10-4941- C V

Galiano v. Fidelity Nat'l Title Ins. Co. U N I T E D S TAT E S C O URT O F A P P E AL S F O R T H E S E C ON D C I RC U I T Augus t Ter m 201 1 (Argu ed: O ctobe r 17, 2011 De cided : Jul y 3, 2012) Docke t No. 10-4 941-c v



### G E R R Y 

### GA L I AN O 

### , on be half of hi mself and all o thers simi larly situa ted 

### , G A R Y 

### K R O M E R 

### , J O S E P H 

### AMM I RA T I 

### , M I C H E L L E 

### AMM I RA T I 

### , S U S AN 

### M . MA R O T T A 

### , A KA 

### S U S AN 

### MA R O T T A 

### , P E T E R 

### M I L E Y 

### , V I N C E N T 

### T R U L L I 

### , MA R T I N 

### MA R T I N U C C I 

### , A KA 

### M I C H A E L 

### MA R T I N U C C I 

### , S T E P H E N 

### J . P H E L AN 

### , A KA 

### S T E P H E N 

### P H E L AN 

### ,

Plain tiffs -Appe llant s ,

v. 

### F I D E L I T Y 

### N A T I O N A L 

### T I T L E 

### I N S U RAN C E 

### C O M P AN Y 

### , A KA 

### F I D E L I T Y 

### N A T I O N A L 

### T I T L E S 

### I N S U RAN C E 

### C O M P AN Y 

### , C H I C A G O 

### T I T L E 

### I N S U RAN C E 

### C O M P AN Y 

### , T I C O R 

### T I T L E 

### I N S U RAN C E 

### C O M P AN Y 

### , F I D E L I T Y 

### N A T I O N A L 

### F I N AN C E 

### , I N C 

### . , F I R S T 

### AM E R I C AN 

### T I T L E 

### I N S U RAN C E 

### C O M P AN Y O F 

### N E W 

### Y O R K 

### , U N I T E D 

### G E N E RA L 

### T I T L E 

### I N S U RAN C E 

### C O M P AN Y 

### , F I R S T 

### AM E R I C AN 

### C O R P O RA T I O N 

### , S T E WA R T



### T I T L E 

### I N S U RAN C E 

### C O M P AN Y 

### ,

Defen dants -Appe llees . *

Befor e: L Y N C H , C H I N , AN D C A RN E Y , Circu it Ju dges.

The Clerk of the Court is directed to amend the * official caption in accordance with the above.Appea l fro m a j udgme nt of the Unite d Sta tes

Distr ict C ourt for t he Ea stern Dist rict of Ne w Yor k (Pl att, J. ) gra ntingdefe ndant s-app ellee s' mo tion to di smiss plain tiffs -appe llant s' cl aims for r elief unde r the Real Estat e Set tleme nt Pr ocedu res A ct.

AFFIRMED.

P E T E R D. S T . P H I L L I P , J R . (Barb ara H art,

Vince nt Br igant i, Sc ott V . Pap p, on the b rief ), Lo wey D annen berg Cohen & Hart, P.C. , Whi te Pl ains, New York, for Plaint iffs- Appel lantsGerry Galia no, Gary Kromer , Mon ique Krome r, Jo seph Ammir ati, Miche lle Ammir ati, SusanMaro tta, Peter Miley , Vin cent Trull i, an d Mar tin Marti nucci . Josep h S. Tusa, on th e bri ef , Tus a, P. C., New Y ork, New Y ork, for Plaint iffAppel lant Vince nt Tr uilli , Jr. Antho nio V ozzol o, Ke ndall S. Z ylstr a, Peter Cohn , on th e bri ef , Far uqi & Faruq i, LL P, Ne w Yor k, Ne w Yor k, for Plain tiffs -Appe llant s Jon athan Dzedzy, Ja clyn Dzedzy, an d Mic hael Marti nucci . Lee S quiti eri, on th e bri ef , Squ itier i & Fearo n, LL P, Ne w Yor k, Ne w Yor k, for Plain tiff- Appel lant Peter Miley .

