Term: 2011
Docket: 10-708
First American Financial Corporation, Successor In Interest To The First American Corporation, Et Al., Petitioners v. Denise P. Edwards
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10-708 FIRST AMERICAN FINANCIAL V. EDWARDS DECISION BELOW: 610 F.3d 514 LIMITED TO QUESTION 2 PRESENTED BY THE PETITION. DISMISSED AS IMPROVIDENTLY GRANTED. CERT. GRANTED 6/20/2011 QUESTION 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 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)? LOWER COURT CASE NUMBER: 08-56536, 08-56538
In the case of First American Financial Corporation v. Denise P. Edwards, 2011, the U.S. Supreme Court was asked to determine whether a homebuyer could sue a title insurance company for alleged violations of federal anti-kickback laws even if she wasn't overcharged for services. The plaintiff, Denise Edwards, claimed that First American violated the Real Estate Settlement Procedures Act (RESPA) by paying kickbacks to her real estate agent in exchange for business referrals and argued that this practice increased overall costs for consumers like herself. However, First American contended that since Edwards couldn't prove she was personally overcharged or suffered any financial harm as a result of their actions; therefore she lacked standing to sue under Article III of the Constitution which requires plaintiffs to demonstrate an "injury-in-fact." The court initially agreed with Edward's argument but later dismissed it due to other reasons unrelated to RESPA violation claims.
The dissenting opinion in the case of First American Financial Corporation v. Denise P. Edwards argued that the plaintiff, Edwards, did not have standing to sue because she had not suffered any concrete harm as a result of First American's alleged violation of the Real Estate Settlement Procedures Act (RESPA). The dissenters contended that merely alleging a statutory violation is insufficient for Article III standing; instead, plaintiffs must demonstrate actual or imminent injury. They further asserted that allowing lawsuits based solely on statutory violations would open floodgates to frivolous litigation and potentially overwhelm courts with cases where no real harm has been done. This view emphasizes strict interpretation of constitutional requirements for legal disputes and cautions against expanding access to federal courts beyond those who have sustained or are in immediate danger of sustaining direct injury.
