of Am.

R.R., 135 S. Ct. at 1241 (Thomas, J., concurring in the

judgment). Accordingly, “[w]hen the Government is

called upon to perform a function that requires an exercise of legislative, executive, or judicial power, only

the vested recipient of that power can perform it.” Id.

(Thomas, J., concurring in the judgment).

Nowhere, of course, does the Constitution authorize the concentration of the three powers in any one of

the three branches—much less, into an independent,

“fourth” branch. See FTC v. Ruberoid Co., 343 U.S.

470, 487 (1952) (Jackson, J., dissenting) (noting that

administrative agencies “have become a veritable

fourth branch of the Government, which has deranged

our three-branch legal theories”).

One byproduct of the proliferation of independent

agencies is this Court’s “pragmatic” review of the separation of powers. For example, in Morrison, the

Court addressed “whether the [Ethics in Government]

Act, taken as a whole, violate[d] the principle of separation of powers by unduly interfering with the role of

the Executive Branch.” 487 U.S. at 693 (emphasis

added). See also Mistretta v. United States, 488 U.S.

361, 380 (1989) (describing a “pragmatic, flexible view

of differentiated governmental power”); Commodity

Futures Trading Comm’n v. Schor, 478 U.S. 833, 851

(1986) (declining to adopt “formalistic and unbending

rules” to determine whether congressional decision to

12

allow Article III adjudication in non-Article III tribunal “impermissibly threaten[ed] the institutional integrity of the Judicial Branch”) (emphasis added) (citation omitted).

While it may be difficult to delineate the precise

boundaries between the branches in every circumstance, see The Federalist No. 37 (Madison), the Court

need not begin its separation-of-powers analysis at

the margins. When, as here, an executive agency exercises core legislative and judicial powers—largely

free of oversight by all three constitutional powers—

there is no cause to consider whether the agency “unduly” interferes with or “impermissibly” threatens the

“integrity” of the legislative or judicial branch. Instead, the “question is whether the particular function

requires the exercise of a certain type of power; if it

does, then only the branch in which that power is

vested can perform it.” Ass’n of Am. R.R., 135 S. Ct. at

1242 (Thomas, J., concurring in the judgment). Adopting general rules for the government of society requires the exercise of legislative power; enforcing

those rules against persons requires the exercise of executive power; and adjudicating enforcement actions

by the government against persons requires the exercise of judicial power. Only the legislative, executive,

and judicial branches, respectively, can perform those

powers.

The Constitution sought to prevent “a gradual concentration of the several powers in the same department.” The Federalist No. 51, at 321 (Madison). Therefore, this Court should grant the petition and reconsider the “flexible” separation-of-powers analysis that

accepts “incremental” encroachments. Cf. Schor, 478

U.S. at 861 (Brennan, J., dissenting) (The “important

13

functions of Article III are too central to our constitutional scheme to risk their incremental erosion.”).

II.

“T HE ” E XECUTIVE P OWER IS V ESTED IN “ A ”

P RESIDENT W HO “ SHALL TAKE C ARE THAT

THE L AWS BE FAITHFULLY EXECUTED ”

It is generally assumed that the CFPB, like all “independent” agencies, is part of the Executive Branch.

Cf. City of Arlington, 133 S. Ct. at 1878 (Roberts, C.J.,

dissenting). If so, another problem presents itself: the

CFPB Director’s for-cause removal protection, which

deranges Article II’s structure—a problem that is ripe

for this Court’s review.

The Framers gave serious thought to the structure

of the Executive Branch, even appointing a committee

to study the matter. This committee resolved that an

able President would be hampered by a plural executive (to include either a privy council or a council of

revision) and that a weak executive would hide behind

it to avoid accountability for bad decisions. See Todd

F. Gaziano, The Opinions Clause, in THE HERITAGE

GUIDE TO THE CONSTITUTION (noting Charles Pinckney’s comment, “Give [the President] an able Council

and it will thwart him; a weak one and he will shelter

himself under their sanction.”).4

Thus, after extensive debate and consideration,

the Framers definitively concluded that the liberty of

the people was best secured by a single President,

charged with all of the responsibility and accountability to manage the Executive Branch. As Alexander

4 See https://www.heritage.org/constitution/#!/articles/2/essays/88/opinion-clause.

14

Hamilton explained, the Framers rejected a “plural”

executive because, in part, a plural executive could escape public accountability more easily than a single

President—precisely the problem raised by the CFPB

here. See The Federalist No. 70, at 474 (Hamilton).

Not surprisingly, then, the Constitution’s text and

structure demonstrate that the Executive Branch is to

be headed by a “unitary” executive, who can be held

accountable for all of the branch’s actions.

