Federal Court Allows California Title Insurance Lawsuit to Proceed

A Federal Judge Has Ruled That a Class Action Lawsuit Brought on Behalf of Consumers Who Purchased Title Insurance in California Will Move Forward, Alleging Illegal Kickbacks, Commissions and Rebates Paid in Violation of California Law

SAN FRANCISCO--(BUSINESS WIRE)--The law firm of Girard Gibbs LLP (www.girardgibbs.com/catitle.asp) announces that a class action lawsuit pending against California’s largest title insurers will proceed following the Court’s ruling on defendants’ motion to dismiss. Specifically, the Court determined that, while certain claims were dismissed, plaintiffs’ allegations of unlawful conduct under California’s Unfair Competition Law could proceed against certain title insurance companies.

“but for the improper kickbacks they would have paid less for title insurance.”

The federal class action lawsuit, filed on behalf of consumers who bought title insurance as part of a California residential real estate purchase or refinance between 2004 and 2007, alleges that the defendant title insurance companies paid illegal kickbacks and commissions to agents and brokers in exchange for steering title insurance business to them, and then passed off these expenses to consumers through higher insurance premiums.

In an order issued by the Court on November 6, 2009, U.S. District Judge Jeffrey White found as to defendants Fidelity Title, Commonwealth, Old Republic, First American Title, and Chicago Title that “[p]laintiffs have alleged facts demonstrating unlawful conduct” on the part of the defendants as to violations of California unfair competition law Section 17200, and that the alleged illegal conduct was sufficient to show harm to the plaintiff consumers because “but for the improper kickbacks they would have paid less for title insurance.”

With respect to defendant companies Stewart Title, Lawyers Title, Ticor, Ticor Florida, Security Union, National Title, United General, the court dismissed all claims, noting that the named plaintiffs did not purchase title insurance from those companies, but granted plaintiffs the opportunity to amend the complaint by November 25, 2009 to add additional plaintiffs who purchased title insurance directly from those companies.

“We are pleased to have overcome this important hurdle in the lawsuit and are eager to move forward in prosecuting our clients’ unfair competition claims,” said interim class counsel for the plaintiffs, Elizabeth Pritzker, “We believe that this is a highly significant case for consumers’ rights, underscoring the importance of full disclosure as to the sale of goods and services to consumers. We intend to prove that these title insurance companies engaged in illegal schemes to enrich themselves at a serious detriment and cost to consumers.”

More than 10 class action lawsuits were filed throughout California by consumers who purchased title insurance from the named defendants. On July 24, 2008, all of the lawsuits pending in federal court were consolidated and coordinated for pre-trial proceedings before Judge Jeffrey White in the United States District Court for the Northern District of California. The coordinated case, 08-cv-1341, is known as In re California Title Insurance Antitrust Litigation.

Consumers who purchased title insurance from Stewart Title Insurance Company, Lawyers Title Insurance Company, Fidelity Title, Commonwealth, Old Republic, First American Title, and Chicago Title and wish to learn more about their rights in the lawsuit may contact Girard Gibbs LLP (www.GirardGibbs.com/catitle.asp) or call 866-981-4800. Girard Gibbs LLP is one of the nation`s leading firms in prosecuting complex litigation including class and mass action cases.