The Constitutionality of Independent Agencies: The CFPB Thursday, August 25, 02:00 PMFederalist Society Teleforum Conference Call
In April, the mortgage lender PHH Corporation challenged the constitutionality of the Consumer Financial Protection Bureau (CFPB) after being ordered by the CFPB to disgorge $109 million. PHH challenged the bureau’s legitimacy under Article II, and cited Free Enterprise Fund v. Public Company Accounting Oversight Board as relevant precedent, because PCA officers could be removed for cause, and then, only by officers of the SEC. Meanwhile, the CFPB cited Humphrey’s Executor v. United States, in which the Supreme Court upheld the constitutionality of the Federal Trade Commission Act, which allowed the president to remove an FTC commissioner only for cause. Here to discuss the CFPB and the constitutionality of other independent agencies like it are Professor Peter Conti-Brown of The Wharton School and Gregory Jacob, partner at O'Melveny & Myers LLP.
Litigation Practice Group Podcast
- Peter Conti-Brown, Assistant Professor of Legal Studies and Business Ethics, The Wharton School
- Gregory F. Jacob, Gregory F. Jacob Partner, O'Melveny & Myers LLP
The Federal Arbitration Act (FAA), passed in 1925, generally requires courts to look favorably upon all arbitration agreements. In 2011, the Supreme Court upheld an arbitration agreement in a contract for mobile phone services that contained a class action ban. The court ruled that a state law that prevented the class action ban from being enforced was “an obstacle to the accomplishment of the FAA’s objectives.”
However, Congress passed the Dodd-Frank Act in 2010, which authorizes the Consumer Financial Protection Bureau (CFPB) to study arbitration agreements in consumer contracts and limit or prohibit them if doing so would be in the public interest and for the protection of consumers. In May 2016, the CFPB issued a proposed rule that would ban arbitration agreements that acted to prevent class action lawsuits and would further establish certain reporting requirements for other arbitrations that are filed between consumers and providers.
Our experts discussed this proposed rule, including the history that led us to this point and the potential impact it will have if it is finalized.
Litigation Practice Group Teleforum
- Prof. Jason Johnston, Henry L. and Grace Doherty Charitable Foundation Professor of Law, University of Virginia School of Law
- Thaddeus King, Officer, Consumer Banking,The Pew Charitable Trusts
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 instructs the Consumer Financial Protection Bureau to study “the use of agreements providing for arbitration of any future dispute . . . in connection with the offering or providing of consumer financial products or services,” and to provide a report to Congress on the same topic. This past March, the CFPB issued its study, pursuant to the statutory requirement. Is the “arbitration study” an anti-arbitration study? Our experts discussed the report and its implications.
Short video featuring Greg Dolin
- Mr. Deepak Gupta, Founding Principal, Gupta Wessler PLLC
- Mr. Andrew J. Pincus, Partner, Mayer Brown LLP
Gregory Dolin May 12, 2015
Professor Greg Dolin of the University of Baltimore School of Law discusses the dispute in Kimble v. Marvel, a case argued before the Supreme Court in March. Petitioner Kimble invented and patented a toy. Respondent Marvel contractually agreed to pay royalties on that patent that included a period of time after the expiration of the patent. The Court is being asked to overrule a precedent dating back to 1964 which held such agreements to be unlawful per se.
As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. Litigation Practice Group Podcast
Are shareholder lawsuits, filed in opposition to proposed corporate mergers or asset acquisitions, on the rise and, even if so, does that indicate a problem? Does the fact that most such lawsuits are quickly settled indicate they have underlying merit? Who are the winners and losers in such lawsuits, and are the interest of shareholders generally served by such lawsuits? How are attorney’s fees calculated? Assuming something is amiss, is there a remedy? Is the opportunity for intervention by an objector useful?
- Prof. Jonathan R. Macey, Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law, Yale Law School
- Hon. Gerald Walpin, former Inspector General, Corporation for National and Community Service, former Chief of Prosecutions, Office of the United States Attorney, Southern District of New York