Jodi Godoy
(Reuters) – A federal judge in a Texas court that has become a favorite in conservative challenges to the Biden administration’s policies on Thursday transferred a lawsuit challenging a rule limiting late fees on credit cards to court in Washington, D.C.
U.S. District Judge Mark Pittman said half of the business groups suing 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 asked the judge to remit the case because none of the card issuers covered by the rule are located in Fort Worth.
The U.S. Chamber of Commerce, which filed the lawsuit along with five other groups, countered that potentially affected cardholders live there.
Pittman, an appointee of former President Donald Trump, rejected that argument Thursday, saying it would allow the lawsuit to be filed anywhere in the country rather than where the main events took place.
“The venue is not a continental breakfast; you can’t pick and choose at the whim of plaintiffs where or how to file a claim,” Pittman said.
Representatives for the CFPB and the Chamber of Commerce did not immediately respond to requests for comment.
The groups have called on Pittman to block the rule, which is set to take effect in May, while the lawsuit continues, arguing that to make changes that may be necessary, they will need to send notices to consumers starting Friday. They asked the 5th U.S. Circuit Court of Appeals to review Pittman’s decision not to expedite the case.
The rule addresses what the CFPB called “excessive” fees that credit card issuers charge for late payments, which the consumer agency estimates costs consumers $12 billion a year.
Under the rule, credit card issuers with more than 1 million open accounts can only charge $8 late fees unless they can prove that 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 sitting federal judges in Fort Worth, expressed concern about whether the lawsuit belongs in his court after federal court administrators announced a new policy aimed at limiting “judge shopping.”
The Fort Worth courthouse has become a popular venue for conservative plaintiffs and business groups challenging President Joe Biden’s administration’s policies, including on student debt, guns and LGBTQ rights.
Pittman said Thursday that several factors support transferring the credit card case, including that his court is busier than the court in Washington and that taxpayers will pay CFPB lawyers to travel to Texas.