-2-Edwar d A. Walla ce, K ennet h A. Wexle r, Amber M. N esbit t, on th e bri ef , Wexle r Wal lace, LLP, Chic ago, Illin ois, for Plaint iff-A ppell ant Peter Miley . Todd A. Se aver, Jose ph J. Taba cco, Jr., on th e bri ef , Ber man D eVale rio P ease Tabac co Bu rt & Pucil lo, S an Franc isco, Cali forni a, for Plain tiff- Appel lant SusanMaro tta . DavidJ. C ohen, on th e bri ef , Kol man E ly, P.C., Penn del, Penns ylvan ia, for Plain tiff- Appel lant Steph en J. Phela n . B A R R Y R. O S T RA G E R (Kevi n J. Arqui t, Pa trick T. Sh illin g, on th e bri ef ), Si mpson Thach er & Bartl ett L LP, N ew Yo rk, New Y ork, for D efend ants- Appel lees Fidel ity Nation al Ti tle Insura nce Compa ny, Chicag o Tit le In suran ce Compa ny, Ticor TitleInsu rance Compa ny, a nd Fi delit y Nat ional Finan cial, Inc . James I. S erota , Ste phen L. Sa xl, on th e brief , Gre enber g Tra urig, LLP, New York, New York, for D efend antsAppel lees The First Ameri can Corpo ratio n, Fi rst Americ an Ti tle Insur ance Compa ny of New York, and Unite d Gen eral TitleInsu rance Compa ny . DavidM. F oster , Mar k A. Rober tson, on the b rief , Ful brigh t & J awors ki L.L.P ., Wa shing ton, DC, a nd Ne w

-3-York, New York, for D efend antAppel lee S tewar t Tit le In suran ce Compa ny .

C H I N , Circu it Ju dge :

In th is pu tativ e cla ss ac tion, plai ntiff sappel lants alle ge th at de fenda nts-a ppell ees – - tit le insur ance compa nies -- so ld ti tle i nsura nce a t imp roper ly infla ted r ates as a resul t of illeg al ki ckbac ks in viol ation of th e ant i-kic kbackprov ision of t he Re al Es tate Settl ement Proce dures Act ("RES PA"). See RESPA§ 8( a), 1 2 U.S .C. § 260 7(a) ("§ 8 (a)") . Th e dis trict cour t (Pl att, J. ) dismi ssed the a ction . Pl ainti ffs a ppeal . Fo r the reas ons set f orth below , we affir m. STATE MENT OF TH

E CAS E 1. Facts

The f ollow ing f acts are d rawn from plain tiffs ' first amen ded c onsol idate d cla ss ac tion compl aint of Ju ly 9, 2008 (the "Comp laint "). We co nstru e the Comp laint liber ally, acce ptingall factu al al legat ions in th e Compl aint as tr ue, a nd dr awingall reaso nable infe rence s

-4-in pl ainti ffs' favor . See Chambe rs v. TimeWarn er, Inc. ,

282 F .3d 1 47, 1 52 (2 d Cir . 200 2).

Defen dants are title insu rance comp anies that sell title insu rance poli cies to pu rchas ers o f commerci al an d resid entia l rea l est ate i n NewYork . Ti tle i nsura nce premi ums f or Ne w Yor k res ident ial p roper ties gener ally range from appro ximat ely $ 1,800 to $ 3,700 . Fo r mor e exp ensiv e homes and comme rcial prop ertie s, Ne w Yor k tit le in suran ce rates can amoun t to tens of th ousan ds of doll ars. Plain tiffs purc hasedtitl e ins uranc e fro m, an d pai d tit le insur ance premi ums t o, de fenda nts i n con necti on wi th th eir purch ases of Ne w Yor k pro perty .

Title insu rance rate s in New Y ork a re es tabli shed and r egula ted b y the New York Insur ance Depar tment (the "Insu rance Depa rtmen t"). SeeN.Y. Ins. Law §§ 23 05, 2 306. The I nsura nce D epart ment sets insur ance rates by r eview ing infor matio n -- inclu ding "past and prosp ectiv e los s exper ience " andfina ncial data –- s ubmit ted b y ind ividu al insur ers a nd "r ate s ervic e org aniza tions ." See N.Y. Ins. Law § § 230 4 (ou tlini ng fa ctors and mater ials consi deredby

-5-the I nsura nce D epart ment) , 231 3(a) (defi ning "rate serv ice

organ izati on"). Rat e ser vice organ izati ons a re li cense d by the I nsura nce D epart ment and i nclud e ass ociat ions of st ate title insu rers that file rates on b ehalf of t heir membe rs. See N.Y. Ins. Law § 2313 (a).

