Brown v. Ticor Title Ins. Co.
| Decision Date | 28 December 1992 |
| Docket Number | No. 91-15474,91-15474 |
| Citation | 982 F.2d 386 |
| Parties | 1992-2 Trade Cases P 70,081, 24 Fed.R.Serv.3d 865 Walter Thomas BROWN, on behalf of themselves and all others similarly situated; Jeffrey L. Dziewit, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. TICOR TITLE INSURANCE COMPANY, a California corporation; Chicago Title Insurance Company, a Missouri corporation; Security Union Title Insurance Co., as successor in interest to Safeco Title Insurance Company, a California corporation; First American Title Insurance Company, a corporation; Lawyers Title Insurance Corporation, a Virginia corporation; Stewart Title Guaranty Company, a Texas corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Gerald D.W. North and Peter C. Warner, North & Vaira, Phoenix, AZ, for plaintiffs-appellants.
Paul J. Laveroni, Cooley, Godward, Castro, Huddleston & Tatum, San Francisco, CA, John C. Christie, Jr., Bell, Boyd & Lloyd, Washington, DC, for defendants-appellees.
Appellants Brown and Dziewit (hereinafter "Brown") are representatives of the Arizona and Wisconsin classes of consumers of title insurance. After the approval of a settlement agreement in a class action in Pennsylvania involving the same parties, Brown filed the present action in the district court of Arizona alleging a conspiracy to fix price levels for title search and examination services. Brown sought relief from the district court in the form of (1) treble damages, (2) costs and attorney fees, and (3) judgment restraining and enjoining the appellees from engaging in unlawful conduct. The appellees, title insurance companies (hereinafter "Ticor"), filed a motion for summary judgment, based on res judicata, which the district court granted. We affirm the district court in part in holding that res judicata bars injunctive relief, and reverse and remand on all other issues.
In 1985, following enforcement proceedings initiated by the Federal Trade Commission ("FTC"), twelve separate class action lawsuits were filed in five federal district courts in four states. The complaints alleged price fixing by various title insurance companies, encompassing the defendants in the present case, in thirteen affected states, including Arizona and Wisconsin. The class actions were consolidated as MDL 633 in the Eastern District of Pennsylvania by the Judicial Panel on Multidistrict Litigation pursuant to 28 U.S.C. § 1407. In re Real Estate Title and Settlement Servs. Antitrust Litig., 1986-1 Trade Cas. (CCH) p 67,149 (E.D.Pa.1986), aff'd without opinion, 815 F.2d 695 (3d Cir.1987), cert. denied, 485 U.S. 909, 108 S.Ct. 1085, 99 L.Ed.2d 243 (1988). The complaints alleged that Ticor had violated the antitrust laws by participating in state-licensed rating bureaus which filed collective rates for real estate title search and examination services with state insurance regulatory bodies.
The district court in MDL 633 found that under Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 105 S.Ct. 1721, 85 L.Ed.2d 36 (1985), Ticor could establish at least the first part of the two-part test for a state action immunity defense. See In re Real Estate, 1986-1 Trade Cas. (CCH) p 67,149, at 62,923. 1 Before the court could decide the second part of the test, however, the parties reached a settlement in which the monetary claims against Ticor were dropped. The settlement was accepted by the MDL 633 court in its written decision dated June 10, 1986. Id. at 62,937.
The Arizona attorney general then filed a new complaint in Arizona state court on behalf of state school districts seeking damages from the same defendants under state law. The MDL 633 court granted an injunction against the state court suit. The injunction was vacated by the Third Circuit, which held that the MDL 633 settlement could be collaterally attacked. In re Real Estate and Settlement Servs. Antitrust Litig., 869 F.2d 760, 769 (3d Cir.), cert. denied, 493 U.S. 821, 110 S.Ct. 77, 107 L.Ed.2d 44 (1989). The court held that if a class member had "not been given the opportunity to opt out in a class action involving both important injunctive relief and damage claims," then the class member must have either "minimum contacts with the forum or consent to jurisdiction in order to be enjoined by the district court that entertained the class action." Id. The court found that the class members in the MDL 633 case were not afforded the opportunity to opt out and did not have minimum contacts or consent to jurisdiction. The Arizona state court action was therefore allowed to proceed in part to decide if the plaintiffs were afforded due process in the MDL 633 action.
