U.S. Supreme Court Dismisses Certiorari in First American Financial Corp. v. Edwards

by charlesjung

In a notable non-decision, the U.S. Supreme Court today decided not to decide First American Financial Corporation v. Edwards.  567 U. S. ____ (2012) (available at http://www.supremecourt.gov/opinions/11pdf/10-7081b2d.pdf).  Edwards was a case closely watched by class action attorneys.  Class action defense counsel have argued that putative class representatives lack Article III standing where the basis for standing is solely statutory damages (i.e., not actual damages).  The Ninth Circuit ruled that Article III injury can exist solely by statutes creating legal rights. In a per curiam opinion, the U.S. Supreme Court ordered that the “writ of certiorari is dismissed as improvidently granted.”

Questions Presented

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 were:

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)?

On June 20, 2011, the Court granted cert on Question 2; and it reversed itself today.  More later.

By CHARLES JUNG

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