Winston & Strawn litigation partner Stephen Smerek, based in the firm's Los Angeles office, was quoted in the June 29, 2012 Westlaw Journal article "Supreme Court declines opportunity to rule in title insurance dispute." An article on the same topic was also published in Law360.
The article discusses the U.S. Supreme Court's decision not to hear First American Financial Corp. v. Edwards, a case allowing individuals to sue a company over a violation of the Real Estate Settlement Procedures Act (RESPA), despite suffering no financial harm.
"The dismissal leaves standing the 9th Circuit's finding that the 'injury required by Article III can exist solely by virtue of statutes creating legal rights, the invasion of which creates standing,'" said Mr. Smerek.
Companies argue that consumer class actions brought under consumer protection legislation such as RESPA can open the door for nuisance lawsuits. "The issue here is giving individuals the right to pursue enforcement of laws that do not impact them any more than they impact anybody else," Mr. Smerek explained.
The 9th Circuit ruled that homeowner Denise Edwards could sue her title insurer, First American Financial Corp., as a result of an improper kickback arrangement, despite her not having suffered any harm as a result. The case was appealed to the Supreme Court and granted certiorari; however, after the court held oral arguments, it ruled per curiam to dismiss its decision to hear the case.
According to Mr. Smerek, "because Edwards conceded that Article III limits Congress' authority to broadly create such rights, questions regarding the extent of congressional power remain unresolved." Mr. Smerek added that it is likely other business interests will bring similar cases and "the issue will continue to be litigated until it again arises in front of the Supreme Court."