Opinion ID: 2821408
Heading Depth: 4
Heading Rank: 3

Heading: RESPA Claims

Text: 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 51 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. 52 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)). 53 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.