severability

Issues

Buckeye Check Cashing, a service provider in the payday loan industry, agreed to loan money to John Cardegna. The loan agreement contained an arbitration clause that compelled the parties to use arbitration, and not the courts, in case of dispute. Cardegna brought a class action lawsuit against Buckeye for allegedly charging interest rates higher than Florida usury law allows. Buckeye responded by filing a motion to compel arbitration pursuant to the arbitration clause. Cardegna resisted arbitration, maintaining that the arbitration clause was part of an illegal contract and therefore void ab initio—the clause had never come into existence as a matter of law. The issue before the Court is thus whether a court or an arbitrator should determine whether the underlying contract is void for illegality before enforcing the arbitration clause. The outcome will depend on whether the Supreme Court believes the separability doctrine applies to such contracts. If the Court affirms and holds that Cardegna's claims should be decided by the courts, the payday industry and its consumers, businesses that use arbitration clauses, and the policies behind the Federal Arbitration Act may suffer. If the Court instead decides that the claims should be sent to arbitration, low-income consumers, consumer protection regulation, and the integrity of the judicial system as a whole may be negatively affected.

Questions as Framed for the Court by the Parties

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Issues

This case asks the Supreme Court to determine the status of the Affordable Care Act (“ACA”) after Congress amended the ACA’s individual mandate in 2017. When Congress enacted the ACA in 2010, the individual mandate required individuals to maintain health insurance or pay a penalty. In 2012, the Court upheld the individual mandate as a valid exercise of Congress’s Taxing Power. In 2017, as part of the Tax Cuts and Jobs Act, Congress lowered the individual mandate’s penalty for failing to maintain health insurance to zero dollars. Texas contends that by setting the penalty for non-compliance to zero dollars, Congress rendered the individual mandate unconstitutional because it no longer is a valid exercise of Congress’s Taxing Power. Texas further argues that the individual mandate is not severable from the rest of the ACA, requiring the Supreme Court to strike down the entirety of the ACA. California disputes this. As a threshold matter, California contends that the opposing parties do not have standing to bring this claim because they have not been injured by the penalty of zero dollars. But even if they have standing, California argues that the individual mandate is constitutional. Finally, if it is not constitutional, California contends that the individual mandate can be severed from the rest of the ACA. This case, and the viability of the ACA, has drastic policy implications for the millions of Americans who rely on the ACA for their health insurance.

Questions as Framed for the Court by the Parties

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Issues

This case asks whether the President of the United States is unconstitutionally restricted from removing the director of the Consumer Financial Protection Bureau (“CFPB”). Established through part of the Dodd-Frank Act and in response to the financial crisis in 2008, the CFPB regulates the financial markets and enforces consumer protections. The CFPB is headed by a single director who is removable by the President only for “inefficiency, neglect of duty, or malfeasance in office.” Petitioner Seila Law LLC and Respondent CFPB both argue that this removal restriction violates separation of powers because it impermissibly restricts the President’s ability to remove an executive officer. The Court-appointed Amicus Curiae maintains that so long as the President has the exclusive removal power, a modest restriction on that power is constitutional. The outcome of this case has implications on accountability mechanisms used by administrative agencies, state consumer protection regulators, and industries regulated by the CFPB.

Questions as Framed for the Court by the Parties

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