Is It Unamicable to Reject the Argument of a Friendly Amicus Brief?

The Solicitor General rejects an academic argument offered in defense of the Consumer Financial Protection Bureau.

Yesterday the Supreme Court heard oral argument in Consumer Financial Protecion Bureau v. Community Financial Services Association of America, a case challenging the constitutionality of the manner in which the CFPB is funded. According to the respondents, the CFPB's funding mechnism violates the Appropriations Clause because the CFPB is funded through the Federal Reserve Board, in amounts requested by the CFPB, rather than through the usual annual appropriations process through Congress. (For more on how the CFPB is funded, see here and here.)

At oral argument, Justice Barrett asked the Solicitor General about an argument made in defense of the CFPB in an amicus brief submitted on the government's side. Interestingly enough, SG Prelogar unequivocally rejected the amicus brief's argument.

Here's the exchange (slightly cleaned up):

JUSTICE BARRETT: General, can I ask you a question about  . .  the Treasury? So the professors of constitutional law and history say, listen, the Appropriations Clause doesn't even apply here at all because these funds aren't being drawn from the Treasury. Do you agree with that argument? It's not the argument that you made.

GENERAL PRELOGAR: We are not making that argument. We accept that the Appropriations Clause applies here. The reason for that is we understand the term in the Constitution to refer to the public treasury as a general matter, not specifically to the Treasury Department.

Of course, at the time of the founding, ratification, the Treasury Department hadn't even been created, and that's also how this Court has described the scope of the Appropriations Clause in cases like OPM versus Richmond, where it referred to public monies generally.

And, of course, the --the contrary approach would expose a gaping loophole in Congress's authority here because it would mean  the executive, if it has funds that aren't held in the general treasury, could spend even without Congress appropriating it or providing that authority in the first place.

It seems in the SG's view, the amicus' argument would raise (or exacerbate) some of the accountability concerns made by those challenging the CFPB's funding structure, and thus sought to distinguish those arguments from those the government is actually making on the CFPB's behalf.

UPDATE: Some commenters read this post as a criticism of the SG. Far from it. I think the SG handled the matter properly and prudently. Based upon my read of the briefs and argument, the arguments made by the SG were both more grounded in history and practice and more likely to appeal to potential swing justices than were the arguments in the amicus brief. At the same time, the presentation of more "extreme" arguments in the amicus brief may help make the SG's arguments look more moderate and reasonable.

Comments

[loki13]

I don’t think that this is surprising at all.

Look, this is a crazy case. This is, for lack of a better phrase, the “5th Circuit Term.” Of course, this is just the first of what looks to be many 5th Cir. terms. It’s kind of insane that we are at the point where the Supreme Court … hardly a bastion of moderate jurisprudence … has to spend so much of their merits docket and shadow docket smacking down a single circuit for being too crazy and conservative, and that people are thinking, “Oh, maybe they’re not too bad, given that they might not agree with the absolutely bats*** crazy things that the 5th is up to.”

Anyway, the SG is relying on cases and a well-trod theory for this litigation. If an amicus is proposing a theory that is at odds with what should be an uncontroversial, conservative (small-c), and winning position, they don’t need to adopt it. In fact, it’s a mark of integrity that they don’t. IMO.

[Cheerio]

Yep, today's 5th circuit is kind of like the right's version of what the 9th circuit was on the left for many years.

(Queue the false cries of "both-sides-ism" by partisans, in attempt to paint their respective sides as being not-as-bad, by nitpicking minor quibbles here and there...)

[loki13]

Nope. This actually is "both-sides-ism." Because the issues with the Ninth, while some existed, were largely overblown and the product of two things; first, that the Ninth was out-of-step with the more conservative Supreme Court, and second (and most importantly) that it was a convenient whipping post used by people who actually weren't that familiar with the judiciary.

All circuits have had their issues. The (old) Fifth with the death penalty. The Sixth with AEDPA. The Federal Circuit ... whenever SCOTUS bothers to review them. And so on. What the Fifth is doing, now, is qualitatively different that what I have ever seen. They have pretty much abandoned regular procedure (the recent mandamus opinion... wow!).* And their opinions regularly thumb their nose at controlling precedent, or decide to create brand new law in settled areas because of some bizarre ideological issue in the case.

