Opinion ID: 2821408
Heading Depth: 2
Heading Rank: 4

Heading: Post-Community Bank II Proceedings11

Text: 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. 17 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. 18 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 19 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. 20 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