Rare split occurs between Supreme Court's conservative Justices Thomas and Alito on CFPB funding

 May 18, 2024

Supreme Court Justices Clarence Thomas and Samuel Alito are arguably the two most conservative members of the bench, and the pair are far more often than not in agreement on the various issues taken up by the court.

A relatively rare split between Thomas and Alito occurred on Thursday, however, as the conservative duo diverged on the matter of the statutory funding mechanism for the Consumer Financial Protection Bureau, according to the Washington Times.

The surprising division was stark as Thomas authored the majority opinion that upheld the constitutionality of how the CFPB uniquely gets its funding while Alito penned a lengthy opinion in dissent of the majority's view.

The unique way the CFPB draws its annual funding

At issue here, according to SCOTUSblog, is the fact that, unlike most federal agencies, the CFPB is not funded by Congress through the annual appropriations process, but rather enjoys the statutory authority to draw funding directly from the Federal Reserve up to a particular inflation-adjusted annual cap.

A pair of industry groups who unsuccessfully challenged a CFPB regulation claimed that the unique funding structure unconstitutionally violated Article I, Section 9's Appropriations Clause, and though the groups failed to overturn the challenged regulation, a 5th Circuit Court of Appeals panel agreed that the CFPB's independent manner of funding was not in keeping with the Constitution.

However, in a 7-2 decision, the Supreme Court just ruled that the CFPB's funding structure was in line with the Appropriations Clause's stricture that "no money shall be withdrawn from the Treasury, but in Consequence of Appropriations made by Law," given that Congress had specifically authorized it by statute.

Thomas writes for the majority

For the majority opinion, Justice Thomas wrote that when the Constitution was first ratified, "appropriations were understood as a legislative means of authorizing expenditure from a source of public funds for designated purposes."

He pointed to various examples throughout British and U.S. history of legislatures statutorily granting "a wide range of discretion" in securing funding for certain government agencies, even if the particular manner of doing so differed from the otherwise routine procedures that applied to the vast majority of other government agencies.

In the end, Thomas concluded, "The statute that authorizes the Bureau to draw money from the combined earnings of the Federal Reserve System
to carry out its duties satisfies the Appropriations Clause. Accordingly, we reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion."

Alito's dissent

Justice Alito, joined by Justice Neil Gorsuch, dissented from the majority view and argued that the Constitution's Framers "would be shocked, even horrified, by" how the CFPB was able to draw funding directly from the Federal Reserve without going through the normal congressional appropriations process.

Following his own lengthy recitation of history, Alito concluded, "The Court holds that the Appropriations Clause is satisfied by any law that authorizes the Executive to take any amount of money from any source for any period of time for any lawful purpose. That holding has the virtue of clarity, but such clarity comes at too high a price."

"There are times when it is our duty to say simply that a law that blatantly attempts to circumvent the Constitution goes too far. This is such a case," he added. "Today’s decision is not faithful to the original understanding of the Appropriations Clause and the centuries of history that gave birth to the appropriations requirement, and I therefore respectfully dissent."

Surprising split between Thomas and Alito may have been manufactured by Roberts

The Times reported that SCOTUSblog creator Adam Feldman told the outlet, "I was surprised by the split between Thomas and Alito here. I think this may have to do with backroom conversations," as he suggested that Chief Justice John Roberts may have purposefully assigned Thomas to write the majority opinion.

"I’m not shocked by Gorsuch’s position in dissent as the dissent seems more grounded in ostensible originalism. I wasn’t surprised that Alito wanted to overhaul the CFPB because of its unique structure that in some sense seeps power from Congress," he added. "Thomas is the quirky vote and so I think the discretion he was given in opinion authorship was what motivated him to side with the majority."

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