2015 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-29-2015

In re: Community Bank of NVA

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 13-4273

_____________

IN RE: COMMUNITY BANK OF NORTHERN VIRGINA

MORTGAGE LENDING PRACTICES LITIGATION

 PNC Bank NA, successor to CBNV,

 Appellant 

_______________

On Appeal from the United States District Court

for the Western District of Pennsylvania

(D.C. No. 2-03-cv-00425)

District Judge: Hon. Arthur J. Schwab

_______________

Argued January 20, 2015

Before: FISHER, JORDAN, and GREENAWAY, JR., 

Circuit Judges.

(Filed: July 29, 2015)

_______________
2

Martin C. Bryce, Jr., Esq. [ARGUED]

Joel E. Tasca, Esq.

Ballard Spahr

1735 Market St. 

51st Floor

Philadelphia, PA 19103

 Counsel for Appellant

Scott C. Borison, Esq.

Legg Law Firm

5550 Buckeystown Pike

Frederick, MD 21703

R. Bruce Carlson, Esq. [ARGUED]

Gary F. Lynch, Esq.

Carlson Lynch Sweet & Kipela

115 Federal St. 

Suite 210

Pittsburgh, PA 15122

Daniel O. Myers, Esq.

100 Park St.

Traverse City, MI 49684
3

David M. Skeens, Esq.

Roy F. Walters, Esq. [ARGUED]

Walters, Bender, Strohbehn & Vaughan

1100 Main St. 

Suite 2500

P.O. Box 26188

Kansas City, MO 64196

Robert S. Wood, Esq.

Richardson, Patrick, Westbrook & Brickman

1037 Chuck Dawley Boulevard

Building A

Mount Pleasant, SC 29464

 Counsel for Appellees

_______________

OPINION OF THE COURT

_______________
4

TABLE OF CONTENTS

Page

I. Background. . . . . . . . . . . . . . . . . . . . . . . . . . . 6

A. The Alleged Illegal Lending Scheme . . 7

B. Community Bank I. . . . . . . . . . . . . . . . . 10

C. Community Bank II . . . . . . . . . . . . . . . . 13

D. Post-Community Bank II Proceedings. . 17

II. Discussion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

A. Adequacy of Representation . . . . . . . . . 23

B. Conditional Certification. . . . . . . . . . . . 30

C. Other Rule 23 Requirements. . . . . . . . . 31

1. Ascertainability . . . . . . . . . . . . . 31

2. Commonality. . . . . . . . . . . . . . . 34

3. Predominance . . . . . . . . . . . . . . 38

a. Standing . . . . . . . . . . . . . 40

b. Equitable Tolling . . . . . . 40

i. Active Misleading 43
5

ii. Reasonable Due 

Diligence . . . . . . . 47

c. RESPA Claims . . . . . . . . 51

d. TILA/HOEPA Claims. . . 54

e. RICO Claims . . . . . . . . . 57

4. Superiority . . . . . . . . . . . . . . . . . 59

5. Manageability . . . . . . . . . . . . . . 61

III. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6

JORDAN, Circuit Judge.

PNC Bank, N.A. (“PNC”) challenges an order of the 

United States District Court for the Western District of 

Pennsylvania certifying a nationwide litigation class of 

individuals who received residential mortgage loans from

Community Bank of Northern Virginia (“CBNV”), a 

financial institution whose interests were later acquired by 

PNC. The appeal presents several arguments against 

certification. First, PNC contends that there is a fundamental 

class conflict that undermines the adequacy of representation 

provided by class counsel. Second, PNC claims that the 

District Court conditionally certified the class and thus erred. 

Third, PNC says that the putative class does not meet the 

ascertainability, commonality, predominance, superiority, or 

manageability requirements of Rule 23 of the Federal Rules 

of Civil Procedure. We have considered each of those 

arguments and a number of subsidiary ones and find them 

unpersuasive. We will therefore affirm. 

I. Background

This is the third appeal from the certification of a class 

based on allegations of an illegal home equity lending scheme 

involving two banks, specifically CBNV and Guaranty 

National Bank of Tallahassee (“Guaranty”), and also 

involving GMAC-Residential Funding Corporation n/k/a 

Residential Funding Corporation, LLC (“Residential 

Funding”), a company that purchased mortgage loans from 

those banks. See In re Cmty. Bank of N. Va. (Community 

Bank I), 418 F.3d 277 (3d Cir. 2005); In re Cmty. Bank of N. 

Va. (Community Bank II), 622 F.3d 275 (3d Cir. 2010). The 
7

two previous appeals involved certification of settlement

classes, but this appeal involves certification of a litigation 

class. Much of the factual and procedural history of this case 

is set out in detail in our two prior opinions, but we reiterate 

the relevant portions here. 

A. The Alleged Illegal Lending Scheme

The Plaintiffs describe a predatory lending scheme 

affecting numerous borrowers nationwide and allegedly

masterminded by the Shumway Organization (“Shumway”), a 

residential mortgage loan business operating in Chantilly, 

Virginia. Through a variety of entities, including EquityPlus 

Financial, Inc. (“Equity Plus”), Equity Guaranty, LLC 

(“Equity Guaranty”), and various title companies, Shumway 

offered high-interest mortgage-backed loans to financially

strapped homeowners. 

As a non-depository lender, Shumway was subject to 

fee caps and interest ceilings imposed by various state 

mortgage lending laws. The Plaintiffs aver that, in an effort 

to circumvent those limitations, Shumway formed 

associations with several banks, including CBNV and 

Guaranty. Shumway allegedly arranged payments to CBNV 

and Guaranty to disguise the source of its loan origination 

services so that fees for those services would appear to be

paid solely to the banks, which were depository institutions. 

The Plaintiffs allege that, in reality, the overwhelming 

majority of fees and other charges associated with the loans 

were funneled through the two banks to Shumway via Equity 

Plus (in the case of loans made by CBNV) and Equity 

Guaranty (in the case of loans made by Guaranty). After 

Virginia banking regulators expressed concern to CBNV
8

regarding the legality of the arrangement, the deal between 

CBNV and Equity Plus was allegedly restructured in October 

1998 so that Equity Plus became a “consultant” to CBNV that

provided no settlement services yet still received the lion’s 

share of fees paid in exchange for those services. 

The Plaintiffs allege that CBNV and Guaranty

uniformly misrepresented the apportionment and distribution 

of settlement and title fees on their HUD–1 Settlement 

Statement forms.

1

 The Plaintiffs further allege that the fees 

listed on the HUD–1s included illegal kickbacks to Shumway 

and did not reflect the value of any services actually 

performed. 

According to the Plaintiffs, Residential Funding

derived a significant portion of its business from the 

securitization of “jumbo” mortgages2and especially HighLoan-to-Value loans.

3

 The Plaintiffs allege that Residential 

Funding purchased a majority and perhaps all of the loans 

 

1 A HUD–1 is a standard real estate settlement form 

that the Real Estate Settlement Procedures Act requires in 

connection with all mortgage loans that are covered by 

federal law. 12 U.S.C. § 2603.

2 A jumbo mortgage is a home loan with an amount 

that exceeds the conforming loan limits imposed by the 

Federal Home Loan Mortgage Corporation and the Federal 

National Mortgage Association, the two governmentsponsored enterprises that buy mortgages from lenders. 

3 Loans where the amount financed represent up to 

125% of the value of the securitized collateral are called 

High-Loan-to-Value loans. 
9

originated by CBNV and Guaranty, despite knowing that 

those entities passed most of the origination and title service

fees to Shumway. Because Residential Funding derived 

substantial income from the settlement fees, the Plaintiffs 

allege that it ignored unlawful settlement practices and

actively worked with CBNV and Guaranty to expand the loan 

volume generated by the scheme. 

In the early 2000s, a number of putative class actions 

arising out of the alleged Shumway scheme were filed by 

various plaintiffs (the “Original Plaintiffs”) and were 

eventually consolidated in the United States District Court for 

the Western District of Pennsylvania.4 The Original Plaintiffs 

asserted claims arising under the Real Estate Settlement 

Procedures Act (“RESPA”),

5

the Racketeer Influenced and 

 

4

In all, six putative class actions were consolidated on 

July 18, 2003. We provided a detailed outline of the separate 

class actions and the consolidation process in Community 

Bank I. 418 F.3d at 284-87. 

5 Congress enacted RESPA in 1974 in response to 

abusive loan practices that inflated the cost of real estate 

transactions. 12 U.S.C. § 2601(a). Section 8 of RESPA 

prohibits kickbacks and unearned fees, and it may be 

enforced criminally or civilly. Id. §§ 2607, 2614. More 

specifically, section 8(b) of RESPA prohibits the giving or 

receiving of “any portion, split, or percentage of any charge 

made or received for the rendering of a real estate settlement 

service ... other than for services actually performed.” Id. 

§ 2607(b). Civil actions under that section must be brought 

within one year of the alleged violation. Id. § 2614. 
10

Corrupt Organizations Act (“RICO”),

6

and Pennsylvania law. 

The putative class consisted of approximately 44,000 

borrowers. 

B. Community Bank I

On July 14, 2003, the Original Plaintiffs and certain 

defendants, including CBNV, Guaranty, and Residential 

Funding, proposed a nationwide class action settlement, 

which was approved by the District Court. Under the terms 

of the settlement, the maximum total payout to the 

approximately 44,000 member class was $33 million. The 

settlement payouts ranged from $250 to $925 per borrower 

depending on the borrower’s residence and the date on which 

the loan was entered. In exchange, the borrowers were to 

release any and all state or federal claims that they might have 

relating to the mortgage loans at issue, including the right to 

use a violation of federal or state law as a defense to any

foreclosure action. Because CBNV supported the settlement, 

 

6 RICO makes it “unlawful for any person employed 

by or associated with any enterprise engaged in, or the 

activities of which affect, interstate or foreign commerce, to 

conduct or participate, directly or indirectly, in the conduct of 

such enterprise’s affairs through a pattern of racketeering 

activity.” 18 U.S.C. § 1962(c). “Any person injured in his 

business or property by reason of a violation of section 1962 

... may sue therefor in any appropriate United States district 

court and shall recover threefold the damages he sustains and 

the cost of the suit, including a reasonable attorney’s fee.” Id.

§ 1964(c). 
11

it did not contest the requirements for class certification.7 

The order approving the settlement was appealed by a group

of plaintiffs (the “Objector Plaintiffs”) who argued that

claims under the Truth in Lending Act (“TILA”)8and the 

 

7 Defendants may engage in settlement negotiations

and become parties to a class action settlement agreement 

without giving up the ability to contest class certification

requirements later should the settlement fall apart. In re Gen. 

Motor Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 

F.3d 768, 786 (3d Cir. 1995). 

8

“TILA is a federal consumer protection statute[]

intended to promote the informed use of credit by requiring 

certain uniform disclosures from creditors.” Community 

Bank I, 418 F.3d at 303. “Among other things, creditors who 

make loans secured by a borrower’s principal dwelling are 

required to provide all borrowers with ‘material disclosures,’ 

including ‘the annual percentage rate, the finance charge, the 

amount financed, the total payments, [and] the payment 

schedule.’” Id. at 304 (quoting 12 C.F.R. § 226.23) 

(alteration in original) (footnote omitted). “If ‘material 

disclosures’ are not provided or inaccurately provided, the 

creditor is strictly liable and a borrower has the right to 

rescind the loan up to ‘3 years after consummation, upon 

transfer of all of the consumer’s interest in the property, [or] 

upon sale of the property, whichever occurs first.’” Id.

