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

No. 19-7

IN THE

Supreme Court of the United States

SEILA LAW LLC,

Petitioner,

v.

CONSUMER FINANCIAL PROTECTION BUREAU,

Respondent.

On Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

BRIEF AMICI CURIAE OF

TWENTY-SEVEN MEMBERS OF THE

U.S. HOUSE OF REPRESENTATIVES

IN SUPPORT OF PETITIONER

Michael A. Carvin

Counsel of Record

Paul Lettow

Anthony J. Dick

Kaytlin L. Roholt

JONES DAY

51 Louisiana Avenue NW

Washington, DC 20001

(202) 879-3939

macarvin@jonesday.com

Counsel for Amici Curiae

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...................................... ii

INTEREST OF AMICI CURIAE ............................... 1

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

ARGUMENT .............................................................. 4

I.

Congress Cannot Restrict The Removal Of

Principal Executive Officers................................ 4

A. Removal Is A Vital Element Of “The

Executive Power” .......................................... 4

B. Humphrey’s Executor Does Not

Apply To Executive Officers ......................... 7

C. Morrison Does Not Apply To

Principal Officers ........................................ 10

II. The CFPB Director Must Be Removable

At Will Because She Exercises Substantial

Executive Power ................................................ 13

A. The CFPB Director Is An Executive

Officer .......................................................... 14

B. The CFPB Director Is A Principal

Officer .......................................................... 18

III. The Removal Restriction Is Not

“Severable” ......................................................... 22

CONCLUSION ......................................................... 27

APPENDIX OF AMICI CURIAE ...................... App. 1

ii

TABLE OF AUTHORITIES

Page(s)

CASES

Alaska Airlines, Inc. v. Brock,

480 U.S. 678 (1987) .............................................. 22

Ayotte v. Planned Parenthood of N. New

England,

546 U.S. 320 (2006) .............................................. 23

Bowsher v. Synar,

478 U.S. 714 (1986) .............................. 6, 13, 16, 24

Buckley v. Valeo,

424 U.S. 1 (1976) ...................................... 14, 15, 23

Chevron, U.S.A., Inc. v. NRDC,

467 U.S. 837 (1984) .............................................. 16

Crowell v. Benson,

285 U.S. 22 (1932) ................................................ 17

Edmond v. United States,

520 U.S. 651 (1997) ........................................ 18, 19

English v. Trump,

279 F. Supp. 3d 307 (D.D.C. 2018) ...................... 21

Free Enter. Fund v. Pub. Co. Accounting

Oversight Bd.,

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

FTC v. Cement Inst.,

333 U.S. 683 (1948) .............................................. 16

Heater v. FTC,

503 F.2d 321 (9th Cir. 1974) ................................ 16

iii

TABLE OF AUTHORITIES

(continued)

Page(s)

Humphrey’s Executor v. United States,

295 U.S. 602 (1935) ...................................... passim

INS v. Chadha,

462 U.S. 919 (1983) .............................................. 23

Morrison v. Olson,

487 U.S. 654 (1988) ...................................... passim

Myers v. United States,

272 U.S. 52 (1926) ........................................ passim

N. Pipeline Constr. Co. v. Marathon

Pipe Line Co.,

458 U.S. 50 (1982) ...................................... 9, 24, 25

Nat’l Petroleum Refiners Ass’n v. FTC,

482 F.2d 672 (D.C. Cir. 1973) .............................. 17

PHH Corp. v. Consumer Fin. Prot. Bureau,

881 F.3d 75 (D.C. Cir. 2018) (en banc) ................ 19

Regan v. Time, Inc.,

468 U.S. 641 (1984) .............................................. 23

United States v. Jackson,

390 U.S. 570 (1968) .............................................. 25

United States v. Perkins,

116 U.S. 483 (1886) .............................................. 13

United States v. Reese,

92 U.S. 214 (1875) ................................................ 23

Wiener v. United States,

357 U.S. 349 (1958) ................................................ 9

iv

TABLE OF AUTHORITIES

(continued)

Page(s)

CONSTITUTIONAL AND STATUTORY AUTHORITIES

U.S. Const., art. I, § 7 ................................................ 26

U.S. Const., art. II, § 1 ................................................ 4

12 U.S.C. § 5302 ........................................................ 25

12 U.S.C. § 5481 ............................................ 15, 16, 22

12 U.S.C. § 5491 ........................................................ 25

12 U.S.C. § 5492 ........................................................ 19

12 U.S.C. § 5497 ........................................................ 20

12 U.S.C. § 5511 ........................................................ 15

12 U.S.C. § 5512 ........................................................ 17

12 U.S.C. § 5513 ........................................................ 19

12 U.S.C. § 5531 ........................................................ 16

12 U.S.C. § 5536 .................................................. 15, 16

12 U.S.C. § 5562 ........................................................ 15

12 U.S.C. § 5564 .................................................. 15, 17

12 U.S.C. § 5565 ........................................................ 17

12 U.S.C. § 5581 ............................................ 15, 16, 22

OTHER AUTHORITIES

1 Annals of Cong. (J. Gales ed. 1789) ......................... 5

12 C.F.R. § 1081.402 ................................................. 18

v

TABLE OF AUTHORITIES

(continued)

Page(s)

Power of the President to Remove

Members of the Tennessee Valley

Authority from Office,

39 Op. Att’y Gen. 145 (1938) ......................... 2, 8, 9

82 Fed. Reg. 54472 (Nov. 17, 2017) .......................... 21

124 Stat. 2018 ............................................................ 15

156 Cong. Rec. 2755

(statement of Sen. Dodd) ..................................... 25

CFPB, Strategic Plan: FY2013-FY2017

(Apr. 2013) ...................................................... 20, 21

Daniel A. Crane,

Debunking Humphrey’s Executor,

83 GEO. WASH. L. REV. 1835 (2015) ..................... 16

Department of the Treasury,

Financial Regulatory Reform: A New

Foundation (2009) ................................................ 15

FEC, Thirty Year Report (Sept. 2005) ..................... 24

Financial CHOICE Act of 2017,

H.R. 10, 115th Cong. §§ 711, 712 (2017) ............. 26

Financial Product Safety Commission Act

of 2018, H.R. 5266, 115th Cong. § 2

(2018) .................................................................... 26

The Federalist No. 70 (Hamilton)

(Jacob Ernest Cooke ed., 1961).............................. 5

The Federalist No. 72 (Hamilton)

(Jacob Ernest Cooke ed., 1961).............................. 5

1

INTEREST OF AMICI CURIAE

Amici are the twenty-seven members of the United

States House of Representatives listed in the

Appendix.

