Law Firm, Fighting CFPB Subpoena, Urges Court to End 'Fishing Expedition'
A California law firm on July 21 blasted a recent subpoena from the Consumer Financial Protection Bureau as "nothing more than an unwarranted and impermissible fishing expedition," in a brief that also called for eliminating the agency on the grounds that its independent, single-director structure violates the Constitution.
July 24, 2017 at 01:01 PM
5 minute read
A California law firm on July 21 blasted a recent subpoena from the Consumer Financial Protection Bureau as “nothing more than an unwarranted and impermissible fishing expedition,” in a brief that also called for eliminating the agency on the grounds that its independent, single-director structure violates the Constitution.
Seila Law LLC raised those objections in response to the CFPB's effort to force the firm to respond to an administrative subpoena—known as a civil investigative demand—seeking information about the marketing, advertising and sale of debt relief services. Among other defenses, Seila Law argued the CFPB's subpoena is overly broad and violates the “practice of law exclusion” that puts the firm outside the agency's jurisdiction.
The dispute marks the latest standoff between a law firm and the CFPB, which has targeted firms in recent years over their involvement in everything from debt collection to real estate closing services. A Kentucky firm this month beat CFPB allegations that it orchestrated an illegal kickback scheme, and in April, the CFPB sued an Ohio firm alleging it used overly aggressive debt collection tactics.
“The [civil investigative demand] is nothing more than a continuation of the fishing expedition the CFPB previously attempted, seeking information to which it was not entitled,” Seila Law's defense team at Bienert, Miller & Katzman, in San Clemente, California, said in court papers.
Seila Law and the CFPB have a history of skirmishes.
In February 2016, the CFPB asked a judge in the U.S. District Court for the Central District of California to hold Seila Law in contempt for allegedly violating an injunction barring the debt relief provider Morgan Drexen from charging illegal upfront fees. Seila Law was not a party in the Morgan Drexen case, but the CFPB accused it of “acting in concert” with three other firms that were allegedly involved with the Morgan Drexen scheme and violating the injunction.
The CFPB sued those three firms—Howard Law PC, the Williamson Law Firm LLC and Williamson & Howard LLP—in January alleging that they ran the debt relief operation with Morgan Drexen, which shut down in 2015 following the agency's lawsuit. The case is pending in the U.S. District Court for the Central District of California.
CFPB lawyers noted that Seila Law was formed in October 2015, “just weeks” after those three firms were held in contempt by Judge Josephine Staton. (The U.S. Court of Appeals for the Ninth Circuit overturned the contempt order last year.) Staton closed the case in February without ever holding Seila Law in contempt.
“Dissatisfied with the result, the CFPB continued its campaign against Seila Law,” the firm's attorneys said in its brief July 21.
The brief describes the agency's lawsuit over the subpoena as “the latest effort by the CFPB in its quixotic quest against Seila Law, which is now well into its second year.”
“The CFPB failed in its prior effort to have this court sanction and hold Seila Law in contempt for purported violation of a permanent injunction entered by this court” in the Morgan Drexen case, Seila Law's attorneys said.
The CFPB recently has had a mixed record forcing companies to respond to subpoenas.
In April, a unanimous three-judge panel of the D.C. Circuit upheld a lower court that struck down a subpoena the CFPB had issued to the Accrediting Council for Independent Colleges and Schools, an organization cited over lax oversight of for-profit colleges. U.S. District Judge Richard Leon of the District of Columbia had said the bureau strayed outside its jurisdiction in issuing the subpoena.
“Although it is understandable that new agencies like the CFPB will struggle to establish the exact parameters of their authority, they must be especially prudent before choosing to plow [headlong] into fields not clearly ceded to them by Congress,” he wrote.
Last month, nearly a year after suing the financial services company J.G. Wentworth over its refusal to cooperate with an investigation, the CFPB withdrew its subpoena.
But the CFPB has also found success. In February, a federal district judge in Detroit ordered Harbour Portfolio Advisors—an investment firm that purchased foreclosed properties in bulk and resold them through high-interest installment contracts known as “contracts for deed”—to comply with a CFPB subpoena.
Related Articles:
|- Kentucky Law Firm Beats CFPB's Kickback Claims
- CFPB Just Withdrew Investigative Subpoena. That Doesn't Happen Often
- CFPB Sues Ohio Law Firm Over Debt-Collection Practices
- Financial Lobby Groups Reject CFPB's Criticism of Deferred-Interest as 'Risky'
- The CFPB Wants to Create an Arbitration Database. Companies Will Hate That.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllJetBlue Airways Will Pay $2M to Settle DOT Charges of Chronically Delayed Flights
Chicago Federal Court Offers Banks Relief From Illinois' Historic Credit Fee Curbs
4 minute readWill Khan Resign? FTC Chair Isn't Saying Whether She'll Stick Around After Giving Up Gavel
Trending Stories
- 1Restoring Trust in the Courts Starts in New York
- 2'Pull Back the Curtain': Ex-NFL Players Seek Discovery in Lawsuit Over League's Disability Plan
- 3Tensions Run High at Final Hearing Before Manhattan Congestion Pricing Takes Effect
- 4Improper Removal to Fed. Court Leads to $100K Bill for Blue Cross Blue Shield
- 5Michael Halpern, Beloved Key West Attorney, Dies at 72
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250