* Circuit Judge, United States Court of Appeals for the Second

Circuit, sitting by designation.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 94-30343

STATE OF LOUISIANA,

Plaintiff-Appellant,

v.

LITTON MORTGAGE COMPANY, Class

Representative, and all other similarly

situated mortgage servicing companies,

Defendant,

BISYS LOAN SERVICES, INC., Class

Representative, and all other similarly

situated mortgage servicing companies

fka

Litton Mortgage Servicing Center, Inc.,

ET AL.,

Defendants-Appellees.

Appeal from the United States District Court

for the Eastern District of Louisiana

(March 30, 1995)

Before VAN GRAAFEILAND * , JOLLY AND WIENER, Circuit Judges.

PER CURIAM:

Plaintiff-Appellant, the State of Louisiana ("the State")

appeals two district court orde rs, one granting the DefendantsAppellees' Litton Mortgage Company, Inc.

- now BISYS Loan Services,2

Inc.

- ("Litton/BISYS") and Magnolia Federal Bank for Savings

("Magnolia") (collectively "Defendants") motions to dismiss the

State's complaint for failure to state a claim, and the other

denying the State's subsequent mo tion for leave to amend its

complaint. The State asserts that the court erred in (1)

dismissing its complaint on the ground that Section 10 of the Real

Estate Settlement and Procedures Act ("RESPA"), 12 U. S.C. §

2609(a), does not imply a right of private action, and (2) denying

its motion to amend on alternative grounds: that the dismissal of

the State's complaint constituted a dismissal of the State's entire

action, and that the circumstances underlying the State's motion to

amend - particularly the State's effort to resurrect an abandoned

claim - did not justify allowing yet another amendment.

We agree with the district court's legal ruling that Section

10 of RESPA does not imply a private cause of action. It follows

that the court did not err in dismissing the State's complaint for

failure to state a claim under RESPA. With respect to the State's

motion for leave to amend, we conclude that the court erred in

denying the motion on the ground that the dismissal of the State's

complaint constituted a dismissal of the entire action. We are

satisfied, however, that this error is harmless by virtue of the

fact that the court also addressed the merits of the State's motion

to amend and did not abuse its discretion in denying that motion.

We therefore affirm the court's order to that effect.1 See 12 U.S.C. § 2609(a) (1994) (limiting amount of advance

deposit in escrow account that lender may requ ire in connection

with federally related mortgage loan).

3 I

FACTS AND PROCEEDINGS

In November 1993 the State filed an action on behalf of

Louisiana homeowners against Litton/BISYS and other similarly

situated mortgage companies, asserting claims under Section 10 of

the RESPA, 1 the Racketeering Influenced and Corrupt Organizations

Act ("RICO"), the Louisiana Unfair T rade Practices and Consumer

Protection Act ("UTP"), and state antitrust laws. The State's

action stemmed from the mortgage companies' all eged practice of

requiring homeowners to deposit funds in mortgage escrow accounts

in amounts that exceed the amount permitted by federal law or by

the homeowners' mortgage contracts. Due to the number of common

claims against numerous mortgage servicers, the State in its

initial complaint sought to certify a class with Litton/BISYS named

as class representative. Prior to an answer being filed, the State

amended its original complaint to include federal antitrust claims.

After a preliminary court con ference the State amended its

complaint a second time, asserting only the RESPA and UTP claims

against the defendants individually. Litton/BISYS and Magnolia

filed motions to dismiss the complaint. The court granted these

motions, concluding that Section 10 of RESPA does not provide a

priva te right of action and declining to exercise supplemental

jurisdiction over the remaining state UTP claim.

Following the court's dismissal but before final judgment was2 Fernandez-Montes v. Allied Pilots Ass'n , 987 F.2d 278, 284

(5th Cir. 1993); FDIC v. Ernst & Young

, 967 F.2d 166, 169 (5th Cir.

1992) (citing Bar rientos v. Reliance Standard Life Ins. Co. , 911

F.2d 1115, 1116 (5th Cir. 1990), cert. denied

, 498 U.S. 1072

1991)).

