title insurance

First American Financial Corp. v. Edwards

Issues

Whether a plaintiff who identifies a violation of the Real Estate Settlement Procedures Act has standing under Article III when the plaintiff is among the category of victims that Congress sought to protect but does not allege a particular, concrete harm arising from the cause of action.

 

In this case, the Supreme Court will decide whether a plaintiff has Article III standing to sue under the Real Estate Settlement Procedures Act (“RESPA”) when the plaintiff alleges no injury-in-fact. Respondent Denise Edwards contends that she has standing because, through RESPA, Congress identified a specific harm resulting from a conflict of interest between title insurance service firms and title agents who enter exclusive agreements to exchange referrals for kickbacks. Edwards argues that Congress tethered that harm to a certain class of plaintiffs, which includes Edwards. Respondent First American Financial Corporation rejoins that a plaintiff must allege a personal and concrete harm to gain Constitutional standing. Under this standard, First American asserts that Edwards alleged no such harm and thus lacks standing to sue. The Court’s decision here has the potential to greatly enhance plaintiffs’ ability to organize class actions and obtain relief for statutory violations in various industries and differing legal frameworks.

Questions as Framed for the Court by the Parties

Section 8(a) of the Real Estate Settlement Procedures Act of 1974 ("RESPA" or "the Act") provides that "[n]o person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding ... that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person." 12 U.S.C. § 2607(a). Section 8(d)(2) of the Act provides that any person "who violate[s]," inter alia, § 8(a) shall be liable "to the person or persons charged for the settlement service involved in the violation in an amount equal to three times the amount of any charge paid for such settlement service." Id. § 2607(d)(2). The questions presented are:

1. Did the Ninth Circuit err in holding that a private purchaser of real estate settlement services has standing under RESPA to maintain an action in federal court in the absence of any claim that the alleged violation affected the price, quality, or other characteristics of the settlement services provided?

2. Does such a purchaser have standing to sue under Article III, § 2 of the United States Constitution, which provides that the federal judicial power is limited to "Cases" and "Controversies" and which this Court has interpreted to require the plaintiff to "have suffered an 'injury in fact,'" Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)?

LIMITED TO QUESTION 2 PRESENTED BY THE PETITION.

To buy a house, an individual typically must obtain certain settlement services, such as title insurance. See 12 U.S.C.

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