The D.C Circuit panel on Thursday denied all three motions to intervene in the landmark case between the Consumer Financial Protection Bureau and PHH.
The case, which is waiting for a final decision on the CFPB’s petition for rehearing en banc, received three additional motions over the last couple weeks from Democratic state attorneys general, Senators, and consumer advocacy groups, who were attempting to intervene on behalf of the CFPB.
However, the likelihood that the court would deny those motions was high. Alan Kaplinsky, partner and leader of Ballard Spahr’s Consumer Financial Services Group, explained that it is very uncommon for motions to intervene to be filed in an appellate court. “In my 46 years of practicing law, this is the first time I have seen it,” he said.
Kaplinsky said the motions were a long shot, adding that it would’ve been a real Hail Mary.
More than a dozen state attorneys general filed their motion to intervene first, stating that the election of Donald Trump compelled them to intervene in the CFPB lawsuit. “When PHH filed the original petition for review in June, 2015, there was little reason for the State Attorneys General to intervene. At that time, the CFPB still had an independent Director and was fully committed to seeking rehearing to challenge the panel's ruling and defend the constitutionality of the bureau's independent structure,” the AGs state in their motion to intervene.
“But as a result of the presidential election,” the AGs continued, “the situation has changed.”
The state attorneys general included: Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia.
Shortly before the court denied the state AGs’ motions, PHH filed a response opposing the motion. Ballard Spahr highlighted PHH’s argument for why the motion should be denied in its CFPB Monitor blog. Here are only quick snippets from the explanation. Check the blog for the full explanation.
- The motion was untimely because federal appellate rules require a motion to intervene to be filed within 30 days after a petition for review is filed and PHH filed its petition for review in June 2015.
- The state AGs lack standing to intervene because they have no legally protected interest. With regard to RESPA, the state AGs’ involvement is not “necessary or appropriate to protect the Executive Branch’s interest in the interpretation and enforcement of RESPA.
- The motion “is simply an effort by the state AGs to intervene in order ‘to file a petition for certiorari,’ as they admit, in the event the Solicitor General does not.” The state AGs should not be given control over efforts to seek Supreme Court review.
Shortly thereafter, Sen. Sherrod Brown, D-Ohio, and Rep. Maxine Waters, D-Calif., who are, respectively, the Ranking Members of the Senate Banking Committee and the House Financial Services Committee, followed suit and filed a motion with the D.C. Circuit seeking to intervene in the PHH appeal.
And it doesn’t end there. Maeve Brown, Americans for Financial Reform, Center for Responsible Lending, Leadership Conference on Civil and Human Rights, Self-Help Credit Union, and the United States Public Interest Research Group, also filed on motion at the same time.
The CFPB Monitor explained their arguments:
The new movants rely primarily on the argument that they cannot rely on the CFPB under the Trump Administration to adequately represent their interest in defending the CFPB’s status as an independent agency.
As grounds for why they have a legally protected interest which would be impaired by the litigation, Senator Brown and Representative Waters point to their votes for the Dodd-Frank Act and claim that if the CFPB, acting at the new Administration’s direction, does not defend its constitutionality, “movants’ votes to establish the Bureau as an independent agency will be nullified without full judicial review of the constitutional question presented in this case.”
The consumer advocacy groups rely on their roles as advocates for various consumer interests for their claim that they have a legally protected interest while the credit union movant and Ms. Brown rely on, respectively, the impact of CFPB regulations and enforcement on its members and the need for a CFPB “Director [who] is independent and responsive to the [Consumer Advisory] Board’s recommendations and analysis.”
PHH filed a motion against the Democratic lawmakers before the D.C. Court made a decision to deny all three motions, but it didn’t file a motion against the consumer advocacy groups prior to the denial.
Ultimately, all three motions to intervene were denied.
The next step, the CFPB Monitor stated, will presumably be a decision on the CFPB’s petition for rehearing en banc. Kaplinsky added that the decision will likely come in the next couple of weeks.