3 Whi taker v. City of Houston , Tex. , 963 F.2d 831, 836 (5th

Cir. 1992) (citing Gregory v. Mitchell

, 634 F.2d 199, 203 (5th Cir.

1981)); Avatar Exploration, Inc. v. Chevron, U.S.A., Inc.

, 933 F.2d

314 (5th Cir. 1991).

4 entered, the State filed two motions for leave to amend its

complaint,

- for the third an d fourth times - asking to reassert

the RICO claim, reinstate the RESPA and state law claims, and add

additional defendants. The court denied these motions to amend,

reasoning that, as the earlier order of the court had dismissed the

State's entire action there was nothing left for the State to

amend. The court also concluded that the State's attempt to

reassert the abandoned RICO claim, when viewed in conjunction with

other circumstances surrounding the case, was indicative at worst

of possible bad faith or dilatory motive, or at best, of inartful

pleading, thus providing the court with substantial reason s for

denying the motions on the merits.

II

ANALYSIS

A. S TANDARD OF R EVIEW

We review de novo a dismissal of a compliant for failure to

state a claim. 2 And, although we review a district court's denial

of a motion to amend for abus e of discretion, 3 we review de novo

t hat portion of a district court's denial of the motion to amend

that rests on a question of law: here, whether the court's order4 422 U.S. 66, 78 (1975)

5 See id

. (establishing four-part test for determining whether

private right of action is implicit in particular statute). The

four-part test developed in Cort is as follows:

First, is the plaintiff "one of th e class for whose

especial benefit the statute was enacted," that is, does

the statute create a federal righ t in favor of the

plaintiff? Second, is there any indication of

legislative intent, explicit or implicit, either to

create such a remedy or to deny o ne? Third, is it

consistent with the underlying purposes of the

legislative scheme to imply such a remedy fo r the

plaintiff? And finally, is the cause of action one

traditionally relegated to state law, in an area basically the concern of the States, so that it would be

inappropriate to infer a cause of action based solely on

federal law?

Id . (citations omitted).

5 constituted a dismissal of the State's entire action or merely

dismissal of specific complaints.

B. S ECTION 10 OF RESPA

The State challenges the order dismissing its complaint based

on the court's conclusion that Section 10 of RESPA does not imply

a private cause of action. Relying on the C o rt v. Ash 4 standard

for determining whether a private right of action may be inferred

from a partic ular statute, the State insists that Section 10

clearly does imply a private cause of action. 5

Applying Cort 's four-part test to Section 10, th e State

reasons that (1) the plaintiff is a member of the class for whose

special benefit the statute was enacted; (2) as § 2609(a) does not

provide any other remedy, the provision w ould be superfluous and

ineffective without a private cause of action; (3) an implied right

of private action is consistent with the purposes of the

legislative scheme; and (4) even though injured borrow ers could6 See e.g.

, Transamerica Mortgage Advisors, Inc. v. Lewis

, 444

U.S. 11, 15-16 (1979) (reiterating that, although prior opinions of

Court place con s iderable emphasis on desirability of implying

private right of action in order to effectuate purposes of statute,

u ltimate question is whether Congress intended to create private

rem edy); T ouche Ross & Co. v. Redington

, 442 U.S. 560, 568 575

(1979) (noting that Court's task is limited solely to determining

whether Congress intended to create a private right of action).

7 See Allison v. Liberty Sav.

, 695 F.2d 1 086, 1091 (7th Cir.

1982) (holding that no implied private cause of action exists under

Section 10 of RESPA); contra Vega v. First Federal Sav. & Loan

Ass'n of Detroit

, 622 F.2d 918, 925 n.8 (6th Cir. 1980) (concluding

that Congress intended to create private remedy for v iolation of

RESPA).

8 622 F.2d 918 (6th Cir. 1980).

9 695 F.2d 1086 (7th Cir. 1982).

