On October 11, the U.S. Court of Appeals for the D.C. Circuit cited Joshua D. Wright’s Volume 121 Essay[1] in an important separation of powers case, PHH Corp. v. CFPB.[2] In a split decision, the panel held that the structure of the Consumer Financial Protection Bureau (CFPB), as established by the Dodd-Frank Act of 2010,[3] violated Article II.[4] Writing for the court, Judge Brett Kavanaugh reasoned that the Act improperly broke with historical practice by constituting, for the first time in history, an independent agency under a single Director, only removable for cause,According to Judge Kavanaugh, this structure made the CFPB Director the most powerful person in the United States government, aside from the President.[5]

In 2014, the Consumer Financial Protection Bureau fined PHH, a mortgage company, for violating Section 8 of the Real Estate Settlement Procedures Act[6] by referring its borrowers to mortgage insurers who obtained reinsurance from a PHH subsidiary.[7] Reversing prior Department of Housing and Urban Development interpretations of Section 8, the Bureau applied its own interpretation retroactively and ordered PHH to pay $109 million in disgorgement.[8] In response, PHH brought a constitutional claim against the CFPB.[9]

In his Essay, The Antitrust/Consumer Protection Paradox: Two Policies at War with Each Other, Wright identifies “a significant likelihood that the [CFPB]’s policy goals will be subject to the whim and idiosyncratic views of a single individual.”[10] Judge Kavanaugh cited this language to distinguish the multi-member bodies that have traditionally led independent agencies from CFPB’s single-director structure.[11] To remedy this constitutional defect, the court struck down Dodd-Frank’s for cause provision, thus making the CFPB Director removable at-will by the President.[12]