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Case: 08-56536 03/24/2009 Page: 1 of 17 DktEntry: 6857345

Case No. 08-56536, 08-56538

In the Court Below: CV 07-03796 SJO (FFMx) (C.D. Cal.)



DENISE P. EDWARDS, individually and on behalf of all others similarly situated,







Defendants-Appellees, The First American Corporation (“FAC”) and First

American Title Insurance Company (“FATIC”, and with FAC, “First American”)

respectfully submit this opposition to the motion of the National Association of

Independent Land Title Agents (“NAILTA”) for leave to file a brief, amicus


First American notes that NAILTA’s motion for leave to file an amicus brief is
untimely. Under FED.R.APP.P. 29(e), an amicus curiae must file its brief and
motion “no later than seven days after the principal brief of the party being
supported is filed.” Plaintiff-appellant filed her opening brief on March 2, 2009
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Critically and as an initial matter, NAILTA is not what it purports to be.

NAILTA was formed on December 1, 2008, barely three months before it

presented itself to this Court as an industry spokesperson.2 Although it calls itself

a “national association,” NAILTA’s membership is comprised of less than 40

individuals affiliated with less than two dozen title insurance agencies and one title

insurance company in three Eastern states (New Jersey, Maryland, and

Pennsylvania) and two mid-Western states (Ohio and Wisconsin)—a minute, and

by no means representative, fraction of the title insurance industry in the nation.3

In its proposed brief to this Court, NAILTA proclaims that it “works to

protect the independence of the title insurance industry,” but neither its proposed

brief nor its website4 lists anything at all that it has done in the three months since

it was established. Indeed, the nascent, tentative nature of NAILTA is reflected by

(Dkt. 6828406). Thus, any amicus brief in support thereof was due by March 11,
2009. FED.R.APP.P. 26(a)(2). NAILTA filed its brief and motion on March 12,
2009, however (Dkt. 6843450).
www.corporations.state.pa.us/corp (visited March 23, 2009).
NAILTA’s membership list appears as an Addendum to its proposed brief. To
put NAILTA’s size in context: The American Land Title Association, founded in
1907, has 3,000 members, including title agents, abstracters, and title insurance
companies, ranging from small, one-county operations, to large national title
insurers. www.alta.org (visited March 23, 2009).
www.nailta.org (visited March 23, 2009).

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the fact that its website tells new members that they will have the right to withdraw

their membership applications once they later read the Code of Ethics,

Constitution, or By-Laws of NAILTA that are not yet in existence.5

Trade associations presenting themselves as amici curiae are often met with


Amicus briefs are often attempts to inject interest-group politics into

the federal appellate process by flaunting the interest of a trade
association or other interest group in the outcome of the appeal.

Nati’l Org. for Women, Inc. v. Scheidler, 223 F.3d 615, 617 (7th Cir. 2000). But

whatever inquiry is appropriate when a bona fide, established, national trade

association appears as an amicus curiae should be heightened when a new trade

association with high aspirations but scant membership and no track record

pretends to be an industry spokesperson.

An entity seeking amicus status before this Court has a threshold obligation

to describe itself accurately—an important factor in the Court’s evaluation of the

motion and the proposed brief. NAILTA did not do so. See In re Grand Jury

Witness, 695 F.2d 359, 363 n.7 (9th Cir. 1982) (“The court also received a motion

from one Ralph L. Rogers, seeking leave to file an amicus brief. The motion failed

www.nailta.org (visited March 23, 2009).

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to identify Rogers or his interest in the case and was therefore denied.

FED.R.APP.P. 29.”).



NAILTA’s proposed brief is replete with bald, unsupported contentions

presented as though they were fact, but tethered to neither any evidence of record

nor any reliable publications. In addition, many of NAILTA’s contentions have no

bearing on any issue in this case. Two examples suffice.

A. NAILTA Premises Its Proposed Brief on the Proposition

That Consolidation of Title Insurers Has “Impacted the
Quality of the Product” Even Though There Is No Factual
Basis for that Assertion and No Claim In this Case That
There Was Any Deficiency in the Title Insurance Policy

NAILTA begins its proposed brief by asserting that “consolidation” in the

title insurance industry has “impacted the quality of the product and service being

provided by the title insurance underwriters” (NAILTA Proposed Br. 4). In its

conclusion, NAILTA goes even further, bemoaning the “damage and harm to the

title insurance consumers who were denied a meaningful choice between the

standards offered by various title insurance underwriters” (Id. at 15). But

NAILTA’s baseless assertions are neither relevant to this case nor supported by

any facts—and are, First American respectfully submits, simply false.

