United States Court of Appeals, District of Columbia Circuit
BEFORE: Kavanaugh, [*] Millett, and Wilkins, Circuit
consideration of the emergency motion for injunction pending
appeal, the response thereto, and the reply, it is
that the motion for injunction be denied.
John Doe Company is a California limited liability company
with its principal place of business in the Philippines. The
Company is in the business of purchasing and selling income
streams. A recent Government Accountability Office study
explained that income-stream-marketing businesses often
target vulnerable clients such as our military veterans and
the elderly, charging effective interest rates far in excess
of state usury laws (up to 87% in some cases) and providing
lump sum payouts that are roughly half the minimum required
under federal law governing pensions. See U.S.
Gov't Accountability Office, GAO-15-846T, Pension Advance
Transactions: Questionable Business Practices Identified
20-22, 23-26, 27 (2015). The GAO Report recommended that the
Federal Trade Commission and the Consumer Financial
Protection Bureau investigate income-stream marketers. The
Company itself has been the subject of regulatory proceedings
by at least six States under their consumer protection laws.
As the district court found, "neither side seems to
dispute that John Doe Co. has been the subject of
considerable negative publicity throughout the past few
years." Dist. Ct. Op. Denying Prelim. Inj. 7.
November 2016, the Consumer Financial Protection Bureau
issued a Civil Investigative Demand ("CID") to the
Company pursuant to its statutory authority, 12 U.S.C. §
5562(c)(1). Congress authorized the Bureau to issue CIDs to
collect information relevant to the enforcement of specified
consumer protection laws. Id.; see also 12
U.S.C. § 5511. The issuance of a CID is purely
investigatory. It does not initiate a law-enforcement
proceeding or even signify that any violation of law has been
committed. See 12 U.S.C. § 5562(e).
are not self-enforcing, and non-compliance triggers no fine
or penalty. 12 U.S.C. § 5562(e)(1); Morgan Drexen,
Inc. v. Consumer Fin. Prot. Bureau, 979 F.Supp.2d 104,
108 (D.D.C. 2013), aff'd, 785 F.3d 684 (D.C.
Cir. 2015). The Company thus needed to do nothing in response
to the CID it received. If a recipient declines to respond to
the CID, the Bureau must obtain a court order to enforce it.
12 U.S.C. § 5562(e). In that court proceeding, the
recipient can raise any relevant legal objection to
enforcement of the CID.
case, the Company did not wait for the Bureau to seek
enforcement of the CID, but instead filed a pre-enforcement
suit in district court challenging the constitutionality of
the Bureau's structure and seeking to halt any and all
Bureau action "adverse" to the company, Mot. for
Prelim. Inj. 26, including enjoining enforcement of the CID
and forbidding the disclosure of the Company's identity.
The district court denied Doe's request for a preliminary
injunction, concluding that the Company had not met its
burden of establishing either a likelihood of success or
irreparable harm. The Company now requests an emergency
injunction pending appeal.
preliminary injunction is "an extraordinary remedy that
may only be awarded upon a clear showing that the [movant] is
entitled to such relief." Winter v. Natural Res.
Def. Council, Inc., 555 U.S. 7, 22 (2008). "A
plaintiff seeking a preliminary injunction must establish
that he is likely to succeed on the merits, that he is likely
to suffer irreparable harm in the absence of preliminary
relief, that the balance of equities tips in his favor, and
that an injunction is in the public interest."
Id. at 20. Because the Company seeks the exceptional
remedy of an injunction pending appeal, the Company faces the
difficult task of coming forward with evidence and argument
showing that it is "likel[y]" that the district
court "abused its discretion" in denying a
preliminary injunction. See, e.g., Washington
Metro. Area Transit Comm'n v. Holiday Tours, Inc.,
559 F.2d 841, 844 (D.C. Cir. 1977); Chaplaincy of Full
Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir.
Company's sole argument regarding likelihood of success
on the merits before this court and the district court has
been to point to the now-vacated majority opinion in PHH
Corporation v. Consumer Financial Protection Bureau, 839
F.3d 1 (D.C. Cir. 2016), vacated, reh'g en banc
granted, No. 15-1177 (D.C. Cir. Feb. 16, 2017). But
remember: the Company has to show not just that there is
potentially persuasive authority for its legal position, but
that the district court abused its discretion in not
sufficiently crediting that showing in the balancing of
equities that preliminary injunctive relief requires.
Pointing to PHH is not enough for four reasons.
the PHH decision on which the Company relies has
been vacated. And even within that decision, panel members
differed on the appropriateness or necessity of issuing the
separation-of-powers ruling given predicate statutory issues
in the case. PHH, 839 F.3d at 56 (Henderson, J.,
concurring in part and dissenting in part) (declining to
reach the constitutional question because an adequate remedy
could be provided on the statutory ground); see also
id. at 55 (Randolph, J., concurring) (also finding
constitutional error in the ALJ who heard the proceeding).
Without suggesting anything one way or the other about how
the en banc court might ultimately resolve the PHH
case and with all due respect to its panel members, the
district court did not abuse its discretion in determining
that simply pointing to the vacated majority opinion in
PHH did not establish the likelihood of an
identical constitutional ruling by the en banc court in
PHH or the court in this case.
even assuming for purposes of this motion that the en banc
court were to reach the same constitutional ruling as the
majority opinion in PHH, the Company is not remotely
in the same constitutional position as PHH. PHH, remember,
was on the receiving end of a completed law enforcement
proceeding by the Bureau, and had been ordered to pay a $109
million fine. PHH, 839 F.3d at 7. In finding a
separation-of-powers violation, the majority opinion
repeatedly emphasized its view of the
assignment of "law enforcement" authority to the
Executive Branch. See, e.g., id. at 18
(discussing "the core Article II executive power of
bringing law enforcement actions"); id. at 19
(Social Security Administrator distinguishable because he
"does not possess unilateral authority to bring law
enforcement actions against private citizens, which is the
core of the executive power and the primary threat to
individual liberty posed by executive power");
id. at 20 n.5 (court's holding would not
invalidate other single-director independent agencies because
they "do not exercise the core executive power of
bringing law enforcement actions").
Company, by contrast, filed a pre-enforcement suit to stop a
non-self-executing investigative demand for regulatory
information. The Company voices no objection here to the
scope or content of the CID and does not argue that it falls
beyond the Bureau's statutory authority. The
Company's sole argument is that the Bureau's
single-Director structure is unconstitutional. And the ...