350 F. Supp. 3d 1129
D.N.M.2018Background
- People's Trust (a federally chartered credit union) holds 10% interests in two loans (SRE and Verkin); Commercial Lending/Chetco CU and Alliant CU hold the remainder; NCUA Board became Chetco's liquidating agent.
- People's Trust sought to settle an underlying New Mexico foreclosure through a Settlement Agreement; other interest-holders (NCUA and Alliant) initially declined.
- People's Trust filed an AAA arbitration demand seeking a declaration it may settle without others' consent; NCUA objected and asserted the dispute belongs to NCUA's administrative process.
- NCUA moved for a TRO/preliminary injunction to stop arbitration and settlement steps; this Court granted a TRO and set, continued, and repeatedly stayed a preliminary-injunction hearing while parties negotiated.
- On June 23, 2017 People's Trust and NCUA jointly moved to vacate/continue the June 28, 2017 preliminary-injunction hearing, stay proceedings, and extend the TRO to allow further settlement talks; Alliant CU refused to join.
- The Court denied the joint motion because Alliant CU objected and, under Rules 16 and 65, Alliant CU had a right to a preliminary-injunction hearing or to refuse a scheduling modification; the Court later entered an Agreed Order staying arbitration and continuing the TRO pending final judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Court should vacate/continue preliminary-injunction hearing to allow more settlement talks | Vacate and reschedule the hearing (parties reached agreement or need time to finalize) | NCUA joined motion; Alliant opposed — it wants the hearing to protect its interests | Denied: hearing may not be vacated over Alliant's objection; party with interest can insist on hearing |
| Whether Court should stay further proceedings until new PI hearing date | Stay to permit settlement and avoid prejudicial injunction rulings | NCUA agreed to stay; Alliant refused and said delay harms it and negotiations are stalled | Denied: cannot extend agreed deadlines under Rule 16 without good cause and consent of all interested parties |
| Whether Court should continue the TRO pending the new hearing | Continue TRO to preserve status quo during settlement talks | Alliant opposed continuation absent resolution; Court must protect parties' rights to hearing | Denied (oral ruling): TRO not continued for same reasons, though an Agreed Order later stayed arbitration and TRO until final judgment |
| Whether parties can modify scheduling under Rule 16 when an intervenor objects | Joint movants argued good cause based on ongoing negotiations and mutual agreement between principal parties | Alliant argued it need not agree and has right to insist on hearing; Rule 16 requires good cause and judge's consent | Denied: scheduling changes require good cause and cannot be forced over an interested party's objection; court exercised discretion to keep hearing date unless parties submit agreed preliminary-injunction order |
Key Cases Cited
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (movant for preliminary injunction must show likelihood of success and irreparable harm)
- Univ. of Texas v. Camenisch, 451 U.S. 390 (1981) (preliminary injunctions preserve parties' relative positions; hearings are customary)
- Diné Citizens Against Ruining Our Env't v. Jewell, 839 F.3d 1276 (10th Cir. 2016) (modified/relaxed preliminary-injunction tests are impermissible under Winter)
- Schrier v. Univ. of Colo., 427 F.3d 1253 (10th Cir. 2005) (disfavored preliminary injunctions that alter the status quo or are mandatory)
- Bylin v. Billings, 568 F.3d 1224 (10th Cir. 2009) (Rule 16 'good cause' is a stringent standard; district court has broad discretion over scheduling)