They include two members of the

Bipartisan Legal Advisory Group—Minority Leader

Kevin McCarthy and Minority Whip Steve Scalise—

and Republican members of the U.S. House

Committee on Financial Services, which has

jurisdiction over the CFPB. As federal officials and

members of the legislative branch, they have a strong

interest in upholding the constitutional separation of

powers. In particular, they seek to ensure that the

laws they enact will be implemented and enforced by

an executive branch that is accountable to an elected

President, who is accountable to the American people.

In addition, amici have a direct stake in the

“severability” question. Under Article I, Congress has

the authority to decide the scope of statutory powers

that the President is authorized to exercise. Thus, if

this Court strikes down the removal restriction in this

case, it should likewise invalidate the statutory

powers that Congress granted to the CFPB’s

independent Director. This Court should not

automatically reassign those powers to the President,

which would usurp the legislative role. Congress

deliberately withheld the CFPB’s powers from the

President, and Congress must decide whether they

should be reenacted under the President’s control.1

1 No counsel for any party authored this brief in any part, and

no person or entity other than amici or their counsel made any

monetary contribution intended to fund the preparation or

submission of this brief. All parties have provided written

blanket consent to the filing of amicus briefs.

2

SUMMARY OF ARGUMENT

The Consumer Financial Protection Bureau is an

unprecedented threat to the separation of powers and

to the democratic legitimacy of the federal

government. By design, it is one of the nation’s most

powerful executive agencies. It has vast power to

regulate the national economy by setting consumerprotection policy and enforcing federal law. Under the

Constitution, this agency cannot be allowed to operate

as a Platonic guardian without any popular control. It

must be accountable to the President, who is directly

accountable to the American people.

This Court has never upheld a restriction on the

removal of a principal executive officer like the head

of the CFPB, and it should not start now. In

Humphrey’s Executor v. United States, 295 U.S. 602

(1935), the Court upheld a restriction on a principal

officer only by relying on the explicit premise that the

office was “neither political nor executive.” Id. at 624.

As Acting Attorney General Robert H. Jackson

recognized, Humphrey’s Executor thus “did not

disturb” the rule that the President has inherent

authority over the removal of “executive officers.”

Power of the President to Remove Members of the

Tennessee Valley Authority from Office, 39 Op. Att’y

Gen. 145, 146 (1938).

A half-century later, in Morrison v. Olson, 487 U.S.

654 (1988), this Court for the first time upheld an

executive removal restriction. Over the past three

decades, that decision has been gradually discredited

as Justice Scalia’s dissent has been vindicated. But

even on its own terms, Morrison applied only to an

“inferior” officer, whose duties were strictly “limited.”

3

Id. at 691. It did not authorize a removal restriction

on a principal executive officer.

Here, unlike in Humphrey’s Executor and

Morrison, the Director of the CFPB is unquestionably

a principal executive officer. She wields a formidable

array of core executive powers—enforcing a phalanx

of federal laws, filing enforcement actions directly in

federal court, and setting broad-based government

policies through substantive executive rulemaking.

These distinct powers are far more “executive” than

those of the officer in Humphrey’s Executor. Nor are

they anything like the relatively “limited” executive

powers of the inferior officer in Morrison.

Accordingly, this case presents a novel question

that this Court has never addressed: May Congress

restrict the President’s ability to remove a principal

executive officer? The answer to that question is no.

“Our Constitution was adopted to enable the people to

govern themselves,” which in turn “requires that a

President chosen by the entire Nation oversee the

execution of the laws.” Free Enter. Fund v. Pub. Co.

Accounting Oversight Bd., 561 U.S. 477, 499 (2010).

For this reason, Article II vests “the executive power”

in the President alone, and charges him alone with the

duty to “take Care that the Laws be faithfully

executed.” That requires him—and ultimately the

voters who elect him—to have direct and meaningful

control over the principal components of the executive

branch. Because the CFPB Director is undeniably a

principal executive officer—and indeed, the head of an

entire executive department—she must be removable

at will. Otherwise, the CFPB would be entirely free

from any “dependence on the people,” which is the

“primary control on the government.” Id. at 501

4

(quoting The Federalist No. 51, at 349 (Madison)

(Jacob Ernest Cooke ed., 1961)).

The removal restriction is not “severable” because

it is a fundamental feature of the CFPB’s design. It is

not an extraneous feature that can be excised by

judicial fiat. Congress did not authorize the President

to control the CFPB’s vast array of statutory powers,

and never even considered doing so. For this Court to

do so now would be a major usurpation of the

legislative role, granting powers to the President that

Congress never authorized him to wield.

ARGUMENT

I.

Congress Cannot Restrict The Removal Of

Principal Executive Officers

A. Removal Is A Vital Element Of “The

Executive Power”

The Constitution provides that “[t]he executive

Power shall be vested” in the President, who must

“take Care that the Laws be faithfully executed.” U.S.