I am not trying to paint the federal judiciary as perfect. I can easily recite cases where judges paid lip service to the legal standard and fudged the facts. But the torrent of ... lawless ... stuff coming down the pipeline from the Fifth is qualitatively different than anything I've ever seen from any circuit in the past.

*Sure, I can recall the Yovino issue out of the Ninth. But that was notable because it was so bizarre. That would be just another day at the Fifth.

[LawTalkingGuy]

The Fifth Circuit cases that I keep thinking about are the airline vaccine mandate ones. Three judges endorsed the idea that there could be preliminary injunctive relief under Title VII. Complete disregard for very well established principles of employment and remedies law.

[loki13]

I know. Trust me, that one bugged the everliving crud out of me. When I think about Fifth Circuit lawlessness, it's like counting the stars in the sky ... but Sambrano really shines.

In fairness, it was only two judges. Judge Jerry Smith, to his credit, wrote one of the most blistering dissent you will ever see.

My favorite part of that opinion was that they tried to "Bush v. Gore" it by saying that it had no precedential value. HA! Plaintiffs' attorneys have already cited it.

So what now? "Oh, we were just lying. That was just something we made up because we really, really wanted to issue an injunction, even though we knew it was totally BS when we wrote it."

[LawTalkingGuy]

Three. Ho dissented from one panel in a separate case :/

[loki13]

Fair. I was thinking about the controlling opinion, not the motions panel.

Then again, the less I think about that Ho, the better.

[Dilan Esper]

Loki, I think it is fair to say that at least in habeas cases, the Ninth Circuit, back in the day, was ignoring the law. They were ignoring Congress (which had been very clear in cutting back on habeas), not just SCOTUS.

[loki13]

I think it is just as fair to say that the Ninth was not alone in that. A significant portion of the Federal Judiciary had … shall we say … issues with the AEDPA. I would add that you were more familiar with the issues in the Ninth given your location. ????

Arguably, the Ninth corrected earlier on those issues than some circuits. And yes, I mean the Sixth.

(BTW, this isn't an excuse, so much as an observation. The AEDPA fundamentally changed federal criminal practice and it took a while to fully take effect. If you want to say that the Ninth was a little more hesitant to follow than, say, the Eleventh or the Eighth, I wouldn't disagree with you. But I wouldn't say that they were a giant outlier, either.)

[Drewski]

Betteridge's Law of Headlines applies. I see no reason why any party to any litigation must accept an amicus merely because it could be favorable in the present matter but regardless of its implications otherwise. Nobody is required to advance every possible argument that anyone has dreamt up. This is especially true for the SG, whose arguments represent the official policy of the executive.

[Krayt]

And, of course, the –the contrary approach would expose a gaping loophole in Congress's authority here because it would mean the executive, if it has funds that aren't held in the general treasury, could spend even without Congress appropriating it or providing that authority in the first place.

'member when selling missiles to Iran, and using the profits to fund the Contras, because that would bypass Congress appropriating money, was a bad thing, er cool thing, er bad thing?

Wait, before I respond, what is the decade and what is the issue, so I can tell whether bypassing Congress is a thing to rage for or ag'in!

[Krayt]

We love democracy. Until we don't.

We love democracy so much, so god damned much, we want to use democracy to put control of things outside of democracy, when our opponents control things.

Like a man from an oppressive culture, demanding his daughter cover up, lest other men look at her.

[loki13]

I know you think that this is a clever analogy, but it isn’t.

What you’re missing is this … “or providing that authority in the first place.”

So, to recap- Iran/Contra. The Reagan Administration sold arms to Iran, and used the money to fund the contras.

First, this was not authorized by Congress. Second, Iran was under an arms embargo. Now, that was actually the smallest issue, given that the embargo was from the executive branch (originally from Carter, continued by Reagan). Trouble with that was it was never changed or authorized by the Executive. In fact, the opinion within the Executive at the time was that providing these arms was illegal. Third, funding the Contras was explicitly prohibited by Congress.

So … completely different.

