b'Major U.S. Supreme Court + Appellate Cases Decided In 20202020 brought the much anticipated Supreme CourtCFPB Director despite the Supreme Court holding that decision in Seila Law LLC v. CFPB, along with a varietythe agencys leadership structure was unconstitutional. of Courts of Appeals decision with sweeping impactsThe Ninth Circuit found that the ratification remedies on the financial services industry and legal landscape.any constitutional injury that Seila Law may have Multiple Courts of Appeals focused on the FDCPA,suffered due to the manner in which the CFPB was issues of standing and class awards.originallystructured. Ninth Circuit Broadens Statutory Definition of Debt 2020 Highlights Collector Under FDCPAIn March, the Ninth Circuit held in McAdory v. M.N.S. Supreme Court Associates, LLC, No. 18-35923, that entities that Supreme Court Strikes Down For-Cause Removal ofotherwise meet the definition of debt collector cannot CFPB Director avoid liability under the FDCPA by outsourcing its debt In June, the Supreme Court issued its highly anticipatedcollection activities. In McAdory, the plaintiff alleged decision in Seila Law LLC v. CFPB, No. 19-7. Asthat the defendanta passive debt buyerfell within predicted, the Supreme Court held that the Dodd-Frankthe definition of a debt collector as defined under Acts for-cause removal provision for the CFPB Directorthe FDCPA. Included in the FDCPAs definition of debt violates the separation of powers, as Article II of thecollectors is any person who uses any instrumentality Constitution vests in the President the power to removeof interstate commerce or the mail in any business federal officials. The Supreme Court found that thethe principal purpose of which is the collection of any CFPB Director did not fit into the only two exceptionsdebts. Citing the Third Circuits decision in Barbato v. to the Presidents unrestricted removal of power.Greystone All., LLC, No. 18-1042, the Ninth Circuit found First, the CFPB Director is not an inferior officer withthat the words collection and principal purpose in limited duties and no policymaking or administrativethe definition of debt collector focus on what is being authority. Second, the CFPBs Director is not like thecollected rather than the act of collecting. In other words, commissioners of multimember executive agencies;the relevant question . . . is whether debt collection is she exercises substantial executive power. However,incidental to the businesss objectives or whether it is the the Court was careful to avoid striking down the otherbusinesss dominant, or principal, objective. The Court provisions of the Dodd-Frank Act that establish theheld that the plaintiff had adequately alleged that the CFPB and define its authority, holding that while thedefendants principal purpose was debt collection. It also leadership structure is unconstitutional, the Acts found that a defendant could fall under the definition of for-cause removal protection could be severed from thedebt collector and a creditor simultaneously under rest of the statute. Thus, the agency may continue tothe FDCPA. operate as long as its Director can be removed by theThird Circuit Holds FDCPA Does Not Require Debtors President at will.to Dispute Validity of Debt in WritingCourts of AppealsIn March, the Third Circuit in Riccio v. Sentry Credit, Inc., No. 18-1463, overruled Third Circuit precedent, Graziano Ninth Circuit Upholds CID Issued Against Seila Law v. Harrison, No. 91-5082, holding that debt collection In December, on remand from the Supreme Court,notices sent under the FDCPA do not require debtors to the Ninth Circuit held in CFPB v. Seila Law LLC,dispute the validity of their debt in writing. In overruling No.17-56324, that the civil investigative demand (CID)itself, this decision resolved a circuit split and restore[d] issued against Seila Law LLC was validly ratified by thenational uniformity to the meaning of1692g. Since 52'