Vinson Mortgage Services, Inc. v. Carson, 4:18-cv-00079

Background

Vinson Mortgage Services, Inc. (a Missouri mortgagee) sued HUD under the APA seeking review of HUD’s January 10, 2018 withdrawal of its FHA Title II approval.
On January 26, 2018, the parties consented to a court stay permitting Vinson to continue FHA activity pending judicial review of the license-withdrawal decision.
Separately, HUD initiated and concluded debarment proceedings (initiated 2017; decision issued March 13, 2018) that debarred Vinson’s principals, Ray Shawn Vinson III and Kevin Vester, for three years based on findings about misrepresentations in financial submissions.
HUD counsel notified plaintiff by March 23, 2018 email that the individual debarments were effective immediately, would bar the debarred individuals from FHA participation, and—because Vinson Mortgage employs/ is owned by those individuals—could render the mortgagee ineligible or subject it to sanctions.
Vinson moved to hold HUD in contempt for violating the January 26 stay and sought fees and enforcement; it argued the debarment-related communications and threatened administrative sanctions effectively nullify the court’s stay.
The court held the contempt motion was not proven: the stay covered only HUD’s withdrawal of Vinson’s FHA approval, not separate debarment proceedings against the company’s principals, which involve different proceedings and legal standards.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether HUD violated the January 26, 2018 stay by implementing/enforcing individual debarments and related communications	The debarment and HUD’s email threaten enforcement (daily penalties, suspension) that undermine the stay and thus constitute contempt	The stay only covered the withdrawal of Vinson’s FHA approval; debarment is a separate administrative action not covered by the stay	Denied — plaintiff did not prove contempt by clear and convincing evidence; debarment activity did not violate the stay
Whether plaintiff has standing to seek contempt	Vinson argued it faced imminent enforcement threats and sanctions if it continued operating with the debarred principals, creating a live controversy	HUD argued the stay did not extend to debarment and the threatened enforcement relates to separate rules and procedures	Court found Vinson has standing to seek relief (credible, imminent threat) but still failed to prove contempt
Whether the court’s stay should enjoin separate debarment enforcement under APA §705	Vinson urged the court to use §705 to postpone debarment effects to preserve rights pending review	HUD argued §705 authority is narrow and only applies to preserve status related to the specific agency action under review (the license withdrawal)	Court declined to extend the stay to the debarment; §705 does not automatically reach separate administrative proceedings with distinct standards
Whether Vinson can continue FHA activity despite ownership/employment ties to debarred individuals	Vinson contended the consent stay permitted ongoing FHA participation consistent with original approval	HUD and regulations show eligibility also depends on absence of suspended/debarred officers, and Vinson could operate under different ownership	Court noted Vinson remains able to do business under different ownership and that the stay did not override other regulatory disqualifications

Key Cases Cited

Wieland v. U.S. Dep’t of Health & Human Servs., 793 F.3d 949 (8th Cir. 2015) (standing exists where agency action causes actual or threatened injury)
Chi. Truck Drivers Union Pension Fund v. Bhd. Labor Leasing, 207 F.3d 500 (8th Cir. 2000) (party seeking civil contempt must prove violation of court order by clear and convincing evidence)
In re GTE Service Corp., 762 F.2d 1024 (D.C. Cir. 1985) (scope of court authority under APA §705 is narrow and connected to the specific agency action under review)