NCLC Publishes Analysis of ‘Major Question Doctrine’ on Consumer Litigation

Tucked away behind some rulings that generated a lot more attention and possibly because it was issued on the last day of the session, the Supreme Court’s ruling in West Virginia v. Environmental Protection Agency did not create a lot of buzz. But the National Consumer Law Center has published an analysis of the ruling and its potential impact on consumer litigation, pointing out different strategies that could be used in response to challenges invoking the ruling.

Boiling down a Supreme Court ruling into a sentence or two usually is not a good idea, but in the interest of brevity, the ruling in West Virginia held that the EPA did not have the authority to issue a particular rule because Congress did not empower the agency to do so.

In the context of consumer litigation, the NCLC warned advocates that they “should not be surprised when defendants cite to the doctrine in challenging consumer complaints based on federal regulations.” As you should all know by now, I am not a lawyer (and am envious of those who are), and to this non-lawyer, this to me seems like situations where companies fought back against enforcement actions or lawsuits filed by the Consumer Financial Protection Bureau by arguing that the leadership structure of the Bureau was unconstitutional.

To help block such challenges, the analysis offers five tips should they ever come across a situation where a defendant attempts to invoke the ruling.

One such tip is that the doctrine cited by the Supreme Court — the major question doctrine — only applies to laws, not regulations. Does this mean we will see fewer lawsuits alleging violations of Regulation F and instead more lawsuits alleging violations of the Fair Debt Collection Practices Act or the Fair Credit Reporting Act?

Another tip is to make sure that the establishment of Congressional authority is clear. In demonstrating this, the NCLC used Regulation F and the FDCPA.

For example, the CFPB’s Regulation F provides at 12 C.F.R. § 1006.1(a):

Authority. This part, known as Regulation F, is issued by the Bureau of Consumer Financial Protection pursuant to sections 814(d) and 817 of the Fair Debt Collection Practices Act (FDCPA or Act), 15 U.S.C. 1692l(d), 1692o; title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), 12 U.S.C. 5481 et seq.; and paragraph (b)(1) of section 104 of the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), 15 U.S.C. 7004.

The second step is to review the language in the applicable statute providing the agency with rulemaking authority. For example, the FDCPA provides:

Except as provided in section 1029(a) of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5519(a)], the Bureau may prescribe rules with respect to the collection of debts by debt collectors, as defined in this subchapter.

15 U.S.C. § 1692l(d).

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