Defen dants are membe rs of the Title Insu rance Rate Servi ce As socia tion, Inc. ("TI RSA") , an assoc iatio n of state title insu rers licen sed b y the Insu rance Depa rtmen t as a rate servi ce or ganiz ation . TIR SA an nuall y sub mits 1 aggre gatedfina ncial data fromits membe rs to the Insur ance Depar tment . TI RSA a lso p repar es th e NewYorkTitl e Insur ance Rate manua l, wh ich i s sub mitte d to the I nsura nce Depar tment for appro val a nd se ts fo rth c ollec tivel y fix ed title insu rance rate s to be ch argedby i ts me mbers .

TIRSA 's co llect ivelyfixe d rat es ar e bas ed, i n part, on: (1) a per centa ge of the total valu e of the prope rty b eing insur ed; ( 2) th e cos t of insur ing t he ri sk

assoc iatedwithissu ing t he ti tle p olicy ; (3) the costs

TIRSA was named a defendant in the Complaint; the 1 claims against TIRSA were discontinued on December 17, 2010. -6-assoc iatedwiththe searc h andexam inati on of prio r

owner ship recor ds; a nd (4 ) "ag ency commi ssion s" us uallypaid to ti tle a gents . Th e cos t of insur ing t he ri sk ca pture s both prior even ts th at ca use d efect s to title , man y of which

are o r can be e xclud ed fr om th e pol icy's cove rage, and futur e los ses a n ins urer canno t con trol; it i s bas ed on , inter alia , the age of th e pro perty , the comp lexit y of the

owner ship histo ry, a nd th e acc essib ilityof p rior owner ship

recor ds. Agenc y commissi ons c over payme nts m ade t o tit le agent s, in cludi ng pa yment s for the searc h andexam inati on of prior owne rship reco rds.

While titl e age nts d o pro vide actua l ser vices to defen dants , the comm issio ns th ey ar e pai d exc eed t he va lue of th e ser vices . In shor t, ti tle i nsure rs, i nclud ing "[d]e fenda nts[, ] pai d ill egal kickb acks to ti tle a gents [, lawye rs, b roker s, an d len ders, ] for refe rrals and gave fees and o ther thing s of value to o thers for unear ned s ettle ment servi ces a nd se ttlem ent s ervic es no t pro vided " to plain tiffs and o ther purch asers of t itle insur ance. (Co mp. ¶ 91; see Compl . ¶¶ 32, 3 7). The " vast major ity" of ag ency

-7-commi ssion s and"rou ghly 85 pe rcent of t otal title insu rance

premi ums" consi st of kickbacks and other ille gitim ate c osts. (Comp l. ¶¶ 37, 38). Thus , "[t ]itle insu rers get b usine ss by

encou ragin g tho se ma king the p urcha sing decis ions . . . to direc t bus iness to t hat i nsure r. T he be st wa y to encou rage [suchbusi ness] is . . . [thro ugh] finan cial induc ement s." (Comp l. ¶ 32). 2 2. Proce edings Bel ow

On Ju ly 9, 2008 , pla intif fs fi led t he Co mplai nt in the S outhe rn Di stric t of New Y ork. The Compl aint alleg ed claim s und er RE SPA § 8(a) and (b). Pla intif fs as ked t he 3 distr ict c ourt to, inter alia , "pe rmane ntly enjoi n[] a nd restr ain[] [def endan ts] f rom[] unla wfull y fix ing o r maint ainin g the ir ti tle i nsura nce r ates at su praco mpeti tive level s." (Comp l. ¶ B). Plain tiffs soug ht to reco up "' three times the amoun t of any c harge paid ' for the unear ned

Defendants, of course, deny these allegations. We 2 assume them to be true only for the purposes of this appeal.

