In a recent legal maneuver that highlights the contentious issue of “judge shopping,” the 5th U.S. Circuit of Appeals rebuffed a Texas judge’s attempt to transfer an industry-backed lawsuit challenging a credit card late fee rule to Washington, D.C. The ruling comes amidst a broader debate over the practice of strategically choosing sympathetic courts for litigation against government policies.
The lawsuit, initiated by business and banking groups, was originally filed in Fort Worth, Texas, a known hotspot for litigants opposing the policies of President Joe Biden’s administration. These groups contested a rule issued by the Consumer Financial Protection Bureau (CFPB) aimed at curbing what the agency termed as “excessive” late fees imposed by credit card issuers.
Under the disputed rule, credit card issuers with over 1 million open accounts faced limitations on late fees, capping them at $8 unless higher fees could be justified to cover costs. This marked a significant reduction from previous late fee thresholds of up to $30 or $41 for subsequent payments.
Rather than ruling on the merits of the case, U.S. District Judge Mark Pittman, a nominee of former President Donald Trump, opted to transfer the lawsuit to Washington. This decision coincided with the U.S. Judicial Conference’s introduction of new measures aimed at curbing forum shopping.
However, the business groups promptly appealed Pittman’s decision, arguing that it divested him of jurisdiction over the case. U.S. Circuit Judge Don Willett, supported by U.S. Circuit Judge Andrew Oldham, concurred with this view, asserting that once an appeal is lodged, the trial judge relinquishes authority to alter the case’s status.
In a dissenting opinion, U.S. Circuit Judge Stephen Higginson, appointed by former President Barack Obama, contended that the majority’s stance undermined the discretion of district courts in managing their dockets and combating forum shopping.
Despite the case already being transferred to a judge in Washington, Willett directed Pittman to notify the new jurisdiction that the transfer should be disregarded, underscoring the complexity and contentious nature of legal battles surrounding government regulations.
