                                                         NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                              ______________

                                    No. 18-1516
                                  ______________

                CONSUMER FINANCIAL PROTECTION BUREAU

                                          v.

                   HEARTLAND CAMPUS SOLUTIONS, ECSI,
                                       Appellant
                            ______________

            APPEAL FROM THE UNITED STATES DISTRICT COURT
             FOR THE WESTERN DISTRICT OF PENNSYLVANIA
                          (D.C. No. 2-17-cv-1502)
                     District Judge: Hon. Cathy Bissoon
                               ______________

                                 Argued July 10, 2018
                                  ______________

          Before: SHWARTZ, NYGAARD, and RENDELL, Circuit Judges.

                              (Filed: August 13, 2018)

Allyson B. Baker, Esq. [ARGUED]
Eric Z. Cass, Esq.
Alexandra Megaris, Esq.
Sameer P. Sheikh, Esq.
Rachel P. Willer, Esq.
Venable
600 Massachusetts Avenue, N.W.
Washington, D.C. 20001

      Counsel for Appellant

Kelly M. Folks, Esq.
Kevin E. Friedl, Esq. [ARGUED]
Thomas McCray-Worrall, Esq.
Alusheyi J. Wheeler, Esq.
Consumer Financial Protection Bureau
1700 G Street, N.W.
Washington, D.C. 20552

       Counsel for Appellee
                                     ______________

                                        OPINION *
                                     ______________

SHWARTZ, Circuit Judge.

       The Consumer Financial Protection Bureau (“CFPB”) issued a civil investigative

demand (“CID”) to Heartland Campus Solutions, ECSI (“ECSI”), a student loan servicer,

seeking information concerning ECSI’s “servicing of student loans, including processing

payments, charging fees, transferring loans, maintaining accounts, and credit reporting[.]”

J.A. 41. ECSI objected to the CID for, among other reasons, failing to comply with the

statute authorizing the CFPB to enforce CIDs, 12 U.S.C. § 5562(c). The CFPB filed a

petition to enforce the CID, which the District Court granted. Because the CID complies

with § 5562(c)(2), we will affirm.

                                             I

       Congress established the CFPB to “regulate the offering and provision of

consumer financial products or services under the Federal consumer financial laws,” 12

U.S.C. § 5491(a), which include eighteen statutes set forth in 12 U.S.C. § 5481(12) as

well as 12 U.S.C. § 5531, which allows the CFPB to prohibit unfair, deceptive, or


       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.

                                             2
abusive acts or practices. One of the CFPB’s “primary functions” is to “tak[e]

appropriate enforcement action to address violations of Federal consumer financial

law[.]” Id. § 5511(c)(4).

       To enforce these consumer financial laws, Congress empowered the CFPB to issue

CIDs requiring, among other things, the production of documents or testimony from “any

person” whom the CFPB “has reason to believe” has information relevant to a violation

of such laws. Id. § 5562(c)(1). Each CID must “state the nature of the conduct

constituting the alleged violation which is under investigation and the provision of law

applicable to such violation.” Id. § 5562(c)(2). This is known as the “Notification of

Purpose.” 12 C.F.R. § 1080.5. The recipient of a CID may engage in a meet-and-confer

with a CFPB investigator to “resolve all issues regarding compliance with” the CID. 12

C.F.R. § 1080.6(c). If the recipient refuses to comply with the CID, the CFPB may file a

petition in federal court to enforce it. 12 U.S.C. § 5562(e)(1).

       On May 18, 2017, the CFPB issued a CID to ECSI, seeking documents and

written responses to interrogatories. ECSI and the CFPB engaged in a meet-and-confer,

during which ECSI objected to the Notification of Purpose contained in the CID. The

CFPB withdrew its May 18 CID and, on June 9, 2017, issued a new CID to ECSI. The

Notification of Purpose in the June 9 CID provided:

       The purpose of this investigation is to determine whether student-loan
       servicers or other persons, in connection with servicing of student loans,
       including processing payments, charging fees, transferring loans,
       maintaining accounts, and credit reporting, have engaged in unfair,
       deceptive, or abusive acts or practices in violation of §§ 1031 and 1036 of
       the Consumer Financial Protection Act of 2010, 12 U.S.C. §§ 5531, 5536; or
       have engaged in conduct that violates the Fair Credit Reporting Act, 15


                                             3
       U.S.C. §§ 1681 et seq., and its implementing Regulation V, 12 C.F.R. Part
       1022. The purpose of this investigation is also to determine whether Bureau
       action to obtain legal or equitable relief would be in the public interest.

