By Nate Raymond
(Reuters) – A federal appeals court ruled on Friday that a Texas judge wrongly transferred to another court in Washington, D.C., an industry-backed lawsuit challenging an agency rule on card delay penalties credit, highlighting the debate over “judge shopping” in the Washington courthouse. WE
The New Orleans-based U.S. 5th Circuit of Appeals, by a 2-1 vote, sided with the business and banking groups that filed the lawsuit last month in Fort Worth, Texas, a city the whose federal court has become the preferred venue for litigants challenging President Joe Biden’s decision. administration policies.
The ruling was a jurisdictional victory for business groups, including the U.S. Chamber of Commerce and the American Bankers Association, amid a broader debate over how and whether to curb “judge shopping” by litigants who litigate government policies in courts with one or two sympathetic judges.
The Consumer Financial Protection Bureau (CFPB), whose rule was the subject of the lawsuit, and business groups did not respond to requests for comment.
At issue was the CFPB rule that took aim at what the government agency called “excessive” fees charged by credit card issuers for late payments, which it estimates cost consumers $12 billion a year .
Under that rule, credit card issuers with more than 1 million open accounts can only charge $8 in late fees unless they can demonstrate that higher fees are needed to cover the costs. Previously, issuers could charge up to $30 or $41 for subsequent late payments.
Rather than rule on the business group’s request to block the rule, U.S. District Judge Mark Pittman, an appointee of former Republican President Donald Trump, concluded last week that the lawsuit should instead be heard by a judge in Washington.
His decision came after the Judicial Conference of the United States, the judiciary’s decision-making body, announced a new policy aimed at curbing “judge shopping” in cases that challenge federal or state laws.
Before he transferred the case, the groups appealed what they said was Pittman’s previous effective denial of their request to block the rule, stripping him of jurisdiction over the case and the ability to transfer it.
U.S. Circuit Judge Don Willett, in an opinion on Friday joined by his fellow Trump appointee, U.S. Circuit Judge Andrew Oldham, agreed, saying that once a party appeals the decision of a trial judge, that judge has “zero jurisdiction to do anything to alter the status of the case.”
U.S. Circuit Judge Stephen Higginson, appointed by former Democratic President Barack Obama, dissented, saying his decision was “inconsistent with the district court’s discretion over records management and prudent oversight of forum shopping.”
The case has already been transferred to a judge in Washington, over which the 5th Circuit has no jurisdiction. Willett ordered Pittman to advise the judge that his transfer “should be ignored.”