In re Cmty. Bank of N. Va. Mortg. Lending Practices Litig.

• Citation: 795 F.3d 380
• Decision Date: 29 July 2015
• Docket Number: No. 13–4273.,13–4273.
• Parties: In re COMMUNITY BANK OF NORTHERN VIRGINIA MORTGAGE LENDING PRACTICES LITIGATION. PNC Bank NA, successor to CBNV, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

795 F.3d 380

In re COMMUNITY BANK OF NORTHERN VIRGINIA MORTGAGE LENDING PRACTICES LITIGATION.

PNC Bank NA, successor to CBNV, Appellant.

No. 13–4273.

United States Court of Appeals, Third Circuit.

Argued Jan. 20, 2015.
Filed: July 29, 2015.

795 F.3d 384

Martin C. Bryce, Jr., Esq. [Argued], Joel E. Tasca, Esq., Ballard Spahr, Philadelphia, PA, for Appellant.

Scott C. Borison, Esq., Legg Law Firm, Frederick, MD, R. Bruce Carlson, Esq. [Argued], Gary F. Lynch, Esq., Carlson Lynch Sweet & Kipela, Pittsburgh, PA, Daniel O. Myers, Esq., Traverse City, MI, David M. Skeens, Esq., Roy F. Walters, Esq. [Argued], Walters, Bender, Strohbehn & Vaughan, Kansas City, MO, Robert S. Wood, Esq., Richardson, Patrick, Westbrook & Brickman, Mount Pleasant, SC, for Appellees.

Before: FISHER, JORDAN, and GREENAWAY, JR., Circuit Judges.

OPINION OF THE COURT

JORDAN, Circuit Judge.

TABLE OF CONTENTS

Page

I. Background 385

A.	The Alleged Illegal Lending Scheme	385
B.	Community Bank I	386
C.	Community Bank II	388
D.	Post–Community Bank II Proceedings	390

II. Discussion 391

A.	Adequacy of Representation	392
B.	Conditional Certification	395
C.	Other Rule 23 Requirements	396

1.	Ascertainability	396
2.	Commonality	397
3.	Predominance	399

a.	Standing	400
b.	Equitable Tolling	400

i.	Active Misleading	401
ii.	Reasonable Due Diligence	403

c.	RESPA Claims	405
d.	TILA/HOEPA Claims	406
e.	RICO Claims	408

4.	Superiority	408
5.	Manageability	409

III. Conclusion 410

795 F.3d 385

PNC Bank, N.A. (“PNC”) challenges an order of the United States District Court for the Western District of Pennsylvania certifying a nationwide litigation class of individuals who received residential mortgage loans from Community Bank of Northern Virginia (“CBNV”), a financial institution whose interests were later acquired by PNC. The appeal presents several arguments against certification. First, PNC contends that there is a fundamental class conflict that undermines the adequacy of representation provided by class counsel. Second, PNC claims that the District Court conditionally certified the class and thus erred. Third, PNC says that the putative class does not meet the ascertainability, commonality, predominance, superiority, or manageability requirements of Rule 23 of the Federal Rules of Civil Procedure. We have considered each of those arguments and a number of subsidiary ones and find them unpersuasive. We will therefore affirm.

I. Background

This is the third appeal from the certification of a class based on allegations of an illegal home equity lending scheme involving two banks, specifically CBNV and Guaranty National Bank of Tallahassee (“Guaranty”), and also involving GMAC–Residential Funding Corporation n/k/a Residential Funding Corporation, LLC (“Residential Funding”), a company that purchased mortgage loans from those banks. See In re Cmty. Bank of N. Va. (Community Bank I ), 418 F.3d 277 (3d Cir.2005) ; In re Cmty. Bank of N. Va. (Community Bank II ), 622 F.3d 275 (3d Cir.2010). The two previous appeals involved certification of settlement classes, but this appeal involves certification of a litigation class. Much of the factual and procedural history of this case is set out in detail in our two prior opinions, but we reiterate the relevant portions here.

A. The Alleged Illegal Lending Scheme

The Plaintiffs describe a predatory lending scheme affecting numerous borrowers nationwide and allegedly masterminded by the Shumway Organization (“Shumway”), a residential mortgage loan business operating in Chantilly, Virginia. Through a variety of entities, including EquityPlus Financial, Inc. (“Equity Plus”), Equity Guaranty, LLC (“Equity Guaranty”), and various title companies, Shumway offered high-interest mortgage-backed loans to financially strapped homeowners.

As a non-depository lender, Shumway was subject to fee caps and interest ceilings imposed by various state mortgage lending laws. The Plaintiffs aver that, in an effort to circumvent those limitations, Shumway formed associations with several banks, including CBNV and Guaranty. Shumway allegedly arranged payments to CBNV and Guaranty to disguise the source of its loan origination services so that fees for those services would appear to be paid solely to the banks, which were depository institutions. The Plaintiffs allege that, in reality, the overwhelming majority of fees and other charges associated with the loans were funneled through the two banks to Shumway via Equity Plus (in the case of loans made by CBNV) and...