(quoting 12 C.F.R. § 226.23) (alteration in original) (footnote 

omitted). “In addition to the right of rescission, an aggrieved 

borrower may, within one year of the date of the violation, 

seek ‘actual damage[s] sustained ... as a result of the failure,’

and statutory damages, which cannot exceed $500,000 or one 

percent of the creditor’s net worth (whichever is less) in the 

case of a class action.” Id. (quoting 15 U.S.C. 
12

Home Ownership and Equity Protection Act (“HOEPA”)9

should also have been asserted on behalf of the putative class. 

 

§ 1640(a)(1),(2)(B)) (alteration in original) (footnote 

omitted). 

9

“HOEPA, enacted as an amendment to TILA, creates 

a special class of regulated loans that are made at higher 

interest rates or with excessive costs and fees” than those

regularly covered by TILA. Community Bank I, 418 F.3d at 

304. HOEPA protections apply if a loan meets one of two 

high-cost loan triggers: (1) the annual percentage rate 

(“APR”) exceeds by more than 6.5 percent or 8.5 percent, 

depending on the value of the transaction, the yield on 

Treasury securities having comparable periods of maturity for 

first-lien loans, or above ten percent for subordinate-lien 

loans; or (2) the total of all the loan’s points and fees exceed

eight percent of the loan total or $400 (adjusted for inflation), 

whichever is greater. 15 U.S.C. § 1602(bb)(1) & (3); 12 

C.F.R. § 226.32(a)(1)(i), (ii). 

Loans covered by HOEPA are not only subject to 

certain restrictions, but are also subject to special disclosure 

requirements. 15 U.S.C. § 1639. Within three business days 

prior to the consummation of a loan, a creditor is required to 

disclose to the borrower, inter alia, the APR of the loan and 

the amount of regular monthly payments. 15 U.S.C. 

§ 1639(a)(2) & (b)(1). Failure to materially comply with such 

requirements entitles a borrower to “an amount equal to the 

sum of all finance charges and fees paid by the consumer.” 

Id. § 1640(a)(4). An action for damages under HOEPA must 

be brought within one year of the violation, id. § 1640(e), and 

an action for rescission must be brought within three years, 12 

C.F.R. § 226.23. Community Bank II, 622 F.3d at 283. 
13

We vacated the order approving the settlement and 

remanded the case because, among other things, the District 

Court had not adequately analyzed the propriety of class 

certification under Federal Rule of Civil Procedure 23. 

Community Bank I, 418 F.3d at 300-02. We stated that 

various class certification requirements, which had not been 

disputed, were likely met, id. at 303 (suggesting “that the 

numerosity, typicality, and commonality prongs are met”), 

but we specifically directed the District Court to perform its 

own independent analysis, id. at 306 (“All of the above, of 

course, are issues to be considered by the District Court in its 

independent analysis.”). In particular, we questioned whether 

the putative class representatives – whose claims were 

untimely under TILA/HOEPA without the benefit of 

equitable tolling – could adequately represent putative class 

members who had timely TILA/HOEPA claims. Id. at 306-

07. To resolve that problem with the adequacy of 

representation, we suggested that the District Court “divid[e] 

the class into sub-classes.” Id. at 307. 

C. Community Bank II

On remand, the District Court approached its analysis 

in two steps. First, it addressed the viability of potential 

TILA/HOEPA claims. Second, it addressed adequacy of 

representation and other Rule 23 requirements. While the 

parties were briefing the viability issue, the Original Plaintiffs 

entered into new settlement negotiations with the defendants,

which resulted in a new settlement agreement (the “Modified 

Settlement Agreement”). The Modified Settlement 

Agreement took the availability of TILA/HOEPA claims into 

account and increased the settlement amount for class 

members who were able to assert such claims. 
14

The District Court then heard oral argument on the 

viability of potential TILA/HOEPA claims. In discussing the 

case, the Original Plaintiffs and the Objector Plaintiffs agreed 

with the District Court that a Rule 12(b)(6) standard should 

be used to determine the viability of potential TILA/HOEPA 

claims. The District Court’s reasoning appeared to be that, if 

those claims could not survive a Rule 12(b)(6) motion to 

dismiss (and thus were not viable), neither the named 

plaintiffs nor their counsel could be faulted – on adequacy of 

representation grounds or otherwise – for failing to bring 

them. In October 2006, the District Court issued an order in 

which, purportedly applying a Rule 12(b)(6) standard,10 it 

determined that the potential TILA/HOEPA claims were not 

viable. It concluded that “no class member could bring a 

timely claim under TILA or HOEPA for damages or 

rescission” because those claims would not relate back to any

earlier complaint, and it also concluded that “no class 

member could rely on equitable tolling to save their otherwise 

time-barred claims.” Community Bank II, 622 F.3d at 288. 

 

10 “Though the District Court purported to approach 

this question using a Rule 12(b)(6) standard, its analysis 

actually dealt with Rule 15(c), which governs the 

circumstances where an amended pleading ‘relates back to 

the date of the original pleading.’” Community Bank II, 622 

F.3d at 295 (quoting Fed. R. Civ. P. 15(c)). “The Court 

approached the relation-back question – i.e., whether an 

amended pleading asserting TILA/HOEPA claims could 

relate back to any earlier complaint – not by reference to a 

hypothetical amended complaint that the existing named 

plaintiffs could file, but by reference to an amended 

complaint filed by absent members of the class.” Id. 
15

On December 1, 2006, the District Court informed the 

parties that it intended to appoint an “independent body” to 

evaluate the fairness of the Modified Settlement Agreement. 

Id. The Court later appointed Donald Ziegler, a retired Chief 

Judge of the United States District Court for the Western 

District of Pennsylvania, to provide a non-binding opinion as 

to whether the Modified Settlement Agreement was “fair and 

reasonable” under Rule 23. Id. Judge Ziegler heard 

arguments from the parties and issued an advisory opinion in 

which he concluded that the Modified Settlement Agreement 

was fair and reasonable. On August 14, 2008, the District 

Court issued an order adopting Judge Ziegler’s 

recommendation. The Court certified the settlement class and 

approved the Modified Settlement Agreement. 

The Objector Plaintiffs once more appealed, 

challenging both the District Court’s certification order and 

its earlier ruling regarding the adequacy of representation. 

We again vacated the District Court’s order, finding that the 

Court had erred in a number of ways. Without actually 

deciding the issue, we expressed doubts about the District 

Court’s Rule 12(b)(6) analysis because, in our opinion, the 

Objector Plaintiffs had a “strong argument that their 

TILA/HOEPA claims” qualified for class action tolling. Id. 

at 300. We also stated that, “because the question [of]

whether a particular party is eligible for equitable tolling 

generally requires consideration of evidence beyond the 

pleadings, such tolling is generally not amenable to resolution 

on a Rule 12(b)(6) motion.” Id. at 301-02. We went on to 

note that, in any event, the District Court’s merits inquiries –

i.e., whether a new plaintiff could file an amended pleading 

asserting TILA/HOEPA claims or adequately plead a basis 
16

for equitable tolling under Rule 12(b)(6) – “were unnecessary 

to evaluate the adequacy requirement.” Id. at 303. 

Looking at the adequacy requirement, we concluded, 

that the District Court had “incorrectly evaluated the 

adequacy of the named plaintiffs and class counsel.” Id. We 

repeated that the adequacy requirement is designed “‘to 

uncover conflicts of interest between named parties and the 

class they seek to represent.’” Id. (quoting Amchem Prods., 

Inc. v. Windsor, 521 U.S. 591, 625 (1997)). And we stated 

that there was an “obvious and fundamental intra-class 

conflict of interest,” which was the same conflict of interest

we had identified in Community Bank I. Community Bank II, 

622 F.3d at 303. We were concerned that the class 

representatives’ RESPA and TILA/HOEPA claims were 

untimely and required equitable tolling to be saved, but that 

they nevertheless sought to represent a “sizeable subgroup” of

approximately 14,000 persons who had timely claims under 

each statute. Id. We directed the District Court to consider 

that intra-class conflict on remand and stated that “[t]he most 

obvious remedy would be to create subclasses.” Id. at 304. 

We also noted that, as to class counsel, the adequacy

requirement assures that counsel possesses adequate 

experience, will vigorously prosecute the action, and will act

at arm’s length from the defendant. Id. at 304-05. “[M]ere 

disagreement,” we said, “over litigation strategy ... does not 

in and of itself, establish inadequacy of representation.” Id. at 

305 (internal quotation marks omitted) (alteration in original). 

“Were it otherwise, disagreements over strategy would 

require decertification any time an objection is raised to a 

class, certainly not the standard envisioned by Rule 23.” Id. 

(internal quotation marks omitted). Looking to the particulars 
17

presented in Community Bank II, we stated that, while “class 

counsel is not inadequate simply because they have not 

asserted every claim that could theoretically be pled against a 

defendant,” class counsel’s explanation for not asserting

TILA/HOEPA claims on behalf of the class “deserve[d] more 

scrutiny” than the Court had given it. Id. at 305. 

Accordingly, we directed the District Court to examine the 

adequacy of class counsel more closely on remand. Id. at 

314. 

D. Post-Community Bank II Proceedings11

Following remand, the Original Plaintiffs abandoned 

settlement negotiations and joined forces with the Objector 

Plaintiffs, and on October 4, 2011, the Plaintiffs filed a Joint 

Consolidated Amended Complaint (the “Complaint”) that 

now includes TILA/HOEPA claims, along with RESPA and 

RICO claims. The Complaint originally named as 

Defendants CBNV, the Federal Deposit Insurance 

Corporation (“FDIC”) as the Receiver for Guaranty,

12 PNC 

 

11 On April 24, 2013, the judge who had presided in 

this case passed away. United States District Judge Arthur 

Schwab has presided over the case since May 16, 2013.

12 On March 12, 2004, after this litigation began, the 

Comptroller of the Currency declared Guaranty to be unsafe 

and unsound, and appointed the FDIC as receiver. On 

March 29, 2004, the FDIC asked to be substituted for 

Guaranty as the true party in interest. That motion was 

granted. 
18

Bank as Successor to CBNV,13 and Residential Funding. 

Residential Funding subsequently filed a Notice of 

Bankruptcy and Effect of Automatic Stay, and all claims 

against it were stayed. The District Court also granted the 

FDIC’s Motion to Dismiss for lack of subject matter 

jurisdiction.14 As a result, the only active claims remaining 

before the District Court at the certification stage were those 

asserted against CBNV and its successor in interest, PNC. 

On June 21, 2013, the Plaintiffs moved for 

certification of a general class and of five subclasses. The 

general class was defined as: “All persons nationwide who 

obtained a second or subordinate, residential, federally 

related, non purchase money, mortgage loan from CBNV that 

was secured by residential real property used by the Class 

Members as their principal dwelling, for the period May 

1998-December 2002.” (App. at 1271.) The five subclasses 

were defined as:

Sub-Class 1: (RESPA [Affiliated Business 

Association] Disclosure Sub-Class) (Plaintiffs: 

Philip and Jeannie Kossler) – All persons 

nationwide who obtained a second or 

 

13 Mercantile Bankshares Corp. acquired CBNV in 

2005. PNC acquired Mercantile Bankshares Corp. in 2007. 

14 The FDIC moved for dismissal pursuant to, among 

other legal authorities laid out in a 60-page brief, Federal 

Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(b)(7). 