A. The President—and Only the President

—Is Authorized and Obligated To “Take

Care That the Laws Be Faithfully Executed”

“The” executive power is vested in “a” single “President of the United States of America.” U.S. Const.

art. II, § 1.5 Steven G. Calabresi & Saikrishna B. Prakash, The President’s Power to Execute the Laws, 104

Yale L.J. 541, 568–69 (1994) (“Article II’s vesting of

the President with all of the ‘executive Power’ give[s]

him control over all federal governmental powers that

are neither legislative nor judicial[.]”). This President

“shall take Care that the Laws be faithfully executed[.]” U.S. Const. art. II, § 3. The President is thus

“both empowered and obliged” to do so. Akhil Reed

Amar, Some Opinions on the Opinion Clause, 82 Va.

L. Rev. 647, 658 (1996).

5 Compare U.S. Const. art. I, § 1 (vesting the legislative powers “in a Congress of the United States,” but dividing that power

in “a Senate and House of Representatives”) (emphasis added).

15

B. To “Take Care” That the Laws Be Faithfully

Executed, the President Must Have Agents—

Executive-Branch “Officers of the

United States”—Whose Offices Are

Lodged in the Executive Branch

1. The Constitution Contemplates

Presidential Assistants

The President is not required to personally execute

all of the laws; rather, the President must “take Care”

that the laws be (faithfully) executed. U.S. Const.

art. II, § 3. As George Washington explained, because

it is “‘impossib[le] that one man should be able to perform all the great business of the State,’ the Constitution provides for executive officers to ‘assist the supreme Magistrate in discharging the duties of his

trust.’” 30 Writings of George Washington 334 (John

C. Fitzpatrick ed., 1939), quoted in Free Enterprise

Fund v. PCAOB, 561 U.S. 477, 483 (2010). See Myers

v. United States, 272 U.S. 52, 117 (1926) (“[T]he President alone and unaided could not execute the laws.

He must execute them by the assistance of subordinates.”).

Thus, while Congress writes the laws and creates

offices for their administration, Buckley v. Valeo, 424

U.S. 1, 138–39 (1976), the actual administration of the

laws is left to the Executive Branch alone: “Legislative

power, as distinguished from executive power, is the

authority to make laws, [] not to enforce them or appoint the agents charged with the duty of such enforcement. The latter are executive functions.” Id. at

139 (internal quotation marks and citation omitted).

As Hamilton noted, the “administration of government . . . is limited to executive details, and falls pecu-

16

liarly within the province of the executive department.” The Federalist No. 72, at 486 (Hamilton) (emphasis added).

2. Executive Officers Work in the

Executive Branch and Are

Subordinate to the President

These executive officers, who carry out some portion of the President’s executive power, are and must

be agents of the President—and “of no one else.” John

Harrison, Addition by Subtraction, 92 Va. L. Rev.

1853, 1862 (2006) (emphasis added). See also The Federalist No. 72, at 487 (Hamilton) (The “persons . . . to

whose immediate management these different [executive] matters are committed ought to be considered

as assistants or deputies to the chief magistrate.”);

Gouverneur Morris (July 19, 1787), 2 Farrand, Records of the Federal Convention of 1787 at 53–54

(“There must be certain great officers of State; a minister of finance, of war, of foreign affairs &c. These he

presumes will exercise their functions in subordination to the Executive . . . . Without these ministers the

Executive can do nothing of consequence.”) (emphasis

added).

If these officers “were agents of someone [other

than the President], that someone else would have the

executive power, or some share of it.” Harrison, supra,

at 1862. The Constitution, however, does not vest anyone but the President with “[t]he” executive power.

U.S. Const. art. II, § 1. See Neomi Rao, Removal: Necessary and Sufficient for Presidential Control, 65 Ala.

L. Rev. 1205, 1213 (2014) (The Executive Vesting

Clause “implies that all administrative powers that

are not exercises of the legislative and judicial powers

17

are within the executive branch and therefore must be

within the control of the President[.]”).

Accordingly, the administrative power “must be a

subset of the President’s ‘executive Power’ and not of

one of the other two traditional powers of government.” Calabresi & Prakash, supra, at 569 (footnote

omitted).

The Opinions Clause supports this reading. According to the Opinions Clause, the President “may

require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any

Subject relating to the Duties of their respective Offices.” U.S. Const. art. II, § 2, cl. 1. Even the heads of

the “core” executive departments—e.g., State and Defense—although appointed to office with the advice

and consent of the Senate, report directly to the President, in writing if the President so requires. This

clause confirms that the President is the head of the

executive branch and that the officers in the executive

departments are the President’s subordinates. Further, as Professor Amar explains, this Clause also

shows that the Framers “rejected a committee-style

Executive Branch in favor of a unitary and accountable President, standing under law, yet over Cabinet

officers.” Amar, supra, at 647 (footnote omitted).

