Court Opinion

ID: 2821408
Source: CourtListenerOpinion
Date Created: 2015-07-29 17:01:02.727906+00
Date Added: 2024-06-11T11:31:00.965950
License: Public Domain

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)
                  _______________
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

                           2
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
                   _______________

                           3
                     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

                                       4
                                   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

                                         5
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

                               6
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

                               7
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” mortgages2 and especially High-
Loan-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 government-
sponsored 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.

                             8
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.

                               9
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).

                               10
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”)8 and 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.

                              11
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.

                               12
        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.

                               13
        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.

                              14
       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

                              15
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

                               16
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.

                              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” intra-
class 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).

                              21
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,

                               22
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.

                              23
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).

                             24
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

                               25
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.

                             26
        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

                              27
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

                               28
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

                               29
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

                               30
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

                               31
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

                              32
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 One-
A-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

                               33
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,

                               34
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

                             35
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

                              36
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

                              37
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

                             38
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

                              39
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

                              40
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

                                41
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).

                              42
                            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

                                 43
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 “self-
concealing.” (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,

                               44
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

                              45
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

                             46
       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.

                                  47
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

                               48
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

                              49
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.

                              50
                     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

                               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.

                      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

                                54
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.)

                              55
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

                              56
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

                             57
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)).

                              58
       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 non-
exhaustive list of factors to consider in determining
superiority, including: the class members’ interest in

                               59
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).

                               60
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

                              61
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.

                                62