In the instant case, Congress passed a law authorizing the money. Congress can also, at any time, pass a law that ends the authorization.

[Krayt]

It's the thought that counts. Moving funding outside tax allocation pipeline is seen as a clever way to work around politics of Congress messing with it.

We love democracy. Until we don't, and want to continue stuff when the opposition controls Congress.

[loki13]

"It's the thought that counts," is not, in fact, within the text of the Constitution.

There's a lot of things that people want to be true(tm), or think are good or bad policy, that are neither mandated, nor prohibited, but the Constitution.

If you don't like Congress passing laws that AUTHORIZE this (which is constitutional), then you have a lot of easy, simple, not-hard-to-understand ways to combat it. First, you can get Congress to ... wait for it... not authorize it. Or, in the alternative, if it isn't authorized, you can get Congress ... wait for it... to stop funding it.

It is passing strange that the same people who continually talk about how awesome our form of government is ... because it has checks and balances, and isn't a "democracy" (whatever!), and will even proclaim loudly that they just love gridlock and not getting things done ... will then turn around and complain to high heaven that ... heavens to Betsy, all that stuff that they love might make it a smidge hard for Congress to do what they want.

But that doesn't, in fact, make it unconstitutional.

[Life of Brian]

This seems like another weird tribalism post. Setting aside the broader question of whether magic money tree funding is constitutional, the idea that you should adopt a particularly far-out academic theory just because it's on your side of the argument is... well, silly. Kudos to the SG for being a responsible advocate.

[Estragon]

Having listened to the oral arguments, I got the distinct impression that “whether magic money tree funding is constitutional” was actually the far-out academic theory

[Life of Brian]

Sadly, I'm unlikely to have the luxury of enough time to listen to them. Fairly hot bench?

[Dan Schiavetta]

I don’t know how many times I should have won a motion (or an appeal) but a witless co-party threw in a confusing or even self-defeating argument.

[Life of Brian]

True story. Some lawyers just can't help themselves and have to make every single argument that they can think of; some just can't keep from digging in on one particular too-clever argument because they were the one that thought of it and can't get past the tunnel vision.

[Flight-ER-Doc]

Uncollegial, certainly.

[LawTalkingGuy]

Not really. Collegiality doesn't mean you have to endorse arguments you don't agree with, especially if they don't actually help your case.

[Rev. Arthur L. Kirkland]

Not at all.

At least, not among people familiar with the meaning of collegiality.

[Noscitur a sociis]

How could the SG have possibly responded more collegially?

[Kazinski]

Maybe he should of just ripped up the brief page by page in front of the court and then said "What brief was that?"

[Bob from Ohio]

Nothing crazy about a decision striking down the CFPB's funding system.

An agency unilaterally decides what money it "needs" without any real check, not even by the governing board of the Fed which in theory the CFPB is part of, let alone from any elected official.

Thanks to an earlier case, at least the president can remove the CFPB director, but when the president is a democrat, that's no check. Neither can we expect an evenly divided Congress to change the law.

Its a bad statute, counter to 500 years of Anglo-American history where the legislature took the power of the purse from the executive.

[Estragon]

“An agency unilaterally decides what money it “needs” without any real check“

Isn’t there a cap on how much money they can get from the fed?

[Kazinski]

Its a percentage of Fed revenues adjusted for wage inflation:
From the CFPB 2022-26 strategic plan:

"Annual transfers to the CFPB may not exceed an amount equal to 12 percent of the Federal Reserve System’s operating expenses in 2009, adjusted annually based on the percentage increase in the employment cost index by the Federal Government for total compensation for state and local government workers as specified in the Dodd-Frank Act. The transfer cap for fiscal year 2022 is $734 million."

[Estragon]

Yes Kaz, I see.

So “without any real check” wouldn’t be strictly accurate— right Bob?

[Kazinski]

I'm not sure a percentage of the fed revenue is any real check.

But I do think the best solution is for the House to regularize the CFPB's appropriation in the budget.

And tell the Senate take it or leave it, if they don't want a budget its their call.

[Estragon]

“a percentage of the fed revenue is any real check.“

In the figurative sense that the fed’s budget is huge? I agree

In the literal sense that there is no “real check” … well, no. I think it’s capped.