***

In sum, the President—and only the President—is

authorized and obligated to “take Care” that the laws

be faithfully executed, (2) the President cannot personally execute all of the laws and must therefore

have assistance, and (3) the individuals who assist the

President in the execution (administration) of the

laws—i.e., the executive “officers of the United

18

States”—are part of the Executive Branch and subordinate to the President.

C. To Faithfully Execute the Laws, the

President Must Have Control Over His

Officers—By Removal, If Necessary

The President’s exclusive authority and obligation

to “take Care that the laws be faithfully executed” require that the President have sufficient control over

his agents. Traditionally, the President’s control was

effected through his power to remove executive officers at will. See Free Enterprise Fund, 561 U.S. at 483

(“Since 1789, the Constitution has been understood to

empower the President to keep these officers accountable—by removing them from office, if necessary.”)

(citing Myers, supra).

Although not expressly provided for in the Constitution, the President’s removal power has long been

considered a necessary incident of the executive power

vested exclusively in the President. See Myers, 272

U.S. at 163–64 (“[A]rticle 2 grants to the President the

executive power of the government—i.e., the general

administrative control of those executing the laws, including the power of appointment and removal of executive officers—a conclusion confirmed by his obligation to take care that the laws be faithfully executed[.]”).

As noted above, “the executive authority, with few

exceptions, is to be vested in a single magistrate.” The

Federalist No. 69, at 462 (Hamilton) (emphasis

added). The exceptions are explicitly identified in the

Constitution. See id. (identifying exceptions, including the President’s power, with the advice and consent

19

of the Senate, to make treaties). Therefore, when “traditional executive power was not ‘expressly taken

away, it remained with the President.’” Free Enterprise Fund, 561 U.S. at 492 (emphasis added) (quoting

Letter from James Madison to Thomas Jefferson

(June 30, 1789), in 16 Documentary History of the

First Federal Congress 893 (2004)). “Under the traditional default rule, [the] removal [power] is incident to

the power of appointment.” Free Enterprise Fund, 561

U.S. at 509 (citations omitted).

Congress may have the power to establish administrative agencies, but Congress cannot restrict the

President’s executive power of removal and thereby

“reduce the Chief Magistrate to a cajoler-in-chief.”

Free Enterprise Fund, 561 U.S. at 502. See id. at 500

(“Congress has plenary control over the salary, duties,

and even existence of executive offices. Only presidential oversight can counter its influence.”); id. at 499

(Congress has the “power to create a vast and varied

federal bureaucracy[],” but the “Constitution requires

that a President chosen by the entire Nation oversee

the execution of the laws.”). See also id. at 516 (Breyer,

J., dissenting) (The separation-of-powers “principle,

along with the instruction in Article II, § 3 that the

President ‘shall take Care that the Laws be faithfully

executed,’ limits Congress’ power to structure the Federal Government.”) (citations omitted); Calabresi &

Prakash, supra, at 581 (“Once created, these agencies

and officers executing federal law must retain the

President’s approval and be subject to presidential superintendence if they are to continue to exercise ‘the

executive Power.’”).

20

In short, the President is “both empowered and

obliged” to take care that the laws be faithfully executed, Amar, supra, at 658; and to exercise this power

and meet this obligation, the President must have sufficient control over his administration—through the

at-will removal power, if necessary.

D. The President’s Control Over His

Administration Makes the President

Accountable for the Faithful Execution

of the Laws—and Thereby Helps

To Secure Individual Liberty

The President’s (necessary) delegation of executive

power to his agents involves a risk, since the “diffusion

of power carries with it a diffusion of accountability.”

Free Enterprise Fund, 561 U.S. at 497. This risk,

though, is tempered by the President’s constitutionally derived control over his administrative agents.

The Constitution “that makes the President accountable to the people for executing the laws also

gives him the power to do so. That power includes, as

a general matter, the authority to remove those who

assist him in carrying out his duties.” Free Enterprise

Fund, 561 U.S. at 513–14. Without the removal

power, the President “could not be held fully accountable for discharging his own responsibilities; the buck

would stop somewhere else[,]” and this “diffusion of

authority ‘would greatly diminish the intended and

necessary responsibility of the chief magistrate himself.’” Id. at 514 (quoting The Federalist No. 70, at 478

(Hamilton)).

The Constitution was designed to ensure that

“those who are employed in the execution of the law

21

will be in their proper situation, and the chain of dependence be preserved; the lowest officers, the middle

grade, and the highest, will depend, as they ought, on

the President, and the President on the community.”

James Madison (June 17, 1789), 1 Annals of Cong.

499.

