Seven years ago the U.S. Supreme Court decided to ‘dismiss as improvidently granted’ its agreement to hear the following RESPA case. Since then, they have never provided homeowners any relief. They have been silent for over a decade on the worst financial crimes against homeowners and citizens of the United States of America.
First American Financial Corp. v. Edwards (10-708)
STANDING REAL ESTATE SETTLEMENT PROCEDURES ACT KICKBACKS TITLE INSURANCE ACTUAL INJURY SETTLEMENT SERVICE
Appealed from: United States Court of Appeals for the Ninth Circuit (June 21, 2010)
In this case, the Supreme Court will decide whether a plaintiff has Article III standing to sue under the Real Estate Settlement Procedures Act (“RESPA”) when the plaintiff alleges no injury-in-fact. Respondent Denise Edwards contends that she has standing because, through RESPA, Congress identified a specific harm resulting from a conflict of interest between title insurance service firms and title agents who enter exclusive agreements to exchange referrals for kickbacks.
Edwards argues that Congress tethered that harm to a certain class of plaintiffs, which includes Edwards.
Respondent First American Financial Corporation rejoins that a plaintiff must allege a personal and concrete harm to gain Constitutional standing. Under this standard, First American asserts that Edwards alleged no such harm and thus lacks standing to sue.
The Court’s decision here has the potential to greatly enhance plaintiffs’ ability to organize class actions and obtain relief for statutory violations in various industries and differing legal frameworks.
Section 8(a) of the Real Estate Settlement Procedures Act of 1974 (“RESPA” or “the Act”) provides that “[n]o person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding … that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” 12 U.S.C. § 2607(a). Section 8(d)(2) of the Act provides that any person “who violate[s],” inter alia, § 8(a) shall be liable “to the person or persons charged for the settlement service involved in the violation in an amount equal to three times the amount of any charge paid for such settlement service.” Id. § 2607(d)(2). The questions presented are:
1. Did the Ninth Circuit err in holding that a private purchaser of real estate settlement services has standing under RESPA to maintain an action in federal court in the absence of any claim that the alleged violation affected the price, quality, or other characteristics of the settlement services provided?
2. Does such a purchaser have standing to sue under Article III, § 2 of the United States Constitution, which provides that the federal judicial power is limited to “Cases” and “Controversies” and which this Court has interpreted to require the plaintiff to “have suffered an ‘injury in fact,'” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)?
LIMITED TO QUESTION 2 PRESENTED BY THE PETITION.
Whether a plaintiff who identifies a violation of the Real Estate Settlement Procedures Act has standing under Article III when the plaintiff is among the category of victims that Congress sought to protect but does not allege a particular, concrete harm arising from the cause of action.
To buy a house, an individual typically must obtain certain settlement services, such as title insurance. Due to consumer reliance on real estate agents, settlement service firms began paying agents kickbacks to refer clients to them exclusively. . After extensive hearings, Congress learned that these kickbacks potentially result in increased costs to the consumer, since the agents, instead of considering consumer interests, instead choose the firm that maximizes their own profits.
In response, Congress enacted the Real Estate Settlement Procedures Act (“RESPA”), which banned kickbacks for referrals in federally related mortgage financing.
Congress subsequently amended RESPA to close a loophole through which agents who were affiliated with settlement service firms could exclusively refer individuals and receive corporate dividends instead of kickbacks. . However, since such business arrangements were sometimes found beneficial, the amendments offered an exemption where referral payments could be made if they were disclosed to consumers, the consumer was not obligated to use the referral, and the arrangement only contemplated a return on ownership interest.
RESPA provided for a private right of action in the event of violation.
First American Financial Corporation issues title insurance policies through its subsidiary, First American Title (collectively “First American”), and affiliated title insurance agencies, in which it owns small equity stakes.
