Last week ended with an intense flurry of activity in the lawsuit challenging the CFPB’s final credit card late fee rule (Rule).  The flurry followed the plaintiffs’ March 25 filing of a Notice of Appeal after the district court denied their motion for expedited consideration of their preliminary injunction motion.  In their Notice of Appeal, the plaintiffs assert that the denial of their motion for expedited consideration effectively denied their request for meaningful preliminary injunctive relief.  

On March 28, just two days after entering an order setting an April 2 hearing date on the plaintiffs’ preliminary injunction motion, the Texas federal district court entered an order transferring the case to the U.S. District Court for the District of Columbia.  Of the six plaintiffs in the case, only the Fort Worth Chamber of Commerce is a resident of the Northern District of Texas, Fort Worth Division.  In his order, Judge Pittman concluded that “[t]his case does not belong in the Northern District of Texas and certainly not in the Fort Worth Division.”  Most notably, under the private- and public-interest factors set forth in In re Volkswagen that the Fifth Circuit has directed district courts to apply in determining whether a transfer of venue is justified, he found that “there is a strong interest in having this dispute resolved in the District of Columbia.”  Judge Pittman stated:

The case chiefly involves out-of-state Plaintiffs challenging the actions of government officials taken in the District of Columbia. … The fact that there are customers of businesses in the Northern District of Texas that will potentially feel the effects of the Rule does not create a particularized injury in the Northern District of Texas, nor does it represent a substantial part of the events giving rise to the claim.  Under Plaintiffs’ theory, there isn’t a city in the country where venue would not lie, as every city has customers who may be potentially impacted by the Rule.  Plaintiffs could find any Chamber of Commerce in any city of America and add them to this lawsuit to establish venue where they desire.  It appears this is exactly what Plaintiffs attempt to do by recommending transfer to the Eastern District of Texas.  Here, once again, the only tie to the Eastern District of Texas, Tyler Division, is that one of the Plaintiffs happens to be there and there is a possibility that tangential harm could be felt there once the Rule goes into effect in May.  (emphasis included)

(In their opposition to the CFPB’s motion to transfer, the plaintiffs argued that if the court determined either that venue was improper or that a transfer was warranted, the court should transfer the case to the Tyler Division of the Eastern District of Texas.  Another of the plaintiffs, the Longview Chamber of Commerce, resides in the Tyler Division.)

In response to Judge Pittman’s transfer order, on March 28, the plaintiffs filed in the Fifth Circuit an Updated Notice and Emergency Motion for Administrative Stay of District Court’s Transfer Order (Emergency Motion).  The Emergency Motion sought a stay of the district court’s transfer order “to eliminate any ambiguity as to whether this Court retains jurisdiction over that order while Plaintiffs prepare a petition for a writ of mandamus, and to ensure that this Court is able to give meaningful relief in this case.”  The CFPB opposed the Emergency Motion.

On March 29, the Fifth Circuit entered an order stating “appellants’ motion for stay of the District Court’s transfer order pending appeal is administratively stayed until 10:00 a.m. on March 30, 2024.”  Also on March 29, the case was docketed in the D.C. federal district court and assigned to Judge Amy Jackson Berman.  On March 30, the Fifth Circuit entered a second order stating “the District Court’s transfer order is administratively stayed until 5:00 PM on Tuesday, April 2, 2024” and that “this appeal and all pending motions are expedited to the next oral argument panel.”

On March 29, the plaintiffs filed an Emergency Petition for Writ of Mandamus and Administrative Stay in which they argue that, despite the docketing of the case in the D.C. federal court, the Fifth Circuit continues to have jurisdiction over the case and ask the Fifth Circuit to order the Texas district court to reopen the case and/or request that the D.C. federal court return the case to Texas.  In the Emergency Petition, the plaintiffs cite an unpublished Fifth Circuit order involving a petition for a writ of mandamus in which the Fifth Circuit found that it retained jurisdiction over a case filed in a Texas federal court that had been transferred to and docketed in a California federal court because the case was docketed in California after the Fifth Circuit had stayed the transfer order.  It seems likely that despite the unclear wording of its March 29 order, the Fifth Circuit will conclude that it stayed the transfer order before the case was docketed in D.C. and that the Fifth Circuit retained jurisdiction over the case.

On March 25, the date on which the plaintiffs filed their Notice of Appeal, the plaintiffs also filed an emergency motion with the Fifth Circuit seeking an administrative stay of the Rule “and, ultimately, an injunction [to enjoin the Rule] pending appeal.”  The CFPB has opposed the emergency motion.  Presumably this pending emergency motion is among the motions expedited to the next oral argument panel by the Fifth Circuit’s March 30 order staying the transfer order.  (On March 26, the Fifth Circuit entered a briefing schedule that requires the plaintiffs to file their brief by May 6.  The CFPB’s brief will be due 21 days thereafter.)