On May 29, the CFPB filed a response to a letter from the defendants notifying the U.S. SDNY of the Bureau’s intention to file a motion to dismiss the CFPB’s second amended complaint based on the Bureau’s alleged lack of lawful funding. In its response, the CFPB did not address the constitutionality of its funding structure but argued that the defendants’ intention to challenge the CFPB’s funding mechanism could have been raised in defendants’ prior motion to dismiss and is therefore improper under federal civil procedure rules. The CFPB took the position that while the defendants are not permanently barred from presenting their funding argument, they cannot raise it in a successive motion to dismiss and must wait to make the argument after answering the Bureau’s amended complaint or in a motion for summary judgment.
As covered by InfoBytes, the district court previously granted defendants’ motion to dismiss in part, allowing the CFPB to amend its complaint after the Bureau confirmed its intention to pursue the case under the new administration (confirmation covered here).
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