Back in June, a judge in the Southern District of New York (S.D.N.Y.) found that the Bureau of Consumer Financial Protection's (BCFP or Bureau) structure is unconstitutional in Consumer Financial Protection Bureau and the People of New York v. RD Legal Funding, LLC, et al., No. 17-cv-890 (S.D.N.Y. Jun. 21, 2018). On Friday, September 14, the Bureau appealed this decision to the Second Circuit Court of Appeals.
This news comes on the tail of State National Bank of Big Spring filing a petition for writ of certiorari with the U.S. Supreme Court in a case that questions the constitutionality of the Bureau. The petition is a request for the nation's hightest court to hear the issue.
As previously reported by insideARM, the State National Bank of Big Spring, et al., v. Steven Mnuchin, et al. case arose from the D.C. Circuit Court of Appeals. After the lower court (the D.C. District Court) found the structure of the BCFP to be constitutional, State National Bank of Big Spring appealed the matter to the D.C. Circuit. Almost immediately after the D.C. Circuit opened the matter, the parties filed a joint motion for judgment so that they could immediately appeal the matter to the U.S. Supreme Court.
The Second Circuit’s decision will likely have an impact on the U.S. Supreme Court's decision to hear the case. The name of the game here is jurisdictional split.
The judgment affirmed by the D.C. Circuit found that the structure of the Bureau is constitutional. If the Second Circuit reverses S.D.N.Y.’s decision and also finds that the structure is constitutional, then the chances of the U.S. Supreme Court hearing the case are decreased. While the issue -- the constitutionality of the structure of a federal agency that touches and impacts many individuals and entities -- seems perfect for the U.S. Supreme Court, the highest court may feel less compelled to review the issue if the courts agree on the answer.
If, however, the Second Circuit affirms the S.D.N.Y. case or the parties follow the same procedure as in the State National Bank case, then a jurisdictional split occurs and the odds of the U.S. Supreme Court granting the petition for writ of certiorari are raised.
Whether it comes from the Supreme Court or the Second Circuit, it seems that we will soon have an answer to this question.