J.A. 41. ECSI objected to the Notification of Purpose during a second meet-and-confer,

submitted a letter to the CFPB requesting modifications and clarifications of certain

interrogatories and document requests, and received a response from the CFPB

addressing some of its comments. ECSI nevertheless petitioned the CFPB to set aside or

modify the CID. The CFPB denied the petition and, when ECSI ultimately refused to

comply with the CID, it filed its own petition for enforcement in the United States

District Court for the Western District of Pennsylvania. Consumer Financial Protection

Bureau v. Heartland Campus Solutions, ESCI, No. 17-1502, 2018 WL 1089806, at * 1

(W.D. Pa. 2018) (“ESCI”). The Court held a Show Cause hearing, at which ECSI

conceded that if the Notification of Purpose listed just one of the five activities specified,

the CID would have satisfied § 5562(c)(2).

       The District Court granted the petition and: (1) found that the CID satisfied

§ 5562(c)(2)’s statutory notice requirement because it specified the “nature of the

conduct” under investigation by enumerating five specific activities and the applicable

provisions of law, ESCI, 2018 WL 1089806, at *4; (2) rejected ECSI’s argument that the

CID’s inclusion of all aspects of a student loan servicer’s operations in its list of activities

under investigation rendered it insufficient because there is “no authority . . . holding that

the CFPB is barred from investigating the totality of a company’s business operations,”

id.; (3) determined that the CID at issue here materially differed from the CID held

unenforceable in Consumer Financial Protection Bureau v. Accrediting Council for


                                               4
Independent Colleges & Schools, 854 F.3d 683 (D.C. Cir. 2017) (“ACICS”), id.; and (4)

held that the CID satisfied all the requirements for enforceability of an administrative

subpoena under University of Medicine & Dentistry of New Jersey v. Corrigan, 347 F.3d

57 (3d Cir. 2003) (applying factors for enforcement of an administrative subpoena set

forth in United States v. Morton Salt Co., 338 U.S. 632 (1950)). Id. at *4-5.

       ECSI appeals.

                                             II 1

       An administrative agency “can investigate merely on suspicion that the law is

being violated, or even just because it wants assurance that it is not.” United States v.

Powell, 379 U.S. 48, 57 (1964). Ordinarily, “judicial proceedings are appropriate only

after the investigation has led to enforcement, because [j]udicial supervision of agency

decisions to investigate might hopelessly entangle the courts in areas that would prove to

be unmanageable and would certainly throw great amounts of sand into the gears of the

administrative process.” Corrigan, 347 F.3d at 64 (alteration in original, citations and

internal quotation marks omitted). As a result, “judicial review of administrative

subpoenas is ‘strictly limited.’” Id. (quoting FTC v. Texaco, Inc., 555 F.2d 862, 871-72



       1
         The District Court had jurisdiction pursuant to 28 U.S.C. § 1331 and 12 U.S.C.
§ 5562(h)(1). We have jurisdiction pursuant to 28 U.S.C. § 1291 and 12 U.S.C.
§ 5562(h)(2).
       We review a district court’s order enforcing administrative subpoenas for abuse of
discretion. FDIC v. Wentz, 55 F.3d 905, 908 (3d Cir. 1995). Abuse of discretion occurs
when “the district court’s decision rests upon a clearly erroneous finding of fact, an errant
conclusion of law or an improper application of law to fact.” NLRB v. Frazier, 966 F.2d
812, 815 (3d Cir. 1992). We review a district court’s interpretation of federal statutes de
novo. Gagliardo v. Connaught Labs., Inc., 311 F.3d 565, 570 (3d Cir. 2002).

                                              5
(D.C. Cir. 1977) (en banc)). Under this “strictly limited” review, a district court will

enforce a CFPB CID if it, first, complies with the terms of § 5562(c)(2), and, second,

satisfies the standard set forth in Morton Salt Co. See ACICS, 854 F.3d at 690. The CID

here satisfies both requirements.

