There’s a Supreme Court decision that’s been bothering us since June 28.
Not the Affordable Care Act or the Stolen Valor Act decision. We’re talking about the one that almost no one else is talking about: First American Financial v. Edwards.
In the case, Cleveland homebuyer Denise Edwards alleged that her title insurance provider, First American Financial Corp, engaged in an illegal kickback scheme with her settlement agent, Tower City Title Agency, in exchange for Tower City’s title insurance referrals. First American says that Edwards lacks standing because she didn’t suffer an injury; all title insurance policies in Ohio cost the same amount at the time, reports The Plain Dealer.
The injury element - not the RESPA violation - sparked interest in the case because First American argued that Edwards only had a statutory cause of action, not an injury in fact.
First American claims that “injury in fact is a hard floor of Article III standing that cannot be removed by statute” and that Congress’s authorization of an award does not trump the standing requirement in the absence of injury in fact. Businesses agreed, flooding that Court with amicus brief filings; injury in fact proponents ranging from Facebook to the Association of Global Automakers filed amicus briefs on First American’s behalf.
If the Supreme Court had sided with First American, the decision would have invalidated about a dozen federal statutes that provide a cause of action without a showing of injury in fact. Instead, the Court dismissed the case as “improvidently granted” on the last day of the term; seven months after it heard arguments in the case. (By contrast, the Court dismissed the other “improvidently granted” case of the term, Vasquez v. United States, two weeks after oral arguments.)
Kevin Russell at SCOTUSblog wrote that some people have suggested that the Court dismissed the case because it came to doubt First American’s claim that there could be no financial injury from the kickbacks because the title insurance premium was set by law. Russell questioned that theory, noting that the Court was aware of that argument before it granted cert.
(Perhaps the loose-lipped justice who shed some light on the healthcare decision would like to chime in with the answer?)
Regardless of the reasoning, the Court’s inaction leaves the Ninth Circuit’s ruling — and a statutory cause of action absent injury in fact — in tact.
- Ninth Circuit: Edwards v. First American (FindLaw’s CaseLaw)
- The Importance of a Backup Plan: SCOTUS Upholds Individual Mandate (FindLaw’s Supreme Court Blog)
- No Injury in Fact, No Problem? SCOTUS Talks RESPA Rules Next Week (FindLaw’s Supreme Court Blog)