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Plaintiff-appellant, Denise P. Edwards, makes no claim that her title

insurance policy was deficient in any way (E.R. 94-95 ¶ 5). She does not claim

that the title search was inadequate or incomplete, or that there are any clouds on

her title that were missed, or that any adverse claims have been made (Id.). She

does not claim that a different title insurer would have employed—in NAILTA’s

words—higher “standards” (Id.). Her complaint implicitly acknowledges that the

title search was properly done, and that there is absolutely nothing wrong with the

title insurance policy, as she explicitly confirmed at her deposition:

Q. [A]s far as the work that Tower City did and the policy that it
provided to you back in October of 2006, did you have any
complaints about any of that?

A. No.

(Edwards Deposition, p. 41) (Exhibit A hereto).

Because there is absolutely no issue in this case about the quality of the title

policy that Edwards received, NAILTA is “crying wolf” and has failed to show

that its arguments about “standards” for title searches or title policies are “relevant

to the disposition of the case,” as required by FED.R.APP.P. 29(b) (emphasis

added). See also SUP.CT.R. 37.1 (“An amicus curiae brief that brings to the

attention of the Court relevant matter not already brought to its attention by the

parties may be of considerable help to the Court. An amicus curiae brief that does

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not serve this purpose burdens the Court, and its filing is not favored.”) (emphasis


Worse yet, NAILTA’s claim that a title insurance purchaser such as

Edwards might have received a title search or title policy with higher standards had

a different title insurer been used is utterly baseless. NAILTA cites nothing (such

as publications, or manuals of different title insurers) to support that assertion.

Title insurers not only have a professional responsibility to ensure the

quality of their title searches and title policies, but it is in their economic interest to

do so. See Joyce Palomar, TITLE INSURANCE LAW § 1:15 (“[A] title insurance

company makes underwriting judgments based on the preliminary title

examination.”); id. §§ 12:1-12:13 (detailing title insurer’s duty to search title

fully). Once the policy issues (like the policy First American issued covering

Edwards’ property), the underwriting process is superseded and irrelevant. See id.

§§ 1:15, 5:1. If there is an adverse claim based on facts that should have been, but

were not, learned through a title search, it is the title insurer that will bear not only

the costs of litigation but also the cost of clearing the title. See id. § 5:3 (title

insurer will bear loss or damage to insured caused by defects in title); id. §§ 10:1-

10:39 (detailing recoveries available against title insurer); id. §§ 11:1-11:20

(detailing title insurer’s duty to defend insured title).

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To support its claim that there has been a decline in quality of title searches,

NAILTA asserts that some title insurance underwriters require only a “current

owner” search rather than a full title search that would disclose defects in title or

liens that predate the current owner’s acquisition of the property. (NAILTA

Proposed Br. 14). That argument is based on a misrepresentation of Ohio law.

In Ohio, where Edwards purchased her home, the Rate Manual of the Ohio

Title Insurance Rating Bureau (“OTIRB”), which files uniform rates on behalf of

all title insurers in Ohio in accordance with Ohio law, OHIO REV. CODE § 3935.04,

authorizes title insurers to offer discounted “reissue” or “refinance” rates if: the

home was sold within the last ten years; an “Owner’s Policy” was purchased at that

time; and the owner-applicant meets other requirements including presenting the

prior insurance policy. OTIRB, Schedule of Rates for Title Insurance in the State

of Ohio, PR-4 (pp. 3.2-3.3), PR-9 (p. 3.6), and PR-10 (pp. 3.6-3.7) (effective

December 1, 2008) (“OTIRB Rate Manual”).6 The reason for this requirement is

self-evident: If a thorough title search was done and a title policy issued when the

home was last sold the title company can rely upon that prior search, and need only

The current version of the OTIRB Rate Manual is available at
9.pdf (visited March 23, 2009). The version of the OTIRB Rate Manual in effect
at the time of Edwards’ purchase of title insurance will appear in First American’s
supplemental excerpts of record on appeal. (Decl. of Samuel Halkias, Ex. A (Dkt.

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update that search by reviewing possible defects in title that arose since the last

title policy was issued. The use of a “current owner” search in Ohio is not, as

NAILTA contends, a device that title insurers concocted to cut corners, but a

measure recognized by OTIRB as a sound approach to save home buyers money.

