Another Thursday, another decision hand-down day for the U.S. Supreme Court. Three more opinions were issued by the court today — by my count, that leaves 38 to go, so we have a long road ahead. Two of the three decisions were unanimous and are fairly short — both involve rather dry procedural questions.
Then there's the 7-2 CFPB decision, which, frankly, is disappointing in terms of the outcome, though this may be one of those: Congress broke it, so Congress needs to fix it deals. The split is also a bit surprising: Justice Clarence Thomas wrote the decision in which six of his fellow justices joined. The dissent was authored by Justice Samuel Alito and joined by Justice Neil Gorsuch. Joe Cunningham has a full write-up of that decision.
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The Consumer Financial Protection Bureau Lives Another Day, SCOTUS Rules
May 16, 2024 Decisions
Consumer Financial Protection Bureau v. Community Financial Services of America, Ltd.
Date: May 16, 2024
Author: Thomas
Split: 7-2
Dissent: Alito, Gorsuch
Appeal From: Fifth Circuit
Basic Facts:
The Constitution gives Congress control over the public fisc subject to the command that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Art. I, §9, cl. 7. For most federal agencies, Congress provides funding through annual appropriations. For the Consumer Financial Protection Bureau, however, Congress provided a standing source of funding outside the ordinary annual appropriations process. Specifically, Congress authorized the Bureau to draw from the Federal Reserve System an amount that its Director deems “reasonably necessary to carry out” the Bureau’s duties, subject only to an inflation-adjusted cap. 12 U. S. C. §§5497(a)(1), (2). In this case, several trade associations representing payday lenders and credit-access businesses challenged regulations issued by the Bureau pertaining to high-interest consumer loans on statutory and constitutional grounds. As relevant here, the Fifth Circuit accepted the associations’ argument that the Bureau’s funding mechanism violates the Appropriations Clause.
Whether the court of appeals erred in holding that the statute providing funding to the Consumer Financial Protection Bureau (CFPB), 12 U.S.C. 5497, violates the Appropriations Clause, U.S. Const. Art. I,§ 9, Cl. 7, and in vacating a regulation promulgated at a time when the CFPB was receiving such funding.
Holding: Reversed and remanded.
Congress’ statutory authorization allowing the Bureau to draw money from the earnings of the Federal Reserve System to carry out the Bureau’s duties satisfies the Appropriations Clause.
Skinny:
Even though the CFPB is funded in a different manner than most federal agencies, the way they're doing it is okay enough — if Congress wants to bring it more in line with the way they handle appropriations for other agencies, that's up to them to do.
Date: May 16, 2024
Author: Sotomayor
Split: 9-0
Dissent: N/A
Appeal From: Ninth Circuit
Basic Facts:
The Federal Arbitration Act (FAA) sets forth procedures for enforcing arbitration agreements in federal court. Section 3 of the FAA, entitled “Stay of proceedings where issue therein referable to arbitration,” provides that when a dispute is subject to arbitration, the court “shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.” 9 U. S. C. §3. In this case, petitioners filed suit against respondents in state court alleging violations of federal and state employment laws. Respondents then removed to federal court and filed a motion to compel arbitration and dismiss the suit. Petitioners agreed their claims were arbitrable, but contended that §3 of the FAA required the District Court to stay the action pending arbitration rather than dismissing it entirely. The District Court issued an order compelling arbitration and dismissed the case without prejudice. The Ninth Circuit affirmed.
Whether Section 3 of the FAA requires district courts to stay a lawsuit pending arbitration, or whether district courts have discretion to dismiss when all claims are subject to arbitration.
Holding: Reversed and remanded.
When a district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court proceeding pending arbitration, §3 compels the court to issue a stay, and the court lacks discretion to dismiss the suit.
...
The FAA’s structure and purpose confirm that a stay is required. Section 16(a)(1)(C) of the FAA authorizes an immediate interlocutory appeal of the denial of an arbitration request. By contrast, Congress made clear in §16(b) that, outside of a narrow exception not applicable here, an order compelling arbitration is not immediately appealable.mIf a district court could dismiss a suit subject to arbitration even when a party requests a stay, that dismissal would trigger the right to an immediate appeal where Congress sought to forbid such an appeal. Finally, staying rather than dismissing a suit comports with the supervisory role that the FAA envisions for the courts. Keeping the suit on the court’s docket makes good sense in light of the FAA’s mechanisms for courts with proper jurisdiction to assist parties in arbitration.
Skinny:
The statute says what it says: If a party requests a stay pending arbitration, the court must issue one. That's consistent with Congress' intent and makes good sense to keep the courts involved from a supervisory standpoint.
Harrow v. Department of Defense
Date: May 16, 2024
Author: Kagan
Split: 9-0
Dissent: N/A
Appeal From: Federal Circuit
Basic Facts:
When the Department of Defense furloughed petitioner Stuart Harrow for six days, he challenged that decision before the Merit Systems Protection Board. After a five-year delay, the Board ruled against him. Harrow had the right to appeal that decision to the Court of Appeals for the Federal Circuit, provided he did so “within 60 days” of the Board’s final order. 5 U. S. C. §7703(b)(1). But Harrow did not learn about the Board’s decision until the 60-day period to appeal had run, and filed his appeal late. Given the circumstances, Harrow asked the Federal Circuit to overlook his untimeliness and equitably toll the filing deadline. But the Circuit, believing that the deadline was an unalterable “jurisdictional requirement,” denied his request.
Whether the 60-day deadline in Section 7703(b)(1)(A) is jurisdictional.
Holding: Vacated and remanded.
Section 7703(b)(1)’s 60-day filing deadline is not jurisdictional. Although the procedural rules that govern the litigation process are often phrased in mandatory terms, they are generally subject to exceptions like waiver, forfeiture, and equitable tolling. But when Congress enacts a “jurisdictional” requirement, it “mark[s] the bounds” of a court’s power, and a litigant’s failure to follow the rule “deprives a court of all authority to hear a case,” with no exceptions. Boechler v. Commissioner, 596 U. S. 199, 203. Mindful of those repercussions, the Court will “treat a procedural requirement as jurisdictional only if Congress ‘clearly states’ that it is.” Ibid. Under that approach, “most time bars are nonjurisdictional,” even when “framed in mandatory” and “emphatic” terms. United States v. Kwai Fun Wong, 575 U. S. 402, 410–411.
Skinny:
Unless Congress clearly states a filing deadline is jurisdictional, the court will recognize certain exceptions, such as in this case, where the petitioner didn't learn of the ruling until after the 60-day filing deadline had expired. (Note: The missed deadline was due in part to the lengthy delay in the Board issuing its decision.)
READ MORE:
Skinny on SCOTUS - 5/9/24 Edition - Forfeiture and Copyright
The Skinny on SCOTUS (2023 Term - December-February)
The Skinny on SCOTUS (2023 Term - March)
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