Law Firms

Federal judge calls out law firm for 'cleverly' using ellipses

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A California law firm was unable to persuade a federal judge in Santa Ana that the Consumer Financial Protection Bureau had gone on an “impermissible fishing expedition” in seeking the firm’s debt-relief records.

U.S. District Judge Josephine Staton called out Seila Law for using ellipses in trying to persuade the court that the CFPB had failed to provide adequate notice, the National Law Journal (sub. req.) reports. Her order from last Friday is here (PDF).

“Seila Law cleverly uses ellipses” to suggest the notice in the civil investigative demand was inadequate, Staton wrote. “But what Seila Law omits through ellipses provides the fair notice that it supposedly seeks.”

Seila Law’s brief had quoted from the civil investigation demand. According to the brief, the CID notice of purpose said the investigation was “to determine whether … unnamed persons are engaging in unlawful acts or practices in the advertising, marketing or sale of debt relief services or products … in violation of … any other federal consumer financial law.”

That description:

• Omitted that the types of persons being investigated included debt relief providers and lead generators.

• Omitted that the type of debt relief services being investigated included debt negotiation, debt elimination, debt settlement, and credit counseling.

• Omitted a recitation of the specific laws possibly being violated.

Staton agreed with Seila Law that the CFPB request for information on “other services” provided by the firm was overbroad, and she narrowed the request.

Staton also rejected Seila Law’s argument that the structure of the CFPB is unconstitutional. Staton said Seila Law had relied on a now-vacated decision by the U.S. Court of Appeals for the D.C. Circuit that she “continues to find unpersuasive.” Staton had previously rejected a constitutional challenge. The en banc D.C. Circuit is considering the issue.

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