In Re: Kevin Clarke
94 F.4th 502
5th Cir.2024Background
- Petitioners sued the CFTC in the Western District of Texas, alleging the agency's withdrawal of a 2014 "no-action" letter regarding the PredictIt market was arbitrary, capricious, and procedurally improper under the APA.
- Petitioners include individual PredictIt users residing in Austin, Texas, as well as marketplace operators and academics claiming harm from CFTC's revocation.
- After petitioners won a preliminary injunction at the Fifth Circuit, on remand, the CFTC moved to transfer the case to the District of Columbia (D.D.C.), which the district court granted, citing mainly court congestion.
- Petitioners sought mandamus from the Fifth Circuit to reverse this transfer, arguing the district court improperly weighted the § 1404(a) transfer factors.
- The Fifth Circuit reviewed whether the district court clearly abused its discretion in granting the transfer, particularly by relying on court congestion as a dispositive factor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether transfer to D.D.C. was proper under § 1404(a) | CFTC failed to show D.D.C. is clearly more convenient; local witnesses in Texas | D.D.C. is less congested; main entity plaintiffs are based in D.C. | Transfer was an abuse of discretion; transfer order vacated |
| Whether court congestion alone justifies transfer | Court congestion is not a dispositive factor; statistics favor Texas | District court delayed injunction ruling; D.D.C. dockets less congested | Court congestion alone cannot justify transfer |
| Appropriate local interests analysis under § 1404(a) | District court ignored local harm to Texas-resident plaintiffs | Entity plaintiffs based in D.C. bear most direct harm, favoring D.D.C. | Court misapplied law; local interests were at most neutral |
| Assessment of private-interest factors | District court wrongly presumed all factors are neutral; standing issues may require witness testimony in Texas | Unlikely to need evidentiary hearing; declarations suffice for standing | Error to call all private factors neutral; third favors Texas |
Key Cases Cited
- In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) (en banc) (framework for analyzing § 1404(a) venue transfers)
- In re Radmax, Ltd., 720 F.3d 285 (5th Cir. 2013) (neutral transfer factors cannot weigh in favor of transfer)
- Defense Distributed v. Bruck, 30 F.4th 414 (5th Cir. 2022) (movant must clearly show transferee venue is clearly more convenient)
- In re TikTok, Inc., 85 F.4th 352 (5th Cir. 2023) (abuse of discretion where district court misapplies transfer analysis)
- In re Planned Parenthood Fed’n of Am., Inc., 52 F.4th 625 (5th Cir. 2022) (speculative court congestion is insufficient for transfer)