Does an invalid appointment under Article II mean no standing under Article III?

Consumer Fin. Protection Bureau v. Gordon, No. 13-56484 (9th Cir. Apr. 14, 2016).

Back in 2012, President Obama invoked his power to make recess appointments when he tapped Richard Cordray to head the CFPB without getting the Senate’s confirmation. Noel Canning has now confirmed that the President lacked that power, so Cordray’s recess appointment was a nullity. 

Cordray was later confirmed by the Senate. The significant fact for present purposes, though, is that the CFPB lacked a lawful head in 2012, when it instituted this enforcement suit against Gordon, a lawyer providing mortgage-modification services.

Did the headlessness of the CFPB deprive the agency of Article III standing to bring this suit? 

The argument for lack of standing goes like this. While the executive branch has the power to enforce the law, other litigants cannot use the machinery of the federal courts simply to ensure that the law is obeyed. Without a concrete injury, those litigants lack standing. Here, without an executive-branch official to head it, the CFPB was a creature of congressional legislation, not presidential appointment, and hence lacked the executive branch’s unique power to take care that the laws be faithfully executed. And because the CFPB was not in the executive branch, it had no standing to bring the present suit. This is the position that Judge Ikuta takes in dissent.

The majority of this Ninth Circuit panel sees things differently. Congress has provided that the CFPB itself is part of the executive branch—and, in any case, the problems with Cordray’s recess appointment under Article II do not deprive the federal courts of jurisdiction under Article III.