Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—D.D.C.: CFPB gets another brief reprieve from Trump administration’s dismantlement plans, (Apr 4, 2025)

By Jason Albright, J.D.

“What is striking about the defendants’ motion is that they pay very little attention to the merits of the case at all.”

A federal district court in the District of Columbia Thursday found that the Trump administration was not entitled to a stay against a March 28 preliminary injunction prohibiting it from dismantling the Consumer Financial Protection Bureau, an agency created by Congress under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed in 2010 in the aftermath of the 2008 financial crisis. Staying the action would substantially injure the National Treasury Employees Union, the district court found: The administration “would be free to move swiftly to take the steps that would eliminate the agency in thirty days, which the Court has already found they are poised to do, and that would cause plaintiffs irreparable harm.” In addition, “[g]iven the devastating consequences that would ensue if a stay were entered… the public interest lies decidedly against a stay” (National Treasury Employees Union v. Vought, No. 25-0381 (ABJ) (D.D.C. Apr. 3, 2025)).

Preliminary injunction. The federal district court previously preliminarily enjoined the Trump administration’s effort to shutter the Consumer Financial Protection Bureau (CFPB), finding that, in the absence of an injunction freezing the status quo and thereby preserving the agency’s data, operational capacity, and workforce, there would be substantial risk that CFPB Acting Director Russell Vought and the other CFPB defendants would “complete the destruction of the agency completely in violation of law well before the Court can rule on the merits.”

Administration’s request for stay. The administration sought a stay of the preliminary injunction, including of its requirement that the administration inform the court of its compliance with its terms by Friday, April 4.

Granted in limited part. The court granted the stay to the limited extent that the administration objected to the requirement that it inform the court of its compliance. That part of the order was stayed with the NTEU’s consent.

Main part of stay motion denied. The rest of the administration’s stay motion was denied, “but without prejudice to a motion that proposes reasonable and appropriate modifications to the preliminary injunction that preserve its day-to-day managerial discretion.”

Four Nken factors. The court first observed that it must consider four factors in connection with a motion to stay pending appeal: (1) whether the movant has made a strong showing that it is likely to succeed on the merits; (2) whether the movant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies. Nken v. Holder, 556 U.S. 418, 434 (2009).

Likelihood of success. First, the court found that the NTEU and other plaintiffs are likely to succeed on the merits of their claims, including the claim that the Trump administration is in fact engaged in an effort to shut down the agency in violation of law notwithstanding its denials. “This is not just a typical pause while the new administration considers and readjusts agency priorities,” the court observed.

Administration points to no injury. Second, the administration “cannot point to any injury, much less any irreparable injury, that would flow from compliance with an injunction that requires that the agency continue to exist as Congress mandated and to perform its statutorily required duties, including in particular, the duties assigned to the Office of Consumer Response, while the merits of plaintiffs’ claims are being litigated,” said the court.

“What is striking about the defendants’ motion,” it observed, “is that they pay very little attention to the merits of the case at all. They do not seem to dispute that they lack the ability to close the agency established by Congress on their own.”

Substantial injury to NTEU. In addition, staying the action would substantially injure the plaintiffs, said the court. The administration would be free to move swiftly to take the steps that would eliminate the agency in 30 days—which the court already found they are poised to do—and that would cause the NTEU and its members irreparable harm. Indeed, observed the court, during the hearing on the motion for the preliminary injunction, the administration’s only witness, the Chief Operating Officer of the CFPB, testified, “I now realize how much damage can be done... just within a couple of days.”

Public interest against stay. Finally, “[g]iven the devastating consequences that would ensue if a stay were entered and the defendants were relieved of their obligation to comply with the Order,” the district court said, “the public interest lies decidedly against a stay.”

The case is No. 25-0381 (ABJ).

Judge: Jackson, A.

Attorneys: Deepak Gupta (Gupta Wessler) for National Treasury Employees Union. Brad P. Rosenberg, U.S. Department of Justice, for Russell Vought.

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