Consumer Law

Eleventh Circuit Issues Important RESPA Class Action Decision

By Brian Wolfman

by Brian Wolfman

The Eleventh Circuit's decision in Busby v. JRHBW Realty, No. 06-15308 (Jan. 17, 2008), is worth reading for two reasons.  First, in Busby, the district court denied class certification, the plaintiff class sought permissive interlocutory review under Federal Rule of Civil Procedure 23(f), the appellate court allowed review, and that court reversed in favor of the class. That scenario has been quite rare.  In the vast majority of Rule 23(f) cases, it has been defendants who have convinced the appellate court to review, and, in many of those cases, certification has been reversed.  Plaintiffs' Rule 23(f) petitions have rarely been granted, let alone led to plaintiff-favorable rulings.

Second, the Eleventh Circuit's reversal is interesting on its own terms.  Busby is a class action under the Real Estate Settlement Procedures Act (RESPA).  Section 8(b) of RESPA provides that

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

The Eleventh Circuit held that because all class members were claiming a violation of section 8(b) on the ground that no services were provided for the fee that they were charged in settlement, the predominance requirement of Rule 23(b)(3) had been met.  In so holding, the court distinguished another of its cases holding that class treatment is generally inappropriate in other kinds of RESPA actions.  The Eleventh Circuit's decision also contains an interesting discussion of whether class counsel's allegedly unethical solicitation of the named plaintiff rendered that counsel inadequate under Rule 23(a)(4).

Full post as published by CL&P Blog on January 27, 2008 (boomark / email).