Federal Appeals Court Hears Oral Arguments in ACA Lawsuit against the FCC

In a hearing that just concluded this afternoon in Washington DC, a three-judge panel of the District of Columbia Circuit of the Federal Court of Appeals, composed of Judges Sri Srinivasan, Nina Pillard, and Senior Circuit Judge and Chief Judge Emeritus Harry Edwards, heard the much-anticipated oral arguments in ACA International, et al. v. FCC. The ACA Int’l consolidated appeal challenges the validity of the Federal Communication Commission’s oft-criticized rule changes and interpretations of the Telephone Consumer Protection Act in its July 10, 2015 Omnibus Declaratory Ruling and Order.

ACA and the other petitioners strategically focused critical arguments on three core areas related to the FCC’s Order – the definition of an “automatic telephone dialing system,” the identity of the “called party,” and the means by which consent can be revoked. During the oral arguments, which lasted nearly three hours, there were a number of questions raised by the judges related to these important issues.

ACA’s CEO, Pat Morris, Vice President and General Counsel, Robert L. Föehl, and Regulatory Counsel, Maria Wolvin, attended oral arguments. “The oral arguments in our case against the FCC are the culmination of 15 months of intense work and preparation,” Föehl stated. “We made powerful arguments before a panel of engaged judges who appeared to understand the complexity of the TCPA and the issues resulting from the FCC’s 2015 ruling. Now we wait patiently for their informed decision.”

The oral arguments were the next step in the legal process for this case. ACA filed the first petition for review within hours after the FCC issued the TCPA Order in July, 2015. ACA argued in its petition that the FCC’s exercise of regulatory authority expanded the scope and reach of the TCPA in a way that Congress never intended – leaving a law in place that hurts legitimate, law-abiding business. ACA’s appeal, as well as the subsequent appeals filed by nine other businesses and organizations, were later centralized in the D.C. Circuit by the Judicial Panel on Multidistrict Litigation.

Federal Appeals Court Rules CFPB is Unconstitutionally Structured

The D.C. Circuit Court found that the CFPB’s concentration of enormous power in a single, unaccountable, unchecked Director is unconstitutional.
The U.S. Court of Appeals for the District of Columbia Circuit ruled today that the Consumer Financial Protection Bureau’s structure is unconstitutional because its director retains too much power. In its 110-page ruling in the case PHH Corporation, et al. v. Consumer Financial Protection Bureau, No. 15-1177, 2016 WL (D.C.Cir. Oct. 11, 2016), the court threw out the CFPB’s $109 million fine against PHH Corp., but said the bureau can continue to operate under the president’s supervision.

The case stemmed from a 2014 enforcement action in which the CFPB claimed that PHH Corp. violated the Real Estate Settlement Procedure Act by participating in a mortgage insurance kickback scheme for more than a decade. When the D.C. Circuit Court heard the case in April 2016, judges asked the CFPB’s lawyers to prepare to answer questions about the bureau’s leadership such as “What independent agencies now or historically have been headed by a single person?” and “If an independent agency headed by a single person violates Article II [of the Constitution] … what would the appropriate remedy be?”
The Consumer Financial Protection Bureau survived a constitutional challenge and will remain in business.