Georgia Federal Court Allows RESPA Class Action to Proceed

RESPA

On January 18, the U.S. District Court for the Northern District of Georgia denied a motion to dismiss a putative class action suit alleging violations of the Real Estate Settlement Procedures Act (RESPA). Bolinger v. First Multiple Listing Serv., Inc., No. 10-00211-RWS, 2012 WL 137883 (N.D. Ga. Jan. 18, 2012). Georgia residents who purchased properties listed on the First Multiple Listing Service, Inc. (FMLS) database claim that member agents and brokers paid fees to FMLS out of settlement proceeds but did not disclose those fees on the HUD-1 settlement statement. Plaintiffs also claim that FMLS used those fees to pay kickbacks to member brokers for referrals of listing business. As such, plaintiffs allege that defendants violated (i) Section 8 of RESPA; (ii) the Sherman Act; and (iii) several Georgia state laws. The court found that plaintiffs alleged sufficient facts for their RESPA claims to survive the motion to dismiss. The Court did, however, dismiss plaintiffs’ claims under the Sherman Act, holding that the plaintiffs failed to allege facts showing that defendants engaged in price-fixing by agreeing to fix broker commissions.