U.S. Supreme Court Dismisses First American v. Edwards

June 28, 2012

The U.S. Supreme Court on June 28 dismissed the First American Financial Corp. v Edwards lawsuit, which was addressing if consumers can bring class action lawsuits under the Real Estate Settlement Procedures Act (RESPA) even if they never suffered some actual injury.

The case, which was argued in November, came to the court from the U.S. Court of Appeals for the Ninth Circuit. Without elaborating, the justices dismissed the case in a brief order that said “The writ of certiorari is dismissed as improvidently granted.” In effect, this means the court said it should not have accepted the case.

The Ninth Circuit’s ruling stands and the case will be remanded back to the district court for discovery and trial.

“By dismissing First American Financial Corporation v. Edwards, the U.S. Supreme Court has left the issue to be worked out in the trial court,” said Michelle Korsmo, ALTA’s chief executive officer. “The decision to dismiss leaves the issue of the necessity of injury to bring a class action suit yet to be resolved.”


Denise Edwards, a home purchaser, filed a class action lawsuit contending that First American’s “Captive Title Insurance Agreements” constituted a violation of RESPA. Edwards alleged that First American paid cash and securities to an agent in return for the agent’s agreement to refer all future title insurance business exclusively to First American.

Despite the fact that, under Ohio law, all title insurers are required to charge the same premium, so that there was no claim of overpayment, Edwards sued claiming that the business relationship between First American and its agent violated RESPA. The suit alleged the agreement constituted the payment of a thing of value in exchange for business referrals and constituted an improper fee-splitting structure. First American argued that Edwards lacked standing because she did not suffer concrete injury in fact, because she did not allege that the charge for title insurance was higher than it would have been without the exclusivity agreement. Edwards argued that she had standing under RESPA whether or not an actual overcharge occurred.

Previously, the Ninth Circuit, following the Third and Sixth Circuits, found standing. Citing to the RESPA prohibition of the payment of any fee, kickback or thing of value in exchange for business referrals, the court held that whenever a violation occurs, the defendant is liable to the person who was charged for the settlement service in an amount equal to three times the amount of any charge.

ALTA had filed two amicus briefs in support of First American.

Contact ALTA at 202-296-3671 or communications@alta.org.