PHH Response Due Date Pushed Back as Solicitor’s General Permitted to Respond to CFPB’s Petition in PHH Corp. v. CFPB by December 22

As discussed previously, the D.C. Circuit ordered PHH to respond to the CFPB’s petition for en banc review of the October 2016 three-judge panel decision in PHH Corp. v. CFPB. In an Unopposed Motion for Leave to file the United States’ Response, filed December 1, the Office of the Solicitor General sought permission to file its own responsive briefing on or before December 22. In an Order issued December 1, the D.C. Circuit granted the Solicitor General’s request, but also moved back the due date for PHH’s responsive papers so that both responses are now due on December 22.

Earlier in the week, on November 30, two groups filed amicus briefs in support of the CFPB’s petition together along with motions requesting an invitation from the court. The first brief was submitted by a group of leading consumer protection organizations, while the second brief was filed by a group of 21 current and former members of Congress.

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Federal Judge Blocks Dept. of Labor Overtime Rule from Taking Effect Next Week

On November 22, a federal judge in Texas issued a nationwide preliminary injunction blocking the enactment of the Department of Labor’s (DOL’s) new overtime salary threshold under the Fair Labor Standards Act. In his order—issued in response to a lawsuit brought by 21 states and several business groups—Judge Amos L. Mazzant, III noted that the DOL does not have the authority to utilize a salary-level test or an automatic updating mechanism. By granting the preliminary injunction, the judge has delayed the rule (which was set to take effect on December 1) from becoming effective until further legal proceedings may occur. Plaintiffs’ motion for summary judgment, which seeks to invalidate the final rule, has already been briefed.

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Eleventh Circuit Stays Enforcement of FTC’s LabMD Order

In an order released November 10 in LabMD, Inc. v. FTC, the Eleventh Circuit stayed the execution of an FTC data security enforcement order against LabMD Inc. pending the appellate court’s own ruling on whether the agency acted on an unreasonable interpretation of what security companies must provide.  LabMD, Inc. v. FTC, No. 16-16270-D, Order Granting Stay (11th Cir. Nov. 10, 2016).

The FTC had ruled in July that LabMD’s data security practices violated the FTC Act, clarifying and expanding upon the FTC’s authority to regulate corporate data security practices. After an FTC administrative law judge denied LabMD’s request to stay enforcement until the medical company had exhausted its remedies on appeal, LabMD appealed to the Eleventh Circuit, which granted the stay in a unanimous decision.

Noting that the case turns upon whether the FTC’s interpretation of the FTC Act is reasonable, the Appellate cCourt granted the stay based on its finding that (i) “there are compelling reasons why the FTC’s interpretation may not be reasonable”; (ii) complying with the FTC’s Order would cause LabMD irreparable harm given its financial situation, (iii) there would be no substantial injury to other parties given that LabMD is no longer operating, and (iv) the public interest factor was neutral. The appeal will now proceed on the merits of LabMD’s arguments for reversal of the FTC’s enforcement order.

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POSTED IN: Courts, Data Risk / Privacy

Supreme Court Hears Oral Arguments on Whether City Has Standing to Bring Mortgage Suits

On November 8, the Supreme Court heard oral arguments in Bank of America Corp. v. City of Miami, addressing whether the Fair Housing Act permits Miami to sue mortgage lenders as an “aggrieved person” for alleged racial discrimination in the sale, rental, and financing of housing. The questions presented to the Court for decision are whether (i) the language in the Fair Housing Act that limits standing to sue to “aggrieved person[s]” means that Congress meant to impose a more narrow standing requirement than that in Article III of the Constitution; and (ii) the proximate cause standard in the Fair Housing Act requires that the plaintiffs show more than the possibility that the defendants could have foreseen the harm that occurred through a chain of consequences.

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Supreme Court Hears Oral Arguments On Whether Federal Jurisdiction Exists Based on Presence of Fannie Mae as a Party

The Supreme Court heard oral arguments in Lightfoot v Cendant Mortgage Corp., the latest in a line of cases assessing the boundaries of the jurisdiction of the federal courts over Federal agencies and instrumentalities. In Lightfoot, the questions before the Court are whether (i) the phrase “to sue and be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal” in Fannie Mae’s charter confers original jurisdiction on the federal courts over every case brought by or against Fannie Mae, pursuant to 12 U.S.C. § 1723a(a); and (ii) the majority’s decision in Am. Nat’l Red Cross v. S.G., 505 U.S. 247 (1992) (5-4 decision), should be reversed.

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