As previously reported, in January 2014, the California federal district court hearing the CFPB’s enforcement action against Morgan Drexen rejected Morgan Drexen’s motion to dismiss based on a challenge to the CFPB’s constitutionality. Although similar challenges had been made in other cases, this appeared to be the first decision to rule on the merits of such a challenge.
While its motion to dismiss was pending, Morgan Drexen had sought a preliminary injunction from the district court enjoining the CFPB from moving forward with the case until a decision was rendered on the CFPB’s constitutionality, including any appeal. After denying Morgan Drexen’s motion to dismiss, the district court denied the injunction as moot.
Morgan Drexen thereafter appealed the denial of the injunction to the Ninth Circuit. On April 11, 2014, the Ninth Circuit issued an order dismissing the appeal for lack of jurisdiction because of the interlocutory nature of the district court’s order.