Bloomberg News
The Department of Justice has gone back to a district court to appeal a preliminary injunction that blocked the Trump administration from dismantling the Consumer Financial Protection Bureau.
In a request filed in the U.S. District Court for the District of Columbia Tuesday, the Justice Department disputed evidence presented in a two-day evidentiary hearing last month before Judge Amy Berman Jackson, who sits on the DC District Court. The DOJ said in its motion that Berman Jackson’s belief that the CFPB would be dissolved and dismantled in 30 days was “incorrect” and based on “outdated evidence” that has since been “clarified by the current agency leadership.”
The DOJ is appealing a preliminary injunction issued by Berman Jackson last Friday that prohibited a mass reduction in force at the beleaguered CFPB. The Trump administration called the injunction “sweeping and intrusive requirements” that have “no plausible basis in the CFPB’s organic statute or any other identified statute.”
The DOJ said in its motion that the CFPB should operate with 60% fewer employees, based on the agency’s funding cap from the Federal Reserve Board.
“When it was founded, the agency was ‘never supposed to’ employ ‘above 1,000 people,’ ” the DOJ stated. “The statutory cap is structured in a manner to provide funding for approximately 1,000 people, not the approximately 1,700 people that the CFPB currently employs. This Court’s injunction instead blocks standard workforce decision-making discretion, resource allocation decision-making discretion, and discretion to issue administrative directives retained by agencies that are not closing.”
Berman Jackson is expected to deny the DOJ’s motion and the DOJ expected to apply for relief from the U.S. Court of Appeals for the D.C. Circuit. A stay pending appeal order, if granted, would temporarily suspend the enforcement of the lower court’s injunction while an appeal is being processed.
The National Treasury Employees Union sued acting CFPB Director Russell Vought in February and, in a motion filed Tuesday, argued that the government filed its appeal in the wrong court, which the government has now corrected with Tuesday’s filing.
Deepak Gupta, who represents the NTEU, responded Wednesday by opposing the defendant’s motion for a stay, which he said “relies on a fictional account of the facts that is entirely at odds with the findings of this Court.”
At the evidentiary hearings in March, Gupta presented evidence showing that Vought and Mark Paoletta, the CFPB’s chief legal officer, planned to fire 1,175 CFPB employees in a first round of layoffs. President Trump, Elon Musk, and Vought, have all stated that the CFPB should be gutted, which Berman Jackson noted in her injunction.
She said that CFPB leaders had engaged in “a charade for the Court’s benefit” by authorizing a resumption of some work at the CFPB while laying plans behind the scenes to fire most of the bureau’s employees and shut down the agency.
In the appeal, the DOJ repeated its now-debunked claims about a stop-work order instituted by Vought in February.
“Agency leadership has repeatedly made clear that the intent of this pause was not to stop work in furtherance of statutory obligations, but rather to ‘ensure that new leadership could establish operational control over the agency while ensuring that it would continue to fulfill its statutory duties,'” the motion stated.
