Real Estate Law

U.S. Supreme Court Dismisses Appeal Over Plaintiff’s Standing In Kickback Lawsuit

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court today dismissed an appeal of a Ninth Circuit U.S. Court of Appeals ruling [enhanced version available to subscribers] that affirmed a plaintiff's right to sue banks and title insurance companies accused of paying kickbacks for fees and services in violation of the Real Estate Settlement Procedures Act (RESPA) (First American Financial Corp. v. Denise Edwards, No. 10-708, U.S. Sup.).

(Order available.  Document #85-120727-003Z.)

In a one-page per curiam opinion, the high court concluded that First American Financial Corp.'s writ of certiorari was "improvidently granted."

Denise P. Edwards sued First American in the U.S. District Court for the Central District of California, alleging that it violated RESPA's anti-kickback provision by entering into exclusivity agreements with thousands of title insurance agencies authorized to sell First American title insurance policies.  Under RESPA's remedies, Edwards seeks treble damages for the $455 cost of her title insurance.

The District Court denied First American's motion to dismiss for lack of standing [enhanced version available to subscribers].  On appeal, the Ninth Circuit U.S. Court of Appeals affirmed.

Oral Arguments

First American asked the Supreme Court to review the Ninth Circuit's ruling, and the high court granted its petition for a writ of certiorari.  On Nov. 28, 2011, the high court heard oral arguments on two issues:  whether the Ninth Circuit erred in holding that Edwards has standing to sue under RESPA when she does not claim that the violation affected the price, quality or other characteristic of the settlement services, and whether Edwards has standing to sue under Article III, Section 2, of the U.S. Constitution when she does not have an injury in fact.

Aaron M. Panner of Kellogg Huber Hansen Todd Evans & Figel in Washington is counsel for First American.  Cyril V. Smith of Zuckerman Spaeder in Baltimore, Jeffrey A. Lamken of MoloLamken in Washington and David Adam Reiser in Washington represent Edwards.

[Editor's Note:  Lexis subscribers may download the document using the link above. The document(s) are also available at or by calling the Customer Support Department at 1-800-833-9844.]

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