The OTIRB Rate Manual recognizes that if a full title search—going back to the

“root” of the title—was done when the current owner purchased his or her home a

few years ago, all that need be done is to update that search.

Thus, instead of “drawing the court’s attention to law that escaped

consideration”—a proper role for a would-be amicus curiae, Miller-Wohl Co. v.

Commissioner of Labor & Industry, 694 F.2d 203, 204 (9th Cir. 1982) (per

curiam)—NAILTA seeks to infect this case with an inaccurate description of the


If, in fact, there had been a decline in the quality of the service provided by

title insurers, one would expect to see burgeoning claims made against title

policies. NAILTA offers no such evidence, because there is none.

B. NAILTA’s Description of the Difference Between

“Independent” Title Agencies, and Those In Which A Title
Insurer Holds an Interest, Has No Basis In Fact

NAILTA’s brief asserts that there are essentially two kinds of title insurance

agencies—those affiliated with title insurers, and “independent” agencies—and

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that only “independent” agencies can properly do their job.7 NAILTA thus asserts

that once a title insurer acquires any interest in what had been an independent title

agency, the agency can no longer function:

Prior to the acquisition of interest, the independent title insurance

agent or agency had the power to exercise its independent judgment as
to which title insurance underwriter was best suited for a particular
real estate transaction, i.e., land purchase or refinancing. After the
acquisition of interest, the power of any purchased title insurance
agent or agency to exercise an autonomous choice of title insurance
underwriter is eliminated.

(NAILTA Proposed Br. 10). This, similarly, is an extraordinary distortion of the

title insurance industry. Here again, NAILTA turns the role of an amicus curiae

upside down.

“The privilege of being heard amicus rests in the discretion of the

court which may grant or refuse leave according as it deems the
proffered information timely, useful, or otherwise.” Community Ass’n
for Restoration of Environment (CARE) v. DeRuyter Bros. Dairy, 54
F.Supp.2d 974, 975 (E.D.Wash. 1999) (citing Hoptowit v. Ray, 682
F.2d 1237, 1260 (9th Cir. 1982)). Leave to file an amicus brief should
be denied unless a party is not represented competently or at all, a
decision in the present case may affect the interest of the amicus in
another case in which he has an interest, or the amicus has “unique
information or perspective that can help the court beyond the help that
the lawyers for the parties are able to provide.” Id. (citing Northern
Sec. Co. v. United States, 191 U.S. 555, 556, 24 S.Ct. 119, 48 L.Ed.
299 (1903)).

NAILTA completely omits discussion of title insurance underwriters’ direct
operations that issue title insurance policies. See Joyce Palomar, TITLE INSURANCE
LAW § 2:2 & n.1.

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Greater Yellowstone Coal. v. Timchak, 2008 WL 4911410, *6 (D.Idaho 2008).

Instead of providing special information not otherwise available to the court that

would materially aid the court’s deliberations, NAILTA offers baseless

contentions, not facts.

Some title agencies, both those that are independently-owned and those in

which an interest is owned by a title insurer, serve as exclusive or largely exclusive

agents for only one title insurer. Other title agencies, again including both those

that are independently-owned and those in which an interest is owned by a title

insurer, serve as agents for more than one title insurer. Some title insurers also sell

policies directly. When a home buyer selects a title agency (whether

independently-owned or not) which has an exclusive agency relationship with one

title insurer or purchases a policy from a title insurer’s direct operation, the home

buyer typically thereby selects that title insurer. It is usually a simple matter for a

home buyer to learn whether a title agency represents only one, or represents more

than one, title insurer. The mere fact that a title agency—whether independently-

owned or not—has an exclusive relationship with one title company does not mean

that a consumer is not receiving the highest quality service. Likewise, a customer

who purchases a title policy from an underwriter’s direct operation, which

necessarily does not offer a choice of policies underwritten by multiple companies,

does not ipso facto receive some lesser service.

