Appeals Court Paves Way for Mass Layoffs at C.F.P.B.

New York Times

12 hours ago

A federal appeals court paved the way for the Trump administration to move ahead with plans to decimate the Consumer Financial Protection Bureau, ruling 2 to 1 to throw out a lower court's effort to block mass layoffs.
In the 49-page ruling, Judge Gregory G. Katsas of the U.S. Court of Appeals for the District of Columbia Circuit, a Trump appointee, wrote that Judge Amy Berman Jackson of the Federal District Court in Washington had no jurisdiction to block the Trump administration's efforts to lay off about 1,500 of the C.F.P.B.'s 1,700 workers.
Civil servants' employment-related complaints are subject under law to a specialized review process, he wrote, and the plaintiffs' other grievances did not pertain to reviewable, final agency actions or unconstitutional acts.
'Accordingly, we vacate the preliminary injunctions,' Judge Katsas wrote in the majority decision, in which he was joined by Judge Neomi Rao, also a Trump appointee.
But the effect of the ruling is not expected for at least seven days, leaving the plaintiffs time to appeal.
This spring, the Trump administration attempted to reduce the C.F.P.B.'s work force by nearly 90 percent, a move blocked by Judge Jackson. Over the next several weeks, a frenetic back-and-forth ensued, as the three-judge panel from the U.S. Court of Appeals for the District of Columbia Circuit overturned Judge Jackson's initial injunction before allowing a revised version to stand until they could fully address the matter.
The C.F.P.B., an Obama-era creation that was the brainchild of Senator Elizabeth Warren, Democrat of Massachusetts, has long been a target of President Trump, and was a focal point for his so-called Department of Government Efficiency, a federal cost-cutting operation led by the tech billionaire Elon Musk.
Less than three weeks into Mr. Trump's second term, Russell T. Vought, the director of the Office of Management and Budget who was also named acting director of the C.F.P.B., ordered the agency's employees to cease 'all supervision and examination activity,' effectively freezing their operations. The layoff notices came almost immediately after.
Congress created the C.F.P.B. in 2010, as part of a wider financial regulatory overhaul, and the plaintiffs argued that the Trump administration's efforts to diminish it were an unlawful power grab from the legislative branch. The appeals court's ruling disputed their argument that the administration's moves to drastically reduce the agency's staff were a final decision about the fate of the agency.
In a dissent published Friday, Judge Cornelia T.L. Pillard, an Obama appointee, rejected her colleagues' view, stating that only Congress could dissolve the agency.
'It is emphatically not within the discretion of the president or his appointees to decide that the country would benefit most if there were no bureau at all,' she wrote in a 60-page dissent.