903 F.3d 456
5th Cir.2018Background
- The CFPB issued a civil investigative demand (CID) to The Source for Public Data, L.P. (Public Data), seeking documents, interrogatory answers, and a written report concerning "unlawful acts and practices in connection with the provision or use of public records information" and citing the Fair Credit Reporting Act and "any other federal consumer financial law."
- Public Data objected that the CID's "Notification of Purpose" failed to identify the nature of the conduct under investigation and the specific law applicable, and it also disputed CFPB jurisdiction.
- The CFPB denied Public Data's administrative petition to set aside the CID and then filed in federal court to enforce it after Public Data refused to comply.
- The district court enforced the CID; Public Data appealed and obtained a stay pending appeal.
- The Fifth Circuit reviewed the enforcement order, focusing on whether the CID complied with 12 U.S.C. § 5562(c)(2)’s requirement to state the conduct under investigation and the provision of law applicable to that conduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the CID satisfied §5562(c)(2)’s notification-of-purpose requirement | Notification was adequate because it referred to investigation of unlawful acts in connection with public records and cited the FCRA and other federal consumer financial laws | Notification is too vague: it does not identify the specific conduct allegedly violating law or the statute governing that conduct | The CID failed §5562(c)(2); it did not state the nature of the conduct or the applicable law, so it is invalid and unenforceable |
| Whether the court may apply the usual "reasonable relevance" enforcement standard | Enforcement under the reasonable relevance test is appropriate | The court cannot apply reasonable relevance if the CID does not state the investigation's purpose | Court cannot meaningfully apply reasonable relevance because the CID's purpose is unspecified; judicial review is frustrated |
| Whether the CFPB has jurisdiction over Public Data | CFPB asserted authority to investigate and enforce consumer financial laws | Public Data argued CFPB lacked jurisdiction over its public-records business | Court did not decide jurisdictional argument because it reversed based on the §5562(c)(2) defect |
| Whether D.C. Circuit precedent (ACICS) controls the adequacy analysis | CFPB implicitly argued notification was sufficient; attempted to rely on breadth of authorities it enforces | Public Data relied on ACICS holding that similar, broad notifications are inadequate | The court followed ACICS: broad, catch-all language and lack of specific alleged conduct do not satisfy §5562(c)(2) |
Key Cases Cited
- Consumer Fin. Prot. Bureau v. Accrediting Council for Indep. Colleges & Schs., 854 F.3d 683 (D.C. Cir. 2017) (CID lacking specific conduct and relying on broad catch-all law references is deficient)
- United States v. Zadeh, 820 F.3d 746 (5th Cir. 2016) (standard for subpoena/CID enforcement review and reasonable relevance test)
- United States v. Transocean Deepwater Drilling, Inc., 767 F.3d 485 (5th Cir. 2014) (elements of administrative subpoena enforcement: statutory authority, reasonable relevance, and not unreasonably broad or burdensome)
- In re Sealed Case (Admin. Subpoena), 42 F.3d 1412 (D.C. Cir. 1994) (agencies lack unfettered authority to "cast about for potential wrongdoing")