6 seek relief under state law, the likelihood of inconsistent results

is high. The State glosses over subsequent cases in which the

S upreme Court departed from C ort to conclude that the weightiest

factor in determining whether a statute implies a private right of

action is whether Congress intended to create one. 6 Moreover, the

State apparently overlooks the fact that the absence of legislative

history regarding Congress' intent t o create a private right of

action generally augurs against implying a private cause of action.

The circuits are split on this precise issue. 7 After

considering the opposing position of Vega v. First Federal Savings

& Loan Association of Detroit

, 8 we find most persuasive the Seventh

Circuit's well-reasoned opinion in Allison v. Liberty Savings

. 9 In

reaching its conclusion that Section 10 of RESPA does not create a

private right of action, the A llison court acknowledged the Cort

test, yet recognized that the central inquiry for determining1 0 Id

. at 1088 (citing Transamerica Mortgage Advisors, Inc.

, 444

U.S. at 15-16 and Touche Ross & Co. , 442 U.S. at 575).

11 Id . at 1089 (citing Touche Ross & Co. , 442 U.S. at 571).

1 2 Id

. (citing Transamerica Mortgage Advisors, Inc.

, 444 U.S.

at 24).

1 3 See 12 U.S.C. § 2609(b)-(d) (1994) (1 9 90 amendments to

Section 10: adding penalties for violation of subsection § 2609(c)

(escrow account statements), but n ot penalties for violations of

subsection § 2609(a) (limits on advance deposits)).

7 whether a statute creates a private cause of action is whether

Congress intended to create a private re medy. 1 0 Observing that

Congress explicitly provide d federal private remedies in other

sections of the Act but not in Sectio n 10, and that there was no

legislative history on the issue, the Allison court concluded that

when "analysis of the statute itself weighs against implication of

a private cause of action and the legislative history is silent, we

must conclude that Congress did not intend to create a private

remedy." 11 The court stopped its analysis at that point, noting

that "once we have concluded that Congress did not intend to create

a private remedy, our inquiry is at an end." 12 In addition to

the reasoning of Allison

, we are persuaded further by the fact that

when Congress did amend Section 10

- which occurred after Allison

-

it added penalties for violations of a different provision of that

section but not f or violations of the provision limiting escrow

deposit accounts. 13 We also note in passing that four district

courts sitting in three additional circuits have adhered to Allison

when concluding or observing that Section 10 of RESPA does not1 4 See Campbell v. Machias Sav. Bank

, 865 F.Supp. 26, 31 (D.Me.

1994) (agreeing with Seventh Circuit; finding no implied private

right of action under § 2609); Michels v. Resolution Trust Corp

. , Civ. No. 4-93-1167, 1994 WL 242162, at *3 (D.Minn. April 13, 1994)

(concluding that Allison decision was correct; dismissing

plaintiff's claim for violation of RESPA § 10); Bloom v. Martin

, 865 F.Supp 1377, 1384-85 (N.D.Cal. 1994) (citing Allison

- and

criticizing Vega 's unsupported contrary conclusion

- to support its

holding that, as § 2609 does not create a private remedy, neither

does the RESPA § 2603); Bergkamp v. New York Guardian Mortgagee

Corp.

, 667 F.Supp. 719, 723 (D.Mont. 1987) (concluding that no private remedy was intended under Section 10 of RESPA).

1 5 See e.g.

, Whitaker v. City of Houston, Tex.

, 9 63 F.2d 831,

835 (5th Cir. 1992) (holding that if district court order does not

expressly or by clear implicati on dismiss entire action, order

dismisses complaint only and plaintiff may amend pursuant to Rule

15(a)). S ee F ED

. R. C IV

. P. 15(a) (establishing in part that party

may amend pleading by leave of court and that leave shall be freely

given when justice so requires).

16 963 F.2d 831 (5th Cir. 1992).

8 imply a private right of action. 14 We are comfortable in deciding

for this circuit that there is no privat e right of action under

Section 10 of RESPA.