The June 12, 2013 order dismissing the claims against the 

FDIC appears to grant the motion pursuant to Rule 12(b)(1), 

but the Court provided no explanation for its ruling. 
19

subordinate, residential, federally related, non 

purchase money, mortgage loan from CBNV 

that was secured by residential real property 

used by the Class Members as their principal 

dwelling for the period May 1998-October 

1998;

Sub-Class 2: (RESPA Kickback Sub-Class) 

(Plaintiffs: Brian and Carla Kessler; John and 

Rebecca Picard) – All persons nationwide who 

obtained a second or subordinate, residential, 

federally related, non purchase money, 

mortgage loan from CBNV that was secured by 

residential real property used by the Class 

Members as their principal dwelling for the 

period October 1998-November 1999;

Sub-Class 3: (TILA/HOEPA Non-Equitable 

Tolling Sub-Class) (Plaintiffs: Kathy and John 

Nixon; Flora Gaskin; and, Tammy and David 

Wasem) – All persons nationwide who obtained 

a second or subordinate, residential, federally 

related, non purchase money, mortgage loan 

from CBNV that was secured by residential real 

property used by the Class Members as their 

principal dwelling for the period May 1, 2001-

May 1, 2002;

Sub-Class 4: (TILA/HOEPA Equitable Tolling 

Sub-Class) (Plaintiffs: All [named] plaintiffs 

other than the Nixons, Gaskins and Wasems) –

All persons nationwide who obtained a second 

or subordinate, residential, federally related, 

non purchase money, mortgage loan from 
20

CBNV that was secured by residential real 

property used by the Class Members as their 

principal dwelling for the period May 1998-

December 2002;

Sub-Class 5: (RICO Sub-Class) (Plaintiffs: John 

and Rebecca Picard; Brian and Carla Kessler) –

All persons nationwide who obtained a second 

or subordinate, residential, federally related, 

non purchase money, mortgage loan from 

CBNV that was secured by residential real 

property used by the Class Members as their 

principal dwelling for the period May 1998-

November 1999. 

(App. at 1271-1272.) The Plaintiffs requested that all named 

class representatives be appointed as representatives of the 

general class and that the designated class representatives be 

appointed as representatives of the requested subclasses. The 

Plaintiffs also requested that two law firms be appointed as 

co-lead counsel and that a handful of other lawyers and law 

firms be appointed as class counsel. 

On July 31, 2013, the District Court granted class 

certification.15 The Court’s certification ruling relied heavily 

on our dicta in Community Bank I discussing the requirements 

of Rule 23, and it approved the general class and subclasses 

proposed by the Plaintiffs. The order did not make provision 

for separate counsel for the subclasses. In analyzing the 

 

15 As noted by the District Court, the Motion for 

Certification was silent as to any state law claims. As a 

result, no state law claims were certified for class treatment. 
21

adequacy requirement, the District Court relied primarily on 

Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d 170 (3d 

Cir. 2012), in which we stated that only “fundamental” intraclass conflicts will defeat the adequacy requirement. Id. at 

183-84. Because the Original Plaintiffs and the Objector 

Plaintiffs each asserted TILA/HOEPA claims in the 

Complaint, the District Court concluded that there is no 

fundamental conflict between the subclasses. PNC has now

appealed the class certification order.16 

II. Discussion17

The fundamental question in this appeal is whether the 

litigation class, including its subclasses, was properly 

certified. To be certified, a class must satisfy the four 

requirements of Rule 23(a), namely: (1) numerosity; (2) 

commonality; (3) typicality; and (4) adequacy of 

representation. Fed. R. Civ. P. 23(a). The parties seeking 

class certification bear the burden of establishing by a 

preponderance of the evidence that the requirements of Rule 

 

16 PNC petitioned for leave to appeal pursuant to Rule 

23(f). That petition was granted on October 12, 2013 by a 

panel of this court. 

17 The District Court had jurisdiction under 28 U.S.C. 

§ 1331. We have jurisdiction pursuant to 28 U.S.C. § 1292(e) 

and Federal Rule of Civil Procedure 23(f). We review a class 

certification order for abuse of discretion, which occurs if the 

district court’s decision rests upon a clearly erroneous finding 

of fact, an errant conclusion of law, or an improper 

application of law to fact. In re Hydrogen Peroxide Antitrust 

Litig., 552 F.3d 305, 312 (3d Cir. 2008). 
22

23(a) have been met. Carrera v. Bayer Corp., 727 F.3d 300, 

306 (3d Cir. 2013). To carry that burden, they must 

“affirmatively demonstrate” that “there are in fact sufficiently 

numerous parties, common questions of law or fact, etc.” 

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011) 

(emphasis in original). 

If the Rule 23(a) requirements are met, then a court 

must consider whether the class fits within one of the three 

categories of class actions set forth in Rule 23(b). In the 

present case, the Plaintiffs have chosen to pursue their claims

under Rule 23(b)(3), the customary vehicle for obtaining 

damages. That Rule requires a court to consider whether

common questions of law or fact predominate and whether

the class action mechanism is the superior method for 

adjudicating the case. Fed. R. Civ. P. 23(b)(3). The 

manageability of class litigation is pertinent to those findings. 

Id. We have also recognized that “an essential prerequisite of 

a class action, at least with respect to actions under Rule 

23(b)(3), is that the class must be currently and readily 

ascertainable based on objective criteria.” Carerra, 727 F.3d 

at 305 (internal quotation marks omitted). 

As noted at the outset, PNC advances three principal 

arguments against certification, contending first that there is a

class conflict that undermines the adequacy of representation 

provided by class counsel; second, that the District Court 

erred by conditionally certifying the class; and, third, that the 

putative class does not satisfy the demands of Rule 23, 

particularly the requirements of ascertainability, 
23

commonality, predominance, superiority, or manageability. 

We consider each argument in turn.

18

 

A. Adequacy of Representation

The adequacy requirement primarily examines two 

matters: the interests and incentives of the class 

 

18 PNC also argues that the District Court erred in the 

following ways: (1) failing to accord ample time for 

discovery before deciding whether to certify the putative 

class; (2) limiting class certification briefs to 20 pages; (3) 

compressing the class certification briefing schedule; (4) 

limiting counsel’s arguments at the class certification hearing; 

and (5) relying too heavily on dicta from Community Bank I

and thereby failing to perform an independent analysis of the 

certification requirements. Those arguments are 

unpersuasive. As to the first argument, the Plaintiffs respond 

that, prior to certification, “the parties conducted discovery 

and exchanged thousands of pages of documents which bore 

on the propriety of class certification.” (Answering Br. at 

13.) PNC’s only reply appears to be that it would have liked 

even more discovery, since it apparently failed to engage in 

rigorous discovery while it waited for the District Court to 

rule on its motion to dismiss. That is not an adequate 

response, particularly given that the District Court denied a 

motion to stay discovery in November 10, 2011, and did not 

rule on PNC’s motion to dismiss until June 12, 2013. As to 

the second, third, and fourth arguments, PNC provides no 

legal authority to suggest that any of the alleged defects are 

grounds for reversal. As to the fifth argument, the District 

Court adequately addressed each certification requirement in 

its memorandum opinion, as is more fully discussed herein. 
24

representatives, and the experience and performance of class 

counsel. Community Bank I, 418 F.3d at 303. PNC does not 

question the adequacy of the class representatives. The 

argument it raises is directed instead at class counsel. In 

particular, it asserts that “the ‘fundamental’ intra-class 

conflict found by this Court continues to exist because the 

District Court failed to appoint separate counsel to represent 

the subclasses it created.”19 (Reply Br. at 1.) 

According to PNC, the Supreme Court’s decision in 

Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), requires that 

separate counsel be appointed for each subclass. In Ortiz, the 

Supreme Court stated:

[I]t is obvious after Amchem [Prods., Inc. v. 

Windsor, 521 U.S. 591 (1997)] that a class

divided between holders of present and future 

claims (some of the latter involving no physical 

injury and attributable to claimants not yet 

born) requires division into homogeneous 

subclasses under Rule 23(c)(4)(B), with 

separate representation to eliminate conflicting 

interests of counsel. See Amchem, 521 U.S. at 

627, ... (class settlements must provide 

“structural assurance of fair and adequate 

representation for the diverse groups and 

individuals affected”).

 

19 Although they do not cite the rule, we understand 

PNC to be challenging counsel’s ability to fairly and 

adequately represent the interests of the class under Rule 

23(g)(1)(B). 
25

527 U.S. at 856. But PNC provides precious little support for 

its assertion that the situation in Ortiz is present here and that 

class counsel is conflicted or somehow otherwise inadequate.

The passing argument PNC does present fails to persuade us 

that, in light of Ortiz and the case it relies on, Amchem, the 

District Court abused its discretion when it chose not to 

appoint separate counsel for each subclass. In fact, an 

argument like PNC’s was specifically rejected by the United 

States Court of Appeals for the Eighth Circuit in Professional 

Firefighters Association of Omaha, Local 385 v. Zalewski, 

678 F.3d 640, 646-47 (8th Cir. 2012). As the court in that 

case explained: 

Ortiz and Amchem were massive tort class 

actions prompted by the elephantine mass of 

asbestos cases that defied customary judicial 

administration. The Supreme Court found the 

exceedingly divergent interests of present and 

future claim holders in those cases required 

separate counsel to address adequately the 

conflict. But the need for separate 

representation under the atypical circumstances 

of Ortiz and Amchem does not make appointing 

separate counsel the only acceptable means of 

addressing any conflicting interests of class 

members, and providing structural assurance of 

fair and adequate representation for the entire 

class. 

678 F.3d at 646 (brackets, citations, and internal quotation 

marks omitted). In other words, the circumstances that 

required separate counsel in Ortiz simply were not present in 
26

Professional Firefighters, nor do we think they are present

here.

The principal purpose of the adequacy requirement is 

to determine whether the named plaintiffs have the ability and 

the incentive to vigorously represent the claims of the class. 

Community Bank II, 622 F.3d at 291. We have explained that 

“the linchpin of the adequacy requirement is the alignment of 

interests and incentives between the representative plaintiffs 

and the rest of the class.” Dewey, 681 F.3d at 183. More 

important for our purposes, however, is the corollary 

principle that class counsel may not, consistent with Ortiz, 

represent an entire class if subgroups within the class have 

interests that are significantly antagonistic to one another. 

We must therefore ascertain the alignment of interests within 

the class and whether conflicts, if any, are serious enough to 

require separate counsel for each subclass. 

Not every intra-class conflict is consequential, but 

certain ones are what we have called “fundamental.” Dewey, 

681 F.3d at 184. A “fundamental” conflict exists, for 

example, when some class members “have been harmed by 

the same conduct that benefitted other members of the class.” 

Id. (internal quotation marks omitted). To be “fundamental,” 

a conflict must touch on “‘the specific issues in 

controversy.’” Id. (quoting Alba Conte & Herbert B. 

Newberg, Newberg on Class Actions § 3:26 (4th ed. 2002)). 