Const., art. II, § 1, cl. 1; § 3. As Justice Scalia

explained, this provision does not grant the President

“some of the executive power, but all of the executive

power.” Morrison, 487 U.S. at 705 (Scalia, J.,

dissenting). This is not an arid legalism but a central

feature of the constitutional design. In order for our

democracy to function, executive officers must be

accountable to the President because he alone is

accountable to the voters. If any part of the executive

branch cannot be controlled by the President then it

cannot be controlled by the people, who are the

ultimate sovereigns in our system of government.

Entrusting the executive power to a single elected

President was no accident. The founders had seen the

5

pitfalls of divided executive authority under the

Continental Congress and the Articles of

Confederation, and they drafted the Constitution to

avoid this evil. “The debates in the Constitutional

Convention indicated an intention to create a strong

executive, and after a controversial discussion the

executive power of the government was vested in one

person.” Myers v. United States, 272 U.S. 52, 116–17

(1926). As Hamilton explained, placing the executive

power “in a single hand” was deemed essential to the

energy that is “a leading character in the definition of

good government.” The Federalist No. 70, at 423-24.

Madison too recognized that Article II was built on the

“great principle of unity and responsibility in the

Executive department, which was intended for the

security of liberty and the public good.” 1 Annals of

Cong. 499 (J. Gales ed. 1789). In short, ensuring the

unity of the Executive Branch would make it not only

more accountable, but also more effective.

Of course, the framers recognized that “the

President alone and unaided could not execute the

laws.” Myers, 272 U.S. at 117. But because the duty of

faithful execution ultimately resides in the President,

any officers who wield the executive power must be

his “subordinates” and “act for him under his

direction.” Id. They cannot be chief executives in their

own right, but must “be considered as the assistants

or deputies of the Chief Magistrate . . . and ought to

be subject to his superintendence.” The Federalist No.

72, at 436 (Hamilton). This explains why Article II

gives the President “the general administrative

control of those executing the laws,” which requires

the “power of removing those for whom he cannot

continue to be responsible.” Myers, 272 U.S. at 117,

6

164. After all, “[o]nce an officer is appointed, it is only

the authority that can remove him, and not the

authority that appointed him, that he must fear and,

in the performance of his functions, obey.” Bowsher v.

Synar, 478 U.S. 714, 726 (1986) (internal quotation

marks omitted).

This Court has repeatedly reaffirmed the

importance of the President’s removal power,

including in its recent decision in Free Enterprise

Fund. As the Court there explained, “[t]he

Constitution that makes the President accountable to

the people for executing the laws also gives him the

power to do so.” Free Enter. Fund, 561 U.S. at 513.

“That power includes, as a general matter, the

authority to remove those who assist him in carrying

out his duties.” Id. at 513-14. “Without such power, the

President could not be held fully accountable for

discharging his own responsibilities; the buck would

stop somewhere else.” Id. at 514. “Such diffusion of

authority ‘would greatly diminish the intended and

necessary responsibility of the chief magistrate

himself.’” Id. (quoting The Federalist No. 70, at 478).

Indeed, the President’s removal power has even

more relevance today than it did at the founding. “The

growth of the Executive Branch, which now wields

vast power and touches almost every aspect of daily

life, heightens the concern that it may slip from the

Executive’s control, and thus from that of the people.”

Free Enter. Fund, 561 U.S. at 499. That is why the

removal power continues to rank among those that

“the Constitution … vests … in the President,” and

that “‘the Legislature has no right to diminish or

modify.’” Id. at 500 (quoting 1 Annals of Cong., at 463

(J. Madison)).

7

In the span between Myers and Free Enterprise

Fund, this Court has strayed somewhat from the

constitutional design by upholding “limited

restrictions on the President’s removal power.” Id. at

495. As explained below, however, the present case

does not fit within those “limited restrictions.” Id. This

Court has never upheld a restriction on removing a

principal executive officer like the head of the CFPB,

and doing so now would be an unprecedented

incursion on the President’s Article II authority.

B. Humphrey’s Executor Does Not Apply To

Executive Officers

This Court has never overturned its general

holding that the President’s “power of appointment to

executive office carries with it, as a necessary

incident, the power of removal.” Myers, 272 U.S. at

126. Although the Court upheld a significant removal

restriction ten years later in Humphrey’s Executor, it

did so only by finding that the officer there—a

member of the FTC—was not part of the executive

branch and did not exercise any “executive power in

the constitutional sense.” 295 U.S. at 628. However

dubious that particular description of the FTC and its

powers may have been, it was the clear premise of the

Court’s holding. Accordingly, Humphrey’s Executor

does not apply to actual executive officers with

undeniable executive power.

The Court’s opinion in Humphrey’s Executor was

quite clear on this point. It did not assail the general

rule that officers “in the executive department” are

“inherently subject to the exclusive and illimitable

power of removal by the Chief Executive.” 295 U.S. at

627. Instead, the Court reasoned that “the President's

8

illimitable power of removal” does not apply “in

respect of other than executive officers.” Id. at 631

(emphasis added). The Court’s decision thus rested on

the premise that the FTC’s “duties are neither

political nor executive,” and that the agency “cannot in

any proper sense be characterized as an arm or an eye

of the executive.” Id. at 624, 628 (emphasis added).

The agency acted only “in the discharge and

effectuation of its quasi-legislative or quasi-judicial

powers, or as an agency of the legislative or judicial

departments of the government.” Id. at 628. The

agency was “wholly disconnected from the executive

department,” and was “created by Congress as a

means of carrying into operation legislative and

judicial powers, and as an agency of the legislative

and judicial departments.” Id. at 630.

