On Friday, April 11, a panel of the D.C. Circuit Court of Appeals modified Judge Jackson’s preliminary injunction order of March 28 pending appeal, as follows:
- Provision two (which required blanket reinstatement of probationary and term employees that were fired by the CFPB) stayed insofar as it requires the CFPB to reinstate employees whom defendants have determined, after an individualized assessment, to be unnecessary to the performance of defendants’ statutory duties.
- Provision three (which mandated that the CFPB 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 to any CFPB employee) stayed insofar as it prohibits the CFPB from terminating or issuing a notice of reduction in force to employees whom the CFPB has determined, after a particularized assessment, to be unnecessary to the performance of its statutory duties.
- Provision four (which mandated that the CFPB not enforce the February 10, 2025 stop-work order or require employees to take administrative leave in furtherance of that order, and not reinstitute or seek to achieve the outcome of a work stoppage) was allowed to stay in effect with the understanding that it allows work stoppages that the CFPB has determined, after a particularized assessment, would not interfere with the performance of its statutory duties.
- Provision eight (which required that the CFPB report to the court by April 4 confirming compliance and that all appropriate individuals and entities have received notice of the order) was stayed, something which Judge Jackson already agreed to.
- All other provisions of the preliminary injunction were allowed to remain in full effect pending further order of the court.
The Court of Appeals did not define in the order or at oral argument on April 9 what it means by the term “particularized assessment.” Because of the lack of clarity in its meaning and the likelihood that the Court of Appeals will decide the appeal of Judge Jackson’s preliminary injunction order by the end of May or early June, the CFPB would be wise to follow Judge Jackson’s order before it was modified or to seek approval from the Court before refusing to reinstate probationary or term employees or effectuating any reduction-in-force.
The Court of Appeals, in its order, also set the following accelerated briefing schedule:
CFPB’s brief due April 25
Plaintiffs’ opposition brief due May 9
CFPB’s reply brief due May 13
Oral argument has been scheduled for May 16 at 2:00 pm, ET.
Apparently because the Trump Administration’s attempts to shut down the CFPB have so far been thwarted by the Courts, Professor Hal Scott, has written another op-ed which was published in this week's Wall St Journal in which he once again urges the CFPB to switch course and take the position that its funding has been unlawful since September 2022 and it must cease operations. He recommends the following action: “Since the bureau is operating illegally, the president can halt its work immediately by executive order. The order should declare that all work at the CFPB will stop, that all rules enacted since funding became illegal in September 2022 are void, and that no new rules will be enforced.” Such an Executive Order will undoubtedly be challenged in court and the outcome is uncertain. Opponents will obviously question why this action was not taken long ago.
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