Edwards v. First American Corp.

To qualify for adjudication as a nationwide class, the class must have numerosity, commonality, typicality and adequacy; furthermore, the common issues must predominate over the individual issues.

Denise Edwards and other home buyers claimed that a profitable agreement between First American Corporation and its wholly owned subsidiary First American Title Insurance Company (collectively, “First American”), and certain title companies violated the anti-kickback provision of the Real Estate Settlement Procedures Act (“RESPA”). Edwards alleged that First American would pay the title agencies in exchange for referral business. Edwards motioned for class certification to represent a class of similarly-situated home buyers. The district court denied certification, holding that there was “no single, overwhelming common question of fact.” The Ninth Circuit reversed and ordered nationwide discovery. Again, the district court denied the certification, with new reasoning that the class’s common issues “did not predominate over individual issues for the nationwide class.” On appeal, the Ninth Circuit reviewed the district court’s denial of class certification for abuse of discretion, and considered whether the district court’s application of Federal Rule of Civil Procedure 23 was correct. Rule 23(a) requires that individuals seeking to class certification demonstrate “(1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation.” Furthermore, the proposed class must “demonstrate the superiority of maintaining a class action and show ‘that the questions of law or fact common to class members predominate over any questions affecting only individual members.’” The panel found that Edwards’s class did have commonality through the question of whether the kickback agreement influenced the home buyers’ choice for First American. Since the district court held Edwards’s class did not have commonality, and thus ended its analysis, the panel remanded for further analysis. However, the panel did affirm the district court’s denial of class certification in part as to the newly-formed title agencies since those title agencies did not raise issues sufficient for class adjudication. AFFIRMED in Part, VACATED in Part, and REMANDED.