One Ohio-based title agent, Tower City, almost exclusively issues First American Title insurance as part of an affiliation agreement. Denise Edwards contracted with Tower City to close the purchase of her home. Pursuant to the affiliation agreement, Tower City referred the insurance to First American, who issued a First American Title policy and paid Tower City through its equity ownership. Although Tower City mentioned an affiliation with First American, it did not reveal the exclusive referral agreement between the two.
Edwards filed suit against First American in the United States District Court for the Central District of California alleging that First American violated RESPA by not informing her of the exclusive referral agreement with Tower City and by paying illegal kickbacks to Tower City.
First American moved to dismiss, asserting that Edwards did not claim any actual overpayment, and therefore lacked standing under Article III of the Constitution.
Edwards rejoined that RESPA provided her a claim because she was denied the right to purchase insurance free of illegal kickbacks; she moved to certify either a nationwide class of similarly situated consumers or a class of Tower City consumers. The District Court denied First American’s motion to dismiss and Edwards’s motion to certify for class action.
First American appealed to the United States Court of Appeals for the Ninth Circuit. . The Ninth Circuit held that RESPA’s language, by creating a cause of action, gave Edwards Article III standing to sue regardless of whether she was overcharged. First American requested a rehearing en banc, but the Ninth Circuit denied the petition. .On June 20, 2011, the Supreme Court granted certiorari limited to the Article III standing question.
This case considers whether purchasers of title insurance have Article III standing to sue under RESPA for undisclosed kickbacks without asserting an actual injury. The Court’s decision here could affect the future of the settlement services business and enable similar statutory causes of action under other frameworks.
Socioeconomic Impact of No-Injury Statutory Relief
The Association of Global Automakers, Inc. and others argue that the potential for large damages stemming from RESPA class action suits could severely impede mass-market businesses like the automobile industry. It notes that the damages may be arbitrary, since private suits are often not decided by regulators but by inexperienced judges.
Additionally, the Consumer Data Industry Association (“CDIA”) asserts that upholding the Ninth Circuit’s conclusion could result in a flood of lawsuits against Credit Reporting Agencies if that decision were extended to the Fair Credit Reporting Act. Moreover, the CDIA explains that the increased costs would ultimately be passed on to the consumer in the form of higher prices.
In fact, the American Land Title Association (“ALTA”) contends that a decision for Edwards would even have the opposite result from that intended: it would increase title insurance premiums. ALTA explains that, since the mortgage process involves multiple affiliated entities, a finding for Edwards would subject a large number of real estate firms to similar suits—again, costs ultimately borne by homeowners.
However, the Toyota Economic-Loss Plaintiffs point out that increased premiums already exist because the anti-competitive nature of kickback agreements harms the insurance market price equilibrium. Citing various studies, Birny Birnbaum and others contend that kickbacks promote anti-competitive behavior, resulting in artificially inflated prices and decreased service quality.
Moreover, the National Association of Independent Land Title Agents (“NAILTA”) asserts that private suits provide a necessary tool to address and deter violations, where regulators cannot adequately enforce RESPA due to limited resources.
Finally, the Reporter and Advisers to Restatement (Third) of Restitution and Unjust Enrichment argue that a victory for First American would contravene the prevailing understanding of unjust enrichment—a doctrine that allows plaintiffs to sue, not for compensation, but for rewards obtained at the expense of plaintiffs. .
Do Consumers Need a Private Cause of Action?
Edwards argues that consumers need statutory relief because conflicts of interest and related economic harms are difficult to prove.
The AARP argues that the difficulty of proving that any one transaction caused harm, whether in the form of anti-competitively inflated prices or poor service, calls for statutory relief to compensate for these expected losses.
NAILTA contends that plaintiffs in some states will be hard-pressed to prove injury because, although title insurance rates filed with the state will not appear overpriced, premiums are typically understated because they do not include “the costs of the title search, title examination or other settlement services.”
In response, First American points out that the power to bring either criminal or civil actions without standing is vested solely in the executive branch, typically an individual subject to the democratic process.
First American argues that to allow private individuals to bring private no-injury suits would usurp this role and grant them unaccountable prosecutorial discretion.