While it may be wise to appoint separate counsel even before 

a serious conflict fully emerges, the requirement to put 

separate counsel in place arises when a conflict ceases to be 

theoretical and becomes real and fundamental. 
27

In Community Bank II, we stated that there was “an 

obvious and fundamental intra-class conflict of interest” that 

precluded a finding of adequacy of representation. 622 F.3d 

at 303. Elaborating, we explained that the conflict of interest 

stemmed from the fact that the named class representatives 

had untimely claims under RESPA, TILA, or HOEPA that 

would require equitable tolling to survive and yet they sought

to represent at the settlement negotiating table a sizeable 

subgroup of class members who had timely claims. Id. We 

said that the “most obvious remedy” for this conflict “would 

be to create subclasses.” Id. at 304. On remand, the District 

Court considered the Plaintiffs’ proposed five subclasses, 

which had been formed “to ameliorate the statute of 

limitations problems” that we identified in Community Bank I

and Community Bank II. (App. at 18.) The Court noted that 

CBNV’s conduct “was the same as to all class members” and 

characterized the distinction between the subclasses as merely 

“a temporal one, that is, when [actionable] conduct occurred.” 

(Id.) In short, the Court effectively concluded that there was 

not a fundamental conflict any longer, now that subclasses 

had been formed and the putative class was to be certified for 

litigation rather than settling for a fixed amount. 

Unfortunately, PNC spends practically no effort in this 

appeal trying to demonstrate that any intra-class conflict 

should now be viewed as “fundamental,” even though that 

issue is essential to its leading argument. It relies on 

Community Bank II’s statement that a fundamental class 

conflict existed, which defeated certification of the settlement 

class. PNC accuses the District Court and the Plaintiffs of 

disregarding, “in the starkest manner possible, an explicit 

command of [the Third Circuit].” (Opening Br. at 18.) But 

PNC fails to address the basic change in circumstances that 
28

has occurred since Community Bank II: we are no longer 

dealing with a settlement class and a fixed sum to satisfy

claims. The Original Plaintiffs and the Objector Plaintiffs 

have jointly filed a new Complaint that asserts RESPA, 

TILA/HOEPA, and RICO claims on behalf of all subclasses. 

Those new circumstances are materially different from the 

scenarios presented in Community Bank I, Community Bank 

II, or the other cases cited by PNC, in which subclasses were 

jockeying for pieces of a limited settlement pie. By contrast, 

the subclasses here are not competing for limited settlement 

funds. All class members can assert all of their available 

claims, and all class members can, at least in theory, recover 

all of their damages without impacting the recovery of any 

other class members. 

PNC has provided no reason to believe that, in this 

new context, the named class representatives of each subclass 

will not vigorously represent the interests of their fellow class 

members. They are all pursuing damages under the same 

statutes and the same theories of liability, and the differences 

among them will not, at least as things presently stand, pit one 

group’s interests against another. Cf. In re Corrugated 

Container Antitrust Litig., 643 F.2d 195, 208 (5th Cir. 1981)

(“[S]o long as all class members are united in asserting a 

common right, such as achieving the maximum possible 

recovery for the class, the class interests are not antagonistic 

for representation purposes.” (internal quotation marks 

omitted)). There is thus no fundamental intra-class conflict to 

prevent class certification, Rodriguez v. W. Publ’g Corp., 563 

F.3d 948, 960 (9th Cir. 2009) (stating parenthetically that the 

adequacy requirement consists of an “absence of antagonism”

(internal quotation marks omitted)), nor is there any 

derivative conflict of interest that would prevent counsel from 
29

fairly and adequately representing the interests of the entire 

class. 

In summary, the conflict that existed when a settlement 

class was facing a fixed pool of resources to resolve all claims 

is, for the time being, no longer a problem that can rightly be 

called fundamental. Appointing separate counsel, therefore, 

was not a necessary prerequisite for certification of the 

subclasses. 

We would be remiss, however, if we did not note a

problem growing on the horizon, and it is a familiar one by 

now in this case. If the District Court determines that any

subclass’s equitable tolling arguments fail, it may well be 

necessary to appoint separate counsel to represent newly 

divergent interests. Whether to make any adjustments now, 

rather than later, is for the District Court to consider when 

and as it sees fit. The conflict is only a potential one now and

not yet imminent. On this record, we cannot say that the 

District Court abused its discretion in deciding that the 

adequacy requirement has been satisfied, notwithstanding the 

joint representation of the subclasses. Cf. Gunnells v. 

Healthplan Servs., Inc., 348 F.3d 417, 430 (4th Cir. 2003) 

(“To defeat the adequacy requirement ... a conflict must be 

more than merely speculative or hypothetical.” (internal 

quotation marks omitted)); In re Ins. Brokerage Antitrust 

Litig., MDL No. 1663, 2007 WL 2589950, at *11 (D.N.J. 

Sept. 4, 2007), aff’d, 579 F.3d 241 (3d Cir. 2009) (“[A] 

conflict will not be sufficient to defeat class action unless that 

conflict is apparent, imminent, and on an issue at the very 

heart of the suit.” (internal quotation marks and brackets 

omitted)); Alba Conte & Herbert B. Newberg, Newberg On 

Class Actions § 3:58 (5th ed. 2011) (“A conflict must be 
30

manifest at the time of certification rather than dependent on 

some future event or turn in the litigation that might never 

occur.”); id. § 9:48 (4th ed. 2002) (“When the divergent 

interests will arise only [later] ..., generally the use of 

subclasses may be deferred until such time as the potential 

conflicts arise in fact.”). 

B. Conditional Certification

Following certification, the District Court agreed to 

give the Plaintiffs an opportunity to conduct further discovery

touching on merits-related issues. PNC argues that, in doing 

so, the District Court conditionally certified the class – an 

approach that PNC asserts is “entirely backwards” and 

represents a prohibited practice. (Opening Br. at 29.) See 

Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 358 (3d Cir. 

2013) (“Certification may not be granted because the plaintiff 

promises the class will be able to fulfill Rule 23’s 

requirements, with the caveat that the class can always be 

decertified if it later proves wanting. To certify a class in this 

manner is effectively to certify the class conditionally, which 

Rule 23 does not permit.”); see also In re Nat’l Football 

League Players Concussion Injury Litig., 775 F.3d 570, 579 

(3d Cir. 2014) (explaining that the Supreme Court and 

Congress specifically amended Rule 23 to preclude 

conditional certification of putative class actions). 

PNC relies upon statements made by the Court at a 

status conference held on August 28, 2013, a month after it 

had certified the class, to argue that the class was

conditionally certified. For instance, at one point the Court 

stated, “I want to know what documents you’re looking for 

that will prove your theory not only of the case, but be 
31

supportive of the fact that this should be a class action 

proceeding as opposed to individual cases.” (App. at 1824.) 

After reviewing the transcript of the entire status conference,

however, we conclude that the District Court did not 

impermissibly certify the class on a conditional basis. At that 

conference, the Court attempted to streamline proceedings 

going forward, including additional discovery that the 

Plaintiffs had requested. To that end, the Court discussed the 

nature and quality of evidence the Plaintiffs were seeking. 

Although it articulated an expectation that discovery would 

vindicate its decision to grant class certification, we do not 

believe that the Court’s statements were meant to indicate that 

the earlier ruling was conditional. PNC points to nothing in 

the ruling itself to show that it was an impermissible 

conditional certification. We conclude, therefore, that the 

class was not conditionally certified. 

C. Other Rule 23 Requirements

1. Ascertainability

“[A]n essential prerequisite of a class action, at least 

with respect to actions under Rule 23(b)(3), is that the class 

must be currently and readily ascertainable based on objective 

criteria.” Marcus v. BMW of N. Am. LLC, 687 F.3d 583, 592-

93 (3d Cir. 2012). “If class members are impossible to 

identify without extensive and individualized fact-finding or 

‘mini-trials,’ then a class action is inappropriate,” id. at 593, 

because, “[i]f a class cannot be ascertained in an economical 

and administratively feasible manner, significant benefits of a 

class action are lost,” Carrera, 727 F.3d at 307 (citation and 

internal quotation marks omitted). It is the Plaintiffs’ burden 

to show by a preponderance of the evidence that the class is 
32

currently and readily ascertainable. Id. at 306. “‘A party’s 

assurance to the court that it intends or plans to meet the 

requirements [of Rule 23] is insufficient.’” Id. (quoting In re 

Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 318 (3d 

Cir. 2008)) (brackets in original). “A plaintiff may not 

merely propose a method of ascertaining a class without any 

evidentiary support that the method will be successful.” Id. at 

306. “A critical need of the trial court at certification is to 

determine how the case will be tried, including how the class 

is to be ascertained.” Id. at 307 (citations and internal 

quotation marks omitted). 

PNC asserts that some borrowers may have declared 

bankruptcy since entering into mortgage loans with CBNV

and therefore a bankruptcy estate rather than the borrower

may now be the real party in interest. As PNC sees it, that 

puts at issue the standing of each putative class member and

renders ascertainment of the class impossible without 

substantial individualized inquiry. To determine the standing 

of each putative class member, PNC claims it would be 

necessary to determine each of the following facts: (1) 

whether the putative class member filed for bankruptcy; (2) if 

so, whether the putative class member disclosed the claims in 

the bankruptcy proceeding that it now seeks to assert in the 

class action; and (3) if no such disclosure was made, whether 

the bankruptcy trustee abandoned the claims such that they 

may be pursued here. 

That argument is mired in speculation, and Carrera, 

the case upon which PNC primarily relies, provides no 

support. In Carrera, the plaintiff sought to certify a 

nationwide class to sue Bayer Corporation and Bayer 

Healthcare (collectively “Bayer”) for false and deceptive 
33

advertising practices in connection with a product called

“One-A-Day WeightSmart.” Id. at 304. Bayer did not sell 

the weight-loss pills directly to consumers. Id. Instead, the 

pills were sold in retail stores, which meant that Bayer had no 

list of purchasers. Id. Acknowledging that class members 

were unlikely to have documentary proof of purchase, the 

plaintiff proposed two ways to ascertain the class: scour 

retailer records of online sales or solicit affidavits from 

prospective class members attesting that they purchased OneA-Day WeightSmart. Id. On those facts, we determined that 

the plaintiff had not met his burden of showing that the class 

was ascertainable because he failed to adduce sufficient 

evidence showing that the first method could identify even a 

single purchaser of One-A-Day-WeightSmart and because the 

second method would result in too much individualized 

inquiry. Id. at 308-12. The case before us now does not 

appear to present the evidentiary problems at issue in 

Carerra. On the contrary, PNC possesses all of the relevant 

bank records needed to identify the putative class members. 

PNC’s ruminations about bankruptcy are not 

persuasive. First, we have held that only named plaintiffs, 

and not unnamed class members, need to establish standing. 

In re Prudential Ins. Co. Am. Sales Practice Litig. Agent 

Actions, 148 F.3d 283, 306-07 (3d Cir. 1998); see also 

Lowden v. T-Mobile USA, Inc., 512 F.3d 1213, 1215 n.1 (9th 

Cir. 2008) (“In a class action, standing is satisfied if at least 

one named plaintiff meets the requirements.”). Second, 

unlike in Carrera and other cases in which putative class 

members were not ascertainable, the Plaintiffs here have 

identified a reliable, repeatable process whereby members of 

the putative class may be identified: consult CBNV’s 

business records and then follow a few steps to determine 
34

whether the borrower is the real party in interest. PNC has 

cited no authority holding that such an inquiry is onerous 

enough to defeat the ascertainability requirement. And, even 

if the inquiry were difficult, PNC has adduced no evidence 

whatsoever suggesting that many – or even any – members of 

the class are actually embroiled in bankruptcy proceedings. 

