Case Information
*1 Before: B. FLETCHER, PREGERSON, and GRABER, Circuit Judges.
Plaintiff Denise P. Edwards appeals with respect to the denials of her two motions for class certification and her motion for nationwide discovery in her suit against Defendants The First American Corporation and its wholly owned *2 subsidiary, First American Title Insurance Company (collectively, "Defendants"). The complaint alleged a national scheme by which Defendants paid millions of dollars to individual title companies and received written exclusive referral agreements in return. In an opinion filed this date, we addressed Defendants’ motion to dismiss. Here, we address Plaintiff’s appeal.
We review for abuse of discretion the district court’s determination of class
certification. Staton v. Boeing Co.,
1. The district court did not abuse its discretion in denying the nationwide
class. The party seeking certification bears the burden of showing that each of the
four requirements of Federal Rule of Civil Procedure 23(a) and at least one
requirement of Rule 23(b) have been met. Zinser v. Accufix Research Inst., Inc.,
2. The district court abused its discretion in denying nationwide discovery.
Plaintiff must be given "an opportunity to present evidence as to whether a class
action [is] maintainable," and such an opportunity requires "enough discovery to
obtain the material." Doninger v. Pac. Nw. Bell, Inc.
3. The district court abused its discretion in denying the Tower City (Ohio)
class. With respect to liability, there is a single, overwhelming common question
of fact: whether the arrangement between Tower City and First American violated
the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. § 2607 ("RESPA").
The district court erred when it held that individualized issues predominated
because individualized proof would be necessary to determine whether Tower City
had referred each class member to First American Title, who was in the class, and
what damages each class member suffered. The second two factors clearly do not
defeat class certification; every class action requires identification of class
members, and most require individual proof of loss. See Yokoyama v. Midland
Nat’l Life Ins. Co.,
To show that a "referral" was made by Tower City would not require a great amount of individualized proof. A "referral" is "any oral or written action directed to a person which has the effect of affirmatively influencing the selection by any *4 person of a provider of" title insurance. 24 C.F.R. 3500.14(f). Plaintiffs contend that Tower City was contractually obligated to refer customers to First American Title, which, if true, would be common proof of the "action" element of a referral.
The reliance or causation element requires a more individualized determination, but when misrepresentations are made to a class of similarly situated individuals, the requirement that the Plaintiff prove reliance or causation will not, by itself, defeat class certification. See Fed. R. Civ. P. 23(b)(3) advisory committee’s note ("[A] fraud perpetrated on numerous persons by the use of similar misrepresentations may be an appealing situation for a class action . . . [unless] there [is] material variation in the representations made or in the kinds or degrees of reliance by the persons to whom they were addressed."). Evidence submitted by Plaintiff demonstrates that title agents, in this case Tower City, rather than purchasers, choose which title insurance underwriter to use. Indeed, RESPA was motivated by the fact that "reverse competition" is widespread in the title insurance market. In support of their contention that title agents do not always pick the title insurance underwriter, Defendants point to an affidavit stating that, "[f]rom time to time," banks and other lenders involved in a real estate purchase, not the title agent, pick the title insurance underwriter. This statement is plainly insufficient to show that class members are not similarly situated.
Because individualized questions of law and fact do not predominate, the district court’s denial of Plaintiff’s motion to certify the Tower City class was an abuse of discretion.
AFFIRMED in part; REVERSED in part and REMANDED. The parties shall bear their own costs on appeal.
Notes
[*] This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.