Morgan Drexen Asks D.C. Judge to Halt CFPB Counter-Lawsuit

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WASHINGTON, Aug. 24, 2013 (GLOBE NEWSWIRE) -- First thing's first. Morgan Drexen has asked a federal judge to put a stop to a lawsuit filed this week by the Consumer Financial Protection Bureau (CFPB) until the agency's constitutionality can be determined. On Tuesday, the CFPB filed a complaint against Morgan Drexen in a California federal court, essentially defying a request from a District of Columbia judge not to pursue legal action until she issues a ruling on the agency's constitutional legitimacy.

The CFPB ignored the request, filing the lawsuit exactly one week before it was due to issue a response to Morgan Drexen's motion for summary judgment in the lawsuit the company filed against the CFPB in July. Morgan Drexen is asking U.S. District Court Judge Colleen Kollar-Kotelly to issue a temporary restraining order and preliminary injunction preventing the California lawsuit from moving forward until she renders her decision, which is expected in late September.

"This retaliatory move by the CFPB is disruptive, distracting, and, we believe, disrespectful to the Court," said Randall K. Miller, the attorney representing Morgan Drexen. "The judge set forth an expedited schedule that all parties agreed to, yet the CFPB chose to file suit 3,000 miles away before any resolution regarding the agency's very legitimacy had been reached."

Morgan Drexen's lawsuit argues the CFPB lacks the constitutionally-required checks, balances, and oversight required of a federal agency. Further, the complaint accuses the CFPB of attempting to data mine private bankruptcy documents and communications protected by attorney-client privilege. As described in the motion filed:

"An injunction is necessary to permit the orderly disposition of this case, which is proceeding on an expedited schedule ordered by the Court, and consented to by the CFPB, and to avoid the duplication, inefficiency, and risk of inconsistent decisions on the foundational constitutional issue."

The CFPB's lawsuit against Morgan Drexen inaccurately characterizes the company as a debt settlement firm. Morgan Drexen is a business-to-business provider that offers software and back-office support services to help companies, including law firms, operate more efficiently. Morgan Drexen's support services model has been evaluated and confirmed by at least 16 jurisdictions across the country, including state bars and district courts. Morgan Drexen's attorney, Randall K. Miller, has called the CFPB's lawsuit "procedural gamesmanship" designed to derail its own case in federal court.

CONTACT: Karen Carlson 818-434-1184

Source: Morgan Drexen Integrated Systems