[Dilan Esper]

Is the Federal Reserve unconstitutional? Because that would destroy the country's economy.

[Rev. Arthur L. Kirkland]

Roughly half of these disaffected clingers live for that day.

[Life of Brian]

Because that would destroy the country’s economy.

I know, right? Remember before the Fed was created, when people were cooking over fires with loincloths and rubbing art on the wall with charcoal? And how the Great Depression nearly three decades into their watch, not to mention the last three major economic collapses in the past 25 years, just didn't happen? And how its inflation-is-groovy monetary policy isn't in the least destroying the country's economy beneath its patina of so-called "stability"?

I'll save you the trouble: "Would have been worse without them!" And eventually it rained.

[Bob from Ohio]

The main reason the Fed was passed was to avoid bank panics. The FDIC has removed that as a reason but the monster still lives.

[Dilan Esper]

Actually the economy in the 19th Century featured such things as panics and a 20 year long recession.

So yes we need the federal reserve and this why every successful country on earth has an independent central bank.

[Life of Brian]

Actually the economy in the 19th Century featured such things as panics and a 20 year long recession.

Huh. Here’s a list of recessions in the 19th century. Longest one is 6 years. The Great Depression under the Fed’s watch (as I mentioned in my first post and somehow you forgot to address) was ~10 years.

And more recently hasn’t been better at all. Here is an all-inclusive multi-century list. Just the 2000s has more events than the entire 19th century.

I mean, at least with rain dances there’s a discrete event you can eventually point to that “proves” your intervention works. But you appealed to aggregate statistics, and they all seem to point in the opposite direction.

[loki13]

That gold isn't going to horde itself!!!!

[Bob from Ohio]

"Is the Federal Reserve unconstitutional? "

Yes, of course, for multiple textual reasons. Among other things, it exercises"Executive Power" outside the control of the President, in violation of Article II.

We had the largest economy in the world before the Fed. Everything it does can be done by the Treasury so as to comply with the Constitution.

[Dilan Esper]

You are dangerous and ignorant.

[David Welker]

Dilan:

To me, you are just making a policy argument. But do we ACTUALLY need a Federal Reserve whose members are not accountable to the President?

I don't think so. Chairman Paul Volker essentially destroyed any chance that President Carter had to be re-elected by driving the economy into the ground in order to combat inflation. Whether that was actually wise policy or not is highly debatable. Controlling inflation is often generally considered desirable (despite the ability of people to contract around the problem), but I think that is even debatable because people are capable of contracting around it and statutes can include provisions adjusting dollar amounts in them for inflation. And even if controlling inflation IS desirable from a policy standpoint, should the Federal Reserve be EXTREMELY AGGRESSIVE in lowering that to, say 2% even if that puts millions of people out of work and even if that makes it much more difficult for the federal government to pay for its debt?

This is CLEARLY a political debate, not something that should OBVIOUSLY be delegated to the Federal Reserve. Milton Friedman believed that rather than having a discretionary board making discretionary decisions, that the standard should be set in a rule-based manner. That is, decisions could be dictated by statute and an administrative agency could merely implement the decision rather than using individual discretion.

So, it seems like the necessity of a discretionary board is itself highly debatable. But, you seem to be arguing further, and saying that not only is a board with discretionary powers necessary, but it is also necessary that such a board not be accountable to a duly elected President. If, so, why? So that the board can be highly aggressive in a manner that ensures that a President is not re-elected in case the board decides that inflation must be controlled immediately, regardless of any collateral consequences?

Long story short. I don't believe that the Federal Reserve is more important than the Constitution, nor should the Constitution be artificially interpreted in a manner to enable its continuing existence. And I believe we should be debating the trade-offs here, between fighting inflation in a very aggressive manner perhaps at the cost of increased unemployment or not. Also, it is not unreasonable to think that inflation should be fought, but that the pain of doing so should be spread over a longer period of time instead of applying large shocks to the economy.

It should be pointed out that it appears that the latest moves by the Federal Reserve to combat inflation have not had as big of an impact on unemployment as expected; that is really great, but they have still had a negative impact on the federal governments financial position since it has to pay higher interest rates on its borrowing. Ultimately, the decision about how aggressively to fight inflation is a policy debate that ultimately belongs to Congress and any board created by Congress to do this sort of work should be accountable to an elected President.

