Symposium: Why a Justice James Madison and a Justice Jerry Jones would vote for Seila Law

Tyler R. Green is solicitor general of the state of Utah, which joined a 13-state amicus brief supporting the petitioner in Seila Law v. Consumer Financial Protection Bureau.

Seila Law v. Consumer Financial Protection Bureau might be this terms most important case that nonlawyers outside of Washington, D.C., havent heard of. It presents classic governmental power strugglesthe president versus Congress, and the federal government versus the statesthat gripped the Founders in Philadelphia more than 200 years ago. They understood that the outcome of those struggles would shape how the Constitution protects individual liberty. Anyone still interested in that issue would do well to follow this case closely.

The facts giving rise to those questions here are straightforward enough. Prompted by the Great Recession, Congress passed a law in 2010 that came to be known as the Dodd-Frank Act (after two of its main sponsors). Among other things, Dodd-Frank created a new federal agency named the Consumer Financial Protection Bureau. The federal government describes the CFPBs job as regulat[ing] a substantial segment of the Nations economy. In fact, the government says the CFPB wields much of the authority to regulate consumer financial products and services that had been vested in other federal agencies.

But those other federal agencies and the CFPB have vastly different leadership structures. At the other agencies, the bosses are either a group of commissionersso official action requires a majority voteor a single person whom the president may remove at will. In contrast, the CFPBs director is one person appointed by the president and confirmed by the Senate to a five-year term. And during that five-year term, the president may remove the director only for inefficiency, neglect of duty, or malfeasance in office.

So constituted, the CFPB decided to investigate whether Seila Law, a solo-practitioner law firm, violated federal consumer-financial regulations when it helped clients obtain consumer debt relief. The CFPB asked Seila Law to give it documents and information related to its investigation. Seila Law responded by asking the CFPB to withdraw its demand for documents, arguing that the agencys leadership structure violates the Constitutions separation of powers. When the CFPB persisted, Seila Law responded to only part of the demand, continuing to argue that the agencys structure is unconstitutional. The CFPB then obtained an order from a federal district court in California requiring Seila Law to comply with the CFPBs demand (narrowed slightly). The U.S. Court of Appeals for the 9th Circuit affirmed that district court order.

What about those facts moved 13 states to file a friend-of-the-court brief urging the Supreme Court to agree with the federal government, which itself has conceded that the CFPBs structure violates the separation of powers? Readers with enough time and interest can find full explanations in the states brief. For everyone else, heres the CliffsNotes version of the two critical points. And to try to make those points even clearer, Ill use a metaphor based on Americas apparent de facto religion: the National Football League.

Suppose you own an NFL team. You and millions of your fans share the same obvious goalwin the Super Bowl. Thats easier said than done; every year, 31 teams fall short. Consider all the pieces that must fall into place for you to become the champion: You need the right players executing the right plays at the right time for the better part of at least 19 weeks. With so many moving pieces, arguably the most important decision youll make is whom to hire to fit them all into placewho will be your head coach?

So much flows from that crucial decision. Your head coach sets your teams tone, and not just by his personal demeanor. As head coach, hell make scores of critical choices that saturate every aspect of team life. Hell hire an offensive and a defensive coordinator and position coaches. Hell implement a practice system. Hell need to communicate his vision to his staff and players and decide how to respond if they disagree with him or fail to meet expectations. In short, to paraphrase President Harry Truman, the buck stops with him.

Given those realities, if you decided to fire your head coach and hire a new one, no one would take seriously the suggestion that the new guy must retain the old ones coordinators or position coachesor that, going forward, the new coach could not make changes to his staff as he deems appropriate. Youve given him a job to do; like Jerry Jones, you want to give your coach carte blanche to form his staff as he sees fit. Even players recognize that a new head coach doesnt want to inherit a whole lot of coaches because he has to make sure everyone he has in place is on the same page as him.

So it is here. Thats the states first critical point. Truman was rightthe buck does stop with the president. After a long campaign, Americans hire just one person to do the specific job of carrying out the federal governments constitutional duties in a way that honors the Constitutions text but reflects the majoritys political and policy preferences. The president must be able to pick his own department and agency headsthat is, his coordinators and position coachesto give him the best chance of implementing his vision and keeping his political promises. Hence James Madisons insistence, quoted in Free Enterprise Fund v. Public Company Accounting Oversight Board, that the president has the power of appointing, overseeing, and controlling those who execute the laws.

Dodd-Franks removal restriction on the CFPBs director violates that intuitive order. And upholding it would break new constitutional ground. Never before has the Supreme Court held that Congress can restrict the presidents ability to remove a single-person agency head. This is no time for the court to change course and effectively hold that, like it or not, some presidents must do part of their job with a prior presidents person.

The states second point concerns the limits of the coachs and teams control. Though a head coach bears ultimate final responsibility for the parts of a players life bound up with the team, he has little control over a players choices outside that realm. Take nutrition, for example. Even if a team hires a dietitian to give its players nutritional advice, or provides some meals during training camp or other parts of the year, players can still hire their own consultants to advise on specific nutrition or other fitness needs. When that advice makes a player more valuable to the team, no harm done. But sometimes disputes arise between the teams and the players preferences, and the coach needs unfettered flexibility to respond to them.

Just like the team and the coach, the federal government and the president have limits on their power. Madison wrote in Federalist No. 39 that the federal governments jurisdiction extends to certain enumerated objects only, and leaves to the several States a residuary and inviolable sovereignty. And historically, consumer-protection laws have been the states domain. Yet as financial markets have matured, federal regulatorstypically multi-member commissionshave begun to exercise some overlapping consumer-protection power in this area. Over time, state regulators and their federal counterparts have joined forces to create regulatory regimes that foster the consistency necessary to both protect consumers and keep financial markets stable. No harm, no foul.

Ironically, in the name of protecting consumers, Dodd-Frank created a system that threatens to upend that cooperative framework. The CFPBs largely unremovable director can exercise vast amounts of regulatory power with no input from the president or any state legislature. The reality that one politically unaccountable federal agency head can make (or unmake) consumer-financial policies affecting millions of people and billions of dollars is more than a little hard to square with the Framers promise of retained state sovereignty.

At bottom, the states concerns here are not the separation of powers or state sovereignty for their own sake. The Framers deployed each of those devices for one overarching purpose: to protect individual liberty. A federal agency head with vast regulatory power over a substantial segment of the Nations economybut who is largely insulated from the presidents political control, and who need not bother consulting with the states before actingepitomizes the very type of threat to liberty that the Constitution guards against. Disapproving the restrictions on the presidents power to remove the CFPB director would affirm the Constitutions first principles by protecting the structures that protect us.