Since the Court did not understand the officer in

Humphrey’s Executor to exercise any executive power

under Article II, it had no occasion to consider the

issue of true executive officers. Instead, it expressly

declined to decide that issue. It chose to “leave such

cases . . . for future consideration and determination

as they may arise.” Id. at 632. The Court thus

expressly disavowed any holding that those who do

exercise executive power could be subject to removal

restrictions.

The limited scope of Humphrey’s Executor was

immediately clear. As Acting Attorney General Robert

H. Jackson explained, Humphrey’s Executor “limited

the application of the Myers case but did not disturb

the ruling therein as applied to executive officers.” 39

Op. Att’y Gen. at 146. Instead, the Court “relied upon

the distinguishable fact that the [FTC] exercises

quasi-legislative and quasi-judicial functions and is

9

not a part of the executive branch.” Id. This was

hardly a controversial characterization of the

decision, since it tracked precisely what the Court had

said in its own opinion.

The Court again confirmed this understanding in

Wiener v. United States, 357 U.S. 349 (1958), which

reaffirmed that “officials who [are] part of the

Executive establishment [are] thus removable by

virtue of the President’s constitutional powers” to

supervise the executive branch. Id. at 353 (citing

Humphrey’s Executor, 295 U.S. at 625-26). That case

involved the War Claims Commission, a multimember body responsible for “adjudicat[ing]” claims

for government benefits from those who had “suffered

personal injury or property damage at the hands of

the enemy in connection with World War II.” Id. at

350. The Commission was an Article I tribunal that

adjudicated claims of purely “public rights”—

something Congress could have done by itself if it

wished. Cf. N. Pipeline Constr. Co. v. Marathon Pipe

Line Co., 458 U.S. 50, 67-68 (1982). To decide whether

the commissioners were “executive” officers subject to

removal, the Court looked to “the nature of the

function that Congress vested in” them. Wiener, 357

U.S. at 353. And because they did not exercise any

executive power but were a purely “adjudicatory

body,” they fell outside the scope of the President’s

inherent removal authority. Id. at 356.

In Free Enterprise Fund, this Court again

underscored that Humphrey’s Executor does not

extend to those deploying executive power. When the

Court discussed cases involving “principal executive

officers,” it noted that Humphrey’s Executor involved

only a “principal officer”—not an executive officer. 561

10

U.S. at 483. And when the Court stated that

“Congress can, under certain circumstances, create

independent agencies run by principal officers,” it

pointedly did not say that they could be principal

executive officers. Id. Likewise, the Court described

Humphrey’s Executor as applying to “principal officers

of certain independent agencies,” without calling

them executive. Id. at 493.

More important, because Humphrey’s Executor

did not address officers exercising “executive power,”

the Court could and did hold in Free Enterprise Fund

that an agency may not wield substantial “executive

power without the Executive’s oversight.” Id. at 498.

That would “subvert[] the President’s ability to ensure

that the laws are faithfully executed.” Id. Accordingly,

Free Enterprise Fund’s square holding is that officials

who exercise the President’s “executive power” must

be subject to the President’s “oversight,” id., which is

not possible if he cannot remove them at will.

C. Morrison Does Not Apply To Principal

Officers

In Morrison v. Olson, this Court for the first time

upheld a restriction on the President’s power to

remove an executive officer. Most observers now agree

with Justice Scalia’s classic dissent in that case

explaining why the decision was so profoundly wrong.

See 487 U.S. at 697 (Scalia, J., dissenting). But even

assuming Morrison remains good law, its holding was

limited to “inferior officers.” Id. at 672-73 (majority

op.); see also Free Enter. Fund, 561 U.S. at 494 (noting

that Morrison considered only “the status of inferior

officers”). Accordingly, Morrison said nothing about

whether Congress may limit the President’s power to

remove principal executive officers.

11

Moreover, the test that Morrison established

makes clear that removal restrictions on principal

executive officers are flatly unconstitutional. Under

that test, which made clear that Humphrey’s Executor

does not apply to executive officers, Congress may not

restrict the removal of an executive officer (even an

inferior one) if doing so would “interfere with the

President’s exercise of the ‘executive power’” or “his

constitutionally appointed duty to ‘take care that the

laws be faithfully executed’ under Article II.”

Morrison, 487 U.S. at 689-90. For inferior officers,

that is a fact-intensive inquiry. The removal

restriction in Morrison passed muster only because

the inferior officer there had “limited jurisdiction and

tenure,” and “lack[ed] policymaking or significant

administrative authority.” Id. at 691. Accordingly, if

she had had significant “policymaking” or

“administrative” authority, then restricting her

removal would have been unconstitutional despite her

inferior status. Id.

By contrast, restricting the removal of principal

executive officers has never been authorized and is per

se unconstitutional because they inherently exercise

significant “policymaking” and “administrative”

power. By definition, a principal officer is one of

substantial “rank and authority” who is not subject to

the control of any other appointed official, and who

supervises others who have substantial authority

themselves. Id. at 671. For officials who exercise such

a substantial portion of the President’s executive

power, any restriction on removal would “unduly

trammel” the President’s “executive authority.” Id. at

658.

12

Morrison itself recognized that certain executive

officers are “so central to the functioning of the

Executive Branch as to require as a matter of

constitutional law that the counsel be terminable at

will by the President.” Id. at 691-92. If the rule were

otherwise, then Congress could cripple the President’s

authority by preventing him from removing even his

closest Cabinet secretaries such as the Attorney

General, the Secretary of State, or the Secretary of the

Treasury. Nor is this category limited to Cabinet

secretaries. For example, because “the Secretary of

the Navy [is] a principal officer and the head of a

department,” restricting his removal has always been

“widely regarded as unconstitutional and void,” both

before and after the Morrison decision. Free Enter.

Fund, 561 U.S. at 494 n.3. Likewise, and for the same

reason, Congress may not “deprive the President of

adequate control over” an agency that “is the regulator

of first resort and the primary law enforcement

authority for a vital sector of our economy.” Id. at 508.

