Order — DV Diamond Club v. SBA (Dkt. 47, E.D. Mich.)

Summary

Order Granting in Part and Denying in Part Defendants' Emergency Motion for a Stay (ECF No. 45) in DV Diamond Club of Flint, LLC v. United States Small Business Administration, Case No. 20-cv-10899, in the U.S. District Court for the Eastern District of Michigan, signed by Judge Matthew F. Leitman on May 13, 2020 as ECF No. 47. The order denies the defendants' request to stay the court's preliminary injunction pending appeal, finding they have not shown a likelihood of success or irreparable injury. It reasons that because loan guarantees are made on a first-come, first-serve basis, a stay could foreclose the plaintiffs and intervenors from the PPP even if they win on appeal. The court grants an additional 36 hours to comply, setting a deadline of 11:59 p.m. on May 15, 2020, while the defendants seek a stay from the Sixth Circuit.

Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Case 4:20-cv-10899-MFL-DRG ECF No. 47 filed 05/13/20       PageID.1690    Page 1 of 3




                     UNITED STATES DISTRICT COURT
                     EASTERN DISTRICT OF MICHIGAN
                          SOUTHERN DIVISION

DV DIAMOND CLUB
OF FLINT, LLC, et al.,

       Plaintiffs,                                  Case No. 20-cv-10899
                                                    Hon. Matthew F. Leitman
v.

UNITED STATES SMALL BUSINESS
ADMINISTRATION, et al.,


     Defendants.
__________________________________________________________________/

 ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’
        EMERGENCY MOTION FOR A STAY (ECF No. 45)

       On May 13, 2020, Defendants filed an emergency motion to stay this Court’s

Opinion and Order granting Plaintiffs’ and Intervenors’ motion for a preliminary

injunction. (See Mot., ECF No. 45.) In the alternative, Defendants ask the Court for

an additional 36 hours to comply with the Court’s order that they contact Plaintiffs’

and Intervenors’ lenders and inform the lenders that the applications by Plaintiffs

and Intervenors for PPP loans shall not be denied based on the “prurient sexual

nature” provisions of the Original SBA Ineligibility Rule, the 2019 SOP, and/or the

PPP Ineligibility Rule (as those terms were defined in the Opinion and Order). (See

id.)   The Court DENIES Defendants a stay, but it GRANTS Defendants an

additional 36 hours to comply with the Court’s Opinion and Order.

                                         1
Case 4:20-cv-10899-MFL-DRG ECF No. 47 filed 05/13/20       PageID.1691    Page 2 of 3




      “A stay is an intrusion into the ordinary processes of administration and

judicial review.” Dodds v. United States Dep’t of Education, 845. F.3d 217, 220 (6th

Cir. 2016) (quoting Nken v. Holder, 556 U.S. 418, 425 (2009)). “To determine

whether to stay the grant of a preliminary injunction, [courts] balance four factors:

the movant’s likelihood of success on appeal; whether irreparable injury to the

movant will result in the absence of a stay; prospective harm to others if a stay is

granted; and the public’s interest in granting a stay.” Id. These are the “the same

factors considered in determining whether to issue a TRO or preliminary injunction.”

Ohio Republican Party v. Brunner, 543 F.3d 357, 361 (6th Cir. 2008).

      For all of the same reasons that the Court explained in its Opinion and Order,

it remains persuaded that Plaintiffs and Intervenors are entitled to a preliminary

injunction. Thus, for all of those same reasons, the Court concludes that Defendants

have not shown a likelihood of success on appeal; that Defendants will not suffer

irreparable injury in the absence of a stay; and that the harm to others and public

interest factors weigh against a stay of the Court’s decision. Indeed, because the

loan guarantees at issue here are made on a “first-come, first-serve” basis, a stay

while the Court’s Opinion and Order is appealed could foreclose Plaintiffs and

Intervenors from participating in the PPP program at all, even if they succeed on

appeal. That possibility “outweighs any harm the [Defendants] would suffer without

a stay.” (5/4/2020 Order Denying Stay, Camelot Banquet Rooms et. al. v. U.S. Small


                                         2
Case 4:20-cv-10899-MFL-DRG ECF No. 47 filed 05/13/20          PageID.1692   Page 3 of 3




Bus. Admin. et al., ECF No. 39-4, PageID.1145.) For all of these reasons, the Court

declines to stay its Opinion and Order.

      However, the Court does conclude that a temporary extension of time for

Defendants to comply with the Court’s Opinion and Order while Defendants seek a

stay in the United States Court of Appeals for the Sixth Circuit will not unduly harm

Plaintiffs or Intervenors. The Court will therefore grant Defendants’ request for an

additional 36 hours to comply with the Court’s Opinion and Order.

      Accordingly, for all of the reasons stated above, IT IS HEREBY ORDERED

that Defendants’ emergency motion for a stay (ECF No. 45) is GRANTED IN

PART AND DENIED IN PART. Defendants’ request for a stay pending appeal is

DENIED. Defendants’ request for an additional 36 hours to comply with the

Court’s Opinion and Order is GRANTED. Defendants shall comply with the

Court’s Opinion and Order by no later than 11:59 p.m. on May 15, 2020.

      IT IS SO ORDERED.

                                          s/Matthew F. Leitman
                                          MATTHEW F. LEITMAN
Dated: May 13, 2020                       UNITED STATES DISTRICT JUDGE

       I hereby certify that a copy of the foregoing document was served upon the
parties and/or counsel of record on May 13, 2020, by electronic means and/or
ordinary mail.

                                          s/ Holly A. Monda
                                          Case Manager
                                          (810) 341-9764


                                            3


File and source

File

47-order-granting-in-part-and-denying-in-part-defendants-45-eme.pdf

Size

138,411 bytes

SHA-256

d38acb6cb5af926fd1bb9edcadcdb422140bea1b96f115df6afd3a6e37ca4656

Our copy

47-order-granting-in-part-and-denying-in-part-defendants-45-eme.pdf

Original

archive.org