A federal judge in a Texas court that has become a favorite for conservative challenges to Biden administration policies transferred a lawsuit challenging a rule curbing credit card late fees to a court in Washington, D.C. on Thursday.
U.S. District Judge Mark Pittman said half of the business groups that sued are based in Washington, as are most of the lawyers representing them and the U.S. Consumer Financial Protection Bureau, which wrote the rule the groups are seeking to block.
The CFPB had asked the judge to transfer the case, as no card issuer subject to the rule is based in Fort Worth.
The U.S. Chamber of Commerce, which sued with five other groups, countered that potentially affected cardholders reside there.
Pittman, an appointee of former President Donald Trump, rejected that argument on Thursday, saying it would allow the lawsuit to be filed anywhere in the country, instead of where the underlying events occurred.
“Venue is not a continental breakfast; you cannot pick and choose on a plaintiffs’ whim where and how a lawsuit is filed,” Pittman said.
Spokespeople for the CFPB and Chamber of Commerce did not immediately reply to requests for comment.
The groups had urged Pittman to block the rule, which is set to take effect in May, while the lawsuit plays out, arguing that in order to make changes that may be necessary, they will need to send out notices to consumers starting on Friday. They have asked the 5th U.S. Circuit Court of Appeals to review Pittman’s decision not to expedite the case.
The rule deals with what the CFPB has called “excessive” fees credit card issuers charge for late payments, something the consumer protection agency estimated costs consumers $12 billion a year.
Under that rule, credit card issuers with more than 1 million open accounts can only charge $8 for late fees, unless they can prove higher fees are necessary to cover their costs. The previous rule allowed issuers to charge up to $30 or $41 for subsequent late payments.
Pittman, one of two active federal judges in Fort Worth, had raised concerns about whether the lawsuit belonged in his court after the federal court administrators announced a new policy aimed at curbing “judge shopping.”
The Fort Worth courthouse has become a popular destination for conservative litigants and business groups challenging the policies of President Joe Biden’s administration, including on student debt, guns and LGBTQ rights.
Pittman said Thursday several factors supported transferring the credit card case, including that his court is busier than the one in Washington, and that taxpayers would pay for CFPB lawyers to travel to Texas.