Because PNC relies solely on speculation, it has not 

demonstrated that the District Court abused its discretion in 

ruling for the Plaintiffs on this issue. 

2. Commonality

“A putative class satisfies Rule 23(a)’s commonality 

requirement if the named plaintiffs share at least one question 

of fact or law with the grievances of the prospective class.” 

Rodriguez v. Nat’l City Bank, 726 F.3d 372, 382 (3d Cir. 

2013) (internal quotation marks omitted). The bar is not high; 

we have acknowledged commonality to be present even when 

not all members of the plaintiff class suffered an actual injury, 

Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir. 1994); when 

class members did not have identical claims, In re Prudential 

Ins., 148 F.3d at 311; and, most dramatically, when some 

members’ claims were arguably not even viable, Sullivan v. 

DB Invs., Inc., 667 F.3d 273, 305-07 (3d Cir. 2011) (en banc). 

In reaching those conclusions, we explained that the focus of 

the commonality inquiry is not on the strength of each class 

member’s claims but instead “on whether the defendant’s 

conduct was common as to all of the class members.” 

Sullivan, 667 F.3d at 298; see also In re Warfarin Sodium 

Antitrust Litig., 391 F.3d 516, 528 (3d Cir. 2004) (focusing 

the commonality inquiry on the defendant’s conduct, not “on 

the conduct of individual class members”); Newtown v. 

Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 
35

183 (3d Cir. 2001) (identifying common questions regarding 

the defendant’s conduct); Baby Neal, 43 F.3d at 57 

(considering only whether the defendant “engag[ed] in a 

common course of conduct toward” the class members). In 

other words, as long as all putative class members were 

subjected to the same harmful conduct by the defendant, Rule 

23(a) will endure many legal and factual differences among 

the putative class members. Baby Neal, 43 F.3d at 56. 

That said, the Supreme Court has emphasized that the 

claims of each class member “must depend upon a common 

contention.” Wal-Mart, 131 S. Ct. at 2551. “The ‘common 

contention ... must be of such a nature that it is capable of 

classwide resolution – which means that determination of its 

truth or falsity will resolve an issue that is central to the 

validity of each one of the claims in one stroke.’” Sullivan,

667 F.3d at 335 (Scirica, J., concurring) (quoting Wal-Mart, 

131 S. Ct. at 2551). Thus, “[w]hat matters to class 

certification ... is not the raising of common questions – even 

in droves – but, rather the capacity of a classwide proceeding 

to generate common answers apt to drive the resolution of the 

litigation.” Wal-Mart, 131 S. Ct. at 2551 (emphasis and 

ellipsis in original) (internal quotation marks omitted). 

We noted in Community Bank I, in dicta, our 

impression that the commonality requirement was satisfied in 

this case. 418 F.3d at 303 (“[T]he named plaintiffs share at 

least one question of fact or law with the grievances of the 

prospective class.” (internal quotation marks omitted)). 

Relying on Community Bank I, the District Court concluded 

that the commonality requirement was satisfied because “the 

claims of all class members ... depend on the existence of the 

Shumway scheme” and “[t]he viability of these claims is 
36

ascertainable by examining identical loan documents.” (App. 

at 15 (internal quotation marks omitted).) PNC asserts that 

the District Court erred in that conclusion in a number of 

ways. First, it contends that each class member’s loan 

documents will “differ markedly on matters including interest 

rates, the existence/amount of discount fees, the title services 

provided, the amounts charged and prepayment features.” 

(Opening Br. at 34.) Second, it asserts that, because fees 

charged to putative class members varied in type and amount, 

resolution of the disputed factual issues regarding those fees 

would require loan-by-loan analysis of each fee paid and each 

service performed. PNC thus argues that class certification is 

foreclosed by Wal-Mart. 

We disagree. In Wal-Mart, the Supreme Court 

explained how the commonality standard applies when the 

complained-of conduct is a discretionary corporate policy that 

allegedly has a discriminatory effect. The putative class in 

that case consisted of “all women employed at any Wal-Mart 

domestic retail store at any time since December 26, 1998, 

who have been or may be subjected to Wal-Mart’s challenged 

pay and management track promotions policies and 

practices.” 131 S. Ct. at 2549 (brackets and internal quotation 

marks omitted). Plaintiffs representing that enormous class of 

about 1.5 million women alleged that Wal-Mart’s policy of

“allowing discretion by local supervisors over employment 

matters” produced a disparate discriminatory impact, 

evidenced by a statistical analysis of the company’s 

employment information. Id. at 2547, 2554 (emphasis 

omitted). The Supreme Court concluded that such evidence 

was insufficient to establish commonality. While 

acknowledging that “giving discretion to lower-level 

supervisors can,” in some circumstances, “be the basis of 
37

Title VII liability under a disparate-impact theory,” id. at 

2554, the Supreme Court in Wal-Mart quoted Watson v. Fort 

Worth Bank & Trust, 487 U.S. 977, 994 (1988), to emphasize 

that such claims must do more than “merely prov[e] that the 

discretionary system has produced a racial or sexual 

disparity” – they must also identify “the specific employment 

practice that is challenged,” Wal-Mart, 131 S. Ct. at 2555 

(internal quotation marks omitted). Moreover, Wal-Mart

explained that, to bring a case as a class action, the named 

plaintiffs must show that each class member was subjected to 

the specifically challenged practice in roughly the same 

manner. Id. at 2555-56. The members of the putative class

were all subjected to the discretion of their supervisors, but 

the plaintiffs had not demonstrated “a common mode of 

exercising discretion that pervades the entire company,” id. at 

2554-55, such that the policy could be considered a “uniform 

employment practice” that all members of the putative class 

had experienced, id. at 2554. Rather, members of the 

proposed class encountered different managers making 

different types of employment decisions for different reasons, 

many of them potentially nondiscriminatory in nature. The 

plaintiffs, therefore, had not demonstrated a common harm, 

and the proposed class lacked commonality. Id. at 2555. 

The claims at issue here differ markedly from those in 

Wal-Mart. Unlike the Wal-Mart plaintiffs, the Plaintiffs in 

this case have alleged that the class was subjected to the same

kind of illegal conduct by the same entities, and that class 

members were harmed in the same way, albeit to potentially

different extents. Specifically, the Plaintiffs allege that 

CBNV operated a residential mortgage assembly line that

included unlawful loans characterized by illegal kickbacks, 

materially inaccurate disclosures of the annual percentage 
38

rates (“APR”) to be applied, and repeated mail and wire 

fraud. As the Plaintiffs rightly point out, the following 

questions are common to each class member and will 

generate common answers: 

(1) Whether the structure created by CBNV

and the loan production officers resulted 

in an unlawful kickback scheme that was 

a per se violation of RESPA. 

(2) Whether CBNV’s uniform method of 

excluding certain title charges from the 

APR calculation resulted in inaccurate 

TILA/HOEPA disclosures. 

(3) Whether CBNV’s acts tolled the claims 

of class members. 

(4) Whether the evidence presented proves a 

RICO conspiracy. 

While some individualized determinations may be 

necessary to completely resolve the claims of each putative 

class member in this case, those are not the focus of the 

commonality inquiry. Instead, we must determine whether 

the Plaintiffs have sufficiently demonstrated that “the 

defendant’s conduct was common as to all of the class 

members.” Sullivan, 667 F.3d at 298. In our judgment, they 

have. 

3. Predominance

“Issues common to the class must predominate over 

individual issues.” In re Prudential Ins., 148 F.3d at 313-14. 

This requirement under Rule 23(b) “tests whether proposed 
39

classes are sufficiently cohesive to warrant adjudication by 

representation.” Amchem, 521 U.S. at 623. It is a “far more 

demanding” standard than the commonality requirement of 

Rule 23(a), id. at 623-24. “Because the nature of the 

evidence that will suffice to resolve a question determines 

whether the question is common or individual, a district court 

must formulate some prediction as to how specific issues will 

play out in order to determine whether common or individual 

issues predominate in a given case.” In re Hydrogen 

Peroxide, 552 F.3d at 311 (citations and internal quotation 

marks omitted). “If proof of the essential elements of the 

cause of action requires individual treatment, then class 

certification is unsuitable.” Newton, 259 F.3d at 172 

(emphasis added); see also Hayes, 725 F.3d at 359 (“[T]he 

predominance requirement focuses on whether essential 

elements of the class’s claims can be proven at trial with 

common, as opposed to individualized, evidence.”). 

Accordingly, we must examine the elements of the Plaintiffs’ 

claims “through the prism” of Rule 23 to determine whether 

the District Court properly certified the class. Newton, 259 

F.3d at 181. 

Quoting our dicta in Community Bank I, the District 

Court noted that “‘[a]ll plaintiffs’ claims arise from the same 

alleged fraudulent scheme.’” (App. at 19 (quoting 

Community Bank I, 418 F.3d at 309).) The Court also

repeated our statement that “the record ... supports a finding 

of ... predominance.” (App. at 19; see also Community Bank

II, 622 F.3d at 284.) 

PNC argues that the predominance requirement is not 

satisfied for a number of reasons: first, because a 

determination of putative class members’ standing based on 
40

prior bankruptcies is highly individualized, it defeats the 

predominance requirement; second, equitable tolling is 

required for many of the putative class members’ RESPA and 

TILA/HOEPA claims to remain viable, and equitable tolling 

is a highly individualized inquiry; third, various elements of 

the Plaintiffs’ RESPA claims require individual analysis; 

fourth, the Plaintiffs’ TILA/HOEPA claims present 

substantial individualized issues; and fifth, the Plaintiffs’ 

RICO claims contain individual issues that would 

predominate. None of those arguments succeeds. 

a. Standing

PNC asserts that, “[b]ecause a determination of 

putative class members’ standing (or lack thereof) based on 

prior bankruptcies is highly individualized, it defeats the 

predominance requirement as well.” (Opening Br. at 37.) 

PNC offers no additional argument or elaboration on this 

assertion. For the reasons discussed above regarding 

ascertainability and standing, the argument is unpersuasive

and requires no further consideration. See supra pp. 31-34. 

b. Equitable Tolling

According to PNC, equitable tolling is a “highly 

individualized” inquiry that is not susceptible to common 

proof, and inquiries about equitable tolling will predominate 

in the litigation. (Opening Br. at 37-38.) 

Equitable tolling permits a plaintiff to sue after the 

statutory time period for filing a complaint has expired “(1)

[if] the defendant has actively misled the plaintiff respecting 

the plaintiff’s cause of action, (2) [if] the plaintiff in some 
41

extraordinary way has been prevented from asserting his or 

her rights, or (3) [if] the plaintiff has timely asserted his or her 

rights mistakenly in the wrong forum.” Oshiver v. Levin, 

Fishbein, Sedran & Berman, 38 F.3d 1380, 1387 (3d Cir. 