Drawing a bright line limiting Morrison to inferior

executive officers also has a solid basis in precedent

dating back to the founding. “Under the traditional

default rule, removal is incident to the power of

appointment.” Free Enter. Fund, 561 U.S. at 509. And

since “the power of appointment and removal is

clearly provided” to the President, Congress may not

limit this power “save by the specific exception as to

inferior offices.” Myers, 272 U.S. at 126-27. That

“exception” has a limited rationale: Because Congress

may empower “the Heads of Departments” to appoint

inferior officers, it may also restrict their power to

remove inferior officers. Id. (citing United States v.

Perkins, 116 U.S. 483, 485 (1886)). Morrison and

13

Perkins thus sustained “restrictions on the power of

principal executive officers . . . to remove their own

inferiors.” Free Enter. Fund, 561 U.S. at 494.

By contrast, there is no basis in text or precedent

for restricting the removal of principal executive

officers. Just as Congress cannot diminish the

President’s power to appoint such officers, neither can

it limit his power to remove them. Indeed, impinging

on the President’s removal power would be even worse

than curtailing his appointment power, since “it is

only the authority that can remove [an officer], and

not the authority that appointed him, that he must . . .

obey.” Bowsher, 478 U.S. at 726 (internal quotation

marks omitted). Destroying the President’s ability to

control principal executive officers through the

removal power would be a “new type of restriction”

that this Court has never blessed, and that would

have unprecedented consequences for the President’s

Article II authority. Free Enter. Fund, 561 U.S. at 514.

II. The CFPB Director Must Be Removable At

Will Because She Exercises Substantial

Executive Power

Under Article II, the Director of the CFPB must

be removable at will because she is a principal

executive officer who wields a substantial portion of

“the executive power” vested in the President. She is

responsible for enforcing no fewer than 19 different

statutes covering an enormous swath of the nation’s

economy, 18 of which were previously enforced by a

host of different agencies. She has the power to issue

subpoenas and file enforcement actions directly in

federal district court, seeking not only prospective

injunctive relief but retrospective penalties and

14

disgorgement that routinely reach into the millions of

dollars. She exercises substantial policymaking and

administrative authority, as she is empowered to

promulgate binding regulations and direct an army of

subordinates to enforce them.

In light of the unprecedented scope and nature of

these extensive executive powers, allowing the

Director to operate free from any electoral control

poses an unprecedented threat to our representative

democracy. It threatens not only the constitutional

authority of our elected President, but also the most

basic principles of political accountability that

undergird our Constitution. This Court has never

tolerated such an affront to the separation of powers.

Allowing it now would take a wrecking ball to one of

the central pillars of our constitutional architecture.

A. The CFPB Director Is An Executive

Officer

There can be no serious question that the CFPB is

an executive agency, and its Director an executive

officer. The primary hallmark of executive power is

the performance of “law enforcement functions that

typically have been undertaken by officials within the

Executive Branch.” Morrison, 487 U.S. at 691. The

“enforcement

power,

exemplified

by

[the]

discretionary power to seek judicial relief, is authority

that cannot possibly be regarded as merely in aid of

the legislative function of Congress.” Buckley v. Valeo,

424 U.S. 1, 138 (1976). In particular, “[a] lawsuit is

the ultimate remedy for a breach of the law,” and this

type of enforcement measure is plainly entrusted to

the control of “the President” under Article II. Id.

Accordingly, “conducting civil litigation in the courts

15

of the United States for vindicating public rights” is a

quintessential executive function. Id. at 140. And that

is exactly what the CFPB does.

One of the chief purposes of the CFPB was to

ensure that consumer-protection laws are “enforced

vigorously.” Department of the Treasury, Financial

Regulatory Reform: A New Foundation 55 (2009).

Under the Dodd-Frank Act, the agency is empowered

to “implement and . . . enforce” a phalanx of federal

statutes related to the “markets for consumer

financial products and services.” 12 U.S.C. § 5511(a).

The Act enumerates 18 pre-existing “[f]ederal

consumer financial law[s],” and also prohibits a new

category of “unfair, deceptive, or abusive act[s] or

practice[s],” and authorizes the CFPB to enforce them

all. Id. §§ 5536(a)(1)(B), 5581(a)(1)(A). Many of these

19 statutes lack a private right of action, but Congress

granted the CFPB a formidable array of

“[e]nforcement [p]owers.” 124 Stat. 2018. These

include the power to issue subpoenas directed toward

enforcement, and to file lawsuits directly in federal

district court seeking penalties or other “legal and

equitable relief.” 12 U.S.C. §§ 5562(a)-(c), 5564(a), (f).

All of these are plainly “law enforcement functions”

that are “typically . . . undertaken by officials within

the Executive Branch.” Morrison, 487 U.S. at 691.

Indeed, before the CFPB was created, officials in

multiple other executive agencies did undertake these

enforcement functions with respect to all of the preexisting statutes that the CFPB now enforces. See 12

U.S.C. §§ 5481(12), 5581 (transferring executive

authority from seven other agencies to CFPB).

In addition, the CFPB also has power to engage in

binding rulemaking. It has “authority to prescribe

16

rules or issue orders or guidelines pursuant to” the

laws above. 12 U.S.C. §§ 5581(a)(1)(A), 5481(12), (14).

In particular, it may promulgate substantive

regulations to define “unfair, deceptive, or abusive

act[s] or practice[s].” Id. §§ 5531(a)–(b); 5536(a)(1)(B).

Because this is part of the agency’s charge to

“implement the legislative mandate” for the laws it

administers, it too “is the very essence of ‘execution’ of

the law.” Bowsher, 478 U.S. at 733. Indeed, one of the

primary justifications for agency rulemaking is that

agencies are part of a “political branch,” subject to a

President who is “directly accountable to the people”

for regulatory decisions. Chevron, U.S.A., Inc. v.