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To illustrate: NAILTA’s office address is in care of Charles W. Proctor III,

one of its members.8 Mr. Proctor is a real estate attorney and title agent, whose

law office adjoins his title office in Chadds Ford, Pennsylvania. His title agency,

Industrial Valley Abstract Company, offers title insurance for only one title

insurer, Stewart Title Guaranty Company (“Stewart Title”).9 Similarly, Gregory

W. Happ, who is both counsel of record in this Court for NAILTA and a member

of NAILTA, is both a real estate attorney and a land title agent, conducting both

practices out of the same office in Medina, Ohio.10 As a title agent, Mr. Happ

offers title insurance from only one title insurer, General Title and Trust Company

(“General Title”).11

When a home purchaser goes to Mr. Proctor’s title agency for title insurance

or settlement services, Mr. Proctor, as a title agent, does not “exercise [his]

(NAILTA Proposed Br. 18); www.cplaw1.com (visited March 24, 2009).
www.cplaw1.com (visited March 24, 2009); www.ivacland.com (visited March
23, 2009).
(NAILTA Proposed Br. i, 17);
http://www.ohioinsurance.gov/Agents/AgentLocator/Default.aspx (visited March
24, 2009).
http://www.ohioinsurance.gov/Agents/AgentLocator/Default.aspx (visited
March 24, 2009). Some of the other NAILTA members are with title agencies that
represent more than one title insurer. For example, James Squeo, a NAILTA
member in Dublin, Ohio, is an agent for both FATIC and General Title.
http://www.ohioinsurance.gov/Agents/AgentLocator/Default.aspx (visited March
24, 2009).

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independent judgment as to which title insurance underwriter [is] best suited for a

particular real estate transaction.” (NAILTA Proposed Br. 10). Instead, Mr.

Proctor’s title agency provides insurance underwritten by Stewart Title—the only

title insurer which Mr. Proctor’s agency represents. In fact, if a home buyer goes

to Mr. Proctor for legal services relating to the home purchase, the client will likely

be referred to Mr. Proctor’s title agency (which will offer a policy only from

Stewart Title). As Mr. Proctor states on his website:

Our affiliated business, Industrial Valley Abstract Company, allows

our office to provide our clients with the convenience of one location
for legal representation and settlement services for their real estate

Similarly, when a home purchaser goes to Mr. Happ’s title agency, Mr.

Happ will provide title insurance underwritten by General Title, not because Mr.

Happ made a comparative judgment between two or more underwriters that

General Title is best suited for that particular transaction, but because that is the

only title insurer for which Mr. Happ is a title agent.

This does not mean that Mr. Proctor or Mr. Happ (or First American, for that

matter) is doing anything wrong. A home buyer who goes to a title agency that

www.cplaw1.com (visited March 23, 2009). The Real Estate Settlement
Procedures Act of 1974, 12 U.S.C. § 2601 et seq. (“RESPA”) specifically
recognizes that attorneys and law firms may establish a “separate corporate title
insurance agency … as an adjunct to his or its law practice.” 12 U.S.C.
§ 2607(c)(5).

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represents only one title insurer no more expects that title agency to offer policies

underwritten by several title insurers than a car buyer who goes to a Chevrolet

dealership would expect to be sold a Toyota.

What ensures that the home purchaser (or lender) gets an appropriate title

policy is the professionalism and service of the title agent and the title insurer, and

their obligations to comply with laws and regulations in a highly-regulated

industry. Many title agencies, whether or not independently-owned, represent only

one title insurer; also, many underwriters sell title insurance policies directly: that

does not violate the law, and does not prevent the title insurance purchaser from

receiving high quality service.



NAILTA’s proposed brief sheds no light on the two issues presented on this

appeal: (a) whether Edwards sustained a “particularized and concrete” injury

caused by her referral by Tower City Title Agency, LLC to FATIC, that would

give her Article III and RESPA standing, and (b) whether the District Court abused

its discretion by denying class certification.

On the standing issue, as noted above, NAILTA offers nothing to support its

conclusory assertion that title insurance purchasers are harmed when a title agency

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acts as agent for only one title insurer, and therefore refers home purchasers to that

insurer, or to identify any harm cognizable under Article III or its jurisprudence.

On the class certification issue, NAILTA states that it supports reversal of

the orders denying class certification—but it takes that position as a political

issue—an “inject[ion of] interest-group politics into the federal appellate

process”—not a legal issue, Nat’l Org. for Women, Inc. v. Scheidler, 223 F.3d at

617, and fails to address the requirements of Rule 23 at all. NAILTA does not

purport to address any of the questions that bear upon class certification, such as

the need for individualized proof and whether a class action would offer a superior

means of adjudication.

