The U.S. Circuit Court of Appeals for the District of Columbia has upheld a temporary injunction issued by Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia prohibiting the CFPB from firing more than 1,400 employees, leaving only about 200 employees at the agency.
The order comes as the latest development in a suit brought by the National Treasury Employees Union, which represents many CFPB employees, and other groups, challenging the Trump Administration's efforts to reduce the agency's operations.
Judge Jackson had issued the injunction after finding that the CFPB's mass firings affected more employees than a mass layoff plan that she had attempted to enjoin earlier in the litigation.
The appeals court had subsequently issued a stay partially blocking that ruling, giving the Trump Administration some flexibility, saying the agency could fire those employees who, after "a particularized assessment," were determined to be non-essential for CFPB operations.
The agency's assertion that it had conducted such assessments did not persuade Judge Jackson. The appeals court is now allowing Jackson's injunction blocking the firings.
The appeals court said that as a result of the dispute over Jackson's decision, it would be best to uphold that injunction. The court said it would ensure that the plaintiffs can receive "meaningful final relief" if they prevail in the suit.
The appeals court also clarified that a "particularized assessment" of employees means that a CFPB official responsible for the RIF must determine that each office can perform its required duties without the employees scheduled to be terminated. However, the circuit court ultimately concluded that it was best to restore the preliminary injunction against the firings "rather than continue collateral litigation over the meaning and reviewability of the 'particularized assessment'" requirement imposed by this court's stay order.
The attempted firings followed a memo by CFPB Chief Legal Officer Mark Paoletta stating that the bureau was rescinding its existing enforcement and supervisory priority documents. The agency, he said, would focus its enforcement and supervision priorities on pressing threats to consumers, in particular servicemembers, their families, and veterans.
After the CFPB released the mass firing plan, Jackson said, "We're not going to disburse 1,483 people into the universe and have them be unable to communicate with the agency anymore until we have determined whether that is lawful or not."
Jackson barred officials from carrying out any mass firing or cutting off employees' access to agency computer systems. The administration vigorously opposed the decision.
Jackson had scheduled a hearing starting on April 29. However, the appeals court has scheduled oral arguments for May 16, so Jackson canceled her hearing.
Judge Neomi Rao, a Trump appointee, dissented from the decision, saying that the appeals court's ruling "hamstrings" the CFPB and leaves a "lack of judicially manageable standards." She said that Jackson's order is an "abuse of discretion" that presents "serious separation-of-powers concerns."
"The lack of judicially manageable standards in this posture is a reason to leave execution of the laws to the Executive, not the courts," she wrote.
The appeals court said it will consider the separation-of-powers argument and other arguments raised by the parties at the May 16 hearing.
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