The Complaint also alleged claims under the Sherman Act 3 (§ 1), New York General Business Law (§ 349), and common law principles of unjust enrichment. Plaintiffs voluntarily discontinued all but their RESPA claims. -8-settl ement serv ices. " (C ompl. ¶ E (citi ng RE SPA § 8(d) , 12

U.S.C . § 2 607(d )). 4

In No vembe r of 2008, this case was trans ferre d to the U nitedStat es Di stric t Cou rt fo r the East ern D istri ct of New Y ork ( Platt , J .) be cause its opera tive facts were subst antia lly d uplic ative of t hose in Dolanv. Fideli ty Natio nal Insura nce C o. , No. 08-c v-046 6, EC F Doc . No. 1 (E.D. N.Y. Feb. 1, 20 08), a put ative clas s act ion a lso f iled in th e Eas tern Distr ict o f NewYork(Pla tt, J .) ag ainst many of th e sam e def endan ts in this case . 5

On Ma rch 2 , 200 9, pl ainti ffs i n thi s cas e mov ed to chang e ven ue an d tra nsfer the case back to th e Sou thern Distr ict o f NewYork . Th e dis trict cour t den ied t he mo tion.

RESPA § 8(d) provides for liability "three times the 4 amount of any charge paid for such settlement service." RESPA § 8(d), 12 U.S.C. § 2607(d) (emphasis added); see also Freeman v. Quicken Loans, Inc. , 132 S. Ct. 2034, 2038 (2012).

On June 17, 2009, the district court dismissed the 5 Dolancomplaint on filed-rate doctrine grounds; this Court affirmed the dismissal. See Dolan v. Fidelity Nat'l Title Ins. Co. , No. 08-cv-00466, 2009 WL 3934153 (E.D.N.Y. June 17, 2009), aff'd , 365 F. App'x 271 (2d Cir. 2010) (summary order), cert. denied , 131 S. Ct. 261 (2010). The plaintiffs in Dolandid not, however, assert a RESPA claim. -9-On Oc tober 5, 2 010, defen dants move d to dismi ss

plain tiffs ' RES PA cl aims pursu ant t o Rul e 12( b)(6) . See Fed. R. Ci v. P. 12(b )(6). On November 8 , 201 0, th e dis trict court gran ted t he mo tion on th e gro unds that plain tiffs faile d to state a pl ausib le cl aim u nder RESPA§ 8( a) an d (b) and b ecaus e the clai m was prec ludedby t he sa fe ha rbor provi sion of RE SPA, § 8(c ), an d the file d rat e doc trine .

This appea l fol lowed .

DISCU SSION We re view de no vo a dis trict cour t's d ismis sal o f

a complain t pur suant to Rule 1 2(b)( 6). Chamb ers , 282 F.3d at 15 2. " To su rvive a mo tion to di smiss , a c ompla int must conta in su ffici ent f actua l mat ter, accep ted a s tru e, to state a cl aim t o rel ief t hat i s pla usibl e on its f ace. . . . The p lausi bilit y sta ndard. . . ask s for more than a sh eer possi bilit y tha t a d efend ant h as ac ted u nlawf ully. " Ashcr oft v . Iqb al , 556 U.S. 662, 678 (2009 ) (in terna l citat ions and q uotat ion m arks omitt ed).

On ap peal, plai ntiff s cha lleng e onl y the dism issal of th eir § 8(a) clai m. T hey a rgue that the d istri ct co urt

-10-erredin g ranti ng de fenda nts' motio n to dismi ss un der RESPA

§ 8(a ) andunde r the file d rat e doc trine . For the reaso ns 6 that follo w, we conc lude that plain tiffs fail ed to stat e a plaus ible claimunde r RES PA § 8(a). We affir m the dist rict court 's di smiss al of the actio n on this groun d. I. Appli cableLaw

Congr ess e nacte d RES PA, i n par t, to elim inate "kickbacks or r eferr al fe es th at te nd to incr ease

unnec essar ily t he co sts o f cer tain settl ement serv ices. " 12 U.S.C . § 2 601(b )(2). RES PA § 8(a) prohi bits kickb acks for refer rals of re al es tate settl ement busi ness. See RESPA § 8(a ), 12 U.S. C. § 2607( a); see a lso Freema n , 132 S. C t. at 2038, 2043 ; Cohenv. JP Mor gan Chase & Co. , 498 F.3d111, 121 ( 2d Ci r. 20 07). A v iolat ion o f § 8 (a) i nvolv es th ree 7 The trial court dismissed the Complaint on three 6 grounds: (1) RESPA's safe harbor provision; (2) the filed rate doctrine; and (3) Iqbal . We elect to decide this case on the third basis only. In light of our disposition below, we do not consider plaintiffs' request to order the transfer of the case to the Southern District of New York.

