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Legal Malarkey from the White House about the CFPB Putsch

posted by Adam Levitin

We now have a CFPB succession crisis with a Director and a Pretender. The White House did a press briefing this morning to put out its case for why Mick Mulvaney is the rightful acting Director of the CFPB. I expected that the White House would argue that the Federal Vacancies Reform Act controls the succession, not the Consumer Financial Protection Act.  Curiously, the White House made a different argument.  The White House's argument is not that the Consumer Financial Protection Act does not provide a succession mechanism. The White House appears to acknowledge that it does.  Instead, the White House contends that the Federal Vacancies Reform Act stands as an alternative to the CFPA, and the choice between which mechanism to use is the President's. This argument appears underresearched and just not well-thought through.  The White House's position fails textually, on the legislative history, and as a matter of logic. 

1.  Text.  Let's start with the text. Section 3347 of the FVRA says that it is:

(a)...the exclusive means for temporarily authorizing an acting official to perform the functions and duties of any office of an Executive agency ... for which appointment is required to be made by the President, by and with the advice and consent of the Senate, unless—

(1) a statutory provision expressly—
(A) authorizes the President, a court, or the head of an Executive department, to designate an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity; 
(B) designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity; or
(2) the President makes an appointment to fill a vacancy in such office during the recess of the Senate pursuant to clause 3 of section 2 of article II of the United States Constitution
As an initial matter, there's the question of what "exclusive" means.  Does it mean that if an exception applies the FVRA is an alternative or does it mean that if an exception applies the FVRA gives way? The legislative history sheds some light on this, as we'll see, but for now suffice it to say that there are problems with the reading of the FVRA as generally being an alternative. 
More importantly, however, even if the FVRA were to stand as an alternative, what says that it is the President's choice? That assumption is not consistent with section 3347(1)(A), which contemplates statutes that authorize either "a court, or the head of an Executive department, to designate an officer or employee" to serve as the acting official temporarily. Such a delegation of authority to a court or a head of an Executive department would be meaningless if the President had the ability to override it by invoking the FVRA as an alternative. Thus, it's hard to see how the FVRA could be an alternative method of succession that is always available to the President. 
2.  Legislative History.  The White House was borderline dishonest in its press briefing this morning.  For starters, the White House called this a "typically routine move".  It's not. It's a naked usurpation of power by the Executive. Routine operating procedure would be (1) to have the Deputy become the acting Director, whether under the CFPA or the FVRA (where it is the default setting), (2) not to act without having first gotten an opinion from the Office of Legal Counsel, and (3) not violating the separation of powers by appointing a cabinet member who is removable at will, to simultaneously head an independent agency whose head is removable only for cause. Whatever this is, it's not routine. 

But let's get into the real problem here.  A representative from the White House Counsel's Office stated at a press briefing this morning that:
the Vacancies Reform Act is available, even when an agency’s governing statute provides an alternate default regarding who should serve as the acting. In the VA legislative history, at the time it was enacted, the Senate said there are 40 agencies where the agency statute says X person shall become the acting, or may become the acting. And in all of those cases, that route continues to be available as a sort of default. But the Vacancies Act is there as a way the president can supersede the way those agency statutes work. The 9th circuit has sort of agreed with that approach in a case last year about the NLRB.
The problem with this argument is that it relies on an expressly inapplicable part of the legislative history of the FVRA.  The Senate Report on the FVRA explains that:
[Section 3347] does allow temporary appointments to be made other than through the Vacancies Reform Act in three narrowly delineated exceptions. First, where Congress provides that a statutory provision expressly provides that it supersedes the Vacancies Reform Act, the other statute will govern. But statutes enacted in the future purporting to or argued to be construed to govern the temporary filling of offices covered by this statute are not to be effective unless they expressly provide that they are superseding the Vacancies Reform Act.
Second, the bill retains existing statutes that are in effect on the date of enactment of the Vacancies Act of 1998 that expressly authorize the President, or the head of an executive department to designate an officer to perform the functions and duties of a specified office temporarily in an acting capacity, as well as statutes that expressly provide for the temporary performance of the functions and duties of an office by a particular officer or employee. (This includes statutes that provide for an automatic designation, unless the President designates another official). The Committee is aware of the existence of statutes specifically governing a vacancy in 41 specific offices, 40 of which would be retained by this bill...
The 40 agencies, and the 9th Circuit case cited by the White House Counsel's office all fall into the second exception, which deals with existing agencies.  (I'll note that nothing in the statutory language makes clear that this exception even exists...)  The CFPB, however, falls into the first exception, for post-FVRA statutes. This is something a first semester 1L would catch, so it's really not a good faith argument for the White House Counsel's office to make. 
The FVRA could not possibly bind future Congresses from passing exceptions, so it's pretty obvious that the first exception holds, and all that exception requires is that there be a statutory provision that expressly supersedes the FVRA. That is exactly what we have the CFPA, and by making the claim that the FVRA is an alternative option, the White House has conceded that the CFPA is a statute that expressly superseded the FVRA. The only issue is whether the FVRA stands as an alternative. The FVRA's legislative history makes clear that it does not, and, as noted above, the structure of the FVRA makes no sense if it is an alternative. 
3.  Logic.  Legislative history of the FVRA aside, it's important that CFPA was passed after the FVRA.  As the CFPA's legislative history shows, Congress considered having FVRA apply to the CFPB and rejected it.  I don’t think it’s possible to read that rejection as a decision to have alternative succession mechanisms among which the President can choose.  Remember that the FVRA has itself three alternative succession mechanisms:  (1) the deputy director, (2) another Senate-confirmed individual, (3) an agency employee at the GS-15 pay scale or higher.  The default setting under the FVRA is that the the Deputy Director becomes Acting Director.  It would make no sense for Congress to have said when passing the CFPA that "The FVRA does not apply, but instead the President gets a choice between the FVRA and a provision that mirrors one of the three FVRA prongs."  In other words, for the White House's argument to hold, Congress would have had to have said, “Not a choice of <1, 2, or 3>, but instead a choice of  <1, 2 or 3> and <1 again>.”  That choice adds nothing as option <1> is already on the menu, so that couldn’t have been what Congress was doing.  
The White House is attempting an internal putsch of the CFPB. This is going to end up in court, and the White House's legal arguments are looking pretty threadbare. 


In summary, Congress does a lousy job writing legislation.

If the Consumer Financial Protection Act had used the same wording as the FVRA ("dies, resigns, or is otherwise unable to perform the functions and duties of the office") or had said "absence, unavailability, or resignation" then this would be clearer. "Absence or unavailability" alone is just ambiguous enough to allow arguments either way.

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