I attended oral argument in the U.S. Supreme Court earlier this month, checking off an item from my lawyerly bucket-list. I was seated in the special section of the courtroom reserved for members of the Supreme Court Bar, immediately behind the podium where counsel stood to argue a constitutional question. The nine justices sat on the bench only a couple dozen feet opposite me.
I have argued five cases in the Texas Supreme Court and at least one in 11 of 14 Texas courts of appeal. I have been counsel on SCOTUS cert petitions and responses and the occasional amicus brief over the years. But I never had the opportunity to argue before the High Court. I realized I needed to make my own arrangements to watch our Supremes in action.
I first visited the Supreme Court as a teenager on a trip to the nation’s capital with my older brother. We marched up the high marble steps straight into the grand building. Even though it was the era of Vietnam War protests and civil unrest, the building was without any security screening. We passed Chief Justice Warren Burger in the main hall outside the ornate courtroom with nary a body guard in sight. Although I immediately recognized the white-haired Chief, who had just completed his first year on the Court, I was too startled to attempt to speak or to shake his hand.
I could hardly imagine then that I would return as a member of the Supreme Court Bar, more than 40 years into a career as a Texas trial lawyer and appellate advocate.
The argument I observed involved a lawsuit out of Texas and the Fifth Circuit challenging the constitutionality of the Consumer Financial Protection Bureau’s funding mechanism. The complex issues turned on interpretation of the appropriations clause, Article 1, Section 9, of the Constitution. The CFPB funding arrangement adopted by Congress allows the agency to draw operating funds from the Federal Reserve without a specific appropriation up to a cap of $600 million annually.
Elizabeth Prelogar, the U.S. Solicitor General, argued for the government and defended the arrangement by pointing to its historical context and analogues. Prelogar explained that the first bill of the first Congress in 1789 had provided for self-funding of the Customs Service without a specific dollar appropriation for the agency. Congress has continued the practice of standing appropriations ever since, and she noted the framers had given thought to the problem but chose to specifically limit the practice only by requiring biennial appropriations for the U.S. Army.
Chief Justice John Roberts and the eight associate justices were active in asking questions of counsel. Justice Neil Gorsuch asked the Solicitor General whether Congress could pass the same law with no upper limit, allowing the President to determine it was necessary to take a trillion dollars for the agency. Prelogar rejected the suggestion that Congress could do something so historically unprecedented, responding that Congress has enacted standing appropriations without a cap “for time immemorial.”
Noel Francisco, former Solicitor General in the Trump administration, argued for the lending associations challenging the CFPB funding structure, and urged the Court to put guard-rails on the structure. According to Francisco, the framers intended for Congress to hold the purse and the executive to hold the sword, while the CFPB arrangement puts both in the agency’s hands in violation of the separation of powers.
Justice Elena Kagan asked Francisco whether in his view the Federal Reserve would also be unconstitutional because of similarities in its funding scheme to that of the CFPB. Francisco answered that the Federal Reserve was “sui generisis” and that funding for the FDIC, OCC and other federal financial regulators would not be at risk if the Court adopted his separation of powers argument.
Veteran Court watcher and SCOTUS blogger Amy Howe viewed the justices as divided in assessing the constitutionality of CFPB funding. Howe wrote that it was not clear whether there were five votes on the Court to affirm the Fifth Circuit’s rejection of the funding arrangement and believed that Justices Brett Kavanaugh and Amy Coney Barrett, who were skeptical of the challenge, may hold the deciding votes.
The CFPB case is only one of several from the Fifth Circuit that the Court will review this term. The justices will hear argument next month in U.S. v. Rahimi, a major Second Amendment case, deciding whether a North Texas man was denied his constitutional right to keep arms under the provisions of a civil protective order for domestic violence. In Net Choice v. Paxton, the Court will examine whether H.B. 20, passed in 2021 by the Texas Legislature, infringes the First Amendment free speech rights of large social media platforms to moderate, and in some cases remove, online content. In Securities and Exchange Commission v. Jarkesy, the Court will consider whether the statutory scheme vesting securities regulation authority in the SEC violates the Constitution.
Not only did I witness the justices and two solicitors general in action in the CFPB case, but my D.C. visit afforded other notable people watching. Mick Mulvaney, former congressman and chief of staff to President Donald Trump and who served as director of the CFPB in that administration, was among those seated in the public section at the argument. U. S. Senator Mike Lee of Utah, who serves on the Joint Economic Committee and the Senate Budget Committee, was seated in the Bar section. While visiting family in the Capitol Hill area, I passed on the street two senators, a member of the cabinet and the former chair of the Federal Reserve who happens to hold the Nobel Prize in economics.
I concluded my DC excursion by attending a media law CLE conference where former Solicitor General Donald Verrilli spoke about the Court and its First Amendment jurisprudence. This gave me the opportunity to chat with him about my trip to the Supreme Court and a case we are collaborating on in Dallas federal court. And then I ran into my congressman at the airport while we waited on a flight to Love Field.
Paul C. Watler is a partner at Jackson Walker and recognized for First Amendment litigation in Chambers and Best Lawyers in America and has represented plaintiffs and defendants in major securities and business litigation cases. The opinions are the author’s own.