Maryland Federal Court Dismisses State Law Claim Against Title Agency for Alleged Kickback Scheme

The United States District Court for the District of Maryland recently dismissed a state law claim against a title agency, among others, based on a claim that the agency was involved in a kickback scheme.  See Fangman v. Genuine Title, LLC, 2016 WL 3027525 (D. Md. May 27, 2016).  In the putative class action, the plaintiffs alleged that the defendants exchanged kickbacks relating to real estate settlement services in violation of both the Real Estate Settlement Procedures Act (“RESPA”) and state law.  See 12 USC 2607; Md. Code Ann., Real Prop. § 14-127.  The defendants filed motions to dismiss on the state law claim, arguing that the statute is criminal in nature and does not contain a private right of action.  The plaintiffs acknowledged that no case law supported their allegation, but argued that a private right of action was implied.  The District Court certified the question to the Maryland Court of Appeals, which found that the statute “does not contain an express or implied private right of action as neither [the statute’s] plain language, legislative history, nor legislative purpose demonstrates any intent on the General Assembly’s part to create a private right of action.”  The District Court therefore dismissed the cause of action arising under Maryland law, although the RESPA claims remain.  Notably, Genuine Title, the named defendant, had previously entered into a Consent Order with the Consumer Financial Protection Bureau relating to kickbacks.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.