DRI – The Voice of the Defense Bar and others assert that statutory relief generates windfalls for plaintiffs that disproportionately benefit lawyers rather than plaintiffs themselves.
Experian Information Solutions, Inc. contends that a decision for Edwards could incentivize attorneys seeking large payouts to bring meritless or questionable claims, where massive threatened damages will force companies to settle rather than risk losing at trial.
Under Article III of the U.S. Constitution, before a court may hear a suit brought by a plaintiff, that plaintiff must establish standing.
First American contends that a basic element of standing is that the plaintiff demonstrates an injury-in-fact caused by the legal wrong upon which the plaintiff sues.
First American argues that the plaintiff, Denise Edwards, has no standing to sue because she did not allege an injury-in-fact.
Edwards counters that, while standing requires an injury-in-fact, Congress may deem given violations of law de facto injuries, and that her standing arises from such an injury: a violation of RESPA.
Edwards argues that RESPA is a valid exercise of Congress’s authority to elevate harms caused by kickbacks for referrals from real estate professionals to the status of a legal injury.
Fiduciary Duties and RESPA
First American argues that RESPA forbids certain kickbacks, but does not create a fiduciary relationship between customers and settlement service providers.
First American asserts that a plaintiff could not claim any conflict of interest in a RESPA violation because Section 8(a) of the Act did not obligate the title agent to provide disinterested advice to the customer.
Even if RESPA bestowed a fiduciary duty on real estate professionals, First American contends breaching that duty does not grant standing without some actual injury to the plaintiff’s interests.
First American asserts that Edwards did not suffer any economic harm, such as overcharges or receiving less value, because the state regulates the prices title insurers may charge.
Moreover, First American asserts that Edwards did not allege a real informational harm from not knowing about First American’s relationship with Tower City because RESPA does not create any statutory right to the information.
Therefore, First American insists that lack of such knowledge is not an injury unless it causes harm to another legal interest.
Edwards responds that real estate professionals have a duty to provide their customers honest referrals, and that the breach of this duty provides standing without requiring any further inquiry into the harm the plaintiff actually suffered.
Edwards contends that the implicit trust customers place in real estate professionals creates a fiduciary-like relationship.
Edwards argues that when real estate professionals are paid kickbacks for their referrals to other companies, they violate their customers’ trust because they are conflicted between increasing their own compensation and providing value to the customer.
Edwards rejects First American’s claim that a plaintiff must allege a harm other than a breach of duty, because courts have long recognized that conflicted transactions misalign incentives and harm customer interests.
Edwards argues that such transactions fall under the “no-further inquiry rule,” which prevents courts from examining the terms of the transaction to see if the conflict actually affected price or quality.
Edwards asserts that American courts adopted this rule from the English common law to allow suits without any proof of economic harm.
Edwards argues the rule applies for cases brought under RESPA because kickbacks to real estate professionals represent a type of violation similar to those the original rule sought to address.
The Injury-In-Fact Requirement
First American argues that Article III requires plaintiffs to allege an actual injury, and that a court cannot grant standing based only on whether the plaintiff alleges a statutory cause of action.
First American contends that the Supreme Court held in Summers v. Earth Island Institute that no federal statute may displace the injury-in-fact requirement.
Further, First American argues that Supreme Court precedent confirms that, while a federal statute may authorize private citizens to sue in court for statutory violations, a violation alone will not confer standing.
First American insists that the Ninth Circuit based its ruling in this case on an erroneous reading of the Supreme Court’s holding in Warth v. Seldin.
In its opinion, the Ninth Circuit relied on Warth for the proposition that in cases in which the plaintiff’s injury arises from invasion of a statutory right, an examination of whether Congress intended to grant persons like the plaintiff judicial relief should answer the question of standing.
However, First American asserts the Ninth Circuit overlooked the argument that Warth maintained that standing still requires the plaintiff to allege how the practices violating the federal law harmed the plaintiff individually. First American argues that Warth stands only for the proposition that Congress may designate an injury where before there was none, not that the plaintiff is relieved from alleging an actual injury from the statutory violation.
