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The D.C. Circuit granted rehearing en banc in PHH Corp. v. CFPB. The en banc court takes on several constitutional issues, in addition to the statutory questions addressed by the panel decision. PHH and the Bureau must specifically address the following questions:
  • Is the CFPB's structure as a single-Director independent agency consistent with Article II of the Constitution, and, if not, is the proper remedy to sever the for-cause provision of the statute?
  • May the court appropriately avoid deciding that constitutional question, given the panel's ruling on the statutory issues in this case?
  • If the en banc court, which has today separately ordered en banc consideration of Lucia v. SEC, 832 F. 3d 277 (D.C. Cir. 2016), concludes in that case that the administrative law judge who handled that case was an inferior officer rather than an employee, what is the appropriate disposition of this case?

The parties are "not otherwise limited," and may therefore address the other issues stemming from the panel's decision. This includes the application of the Real Estate Settlement Procedure Act's Section 8(c) safe harbor and statute of limitations.

The court's third specific question likely seeks to address the circuit split between the D.C. and Tenth Circuits regarding the constitutionality of the Security and Exchange Commission's (and, by extension, the CFPB's) administrative law judges (ALJs). In Lucia, the D.C. Circuit held that the SEC's ALJs are not inferior officers, and therefore need not be appointed under the Appointments Clause of the Constitution. In Bandimere v. SEC, the 10th Circuit ruled in the opposite direction – setting aside an SEC order stemming from an ALJ's initial decision on adjudication.

PHH and Lucia promise to be important cases for parties within the CFPB's jurisdiction, both from the perspective of the constitutional questions and substantive legal issues. The PHH order sets a briefing schedule with oral argument set for May 24, 2017. Additionally, the SEC has until March 13, 2017 to file a petition to review the Bandimere decision en banc—potentially addressing the other side of the ALJ appointment circuit split. Stay tuned.