Originally published in The Washington Legal Foundation’s The Legal Pulse, on January 31, 2013.
In the last days of the 2011 Term, fresh off its decisions in the Patient Protection and Affordable Care Act cases, the Supreme Court dismissed a case many observers believed to be one of the most important “sleeper” cases of the Term. Indeed, according to SCOTUSblog, “[t]he case was regarded as quite a big deal when it was argued, with massive potential implications for Congress’s power to define injury.” Twenty-six amicus briefs in total were filed, including one by the Solicitor General of the U.S. The case, First American Financial Corp. v. Edwards, No. 10-708, raised the question of what limits Article III of the Constitution places on Congress’s power to create private rights of action.
Cleveland home buyer Denise Edwards sued First American Title Insurance for paying an allegedly improper fee to a title agency that agreed to sell First American policies exclusively. Her claim was founded on the Real Estate Settlement Procedures Act (RESPA), which prohibits title insurers and other real-estate-related companies from participating in such payment or “kickback” schemes related to real estate closings. Under RESPA, a consumer who discovers an improper payment related to her closing can sue to recover statutory damages without having to prove that the violation caused her any financial injury or any diminution in the quality of services. First American argued that the plaintiff had suffered no discernible injury from the alleged illegal fee because the rates charged the plaintiff were set by state law and did not change as a result of the title agency’s relationship with First American. Accordingly, First American asserted, Congress was prohibited from authorizing suit against it. The Court granted certiorari, after the lower courts rejected First American’s argument. Oral argument took place and, from the comments made by the Justices, the Court appeared poised to establish new Article III limitations on Congress’s power to create private statutory rights of action...
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