The President is “the only democratically elected

official [within the Executive Branch],” and “the political accountability of his subordinates depends on

their accountability to the President.” Neomi Rao, A

Modest Proposal: Abolishing Agency Independence in

Free Enterprise Fund v. PCAOB, 79 Fordham L. Rev.

2541, 2552 (2011) (citing Free Enterprise Fund, 561

U.S. at 497–98 (quoting The Federalist No. 72, at 487

(Hamilton))).

The people do not vote for administrators—they

“instead look to the President to guide the ‘assistants

or deputies . . . subject to his superintendence.’” Free

Enterprise Fund, 561 U.S. at 497–98 (quoting The

Federalist No. 72, at 487 (Hamilton)). As Justice

Scalia explained, the President is “directly dependent

on the people, and since there is only one President,

he is responsible. The people know whom to blame . . .

.” Morrison, 487 U.S. at 729 (Scalia, J., dissenting).

See also James Madison (June 16, 1789), 1 Annals of

Cong. 462 (The “first Magistrate should be responsible

for the executive department; so far therefore as we do

not make the officers who are to aid him in the duties

of that department responsible to him, he is not responsible to his country.”).

In short, the President “cannot ‘take Care that the

Laws be faithfully executed’ if he cannot oversee the

faithfulness of the officers who execute them.” Free

Enterprise Fund, 561 U.S at 484.

22

***

While the Constitution was framed to ensure liberty through accountability, the CFPB was designed

specifically to escape the control of the President who

is thus unconstitutionally hampered in his obligation

to “take Care that the Laws be faithfully executed.”

U.S. Const. art. II, § 3. The President and, therefore,

We the People are prevented from holding the CFPB

accountable for its administration of the laws. This

Court’s review is necessary to determine whether the

CFPB Director’s for-cause removal protection violates

Article II of the Constitution.

III.

T HE C OURT S HOULD R ECONSIDER

H UMPHREY ’ S E XECUTOR

In 1926, this Court issued a detailed, scholarly

opinion, discussing at length the points raised in Section II above, and concluded that the President had

the power to remove principal officers at will. Myers v.

United States, 272 U.S. 52 (1926). Of course, the Court

adopted a narrow exception less than a decade later

in Humphrey’s Executor. But time and experience

have shown that the Court got it right in Myers. The

Court should revisit this issue.

In Humphrey’s Executor, the Court upheld a statute restricting the President’s power to remove the

Commissioners of the Federal Trade Commission for

cause. This Court upheld the restriction because the

FTC’s “duties [we]re neither political nor executive,

but predominantly quasi-judicial and quasi-legislative.” Id., 295 U.S. at 624. See also id. at 628, 630 (explaining that the FTC could not “in any proper sense

be characterized as an arm or an eye of the executive;”

23

indeed, it was “wholly disconnected from the executive

department”).

Thus, a significant question remains concerning

the extent to which Congress may validly establish

“quasi-legislative” and “quasi-judicial” offices within

the Executive Branch. That is, may Congress constitutionally vest officials in the Executive Branch with

Article I and Article III powers? The CFPB puts this

issue into clear relief: while the Bureau exercises legislative and judicial powers, its exercise of executive

power requires that it be accountable to the (unitary)

head of the Executive Branch.

This Court’s attempts to limit Humphrey’s Executor has not proved successful—as the D.C. Circuit’s

opinion in PHH Corp. demonstrates. There, the court

concluded that Humphrey’s Executor “required only

that the President be able to remove purely executive

officers without congressional involvement.” PHH

Corp., 881 F.3d at 85 (emphasis added) (en banc) (citing Humphrey’s Executor, 295 U.S. at 628). But, the

en banc court continued, “where administrators of

‘quasi legislative or quasi judicial agencies’ are concerned, the Constitution does not require that the

President have ‘illimitable power’ of removal.” Id.

(quoting Humphrey’s Executor, 295 U.S. at 629).

The Court needs to resolve whether executivebranch agencies may be protected from full presidential accountability—including on the ground that they

exercise non-executive-branch powers—or whether executive-branch agencies are limited to exercising only

executive functions, subject to the President’s constitutionally vested oversight.

24

C ONCLUSION

The petition for a writ of certiorari should be

granted.

DATED: July 2019.

Respectfully submitted,

T ODD F. G AZIANO

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 610

Arlington, VA 22201

Phone: (202) 888-6881

Email: TGaziano@pacificlegal.org

O LIVER J. D UNFORD *

*Counsel of Record

Pacific Legal Foundation

930 G Street

Sacramento, California 95814

Phone: (916) 419-7111

Facsimile: (916) 429-7747

E-mail: ODunford@pacificlegal.org

Counsel for Amicus Curiae Pacific Legal Foundation