U.S. Chamber, critic of forum shopping, questioned for doing just that
The United States Supreme Court building is seen as in Washington, U.S., October 4, 2023. REUTERS/Evelyn Hockstein/File Photo Purchase Licensing Rights
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 (BMY.N), 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.
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