1994); see also Miller v. N.J. State Dep’t of Corr., 145 F.3d 

616, 618 (3d Cir. 1998) (holding that equitable tolling is an 

appropriate remedy when principles of equity would make a 

rigid application of the statute of limitations unfair). 

The Plaintiffs invoke equitable tolling based on what 

they allege is fraudulent concealment, and they thereby seek

to preserve the timeliness of certain putative class members’ 

RESPA and TILA/HOEPA claims.20 The fraudulent 

 

20 PNC does not dispute that the doctrine of equitable 

tolling is available to toll the relevant statutes of limitations. 

We have concluded that TILA’s statute of limitations “is not 

jurisdictional and is therefore subject to equitable tolling.” 

Ramadan v. Chase Manhattan Corp., 156 F.3d 499, 505 (3d 

Cir. 1998). We based our conclusion on the statute’s text, 

structure, and policy. Id. at 502-04. For purposes of 

determining whether the two statutes are jurisdictional, the 

text and structure of the limitations statute in TILA and 

RESPA are substantively similar. Compare 12 U.S.C. § 2614 

(RESPA), with 15 U.S.C. § 1640(e) (TILA). The two 

schemes also share similar purposes. Compare 12 U.S.C. 

§ 2601(b) (“It is the purpose of this chapter to effect certain 

changes in the settlement process for residential real estate 

that will result– (1) in more effective advance disclosure to 

home buyers and sellers of settlement costs; (2) in the 

elimination of kickbacks or referral fees that tend to increase 

unnecessarily the costs of certain settlement services ... .”), 

with 15 U.S.C. § 1601(a) (“It is the purpose of this subchapter 
42

concealment doctrine operates to stop the statute of 

limitations from running in circumstances when the accrual 

date of a claim has passed but the “plaintiff’s cause of action 

has been obscured by the defendant’s conduct.” In re 

Linerboard Antitrust Litig., 305 F.3d 145, 160 (3d Cir. 2002). 

The plaintiff has the burden of proving fraudulent 

concealment, which requires a three-part showing: “(1) that 

the defendant actively misled the plaintiff; (2) which 

prevented the plaintiff from recognizing the validity of her 

claim within the limitations period; and (3) where the 

plaintiff’s ignorance is not attributable to her lack of 

reasonable due diligence in attempting to uncover the relevant 

facts.” Cetel v. Kirwan Fin. Grp., 460 F.3d 494, 509 (3d Cir. 

2006).

PNC argues that the “actively misled” and “reasonable 

due diligence” components will require individualized fact 

finding, which undermines any claim of predominance. 

 

to assure a meaningful disclosure of credit terms so that the 

consumer will be able to compare more readily the various 

credit terms available to him and avoid the uninformed use of 

credit ... .”). We therefore conclude that, like TILA, the 

statute of limitations in RESPA is not jurisdictional and is 

thus subject to equitable tolling. See Lawyers Title Ins. Corp. 

v. Dearborn Title Corp., 118 F.3d 1157, 1166-67 (7th Cir. 

1997) (holding that RESPA’s statute of limitations is subject 

to equitable tolling). But see Hardin v. City Title & Escrow 

Co., 797 F.2d 1037, 1038 (D.C. Cir. 1986) (concluding that 

the limitation in RESPA is jurisdictional).
43

i. Active Misleading

As PNC points out, “a plaintiff seeking to demonstrate 

fraudulent concealment of a claim must prove that the 

defendant took affirmative steps to mislead the plaintiff with 

respect to the claim.” (Opening Br. at 41.) See Oshiver, 38 

F.3d at 1391 n.10 (refusing to apply equitable tolling to the 

plaintiff’s failure-to-hire claim because the plaintiff did not 

allege that the defendant affirmatively misled her). PNC also 

notes that proof of active misleading generally requires a

plaintiff to demonstrate “‘efforts by the defendant – above 

and beyond the wrongdoing upon which the plaintiff’s claim 

is founded – to prevent the plaintiff from suing in time.’” 

(Opening Br. at 41-42 (quoting Cada v. Baxter Healthcare 

Corp., 920 F.2d 446, 451 (7th Cir. 1990)).) PNC contends 

that, as a result, “‘[f]or a RESPA claim to warrant equitable 

tolling, mere silence or nondisclosure is not enough to trigger 

estoppel[;] the adversary must commit some affirmative 

independent act of concealment upon which the plaintiffs 

justifiably rely in order to toll the statute.’” (Opening Br. at 

42 (brackets in original) (emphasis omitted) (quoting 

Garczynski v. Countrywide Home Loans, Inc., 656 F. Supp. 

2d 505, 516 (E.D. Pa. 2009)).) Similarly, PNC asserts that, in 

the TILA context, “‘[t]he fraudulent act that forms the basis 

of a claim for damages under the TILA will not satisfy the 

factual showing required to invoke the equitable tolling 

doctrine of fraudulent concealment.’” (Opening Br. at 42

(brackets in original) (quoting Poskin v. TD Banknorth, N.A., 

687 F. Supp. 2d 530, 551 (W.D. Pa. 2009)).) Thus, PNC 

argues, because each putative class member must demonstrate 

an independent misrepresentation (in addition to the allegedly 

misleading loan closing documents) that he or she relied 
44

upon, more individualized inquiry is necessary to resolve the 

equitable tolling issue embedded in the Plaintiffs’ RESPA 

and TILA/HOEPA claims than is permitted under the 

predominance requirement. 

The Plaintiffs counter that no independent act of 

concealment is necessary where the wrong is “selfconcealing.” (Answering Br. at 33.) See Osterneck v. E.T. 

Barwick Indus., Inc., 825 F.2d 1521, 1535 n.28 (11th Cir. 

1987) (stating that where concealment is inherent in the 

nature of the wrong, all that is necessary to toll the statute of 

limitations is a plaintiff’s due diligence in seeking to discover 

the fraud). They also contend that “[n]owhere in any of the 

seminal Third Circuit equitable tolling decisions is there any 

mandate that some further act of concealment is necessary to 

invoke the doctrine where the wrong is self-concealing.” 

(Answering Br. at 34 n.16 (citing Oshiver, 38 F.3d 1380; 

Ramadan v. Chase Manhattan Bank, 156 F.3d 499 (3d Cir. 

2006); Cetel, 460 F.3d 494). 

Because the Plaintiffs have advanced a sufficiently 

credible argument that PNC’s predecessor in interest, CBNV,

did commit an affirmative act of concealment, we do not need

to decide whether mere silence is enough to allow the case to 

proceed. 

The Plaintiffs are able to claim an independent act of 

concealment with respect to each loan because CBNV 

allegedly misrepresented material facts in the HUD–1

settlement statements used in closing the loans of every class 

member, and those misrepresentations arguably support

application of equitable tolling. More specifically, the 

additional act of concealment perpetrated by CBNV was, 
45

according to the Plaintiffs, providing a HUD–1 that contained

false representations as to the destination of the settlement 

fees (for the RESPA claims) and a false representation that a 

title company performed a bona fide title search and title 

examination (for the TILA/HOEPA claims). See Reiser v. 

Residential Funding Corp., 420 F. Supp. 2d 940, 947 (S.D. 

Ill. 2004) (holding that plaintiffs adequately pled equitable 

tolling as to their RESPA and TILA claims by alleging that 

defendants had misrepresented and concealed facts relating to 

fees represented on the HUD–1 statements), rev’d in part on 

other grounds, 380 F.3d 1027 (7th Cir. 2004). 

PNC, of course, disagrees that transmission of a HUD–

1 to a class member can constitute an “independent act” of 

concealment sufficient to invoke the doctrine of equitable 

tolling as to the RESPA or TILA/HOEPA claims. Its 

argument is primarily based on Moll v. U.S. Life Title 

Insurance Company of New York, 700 F. Supp. 1284 

(S.D.N.Y. 1988), which rejected the argument that we now 

accept – that transmission of a misleading HUD–1 constitutes 

an independent act of concealment. The Moll plaintiffs 

argued that the HUD–1s “falsely stated that US Life would 

receive the full premium charged for the title insurance,” 

when in fact portions of that premium were allegedly “kicked 

back” to another entity. Id. at 1292-93. But Moll reasoned 

that the HUD–1s made no representation as to “the ultimate 

disposition of those charges,” and particularly, that the HUD–

1s did not represent that the defendant “was ‘accepting’ (i.e., 

retaining for its own account) the premium charged.” Id. at 

1291-92 (additional internal quotation marks omitted). 

Instead, Moll concluded that the HUD–1s simply reported the 

charges actually assessed to and paid by the plaintiffs, and the 

forms did so without warranting anything about the validity 
46

or ultimate disposition of the disputed charges. Because the 

amounts listed were accurate – that is, they were the amounts 

that plaintiffs had actually paid – Moll concluded that 

transmission of a HUD–1 did not constitute an independent 

act of concealment because it did not contain any false 

information. Id. at 1292-93. 

There is, however, a gap in that logic. Even assuming 

that a HUD–1 correctly summarizes the fees and charges 

actually paid by a borrower for settlement services in 

connection with a federally related mortgage loan, it does not 

follow that the HUD–1 should be viewed in isolation. 

Federal regulations associated with that form control the 

nature and quality of information that is supposed to be 

included in each HUD–1, and borrowers should be able to 

rely on that information in fact being of the requisite nature 

and quality. Of particular relevance here, 24 C.F.R. § 3500.8

provides the following:

The settlement agent shall state the actual 

charges paid by the borrower and seller on the 

HUD–1, or by the borrower on the HUD–1A. 

The settlement agent must separately itemize 

each third party charge paid by the borrower 

and seller. All origination services performed 

by or on behalf of the loan originator must be 

included in the loan originator’s own charge. 

Administrative and processing services related 

to title services must be included in the title 

underwriter’s or title agent’s own charge. The 

amount stated on the HUD–1 or HUD–1A for 

any itemized service cannot exceed the amount 

actually received by the settlement service 
47

provider for that itemized service, unless the 

charge is an average charge in accordance with 

paragraph (b)(2) of this section.21 

HUD–1s that deviate from the requirements of section 3500.8

thus can be materially misleading because transmission of a 

HUD–1 impliedly warrants compliance with that section’s 

specific requirements. We therefore conclude that inclusion 

of misleading information in a HUD–1 can constitute an 

independent act of concealment. Cf. White v. PNC Fin. Servs. 

Grp., No. 11-7928, 2014 WL 4063344, at *2-4 (E.D. Pa. 

Aug. 18, 2014); Barlee v. First Horizon Nat’l Corp., No. 12-

3045, 2013 WL 706091, at *4-5 (E.D. Pa. Feb. 27, 2013). 

Under the facts of this case, a common question as to active 

misleading predominates over any individualized issues. 

ii. Reasonable Due Diligence

To qualify for equitable tolling, however, the Plaintiffs 

must show not only an act of concealment, but reasonable 

diligence on their own part as well. “To demonstrate 

 

21 This version of section 3500.8 was promulgated in 

November 2008. See Real Estate Settlement Procedures Act 

(RESPA): Rule To Simplify and Improve the Process of 

Obtaining Mortgages and Reduce Consumer Settlement 

Costs, 73 Fed. Reg. 68204, 68241 (November 17, 2008). But 

it was removed in June 2014, see Removal of Regulations 

Transferred to the Consumer Financial Protection Bureau, 79 

Fed. Reg. 34224, 34225 (June 16, 2014). It now appears at 

12 C.F.R. § 1024.8(b)(1). Relevant for our purposes, a prior 

version of section 3500.8 that was in effect in 1998 imposed 

substantially identical reporting requirements for HUD–1s. 
48

reasonable diligence, a plaintiff must establish that he pursued 

the cause of his injury with those qualities of attention, 

knowledge, intelligence and judgment which society requires 

of its members for the protection of their own interests and 

the interests of others.” Mest v. Cabot Corp., 449 F.3d 502, 

511 (3d Cir. 2006) (brackets and internal quotation marks 

omitted). 

