Transcripts For CSPAN PHH Corporation V. Consumer Financial

CSPAN PHH Corporation V. Consumer Financial Protection Bureau June 19, 2017

May it please the court. The issue before the court today was considered and decided by our founders on three separate occasions in 1787, 1788, 1789. By a vote of seven still at states against three at the Constitutional Convention is a key part of the ratification the very next year and with the very First Congress on each occasion the founders coated for a single individual rather than a plurality of the presidency of the structure best calculated to ensure a strong and vigorous and accountable executive. The president alone shall take care of the law shall be executed. That obligation according to James Madison in the supreme and the Supreme Court just seven years ago with Free Enterprise fund empowers the president to keep them accountable to hold the power to remove them from office. Didnt that change with humphreys executor . That case that i just quoted is Free Enterprise fund. That was many years later than humphreys executor but the Free Enterprise fund made it clear that there have been exceptions that the court has determined not to revisit with the Free Enterprise fund but there has been exceptions under narrow circumstances but that experiment by congress to take power away from the president are limited to those exceptions. What are the powers of the presidency that are uniquely diminished . Worse . This any humphries executor to examine the agency that was described by the Supreme Court in the case to have limited jurisdiction with quasi legislation and it did not have the powers of the fcc to enforce the law. That was later described as executive power. There was executive power and little distinction between the power exercised by the ftc humphreys executor they are both executives. Examining the ftc in 1935 with limited powers subsequent. It was the inferior officer it with the Free Enterprise fund says we are going to limit intrusions by the legislature on the principle exclusive power of the president to be accountable faithfully to execute the laws. But im asking how was this different to diminish the power of the president . This agency goes further than Anything Congress has ever attempted to do in history. How is the president s power with the same removal . Recognized itself was going further than it ever thought before. In limiting the president s power . Ways. The following the removal power is limited first is a Single Person. And some of which would be appointed. That would seem to me to strengthen the residence power, the president s power if you only have to get rid of one person. But with that debate 1787 focuses when you concentrate power on one individual you have a concentration of power. Humphreys executor recognized and this gore recognized in the Panel Decision if you disbursed the power among five individuals the director of this bureau in the home office yet cannot be replaced by the president without the Senate Congressional authority. That is different than all of the other in agencies and how they operate. They all have multiple members with staggered terms as well as the president s ability to with ability to designate a chair and most of those independent agencies. So the ftc, sec all within the inauguration and that fcc. That is absolute right. It is important here in answer to your question to put this agency in context, the power to appoint every Single Person from the agency without the Senate Involvement that the director Senate Involvement is invested in the director. The director has restricted by statute from even communicating. I dont think it is answering my question. How does that further diminish the president s removal power . All of the statutes one of them takes the power of the president what the director says to interpreting statutes and with respect to looking at regulations and with that exclusive power to decide what to prosecute. I thought it had to do with the number of directors that there is a constitutional flaw because we only have one director. But with respect to that is not it at all the context that was stated by congress with respect to this agency. It gave this director, one individual, but that is not the only thing. This individual is given by a series of statutes were given by congress to make this Agency Completely independent and completely unaccountable so the unaccountable to the president. That doesnt make sense to me. As the chief justice said it diffuses accountability. And it is not as though there is having one person is more accountable and having three or five. Secondly it is not as though there is no accountability even for appropriations. The director has to go every year before a Different Committee and testify and justify the expenditures that are done. I dont understand the argument youre making about the budget source has to do with diminishing the president s power. It is the accumulation of power. This agency does not. But most agencies do not have annually appropriated budget. Is that correct you go is that correct . Executive agencies. Banking regulatory agencies have annual appropriations . Or self funding mechanism . Each of them are different. Some of them do not have to go because there is a separate way so each one is different. These are more accountable than the executive board. How was this director accountable to anyone . If the president wishes to say so, anything this bureau does dont look at me. That that is an attack on all independent agencies that means we cannot do. That is a serious problem cannot do. That that is a serious problem. We cannot do that i know you have preserved your arguments from another court but we cannot do that. But isnt the fact the president can replace the frequency will get to replace this person had only a