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Consumer Financial Protection Bureau v. Mortgage Law Group, LLP

United States District Court, W.D. Wisconsin

April 20, 2017

CONSUMER FINANCIAL PROTECTION BUREAU, Plaintiff,
v.
THE MORTGAGE LAW GROUP, LLP, CONSUMER FIRST LEGAL GROUP, LLC, THOMAS G. MACEY, JEFFERY J. ALEMAN, JASON E. SEARNS and HAROLD E. STAFFORD, Defendants.

          ORDER

          WILLIAM M. CONLEY District Judge.

         The court has reviewed plaintiff's motion for reconsideration under Fed.R.Civ.P. 54(b) challenging Judge Crabb's previous invalidation of two provisions in Regulation O's attorney exemption.[1] (Dkt. #257.) More specifically, plaintiff raises two basic challenges to the court's January 14 and April 21, 2016, summary judgment opinions & orders (dkt. #144 and #187):

(1) the court misread the Consumer Protection Act (CPA) and misinterpreted related regulations by improperly applying step one of the analysis under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984); and
(2) the court should not have found that the plaintiff unreasonably exercised its rulemaking authority in issuing portions of Regulation O under step two of the Chevron analysis.[2]

         With respect to both challenges, plaintiff generally repeats the same arguments raised in its summary judgment briefs over a year ago, neither making new legal arguments nor alleging new facts from its previous briefing in the fall of 2015. Instead, plaintiff's sole basis for the motion for reconsideration appears to be a non-binding and unpublished opinion from the Middle District of Florida, FTC v. Lanier Law, LLC, 2016 WL 3632371 at *27-28 (M.D. Fla. Jul. 7, 2016), that reached a different conclusion with respect to the validity of Regulation O's attorney exemption, also last year.

         Plaintiff offers no explanation as to why it waited more than six months after the decision in Lanier Law to file its motion, which is sufficient grounds by itself, for denying the motion. Indeed, much has happened in that period. For example, Judge Crabb issued a third summary judgment decision on July 20, 2016, relating to liability and damages; the parties have engaged in significant additional discovery; and they filed a number of motions in anticipation of trial, which is set to begin next week. Plaintiff's failure to move for reconsideration until the eve of trial is simply unreasonable. Moreover, even if plaintiff's renewed challenges had not been waived, the court finds no grounds for reconsideration for the reasons set forth below.

         BACKGROUND

         Regulation O, 12 CFR § 1015.7, contains an exemption for attorneys that reads as follows:

§ 1015.7 Exemptions
(a) An attorney is exempt from this part, with the exception of § 1015.5 [prohibiting charging advance fees], if the attorney:
(1) Provides mortgage assistance relief services as part of the practice of law;
(2) Is licensed to practice law in the state in which the consumer for whom the attorney is providing mortgage assistance relief services resides or in which the consumer's dwelling is located; and
(3) Complies with state laws and regulations that cover the same type of conduct the rule requires.
(b) An attorney who is exempt pursuant to paragraph (a) of this section is also exempt from ยง 1015.5 [advance ...

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