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The National Treasury Employees Union (NTEU) filed a petition for rehearing en banc on Sept. 29, 2025, requesting the full U.S. Court of Appeals for the District of Columbia Circuit to reconsider a three-judge panel's decision lifting an injunction that sought to block the Trump Administration from pursuing extensive reductions in force (RIFs).
In a 2-1 decision, the D.C. Circuit panel in August 2025 ordered that a preliminary injunction entered by U.S. District Court Judge Amy Berman Jackson must be lifted as a result of jurisdictional and factual deficiencies surrounding the plaintiffs' claim for relief, as previously reported by Holland & Knight.
Judge Gregory Katsas, writing for the majority and joined by Judge Neomi Rao, concluded that the district court did not have jurisdiction to hear claims based on loss of employment, as such claims "must proceed through the specialized-review scheme established in the Civil Service Reform Act." Moreover, the panel concluded that the district court did not have jurisdiction over non-employment-related claims, as the plaintiffs failed to challenge a "discrete, final agency action" as required by the Administrative Procedure Act (APA).
As "plaintiffs seek to set aside an abstract decision, inferred from a constellation of discrete actions, to prophylactically ensure that the Bureau can fulfill its statutory mandate," the D.C. Circuit concluded that the remaining four plaintiffs "have no viable cause of action."
The D.C. Circuit panel, however, ordered that the injunction remain in place pending a potential petition for rehearing and the D.C. Circuit's consideration of the matter. The NTEU filed the petition on the final day of its 45-day window, which is now under consideration by the D.C. Circuit. The NTEU centered its argument for rehearing on the fact that the panel's decision would "allow[] the Executive Branch to alter the fundamental structure of our government without congressional authorization or judicial review," and result in "far-reaching" and "dangerous" implications beyond its impacts to the CFPB. Specifically, the NTEU highly criticized the panel for adopting a "novel" rule that would "trigger a major regulatory disruption" resulting from the fact that "the CFPB will [ultimately] be eliminated."
The petition, under consideration by the D.C. Circuit, will result in rehearing only if a majority of the judges on the court vote to reconsider the panel's decision. If the D.C. Circuit grants the NTEU's petition, it will vacate the panel's decision, and the injunction will remain in place until the D.C. Circuit reconsiders the matter en banc. If the D.C. Circuit denies the petition, however, the injunction will remain in place for seven days or until a motion for further stay is granted, whichever is later.
In the alternative, should the NTEU elect to file a petition for a writ of certiorari with the U.S. Supreme Court, the injunction may remain in place for an additional 90 days if the D.C. Circuit determines that the cert petition considers a substantial question.
Continuing Agenda
Though this procedural development hinders the CFPB's ability to enforce the RIFs for an additional period, the agency continues to advance its agenda via independent initiatives. As Holland & Knight previously reported, the CFPB has conducted a comprehensive review of guidance materials, withdrawn guidance documents that contradict the provisions of the APA and sought dismissal of pending litigation as alternative routes of descaling the agency's enforcement and supervisory capabilities. Additionally, the agency has reduced oversight throughout various sectors such as digital payments and buy now, pay later (BNPL) and has proposed further oversight reductions, including in the automobile financing, remittances, consumer reporting and consumer debt collection sectors, to serve the Trump Administration's goal of curtailing the agency amid judicial setbacks.
Query whether recent moves by the CFPB that signal that the agency is conducting certain activities – such as its lengthy spring 2025 regulatory agenda and statements made in September 2025 by a CFPB official at an industry conference in Washington, D.C., that he expects examinations to resume in a couple of weeks – affect the D.C. Circuit's decision to grant review or its ultimate decision on the merits. Though the makeup, size and activity level of the CFPB going forward remain uncertain, it can be viewed as a positive development that the CFPB now appears to be resuming at least some of its statutory functions, such as rulemaking and supervision.
Visit Holland & Knight's resource center, CFPB Dispatch: Legal Updates and Insights, to stay on top of the latest CFPB developments.
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