Edwards responds that Congress may create new legal rights and define new injuries. Edwards contends the Supreme Court recognized in Lujan v. Defenders of the Wildlife that violation of these rights alone could satisfy Article III’s injury requirement. Edwards concedes that Article III places limitations on what Congress may cast as a new legal right.
However, Edwards explains that this limitation only requires Congress to identify the injury as it relates to the possible plaintiffs, but does not limit what constitutes an injury.
Edwards argues that RESPA satisfies Article III’s requirements because Congress both identified the injury involved and properly related that injury to the plaintiffs granted the new cause of action.
Thus, Edwards argues that RESPA indicates that the arrangement between First American and Tower City compromised Edwards’s best interests, and, recognizing this as a concrete injury, RESPA confers the right to file suit.
Edwards further argues that an injury arising from the invasion of a legal right is not new to legal history. In particular, Edwards cites examples from tort and contract law where the court granted nominal damages to a plaintiff who proved that another party violated his rights but did not prove the actual harm inflicted, recognizing that the violation itself was the harm.
Edwards further points to the accepted practice of fixed statutory damages as a means for the legislature to remove the focus on proving the actual harm and instead to focus on the invasion of a statutory right.
First American accepts that Congress may define new injuries, but asserts that Congress cannot declare statutory violations as per se injuries for standing purposes.
Further, First American denies that RESPA declares kickbacks themselves to be an injury to the consumer.
First American cites the statute’s language to argue that Congress only intended to eliminate kickbacks that “tend to increase unnecessarily the costs of certain settlement services.”
First American insists that, because Congress intended to protect consumers from the negative economic effects of the kickbacks, the plaintiff must allege adverse economic harms to qualify for relief.
Edwards responds that Congress’ intent was not solely to eliminate the economic harms from kickbacks, but also to eliminate conflicts that decrease the quality of advice consumers receive.
Edwards argues that, if Congress intended RESPA to prevent only injuries from overcharges caused by kickback referrals, then the statute would have explicitly required an overcharge before the plaintiff could recover damages.
Instead, Edwards contends that Congress meant to protect consumers against both the costs and conflicts relating to kickbacks and thus the protected interest is not solely the economic effect of kickbacks, but the right to kickback-free services.
In this case, the Supreme Court will decide whether a plaintiff claiming a statutory right of action based on the Real Estate Settlement Procedures Act has standing to sue under Article III of the Constitution.
Petitioner First American argues that standing requires a plaintiff to allege a personal and concrete harm from which he or she seeks a judicial remedy.
Respondent Denise Edwards argues that courts recognize Congress’s authority to identify legal injuries, and that, where Congress has identified a harm and properly related that harm to a type of plaintiff, that plaintiff has standing.
The Court’s decision here has the potential to greatly enhance plaintiffs’ ability to organize class actions and obtain relief for statutory violations in various industries and differing legal frameworks.
First American Financial v. Edwards
|Docket No.||Op. Below||Argument||Opinion||Vote||Author||Term|
|10-708||9th Cir.||Nov 28, 2011
|Jun 28, 2012||TBD||Per Curiam||OT 2011|
Issue: Whether a private purchaser of real estate settlement services has standing to sue under Article III, § 2 of the United States Constitution.
Plain English Issue: Whether lawsuits under the Real Estate Settlement Procedures Act, which allows homebuyers to sue banks and title companies when they pay kickbacks for the closing of a mortgage loan, are constitutional if the kickback does not affect the price or quality of the services provided?
Judgment: Dismissed as improvidently granted in a per curiam opinion on June 28, 2012.
- First American Financial v. Edwards: Surprising end to a potentially important case (Kevin Russell)
- Argument recap: First American Financial Corp. v. Edwards (Christopher Wright)
- Argument preview: Standing to challenge kickbacks that do not directly affect price (Christopher Wright)
- Petition of the day (Conor McEvily)
Briefs and Documents
Merits Briefs for the Petitioners
- Brief for First American Financial Corporation et al.
