(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Alison Frankel
March 21 (Reuters) - The U.S. Chamber of Commerce is the
staunchest of allies for companies that want the U.S. Supreme
Court to restrict plaintiffs' ability to pick where they can
file lawsuits.
The Chamber has filed amicus briefs supporting corporations
in all kinds of recent Supreme Court disputes over the proper
venue for lawsuits. It sided with Bristol-Myers, for
instance, in the case that limited courts' jurisdiction over
corporations in suits by out-of-state plaintiffs. It backed
venue restrictions in a case that would have required plaintiffs
claiming certain securities law violations to sue in federal
court rather than state court and in a case that would have made
it harder for accident victims to sue in the state where the
accident occurred. It also was a friend of the court in a suit
challenging an expansive Pennsylvania jurisdictional statute.
The issues in these Supreme Court jurisdictional disputes
were varied and complex. But the theme that ties them together
is the persistent warning by defendants and their allies that
courts should be wary of forum-shopping by plaintiffs trying to
gain a litigation advantage by picking a friendly venue.
The Chamber is now being scrutinized for doing exactly that.
Earlier this month, the Chamber, the American Bankers
Association, two Texas Chambers of Commerce and a few other
plaintiffs sued to block a new rule from the U.S. Consumer
Financial Protection Board that limits late fees charged by
credit card issuers with more than a million accountholders.
The plaintiffs filed their suit in federal court in Fort
Worth, Texas - a favorite venue, as my Reuters colleague Nate
Raymond has reported, for companies and business groups
challenging Biden administration initiatives.
Neither the Chamber nor the bankers' group is based in Fort
Worth. Nor, for that matter, is the CFPB.
But the Chamber's complaint asserted that Fort Worth
nevertheless has jurisdiction over the case because one of the
plaintiffs, the Fort Worth Chamber of Commerce, is based in the
district and, like the other plaintiffs, has members that will
be affected by the rule limiting late fees.
That theory has worked before for the Chamber, which
asserted similar arguments last year in a lawsuit challenging
the consumer watchdog's authority to address discriminatory
banking practices. That suit was filed in federal court in
Tyler, Texas, where both judges are Republican appointees. And
although the CFPB argued that Tyler was an improper venue, U.S.
District Judge Campbell Barker rejected the argument because one
of the plaintiffs, the Longview Chamber of Commerce, is based in
the district. (Barker also sided with the plaintiffs on the
merits, holding that the CFPB is not empowered to root out
discrimination.)
More recently, as you know, judge-shopping in cases with
nationwide consequences has become a matter of hot debate. Less
than a week after the Chamber sued to block the CFPB's credit
card late fee rule, the U.S. Judicial Conference announced a new
policy that would require cases seeking to block state or
federal laws to be randomly assigned among all of the judges in
a federal judicial district, not just among judges assigned to
particular courthouses within those districts.
The Judicial Conference has since said, after backlash from
Republican lawmakers and some conservative judges, that courts
can exercise discretion in implementing the policy.
But in the meantime, the judge overseeing the Chamber's
credit card fee case, U.S. District Judge Mark Pittman of Fort
Worth, seems to have taken concerns about forum-shopping to
heart. (Pittman was assigned to the case on March 14 after the
recusal of U.S. District Judge Reed O'Connor.)
On Monday, as Raymond reported, Pittman called for briefing
on whether Fort Worth is the proper venue for the suit, given
that only one plaintiff in the case "has even a remote tie" to
the forum.
Pittman said his order was prompted by a briefing on the
Chamber's motion for a preliminary injunction to block the CFPB
rule. The bureau's opposition brief highlighted the venue issue,
arguing that none of the 30 or 35 credit card issuers that will
be affected by the new rule is based in Fort Worth. Only one
member of the Fort Worth Chamber of Commerce, according to CFPB,
is subject to the new rule -- and that member is "a
forum-shopping Utah bank."
"Far-flung entities cannot just pay membership fees to an
association in their venue of choice to gain access to that
venue," the CFPB brief said.
The agency notified Pittman on Tuesday that it intends to
file a brief on Thursday asking him to transfer the case. A CFPB
spokesperson declined to comment.
The Chamber and its fellow plaintiffs defended their venue
choice in filings this week asking Pittman to expedite his
consideration of their request to enjoin the new rule and
responding to the CFPB's opposition brief.
In essence, the plaintiffs said many members of the Fort
Worth Chamber will be impacted by the rule, including smaller
credit card issuers that may be forced to cut late fees to
compete with big issuers. Moreover, the plaintiffs argued,
members of the other groups that have sued have Fort Worth
customers who will be affected by the new rule.
I asked the Chamber about the contrast between its expansive
view of venue in the CFPB case and the group's amicus briefs
calling for restriction on venue choices for plaintiffs suing
corporations. "The U.S. Chamber of Commerce brings lawsuits with
local partners across the country, where government
micromanagement over businesses is often felt most acutely,"
said Jennifer Dickey of the U.S. Chamber Litigation Center in an
email statement. "It's important to confront the real harm these
rules have to American businesses where these businesses
operate."
Pittman refused on Wednesday to rush a ruling on the
preliminary injunction motion, hinting that the Chamber might
have gotten a faster result if it had sued in Washington, D.C.,
where caseloads are lighter.
The Chamber and other plaintiffs said in filings that they
would seek 5th Circuit review if Pittman did not issue an
injunction ruling by Friday. The Chamber did not respond when I
asked if it would now head to the appeals court.
Read more:
Texas judge questions venue in CFPB credit card fee rule
challenge
US judiciary says courts have discretion to adopt 'judge
shopping' policy
US federal judiciary moves to curtail 'judge shopping'
tactic