The CFPB has filed a letter with Judge Preska in which it asks “for a pre-motion conference with the Court for approval to file a motion under Rule 54(b) for entry of a final judgment with respect to the Bureau” in the RD Legal Funding case.
Under Rule 54(b) of the Federal Rules of Civil Procedure, a district court can certify a final judgment where “(1) there are multiple claims or parties, (2) at least one of the claims or the rights and liability of at least one party has been finally determined, and (3) ’there is no just reason for delay.’” In her June 21 order, Judge Preska ruled that the CFPB’s single-director-removable-only-for-cause structure is unconstitutional, struck the CFPA (Title X of Dodd-Frank) in its entirety, dismissed the CFPB from the case, and allowed the New York Attorney General to proceed with its CFPA and state law claims.
In its letter, the CFPB argues that the three conditions of Rule 54(b) are satisfied. It asserts that in addition to involving two plaintiffs (the CFPB and NYAG), by dismissing the CFPB from the case while allowing the NYAG to proceed with its CFPA claims, her order “finally resolved the Bureau’s claims.” It also asserts that her dismissal of the CFPB “deprives the Bureau of its statutorily-assigned right to participate in the litigation of CFPA claims brought by state regulators.” The CFPB also argues that the issues of its constitutionality and whether the for-cause removal provision is severable from the CFPA are “separable” from the other issues in the case that remain to be decided. According to the CFPB, the court’s “resolution of New York’s claims will not render the court of appeals’ decision advisory or moot, and the appeals court would not have to reach the merits of New York’s claims in resolving the Bureau’s appeal.”
RD Legal Funding previously submitted a letter to Judge Preska in which it asserted that having struck all of Title X in its entirety (including Section 1042 on which the NYAG relies for its authority to bring the CFPA claims), Judge Preska should dismiss the federal claims with prejudice and dismiss the state law claims without prejudice to their being refiled in state court. It also asked the court to then enter judgment against the CFPB and NYAG “allowing the Court’s June 21, 2018 Order to be appealed, if appropriate, in its entirety.” The NYAG has indicated to Judge Preska that it does not take a position on her entry of a Rule 54(b) judgment against the CFPB but that, if the court were to do so, it would oppose any request by RD Legal Funding for a stay of the district court proceeding.
Should Judge Preska enter a final judgment under Rule 54(b) from which the CFPB appeals to the Second Circuit, two circuits will be actively considering the CFPB’s constitutionality, thereby increasing the likelihood of this issue coming before the U.S. Supreme Court in the next year or so. The issue of the CFPB’s constitutionality is currently before the Fifth Circuit in the interlocutory appeal of All American Check Cashing from the district court’s ruling upholding the CFPB’s constitutionality.