NRDC, 467 U.S. 837, 865 (1984). Allowing agency

rulemaking to be insulated from political

accountability would make a mockery of that

justification.

The CFPB’s functions are far more executive in

character than the FTC’s were at the time of

Humphrey’s Executor in 1935. First, and perhaps

most significantly, “[u]nder its original statutory

mandate, which was still in place at the time of

Humphrey’s Executor, the FTC had no power to sue in

federal district court.” Daniel A. Crane, Debunking

Humphrey’s Executor, 83 GEO. WASH. L. REV. 1835,

1864 (2015). Second, the FTC was also limited to

prospective relief, and could not seek “retrospective”

remedies such as disgorgement or other penalties.

Heater v. FTC, 503 F.2d 321, 321-26 (9th Cir. 1974);

FTC v. Cement Inst., 333 U.S. 683, 706 (1948) (The

FTC’s role was “not to punish or to fasten liability on

respondents for past conduct but to ban specific

practices for the future in accordance with the general

mandate of Congress.”). And third, the FTC was not

17

understood to have substantive rulemaking authority

until at least 1962. See Nat’l Petroleum Refiners Ass’n

v. FTC, 482 F.2d 672, 693 & n.27 (D.C. Cir. 1973).

Accordingly, the FTC in 1935 was “quasilegislative” because it was tasked only with “making

investigations and reports . . . for the information of

Congress,” but did not enforce the law through

substantive rulemaking or otherwise. Humphrey’s

Executor, 295 U.S. at 628. Because Congress itself

could conduct investigations, it could have given the

same power to a non-executive body. Likewise, the

FTC was “quasi-judicial” because it was designed to

function as a “judicial aid,” like a “master in chancery,”

working to “ascertain and report an appropriate form

of decree” in particular cases. Id. at 621, 628. See

Crowell v. Benson, 285 U.S. 22, 61 (1932) (noting that

“masters in chancery” are “always subject to the

direction of the court, and their reports are essentially

advisory”). The FTC in 1935 thus acted as “a

legislative agency” and an “agency of the judiciary,”

but not as an executive agency, because it did not have

the power to enforce federal law. Humphrey’s Executor,

295 U.S. at 628.

The CFPB differs in every critical respect. It can

file lawsuits directly in federal district court to enforce

federal law. 12 U.S.C. § 5564(a). It can seek

“disgorgement” and other retrospective “penalties” as

part of its enforcement efforts. Id. § 5565(a)(2). And it

has broad substantive rulemaking power to

implement the statutes that it enforces. Id. § 5512.

These powers are undeniably “executive,” in a way

18

that the powers of the FTC at the time of Humphrey’s

Executor were not.2

In any event, it makes no difference even if “the

powers of the FTC at the time of Humphrey’s Executor

would at the present time be considered ‘executive,’ at

least to some degree.” Morrison, 487 U.S. at 689 n.28.

At most, that means that this Court might apply the

constitutional rule of Humphrey’s Executor differently

today if the same facts arose again. It does not affect

the substance of the rule endorsed in that case,

namely, that restricting removal of a principal officer

is constitutional only if the officer is “neither political

nor executive.” Humphrey’s Executor, 295 U.S. at 624.

Nor does it make the CFPB’s powers any less

“executive” in character today.

B. The CFPB Director Is A Principal Officer

Because the CFPB Director exercises executive

power, her removal cannot be restricted unless she is

an “inferior” officer with strictly “limited duties” like

the officer in Morrison, 487 U.S. at 671. But she is not.

She is plainly a principal officer under any plausible

test.

As this Court has explained, “[w]hether one is an

‘inferior’ officer depends on whether he has a superior,”

as “‘inferior officers’ are officers whose work is

directed and supervised at some level by others who

were appointed by Presidential nomination with the

advice and consent of the Senate.” Edmond v. United

2 In addition, the CFPB has far more adjudicatory authority

than the FTC did in 1935, because the CFPB not only acts in an

advisory capacity to courts, but has the power to issue “final

decision[s] and order[s]” with their own legal effect. 12 C.F.R.

§ 1081.402(b).

19

States, 520 U.S. 651, 662–63 (1997). The CFPB

Director easily qualifies as a principal officer under

that test. No other appointed official can remove her,

nor does any other official supervise or oversee her

decisions, much less have the power to reverse them.

The sole exception is that a two-thirds vote of the

Financial Stability Oversight Council can revoke a

regulation issued by the Director if the rule puts “the

safety and soundness of the United States banking

system or the stability of the financial system of the

United States at risk.” See 12 U.S.C. § 5513(a). This is

not a meaningful control, however, because it does not

apply to the Director’s enforcement powers at all, id.,

and even in rulemaking the standard is “unlikely to

be met in practice in most cases.” PHH Corp. v.

Consumer Fin. Prot. Bureau, 881 F.3d 75, 172 (D.C.

Cir. 2018) (en banc) (Kavanaugh, J., dissenting).

Accordingly, the possibility of a veto in certain rare

circumstances does not convert the Director into an

inferior officer.

The Director’s status as a principal officer is also

clear from the factors considered in Morrison. She is

not “subordinate” to or “subject to removal by a higher

Executive Branch official.” 487 U.S. at 671. Her

powers are far from “limited.” Id. She is the federal

czar of consumer protection, and within this domain

she has ultimate “authority to formulate policy for the

Government [and] the Executive Branch.” Id. Indeed,

Congress specifically provided that the CFPB may

“establish . . . general policies” for “all executive and

administrative functions” it performs. 12 U.S.C.

§ 5492(a). In addition, the Director is not “limited in

jurisdiction” to address a particular offense or

controversy that has arisen. Morrison, 487 U.S. at 672.

