Galiano v. Fidelity National Title Insurance
2012 U.S. App. LEXIS 13614
| 2d Cir. | 2012Background
- Plaintiffs allege RESPA § 8(a) kickbacks inflated title insurance rates in New York.
- District court dismissed RESPA claims as implausible and precluded by safe harbor, filed rate doctrine, and Iqbal.
- Defendants are New York title insurance companies; NY Insurance Department sets rates via rate service organizations like TIRSA.
- TIRSA collects data and issues a fixed-rate manual; commissions paid to title agents allegedly include illegal kickbacks.
- Complaint purportedly shows industry-wide kickbacks but lacks specifics connecting defendants to any particular overcharge or referral.
- Court analyzes whether RESPA § 8(a) claim is plausible under Iqbal and holds the complaint deficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RESPA § 8(a) claim is plausibly pled | Plaintiffs contend kickbacks/referrals violate § 8(a) and inflate rates. | Defendants argue no plausible factual basis tying payments to referrals and to plaintiffs. | Plaintiff's § 8(a) claim dismissed as not plausible. |
| Whether the complaint adequately identifies payments, recipients, and referrals | Plaintiffs allege kickbacks to title agents, lawyers, lenders, and referrals. | Complaint lacks specifics on payments, recipients, and actual referrals. | Deficiency requires dismissal under Iqbal. |
| Whether RESPA § 8(a) claims can be sustained by industry-wide kickback theory without overcharge specifics | Industry practice suggests kickbacks exist and violate § 8(a). | Industry-wide theory is insufficient without factual hookups to plaintiffs and quantified charges. | Industry-wide conjecture insufficient; no plausible § 8(a) claim. |
Key Cases Cited
- Krzalecki v. Republic Title Co. ( Kruse v. Wells Fargo Home Mortg., Inc.), 383 F.3d 49 (2d Cir. 2004) (RESPA not a price-control statute; challenges to reasonableness fail)
- Edwards v. First American Corp., 610 F.3d 514 (9th Cir. 2010) (RESPA creates potential statutory cause of action even without overcharge)
- Carter v. Welles-Bowen Realty, Inc., 553 F.3d 979 (6th Cir. 2009) (identification of actors and referrals essential to § 8(a) claim)
- Alston v. Countrywide Fin. Corp., 585 F.3d 753 (3d Cir. 2009) (requires specifics linking to kickbacks/referrals)
- Egerer v. Woodland Realty, Inc., 556 F.3d 415 (6th Cir. 2009) (identifying payments and referral relationships necessary)
- Freeman v. Quicken Loans, Inc., 132 S. Ct. 2034 (2012) (RESPA § 8(a)/(d) interplay; damages framework)