On August 12, 2024, the plaintiffs filed their brief in opposition to the CFPB’s motion to dismiss Plaintiff Fort Worth Chamber of Commerce (Fort Worth Chamber) for lack of standing and if granted, transfer the case to the Federal District Court for D.C. in the lawsuit challenging the CFPB’s credit card late fee final rule (“Rule”). In their brief, the plaintiffs urge the court to reaffirm its prior finding that the Fort Worth Chamber has associational standing and to not transfer venue to D.D.C.
The CFPB in its motion and brief argues that the Fort Worth Chamber cannot satisfy the test for associational standing and once the Fort Worth Chamber is dismissed, the remaining plaintiffs cannot establish that venue is proper in the Fort Worth Division of the Northern District of Texas. The CFPB claims that the 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 physical 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.
As a reminder, to satisfy the requirements for associational standing, Fort Worth Chamber 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.” Hunt v. Washington State Apple Advertising Commission, 433 U.S. 333 (1977).
The plaintiffs exhort the court to ignore the CFPB’s “sleight of hand” in arguing that there are additional requirements for establishing associational standing that are unsupported by either the facts or the law. The plaintiffs urge the court to follow settled case law and Fifth Circuit precedent that holds that “the germaneness requirement is ‘undermanding’ [i.e., not strict] and required ‘mere pertinence’ between the litigation at issue and the organization’s purpose.” In support of their germaneness argument, the plaintiffs argue that the court should analyze the relationship between the organization’s purposes and the litigation. They state “[t]he Fort Worth economy is affected not just by businesses headquartered in Fort Worth but by businesses that operate in Fort Worth, including [businesses headquartered elsewhere that provide access to credit].” The plaintiffs cite to several cases in the Fifth Circuit to demonstrate that the Fort Worth Chamber has associational standing and how the Rule is germane to its mission, noting that access to credit affects the economy in Fort Worth and the credit card market in Fort Worth is deeply affected by the Rule.
With respect to venue, the plaintiffs state that the case should not be transferred because the Fort Worth Chamber has established associational standing and the burdens of the Rule will be felt in Fort Worth. If the court determines that the Fort Worth Chamber lacks associational standing, the plaintiffs ask the court to dismiss the case instead of transferring it to D.D.C. and maintain the injunction pending the plaintiffs’ appeal to the Fifth Circuit to avoid emergency appellate proceedings for a Rule that has never been in effect. If the court determines a transfer to D.D.C. is appropriate, the plaintiffs specifically ask the court to stay the transfer for 21 days to permit the plaintiffs to seek redress from the Fifth Circuit.
Having previously detailed numerous harms both to its members and to the Fort Worth area in prior declarations, in the Third Supplemental Declaration of Steve Montgomery, the Fort Worth Chamber names six members that are large credit card issuers operating in Fort Worth that will be directly affected by the Rule, states that at least 15 smaller credit card issuers that are members will feel market pressure to lower late fees, and notes that multiple members that offer co-branded cards will also be impacted. (Four of the credit card issuers have been members of the Fort Worth Chamber for more than fifteen years.)
The CFPB will be filing a reply brief on August 19, 2024. A hearing will be held before Judge Pittman on August 27, 2024. We anticipate that Judge Pittman will rule on this motion to dismiss before ruling on the pending motion to dissolve the preliminary injunction.
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