Relying on Riddle v. Bank of America Corp., No. 12-

1740, 2013 WL 6061363 (E.D. Pa. Nov. 18, 2013) aff’d, 588 

F. App’x 127 (3d Cir. 2014), PNC argues that the reasonable 

diligence component of the equitable tolling inquiry is not 

susceptible to common proof but, instead, that each class 

member will need to be queried about his individual 

knowledge and attempts to discover his claims before the 

limitations period expired. Addressing the merits of equitable 

tolling and not the issue of certification in the putative class 

action, Riddle analyzed in detail evidence regarding each 

named plaintiff’s diligence before concluding that plaintiffs 

could not pursue equitable tolling of the limitations period on 

their RESPA claim. Id. at *2-4, *5-7. We do not dispute that 

reasonable diligence is generally a fact-specific inquiry. But

when a wrongful scheme is perpetrated through the use of 

common documentation, such as the documents employed to 

memorialize each putative class member’s mortgage loan, full 

participation in the loan process is alone sufficient to establish 

the due diligence element. Cf. Cunningham v. M & T Bank 

Corp., No. 1:12-cv-1238, 2013 WL 5876337, at *6 (M.D. Pa. 

Oct. 30, 2013) (finding that allegations that the putative class 

fully participated in all aspects of the mortgage loan 

transactions and reviewed all relevant documents, but were 

nonetheless unable to discover the RESPA violation, were 
49

sufficient to satisfy the reasonable diligence requirement for 

equitable tolling at the pleading stage). 

The rationale for holding that participation in the 

mortgage loan process can establish the “due diligence”

element of equitable tolling was explained in Bradford v. WR 

Starkey Mortgage, LLP, No. 2:06-CV-86, 2008 WL 4501957

(N.D. Ga. Feb. 22, 2008), in which the court stated, “Plaintiff 

had no reason to suspect that defendant, or any other lender, 

might be improperly marking-up settlement charges, and the 

due diligence requirement does not demand that plaintiff 

inquire about the various fees at issue.” Id. at *3. Bradford

specifically rejected the same argument made here by PNC, 

saying that, “[h]aving flouted the regulation, defendant cannot 

now try to penalize plaintiff for trusting the validity of the 

settlement costs delineated on his HUD–1 Statement.” Id. at 

*3 n.6. 

We agree with that conclusion. Due diligence does not 

mean that borrowers must presume their bank is lying or 

dissembling and therefore that further investigation is needed. 

Reading the blizzard of paper that sweeps before them is 

ample diligence in itself. In short, a borrower ought to be 

able to rely on the documents provided by a financial 

institution. Indeed, RESPA and TILA/HOEPA were passed, 

in large part, because Congress recognized that the average 

borrower is incapable of detecting many unfair lending 

practices, including fraud. “[W]hile the law of fraud does not 

endorse a ‘hear no evil, see no evil approach,’ neither does it 

require that an aggrieved party have proceeded from the 

outset as though he were dealing with thieves.” Jones v. 

Childers, 18 F.3d 899, 907 (11th Cir. 1994) (additional 

quotation marks omitted). “A plaintiff ... cannot be expected 
50

to exercise diligence unless there is some reason to awaken 

inquiry and direct diligence in the channel in which it would 

be successful. This is what is meant by reasonable 

diligence.” Sheet Metal Workers, Local 19 v. 2300 Grp., Inc., 

949 F.2d 1274, 1282 (3d Cir. 1991) (internal quotation marks 

omitted). The Complaint here does not allege any facts 

disclosed on the face of the HUD–1s or that were otherwise 

provided to the Plaintiffs that should have awakened inquiry 

and demanded some further diligence. We conclude, 

therefore, that the Plaintiffs’ allegation that the class fully 

participated in all aspects of the mortgage loan transactions

by “reviewing their loan documentation” is sufficient to 

satisfy the reasonable diligence requirement for equitable 

tolling in this case. (App. at 307, ¶ 409.) Cf. White, 2014 

WL 4063344, at *5-6. In addition, proving that class 

members did, in fact, fully participate in the loan process in 

that fashion does not cause the issue of equitable tolling to 

predominate over issues common to the whole class. 

We do not address whether the class members are 

actually entitled to equitable tolling on the merits. Equitable 

tolling “is extended only sparingly” and under “sufficiently 

inequitable circumstances.” Glover v. FDIC, 698 F.3d 139, 

151 (3d Cir. 2012) (internal quotation marks omitted). The 

Plaintiffs may ultimately be unable to demonstrate that they 

are factually entitled to its benefits. We only conclude here 

that the common issues of fact and law predominate over 

individual ones such that the issue is suitable for class-wide 

treatment on the merits. 
51

c. RESPA Claims

PNC advances several arguments for why the 

Plaintiffs’ RESPA claims – quite apart from equitable tolling 

concerns – present individualized issues that would 

predominate in this litigation and should therefore prevent 

class certification.22 First, it asserts that, to litigate the

RESPA claims, the putative class will be required to 

demonstrate on a loan-by-loan basis that no services were 

provided in exchange for the alleged kickbacks. But the 

Complaint alleges that Equity Plus performed absolutely no 

services to earn the transferred (i.e., kicked-back) portion of 

the fees, which is at least plausible in light of the contractual 

arrangement between Equity Plus and CBNV.

23

 While that 

 

22 PNC urges us to acknowledge, as other circuits 

have, that RESPA section 8 kickback cases are generally not 

a good fit for class certification. See, e.g., Howland v. First 

Am. Title Ins. Co., 672 F.3d 525, 526, 530 (7th Cir. 2012) 

(“Class actions are rare in RESPA Section 8 cases” because 

“at the class certification stage ... the existence or the amount 

of the kickback ... generally requires an individual analysis of 

each alleged kickback to compare the services performed 

with the payment made.”). There is no need for us to 

consider that broad statement, though, because a narrower 

holding is appropriate here. 

23 According to the Plaintiffs, whether or not services 

were provided in exchange for kickbacks will not be in 

dispute at trial because Equity Plus was contractually barred 

from performing mortgage broker services under a consulting 

agreement between CBNV and Equity Plus. PNC responds 

that the agreement merely states that Equity Plus “will not act 

as a mortgage broker,” but it does not state that Equity Plus 
52

allegation places a potentially onerous evidentiary burden on 

the Plaintiffs, it also leads us to conclude that, on the present 

record and at this stage of the case, PNC’s arguments fail to 

show that the District Court abused its discretion. 

Second, PNC asserts that “there are several different 

types of [fees] that Plaintiffs are complaining about, and not 

all putative class members paid every such fee.” (Opening

Br. at 48.) PNC contends that, as a result, the fact-finder will 

be required to determine what fees were assessed to each 

individual class member and whether Equity Plus performed 

services in exchange for each fee, and that such individual 

determinations would predominate in the litigation. That

argument is also unpersuasive because, again, Equity Plus –

the recipient of the settlement fees at issue in this case –

allegedly performed no mortgage broker services in exchange 

for the fees and was contractually precluded from providing 

any services. 

PNC’s third and fourth arguments can be addressed 

simultaneously. The third argument is that any claims 

premised on alleged violations of the affiliated business 

arrangement (“ABA”) disclosure requirements of RESPA

would require loan-by-loan analysis of the ABA 

 

will not perform other types of services in exchange for the 

fees at issue. (Opening Br. at 47 (internal quotation marks 

omitted).) In fact, PNC argues, portions of the agreement 

suggest that Equity Plus is actually required to perform 

services at CBNV’s request, and PNC claims that it did 

perform a variety of services pursuant to its obligations under 

that agreement. 
53

disclosures.

24 The fourth argument is that any claims 

premised on CBNV’s alleged practice of charging “discount 

fees” without providing a discount interest rate in exchange 

would require an examination of each individual loan to see 

whether the borrower was charged a discount fee, and if so, 

whether the borrower obtained a discount or some other 

benefit as consideration for the fee. We need not address the 

merits of either of those arguments, however, because the 

alleged violations of the ABA disclosure requirements and 

the alleged discount fee practice are not essential to the

Plaintiffs’ RESPA claims. The elements of the Plaintiffs’ 

RESPA claims that are “essential” – namely violations of the 

anti-kickback and unearned fee provisions of RESPA – can

potentially be proven with common evidence. Hayes, 725 

F.3d at 359 (“[T]he predominance requirement focuses on 

whether essential elements of the class’s claims can be proven 

at trial with common, as opposed to individualized, 

evidence.”). 

 

24 RESPA has provisions and regulations relating to 

business arrangements between real estate brokerage firms 

and affiliated settlement service provides. A referrer may 

only refer to affiliates if the following three requirements are 

met: (1) disclosure is given to the consumer at or before the 

time each referral is made, in the form prescribed by 

regulation; (2) the consumer is not required to use any 

particular provider of settlement services; and (3) the only 

thing of value that is received from the arrangement, other 

than reasonable payments for good, facilities, or services 

furnished, is a return on the ownership interest the affiliates 

may have in one another. 12 C.F.R. § 1024.15(b) (earlier 

codified at 24 C.F.R. § 3500.15(b)). 
54

Finally, PNC argues that a damages issue precludes 

class certification. While RESPA permits recovery “in an 

amount equal to three times the amount of any charge paid,” 

12 U.S.C. § 2607(d)(2) (emphasis added), PNC contends that 

many class members did not pay the fees directly, receiving 

reduced loan distributions instead. As a result, says PNC, in 

addition to individualized determinations at the liability stage, 

each class member will be required at the damages stage of 

the case to demonstrate that he actually paid the fees instead 

of receiving reduced distributions. But PNC gives no reason

why the distinction between an indirect payment of fees (i.e., 

by subtracting the fee from the loan distribution) and a direct 

payment has any legal or practical significance, and none 

occurs to us. 