                                             A

       Section 5562(c)(2) sets forth two criteria for CIDs that seek to “ensure[] that the

recipient of a CID is provided with fair notice as to the nature of the Bureau’s

investigation.” ACICS, 854 F.3d at 690. Specifically, the plain language of § 5562(c)(2)

requires each CID to identify (1) the nature of the conduct constituting the alleged

violation and (2) the provision of law applicable to such violation. 2 The CID in this case

satisfies both requirements. First, the CID here clearly identifies the conduct at issue as

“processing payments, charging fees, transferring loans, maintaining accounts, and credit

reporting[.]” J.A. 41. Second, the CID identifies the provisions of law applicable to the

conduct being investigated, namely “§§ 1031 and 1036 of the Consumer Financial

Protection Act of 2010, 12 U.S.C. §§ 5531, 5536; . . . [and] the Fair Credit Reporting Act,

15 U.S.C. §§ 1681 et seq., and its implementing Regulation V, 12 C.F.R. Part 1022.” Id.

Together, they reflect that the CID seeks information about unfair, deceptive, abusive and

acts prohibited by specific statutes in connection with processing payments, charging

fees, transferring loans, maintaining accounts, and credit reporting in connection with


       2
          Because § 5562(c)(2)’s plain language sets forth the required contents of the
notice, it is unnecessary to consider the legislative history ESCI cites regarding the
importance of notice in administrative agency investigations.


                                              6
student loans. Given that “the precise character of possible violations [of a statute]

cannot be known” during the investigative phase, Texaco, Inc., 555 F.2d at 877, the

CFPB is not required to be any more specific. 3 Indeed, “the CFPB may define the

boundary of its investigation ‘quite generally[.]’” ACICS, 854 F.3d at 690 (quoting FTC

v. Invention Submission Corp., 965 F.2d 1086, 1090 (D.C. Cir. 1992)).

       ECSI contends that the CFPB has drawn the boundaries of its investigation too

broadly because the identified conduct includes “all component functions of any student

loan servicing business . . . [,] [leaving ECSI with] no notice of what conduct is being

investigated.” Appellant’s Br. 16. This contention rests on the flawed assumption that

the CFPB could not investigate all of ECSI’s conduct. Nothing prohibits the CFPB from

investigating the totality of ECSI’s business activities, and courts have previously

enforced administrative subpoenas regarding conduct that is coextensive with the

recipient’s business activity. See, e.g., Invention Submission Corp., 965 F.2d at 1087-90



       3
         In essence, the dissent would require the agency to explain how a practice
violates a particular law. This is not what Congress required. Congress required an
agency to identify only the type of conduct that may violate the law and the law being
violated. Congress’ minimal requirements make sense. First, they ensure that the
conduct and laws at issue are within the CFPB’s jurisdiction. Second, they recognize that
CIDs issued at the beginning of an investigation may be served when little is known
about the specific ways the conduct may be deceptive. As stated above, a CID may be
issued where the investigation is in its infancy, and it may be difficult to provide the
detail the dissent seems to require. Third, CIDs can be served on both the target of the
CFPB’s inquiry and nonparties who may have relevant information. The dissent’s
requirement would result in disclosing to nonparties the specific type of deceptive
conduct under investigation and perhaps result in disclosure of information that may
inadvertently harm the target. Thus, Congress’ minimal requirements provide fair notice
to the recipient of the CID concerning the purpose for which it is being issued and allows
the Government to maintain confidentiality concerning the scope of its investigation.

                                             7
(D.C. Cir. 1992) (enforcing administrative subpoena issued to a company that “is in the

business of promoting other people’s inventions” as part of an investigation into “false or

misleading representations made in connection with the advertising, offering for sale and

sale of its services relating to the promotion of inventions or ideas”); Interstate

Commerce Comm’n v. Gould, 629 F.2d 847, 848-49, 853, 857 (3d Cir. 1980) (enforcing

an Interstate Commerce Commission “inspection request” to inspect the “transportation-

related” business records of a “sole proprietorship engaged in the business of brokering

transportation services”).

