DENISE MINTER et al.
WELLS FARGO BANK, N.A. et al.
WILLIAM M. NICKERSON, District Judge.
Pending before the Court are three motions filed by Defendants: Defendants' Conditional Motion Pursuant to 28 U.S.C § 1292(b) to Certify a Question of Law to the Fourth Circuit Court of Appeals, ECF No. 481; Defendants' Motion to Dismiss for Lack of Subject Matter Jurisdiction, ECF No. 475; and, Defendants' Motion to Decertify Tolling and Timely Classes, ECF No. 479. The motions are all fully briefed and the Court heard oral argument on April 24, 2013. Upon consideration of the papers, the parties' arguments, and the applicable law, the Court determines that (1) Defendants' conditional motion to certify a question of law and Defendants' motion to dismiss will be denied, and (2) Defendants' motion to decertify will be granted, in part, and denied, in part.
I. FACTUAL AND PROCEDURAL HISTORY
The alleged facts of this case have now been laid out by the parties and the Court on numerous occasions and will not be repeated here. See ECF Nos. 88, 253, 470. A very brief comment regarding the procedural posture is, however, necessary.
This case has been pending for over five years. Since May, 2011, it has been proceeding as a class action and, presently, there are more than 150, 000 class members divided between the certified Timely and Tolling Classes. Over the years, the case has been pared down by Plaintiffs, see e.g. ECF No. 396 (Letter from Plaintiffs' Counsel to Court), and the Court. Most recently, the Court granted, in part, and denied, in part, motions for summary judgment filed by Defendants. ECF Nos. 470 & 471. Following that ruling, Plaintiffs' only remaining claims are for violations of certain provisions of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601 et. seq., specifically, 12 U.S.C. § 2607(a) and 2607(c). A four-week jury trial on liability issues is scheduled to start in less than two weeks.
A. Defendants' Conditional Motion to Certify a Question of Law to the Fourth Circuit and Defendants' Motion to Dismiss for Lack of Jurisdiction
Defendants' motion to certify a question of law and their motion to dismiss offer little more than an additional confirmation that Defendants dispute Plaintiffs' theory of this case, this Court's prior holdings affirming that theory as valid, and the case law relied upon by the Court to make those determinations. See, e.g., ECF No. 514 at 4 ("with due respect to the Court, defendants continue to believe that this case is proceeding on theories that do not present a legally cognizable cause of action under RESPA."). As such, they can be quickly dispatched.
Defendants have requested that the Court certify a question to the Fourth Circuit regarding the viability of Plaintiffs' claims under § 8(c). ECF No. 481 at 2. While it is true that the question Defendants seek to have certified meets many of the requirements of 28 U.S.C. § 1292(b), other aspects of their motion give the Court pause. First, any delay in seeking certification must be reasonable. See, e.g., Morris v. Flaig , 511 F.Supp.2d 282, 314-15 (E.D.N.Y. 2007); Century Pacific, Inc. v. Hilton Hotels Corp. , 574 F.Supp.2d 369, 371 (S.D.N.Y. 2008); see also Safety-Kleen, Inc. v. Wyche , 274 F.3d 846, 867 (4th Cir. 2001) (holding that weighing a delay in seeking certification of a question of law is built into considerations of excusable neglect and lack of prejudice). Here, Plaintiffs' legal theory was determined to be viable years ago, see ECF No. 253 at 48 (May 3, 2011, memorandum opinion holding "Plaintiffs' reading of RESPA is sound."), they made clear their intention to abandon any claim for economic damages eight months ago, see ECF No. 396, and the Court ruled on Defendants' summary judgment motions two months ago. Thus, the Court determines that Defendants have unreasonably delayed in seeking certification. Second, while the Court may not lean as far as Plaintiffs in calling conditional nature of the motion "gimmicky, " it fails to see the relevance of any connection to the motion for certification of a question of law to the Maryland Court of Appeals that is presently pending in Petry v. Prosperity Mortgage Co., Civ. No. 08-1642. That this case is related to Petry is certainly clear to the Court, but it will not decide Defendants' motion under § 1292(b) based on a goose and gander argument. Defendants' motion for certification of a question of law will therefore be denied.
In Defendants' motion to dismiss they argue that Plaintiffs have not been injured within the meaning of Article III and that Plaintiffs cannot satisfy statutory standing requirements under RESPA. The Court sees no need to review, in any detail, its understanding of Congress' intent when it passed RESPA, which Defendants acknowledge is the key in this inquiry. ECF No. 476-1 at 10. It should suffice to say, once again, that the right to be free from transaction-specific economic harm is not the only right that RESPA created and that RESPA was intended to prevent practices that have market-distorting effects, such as those alleged by Plaintiffs here (i.e., Prosperity is a sham or an undisclosed ABA). ECF No. 253 at 25-26 (citing Robinson v. Fountainhead Title Group Corp. , 252 F.R.D. 275 (D. Md. 2008) ("Congress amended RESPA to exempt [ABAs] from liability only in certain circumstances because of the concern that the harm caused by ABAs was not limited to an increase in settlement costs, but extended to a lack of impartiality in referrals and a general decrease in competition in the settlement services market.") (internal quotations and citations omitted)). Thus, the harm resulting from a violation of RESPA "is not limited to inflating transaction-specific costs, " but also includes a distortion of competition in the market. ECF No. 253 at 35. Against this background, the Court has little difficulty maintaining its conclusion that Plaintiffs have standing to pursue their claims without proving that they were economically damaged. ECF No. 253 at 47-48 ("Plaintiffs... have standing to pursue their theory of liability under Section 8.") (citing Edwards v. First American Corp. , 610 F.3d 514, 518 (9th Cir. 2010); Carter , 553 F.3d at 989; Alston , 585 F.3d at 755).
B. Defendants' Motion to Decertify Tolling and Timely Classes
The Court's letter order of April 23, 2013, ECF No. 534, wherein it outlined the claims currently in play, and elements of proof required to establish Defendants' liability, should bring some clarity to the analysis of Defendants' motion to decertify. For the reasons that follow, the Court will grant the motion as it relates to the Tolling Class, and deny the motion as it relates to the Timely Class, but limit the Timely Class so as to cure some of Defendants' overbreadth concerns.
1. Legal Standard
An order granting class certification is not an untouchable determination. As Fed.R.Civ.P. 23(c)(1)(C) provides, "an order that grants or denies class certification may be altered or amended before final judgment." Indeed, "an order certifying a class must be reversed if it becomes apparent, at any time during the pendency of the proceeding, that class treatment of the action is inappropriate." Stott v. Haworth , 916 F.2d 134, 139 (4th Cir. 1990) (emphasis added). The breadth of this obligation, however, is tempered by commentary in the Advisory Committee Notes which provide that altering certification is appropriate "upon fuller development of the facts." 1996 Amendment Advisory Committee Notes. Other commentators have cautioned that courts should be wary of motions to decertify which simply reargue certification "[i]n the absence of materially changed or clarified circumstances." 3 Newberg on Class Actions § 7:47 (4th ed. ...