Mahon v. Ticor Title Ins. Co.

• Decision Date: 25 June 2012
• Docket Number: Docket No. 10–3005–cv.
• Citation: 683 F.3d 59
• Parties: Deborah MAHON, on behalf of herself and all others similarly situated, Plaintiff–Appellant, v. TICOR TITLE INSURANCE COMPANY and Ticor Title Insurance Company of Florida, Defendants–Appellees, Chicago Title Insurance Company, Defendant.
• Court: U.S. Court of Appeals — Second Circuit

683 F.3d 59

Deborah MAHON, on behalf of herself and all others similarly situated, Plaintiff–Appellant,

v. TICOR TITLE INSURANCE COMPANY and Ticor Title Insurance Company of Florida, Defendants–Appellees,Chicago Title Insurance Company, Defendant.¹

Docket No. 10–3005–cv.

United States Court of Appeals, Second Circuit.

Argued: May 16, 2011.

Decided: June 25, 2012.

Ingrid L. Moll (Mathew P. Jasinski, on the brief), Motley Rice LLC, Hartford, C.T., for Plaintiff–Appellant Deborah Mahon.

Stewart I. Edelstein, Cohen and Wolf, P.C., Bridgeport, C.T., for Defendants–Appellees Ticor Title Insurance Company and Ticor Title Insurance Company of Florida.

Before: WALKER, HALL, and CHIN, Circuit Judges.

Judge HALL concurs in a separate opinion.

JOHN M. WALKER, JR., Circuit Judge:

Plaintiff Deborah Mahon appeals from a partial judgment of the United States District Court for the District of Connecticut (Alvin W. Thompson, Judge ) dismissing from the case Defendants–Appellees Ticor Title Insurance Company (“Ticor”) and Ticor Title Insurance Company of Florida (“Ticor Florida”). The district court concluded that Mahon lacks Article III standing to sue Ticor and Ticor Florida because she does not allege that they injured her.

Mahon argues that the district court erred because, under Article III of the Constitution, a plaintiff need only demonstrate an injury resulting from the conduct of at least one defendant. So long as this constitutional minimum is satisfied, Mahon contends, the plaintiff may sue certain other parties whether or not they injured her.

For the reasons that follow, we reject Mahon's argument and AFFIRM the judgment of the district court.

BACKGROUND

I. Facts as Alleged in the Complaint

Chicago Title Insurance Company (“Chicago Title”) and the Ticor entities, wholly-owned subsidiaries of Fidelity National Financial, Inc., provide title insurance to individuals in the State of Connecticut. Title insurance protects against the risk of a title challenge. In mortgage transactions, lenders generally require borrowers to obtain title insurance to protect their interest in the mortgaged property.

Under Connecticut law, title insurers must file premium rate schedules with the Insurance Commissioner and charge premiums in accordance with these schedules. SeeConn. Gen.Stat. § 38a–419(a), (c). Chicago Title and the Ticor entities coordinated with one another in preparing their rate schedules. Their schedules set a basic rate for new mortgages and a reduced rate for refinance transactions, which generally require the title insurer to perform less work and involve less risk.

Chicago Title and the Ticor entities routinely concealed the reduced rate for refinance transactions from their customers. In June 2003, for example, Plaintiff–Appellant Deborah Mahon refinanced the existing mortgage on a property in Branford, Connecticut, and purchased title insurance for the property from Chicago Title. At the closing, Chicago Title's agent did not disclose to Mahon her eligibility for the discounted refinance rate and charged her the full rate.

II. Procedural History

On April 28, 2009, Mahon sued Chicago Title and the Ticor entities for the overcharge on behalf of herself and similarly situated individuals. She alleges a class comprised of those who paid for title insurance from Chicago Title or the Ticor entities in Connecticut and who qualified for but paid more than the reduced refinance rate. Mahon alleges that Chicago Title and the Ticor entities' practice of overcharging on title insurance for refinanced properties violates the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen.Stat. § 42–110b(a). She also brings claims for unjust enrichment, breach of implied contract, and money had and received.