C. T HE S TATE ' S M OTION TO A MEND

The State urges us to hold tha t the district court erred in

denying the State's motion for leave to amend on the ground that

the earlier dismissal terminated State's entire action, not merely

the RESPA and UTP complaints. The State contends that, as the

order granting the Defendants' motions to dismiss gave no

i ndication that the court intended to dismiss the State's ent ire

action, the order dismissed only the complaint; thus, it was proper

for the State to seek leave to amend its complaint. 15

We stated in W hitaker v. City of Houston 16 that, unless a

district cour t order states expressly or by clear indication17 Whitaker , 963 F.2d at 832.

1 8 See e.g.

, id

. at 834 (noting that if court inten ded to

dismiss entire action it surely would not have considered

subsequent motion to amend because there would have been nothing

left to amend and plaintiff's only options would have been motion

for reconsideration or appeal).

9 ref lects the court's intention to dismiss an entire action, the

order dismisses only the complaint and a plaintiff may seek leave

o f court to amend. 1 7 Here, the dismissal order stated only that

"[i]T IS ORDERED that Defendant BISYS Loan Services, Inc.'s March

18, 1994 Motion to Dismiss, argued before this Court on April 6,

1994 is hereby GRANTED." A literal reading of this order reflects

that the court intended to grant the Litton/BISYS motion, which in

turn literally was a motion to dismiss the State's second amended

complaint

. The docket sheet supports this literal reading in that

it records the dismissal order as granting BISYS' motion to

"dismiss the State's second amended complaint."

Finding that the court order dismissing the State's complaint

neither expressed nor indicated clearly that the court intended to

dismiss the S tate's entire action, we are constrained by the

teaching of Whitaker to conclude that the district court erred in

denying the State's motion for leave to amend on this procedural

basis. Our conclusion is bolstered by the additional facts that

(1) the dismissal order neither invited the State to amend its

complaint nor indicated that an amendment was not possible, (2) a

final Rule 58 judgment was not filed until almost two months later,

and (3) t he court - after saying that there was nothing left for

the State to amend

- went on to address the merits of the motion. 181 9 Chitimacha Tribe of Louisiana v. Harry L. Laws Co. Inc.

, 690

F.2d 1157, 1163 (5th Cir. 1982), cert. denied

, 464 U.S. 814

(1983)).

2 0 Jamieson By and Through Jamieson v. Shaw

, 772 F.2d 1205, 1208

(5th Cir. 1985) (quoting Conley v. Gibson

, 355 U.S. 41, 48 (1957)).

2 1 Whitaker , 963 F.2d at 836 (quoting Foman v. Davis

, 371 U.S.

178, 182 (1962).

10 We are equally convinced, though, that the district court's

error in denying the State's motion to amend based on that

procedural basis is nullified by the court's proper denial of the

same motion on its merits. The State challenges this "substantive

denial," arguing that the court abused it discretion in denying the

motion to amend because the State had abandoned the same RICO claim

that it was seeking to reassert in the amended complaint. We are

again unpersuaded by the State's argument; rather, we are satisfied

that the court did not abuse its discretion in denying the State's

motion on such grounds.

Rule 15(a) "evinces a bias in favor of granting leave [to

amend]," when justice so requires. 19 A decision to grant leave is

within the discretion of the court, although if the court "lacks a

'substantial reason' to deny leave, its discretion 'is not broad

enough to permit denial.'" 20 In exercising its discretion a court

may consider such factors as "'undue delay, bad faith or dilatory

motive on the part of the movant, repeated failure to cure

deficiencies by amendments previously allowed, undue prejudice to

the opposing party by virtue of allowance of the amendment, [and]

futility of amendment.'" 21

When it denied the State's motion to amend, the district court2 2 See e. g.

, Boelens v. Redman Homes, Inc. , 759 F.2d 504, 508

(5th Cir. 1985) ("[A]an amended complaint ordinarily supersedes the

original and renders it of no legal effect, unless the amended

complaint specifically refers to or adopts the earlier pleading.")

(citing Wilson v. First Houston Inv. Corp.

, 566 F.2d 1235, 1237-38

(Former 5th Cir. 1978), vacated on other grounds

, 444 U.S. 959

(1979)).

