Montgomery County v. Merscorp, Inc.
298 F.R.D. 202
E.D. Pa.2014Background
- Nancy J. Becker, Montgomery County Recorder of Deeds, sued MERS entities seeking declaratory, injunctive and monetary relief to compel recording of mortgage assignments and payment of recording fees on behalf of herself and all Pennsylvania county recorders (proposed 67‑member class).
- Complaint alleges MERS created a private system that bypasses statutorily required county recording, harming public land records and depriving counties of fees.
- Defendants moved to dismiss; most claims survived. Becker then moved to certify a class under Fed. R. Civ. P. 23.
- Defendants opposed certification, raising numerosity, typicality, adequacy, competing state suits, venue, and manageability (individual property‑by‑property inquiries for damages).
- The court conducted the Rule 23 rigorous analysis (including ascertainability) and focused on whether common legal issues (liability under Pennsylvania recording law) predominate over individualized damages issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Numerosity / Ascertainability | Class is all 67 county recorders; identities are public and joinder impracticable | Some recorders lack authority to sue individually under local codes | Satisfied: 67 members; identifiable by public records; joinder impracticable |
| Commonality / Typicality | All recorders suffered same injury from MERS bypassing county recording and lost fees | Differences in fees, number of assignments, and county procedures defeat common issues | Satisfied: common legal question (whether MERS must record) will resolve central issue classwide; factual differences limited to damages |
| Adequacy of representative & counsel | Becker will protect class interests; class counsel are experienced | Becker’s fiduciary duties to Montgomery County create a conflict; counsel involved in related litigation | Adequate: no fundamental intraclass conflict shown; counsel qualified; related suits not adverse and may benefit all counties |
| Proper Rule 23(b) vehicle (b(1), b(2) or b(3)) | Seeks injunctive, declaratory and monetary relief, so (b)(3) is appropriate | Some relief is injunctive/declaratory suggesting (b)(2) or (b)(1) | (b)(1) and (b)(2) inappropriate; (b)(3) chosen because monetary claims and opt‑out rights make predominance/superiority findings necessary |
| Predominance / Manageability of damages | Liability is common; damages (fees) vary but are manageable and secondary | Individual property‑by‑property review will predominate and make class unmanageable | Predominance satisfied: liability issues predominate; individualized damages manageable (focus on transfers among MERS members) |
| Superiority / forum objections | Class action is efficient and concentrates litigation | Some counties filed separate suits; venue and quiet‑title rules favor local actions | Superiority satisfied: class is superior; opt‑out available; venue objection waived; district appropriate given defendants’ presence in district |
Key Cases Cited
- Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (class‑action predominance requirement and limits on aggregate damages models)
- Wal‑Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (commonality and limits of Rule 23(b)(2) when monetary relief predominates)
- Marcus v. BMW of N. Am., 687 F.3d 583 (3d Cir. 2012) (plaintiff bears burden to establish Rule 23 elements by a preponderance; ascertainability discussion)
- Hayes v. Wal‑Mart Stores, 725 F.3d 349 (3d Cir. 2013) (ascertainability as a prerequisite to class certification)
- Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013) (ascertainability and administrative feasibility of class membership identification)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (predominance and superiority analysis for class certification)
- In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir. 2008) (rigorous analysis standard and district court fact‑finding on certification issues)