The CFPB and All American Check Cashing have filed a status report with the Mississippi federal district court indicating that they have agreed to a settlement conference before a magistrate judge.
The case was remanded to the district court by the en banc Fifth Circuit, which ruled that the CFPB’s enforcement action against All American could proceed despite the unconstitutionality of the CFPB’s single-director-removable-only-for-cause-structure at the time the enforcement action was filed. However, in a concurring opinion, five judges expressed their agreement with All American’s argument that the unconstitutionality of the CFPB’s funding mechanism required dismissal of the enforcement action. In remanding the case, the Fifth Circuit stated that “[w]e place no limitation on the matters that the court may consider, including, without limitation, any other constitutional challenges, and we express no view on the actions it should take in accordance with this opinion or otherwise.”
Following the remand, the CFPB and All American filed a joint motion asking the district court to set a briefing schedule. The proposed briefing schedule provided for All American to file a renewed motion for judgment on the pleadings and for the parties to address the significant legal developments concerning the CFPB’s constitutionality that had occurred since All American filed its initial motion (such as the U.S. Supreme Court’s Seila Law decision and the Fifth Circuit concurring opinion). The district court, however, denied the motion and instead ordered that the case go to private mediation or a settlement conference before a magistrate judge, with the parties to decide which route they preferred.
While the parties’ agreement to a settlement conference before a magistrate judge creates the possibility that the case will be resolved without a ruling from the district court on the constitutionality of the CFPB’s funding structure, that issue is unlikely to go away (particularly in light of the scholarly Fifth Circuit concurring opinion). For example, the trade groups challenging the CFPB’s payday lending rule submitted the concurring opinion as supplemental authority to the Fifth Circuit panel hearing their appeal and argued that the panel should invalidate the rule based on that opinion.