The U.S. Supreme Court is poised to rule on whether it will review a case in which the U.S. Court of Appeals for the Ninth Circuit held that the plaintiff did not need to show she was overcharged to have standing to assert a claim based on a violation of the Real Estate Settlement Procedures Act’s (RESPA) anti-kickback prohibition.
RESPA Section 8 prohibits the payment or receipt of kickbacks in exchange for referrals of “business incident to or part of a real estate settlement service” and imposes statutory damages equal to three times the amount of the charge for the settlement service. In First American Financial Corporation v. Edwards, the Ninth Circuit ruled that the plaintiff could assert a RESPA claim whether or not an alleged unlawful referral agreement between her settlement agent and her title company increased the amount she paid for the title insurance. According to the Court, the plaintiff’s allegation that her title insurance payment was based on an unlawful referral agreement established sufficient injury to give her standing.
In response to a Supreme Court invitation, the Acting U.S. Solicitor General filed an amicus curiae brief on May 19, 2011, to provide the Obama administration’s view on the case. The brief urged denial of the certiorari petition on the grounds that the Ninth Circuit had correctly decided the case. It also disagreed with the title company’s argument that the RESPA question presented a circuit conflict because decisions of the Seventh and Fifth Circuits have interpreted Section 8 to provide a cause of action only to a plaintiff who has suffered concrete economic injury. According to the brief, the Seventh Circuit did not adopt the title company’s Section 8 reading and the Fifth Circuit’s decision was nonprecedential. The brief argued that because the Ninth Circuit’s ruling was consistent with the only precedential court of appeals decisions, those issued by the Third and Sixth Circuits, there was no conflict warranting Supreme Court review.