Appeals court again nixes judge's transfer of CFPB late-fee case to D.C.

WILLIAM A MORGAN/William A. Morgan - stock.adobe.

WASHINGTON — The 5th Circuit Court of Appeals has, once again, blocked a federal judge's move to transfer a banking industry lawsuit against the Consumer Financial Protection Bureau to Washington, D.C. 

On Tuesday, Judge Mark Pittman of the Fort Worth division of the Northern District of Texas ordered for a second time that the challenge to a CFPB rule capping credit card late fees at $8 be moved from his district back to Washington D.C., following a Supreme Court decision finding the bureau's funding structure constitutional. 

The plaintiffs, which do include some Texas groups but are mostly Washington, D.C.-based trade organizations representing the banking industry, filed a 45-page document within hours of Pittman issuing the transfer order, requesting an immediate stay of the case and asking for a broader review of Pittman's decision that it should be tried in Washington. 

The 5th Circuit order, issued on Wednesday, does not include an explanation of why the case is again being sent back to Texas. 

The plaintiffs originally filed suit in the Fort Worth court, which has become a favorite of industry interests seeking to overturn Biden administration regulations. The 5th Circuit Court of Appeals, which covers Texas, Louisiana and Mississippi, also has a conservative tilt.

Judge Pittman, an appointee of former President Donald Trump, first sent the case to Washington back in March, but the 5th Circuit returned it to Texas, finding that Pittman didn't have the authority to transfer the case. 

Pittman later granted an injunction against the CFPB's rule while the Supreme Court was weighing the constitutionality of the bureau's funding structure. The high court's subsequent decision that the funding structure is constitutional opened the door for lower courts to rule on a number of lawsuits challenging the bureau's rules.

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"Given the 5th Circuit's admonition that this Court had previously not acted swiftly enough in handling this case, the Court determines it is in the best interest of the Parties and justice to transfer the case at the earliest possible juncture," Pittman wrote in his latest opinion. 

"This case did not belong in the Northern District of Texas and certainly not in the Fort Worth Division on March 7, it did not when this Court transferred it on March 28, and it does not today — two months later," he continued. 

Pittman hinted at the likelihood that the 5th Circuit would send the case back to him in his Tuesday order: "As outlined in the Court's preliminary injunction order discussing its docket management, the Court welcomes more guidance from the 5th Circuit regarding the proper way to handle the transfer of cases that seemingly do not belong with this Court or have attenuated ties to this district or division."