The Arizona state court dismissed the complaint. The Arizona Court of Appeals affirmed the dismissal, holding that Arizona's title insurance statutes authorized the "insurers to cooperate in rate-making in the issuance of title insurance policies," and therefore the activity was not within the purview of the Arizona antitrust laws. Tucson Unified Sch. Dist. v. Chicago Title Ins. Co., 167 Ariz. 114, 804 P.2d 843, 845 (App.1991).
In 1986, an Administrative Law Judge entered an initial decision in the FTC's enforcement action against various title insurance companies, including the defendants in this action, for price fixing in real estate title and search services. In re Ticor Title Ins. Co., Docket No. 9190, FTC Initial Decision of Administrative Law Judge (December 22, 1986). In its final order, the FTC found that the defendants' activities in Wisconsin and Arizona were The defendants petitioned the Third Circuit for review of the final order of the FTC in 1991. Ticor Title Ins. Co. v. Federal Trade Comm'n, 922 F.2d 1122 (3d Cir.1991). The Third Circuit held that the defendants' "collective rate setting for title search and examination services in these six states [including Arizona and Wisconsin] [was] immune from federal antitrust liability under the state action doctrine," thereby rejecting the FTC's findings which rejected the state action immunity defense as to Arizona and Wisconsin. 922 F.2d at 1125-26. The court held that the state action immunity defense did not depend upon the quality of supervision, so long as "the state clearly articulates and actively supervises the [anticompetitive] policy." Id. at 1140. The Third Circuit therefore vacated the FTC's final order. Id. The FTC appealed the decision to the United States Supreme Court which reversed and remanded the Third Circuit's decision. Federal Trade Comm'n v. Ticor Title Ins. Co., 504 U.S. ----, ----, 112 S.Ct. 2169, 119 L.Ed.2d 410 (1992).
not beyond the federal antitrust laws and that the state action immunity defense did not apply to defendants' activities in Wisconsin and Arizona because there was no active supervision by these states. In re Ticor Title Ins. Co., Docket No. 9190, FTC Final Order (September 19, 1989)
The Supreme Court held that the "mere potential for state supervision [was] not an adequate substitute for a decision by the State," and therefore concluded that the Wisconsin statute did not provide immunity from antitrust liability. Id. at ----, 112 S.Ct. at 2179, 119 L.Ed.2d at 425. The Supreme Court remanded the case for further proceedings as to the quality of state supervision under the regulatory scheme in Arizona.
FACTS AND PROCEDURAL HISTORY
In 1985, the MDL 633 class action claims were filed in Pennsylvania. In January, 1986, a settlement was reached and presented to the MDL 633 court. The settlement dropped the monetary claims against Ticor and provided for (1) an injunction against Ticor's participation in rating bureaus for a specified time period in five states, including Arizona and Wisconsin, (2) an increased dollar amount of each title insurance policy issued to class members in all thirteen states during the class period, (3) additional coverage for new title insurance policies purchased by class members, and (4) payment of the costs of lawsuit and attorneys' fees as approved by the MDL 633 court.
The MDL 633 court certified the class under Federal Rules of Civil Procedure 23(b)(1) and (b)(2) 2 and accepted the settlement. In doing so, the court considered and rejected objections to the settlement, including an attempt by the Arizona attorney general to opt out of the class. The court deemed these objections and requests to have been made on behalf of the states represented by the various attorneys general, and not on behalf of individual class members. See In re Real Estate, 1986-1 Trade Cas. (CCH) p 67,149, at 62,926 n. 5.
STANDARD OF REVIEW
This court reviews a grant of summary judgment under a de novo standard. In re Bullion Reserve of N. Am., 922 F.2d 544, 546 (9th Cir.1991). If, viewing the record in the light most favorable to the nonmoving party, there are no genuine issues of fact and the moving party is entitled to judgment as a matter of law, the judgment will be affirmed. Norfolk Energy, Inc. v. Hodel, 898 F.2d 1435, 1439 (9th Cir.1990).
RES JUDICATA
Ticor contends...
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