459 F.Supp.3d 981
S.D. Ohio
2020
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Background

  • Plaintiffs (Edwin & Shanna Solis, James Gilbert, Jeffrey Markle, Marta Chaney) sued Emery Federal Credit Union alleging Emery conspired with All Star Title to fix supracompetitive title/settlement prices and accepted kickbacks, harming borrowers who financed through Emery.
  • Claims: violations of RESPA (12 U.S.C. § 2607(a)), the Sherman Act (§ 1), and RICO (18 U.S.C. § 1962); alleged scheme ran roughly 2008–2013 with Emery joining in 2011.
  • Plaintiffs sued May 24, 2019 and filed an amended complaint August 19, 2019; Emery moved to dismiss arguing statute-of-limitations bars the claims, plaintiffs failed to plead tolling/fraud with particularity, and some plaintiffs lack standing.
  • The court treated Emery’s challenges as Rule 12(b)(1) (standing) and 12(b)(6) (merits/pleading), applying Twombly/Iqbal plausibility and Rule 9(b) particularity for fraud-based tolling.
  • The Court dismissed (without prejudice): all of Chaney’s claims; the Solises’ and Gilbert’s Sherman Act and RICO claims for lack of standing; and found plaintiffs failed to plead fraudulent concealment/due diligence to toll the limitations periods—dismissal with 28 days leave to amend.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Standing of individual plaintiffs (Chaney; Solises & Gilbert for Sherman/RICO) Plaintiffs relied on RESPA standing for some plaintiffs and argued supplemental jurisdiction covers related claims/parties Emery: Chaney suffered no injury (she saved money); Solises & Gilbert did not pay the alleged supracompetitive/fixed prices, so lack injury for antitrust and RICO Court: Standing is claim- and party-specific; Chaney dismissed (no injury); Solises & Gilbert lack standing for Sherman Act and RICO; dismissals without prejudice; 28 days to cure
Use of §1367/supplemental jurisdiction to save non-justiciable claims/parties Plaintiffs: because some plaintiffs have federal claims, supplemental jurisdiction covers all related claims/parties Emery: standing cannot be cured by §1367; standing is not dispensed in gross Held: §1367 does not cure absence of standing; standing inquiry is claim-by-claim; Gibbs/ Cuno principles control
Timeliness and fraudulent concealment tolling Plaintiffs: statute of limitations tolled by fraudulent concealment; discovery of claims occurred in Feb. 2019 after counsel contact Emery: claims accrued at closings (last in 2013); plaintiffs failed to plead that they exercised due diligence or that concealment prevented discovery; tolling inadequately pled under Rule 9(b) Held: Plaintiffs failed to plead facts showing reasonable diligence (e.g., efforts to compare charged prices to market or why such comparison would not reveal harm); fraudulent concealment not adequately pleaded; claims time-barred absent adequate tolling allegations
Pleading standard for market-divergence harms (fraudulent concealment/diligence) Plaintiffs relied on factual allegations that concealment prevented discovery and that documents did not reveal fraud Emery: plaintiffs could have discovered divergence by comparing the quoted fees and good-faith estimate; plaintiffs did not plead any such inquiries Held: Where harm is divergence from market price, plaintiff must plead efforts to compare charged price to market or explain why that comparison would not reveal harm; failure to plead this defeats tolling at pleading stage

Key Cases Cited

  • Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (standing requires concrete injury-in-fact)
  • Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (constitutional minimum for standing)
  • DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) (standing is not dispensed in gross; Gibbs cannot override justiciability limits)
  • United Mine Workers of Am. v. Gibbs, 383 U.S. 715 (1966) (common-nucleus-of-operative-fact test for supplemental jurisdiction)
  • Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
  • Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of plausibility standard)
  • Pinney Dock & Transportation Co. v. Penn Central Corp., 838 F.2d 1445 (6th Cir. 1988) (Rule 9(b) applies to fraudulent concealment tolling)
  • Lutz v. Chesapeake Appalachia, L.L.C., 717 F.3d 459 (6th Cir. 2013) (due diligence inquiry for fraudulent concealment; caution about dismissing before discovery)
  • Rotella v. Wood, 528 U.S. 549 (2000) (RICO accrual/discovery rule)
  • Egerer v. Woodland Realty, Inc., 556 F.3d 415 (6th Cir. 2009) (RESPA accrual and limitations analysis)
  • Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389 (6th Cir. 1975) (statutes of limitations and stale claims policy)
  • Bailey v. Glover, 88 U.S. 342 (1874) (fraudulent concealment tolling principle)
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