WASHINGTON (Legal Newsline) - A judge has ruled against the Consumer Financial Protection Bureau's efforts to release the identity of a John Doe company under investigation by the organization.

The lawsuit, John Doe Co. v. Cons. Fin. Protection Bureau, was filed by the company that was under investigation by the CFPB to stop the release of its identity.

Judge Randolph D. Moss of the U.S. District Court for the District of Columbia ruled against the bureau, allowing John Doe Co. to keep its identity under wraps throughout the investigation based on the company’s allegations that it would create harm if this information was released prematurely. Moss agreed with John Doe Co. to seal portions of the case despite the objections made by the CFPB.

“I think the judge took a very measured and practical approach to the case, balancing the public’s interest in the court proceedings and the general harms that can come upon a company that is prematurely identified as even being a potential target of a government investigation,” Ted Kornobis, an associate at K & L Gates, told Legal Newsline.

Although John Doe Co. was under investigation by the CFPB, this doesn’t necessary indicate any wrongdoing by the company. Releasing a company’s name early in a CFPB investigation can cause harm to the business that may not have done anything wrong to warrant the bad publicity.

The ruling is pivotal for companies under CFPB investigation as they may be able to protect themselves against having their identity released to the public, especially if the investigation is dropped with no findings.

“Government agencies tend to cast a wide net early on in their investigation and after spending some time investigating, they might realize there’s smoke but no fire, or the cause or the scope of an issue is different from what they first suspected,” Kornobis said. “To be publicly identified as an investigation target... can cause unnecessary harm to a company in terms of the company’s reputation, the company’s perception among customers, investors, and partners.”

The CFPB did put in a request to Moss to have him reconsider his ruling, but it was denied. The judge said the CFPB has yet to make any allegations in the case and may never do so. The bureau has admitted no wrongdoing in the case and the investigation into John Doe Co. is ongoing.

The suit against the CFPB by John Doe stemmed from an attempt to block the bureau from interviewing an attorney who previously represented John Doe Co. The case didn’t go anywhere and later turned into the suit against the CFPB to stop the release of John Doe Co.’s identity.

In the identity lawsuit, John Doe Co. was represented by Allyson B. Baker of Venable LLP. The CFPB’s counsel was John R. Coleman and Tamara T. Moore.

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Organizations in this Story

Consumer Financial Protection Bureau
1700 G St NW
Washington, DC - 20552

U.S. District Court for the District of Columbia
333 Constitution Ave NW
Washington, DC - 20001

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