23 922 F.2d 261 (5th Cir. 1991)

2 4 See id

. at 265 (concluding that plaintiff did not waive right

to reassert original Title VII claim in second amended complaint

despite fact that plaintiff had replaced Title VII claim in favor

of § 1981 claim in first amended complaint).

11 made three observations. First, it noted that the State proposed

to resurrect its abandoned RICO claim. 22 The court essentially

determined that, as the substance of these "new" RICO allegations

that the State proposed to raise were conceptually identical to

those contained in the original complaint, the State's attempt to

resurrect the abandoned claim justified the court's decision to

deny the motion.

The State complains that the court erred in basing its denial

solely on "abandonment." The State argues that, because a

plaintiff is permitted to reassert an abandoned claim in a

subsequent amended complaint, the State's attempt to resurrect the

RICO claim was not indicative of bad faith or dilatory motive and

thus does not justify the court's denial. The State contends that

we rejected "abandonment" as a basis for denying a motion to amend

in Watkins v. Lujan

, 23 when we held that a plaintiff could reassert

a cause of action that wa s raised in an original complaint but

abandoned in a subsequent complaint. 2425 Id

.

26 Id

.

27 Id

.

12 Despite the State's effort to analogize its situation to

Watkins

, we p erceive a distinguishing difference between the

Watkins circumstances and those before us today. W atkins involved

a pro se plaintiff seeking to reassert an abandoned Title VII

discrimination claim, the operative facts of which were the same as

those of her § 1981 discrimination claim. In addition, the

principal focus i n Watkins was on whether the Title VII cause of

action related back to the original pleading under Rule 15(c),

thereby overcoming the Title VII thirty-day limitation period that

would otherwise bar the plaintiff's cause of action. We were

persuaded in Watkins that the plaintiff's second amended complaint

did relate back to the date of t he original filing because b oth

causes of action were based on the same f acts and allegations of

discriminat ion

. 25 We reasoned therefore that, even though the

plaintiff had replaced her original Title VII claim with a § 1981

claim, her so doing d id not constitute an absolute waiver of her

r ight to reassert the Title VII claim because at all times the

operative facts on which her cause of action was based remained the

same. 26 We concluded that this reasoning was "even more compelling

in light of [the plaintiff's] pro se status and the liberality

accorded the pleadings of such parties." 27

Second, after observing that the State had abandoned its RICO

claim, the district court noted that the State had already amended13

its complaint twice, and that the proposed amended complaints

represented the fourth and fifth complaints in that court. Third,

the court observed that the proposed amendments failed to raise any

new claims or factual allegations. We, too, note that not only was

the State attempting to reassert the s ame RICO claim that it had

abandoned - which purportedly was dropped after the initial court

conference during which the court expounded on the futility of the

claim - but the State was also seeking to reassert the same RESPA

and state law claims that the court had unconditionally dismissed

approximately two weeks prior to the State's motion.

Having thus determine d that these three factors were

"indicative of possible bad faith and dilatory motive at the worst,

and weak attempts at artful pleading at best," the district court

concluded tha t it had substantial reason to deny the State's

motion. We agree. Given the circumstances underlying the State's

motion to amend, we are convinced that the district court did not

abuse its discretion in denying the motion. We affirm, therefore,

the district court's order denying the State's motion for leave to

amend its complaint, based on the merits.

III

CONCLUSION

The State urges us to hold that Section 10 of RESPA implies a

private right of action, and on that basis to reverse the order of

the district court dismissing the State's second amended complaint.

We hold, however, that Congress did not intend to create a private

right of action under Section 10 of RESPA. Consequently, the14

district court committed no error in dismis sing the State's

complaint asserting the RESPA claims.

With respect to the dismissal of the State's subsequent motion

to amend its compl aint, we conclude that the court did err in

holding that the order dismissing the State's complaint constituted

a dismissal of its entire action. This error was harmless,

however, in light of the court's correct analysis of the State's

motion on the merits. As we find no abuse of discretion in the

denial of the State's motion b ased on substantive grounds, we

affirm the district court order to that effect.

AFFIRMED.