This week, the Texas federal district court hearing the industry lawsuit challenging the CFPB’s final credit card late fee rule (Rule) issued the following unusual order:

On March 10, 2024, this Court granted Plaintiffs’ Motion for Preliminary Injunction.  The Court therefore has questions concerning the live causes of actions in this case and what next steps are appropriate to move the case along.

The Court, accordingly, ORDERS both Parties to brief the Court on what the live pleadings are in this case and the current posture of such pleadings.  Briefing should be filed by 5:00 p.m. on Wednesday, May 15, 2024.

(The order mistakenly refers to March 10 rather than May 10 as the date on which the court granted the plaintiffs’ motion for preliminary injunction staying the Rule which was set to become today.)

As an initial matter, it is unclear whether Judge Pittman has authority to take any further steps in the case without direction from the Fifth Circuit.  The Fifth Circuit’s order remanding the case to the district court to allow the district court to rule on the plaintiffs’ preliminary injunction motion stated as follows:

Accordingly, we VACATE the district court’s effective denial of the motion for preliminary injunction and REMAND with instructions that the district court rule on the Chamber’s motion for preliminary injunction by May 10, 2024.  This is a limited remand.  Our panel retains jurisdiction over this appeal.

Assuming Judge Pittman has authority to “move the case along,” it seems likely that the parties will agree that any next steps should await the U.S. Supreme Court decision in CFSA V. CFPB which is expected to be issued by the end of next month.  Based on our review of the docket, it appears that the only remaining “live pleading” is the complaint.  If the Supreme Court holds that the CFPB is constitutionally funded, the court will need to consider the merits of the plaintiffs’ claims based on the CARD Act, TILA, and APA.  Since the district court granted the preliminary injunction motion based only on the plaintiffs’ constitutional claim, the plaintiffs will likely file a pleading in which they argue that the preliminary injunction should remain in place because they have established a likelihood of success on the merits of their other claims. The court will then have to decide the merits of the complaint, either on a motion to dismiss filed by the CFPB or, after the CFPB files an answer to the complaint, on cross-motions for judgment on the pleadings or summary judgment.  (On April 29, the district court entered an order extending the date for the CFPB to answer or otherwise respond to the complaint to May 28, 2024.)

If the Supreme Court holds that the CFPB is unconstitutionally funded and all regulations promulgated by the CFPB are invalid, the preliminary injunction will remain in place without the need for further consideration by the district court.  However, the district court will still need to finally resolve the complaint, which could be accomplished through a ruling on a motion by the plaintiffs for judgment on the pleadings or summary judgment.  Alternatively, the Supreme Court could hold that the CFPB is unconstitutionally funded and all regulations promulgated by the CFPB are invalid but grant a stay of its order to allow Congress to ratify some or all CFPB regulations or take some other action that allows some or all of the regulations to survive.  Should that happen, the preliminary injunction would also remain in place but it seems likely that the district court would stay any further proceedings in the case until Congress acts.