Specifically, § 8(a) provides: "No person shall give 7 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 . . . shall be referred to any person." RESPA § 8(a), 12 U.S.C. -11-eleme nts: (1) a payment or th ing o f val ue; ( 2) gi ven a nd

recei ved p ursua nt to an a greem ent t o ref er se ttlem ent busin ess; and ( 3) an actu al re ferra l. Egere r v. Woodl and Realt y, In c. , 556 F.3d415, 427 (6th Cir. 2009) ; see a lso Culpepper v. Ir win Mortg. Corp . , 491 F.3d1260 , 126 5 (11 th Cir. 2007) (cit ing Culpepper v. In land Mortg . Cor p. , 132 F.3d 692, 695-9 6 (11 th Ci r. 19 98); Paul Barro n, Da n Ros in & Micha el A. Bere nson, 1 Feder al Re gulat ion o f Rea l Est ate a nd Mortgage L endin g

§ 2: 45 (4 th ed . 201 1); J oyce Palom ar, 2 TitleInsu ranceLaw § 21 .2 (2 011). Fur ther, when ther e is a viola tion of § 8(a), § 8( d) pr ovide s a p rivat e rig ht of actio n to "the perso n or perso ns ch argedfor the s ettle ment servi ce in volve d in the v iolat ion i n an amoun t equ al to three time s the amou nt of any charg e pai d for such settl ement serv ice." RES PA § 8(d), 12 U .S.C. § 26 07(d) ; see

§ 2607(a); see also 12 U.S.C. § 2602(2) (defining "thing of value"); 12 U.S.C. § 2602(3) (defining "settlement service"); 24 C.F.R. § 3500.14(f) (defining "referral").

RESPA's "safe harbor provision," however, § 8(c), provides that § 8(a) shall not be construed as prohibiting payments by a title company for goods, facilities actually furnished, or services actually performed. RESPA § 8(c), 12 U.S.C. § 2607(c). -12-also Freem an , 132 S. C t. at 2038 (RES PA § 8(a) and ( b) "a re

enfor ceabl e thr ough, inter alia , act ions for d amage s bro ught by co nsume rs of sett lemen t ser vices agai nst ' [a]nypers on or perso ns wh o vio late the p rohib ition s'" o f the se se ction s. (quot ing RESPA § 8(d ), 12 U.S. C. § 2607( d))). 8

RESPA , how ever, "is not a pric e-con trol statu te." Krusev. Wells FargoHomeMort g., Inc. , 383 F.3d49, 57 (2 d Cir. 2004) (quo ting Krzal ic v. Repu blic TitleCo. , 314 F.3d 875, 881 ( 7th C ir. 2 002)) ; see A rthur v. Ticor TitleIns. Co. , 569 F.3d154, 156 (4th Cir. 2009) . RE SPA i s thu s not a mecha nism for f edera l cou rts t o reg ulate the reaso nable ness of ti tle i nsura nce r ates. See Kruse , 383 F.3dat 5 6 (disc ussin g RES PA § 8(b) and ( d)); Arthu r , 569 F.3dat 1 59 (quot ing Kruse , 383 F.3dat 5 6, an d col lecti ng ca ses).

Additionally, three Circuit Courts have held that RESPA 8 creates a statutory cause of action, even if the plaintiff is not overcharged. See Edwards v. First Am. Corp. , 610 F.3d 514, 518 (9th Cir. 2010), cert. granted , 131 S. Ct. 3022 (2011), and cert. dismissed , No. 10-708, 2012 WL 2427807 (June 28, 2012); Carter v. Welles-Bowen Realty, Inc. , 553 F.3d 979, 989 (6th Cir. 2009); Alston v. Countrywide Fin. Corp. , 585 F.3d 753, 759-62 (3d Cir. 2009). -13-II. Appli cation In th is ca se, t he di stric t cou rt di d not err in dismi ssingthe Compl aint becau se it did not c ontai n suffi cient fact ual m atter to s tate a pla usibl e cla im fo r relie f und er § 8(a). See I qbal , 556 U.S. at 6 78; F ed. R . Civ. P. 12 (b)(6 ). W hile the C ompla int d id al lege a kic kback schem e, it did so in a wh olly concl usoryand specu lativ e

manne r. See I qbal , 556 U.S. at 6 78-79 .