fiveyear term . Or cause could be found the individual could be removed so that is no different so where is humphreys executor with these multimember ones . Many of them specified so many from each party so it is an intrusion of president ial power to say it is a rotating membership but you have to appoint somebody from the opposite party but that isnt happening here. The president has more authority. Actually this term ends next year with respect to this director but unless the senate decides to approve the president ial appointment, this director could serve another 10 or 15 years. The Panel Decision in this case talked about various ways the body such as the ftc or the others have to diffuse because they have to talk to one another in their individual staggered so the president has input over a period of time with respect to selecting the chairman and the responsibility for individuals to talk to one another before making decisions. I understand the principle that restricting the president removal power is a very serious rusion on article to article two power. We would make that but the court point cannot change humphreys executor but we wish that it could. Changelso cannot morrison versus olson. But you say it is different you say it is different because of the independent counsel possible authority was limited, right . It was a limited scope of jurisdiction. Itself andcourt knowledge eyes the independent counsel. The Administrative Agency that have Civil Enforcement power just like this one just like the ftc. So what could be more powerful to indict the highest officials . That is correct and is the jurisdiction it is much more and is the jurisdiction. It is much more powerful in terms of the ability to impair the power of the president the the power of the president which is the critical question. The independent counsel was much more threatened and this zero. Threatened than this bureau. Judge tatel, we simply object to restricting of a president s power faithfully to execute the laws and the independent counsel statute from the cftc but what they said with a Free Enterprise fund whenever those limitations were, they are not before us because they have not asked us. Were the Appeals Court and bound by Supreme Court precedent. And i have not seen an argument in your brief, even if i did agree with you that there is a serious risk for the removal provisions. Even if i agreed with you i dont see how as a judge on the Appeals Court bound by morrison and humphries i can go there. I dont see where this court to gets that. I understand the point and i understand the restriction were faced with, because this is the intermediate Appellate Court so what it comes down to is unless you say this decision is dictated by humphreys executor in the morrison case, everything this director is given all love ir is subsumed havent heard from you yet an argument for how i can conclude that we are not bound by that. The other thing i see is the independent counsel was limited and tenured. Officeras an inferior of the United States and the limited tenure with respect to one investigation. But the question is what is the effect to what extent does it in power compare the power of the president . It doesnt make any difference how long the tenure is but the independent counsel had to indict and prosecute those ties officials of government i cannot imagine anything to more significantly impair than that. I submit to you the invitation of the narrow limitation with respect to the powers of that. I understand the power to indict is serious that the cfpb does that have but to impose for violation and that is a serious problem goes letter given to you cfpb. You keep saying it is serious for the question isnt how is, it is how seriously it limits the president s power. That is the question. I will put it this way because i think you have to look at the broad powers given to this agency to decide if theyre only within the scope of humphreys executor. The Supreme Court was very serious seven years ago when it said we will not go any further or any further experimentation has to be looked at carefully in the context of history and this agency has more power. We looked at three things. We hear are analyzing, i think, the contour is of the of contours of humphries. The Free Enterprise fund says look at history, what are the historical roots . Look at the effect on individuals that are regulated and look at the effect on president ial power. In other words, is there a further diminishment of president ial power by humphries executor . Free Enterprise Funds said, yes, maybe arithmetic from humphries executor alone and from that further diminishment. It seems we have to compare it to how multimember agencies operate. President ial control, they turn over quickly with the new president. The president gets to designate the new chair. We have seen that with the multiple members being staggered terms. This does not turn over quickly so does that matter . Thank you for answering my question. [laughter] i am trying. It does answer the question as far as it goes, but the statute went further than that. It limits the president s ability to control or have communications with congress and took away power with respect to the budget and the process of appropriation and power from the president to have anything to do. Be more specific look at the i am looking at something more specific. If you look at the ftc today, that is not going on with the sec or the sec or nlrb. Why . The way congress has structured these independent agencies. All the studies and academics have shown, there is quick turnover at a new administration. This will not after this appointment will be the third year of the next president and that the fourth year of that president if they win on a platform of Consumer Protection has to live with President Trumps