Most telling, NAILTA’s proposed brief is utterly silent on the fact that all of

the supposed evils that NAILTA sees in the title industry can properly and

thoroughly be addressed through the mechanisms established by RESPA. Those

mechanisms include criminal prosecutions by the United States Department of

Justice, enforcement actions by the Secretary of Housing and Urban Development,

and enforcement actions by state attorneys general and insurance commissioners,

as well as private actions by persons who have sustained actual damage—but do

not extend to private actions (let alone class actions) by persons, such as Edwards,

who have sustained no damages. See 12 U.S.C. § 2607(d); Durr v. Intercounty

Title Co., 14 F.3d 1183 (7th Cir. 1994); Moore v. Radian Group, Inc., 233

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F.Supp.2d 819 (E.D. Tex. 2002), aff’d without opinion, 69 F.App’x 659 (5th Cir.

2003); Mullinax v. Radian Guar. Inc., 311 F.Supp.2d 474, 486 (M.D.N.C. 2004);

Morales v. Attorneys’ Title Ins. Fund, Inc., 983 F.Supp. 1418, 1427 (S.D. Fla.



There is a spirited debate among the Circuits as to when leave to file an

amicus curiae brief should be granted. The Seventh Circuit, relying on a decision

of this Court, has held:

An amicus brief should normally be allowed when a party is not

represented competently or is not represented at all, when the amicus
has an interest in some other case that may be affected by the decision
in the present case (though not enough affected to entitle the amicus to
intervene and become a party in the present case), or when the amicus
has unique information or perspective that can help the court beyond
the help that the lawyers for the parties are able to provide.

Ryan v. Commodity Futures Trading Comm’n, 125 F.3d 1062, 1063 (7th Cir.

1997), citing Miller-Wohl Co. v. Comm’r, 694 F.2d 203. Other Circuits have been

more receptive to amicus curiae briefs. E.g., Neonatology Assocs., P.A. v. C.I.R.,

293 F.3d 128 (3d Cir. 2002).

But even under the most lenient standard for permitting amicus curiae

briefs, NAILTA’s proposed brief, which misrepresents the organization itself and

offers baseless assertions in lieu of facts, inaccurate descriptions of the law in lieu

of well-researched arguments supported by appropriate citations, and political

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advocacy in lieu of legal analysis, does not merit leave. First American

respectfully requests that NAILTA’s motion for leave to file a brief amicus curiae

be denied.

Dated: March 24, 2009

Respectfully submitted,


/s/ Charles A Newman Richard M. Zuckerman
Charles A. Newman rzuckerman@sonnenschein.com
cnewman@sonnenschein.com 1221 Avenue of the Americas
One Metropolitan Square - Suite 3000 New York, New York 10020
St. Louis, MO 63102-2741 212-398-5213; Fax: 212-768-6800
314-259-5399; Fax: 314-259-5959
Kenneth A. Pfaehler
1301 K Street, N.W.
Suite 600, East Tower
Washington, DC 20005-3364
202-408-6468; Fax: 202-408-6399
Attorneys for The First American Corporation and
First American Title Insurance Company, Defendants-Appellees

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The undersigned hereby certifies that a copy of the foregoing Opposition of

The First American Corporation and First American Title Insurance Company,

Defendants-Appellees to Motion of National Association of Independent Land

Title Agents For Leave to File Brief Amicus Curiae was served on March 24, 2009

on counsel of record via operation of this Court’s CM/ECF system and on the

following via United States mail, first class, postage prepaid.

Cyril V. Smith Richard S. Gordan

ZUCKERMAN SPAEDER LLP 102 W. Pennsylvania Avenue
100 E. Pratt Street, Suite 2440 Towson, Maryland 21204
Baltimore, Maryland 21202 (410) 825-2300
(410) 332-0444
James W. Spertus
Edward G. Kramer Ezra D. Landes
THE FAIR HOUSING LAW CLINIC 12100 Wilshire Boulevard, Suite 620
3214 Prospect Avenue Los Angeles, California 90025
Cleveland, Ohio 44115 (310) 826-4700
(216) 431-5300
Attorneys for Plaintiff-Appellant
Gregory W. Happ Mary Dryovage
238 West Liberty Street Law Offices of Mary Dryovage
Medina, Ohio 600 Harrison Street, Suite 120
(330) 723-7000; Fax: (330) 725-8804 San Francisco, California 84107
(415) 593-0095; Fax: (415) 593-0096
Attorneys for National Association of Independent Title Agents,
Proposed Amicus Curiae

March 24, 2009 /s/ Charles A Newman

Charles A. Newman

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