U.S. court dismisses credit card fee transfer rule suit, focusing on ‘judge shopping’ By Reuters
nate raymond
(Reuters) – A federal appeals court ruled on Friday that a Texas judge had wrongly transferred an industry-backed lawsuit challenging the agency’s rules on credit card late fees to another court in Washington, D.C. Us
The New Orleans-based 5th U.S. Circuit Court of Appeals last month voted 2-1 in favor of the corporate and financial groups that filed the lawsuit in Fort Worth, Texas. A federal courthouse in Fort Worth, Texas, has become a preferred venue for litigants challenging President Joe Biden. Administration policy.
The ruling comes amid a broader debate over how to curb “judge shopping” by litigants who file lawsuits over government policy in courts with one or two sympathetic judges. The U.S. Chamber of Commerce and the American Bankers Association It was a jurisdictional victory for business groups including.
The U.S. Consumer Financial Protection Bureau (CFPB) and the business groups targeted by the lawsuit did not respond to requests for comment.
At issue is the CFPB rule, which the government agency said took aim at “excessive” fees charged by credit card issuers for late payments, which are estimated to cost consumers $12 billion a year.
Under the rule, credit card issuers with more than 1 million open accounts can only charge $8 in late fees unless they can prove a higher fee is needed to cover the cost. Previously, issuers could charge up to $30 or $41 for subsequent late fees.
Last week, U.S. District Judge Mark Pittman, an appointee of Republican former President Donald Trump, concluded that a Washington judge should hear the lawsuit instead of ruling on the business group’s request to block the rule.
His decision came after the Judicial Conference of the United States, the judiciary’s policymaking arm, announced new policies aimed at curbing “judge shopping” in cases challenging federal or state law.
Before he transferred the case, the group filed an appeal, saying Pittman had previously denied its request to block the rule, effectively depriving it of jurisdiction over the case and the ability to transfer it.
U.S. Circuit Judge Don Willett, along with U.S. Circuit Judge Andrew Oldham, a Trump appointee, agreed Friday, saying that once a party appeals a trial judge’s decision, that judge can change the status of the case. He said he had no jurisdiction to do anything.
U.S. Circuit Judge Stephen Higginson, an appointee of former Democratic President Barack Obama, dissented from the ruling, saying it was “contrary to the district court’s discretion in document management and prudential policing of forum shopping.”
The case has already been sent to a judge in Washington, where the 5th Circuit does not have jurisdiction. Willett directed Pittman to notify the judge that his transfer “should be disregarded.”
