Consumer Fin. Prot. Bureau v. Gordon, No. 13-56484 (9th Cir. 2016)
Annotate this CaseChance Gordon, a licensed California attorney, appealed the district court's order of summary judgment for the CFPB on its enforcement action for violations of the Consumer Financial Protection Act, 12 U.S.C. 5531, 5536, and Regulation O, 12 C.F.R. 1015.1-11. On January 4, 2012, President Obama, relying on his recess-appointment power, named Richard Cordray as the CFPB’s initial Director. President Obama renominated Cordray as Director on January 24, 2013. The parties agree that while Cordray’s initial January 2012 recess appointment was invalid, his July 2013 confirmation was valid. The court concluded that, while the failure to have a properly confirmed director may raise Article II Appointments Clause issues, it does not implicate the court's Article III jurisdiction to hear this case. That its director was improperly appointed does not alter the Executive Branch’s interest or power in having federal law enforced. The subsequent valid appointment, coupled with Cordray’s August 30, 2013 ratification, cures any initial Article II deficiencies. Because the CFPB had the authority to bring the action at the time Gordon was charged, Cordray’s August 2013 ratification, done after he was properly appointed as Director, resolves any Appointments Clause deficiencies. On the merits, the court concluded that CFPB is entitled to summary judgment on all counts because there is no dispute as to material fact regarding Gordon's liability. Because the district court conscientiously tailored the injunction at issue, it did not abuse its discretion in granting equitable judgment. However, because the district court may have impermissibly entered a monetary judgment against Gordon for a time period prior to the enactment or effective date of the relevant provisions of the CFPA and Regulation O, the court vacated and remanded for further consideration.
Court Description: Standing / Appointments / Consumer Financial. Protection Bureau The panel affirmed in part, and vacated in part, the district court’s summary judgment in favor of the Consumer Financial Protection Bureau in its civil enforcement action for violations of the Consumer Financial Protection Act (“CFPA”) and Regulation O against Chance Gordon. On January 4, 2012, President Obama, relying on his recess-appointment power, named Richard Cordray as the Bureau’s initial Director; and he renominated Cordray as Director on January 24, 2013, and the Senate confirmed him on July 16, 2013. The Bureau filed this action against Gordon in July 2012. The panel held that Cordray’s improper recess reappointment, pursuant to NLRB v. Noel Canning, 134 S. Ct. CONSUMER FIN. PROT. BUREAU V. GORDON 3 2550, 2556–57 (2014), did not divest this court of jurisdiction because the Bureau, as an agency of the Executive Branch, had an interest or power in having federal law enforced, and there was Article III standing. The panel also held that the initial invalid recess appointment of Cordray was not fatal to the case, because the subsequent valid appointment, coupled with Cordray’s Senate confirmation, cured any Article II Appointments Clause deficiencies. The panel held that Gordon failed to demonstrate that there was any dispute of material fact as to his liability under the CFPA or Regulation O, and therefore, the district court properly granted summary judgment in favor of the Bureau. The panel also held that because the district court conscientiously tailored the injunction at issue, it did not abuse its discretion in granting equitable judgment to the Bureau. The panel further held, however, that because the district court may have impermissibly entered a monetary judgment against Gordon for a time period prior to the enactment or effective date of the relative provisions of the CFPA and Regulation O, the case was remanded for further consideration of the monetary judgment. Judge Ikuta dissented. She would hold that the Bureau lacked executive power to bring the civil enforcement action because Richard Cordray was not properly appointed at the time the action was filed, and therefore there was no Article III standing, and the district court was bound to dismiss the action. 4 CONSUMER FIN. PROT. BUREAU V. GORDON
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