U.S. Supreme Court dismisses as improvidently granted a case testing whether mere statutory violations, with no other injury, confer Article III standing
Section 8(a) of the Real Estate Settlement Procedures Act of 1974 ("RESPA" or "the Act") provides that "[n]o person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding ... that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person." 12 U.S.C. § 2607(a). Section 8(d)(2) of the Act provides that any person "who violate[s]," inter alia, § 8(a) shall be liable "to the person or persons charged for the settlement service involved in the violation in an amount equal to three times the amount of any charge paid for such settlement service." Id. § 2607(d)(2). The question presented is:
Does such a purchaser have standing to sue under Article III, § 2 of the United States Constitution, which provides that the federal judicial power is limited to "Cases" and "Controversies" and which this Court has interpreted to require the plaintiff to "have suffered an 'injury in fact,'" Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)?
The U.S. Chamber urged the U.S. Supreme Court to re-affirm the fundamental constitutional requirement that plaintiffs must demonstrate a concrete injury for a federal court to hear a case. In its amicus brief, the Chamber warned that if the Ninth Circuit’s decision – which allowed homebuyers to sue financial institutions for alleged violations of the anti-kickback provision of the federal Real Estate Settlement Services Act (“RESPA”), even though they failed to demonstrate any harm from the statutory violation – is left to stand, courts will be flooded with sham lawsuits where the plaintiffs have not suffered any real injury. A mere assertion of a statutory violation is itself insufficient to establish standing, the Chamber argued. Rather, courts must conduct an independent judicial determination of whether the plaintiff has suffered a concrete injury in fact. The Chamber warned that by conflating 'statutory standing' with 'constitutional standing,' the Ninth Circuit has relinquished to the Legislature the Judiciary's power and duty to determine whether a "case or controversy" exists and may be heard by the courts.
The U.S. Supreme Court dismissed this case as improvidently granted. As a result, the lower court's decision will stand.
Cert. granted 06/20/11. Chamber's amicus brief filed 8/29/11. Decided 6/28/12.