Freeman v. Quicken Loans, Inc.
132 S. Ct. 2034
| SCOTUS | 2012Background
- RESPA §2607(b) prohibits giving or accepting any portion, split, or percentage of a charge for settlement services, except for services actually performed.
- Freemans, Bennetts, and Smiths alleged they were charged unearned fees by Quicken Loans in real estate settlements.
- Cases were removed to federal court, consolidated, and the district court granted summary judgment for respondent for lack of fee-splitting.
- The central issue is whether §2607(b) requires a charge to be divided between two or more persons, or could reach an undivided unearned fee kept by a single provider.
- HUD’s 2001 policy statement suggested a broader reading of §2607(b); petitioners argued for deference, but the Court did not defer to it.
- The Court held that §2607(b) unambiguously covers only fee-splitting between two or more persons; an undivided unearned fee retained by a single provider is not prohibited.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §2607(b) require fee-splitting between two or more persons? | Freeman argues HUD policy supports broader reach of §2607(b). | Quicken Loans contends §2607(b) targets only fee-sharing between parties. | Yes; requires fee-splitting between two or more persons. |
| Does §2607(b) reach undivided unearned fees retained by a single provider? | Petitioners read §2607(b) to prohibit unearned fees even when not split. | Respondent argues statute does not reach undivided unearned fees. | No; undivided unearned fees are not prohibited by §2607(b). |
| Is HUD’s 2001 policy statement controlling interpretation of §2607(b)? | HUD statement supports broader interpretation. | HUD statement not controlling; statute unambiguous. | Not controlling; statute unambiguous and limits §2607(b) to fee-splitting. |
| Does §2607(a) Whit §2607(b) render one provision surplusage? | Petitioners argue overlapping purposes would render §2607(b) surplusage. | §2607(a) and (b) address different conduct; no surplusage problem. | No surplusage; each subsection reaches distinct conduct. |
| Are the statutory purposes of RESPA expanded to cover unearned fees? | RESPS’s purpose to curb abusive practices supports broader protection. | Purpose does not authorize expanding §2607(b) beyond fee-splitting. | No; purposes do not extend §2607(b) beyond its text. |
Key Cases Cited
- MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U.S. 218 (1994) (statutory interpretation; ordinary meaning and structure of text)
- United States v. Williams, 553 U.S. 285 (2008) (noscitur a sociis canon; contextual meaning of terms)
- Duncan v. Walker, 533 U.S. 167 (2001) (reluctance to treat statutory terms as surplusage)
- Crawford v. Metropolitan Government of Nashville & Davidson County, 555 U.S. 271 (2009) (textual meaning governs statutory interpretation)
- Abuelhawa v. United States, 556 U.S. 816 (2009) (prosecutorial discretion and mens rea considerations in criminal statutes)