Mahon alleges that it was Chicago Title's conduct that injured her personally. She does not allege any dealings with the Ticor entities. Nevertheless, Mahon's complaint asserts that the Ticor entities are proper defendants in her putative class action because they are “juridically linked” to Chicago Title. In other words, because Chicago Title and the Ticor entities are wholly-owned subsidiaries of the same parent company, share resources in Connecticut, coordinated in drafting their premium rate schedules, and operate in the same manner with respect to overcharging Connecticut borrowers in refinance transactions, Mahon asserts that she can represent a class of borrowers injured by Ticor and Ticor Florida, as well as borrowers injured by Chicago Title, notwithstanding her own lack of injury with respect to the Ticor entities. The juridical link doctrine stems from dicta in the Ninth Circuit's opinion in La Mar v. H & B Novelty & Loan Co., 489 F.2d 461 (9th Cir.1973). The decision recognized, but did not apply, two exceptions to the general rule that a plaintiff cannot bring a class action against parties that did not injure her. Id. at 466. One of these exceptions permits a plaintiff to bring a class action against parties that did not injure her (hereinafter “non-injurious parties”) if those parties are “juridically related” to the party that did injure her, and if it would be “expeditious” to sue all the parties in one action. Id.

In response to Mahon's complaint, the Ticor entities moved to dismiss all counts against them for lack of standing.² They argued that Mahon lacks Article III standing to sue them because she does not allege any personal injury at their hands, and because the relationship between Chicago Title and the Ticor entities as alleged in her complaint is insufficient to establish a juridical link.

The district court granted the motion, dismissing all claims against the Ticor entities. It did not, however, directly address the issue framed in the Ticor entities' motion. While the Ticor entities had argued that the allegations in Mahon's complaint were insufficient to establish a juridical link, the district court addressed whether, assuming that the allegations in the complaint did establish a juridical link, the juridical link was relevant to Article III standing. It answered this question in the negative, holding that the juridical link doctrine relates only to the question of class certification under the Federal Rules and thus has no bearing on the Article III standing inquiry. It concluded that Mahon lacks Article III standing to sue the Ticor entities whether or not they are juridically linked to Chicago Title because she suffered no injury as a result of their conduct.

Mahon moved for entry of final judgment as to the Ticor entities and for certification to appeal under Federal Rule of Civil Procedure 54(b). The district court granted the motion, finding there to be no just reason for delay.

DISCUSSION

On appeal, Mahon agrees with the district court that the potential presence of a juridical link between Chicago Title and the Ticor entities does not bear on her Article III standing to sue the Ticor entities. She argues, however, that the district court misconstrued Article III's requirements. Article III does not, she contends, require a plaintiff to demonstrate that she was injured by the conduct of each defendant. Rather, she argues that a plaintiff need only demonstrate injury resulting from the conduct of one defendant to pass the Article III threshold. Once the plaintiff passes this threshold, she contends, Article III does not prevent her from suing non-injurious defendants in the same suit. Because Mahon alleges that Chicago Title injured her, she argues that her lack of injury at the hands of the Ticor entities is irrelevant to the Article III inquiry.

We review de novo the district court's dismissal of Mahon's claims against the Ticor entities, accepting as true all well-pleaded material allegations of the complaint. Selevan v. N.Y. Thruway Auth., 584 F.3d 82, 88 (2d Cir.2009).

Article III, Section 2 of the Constitution limits the jurisdiction of the federal courts “to the resolution of ‘cases' and ‘controversies.’ ” Id. at 89. This limitation is “founded in concern about the proper—and properly limited—role of the courts in a democratic society.” Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). “[W]hether the plaintiff has made out a ‘case or controversy’ between himself and the defendant ... is the threshold question in every federal case, determining the power of the court to entertain the suit.” Id. “[T]o ensure that this ‘bedrock’ case-or-controversy requirement is met, courts require that plaintiffs establish their ‘standing’ as ‘the proper part[ies] to bring’ suit.” Selevan, 584 F.3d at 89 (quoting W.R. Huff Asset Mgmt. Co. v. Deloitte & Touche LLP, 549 F.3d 100, 106 (2d Cir.2008)). “If plaintiffs lack Article III standing, a court has no subject matter jurisdiction to hear their claim.” Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck–Medco Managed Care, L.L.C., 433 F.3d 181, 198 (2d Cir.2005).

To satisfy the “ ‘irreducible constitutional minimum’ of standing,” a plaintiff must demonstrate (1) a personal injury in fact (2) that the challenged conduct of the defendant caused and (3) which a favorable decision will likely redress. Alliance for Open Soc'y Int'l, Inc. v. U.S. Agency for Int'l Dev., 651 F.3d 218, 228 (2d Cir.2011) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). Demonstrating that the defendant's allegedly unlawful conduct caused injury to the plaintiff herself is thus generally an essential component of Article III standing.³

Mahon's proposed interpretation of Article III—that it permits suits against non-injurious defendants as long as one of the defendants in the suit injured the plaintiff—is unprecedented. No decision that we can discern has ever adopted such a broad interpretation of constitutional standing. Although Mahon's proposed interpretation does not depend on the juridical link doctrine, it does stem from her attempt, based on the juridical link...