The Federal Vacancies Reform Act of 1998 is about to become a big effin’ deal

Andrew Rudalevige, the Thomas Brackett Reed Professor of Government at Bowdoin College, has an excellent summary of the legal battle over the director of the Consumer Financial Protection Bureau (CFPB). It’s the Game of Vacancies at the CFPB! Watch out for the bureaucratic duel of conflicting statutes.

It’s not exactly “Game of Thrones” – federal budget procedures make it difficult to acquire decent-sized dragons – but there is a monstrous battle over who should be head of the Consumer Financial Protection Bureau (CFPB).

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The Dodd-Frank Act, which created the CFPB, decreed that it should have a single Senate-confirmed director who would serve a fixed term and could not be fired by the president. It also funded the agency via the Federal Reserve instead of the regular budget process, limiting legislators’ ability to slash the CFPB’s budget during annual appropriations.

Most relevant to this week’s drama, the Dodd-Frank Act also states that the agency’s deputy director becomes its acting director in the event of a vacancy at the top. Last Friday, director Richard Cordray resigned, amid speculation that he might run for governor in Ohio. On his way out the door, he named his chief of staff, Leandra English, as deputy director – and thus, in short order, acting director.

FVRA vs. Dodd-Frank: Bureaucratic battle of the giant statutes

Or was she? President Trump turned to a different statute – the Federal Vacancies Reform Act of 1998. The FVRA allows a deputy to fill a temporary vacancy, but also provides that the president can instead appoint another executive branch official in that deputy’s place, so long as that official has also been confirmed by the Senate. And so as soon as Cordray’s resignation took effect, Trump named Office of Management and Budget director Mick Mulvaney to do double duty at CFPB.

On Monday, Mulvaney occupied the CFPB director’s office, dispensed excellent New England donuts and emailed the agency staff to “disregard any instructions you receive from Ms. English in her presumed capacity as Acting Director.” English, for her part, sent her own email greetings to agency staff — and filed a lawsuit calling Mulvaney “the person claiming to be acting director” and herself “the rightful director” of the CFPB.

The legal question turns on whether the FVRA gives the president an option for appointing its head — i.e., the deputy or someone else — or whether the text of Dodd-Frank forecloses that option. The FVRA says it is the “exclusive means” of filling a position, except if another statute specifies a particular acting successor. English’s proponents argue that Dodd-Frank does precisely that. Better yet, in doing so it uses the word “shall,” not “may.” That word “shall” is significant, legal scholars like Marty Lederman emphasize.

The Office of Legal Counsel in the Justice Department, by contrast, issued an opinion defending the president’s right to use the FVRA procedure. Perhaps more surprisingly, so did the CFPB’s own general counsel Mary McLeod. Quoting an earlier OLC opinion, McLeod concluded the fact that the FVRA “is not exclusive does not mean that it is unavailable.”  That is to say, the FVRA may not be the only way to handle the matter, but it is a possible (an “available”) way, and it’s up to the president to make the call — as other legal scholars such as Adam White emphasize.

Here come the subplots

On Tuesday, a district court judge declined to grant a temporary restraining order against Mulvaney’s claim to the CFPB throne. That does not settle the merits of the case, of course. And in the meantime, other subplots abound.

One is that the judge in the case, Timothy Kelly, was appointed by Trump and only took the bench in September. He was quickly attacked on social media, in language that had an unsettling echo of Trump’s own much-derided attack on “so-called” judges.

Another is that new acting director Mulvaney already has a full-time job as the president’s budget director, at a time when budget policy is rather salient. Funding for the federal government expires on Dec. 8. Hopes for a bipartisan spending plan keep sinking, further complicated by pending tax cuts that seem likely to add substantially to the federal deficit and national debt. One might imagine that this might require a full-time budget director.

Mulvaney says he will work three days each week at OMB and three at CFPB — which itself adds a new subplot. After all, Dodd-Frank says that the deputy director shall serve as acting director “in the absence or unavailability of the Director.” Does that put English in charge three days a week?

A third is that the full membership of the D.C. Circuit Court of Appeals is currently considering whether the CFPB can even exist as it is currently structured. Last October, a three-judge panel of that court held that the organization of the CFPB was not just odd but unconstitutional, as I explained here at TMC at the time – that Congress could create an entity with a single director who served at the president’s pleasure, or one led by a multi-member commission with fixed terms, but not by a combination of both that shielded the agency from oversight by elected officials.