In sum, none of these issues defeats the Plaintiffs’ 

showing of predominance as to the RESPA claims. 

d. TILA/HOEPA Claims

PNC advances three arguments for why the Plaintiffs’ 

TILA/HOEPA claims present individualized issues that 

would predominate at trial and thereby prevent class 

certification. First, it asserts that those claims will require the 

class to show that its members paid fees that were not “‘bona 

fide and reasonable in amount.’” (Opening Br. at 51 (quoting 

12 C.F.R. § 226.4(c)(7)).) That showing, PNC contends, 

would require loan-by-loan and fee-by-fee analysis in the 

context of every real estate market in which each transaction 

occurred. The Plaintiffs assert that CBNV improperly 

excluded certain charges from its APR calculation – improper 

charges that were added to every loan – that resulted in a 
55

materially misstated APR.25 Contrary to what PNC argues, 

whether the fees were in fact excluded from the APR 

calculation requires simple arithmetic. Community Bank I, 

418 F.3d at 306 (“Whether an individual borrower has a 

viable TILA or HOEPA claim may be determinable by 

conducting simple arithmetic computations on certain figures 

obtained from the face of each loan’s TILA Disclosure 

Statement.”). And the Plaintiffs contend that whether the fees 

were bona fide can be resolved by classwide evidence: first,

whether CBNV performed independent title abstract or title 

searches or whether it merely paid a third party entity to 

perform a perfunctory current-owner search that generated a 

“property report,” which is not the same thing as performing a 

 

25 The Plaintiffs explain the method employed to 

calculate the APR as follows (the references to line numbers 

being to the lines on the HUD-1 forms): 

The APR is calculated through a mathematical 

formula derived from the Amount Financed 

([i.e.,] funds actually available to the borrower) 

and [the] Finance Charge ([i.e.,] the costs 

incidental to the extension of credit). These two 

numbers are mutually exclusive; a settlement 

charge is allocated to either one or the other, but 

not to both. Title related charges like the line 

1102 fee, a title search or title abstract fee, or 

the line 1103 a title examination fee may be 

excluded from the calculation of the Finance 

Charge (resulting in a lower APR), but only if 

those fees are “bona fide and reasonable in 

amount.” 12 CFR § 226.4(c)(7). 

(Answering Br. at 46.)
56

bona fide title search; and second, whether CBNV performed 

a bona fide title examination or whether it paid a title 

examination company to review the “property report,” which 

does not constitute a true title examination. The District 

Court evidently accepted those arguments, and, at this stage

and on this record, we see no abuse of discretion in that 

decision. 

Second, PNC contends that the Plaintiffs’ 

TILA/HOEPA claims premised on deficient HOEPA 

disclosures will require loan-by-loan analysis because the 

loan documents were not uniform from putative class member 

to putative class member. But, even assuming that PNC is 

correct, those possible issues do not affect the principal 

violations of TILA/HOEPA alleged in the Complaint and so 

do not undermine the District Court’s decision on 

predominance. 

Third, PNC contends that the Plaintiffs’ TILA/HOEPA 

claims premised on CBNV’s failure to provide HOEPA 

notices to borrowers three days before closing will also 

require significant individual inquiry because numerous 

CBNV files contain the borrower’s signed acknowledgment 

of timely receipt of the HOEPA notice or an overnight mail 

receipt demonstrating timely delivery, all of which 

demonstrates that there was no uniform policy to not provide 

notices. The Plaintiffs respond that, while their Complaint

alleges that CBNV failed to provide timely HOEPA 

disclosures and that such a failure is grounds for relief under 

TILA/HOEPA, PNC’s argument is beside the point of their 

claim. The Plaintiffs say that the primary means by which

CBNV violated the advance notice provisions was by 

including inaccurate – not untimely – information in the 
57

HOEPA disclosure, and that the inaccuracy of CBNV’s 

HOEPA disclosures can be proven with classwide evidence. 

Therefore, the Plaintiffs argue, PNC’s contention that each 

class member must testify as to whether he received his 

HOEPA disclosure in a timely manner misses the mark 

because the timeliness of the disclosure is not the alleged 

basis of liability. 

While the Plaintiffs’ argument downplays the actual 

language of their pleading – language that does assert the

timeliness of the HOEPA disclosures as a basis of liability,

completely separate from the accuracy of the disclosures –

PNC has failed to demonstrate that the District Court erred in 

determining that the timeliness issue does not create

evidentiary problems that will predominate in the litigation. 

The timeliness issue might be systematically resolved as to 

each class member by either consulting CBNV’s files, which 

contain signed acknowledgements of delivery and mail 

receipts, or by inspecting mail carriers’ documentation. More 

importantly, though, even if individualized inquiries 

predominate this particular TILA/HOEPA basis for liability

and thus suggest that it not be handled as a class claim, that 

does not undermine the predominance of the primary claims 

of liability for TILA/HOEPA violations, namely, the delivery 

of inaccurate information. 

e. RICO Claims 

PNC also advances three arguments for why the 

Plaintiffs’ RICO claims present individualized issues that 

would predominate and should therefore prevent class 
58

certification.

26

 First, PNC asserts that there is no support for

the Plaintiffs’ contention that reliance may be presumed for 

purposes of their RICO claim and thus it will be necessary for 

each class member to prove individual reliance. The 

Plaintiffs respond that they can prove their RICO claims with 

the same classwide evidence that will be used to prove the 

RESPA and TILA/HOEPA claims. And, they say, “where 

proof of the RICO violation is demonstrated through common 

evidence of a common scheme, reliance may be inferred on a 

classwide basis.” (Answering Br. at 52.) Again, on this 

record and in this context, we do not believe that the District 

Court abused its discretion in accepting the Plaintiffs’ 

position. 

 

26 To plead a violation of section 1962(c), plaintiffs 

must allege “(1) conduct (2) of an enterprise (3) through a 

pattern (4) of racketeering activity.” In re Ins. Brokerage 

Antitrust Litig., 618 F.3d 300, 362 (3d Cir. 2010) (internal 

quotation marks omitted). “Racketeering activity” is defined 

to include a list of state and federal offenses, 18 U.S.C. 

§ 1961(1), two of which are the federal mail fraud and wire 

fraud statutes, 18 U.S.C. §§ 1341 & 1343. Here, Plaintiffs 

allege that the predicate acts are the defendants’ actions that 

underlie the RESPA and TILA/HOEPA violations. “While 

the Supreme Court has clarified that first-party reliance is not 

an element of a RICO claim predicated on mail fraud, it may 

be ... a necessary part of the causation theory advanced by 

the plaintiffs.” In re U.S. Foodservice Inc. Pricing Litig., 729 

F.3d 108, 119 n.6 (2d Cir. 2013) (internal quotation marks 

omitted) (citing Bridge v. Phoenix Bond & Indem. Co., 553 

U.S. 639, 649 (2008)). 
59

Second, PNC asserts that the question of whether each 

settlement fee at issue was somehow improper will require a 

loan-by-loan and fee-by-fee analysis and, therefore, that 

individualized fact inquiries at the damages stage of each 

RICO claim preclude class certification. That argument, 

though, is mistaken. The Plaintiffs do not allege that Equity 

Plus performed inadequate services in exchange for fees. 

Their argument, again, is that class-wide evidence 

demonstrates that Equity Plus performed no services in 

exchange for settlement charges. 

Third, PNC argues that the Plaintiffs cannot “set forth

... [classwide] proof [of] actual monetary loss,” as is required 

to sustain a RICO claim. (Opening Br. at 59 (internal 

quotation marks omitted).) Individual issues will 

predominate, says PNC, because the Plaintiffs will need to 

demonstrate the difference between the fees that they paid 

and the fees that they should have paid. Once more, for the 

reasons set forth above, that argument fails – the Plaintiffs do 

not assert that Equity Plus rendered inadequate services for

which class members are entitled to claw back part of the fee. 

They assert that Equity Plus performed no services and was 

entitled to no fee at all. For that reason, it was not an abuse of 

discretion for the District Court to conclude in effect that 

individualized inquiry will not be necessary. 

4. Superiority

Rule 23(b)(3) requires that class treatment be “superior 

to other available methods for fairly and efficiently 

adjudicating the controversy,” and it provides a nonexhaustive list of factors to consider in determining 

superiority, including: the class members’ interest in 
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individually controlling the prosecution of separate actions;

the extent and nature of any similar litigation already

commenced by class members; the desirability of 

concentrating the litigation in a particular forum; and the 

difficulties likely to be encountered in the management of a 

class action. Fed. R. Civ. P. 23(b)(3). “The superiority 

requirement asks a district court to balance, in terms of 

fairness and efficiency, the merits of a class action against 

those of alternative available methods of adjudication.” 

Community Bank I, 418 F.3d at 309 (internal quotation marks 

omitted). 

The District Court relied on our statement in 

Community Bank I that there is “no reason ... why a Rule 

23(b)(3) class action is not the superior means to adjudicate 

this matter.” Id. The District Court also observed that “class 

members would face some difficult, if not insurmountable, 

tolling issues if they were required to file suit on their own

behalf at this time.” (App. at 19.) 

PNC’s response is that the District Court erred on the 

superiority issue in that “[t]olling of individual suits based on 

previously-filed class action litigation ... is a non-issue 

because of the class action tolling rule”27 and that “[a]n 

individual plaintiff would be in the same position, vis-à-vis 

 

27 Under the class action tolling rule, the filing of a 

class action lawsuit in federal court tolls the statute of 

limitation for the claims of unnamed class members until 

class certification is denied or when the member ceases to be 

part of the class, at which point the class member may 

intervene or file an individual suit. Am. Pipe & Constr. Co. v. 

Utah, 414 U.S. 538, 551-53 (1974). 
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the statute of limitations, as he or she would be as a class 

member.” (Opening Br. at 61.) PNC also asserts that, 

because putative class members’ HOEPA claims average well 

over $28,000 and because they are pursuing statutory claims 

that permit recovery of their attorneys’ fees, this case 

involves the sorts of claims that individuals would have an 

incentive to pursue on their own. 

Those assertions, however, fail to account for the 

“difficult, if not insurmountable” issues noted by the District 

Court that class members would need to overcome in filing 

individual lawsuits “almost a decade after [class members] 

first received notice that this case had been prosecuted and 

settled for them.” (App. at 19). In addition, PNC does not 

consider the tremendous burden that presiding over tens of 

thousands of nearly identical cases alleging RESPA, TILA, 

HOEPA, and RICO claims would impose on the courts. The 

District Court did not abuse its discretion in finding that the 

superiority requirement is satisfied in this case. 

5. Manageability

Finally, PNC argues that the District Court erred on 

manageability. It first says that “the same factors that defeat 

commonality and predominance ... also make this case 

unmanageable as a class action.” (Opening Br. at 62.) 

Because we have concluded that the District Court cannot be 

faulted for deciding that the commonality and predominance 

requirements for class certification have been satisfied, this 

tag-along argument fails. 

PNC further contends that the District Court’s 

acknowledgement that damages issues would require 
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individualized inquiry – while dismissing as “premature” and 

“speculative” any consideration of solutions to address that 

difficulty – “is tantamount to an affirmative finding that the 

manageability requirement is not satisfied.” (Id.) That 

manageability argument fares no better than the first. As the 

District Court noted, “Rule 23(d) vests in the Court

substantial discretion to enter orders, subsequent to the Order 

Certifying the Class that will follow, to manage the class.” 

(App. at 19.) Moreover, there are “‘imaginative solutions to 

problems created by the presence in a class action litigation of 

individual damages.’” (Id. at 19-20 (quoting Carnegie v. 

Household Int’l, Inc., 376 F.3d 656, 661 (7th Cir. 2004).) By 

refusing to settle on any particular solution at the same time 

that it certified the class, the District Court was not ruling that 

the litigation was unmanageable. That a class action may 

require some inquiry into facts specific to individual class 

members, such as damages, is not a novel observation, nor 

does it necessarily mean that a class action will be 

unmanageable. The District Court did not err by deciding 

that it could address this aspect of case management more 

fully at a later date. 

III. Conclusion

Thus ends the third and, one hopes, the last 

quinquennial presentation of class certification questions to 

this court in this case. PNC has failed to demonstrate that the 

District Court abused its discretion as to any certification 

issue or requirement, and we will therefore affirm.