Consumer Financial Protection Bureau found structurally unconstitutional

The U.S. Court of Appeals for the District of Columbia has found unconstitutional the structure of the Consumer Financial Protection Bureau (“CFPB”), the Bureau proposed by Elizabeth Warren to ward against abuses by financial institutions. The ruling challenges the construct that a congressionally-established independent agency may be headed by a single director who may only be removed for cause.

Initially, the court states, the CFPB was to be “another traditional, multi-member independent agency.” However, as the court concludes, the CFPB was ultimately established as “an independent agency headed not by a multi-member commission but rather by a single Director.” It is the latter part of this statement, “… by a single Director,” that the court finds problematic, within the framework of an independent agency. The court holds that the single-director structure, in the context of a congressionally-created independent agency, departs from history and threatens individual liberty, for reasons bound up in agency control and the separation of powers. The court also takes issue with the limitation on the executive’s ability to remove the head of that agency. The court’s remedy is to have the CFPB operate as an executive agency, of which the President “now has the power to supervise and direct the Director of the CFPB.” The court also holds that a three-year statute of limitations was applicable to the enforcement action in dispute.

Judge Henderson, concurring in part and dissenting in part, states that the opinion unnecessarily reaches the question of the constitutionality of the CFPB. Given that there were other reasons to reverse the award in the enforcement action, she opines, the court should have not decided “a constitutional question,” because “there is some other ground upon which to dispose of the case,” citing Nw. Austin Mun. Util. Dist. No. One v. Holder, 557 U.S. 193, 205 (2009); Rostker v. Goldberg, 453 U.S. 57, 64 (1981). This position will likely come up, should this case be subject to further appeal.

 

Hurricane Matthew and Avulsion

Hurricanes can affect property rights, particularly along the coastline. If property is changed suddenly, Florida law treats rights of coastal, upland land owners differently with regard to the addition or subtraction of property. The difference comes down to timing and terminology.

A “gradual and imperceptible” change may trigger possessory interests. While there is a right to possess lands that may come from gradual change, that right is “a contingent, future interest that only becomes a possessory interest if and when land is added to the upland by accretion or reliction.” Walton County v. Stop the Beach Renourishment, Inc., 998 So. 2d 1102 (Fla. 2008).

“Accretion” and “reliction” are bound up with “erosion.” Erosion is “the gradual and imperceptible wearing away of land from the shore or bank.” Id. Accretion is “the gradual and imperceptible accumulation of land along the shore or bank of a body of water.” Id. Reliction is “an increase of the land by a gradual and imperceptible withdrawal of any body of water.” Id.

In contrast, “avulsion” is “the sudden or perceptible loss of or addition to land by the action of the water or a sudden change in the bed of a lake or the course of a stream.” In other words, the key is whether the loss or gain is “gradual and imperceptible,” versus “sudden or perceptible.”

With regard to either an accretion or an avulsion, the deposit of land that is added to the shore or bank is called an “alluvion.” Id.

Under the doctrines of erosion, reliction, and accretion, “the boundary between public and private land is altered to reflect gradual and imperceptible losses or additions to the shoreline.” Id. However, “under the doctrine of avulsion, the boundary between public and private land remains the” mean high water line “as it existed before the avulsive event led to sudden and perceptible losses or additions to the shoreline.” Id.

Hurricanes are “generally considered avulsive events that cause avulsion.” Id. Therefore, alluvion created by hurricanes would not typically alter the boundary line between public and private lands, for the purpose of access to the water, etc.

First District Clarifies Jurisdictional Limits for Declaratory Relief

In Helfrich v. City of Jacksonville, 1D15-1095 (Fla. 1st DCA Oct. 4, 2016) the court withdrew its initial opinion and substituted an opinion which discusses the types of issues that are ripe for a party to seek declaratory relief. Appellant, a former employee of the City of Jacksonville, sought an interpretation of the term “contributions” in the City of Jacksonville’s General Employees Retirements Plan. Having left the employ of the city, the employee was faced with two choices: (1) elect to vest her for deferred retirement and leave her own contributions in the fund; or (2) elect to rescind her vested rights and received a refund of her accumulated contributions. The employee had yet to make a choice between the two options.

The city had also made payments to the fund during the time of Appellant’s employment. If “contributions” included those contributions made by the City of Jacksonville, then it might have been advantageous for the employee to rescind and receive those contributions. The employee sued for declaratory relief, seeking a declaration that “contributions” included those payments made by the city.

The trial court noted, and the appellate court agreed, that it did not have jurisdiction to issue a ruling, because the employee had yet to elect to vest or rescind. In order for a court to have jurisdiction to issue a declaration, it needs to be dealing with a “present, ascertainable state of facts or present controversy as to a state of facts.” The court held that, prior to the employee’s election of either of her two options, there was no “present” controversy, but instead a hypothetical, potential, future controversy.