As we’ve reported, Lower East Side People’s Federal Credit Union (“People’s”), filed suit in the Southern District of New York to block Mick Mulvaney’s appointment as CFPB Acting Director. On December 12, People’s filed a motion for a preliminary injunction.
In general, People’s arguments track those made by Leandra English, Richard Cordray’s choice for Acting Director, in her case before the D.C. federal district court. People’s, however, raises additional arguments regarding the alleged irreparable harm that would justify entering a preliminary injunction. First, it cites Second Circuit case law holding that a constitutional violation constitutes per se irreparable harm. Second, it argues that, as a regulated entity, it is harmed when its regulator acts without statutory authority to do so. It alleges that it is irreparably harmed by the confusion and uncertainty it faces about who to listen to at the CFPB: Mulvaney or English. Third, it argues that, because Mulvaney is (allegedly) making poor decisions, he is causing irreparable harm to People’s mission.
Of course, in raising all of these arguments in its brief, Peoples did not cite a single concrete example. Nor did it identify one thing it would have done differently had English been appointed. It does not cite one rule or act of the CFPB that it wants to comply with but can’t or that it believes would be unlawful to obey. Nor does it explain one aspect of its mission that cannot be carried out with Mulvaney serving as CFPB Acting Director.
At the same time it filed the preliminary injunction motion, People’s sought a briefing schedule that was even more aggressive than the briefing schedule ordered by the D.C. federal district court in English’s lawsuit. On December 13, the DOJ opposed People’s motion on several grounds, including that People’s interest is already protected by English’s lawsuit. Under People’s proposed schedule, its reply brief would have been due three days before the December 22, 2017 oral argument in the English case.
In its opposition, the DOJ faulted People’s counsel for failing to confer on the briefing schedule, a claim which People’s counsel denied in a letter submitted hours later. The DOJ also indicated in its response that it intended to move to dismiss People’s lawsuit on standing and jurisdictional grounds as well and asked the court to consolidate briefing on People’s preliminary injunction motion and DOJ’s motion to dismiss. Surprisingly, DOJ did not specifically say that it intended to file a motion to transfer venue of the lawsuit to Judge Kelly in the D.C. federal district court.
On December 14, 2017, Judge Gardephe ordered the following briefing schedule which, unlike the briefing schedule in the D.C. case, provides for consolidated briefing:
- December 22, 2017. Defendants’ opposition to Plaintiff’s motion for a preliminary injunction and brief in support of Defendant’s motion to dismiss
- December 29, 2017. Plaintiff’s reply in support of its motion for a preliminary injunction and opposition to Defendants’ motion to dismiss
- January 5, 2018. Defendants’ reply in support of their motion to dismiss.
Oral argument will be held on January 12, 2018. Since oral argument in the D.C. case is scheduled for December 22, there is a reasonable likelihood that the D.C. court will have ruled on Ms. English’s preliminary injunction motion by the January 12 oral argument date.
Judge Paul Gardephe
Judge Paul Gardephe is presiding over People’s case. He was nominated to the court by President George W. Bush and took the bench in August 2008. A graduate of Columbia Law School, he clerked for Judge Engel of the Sixth Circuit, and has spent time in private practice, in-house at Time, Inc., and in government service in the U.S. Attorney’s Office.
On December 15, 2017, several amicus briefs were filed in People’s case. All of the briefs supported People’s and were apparently submitted to comply with People’s proposed briefing schedule. The amicus briefs largely track those filed in the D.C. federal district court case, with a few exceptions.
For example, the financial law “scholars” who filed briefs in both cases added an argument to their amicus brief in People’s case. They now argue that allowing for appointment under the VRA would give the President a “perverse incentive” to delay appointing a permanent CFPB Director. That, of course, ignores the time limits applicable to presidential appointments under the VRA found at 5 U.S.C. § 3346. In contrast, the Democratic state attorneys general, who submitted briefs in both cases, have dropped an argument in People’s case. In English’s case, they argued that the doctrine of constitutional avoidance is inapplicable. They do not appear to be making that argument in support of People’s motion.
Credit Union National Association
Although People’s is supporting Leandra English’s argument that she is the rightful CFPB Acting Director, the Credit Union National Association, whose membership consists of more than 6,000 credit unions throughout the country, filed an amicus brief authored by Ballard Spahr in the D.C. federal district court supporting Mick Mulvaney’s argument that he is the rightful CFPB Acting Director.