United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING RESPONDENTS' MOTION TO
G. Edmunds United States District Judge
February 16, 2017, the Court entered an Order requiring
Respondents to comply with Civil Investigative Demands
("CIDs") issued by Petitioner Consumer Financial
Protection Bureau (the "Bureau"). (Dkt. 19.) Now
Respondents move to stay that Order pending appeal. (Dkt.
21.) For the reasons below, their motion is DENIED.
Court reviewed the relevant facts in its February 16 Order,
and it incorporates that background here. (Dkt. 19, at 1-4.)
To summarize, Respondents are targets of a Bureau
investigation into potential violations of the federal
consumer financial laws. On September 8, 2016, the Bureau
issued CIDs to each Respondent. The CIDs required the
production of documents, interrogatories, and written reports
by October 7, 2016.
inter alia, that the Bureau lacked the authority to
issue their respective CIDs, Respondents petitioned the
Bureau to set aside them aside. On November 1, 2016, the
Bureau Director denied Respondents' petitions.
Respondents then continued to oppose enforcement, so the
Bureau petitioned this Court to enforce the CIDs on November
29, 2016. After ordering briefing and holding a hearing on
the matter, the Court issued its February 16, 2017 Order
requiring Respondents to comply with the CIDs within 30 days.
Respondents move to stay enforcement of that Order pending
appeal. Respondents have asked the Court to consider their
motion an expedited basis, and it has obliged, ordering
expedited briefing and declining to hold a hearing.
Respondents also request that, if the Court denies their
motion, the time spent obtaining a decision on their motion
not be counted against the 30-day deadline for complying with
party seeking a stay bears the burden of showing that a stay
is warranted. Ohio St. Conference of NAACP v.
Husted, 769 F.3d 385, 387 (6th Cir. 2014). In deciding
whether to grant a stay, the Court must consider the
following: (1) whether the stay applicant has made a strong
showing that it is likely to succeed on the merits; (2)
whether the applicant will be irreparably injured absent a
stay; (3) whether issuance of the stay will substantially
injure the other parties interested in the proceeding; and
(4) where the public interest lies. Nken v. Holder,
556 U.S. 418, 434 (2009) (citation omitted). "These four
factors are not prerequisites that must be met, but
interrelated considerations that must be balanced."
Concerned Pastors for Soc. Action v. Khouri, 844
F.3d 546, 548-549 (6th Cir. 2016) (internal quotation marks
and citation omitted). However, the "first two factors
of the  standard are the most critical."
Nken, 556 U.S. at 434. And where the Government is
the party opposing the stay, the final two factors merge.
Id. at 435.
contend that they have carried their burden of establishing
that a stay is warranted. For the reasons that follow, the
Likelihood of Success on the Merits
demonstrate a likelihood of success on the merits, the movant
must show, 'at a minimum, serious questions going to the
merits.'" Dodds v. United States Dep't of
Educ., 845 F.3d 217, 221 (6th Cir. 2016) (quoting
Mich. Coal. of Radioactive Mat. Users, Inc. v.
Griepentrog, 945 F.2d 150, 154 (6th Cir. 1991)).
"It is not enough that the chance of success on the
merits be better than negligible." Nken, 556
U.S. at 434 (citation omitted). "[M]ore than a mere
'possibility' of relief is required."
Id. (citation omitted).
Respondents argue that they "easily meet that
standard" because judges and lawyers could reasonably
contest the Court's conclusion that the Bureau has the
authority to issue the CIDs. (Dkt. 21, at 8.) In support,
Respondents emphasize a variety of sources related to their
argument that the financial products they offer do not
constitute "credit" under the federal consumer
financial laws. (Id.) The problem with
Respondents' argument, which the Court addressed in its
February 16 Order, is that whether Respondents'
transactions constitute "credit" is not dispositive
of whether the Bureau has authority to issue the CIDs.
See EEOC v. Karuk Tribe Hous. Auth., 260 F.3d 1071,
1076 (9th Cir. 2001) (noting that the Supreme Court has
"consistently reaffirmed" that "courts should
not refuse to enforce an administrative subpoena when
confronted by a fact-based claim regarding coverage or
compliance with the law"); FTC v. Texaco,
Inc., 555 F.2d 862, 872 (D.C. Cir. 1977). The issue
is whether the Bureau's investigative jurisdiction is
"plainly lacking, " i.e., whether there are
plausible grounds to believe that Respondents may have
information related to a violation of the federal consumer
financial laws. See 12 U.S.C. § 5562(c)(1);
Karuk Tribe Hous. Auth., 260 F.3d at 1077; FTC
v. Ken Roberts Co., 276 F.3d 583, 587 (D.C. Cir. 2001).
And Respondents have not raised a meaningful challenge to the
Court's application of that standard,  nor have they
argued that the Court applied the incorrect standard.
Accordingly, the Court finds that Respondents have not raised
serious questions going to the merits, let alone that they
are likely to succeed on appeal.