D.C. Circuit Vacates Preliminary Injunction on Downsizing CFPB

The D.C. Circuit Court recently vacated a preliminary injunction that restricted CFPB actions, including terminating employees and cancelling contracts, due to a lack of jurisdiction on the employment claims and no viable cause of action found on the other claims.  The preliminary injunction had been granted by the district court after a two-day evidentiary hearing.

The plaintiffs included the National Treasury Employees Union and the CFPB Employee Association, which alleged injuries due to members’ employment loss or future termination.  Other plaintiff organizations included the NAACP, the National Consumer Law Center, and the Virginia Poverty Law Center, which claimed harm from loss of CFPB services.  The plaintiffs argued that actions were taken to eliminate the CFPB, and that those actions “usurped legislative authority conferred upon Congress by the Constitution.”  The plaintiffs also argued that actions taken to stop CFPB work were final, reviewable agency actions under the Administrative Procedure Act. 

The Court found that the district court lacked jurisdiction on the employment-related claims because, under the Civil Service Reform Act, employment-related claims must go through administrative review before being brought in federal court.  And it found that there was no viable cause of action on the plaintiffs’ other claims because the CFPB’s actions were neither final and reviewable under the Administrative Procedure Act nor unconstitutional actions reviewable under equity.

The Court remanded the case, but withheld the mandate until after any decision on a timely rehearing petition.

WBK previously covered a lower court order in this case here.