For over 40 years, putative class members have escaped some of the curbs against late-filed lawsuits that apply to normal cases. Last week, the United States Supreme Court brought back some of those curbs, threatening to reduce the number of spin-off cases that often result from class actions. Lawsuits under the Truth in Lending Act are directly affected. Continue Reading SCOTUS Resolves Dispute Over Class-Action Timing, TILA Cases Affected
Last week, in a much anticipated decision, the U.S. Supreme Court addressed whether a consumer can sue over violations of statutory rights without herself having suffered an actual, concrete harm. The Supreme Court said “no,” but gave little detail about which injuries are concrete enough to pass constitutional muster. That lingering uncertainty is likely to help at least some companies defeat class certification. Continue Reading Supreme Court Bolsters Existing Weapon Against Class Certification
The most common class-action battle in the real estate industry today deals with so-called force-placed insurance, which mortgage lenders buy when a borrower wrongly lets her homeowner’s coverage lapse. Courts around the country have come to varying conclusions about the viability of those cases. Two recent decisions add to the tally of opinions favoring consumers. Continue Reading Consumers Fight for Edge in Tug-of-War over Force-Placed Insurance
In 2009, Congress amended the Truth in Lending Act (TILA) to require lenders that acquire existing mortgages to notify borrowers of the transfer. Until now, it has been unclear whether pre-2009 transfers fall under that amendment. Continue Reading Is New Federal Law on Mortgage Transfer Notices Retroactive?
One of the main laws governing home sales is the Real Estate Settlement Procedures Act (RESPA), which prohibits kickbacks and referral arrangements. Plaintiffs’ lawyers love the statute because, if a violation occurs, an aggrieved consumer can recover attorneys’ fees and three times the amount of the underlying service fee. As a result, RESPA class actions abound. But what if Congress never intended to allow the vast majority of those lawsuits in the first place? RESPA’s text contains strong support for that argument.
Lawyers eager to sue real estate companies are celebrating a recent decision involving Community Bank of Northern Virginia (CBNV), a financial institution that PNC Bank, N.A., acquired in 2007. The plaintiffs in the underlying case accuse CBNV of funneling excess settlement fees to a non-depository lender, whose earnings are capped by law. The opinion exposes real estate professionals to a significantly heightened risk of class liability.
The events at issue occurred more than 13 years ago and have been the subject of three separate rulings by the United States Court of Appeals for the Third Circuit. During the earlier two appeals, rogue borrowers successfully objected to class settlements of $33 million and $47.6 million. During the third go-around, the objectors joined forces with the original plaintiffs and together they convinced a federal judge in Pennsylvania to certify a much larger class. PNC appealed.
The prior objectors, with their new-found allies, continued their winning streak. The Third Circuit rejected PNC’s arguments, one after another—even those were based firmly on the appellate court’s earlier holdings. For example, conflicts of interest that had derailed an earlier settlement were, miraculously, “no longer a problem,” the Third Circuit ruled.