Mick Mulvaney testifies before the Senate Budget Committee in February. (Photo: Diego M. Radzinschi/NLJ)

Deepak Gupta had uttered just a few words Thursday morning, diving into his argument for why White House budget director Mick Mulvaney could not lawfully serve as the Consumer Financial Protection Bureau’s interim leader, when he found himself in a familiar position for a lawyer in Washington’s federal appeals court: interrupted by a judge.

Judge Thomas Griffith questioned whether Gupta’s client, CFPB deputy director Leandra English, could take the director’s chair in the event that she prevails in the U.S. Court of Appeals for the D.C. Circuit.

For Griffith, the question came down to whether the D.C. Circuit could prevent President Donald Trump from simply naming a new interim CFPB director as the administration continues its search for a nominee. The White House’s formal nominee would serve a five-year term upon confirmation.

“If you can’t enjoin the president, what prevents him from naming someone else?” Griffith asked. “That’s an open question, but not very open, right?”

“It’s not a rule that the president can’t be enjoined,” responded Gupta, a former CFPB attorney who now heads the Washington litigation boutique Gupta Wessler.

“Unless you can enjoin the president here,” Griffith said later, “I don’t see how she gets relief.”

The back-and-forth came as Gupta pressed on in his monthslong quest to remove Mulvaney from the CFPB and have English declared the agency’s rightful leader. Gupta took the case to the D.C. Circuit after being twice rebuffed in Washington federal district court by Judge Timothy Kelly, a Trump appointee who took the bench in September.

The case is rooted in a string of events that played out in November following the resignation of Richard Cordray, the CFPB’s first Senate-confirmed director. Shortly before resigning, Cordray elevated English, his chief of staff, to the deputy director role, saying the move put her in line to become acting director under the succession language in the Dodd-Frank Act.

Within hours of Cordray’s resignation, the White House named Mulvaney as the agency’s director, citing its authority under the Federal Vacancies Reform Act, which allows the administration to have Senate-confirmed officials temporarily fill certain vacant positions.

Gupta argued Thursday that Dodd-Frank, the financial reform law that created the CFPB, specifically calls for the deputy director to be elevated in the “absence or unavailability of the director.” Also, he said, the CFPB’s design requires it to be led by an independent director—a structure that necessarily rules out officials such as Mulvaney, who serve at the pleasure of the president. Mulvaney’s appointment, he said, “destroys that statutory design Congress had for this agency.”

Judge Patricia Millett, sitting on the D.C. Circuit panel with Griffith and Judge Judith W. Rogers, at one point questioned whether the “absence or unavailability” language in Dodd-Frank was meant to apply to situations in which the CFPB director resigned or would not return for some other reason. In other statutes, she said, Congress chose to use the term “vacancy.”

“Congress felt they had to use the word ‘vacancy’ in just about every other statute,” she said.

Gupta argued that the word “unavailability” served as a catchall that covered the resignation of a director.

The Justice Department dispatched one of its top appellate lawyers to make the case Thursday in the D.C. Circuit. Justice Department attorney Hashim Mooppan, a former Jones Day partner, argued for the government Thursday.

The Federal Vacancies Reform Act “coexists with a dozen or so agency vacancy statutes” and applies to the CFPB, Mooppan said.

Watching the hearing from the front row was deputy assistant attorney general Brett Shumate, who defeated English’s push for a temporary restraining order and, later, a preliminary injunction against Mulvaney’s appointment. Shumate, a former Wiley Rein partner, has argued some of the biggest Trump administration policy cases.

 

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