20

Instead, she has a wide range of “ongoing

responsibilities

that

extend

beyond

the

accomplishment of” any particular “mission that she

was appointed for” or “authorized . . . to undertake” in

any particular case. Id. Accordingly, the Director is

“the regulator of first resort and the primary law

enforcement authority for a vital sector of our

economy.” Free Enter. Fund, 561 U.S. at 508. That

makes her precisely the type of principal officer who

must remain firmly within the President’s control,

lest she “subvert[] the President’s ability to ensure

that the laws are faithfully executed.” Id. at 498.

The lack of presidential control is especially

offensive to Article II because the Director is not only

a principal officer but the head of an entire executive

department. As this Court has explained, restricting

removal of “a principal officer and the head of a

department” has been “widely regarded as

unconstitutional” throughout our nation’s history,

and “is universally [so] regarded today.” Free Enter.

Fund, 561 U.S. at 494 n.3. The CFPB undoubtedly

“constitutes a ‘Department’” since it “is a freestanding

component of the Executive Branch, not subordinate

to or contained within any other such component.” Id.

at 511. And the Director is the department “head”

because she has complete control over it. Insulating

her from removal is thus a flagrant Article II violation.

Even more troubling, the CFPB also operates

without the strings attached to Congress’s power of

the purse. See 12 U.S.C. § 5497(a). Unlike other

executive agencies, the CFPB operates based on an

independent funding stream that comes directly from

the Federal Reserve, id., “outside of the congressional

appropriations process.” CFPB, Strategic Plan:

21

FY2013-FY2017, 36 (Apr. 2013), available at

https://files.consumerfinance.gov/f/strategic-plan.pdf.

As a practical matter, this frees the agency from the

substantial practical control that the President and

Congress usually exercise through the annual budget.

The lack of political accountability has real

consequences. For example, when President Trump

took office he was unable to replace the CFPB director

and was thus unable to control how the nation’s

consumer-protection laws would be implemented and

enforced. As a result, the agency promulgated a major

executive regulation without the support of the newly

elected President or either house of Congress. 82 Fed.

Reg. 54472 (Nov. 17, 2017). Although the Trump

administration has now moved to repeal that rule, the

repeal likely will not take effect until the final year of

the President’s first term. Moreover, the President’s

inability to remove the CFPB Director at the

beginning of his term led to a circus in which the

former Director attempted to choose his own successor

by transferring power to his chief of staff at midnight

“on the day after Thanksgiving.” English v. Trump,

279 F. Supp. 3d 307, 313-15 (D.D.C. 2018). And similar

absurdities could recur next year. For example, if the

voters elect President Elizabeth Warren, they will

nevertheless be stuck with several more years of

executive enforcement and policymaking from the

unremovable,

unaccountable,

Trump-appointed

CFPB Director. No matter how clearly the voters

express their will, they will not be able to change the

agency’s policy. This is not how democracy is supposed

to work.

22

III. The Removal Restriction Is Not “Severable”

Separation-of-powers principles also dictate that

this Court cannot enhance the President’s power by

giving him a slew of new statutory powers that

Congress never granted him. The President’s powers

are limited and enumerated. He cannot exercise any

statutory authority that Congress did not

affirmatively give him. Here, however, Congress made

clear that it did not authorize him to exercise the

CFPB’s newly created powers. It made the agency

independent precisely to ensure that the President

would not have control over those powers.

Indeed, Congress transferred many of the CFPB’s

powers away from the President, by giving the CFPB

the power to administer multiple statutes previously

administered by executive agencies under the

President’s control. 12 U.S.C. §§ 5481(12), 5581.

Accordingly, it would usurp the legislative role to

strike the removal restriction while leaving the

agency’s powers in place under the President’s control.

That would give the President not only the new

powers that Congress deliberately denied him, but

also the old powers that Congress affirmatively took

away from him. Instead, the only way to respect the

constitutional balance is to invalidate both the

removal restriction and all of the new powers that

Congress improperly vested in the agency. Whether to

create these powers under the President’s control

presents a novel issue that must be addressed by

Congress, not by this Court.

The “inquiry in evaluating severability is whether

the statute will function in a manner consistent with

the intent of Congress” without the invalid portion.

Alaska Airlines, Inc. v. Brock, 480 U.S. 678, 685 (1987).

23

In general, courts should “act cautiously” and “refrain

from invalidating more of the statute than is

necessary.” Regan v. Time, Inc., 468 U.S. 641, 652

(1984) (plurality op.). But courts also must be cautious

not to strike an essential provision in a way that

would create a substantially new law never enacted

through bicameralism and presentment. See INS v.

Chadha, 462 U.S. 919, 951-59 (1983). “This would, to

some extent, substitute the judicial for the legislative

department of the government,” and in substance

“make a new law, not . . . enforce an old one.” United

States v. Reese, 92 U.S. 214, 221 (1875).

The threat is especially pronounced when partial

invalidation would cause the statutory scheme to

operate not just differently, but directly contrary to

the legislative design. The very “touchstone” of the

remedial inquiry is that “a court cannot use its

remedial powers to circumvent the intent of the

legislature” as expressed in the statutory text. Ayotte

v. Planned Parenthood of N. New England, 546 U.S.

320, 330 (2006) (internal quotation marks omitted).

And contravening statutory limits on the President’s

power would impose “a far more serious invasion of

the legislative domain than [courts] ought to

undertake.” Id. (internal quotation marks omitted).

For example, in Buckley v. Valeo, Congress

granted certain powers to the independent Federal

Elections Commission, but unconstitutionally denied

the President the power to appoint the commissioners.

