Yesterday, the U.S. Court of Appeals for the District of Columbia Circuit issued an order temporarily halting the Consumer Financial Protection Bureau’s (CFPB or Bureau) mass layoffs. The court granted an emergency motion to enforce or clarify its previous order, reinstating the preliminary injunction that prevents the CFPB from executing reductions in force (RIFs).

Background

As discussed here, Judge Amy Berman Jackson previously barred the CFPB from terminating employees except for cause. However, the D.C. Circuit partially stayed this injunction, allowing terminations of employees deemed unnecessary after a “particularized assessment” of whether they were necessary to fulfill the Bureau’s statutorily-required functions. Days later, approximately 1,400-1,500 employees received RIF notices, leaving the CFPB with just over 200 personnel. 

The union representing CFPB employees filed an emergency motion, arguing that the reduction interfered with the Bureau’s statutory duties and questioning the validity of the “particularized assessment.” Specifically, in its motion, the union argued that “[i]t is unfathomable that cutting the Bureau’s staff by 90 percent in just 24 hours, with no notice to people to prepare for that elimination, would not ‘interfere with the performance’ of its statutory duties, to say nothing of the implausibility of the defendants having made a ‘particularized assessment’ of each employee’s role in the three-and-a-half business days since the court of appeals imposed that requirement.”

Yesterday’s Order

The Court of Appeals granted the union’s emergency motion in part, clarifying the definition of “particularized assessment” and lifting the partial stay of the preliminary injunction. The court emphasized the need for interim protection to ensure plaintiffs can receive meaningful relief should the CFPB not prevail in the appeal. This decision temporarily halts the RIF, pending further review.

Dissenting Opinion

Circuit Judge Rao dissented, expressing concerns over judicial interference with Executive Branch management decisions. Judge Rao argued that the district court’s actions raise separation of powers issues and impede the CFPB’s ability to implement President Trump’s directives.

District Court’s Follow-Up

Following the Appeals Court’s decision, the district court issued an order denying the plaintiffs’ motion to enforce the preliminary injunction as moot. The provisions of the preliminary injunction that remained intact after the D.C. Circuit’s April 11 order continue to be in effect. The district court also granted the defendants’ motion to stay proceedings, deferring the obligation to respond to the complaint until the appeal’s final resolution.

Next Steps to Watch For

The D.C. Circuit has expedited the CFPB’s appeal of the preliminary injunction, and oral argument has been set for May 16, 2025. We expect the Court of Appeals to issue a decision quickly after that argument occurs, and we will continue to monitor the case as events unfold.