High Court Agrees To Address Standing Issue In Lawsuit Against Title Insurer

High Court Agrees To Address Standing Issue In Lawsuit Against Title Insurer

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on June 20 decided that it would review a Ninth Circuit U.S. Court of Appeals ruling that a woman had standing to bring a suit against her title insurer for alleged violations of the Real Estate Settlement Procedures Act (RESPA) (First American Financial Corp. v. Denise P. Edwards, No. 10-708, U.S. Sup.).

The high court will decide if Denise P. Edwards, who obtained title insurance from First American Financial Corp., established standing under Article III of the U.S. Constitution by suffering an injury in fact.  The Supreme Court declined to take up First American's question as to whether the Ninth Circuit erred in holding that a private purchaser of real estate settlement services has standing to maintain an action under RESPA when there is no claim that the alleged violation affected the price, quality or other characteristic of the service provided. 

Edwards filed a class action suit in the U.S. District Court for the Central District of California against First American, alleging that First American violated the anti-kickback provision of RESPA by entering into exclusivity agreements with thousands of title insurance agencies that are authorized to sell First American title insurance policies.  Edwards does not contend that she was overcharged for title insurance. 

The District Court denied First American's motion to dismiss for lack of standing, and the Ninth Circuit affirmed.  In its decision, the appeals court held that Edwards showed that she suffered a concrete injury as a result of First American's alleged fraudulent conduct because the damages provision of RESPA "gives rise to a statutory cause of action whether or not an overcharge occurred." 

The panel further found that because RESPA gives Edwards a statutory cause of action, she has standing to pursue her claims. 

[Editor's Note:  Full coverage will be in the June issue of Mealey's Litigation Report: Mortgage Lending.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.] 

For more information, call editor Shane Dilworth at 215-988-7725, or e-mail him at Shane.Dilworth@lexisnexis.com.

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