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COLUMN-U.S. Chamber, critic of forum shopping, questioned for doing just that
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COLUMN-U.S. Chamber, critic of forum shopping, questioned for doing just that
Mar 21, 2024 2:25 PM

(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

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