A federal appeals court judge facing questions about a potential conflict of interest regarding his son’s ownership of Citigroup stock does not need to recuse himself from hearing a lawsuit challenging a rule on credit card late fees, a judicial ethics panel has ruled.
Background and Inquiry
U.S. Circuit Judge Don Willett of the 5th U.S. Circuit Court of Appeals sought guidance from the U.S. Judicial Conference’s Committee on Codes of Conduct following concerns raised by the Consumer Financial Protection Bureau (CFPB). The agency argued that Judge Willett’s son’s ownership of Citigroup stock might influence his decision-making in the case.
The controversy emerged shortly after Judge Willett penned a 2-1 opinion opposing the transfer of the case from Fort Worth, Texas, to Washington, D.C. Reports surfaced about Willett’s family investment in Citigroup, a major credit card issuer involved in the lawsuit.
Advisory Opinion
In response to the inquiry, U.S. District Judge Gerald McHugh, acting as the chair of the Committee on Codes of Conduct, determined that Judge Willett’s son’s stock holdings did not necessitate recusal. McHugh emphasized that any potential impact on Citigroup’s stock due to the case outcome was indirect and contingent. He concluded that this indirect financial interest did not warrant Judge Willett’s withdrawal from the case.
Implications and Response
Judge Willett’s participation in the case remains unchanged. He is expected to be part of the three-judge panel overseeing the related request to block the rule on credit card late fees. Recusal would have altered the composition of the panel.
Neither the CFPB nor the Chamber of Commerce, representing banking industry groups challenging the rule, immediately commented on the advisory opinion.
Case Background
The lawsuit revolves around a CFPB rule aimed at curbing excessive late fees charged by credit card issuers. The rule limits late fees to $8 for issuers with over 1 million open accounts unless they can justify higher fees. Previously, late fees could reach up to $30 or $41 for subsequent late payments.
The case is titled Chamber of Commerce of the United States of America, et al, v. Consumer Financial Protection Bureau, pending in the 5th U.S. Circuit Court of Appeals.
- Plaintiffs’ Counsel: Michael Murray of Paul Hastings
- CFPB Counsel: Justin Sandberg of the CFPB