       Moreover, ECSI concedes that if the CID had listed just one of the activities set

forth in the CID, it would have been a permissible demand because it would have notified

ECSI of the specific activity under investigation. Listing several activities does not make

the CID borderless. Rather, it simply specifies in one demand various activities in which

ECSI engages and which are under investigation.

       ECSI’s contention that the Notification of Purpose here is materially

indistinguishable from the Notification of Purpose found to be inadequate in ACICS fails.

The Notification of Purpose at issue in ACICS stated:

       The purpose of this investigation is to determine whether any entity or person
       has engaged or is engaging in unlawful acts and practices in connection with
       accrediting for-profit colleges, in violations of sections 1031 and 1036 of the
       Consumer Financial Protection Act of 2010, 12 U.S.C. §§ 5531, 5536, or any
       other Federal consumer financial protection law. The purpose of this
       investigation is also to determine whether Bureau action to obtain legal or
       equitable relief would be in the public interest.

454 F.3d at 690. The CID in ACICS failed to “explain[] what the broad non-specific

term ‘unlawful acts and practices’ mean[t] in this investigation.” Id. The Notification of


                                              8
Purpose here identifies the actors, i.e., “student loan servicers,” and the types of

activities, i.e., “processing payments, charging fees, transferring loans, maintaining

accounts, and credit reporting,” under investigation. J.A. 41. Thus, it has the specificity

the CID in ACICS lacked.

       ECSI also relies on the ACICS court’s conclusion that the Notification of Purpose

inadequately described the relevant laws, 12 U.S.C. §§ 5531 and 5536, which prohibit an

individual from “committing or engaging in an unfair, deceptive, or abusive act or

practice under Federal law . . . .” 12 U.S.C. § 5531. The ACICS court found the

references to §§ 5531 and 5536 in the ACICS CID insufficient in light of FTC v. Carter,

636 F.2d 781, 788 (D.C. Cir. 1980), where the court held that a reference to a provision

of law prohibiting unfair and deceptive practices “standing broadly alone would not serve

[the] very specific notice of purpose,” “especially considering” the CFPB’s failure to

identify the specific conduct under investigation. ACICS, 854 F.3d at 691. This is not

relevant here. The ECSI CID includes references to specific provisions of law other than

the bar on unfair and deceptive practices, and the CFPB has identified the conduct under

investigation and specific statutes that may be violated. Moreover, whereas the CID in

ACICS included “the uninformative catch-all phrase ‘any other Federal consumer

financial protection law,’” 854 F.3d at 691-92, the ECSI CID does not.

       Finally, despsite ECSI’s assertions, ACICS does not impose any additional

requirements beyond those set forth in § 5562(c)(2). ECSI argues that the CFPB “must

do more than simply state the conduct and list provisions of law; the [CFPB]’s obligation

is to inform a CID recipient ‘of the link between the relevant conduct and the alleged


                                              9
violation.’” Reply Br. 6 (quoting ACICS, 854 F.3d at 691). The ACICS court did not

create such a third requirement. Rather, its discussion of a “link” arose because the

CFPB had acknowledged in ACICS that it lacked statutory authority over the CID

recipient’s business activities. More specifically, in ACICS, the CFPB was investigating

the accreditation process of for-profit colleges, and was examining whether for-profit

colleges engaged in “deceptive practices in connection with their student-lending

activities.” 854 F.3d at 686. ACICS is not a for-profit college, nor is it an entity under

the CFPB’s enforcement authority. Because the basis for the CFPB’s “interest” in

ACICS’s records was nowhere on the face of the CID and the CID itself did not even

disclose the types of conduct alleged to violate the statutes, the ACICS court concluded

that the CFPB failed to provide “the link between the relevant conduct and the alleged

violation.” Id. Thus, the ACICS court did not impose a third requirement regarding

link,” but rather its discussion of a link was merely an explanation for why the CID there

failed to provide notice of its purpose, as § 5562(c)(2) requires. Id.

       For these reasons, the Notification of Purpose in the CID served upon ECSI

complies with § 5562(c)(2). 4




       4
         Whether other cases have approved CIDs with greater specificity is of no
consequence. Nothing compels the CFPB to issue an equally specific CID to ECSI. The
CFPB is only required to issue a CID that complies with § 5562(c)(2) and the Morton
Salt factors.