appointee. Point. Is precisely the does that matter with the agency that we dont control you it does matter dont control . It doesnt matter. Here and now that restriction and diminishment of the president s power and in the future for those points are absolutely correct. So staggered terms are constitutionally required . With the court i think is saying in the Free Enterprise what the court is i think saying is in the Free Enterprise fund but not to be narrowly constrained. But it seems like it has to be in a way that matters with the diminishment of president ial power. I am not quite sure ive understand the situation to remove 100 of officers. He cant remove. Some president s can. Chance that i dont do math. But my question is if you have a fairly robust authority to remove the one person that everybody gets to do that but some are. If you compare that to raise situation of multiple members and a greater likelihood each president can remove one but perhaps a lesser likelihood each president can remove a majority, and then that is a wash everything is else is weld constant been the only difference is to remove one person and that is everybody and that may or may not be a majority. Is there really a difference . I believe what the Supreme Court said in a Free Enterprise fund is that the baseline was decided in 1787, 1788 and 1789 is at the baseline congress has decided to restrict the power. Decided to restrict the power and created an individual that a president can appoint. So the reserve board goes down because those are 14 year terms so no president has the authority to appoint the majority to have policy preferences. But the chairman does not. I understand that but you dont have president ial control. There is a pattern in the financial regulatory agencies of wanting to have some amount of separation. As i take it, it is consistent with the constitution and executive authorities that the laws be faithfully executed to have those people removable for inefficiency, malfeasance and office, neglect of duty but not because themovable president disagrees with the policy matter. You cannot avoid the financial cronyism that you say is out of bounds . It is. We elected a unitary president i looked at the debates between of 1977. It was debated than in the vote was seven to three, because execution of the law is not just enforcement of laws for indictment is policy decisions with how they are enforced. It is july 2018. The president has the ability to replace the director of the bureau with anyone he wants. Yes, there is a senate confirmation. Lets imagine a democratic seat opens up on the ftc commission and the president gets to fill that one, but by statute, has to appoint someone that is from the democratic party. So my question to you so what is the greater intrusion . The replacement of someone of your choice for the bureau . Or forcing a president to appoint someone of another party for the commission . In the first place, on that date you referred to, the president may or may not be able to appoint a new director. If he does not lead, if the senate does not get permission to the person that is the same for the Federal Reserve board and a number of other agencies. What i do want to get back to my question which is put all this desperate all that aside. Put all that aside. When the president exercised his power of the people which is the greater intrusion . If you take the decisions that were made and reaffirmed seven years ago by the United States Supreme Court, yes, the power of appointment is extremely important for the court goes on to say. A power to remove is the same for the ftc commissioners and the director of the bureau the of the bureau. You are not answering my question. Would you agree the president has more of that power to replace the director than replacing a member of the commission . A particular president at a particular point in time with the right circumstances may have more power with respect to the individual but the next president may not so that power may not be there. I would like to reserve the remainder of my time for rebuttal. I have one quick question. So to return to my perspective, this debate about the difference of multi member agencies is fascinating. But i dont understand how Orson Morrison not only up held but said it exercises power powers analogous to the s to the ftc, so you need to go back to the Supreme Court and say take a more careful look how these agencies are very different but from where we sit, i dont see how this can go beyond what the court has now said. If you feel or you conclude this goes no further than humphreys executor and humphries versus morrison the next up is the Supreme Court. But i submit this agency with its collective powers, one individual to appoint everybody can hire and fire nowhere else in the federal government is very limited places. Answer it this way. If the powers and given to the epa and the treasury in the antitrust agencies are all vested in one individual then why not . If it can be done with his name can be done with other people then what is left . Are like to reserve the balance of my time. If it may please the court judge griffith that the function of executive in nature is a critical observation because it tells us the rationale of humphries executor cannot be based on function of the ftc. Lusby based on Something Else and we submit that is the structural features of the ftc because what the court was concerned about what is the multi remember bodies. And never framed the analysis in those terms but they never made these arguments of the multi member. Panel think that is fair from the entire opinion if you read it not just the section that discusses the analysis but why congress made it the way it was they did emphasize it was a multi member bo

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