On July 29, 2024, the CFPB filed a motion to dismiss the Fort Worth Chamber of Commerce as a Plaintiff for lack of standing and if granted, transfer the case to a the Federal District Court for D.C. In its brief, the CFPB argues that the Fort Worth Chamber of Commerce cannot satisfy the test for associational standing and once Fort Worth Chamber of Commerce is dismissed, the remaining plaintiffs cannot establish that venue is proper in the Fort Worth Division of the Northern District of Texas.
On July 18, 2024 upon remand from the Fifth Circuit, the CFPB filed its notice of supplemental authority in support of its still pending motion to dismiss or transfer the case under 28 U.S.C. § 1406(a), motion to dissolve the preliminary injunction, and brief in support of its motion. After reviewing the CFPB’s notice of supplemental authority and Justice Thomas’ concurrence in FCA v. Alliance for Hippocratic Medicine, 602 U.S. 367, 397–405 (2024) (Thomas, J., concurring), Judge Pittman issued an order in which he wrote that he “is deeply concerned with the issue of associational standing” of the Fort Worth Chamber of Commerce to prosecute the remaining claims in the case. Judge Pittman requested a “full briefing on the issue of associational standing and how it relates to the facts and arguments in this case. It is imperative that the Court consider standing before expending any additional resources evaluating the merits of Plaintiff’s [sic] requested relief.” He ordered the CFPB to file its formal motion by July 29, 2024 with Plaintiffs’ response by August 12, 2024 and the CFPB’s reply by August 19, 2024. The court will hear the motion on August 27, 2024. This clearly indicates that Judge Pittman may be looking to transfer the case to the District of Columbia District Court for a third time. We expect the Fifth Circuit will review any such transfer order.
As expected, the CFPB is eagerly following Judge Pittman’s lead to challenge venue under 28 U.S.C. § 1406(a). The CFPB notes that “[t]he Court’s concerns are well founded.” However, this time around to further bolster its arguments that venue is improper the CFPB is seeking the dismissal of the key Plaintiff for venue purposes due to lack of associational standing.
Associational standing allows an association representing members with standing to bring the case to court. Under Hunt v. Washington State Apple Advertising Commission, 433 U.S. 333 (1977), to satisfy the requirements for associational standing, Fort Worth Chamber of Commerce must show that “(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Acknowledging that an association only needs one member with standing in order for the association itself to have standing, Justice Thomas wrote in his Alliance for Hippocratic Medicine concurrence, “If a single member of an association has suffered an injury, our doctrine permits that association to seek relief for its entire membership – even if the association has tens of millions of other, non-injured members.”
The CFPB claims that the credit card late fee rule is not “germane” to the Fort Worth Chamber of Commerce’s mission to “cultivate a thriving business climate in the Fort Worth region.” They also argue that use of an out of state member (in this case one large credit card issuer located in Utah without any presence in Fort Worth or the Northern District of Texas) is not relevant to the economy or business climate in Fort Worth and high late fees do not favor Fort Worth consumers. The CFPB further urges the Court to police Plaintiffs’ efforts to expand associational standing and promote association venue shopping.
The CFPB finally argues that after dismissing the Fort Worth Chamber of Commerce, venue is improper and the case warrants a transfer to D.D.C. Under 28 U.S.C. § 1391(e)(1), venue is proper where “(A) a defendant in the action resides, (B) a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (C) the plaintiff resides if no real property is involved in the action.” The CFPB claims that Plaintiffs fail to meet the burden to prove venue is proper without Plaintiff Fort Worth Chamber of Commerce. To head off Plaintiffs’ argument under (B), the CFPB quotes the Court’s May Transfer Order: “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 . . . represent a substantial part of the events giving rise to the claim.”
While the CFPB notes that the Court has the discretion to dismiss or transfer the case, it indicates that justice would be best served by transferring the case the D.D.C. once the Court determine venue is improper in Fort Worth.
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