In Alston v. Countrywide Financial Corp., 2009 WL 3448264 (3d Cir. October 28, 2009), the United States Court of Appeal for the Third Circuit confronted the issue of whether consumer plaintiffs alleging a violation of section 8 of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), codified in relevant part at 12 U.S.C. § 2607(d)(2), need to show a monetary injury “in the form of an overcharge” to have standing to bring a private right of action against a mortgage lender. The Third Circuit concluded that plaintiffs need not suffer an overcharge because the “plain language of RESPA section 8 indicate[s] that Congress created a private right of action without requiring an overcharge allegation.” Rather, plaintiffs must only allege that a defendant received a “kickback” or offered a “sham service” under RESPA section 8(a) and 8(b) –– regardless of whether plaintiffs have suffered a monetary harm –– to have Article III standing to sue in the Third Circuit. This decision paves the way for class action litigation against other lenders asserting claims under Section 8 of RESPA.
Continue Reading Third Circuit Holds That Plaintiffs Alleging Respa Violations Under Section 8 Need Not Show An Overcharge To Have Article III Standing To Sue
Federal Circuits Grapple With Standard of Proof and the “Fraud-On-The-Market” Presumption At Class Certification Stage
In recent years, a split among the circuits has developed in federal securities class actions with regard to the procedure and standard of proof required to certify a class. At the class certification stage of the proceedings, district courts are instructed to conduct a “rigorous analysis” of the various requirements set forth in Federal Rule of Civil Procedure 23, while at the same time refrain from deciding issues that go to the substantive merits of the case. This tension, coupled with ambiguity in Circuit-level authority, has created uncertainty among many district courts. Most recently, the United States Court of Appeals for the Sixth Circuit granted interlocutory review in In re Abercrombie Fitch & Co., No. 09-0310 (6th Cir. Aug. 24, 2009), to consider this precise issue. The court, in its order granting review, noted that although the Sixth Circuit had yet to address the issue, its sister circuits, including the First, Second, Fourth and Fifth Circuits, have articulated various different standards to be applied.
Continue Reading Federal Circuits Grapple With Standard of Proof and the “Fraud-On-The-Market” Presumption At Class Certification Stage