The opinion of the court was delivered by: S. James Otero, District Judge.
ORDER DENYING DEFENDANTS' MOTION TO DISMISS [Docket No. 29]
This matter is before the Court on Defendants First American Corporation ("First American") and First American Title Insurance Corporation's ("First American Title") Motion to Dismiss for Lack of Subject Matter Jurisdiction and Failure to State a Claim, filed August 7, 2007. Plaintiff Denise Edwards ("Edwards") filed an Opposition, to which Defendants replied. Pursuant to Federal Rule of Civil Procedure 78 and Local Rule 7-15, the Court found this matter suitable for disposition without oral argument and vacated the hearing set for September 4, 2007.
Plaintiff Denise Edwards purchased a home, choosing Tower City Title Agency. LLC as her settlement agent to conduct the closing. Edwards and the seller sought to purchase insurance, and Tower City referred them to First American Title. Edwards alleges that Defendants have formed agreements with various title agencies such as Tower City in which Defendants paid large sums of money in exchange for exclusive referral arrangements that funnel all of the! title agencies' business to Defendants.
Edwards brings suit on behalf of all consumers who purchased title insurance through a title agency subject to an exclusive referral agreement with First American Title under the Real Estate Settlement Procedures Act ("RESPA"), a statute that aims to "eliminat[e] kickbacks and referral fees that tend to increase unnecessarily the costs of certain settlement services." 12 U.S.C. § 2601(b)(2).*fn1
Defendants move to dismiss, arguing that (1) Edwards lacks standing, (2) her claim is barred by the statute of limitations, and (3) her allegations do not state a valid claim.
A. Edwards Has Standing to Pursue a RESPA Claim.
The constitutional requirements of standing are well-known: a plaintiff must demonstrate an injury (2) traceable to the defendant's actions that (3) can be redressed by a favorable decision. Bennett v. Spear, 520 U.S. 154, 167, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). "[S]tanding is an aspect of subject matter jurisdiction...." Fleck & Assocs. v. City of Phoenix, 471 F.3d 1100, 1107 n. 4 (9th Cir.2006).
Upon determining that subject matter jurisdiction is lacking, the Court must dismiss the action. Fed.R.Civ.P. 12(hX3). Because a motion to dismiss for lack of standing is a motion to dismiss for lack of subject matter jurisdiction, the Court must accept all allegations of fact in the complaint as true and construe them in the light most favorable to Plaintiffs. Zimmerman v. City of Oakland, 255 F.3d 734, 737 (9th Cir.2001).
Defendants argue that Edwards lacks standing because she has not suffered an injury. (Mot.6-10.) Edwards admits that the cost of title insurance in Ohio is regulated so that all insurance providers charge the same price, but contends that under RESPA she is entitled to damages in the amount of three times the total she paid for that insurance.
Although Defendants are correct that Congress cannot abrogate, override, or change the constitutional standing requirements (Mot.8), "Congress retains broad authority to create injuries that are the basis for standing." Erwin Chemerinsky, Federal Jurisdiction § 2.3.1 (4th ed.2003). The question before the Court becomes: In passing RESPA, what injury did Congress create?
The answer to this question turns on statutory analysis of the RESPA damages provision, an analysis that has divided ...