A Pennsylvania federal court applied the continuing violations theory to RESPA’s one-year statute of limitations, and allowed Plaintiffs leave to amend their complaint to modify their RESPA claim.
The Court recognized that “ordinarily RESPA’s statute of limitations begins running on the date that a homeowner closes on his or her home loan. However, the question of when a statute of limitations begins to run (by default) is entirely separate from the question of whether or not subsequent kickbacks, fees, and referrals are violations of RESPA that can trigger new limitations periods. This is because under the continuing violation theory, the statute of limitations runs from the date of the last alleged violation rather than the first.”
The Court found “RESPA would be violated each and every time an unlawful fee or kickback was delivered or accepted. Each alleged violation, in turn, reset RESPA’s one-year statute of limitations. Therefore, the plaintiffs’ claims would be untimely only if there had been no alleged kickback, fee or referral within the one year leading up to the day they filed their complaint.” The RESPA kickbacks and fees alleged in this case were explicitly prohibited by statute, thus making them “all a part of one reinsurance scheme, the very nature of which requires the defendants to make continuous and periodic illegal kickbacks.”
In discussing Cunningham v. M & T Bank Corp., 814 F.3d 156 (3d Cir. 2016), the Court noted the Third Circuit “spoke only to the application of equitable tolling” and “did not address whether RESPA may be violated each time there is an illegal kickback, fee or referral.” As noted in the decision, the Third Circuit has never spoken on the continuing violations doctrine’s applicability to RESPA.
Blake, et al. v. JPMorgan Chase Bank, N.A., et al., 5:13-cv-06433 (USDC E.D. Pa. April 26, 2017)
This post written by Nora A. Valenza-Frost.
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