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And yet another plot line involves the FVRA itself. Those appointed under its auspices can only serve 300 days at the start of an administration – right about now. Without a new nominee in the pipeline — and the Trump administration has been notoriously slow in putting people forward – any actions taken by an acting official after the 300 days are up have no legal force. While this won’t affect Mulvaney’s seat at CFPB for a while, there are enough long-term “acting” officials in place that political scientist Terry Sullivan says the FVRA could soon trigger an epic “changing of the guard” all across the bureaucracy.

This last point is about to become a big effin’ deal for the federal government because the Trump administration has failed, either through sheer incompetence or malevolent design, to nominate department heads for confirmation by the U.S. Senate. Lawfare Blog reports, Acting Accordingly: Acting Officers and the Federal Vacancies Reform Act:

Lawfare’s readers are well-aware that the political echelons of the Trump administration are woefully understaffed. Ten months into this presidency, the pace of appointments under Trump trails that of his predecessors by three months. And yet, though the president hasn’t nominated one, we do in fact have an assistant attorney general for national security and a general counsel of the Defense Department—but only in an acting capacity—thanks to the 1998 Federal Vacancies Reform Act (FVRA), 5 U.S.C. 3345-3349.

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But what the FVRA giveth, the FVRA taketh away.

Lawfare contributor Matt Tait asked the following question on Twitter a few weeks ago:

Screen Shot 2017-11-29 at 4.17.04 PM

The answer? Though the acting officers in approximately 400 key vacancies that remain in the Trump administration will not all hit their 300-day limit at the same time—as I explain below, most will reach their deadline within 60 days of Nov. 18—the number is staggering. And the FVRA is clear that any actions taken after the deadline have “no force or effect.”

After an overview of the FVRA, what the courts have said about the law, how it’s enforced and what that means for any officials currently serving in violation of its time limit, the article comes to this conclusion:

Enforcement

So where does that leave the acting officers who as of Nov. 18 (the 300th day of the Trump administration) have begun to fall out of compliance with the FVRA?

The FVRA does not provide a mechanism for removing officers who continue to act beyond their statutorily authorized period. Though the statute requires the comptroller general to report such cases to Congress, which may employ oversight tools to bring the executive branch into compliance, there is no guarantee of efficiency or effectiveness.

If the president does not nominate officers to those positions, then any actions taken after the 300 days of vacancy have no force or effect. The Supreme Court intonated in National Labor Relations Board v. SW General that such actions are “void ab initio,” or “null from the beginning.” (Courts cannot allow void acts to proceed under harmless error doctrine, as they can with “voidable” acts.) A party who has standing to challenge an action taken by a non-compliant officer might argue that the action was void. But in the absence of clearer enforcement language, it may take further litigation to understand how the FVRA applies to the uncharted territory we’ve entered.

In other words, there soon could be hundreds of federal departments rendered powerless to act because the Trump administration has failed, either through sheer incompetence or malevolent design, to nominate department heads for confirmation by the U.S. Senate. This has the potential to cripple the efficient functioning of the U.S. government.

2 Responses to The Federal Vacancies Reform Act of 1998 is about to become a big effin’ deal

  1. is it a bigger deal then the house and senate sexual harassment slush fund? why should the voters care what democratic party supporters say or warn about? today ny democratic congresswoman rice walked out of a meeting because pelosi agreed in the meeting that democrats not complain about congressman clyburn and other black caucus leadership standing behind congressman conyers. how do you answer the voters charge that the only standards democrats have on sexual misconduct is the double standard!

    • There is no double standard, all the MSM and progressive news outlets are talking about is sexual harassment. This is a bad time to be a sexual predator.

      You can’t claim a double standard because some assclown makes some assclownish statement. The assclowns are in the minority.

      The overwhelming sentiment from the left is “believe the women”.

      You really need to block Fox News on your cable box. You are spreading their BS talking points.

      The CFPB was a big win for protecting Americans from predatory financial institutions (all of them).

      Protecting the American people from another 2008 and from having their hard earned money stolen by Goldman Sachs and Wells Fargo and others is critical.

      We can condemn Franken and Trump and Conyers and the rest and still fight to keep the CFPB.

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