[Dilan Esper]

Yes, we need an independent central bank.

If you don't understand this, ask any respected macroeconomics professor. Or just look at the fact that every successful country has one.

Or just take the following hint-- if everyone who is expert on a subject think it needs to be handled in a certain way and you, without that expertise, do not, it's not the experts who are generally wrong.

[David Welker]

Dilan:

“Ask any respected macroeconomics professor.”

This is a lame argument from authority. But since you are going to go there, how about Milton Friedman or John Taylor from Stanford, both of whom advocate for rules-based rather than discretionary systems.

And what does it even mean to ask an economist about whether we “need” an independent bank making decisions about trade-offs without the input of elected officials?

Economist who doesn’t want to be accountable to anyone: “Of course we need such a bank and it can’t be accountable to anyone. Also, appoint me to it!”

There is OBVIOUSLY a major conflict of interest here. And I don’t know about the idea of making a 4th branch of government without a constitutional amendment. Even if wise policy, it strikes me as highly illegal.

Overall, I completely reject your appeal to expertise and it makes me question your judgment. Just because you aren’t informed enough to think for yourself, the same isn’t necessarily true of me.

But as I have already shown above, different experts have different opinions.

Overall, you have just admitted that YOU don’t have a good argument for this one way or another. You are just deferring to imaginary expertise without knowing what expert economists actually have to say. You also don’t appear to know enough about the methodology of economics to conceptually understand the boundaries between an economists expertise and their political opinion.

[David Welker]

Bob:

What part of the Constitution actually says that the legislature cannot make appropriations in this way? As was pointed out during oral argument, Congress can change the funding mechanism for the CFPB at anytime.

The Constitution does limit the appropriations power of Congress, but only in the context of the military:

Article 1, section 8, clause 12 states:
"To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;"

This provision implies that Congress may appropriate money other than to raise and support armies for a period lasting more than two years. And when it comes to the CFPB, that is exactly what Congress has done.

I understand if you think that is unwise, but I am not seeing a good argument emanating from the structure or the text of the Constitution that it is unconstitutional. If anything, it seems like clause 12 of section 8 of Article I goes rather decisively against you.

I believe your argument is a good example of how both liberals and conservatives are tempted to misread the Constitution to support their policy preferences.

The Constitution does NOT prevent all bad things.

[Estragon]

[Life of Brian]

UPDATE: Some commenters read this post as a criticism of the SG. Far from it. I think the SG handled the matter properly and prudently. Based upon my read of the briefs and argument, the arguments made by the SG were both more grounded in history and practice and more likely to appeal to potential swing justices than were the arguments in the amicus brief.

Thanks for the clarification, but doesn't that pretty much moot the basic premise of the post? Seems like we're now at the fairly uninteresting question of: "Is it unamicable to do what is clearly spot-on the right thing for your case?"

[Bob from Ohio]

I'm disappointed Amy read an amicus. Once a professor always a professor.

[Rev. Arthur L. Kirkland]

Maybe the handmaiden was merely doing what she was instructed to do by a (male, of course) spiritual leader.

[Life of Brian]

Maybe the handmaiden

Certainly you meant "birthing person", right? Please do try in the future to adhere to the most recent liturgy.

[Rev. Arthur L. Kirkland]

Nope, it's handmaiden.

Or handmaid.

The handmaidens (or handmaids) in that community report to males known as "heads."

Charming group!

Carry on, clingers.

[Life of Brian]

Oh, come now -- don't deny your sacred creed, Artie. The cock has already crowed twice. Last chance.

[David Welker]

I strongly object to referring to some views of interpretation as "extreme" versus "moderate." Such language suggests interpretation is preference driven in the nuanced way that political decisions are. While I believe that constitutional interpretation must consider consequences (absurd consequences are a strong argument against an interpretation), that is different than saying that interpretation should be preference driven. After all, absurd consequences imply an absurd interpretation. Words have a purpose, and finding and effectuating that purpose is the point of interpretation. For example, the purpose of the First Amendment is to to enable people to express themselves; interpreting the First Amendment in a manner that disregards this purpose (for example, by forbidding only pre-publication censorship, but allowing the government to pass laws punishing people for their expression post-publication) is absurd. Such an interpretation defeats the purpose of enabling people to debate ideas, participate in self-government, and otherwise express themselves and upends the idea that politicians are public servants rather than some sort of nobility.