                                             10
                                             B

       The CID also meets all of the requirements our Court and the Supreme Court have

imposed for enforcing an agency investigative demand. See Morton Salt Co., 338 U.S. at

642-43; Corrigan, 347 F.3d at 64.

       First, the Notification of Purpose identifies a legitimate purpose—to investigate

whether student loan servicers violated 12 U.S.C. §§ 5531 and 5536 or the Fair Credit

Reporting Act and its implementing regulations, law the CFPB is statutorily empowered

to enforce. See 12 U.S.C. § 5481(12); 12 U.S.C. § 5531(a). Second, the requests are

relevant. Texaco, Inc., 555 F.2d at 874 (“[T]he relevance of the agency’s subpoena

requests may be measured only against the general purposes of its investigation.”).

Because the conduct under investigation covers the entirety of its student loan servicing

business operations, the requests, which all relate to ESCI’s student loan servicing, are

relevant to the CFPB’s investigatory purpose. Third, the CFPB asserts, and ESCI does

not dispute, that the information sought is not already in its possession. Fourth, the

agency has followed the administrative steps required, specifically compliance with §

5562(c)(2). Fifth, ESCI’s claim that the CID is unreasonably broad and burdensome

because it amounts to a “fishing expedition” without a “sufficient investigatory purpose,”

Appellant’s Br. 32, fails because, as we have explained, the CFPB has a valid

investigatory purpose and the information sought pertains to activities under

investigation. Thus, the District Court did not err in its application of the Morton Salt

factors and granting the petition.




                                             11
                                           III

      For the foregoing reasons, we will affirm the District Court’s order granting the

CFPB’s petition to enforce the CID.




                                           12
    Consumer Financial Protection Bureau v. Heartland
                Camput Solutons, ECSI

                          No. 18-1516


RENDELL, Circuit Judge, dissenting

        The CFPA prohibits “unfair, deceptive, or abusive
act[s] or practice[s] . . . in connection with any transaction
with a consumer.” 12 U.S.C. § 5531(a). If the Bureau
undertakes an investigation into a suspected violation of the
law, it issues a civil investigative demand (“CID”). The CID
must include a notification of purpose, that is, it must “state
the nature of the conduct constituting the alleged violation
which is under investigation and the provision of law
applicable to such violation.” Id. § 5562(c)(2). One would
logically assume that the notification would point to the
purported deceptive or abusive act or practice—even in
general terms.

        The notice here does no such thing. Indeed, it parrots
all of the activities in which the target engages and cites to the
relevant provisions of law. Curiously, many courts have
approved similarly uninformative notices. 1 In effect, these

1
  See, e.g., CFPB v. Seila Law, LLC, No. 8:17-cv-01081,
2017 WL 6536586, at *3–4 (C.D. Cal. Aug. 25, 2017), stayed
pending appeal, No. 17-56324 (9th Cir. Sept. 13, 2017)
(upholding a CID identifying the relevant conduct as
“advertising, marketing, or sale of debt relief services or
products, including but not limited to debt negotiation, debt
elimination, debt settlement, and credit counseling” and




                                1
courts, and the majority today, bless CIDs that in essence say
“the purpose of this investigation is to determine whether
anyone who works for you, in connection with doing
anything related to your business, has engaged in unfair or
deceptive acts or practices or violated any provision of the
FCRA.” Surely this cannot be the law.

       But one court has pointed out the absurdity of giving a
notification that notifies of no purpose whatsoever. Judge
Sentelle, writing for the Court of Appeals for the District of
Columbia, notes that: “Because the validity of a CID is
measured by the purposes stated in the notification of
purpose, the adequacy of the notification of purpose is an
important statutory requirement.” CFPB v. Accrediting
Council for Indep. Colls. & Schs. (ACICS), 854 F.3d 683, 690
(D.C. Cir. 2017) (citation omitted). In that case, as here, the
CID set forth a broad purpose with no purportedly violative



applicable law as “Sections 1031 and 1036 of the Consumer
Financial Protection Act of 2010, 12 USC §§ 5531, 5536; 12
U.S.C. § 5481 et seq., the Telemarketing Sales Rule, 16
C.F.R. § 310.1 et seq., or any other Federal consumer
financial law”); CFPB v. Source for Public Data, LP, No.
3:17-mc-16, 2017 WL 2443135, at *4, 12 (N.D. Tex. June 6,
2017), stayed pending appeal, No. 17-10732 (5th Cir. July
12, 2017) (upholding a CID identifying the conduct under
investigation and applicable law as “engaging in unlawful
acts and practices in connection with the provision or use
of public records information in violation of the Fair Credit
Reporting Act, 15 U.S.C. § 1681, et seq., Regulation V, 12
C.F.R. Part 1022, or any other federal consumer financial
law”).