424 U.S. at 140-42. The proper remedy was not to

rewrite the statute by giving the President the power

to appoint the commissioners, much less to exercise

the powers that Congress had given them. Instead,

the Court let Congress decide what to do. In the

24

meantime, from March until May of 1976, neither the

FEC nor anyone else could exercise the powers that

had been improperly assigned to the agency. That

changed only when Congress enacted a new statute

conferring the proper appointment authority on the

President. See FEC, Thirty Year Report 6 (Sept. 2005),

available at https://www.fec.gov/resources/aboutfec/reports/30year.pdf.

Likewise, in Bowsher v. Synar, Congress gave new

executive powers to the Comptroller General, but

unconstitutionally denied the President the power to

remove him. This Court held that because the removal

provision was unconstitutional, the Comptroller

General “may not exercise the powers conferred upon

him.” 478 U.S. at 736 n.10. The Court refused to sever

the removal provision and make him “subservient to

the Executive Branch,” because that would give the

President control over a new set of powers that

Congress had deliberately withheld from him. Id. at

734. That would not only “alter the balance that

Congress had in mind,” but effectively create a new

“statute that Congress would probably have refused

to adopt.” Id. at 735.

Similarly, when this Court held in Northern

Pipeline that Congress could not give bankruptcy

judges the power to adjudicate certain common-law

claims, it did not reassign that power to the existing

Article III courts. The Court refused to “assume . . .

that Congress’ choice would be to have these cases

routed to the United States district court of which the

bankruptcy court is an adjunct.” 458 U.S. at 87 n.40

(internal quotation marks omitted). Instead, the

Court simply enjoined the bankruptcy judges from

exercising the power that had been improperly vested

25

in them, thus giving “Congress an opportunity to

reconstitute the bankruptcy courts or to adopt other

valid means of adjudication.” Id. at 88.

This Court should follow the same course here. It

should not unilaterally confer the CFPB’s vast new

powers on the President, but should let Congress

decide whether to do so. Congress expressly declared

that it was creating an “independent” agency that

would be free from political control. 12 U.S.C.

§ 5491(a). Because the creation of such a powerful

political agency was never put to the test of

bicameralism and presentment, it is impossible to

know (and doubtful at best) whether Congress would

have created the agency under the President’s control.

Indeed, it is especially unlikely that Congress would

have given the President control over the CFPB while

keeping in place the restrictions on Congress’ own

control over the agency’s annual budget. As explained

by one of the sponsors of the Dodd-Frank Act, the core

“principles” behind the CFPB required it to have both

an “independent head” and an “independent budget”

so that it could wield its consolidated powers with full

“autonomy.” 156 Cong. Rec. 2755 (statement of Sen.

Dodd). Congress therefore never would have passed a

law which disabled its own ability to control the CFPB

but also bestowed plenary control on the President.3

3 It makes no difference that the Dodd-Frank Act contains a

severability clause. 12 U.S.C. § 5302. Indeed, “the ultimate

determination of severability will rarely turn on the presence or

absence of such a clause.” United States v. Jackson, 390 U.S. 570,

585 n.27 (1968). The clause here does not address whether

Congress meant for the CFPB to continue operating without its

fundamental structure intact, much less whether Congress

meant to bestow the agency’s vast new powers on the President.

26

In fact, amici have already demonstrated that

Congress can and should address any constitutional

deficiencies through the legislative process. Since the

enactment of the Dodd-Frank Act, Republicans in

Congress, including amici, have proposed legislation

that would allow the President to remove the agency’s

Director with or without cause, subject the agency to

the congressional appropriations process, and to

restructure the agency as a multi-member bipartisan

commission, among other proposals. See Financial

CHOICE Act of 2017, H.R. 10, 115th Cong. §§ 711, 712

(2017); Financial Product Safety Commission Act of

2018, H.R. 5266, 115th Cong. § 2 (2018). As these

examples illustrate, such policy judgments regarding

CFPB restructuring are best left to Congress.

In these circumstances, giving the President

control over the CFPB’s vast new powers would not

“remedy” the constitutional violation but would

simply transform it from a violation of Article II to a

violation of Article I. See U.S. Const., art. I, § 7

(bicameralism and presentment). It would usurp the

legislative power by granting the President

significant new statutory powers that Congress

deliberately withheld from him when it sought to

create the CFPB as an independent agency. In this

regard, the present case is not like Free Enterprise

Fund. There, severing the removal restriction

preserved the independence of the agency’s statutory

powers by “leav[ing] the President separated from

[them] . . . [by] a single level of good-cause tenure.”

561 U.S. at 509. Here, no such “separat[ion]” would

remain. Severing the removal restriction would thus

improperly grant the CFPB’s new statutory powers

directly to the President’s control. Only Congress can

27

properly decide whether to do that. If this Court were

to do so instead, it would not be exercising judicial

modesty but the precise opposite.

CONCLUSION

The Court should reverse the decision below.

DECEMBER 16, 2019

Respectfully submitted,

Michael A. Carvin

Counsel of Record

Paul Lettow

Anthony J. Dick

Kaytlin L. Roholt

JONES DAY

51 Louisiana Avenue NW

Washington, DC 20001

(202) 879-3939

macarvin@jonesday.com

Counsel for Amici Curiae

App. 1

APPENDIX

APPENDIX OF AMICI CURIAE

Andy Barr

Ted Budd

Warren Davidson

Tom Emmer

Anthony Gonzalez

Lance Gooden

French Hill

Trey Hollingsworth

Bill Huizenga

Peter T. King

Barry Loudermilk

Frank D. Lucas

Blaine Luetkemeyer

Kevin McCarthy

Patrick McHenry

Alexander X. Mooney

Bill Posey

Denver Riggleman

John Rose

Stephen Scalise

Bryan Steil

Steve Stivers

William Timmons

Scott Tipton

Ann Wagner

Roger Williams

Lee M. Zeldin