- Reply brief for First American Financial Corporation et al.
Amicus Briefs in Support of the Petitioners
- Brief for ACA International Law
- Brief for the American Land Title Association
- Brief for the Association of Global Automakers, Inc., and the Alliance of Automobile Manufacturers
- Brief for the Consumer Data Industry Association for the Reversal of the Ninth Circuit’s Judgement
- Brief for DRI-the Voice of the Defense Bar and the Association of Southern California Defense Counsel
- Brief for Experian Information Solutions, Inc.
- Brief for Facebook, Inc. et al.
- Brief for the International Association of Defense Counsel
- Brief for the National Association of Home Builders and the California Building Industry Association
- Brief for the National Association of Retail Collection Attorneys
- Brief for the New England Legal Foundation et al.
- Brief for the Pacific Legal Foundation and the Center for Constitutional Jurisprudence
- Brief for the Real Estate Services Provider’s Council, Inc., (Respro)
- Brief for the Stewart Information Services Corporation et al.
Merits Briefs for the Respondent
Amicus Briefs in Support of the Respondent
- Brief for Birny Birnbaum, M.S., M.C.P. et al.
- Brief for Electronic Privacy Information Center (Epic)
- Brief for Reporter and Advisers to Restatement of Restitution and Unjust Enrichment
- Brief for AARP et al.
- Brief for Erick and Whitney Carter
- Brief for Lawyers’ Committee for Civil Rights Under Law et al.
- Brief for the National Association of Title Agents
- Brief for Public Law Professors
- Brief for Toyota Economic-Loss Plaintiffs
- Brief for Missouri et al.
- Brief for the United States
- Brief for trust law and ERISA law professors
- Opinion below (9th Circuit)
SCOTUS decision based on internal politics. The CFPB is a sham entity when you look at the Burkes’ case on LIT and the #corruption that is overwhelming.https://t.co/kkbvaMQPsY / https://t.co/qWUCKYuoHY / https://t.co/XstJlLACGZ / https://t.co/UJWPqKnUJY / https://t.co/BcWvOZ5WXX https://t.co/D2mmbdGq35 pic.twitter.com/ROvrPu5bf9
— LawsInTexas (@lawsintexasusa) June 29, 2020
Edwards v. First Am. Corp., 610 F.3d 514 (9th Cir. 2010) [2010 BL 138519]
Cyril V. Smith, Zuckerman Spaeder LLP, Baltimore, MD, and James W. Spertus, Law Offices of James Spertus, Los Angeles, CA, Richard S. Gordon, Quinn, Gordon & Wolf, Chtd., Towson, MD, Edward G. Kramer and David Oakley, The Fair Housing Law Clinic, Cleveland, OH, for the plaintiff-appellant.
Richard M. Zuckerman, New York, NY, and Charles A. Newman, St. Louis, MO, for the defendants-appellees.
Gregory W. Happ, Medina, OH, and Mary Dryovage, Law Offices of Mary Dryovage, San Francisco, CA, for amicus curiae.
Appeals from the United States District Court for the Central District of California, James Otero, District Judge, Presiding. D.C. No. CV-07-03796-SJO-FFM.
Before: B. FLETCHER, HARRY PREGERSON, and SUSAN P. GRABER, Circuit Judges.
GRABER, Circuit Judge:
Plaintiff Denise P. Edwards filed a complaint against Defendants The First American Corporation (“First American”) and its wholly owned subsidiary, First American Title Insurance Company (“First American Title”) (collectively, “Defendants”). The complaint alleged a violation of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), 12 U.S.C. § 2607. According to Plaintiff, First American improperly paid millions of dollars to individual title companies and in exchange those title companies entered into exclusive referral agreements with First American. Plaintiff moved for class certification, and certain discovery, which the district court denied. Plaintiff’s appeal from those rulings is addressed separately in a memorandum disposition filed this date. At the same time as Plaintiff filed her motions, Defendants moved to dismiss the complaint for lack of standing. The district court denied the motion, and Defendants brought this appeal. We have jurisdiction pursuant to 28 U.S.C. § 1292(b). See also [*516] 28 U.S.C. § 1292(e); Fed.R.Civ.P. 23(f). For the reasons that follow, we affirm.
