To ensure that consumer debt products were safe and transparent, Congress created the Consumer Financial Protection Bureau, which had power to investigate and seek relief on behalf of consumers, among other Executive Branch powers. Unlike other independent agencies, the Bureau was led by a single Director, appointed by the President with advice and consent of the Senate for a five-year term, who was removable only for “inefficiency, neglect of duty, or malfeasance in office.” When the Bureau issued an investigative demand to a law firm, the law firm objected on the basis that the Director’s office violated the separation of powers by vesting executive branch power in a single director who was not removable at the President’s will.
The Ninth Circuit rejected that argument, but the Court, in a 5-4 opinion authored by Chief Justice Roberts, reversed, holding that the novel structure of the Bureau was not akin to the Commissioners of the FTC or of the independent counsel’s office, which had been previously held to be compliant with the separation of powers doctrine. Given that the Bureau was granted broad executive branch authority to pursue consumer interests, Congress could not limit the President’s power of removal.
However, the Court also ruled, 7-2, that the removal provision was severable from the rest of the law establishing the Bureau, and therefore the Bureau could continue its work pending new leadership. Justice Thomas filed an opinion that was part concurrence and part dissent, joined by Justice Gorsuch, agreeing that the limitation on removal was unconstitutional, and that the Court should have gone farther in repudiating prior precedent in that area, but also arguing that there was no reason to engage in the severability analysis when all that was needed was to deny the request issued to the law firm. Justice Kagan, joined by Justices Ginsburg, Breyer, and Sotomayor, filed a dissent arguing that the removal limitations were proper as compared to other agencies, and were important in maintaining the Bureau’s independence.
A link to the decision in Seila Law, LLC v. Consumer Financial Protection Bureau is here: https://www.supremecourt.gov/opinions/19pdf/19-7_n6io.pdf