First American Financial Corp. v. Edwards

Whether a private purchaser of real estate settlement services has Article III standing to sue for a RESPA violation when that violation does not affect the price or the quality of the services provided.

When Denise Edwards purchased her home, she was referred by her settlement agent, Tower City Title Agency, to First American Title Insurance Company where she purchased title insurance. Edwards was not told that First American owned a minority interest in Tower City or that Tower City had an “exclusivity” agreement with First American that all prospective purchasers of title insurance would be referred to First American. Upon discovery of those facts, Edwards filed suit and sought class status alleging various violations of RESPA’s “anti-kickback” provisions.

First American filed a motion to dismiss, arguing that Edwards lacked Article III standing because her complaint failed to allege “injury” and noted that the price Edwards paid for her title insurance was statutorily fixed and thus she was not “overcharged” and the services she was provided were adequate. The District Court and the Ninth Circuit both denied First American’s motion to dismiss and concluded that to create standing, it is sufficient to show that a RESPA provision was violated because “[t]he injury required by Article III can exist solely by virtue of statutes creating legal rights, the invasion of which creates standing.”

Before the Supreme Court, First American argues that Edwards has no Article III standing to sue because she alleged no actual, pecuniary, or informational injury and that she should be denied standing because Article III enforcement “serves interests that are critical to the administration of justice and separation of powers.” Edwards responds by citing early English and American case law that would allow a suit to go forth on the showing of a “conflicted transaction” with no further inquiry into economic harm.