In politics, it is often said that if someone has a particular preference that admits of fewer exceptions, that the view is "extreme" as opposed to a more "moderate" position that may go in the same general direction, but allows "exceptions." In this political context, I think saying that something is "extreme" is a valid criticism, although I believe the better way of putting it is to say that a failure to make "secondary distinctions" has a tendency to result in undesirable outcomes.

But when it comes to constitutional interpretation, I do not believe that "secondary distinctions" lacking any textual or structural foundations are justified. After all, the Constitution is supposed to be establishing a general framework, not dictating ideal policy outcomes. It is not helpful to "elevate" the making of "secondary distinctions" aka policy-driven "exceptions" in this context, or the Constitution will not function even as a general framework but will tend to merge with ordinary policy-driven decisions. In that case, the Constitution will not function successfully as a bulwark protecting life, liberty, property, and other enumerated and unenumerated human rights.

[Brian Kennedy]

I practiced before district courts before I retired. We didn't get as many amicus requests as in appellate practice, but it was still a not-infrequent occurrence in high-profile cases. I would usually pretty much automatically consent to opposing amicus briefs; proposed supporting briefs, I treated case by case. Amicus briefs on the other side might provide me with additional targets to shoot at that the opposing party hadn't been incautious enough to expose or give me a chance to respond to concerns a judge might have even if the opposing party wasn't highlighting them. Supporting amicus briefs might be helpful (though, if they were just a way around page limits, how is that fair?), but they also could create a risk of being shot in the back by ill-conceived, hard-to-defend-against friendly fire.

[Brian Kennedy]

Plus, honestly, I was a Rule 19 maximalist who often lost out on internal debates about actually using the motion, so I might on occasion have been a wee bit annoyed by people who I thought should have been parties trying to come in as amicus so they could give their thoughts without the downsides of being bound by the result.

[Brian Kennedy]

(Rule 19(a), not 19(b))

[Religion and Politics, my life]

I worked as a bank statistical analyst under CFPB restrictions and nobody I can recall had anything but vitriol over the CFPB and its results.
1) It was all about age , race, and sexual exploitation but you couldn't investigate race at all !! You had to rely on borrower self-reporting !!
2) Everybody knew that CFPB rules were running minority-lenders out of business. The banks would lure good bad and indifferent Black mortgage seekers and take the results as a write-off less costly than a CFPB fine.

The CRA of Clinton worked against minorities but that is another story.
" “Federal Reserve Board data show that more than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions;” “private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year;” and “only one of the top 25 subprime lenders in 2006 was directly subject to the housing law.”

[ReaderY]

I read the transcript, and I think the 5th Circuit’s reasoning here was really weak. The appellees conceded that if Congress had set a ceiling of $400 million a year instead of $600 million, their constitutional claim would vanish. Making a constitutional case over such a small difference seems a gerrymandered argument specific for the CFPB, given the long history of agencies operating under standing approprations and “not to exceed” rather than exact allocations. I think Justice Kagan’s observation is particularly apt: CFPB’s underspending its allocation cap could be read as evidence Congress thinks it should be doing and spending more, not evidence that Congress has no effective control over its budget.

It seemed pretty clear that the 5th Circuit will be reversed on this case. Even Justice Thomas was skeptical. The Court clearly doesn’t want to fill the federal docket with cases challenging everything an agency ever did every time it underspends its allocated budget.

[ReaderY]

Also, I think the amicus argument is wrong. The President can’t get out of Congressional control of administrative agencies’ budgets just by having someone other than the Treasury write the checks. I agree with the Solicitor General here that the Apprropriations Clause applies. I also agree that a Congressional act providing for a standing appropriation of an amount not to exceed $600 million a year satisfies all that the Appropriations Clause requires Congress to do.