First , the Comp laint fail ed to alle ge fa cts suffi cient to e stabl ish t he el ement s of a § 8 (a) c laim. The Compl aint faile d to ident ify: (1) a payment or th ing o f value ; (2) give n by defen dants and recei ved b y pla intif fs' title agen ts, l awyer s, br okers , len ders, or o ther third parti es pu rsuan t to an ag reeme nt to refe r set tleme nt busin ess; and ( 3) an actu al re ferra l. SeeRESP A § 8 (a), 12 U.S.C . § 2 607(a ); Eger er , 556 F.3dat 4 27; Culpepper , 491 F.3d at 12 65; see a lso E dward s , 610 F.3dat 5 15-17 (iden tifyi ng ac tors and a llegi ng a kickb ack a nd re ferra l); Carte r , 553 F.3dat 9 82-84 (sam e); Alsto n , 585 F.3dat 7 56- 58 (s ame).

-14-Secon d, th e Complain t fai led t o all ege a ny

speci fics as to the date, time , or amoun t of the a llege d § 8(a ) vio latio ns, o r anyconn ectio ns be tween these plain tiffs -- o r the ir ti tle a gents , law yers, brok ers, or lende rs -- and thesedefe ndant s. See E gerer , 556 F.3dat 428; see a lso E dward s , 610 F.3dat 5 15-17 (ide ntify ing a nd

conne ctingacto rs); Carte r , 553 F.3dat 9 82-84 (sam e); Alsto n , 585 F.3dat 7 56-58 (sam e). The C ompla int c ontai ned no al legat ions that defen dants char ged a ny pl ainti ff a rate infla ted b y kic kback s. 9

Third , pla intif fs ar e ess entia lly r elyin g on a suppo sed i ndust ry-wi de pr actic e of kickb acks and r eferr als to su stain thei r § 8 (a) c laim. In effec t, th e Complain t presu med t hat ( 1) th ere w ere s ubsta ntial diff erenc es be tween title insu rance rate s andthe actua l cos ts in curre d by title insur ers - - nam ely, the c osts assoc iatedwiththe risk of loss and t he se arch and e xamin ation of p rior owner ship

An allegation of overcharge is not necessary to sustain 9 a § 8(a) claim. See Edwards , 610 F.3d at 518; Carter , 553 F.3d at 989; Alston , 585 F.3d at 755. In this case, such an allegation would not have been necessary, but would have served the purpose of specifying the facts of the alleged kickback. -15-recor ds -- and (2) t hese diffe rence s rep resen ted k ickba cks

for r eferr als r ather than prof it ma rgins . SeeArth ur , 569 F.3d at 16 0 n.2 ; Galia no v. Fide lity Nat'l Titl es In s. Co . , No. 0 8-cv- 04711 , ECFDoc. No. 89, a t 9 ( E.D.N .Y. N ov. 8 , 2010) (cit ing Arthu r , 569 F.3dat 1 60 n. 2). Witho ut fa cts as to the alleg ed ki ckbac ks, r eferr al ag reeme nts, or refer rals, howe ver, plain tiffs are engag ing i n mer e conje cture ; thi s spe culat ion i s ins uffic ient to st ate a plaus ible claim .

Final ly, w ithou t spe cific fact s as to th e all eged kickb ack s cheme , pla intif fs' § 8(a) RESP A cla im ef fecti vely becom es a claimof o verch arge. Bec ause RESPAis n ot a price -cont rol s tatut e, fe deral cour ts ca nnot revie w the

reaso nable ness or va lidit y of title insu rance rate s for actua l ser vices perf ormed . See Kruse , 383 F.3dat 5 7.

Accor dingl y, be cause the Compl aint did n ot al lege factu al co ntent that woul d hav e all owed the d istri ct co urt to dr aw a plaus ible infer ence that defen dants paidkickbacks for b usine ss re ferra ls in viol ation of § 8(a) in c onnec tion with the t itle insur ance polic ies p urcha sed b y pla intif fs,

-16-the d istri ct co urt d id no t err in g ranti ng de fenda nts'

motio n to dismi ss. CONCL USION

For t he re asons set forthabov e, th e jud gment of the d istri ct co urt i s AFF IRMED .

-17-