First American is a publicly traded holding company that owns, in addition to First American Title, several other companies in the field of real estate-related information services. First American Title is a title insurance underwriter that issues title insurance policies to real estate owners and lenders in 47 states and the District of Columbia. Defendants assert that First American has an ownership interest in a small proportion of the thousands of title insurance agencies that are authorized to sell First American Title policies. Plaintiff contends that, in exchange for First American’s purchase of a minority interest, many of these title agencies enter into “exclusive” agency agreements with First American Title, pursuant to which the agencies agreed to sell First American Title’s title insurance policies generally. Defendants assert that few First American Title “exclusive” agency agreements are [**2] completely exclusive. Plaintiff claims that these agreements are actually exclusive and thus illegal under the anti-kickback provisions of RESPA.
According to Plaintiff’s allegations, she was affected by one such exclusive agency agreement between First American and Tower City. In 1998, First American paid Tower City $2 million in cash and securities. According to Plaintiff’s allegations, in exchange, First American received a 17.5% minority interest in Tower City, and Tower City entered into a “Captive Title Insurance Agreement” that required it to refer all future title insurance business “exclusively” to First American Title. Plaintiff further alleges that Tower City had agreements with and regularly referred business to at least three other title insurers prior to 1998, but then began referring customers exclusively to First American after they entered into the Captive Title Insurance Agreement.
Plaintiff, a resident of Cleveland, Ohio, bought a home in Cleveland in September 2006. Tower City was the settlement agent and conducted the closing at its office in Highland Heights, Ohio. At or before settlement, Plaintiff received a “HUD-1 Settlement Statement” showing, on line 1108, that she would pay $455.43 and the seller would pay $273.42 for title insurance. Plaintiff claims that her title insurance was referred to First American pursuant to an exclusive agency agreement, which Plaintiff alleges was illegal under RESPA.
Plaintiff filed a complaint in district court. Defendants responded by filing a motion to dismiss for lack of subject matter jurisdiction. Specifically, Defendants claimed that Plaintiff lacked both Article III standing and statutory standing under RESPA. The district court denied Defendants’ motion, holding that RESPA gave Plaintiff certain rights, the violation of which conferred standing. We review de novo. Mortensen v. County of Sacramento, 368 F.3d 1082, 1086 (9th Cir. 2004).
 There are three requirements for Article III standing — injury, causation, and redressability. Fulfillment Servs. Inc. v. UPS, 528 F.3d 614, 618 (9th Cir. 2008). The parties disagree about the injury component only. Defendants argue that Plaintiff has not suffered a concrete injury in fact because she has not alleged that the charge for title insurance was higher than it would have been without the exclusivity agreement. Plaintiff does not and cannot make this allegation because Ohio law mandates that all title insurers charge the same price. Ohio Rev. Code Ann. §§ 3935.04, 3935.07 (West 2010). Nonetheless, Plaintiff counters that the damages provision in RESPA gives rise to a statutory cause of action whether or not [*517] an overcharge occurred. We agree with Plaintiff.
 “The injury required by Article III can exist solely by virtue of `statutes creating legal rights, the invasion of which creates standing.'” Fulfillment Servs., 528 F.3d at 618-19 (quoting Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)).  “Essentially, the standing question in such cases is whether the constitutional or statutory provision on which the claim rests properly can be understood as granting persons in the plaintiff’s position a right [**3] to judicial relief.” Warth, 422 U.S. at 500, 95 S.Ct. 2197. Thus, we must look to the text of RESPA to determine whether it prohibited Defendants’ conduct; if it did, then Plaintiff has demonstrated an injury sufficient to satisfy Article III.
