On April 11, the U.S. Court of Appeals for the District of Columbia Circuit issued an order partially staying the district court’s preliminary injunction in the ongoing legal dispute between the National Treasury Employees Union (NTEU) and the Consumer Financial Protection Bureau (CFPB). This decision marks a significant development in the NTEU’s challenge against Acting Director Russell Vought’s actions, which the union claims are unconstitutional and violate the Dodd-Frank Act. The appellate court’s order addresses several key provisions of the district court’s injunction, setting the stage for an expedited appeal process.
Background:
As discussed here, the NTEU, which includes members employed by the CFPB, filed a lawsuit on February 9, 2025, challenging the actions of Acting Director Russell Vought. The lawsuit alleges that Vought’s efforts to “shut down” the CFPB are unconstitutional and violate the Congressional mandate outlined in the Dodd-Frank Act. Following the lawsuit, President Trump nominated Jonathan McKernan to be the new Director of the CFPB, pending Senate confirmation.
On February 14, 2025, Judge Amy Berman Jackson of the District Court for the District of Columbia issued an agreed order in response to the NTEU’s motion for a temporary restraining order. This order included key provisions to maintain the status quo, such as preserving CFPB records, protecting employment, and restricting financial transfers.
After two days of hearings, on March 28, the court granted the plaintiffs’ motion and issued a preliminary injunction to maintain the agency’s existence until the case is resolved on the merits.
As discussed here, the order mandated the CFPB to:
- Maintain and not delete, destroy, remove, or impair any data or other CFPB records covered by the Federal Records Act.
- Reinstate all probationary and term employees terminated between February 10, 2025, and the date of the order.
- Not terminate any CFPB employee, except for cause related to the individual employee’s performance or conduct, and not issue any notice of reduction-in-force.
- Not enforce the February 10, 2025 stop-work order or require employees to take administrative leave in furtherance of that order.
- Provide employees with either fully-equipped office space or permission to work remotely with the necessary technological support.
- Ensure the CFPB Office of Consumer Response continues to maintain a toll-free telephone number, a website, and a database for the centralized collection of consumer complaints.
- Rescind all notices of contract termination issued on or after February 11, 2025, and not reinitiate the wholesale cancellation of contracts.
- File a report with the court by April 4, 2025, confirming compliance with the order.
On March 29, the Bureau filed a notice of appeal of the preliminary injunction to the D.C. Circuit Court of Appeals.
Friday’s Order:
Last week’s appellate order addressed several motions, including an emergency motion for a stay pending appeal and an emergency motion to strike. The court denied the motion to strike and granted a partial stay of the district court’s March 28 order. Specifically:
- Provision Two: Stayed insofar as it requires the defendants to reinstate employees deemed unnecessary to the performance of statutory duties after an individualized assessment.
- Provision Three: Stayed insofar as it prohibits the defendants from terminating or issuing a notice of reduction in force to employees deemed unnecessary after a particularized assessment.
- Provision Four: Remains in effect, allowing work stoppages that do not interfere with statutory duties after a particularized assessment.
All other provisions of the preliminary injunction remain in full effect. The court has also expedited the appeal, setting the following schedule:
- Appellants’ Brief: Due April 25, 2025
- Appendix: Due April 25, 2025
- Appellees’ Brief: Due May 9, 2025
- Appellants’ Reply Brief: Due May 13, 2025
- Oral Arguments: May 16, 2025
We will continue to monitor and report on further developments in this case.
