In In re Fort Worth Chamber of Commerce, No. 24-10266 (5th Cir. Apr. 5, 2024), a 2-1 panel holds that a court in the Northern District of Texas exceeded its jurisdiction by transferring a case to the District for the District of Columbia under 28 U.S.C. § 1404(a) after a notice of appeal had already been filed, and grants mandamus to vacate the transfer.

Under the federal Credit Card Accountability and Disclosure Act, the Consumer Protection Financial Bureau (CFPB) is authorized to set “safe harbor” caps on credit card late fees. “On March 5, 2024, CFPB enacted a Final Rule that decreases the previously applicable safe harbor amount for late fees charged by the nation’s largest credit card issuers. The rule is set to take effect on May 14. To comply with the Final Rule, the credit card issuers must print and distribute disclosure materials about the late fees to customers. The current effective date means that customers must have received notice by March 29.”

Plaintiffs (“the Chamber”), which included one association situated in Texas, filed in that state to challenge the Final Rule on constitutional and statutory grounds. “The Chamber requested a ruling ‘within 10 days, or as soon as possible thereafter, to prevent irrecoverable harm.’ The motion became ripe on March 14. Despite previously finding good cause to expedite briefing, however, the district court did not rule on the motion by within [sic] 10 days of its filing. Instead, it sua sponte requested briefing on venue on March 18 and ‘welcome[d]’ CFPB to file a motion to transfer venue.”

The CFPB moved for transfer 28 U.S.C. § 1404(a) on March 21, 2024. The following day, when the district court had not yet ruled on the injunction, Plaintiffs filed for interlocutory appellate review under 28 U.S.C. § 1292(a)(1). “On March 28, the district court granted the motion to transfer the case to D.D.C.” In the Fifth Circuit, the plaintiffs argued both that the district court lacked jurisdiction to transfer the case and that, alternatively, the district court abused its discretion in so ordering.

The Fifth Circuit grants mandamus to vacate the transfer. The opinion for the court rests on the jurisdictional ground.

“To determine whether the district court had jurisdiction, we must first determine whether the district court effectively denied the preliminary injunction. An effective denial of a preliminary injunction is an appealable order. If there is an appealable order, the appeal divests the district court of jurisdiction ‘over those aspects of the case on appeal.’”

The panel majority finds that there was an “effective” denial of an injunction, triggering interlocutory review. Despite that “only one month has passed since the motion for a preliminary injunction was filed,” the district court’s failure to act on the motion (other than to deny expedited review) arguably prejudiced the plaintiffs because the Final Rule “created a short runway for issuers to comply or seek preliminary injunctive relief. To comply with the Final Rule, credit card issuers needed to have printed and distributed disclosure materials about the late fees to customers by March 29. The Chamber attests that providing notice ‘typically takes 4 months’—not weeks.”

“Of course, we recognize that plaintiffs cannot simply say they need an expedited ruling and then appeal by claiming effective denial when they don’t get it on their preferred timeline . . . . On this limited record, however, the Chamber has made the case that its urgency is justified.”

The panel majority also holds that the court below was divested of jurisdiction to transfer the case upon the filing of the notice of appeal. “Transferring a case to another district while the appeal of an effective denial is pending would essentially nullify the appeal and render us unable to grant relief.”

Finally, the panel majority finds that mandamus is appropriate relief. It notes, in muted language, the raging battle over forum-shopping in the Fifth Circuit. “Facing an uptick in inter circuit transfer orders, we take this opportunity to clarify that once an appealable order is lodged before our court, district courts lack jurisdiction to transfer a case because it stymies our ability to review.”

The majority opinion concludes: “Because the Chamber had a short window of time to either (1) comply with the Final Rule, or (2) seek a preliminary injunction, the district court’s inaction amounted to an effective denial of the Chamber’s motion for a preliminary injunction. That effective denial is properly before us on appeal. The district court lacked jurisdiction to transfer the case after this appeal was docketed because doing so would alter its status.”

In addition to ordering the district court to reopen the case, it also specifically orders the lower court “to give notice to D.D.C. that its transfer was without jurisdiction and should be disregarded.”

Concurring, Judge Oldham joins the jurisdictional ruling but also challenges the transfer order on the merits. “Here, the only factor that weighs in favor of transfer, congestion, is opposed by another factor that plausibly weighs against transfer, local interests . . . . [M]andamus would be appropriate for many reasons, not least of which is to clarify to this district court and others that forum-shopping, whether in or out of one’s home forum, cannot weigh in favor of § 1404(a) transfer.”

Dissenting, Judge Higginson would have denied mandamus. He took aim at the problem of forum-shopping into the Fifth Circuit and lauds the district court’s resistance in this case. “[T]he CFPB and ‘[m]ost of the Plaintiffs in this case are also based in Washington D.C.’—not to mention that all the events are tied to Washington, D.C.: The CFPB Rule in question ‘was promulgated in Washington D.C., by government agencies stationed in Washington D.C., and by employees who work in Washington D.C.’ Conversely, the case has no real, let alone ‘substantial,’ connection to the Northern District of Texas. 28 U.S.C. § 1391(e)(1). As the district court explained, ‘[t]he only apparent connection’ is that: (1) ‘one Plaintiff’—not a card issuer affected by the Late Fee Final Rule, but the Fort Worth Chamber of Commerce, asserting associational standing for an out-of-state bank that claims membership—is headquartered in the Northern District of Texas, and (2) ‘the effects of the Rule will be felt generally here.’”

Concluding, the dissent wryly (if not ironically) notes: “I am confident the District Court for the District of Columbia will give the suggestion that it should disregard a case docketed by it its closest attention.” (See New Jersey District Court Scores TKO in Epic Fight with Fifth Circuit Over Venue of Gun-Rights Case.)