 It is well settled in this court that “statutory interpretation begins with the plain language of the statute.” United States v. Chaney, 581 F.3d 1123, 1126 (9th Cir. 2009) (brackets and internal quotation marks omitted).   “The preeminent canon of statutory interpretation requires us to presume that the legislature says in a statute what it means and means in a statute what it says there. Thus, our inquiry begins with the statutory text, and ends there as well if the text is unambiguous.” Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 951 (9th Cir. 2009) (brackets and internal quotation marks omitted).
RESPA prohibits the payment of “any fee, kickback, or thing of value” in exchange for business referrals and also forbids that a “portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service” be paid for services that are not actually rendered to the customer. 12 U.S.C. § 2607(a), (b). Whenever a violation of these prohibitions occurs, the statute provides that the defendants are liable to the “person or persons charged for the settlement service involved in the violation in an amount equal to three times the amount of any charge paid for such settlement service.” Id. § 2607(d)(2) (emphasis added).
These RESPA provisions are clear. A person who is charged for a settlement service involved in a violation is entitled to three times the amount of any charge paid. The use of the term “any” demonstrates that charges are neither restricted to a particular type of charge, such as an overcharge, nor limited to a specific part of the settlement service. Further, the term “overcharge” does not exist anywhere within the text of the statute.
Because the statutory text does not limit liability to instances in which a plaintiff is overcharged, we hold that Plaintiff has established an injury sufficient to satisfy Article III. The legislative history of RESPA supports our holding. As first enacted in 1974, RESPA entitled purchasers to damages “in an amount equal to three times the value or amount of the fee or thing of value” that changed hands. Pub.L. No. 93-533, § 8(D)(2), 88 Stat. 1724 (1974) (amended 1983). This provision failed to account for “controlled business arrangements” like the alleged agreement between Tower City and First American Title, whereby an entity could provide a referral without the direct payment of a referral fee. A 1982 House Committee Report noted that these practices could result in harm beyond an increase in the cost of settlement services:
[T]he advice of the person making the referral may lose its impartiality and may not be based on his professional evaluation of the quality of service provided if the referror or his associates have a financial interest in the company being recommended. [Because the settlement industry] almost exclusively [*518] rel[ies] on referrals . . . the growth of controlled business arrangements effectively reduce[s] the kind of healthy competition generated [**4] by independent settlement service providers.
H.R. Rep. No. 97-532, at 52 (1982).
Acting on this concern, Congress exempted controlled business arrangements from liability only in limited circumstances, 12 U.S.C. § 2607(c)(4), and eliminated the “thing of value” phrasing in the damages provision, replacing it with “any charge paid” for the settlement service, id. § 2607(d)(2). Calculating the penalty with reference to the entire amount of the settlement service appears to address instances in which no direct referral fee has been paid. Indeed, these no-fee situations were the impetus behind Congress’ enactment of the 1983 amendment. See H.R. Rep. No. 98-123, at 77 (1983) (expecting that RESPA violators “involved in controlled business arrangements . . . shall be . . . liable . . . in the amount of three times the amount of the charge paid for the settlement service”).
Because RESPA gives Plaintiff a statutory cause of action, we hold that Plaintiff has standing to pursue her claims against Defendants. Our holding places us in agreement with two of our sister circuits. In Carter v. Welles-Bowen Realty, Inc., 553 F.3d 979, 989 (6th Cir. 2009), the Sixth Circuit held that a plaintiff has standing to sue a settlement service provider under RESPA, even if that plaintiff was not overcharged for settlement services. The court came to that conclusion after looking at the text of RESPA and then examining its legislative history and the overall intent of RESPA. Id. at 986-88. The Third Circuit held similarly in Alston v. Countrywide Financial Corp., 585 F.3d 753, 755 (3d Cir. 2009), stating that Congress created a private right of action without requiring an overcharge allegation.
AFFIRMED in part; REVERSED in part and REMANDED. The parties shall bear their own costs on appeal.