RD Legal Funding, LLC, et al. v. Consumer Financial Protection Bureau, et al.

Respondent Consumer Financial Protection Bureau brought an enforcement action against Petitioners RD Legal Funding Partners, LP, et al., while, as Seila Law LLC v. CFPB, 140 S. Ct. 2183, 2192, 2202 (2020) held, the CFPB’s “structure” “violate[d] the separation of powers.” Before Seila Law was decided, the district court here also found the CFPB’s structure unconstitutional, and the CFPB appealed. While this case was on appeal and after Seila Law was decided, the CFPB submitted a declaration purporting to ratify both its bringing of the initial enforcement action and its appeal. Although ratification requires that the ratifying party be able to do the act ratified when it was done and when the ratification was made, the CFPB could not act while unconstitutionally structured, and the purported ratification here came years after the time for either bringing an action or filing an appeal had run. Despite the CFPB’s failure to meet those two fundamental requirements, and the Second Circuit’s obligation to determine its own jurisdiction, the appellate court presumed it could act, determining some (but not all) issues on the merits, and remanding to the district court to consider the purely legal issues of ratification. The questions presented are:

1. Whether ratification is an appropriate remedy for the separation-of-powers violation identified in Seila Law.

2. Whether, after Seila Law found the CFPB’s structure unconstitutional, the CFPB could ratify an enforcement action and subsequent appeal long after the time for doing either had run.