CONSUMER FINANCIAL PROTECTION BUREAU v. ITT EDUCATIONAL SERVICES, INC.
1:14-cv-00292
S.D. Ind.Mar 21, 2016Background
- CFPB sued ITT Educational Services asserting claims under the Consumer Financial Protection Act and one Truth in Lending Act claim; the TILA claim was dismissed but three CFPA claims survived.
- ITT appealed the March 6, 2015 order denying dismissal of the CFPA claims and sought a stay of district-court proceedings pending that appeal.
- ITT relied solely on the collateral-order doctrine as the basis for interlocutory appeal and asked the district court to stay all proceedings.
- Nine months elapsed between ITT’s notice of appeal and its motion to stay; during that time ITT participated in discovery and raised no jurisdictional challenge.
- The district court considered and rejected ITT’s arguments that (1) the collateral-order doctrine mandated a stay, (2) the appeal implicated rights analogous to immunity, and (3) the court should exercise its inherent docket-control power to stay the case.
- The court denied ITT’s motion to stay and its motion for oral argument, noting ITT could seek a stay from the Seventh Circuit if it wished.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the collateral-order doctrine permits interlocutory appeal and requires a stay | Collateral-order exception is narrow; no basis here to treat order as immediately appealable | The March 6 order is appealable under the collateral-order doctrine, so proceedings should be stayed | Court held the collateral-order doctrine did not justify a stay; ITT’s appeal did not meet the narrow exception |
| Whether litigation costs/expense constitute irreparable harm justifying a collateral appeal or stay | Litigation expense is not irreparable harm and does not make an order final | The expense and burden of further discovery/defense warrant a stay to avoid undue cost | Court held litigation expense alone is not irreparable harm and does not justify a stay |
| Whether ITT’s constitutional challenges are like immunity claims that warrant immediate appeal and an automatic stay | The CFPA constitutional challenge should be treated as collateral and stay-appropriate | ITT argued its constitutional claims require interlocutory review similar to immunity rights | Court distinguished qualified-immunity precedents and found ITT’s claims do not fit that category; no automatic stay |
| Whether the district court should use inherent docket-control power to stay proceedings | Court should deny broad stay absent strong showing | ITT asked the court to exercise inherent power to stay the entire matter pending appeal | Court declined to exercise inherent power because ITT failed to show sufficient grounds and delayed seeking relief |
Key Cases Cited
- Richardson-Merrell, Inc. v. Koller, 472 U.S. 424 (1985) (describing collateral-order doctrine as a narrow exception to final-judgment rule)
- Digital Equip. Corp. v. Desktop Direct, 511 U.S. 863 (1994) (noting stringent requirements for collateral-order appeals)
- Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368 (1981) (litigation expense does not constitute irreparable harm)
- Renegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1 (1974) (mere litigation expense, even substantial, is not irreparable injury)
- R.R. Donnelly & Sons Co. v. FTC, 931 F.2d 430 (7th Cir. 1991) (cost/delay of litigation does not render an order final)
- Bradford-Scott Data Corp. v. Physician Computer Network, 128 F.3d 504 (7th Cir. 1997) (discussed in context of stays but did not involve collateral-order doctrine appeal)