                              2
conduct outlined. 2 The CID language there stated in part:
“The purpose of this investigation is to determine whether

2
        The majority attempts to distinguish ACICS on the
grounds that the CID referred to business activities which the
Bureau lacked authority to investigate. But the Court there
did not rest its analysis on this question, instead stating that:
“Because we can easily answer the issue on a narrower basis,
and because the invalidity of the CID makes it unnecessary to
reach the broad determination of the Bureau’s authority to
investigate the area of accreditation at all, we will . . . .
confine our analysis to the invalidity of this particular CID.”
Id. at 689–90. Nor can its discussion of a link between the
relevant conduct and the alleged violation be so easily set
aside. The “link” is not a “third requirement,” Majority Op.
Typescript at 10, it is the essential notice of what violative
conduct is being investigated. When, as here, a CID lists
conduct that is otherwise lawful, there must be some stated
nexus between that conduct and the provision of law whose
violation the Bureau seeks to investigate.
        Nor does the CID’s citation to the Fair Credit
Reporting Act cure the infirmity, for the FCRA is itself an
expansive law governing all activities relating to the reporting
of consumers’ credit information. See 15 U.S.C. § 1681. If
the CID were to refer to, say § 623 of the FCRA, which
requires a person furnishing information to a consumer
reporting agency to “promptly notify” the agency that the
person has furnished information that is incomplete or
inaccurate, 15 U.S.C. § 1681s-2, then the nature of the
conduct constituting the alleged violation would be clear to
the subject of investigation. Not so here. Stating another
broad provision of law that the Bureau has the authority to
enforce does not clarify the nexus between that law and the




                               3
any entity or person has engaged or is engaging in unlawful
acts and practices in connection with accrediting for-profit
colleges, in violation of sections 1031 and 1036 of the
Consumer Financial Protection Act of 2010, 12 U.S.C. §§
5531, 5536, or any other Federal consumer financial
protection law.” Id. at 686. The Court correctly noted that
the CID “never explains what the broad and non-specific term
‘unlawful acts and practices’ means in this investigation,” id.
at 690, and opines that the CID did not comply with the
statute because the Bureau “is required by statute to
adequately inform ACICS of the link between the relevant
conduct and the alleged violation,” id. at 691. Similarly, here,
the CID provides no link between the benign conduct it
identifies and the broad provisions of law it cites. A notice
like this one cannot stand.

       The majority posits that “[n]othing prohibits the CFPB
from investigating the totality of ECSI’s business activities.”
Majority Op. Typescript at 7. This assertion may be correct,
as far as it goes, but it is not probative of the issue of fair
notice. Moreover, it signals the potential for an overbroad
exercise of agency powers. The CFPA “does not afford” the
Bureau “unfettered authority to cast about for potential
wrongdoing.” In re Sealed Case (Admin. Subpoena), 42 F.3d
1412, 1418 (D.C. Cir. 1994). And, in Morton Salt, the
Supreme Court emphasized that “[o]f course[,] a
governmental investigation into corporate matters may be of
such a sweeping nature and so unrelated to the matter
properly under inquiry as to exceed the investigatory power.”
United States v. Morton Salt Co., 338 U.S. 632, 652 (1950).


stated, otherwise lawful conduct. If anything, it broadens the
CID’s scope.




                               4
Whether the Bureau investigates a business operation in
whole or in part, it must “provide sufficient notice.”
Crucially, the notice provision is the only substantive
limitation on the CFPB’s authority to issue CIDs. The notice
here is not only not fair notice, it illustrates the potential for
abuse of the agency’s power. I would require the CID to refer
to the purported “unfair, deceptive, or abusive act or
practice.” Therefore, I respectfully dissent.




                                5
