MONTGOMERY COUNTY, PENNSYLVANIA, RECORDER OF DEEDS v. MERSCORP, INC. et al | Pennsylvania MERS Class Action CERTIFIED

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MONTGOMERY COUNTY, PENNSYLVANIA, RECORDER OF DEEDS, by and through Nancy J. Becker in her official capacity as Recorder of Deeds of Montgomery County, on its own behalf and on behalf of all others similarly situated, Plaintiff, v. MERSCORP, INC., and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants. MEMORANDUM AND ORDER JOYNER, J. February 11, 2014 This matter is presently before the Court on Motion of the Plaintiff for Class Certification. After careful consideration of the arguments and evidentiary materials submitted by the parties, we shall grant the motion. Statement of Relevant Facts Plaintiff Nancy J. Becker is the duly-elected Recorder of Deeds for Montgomery County, Pennsylvania. Purporting to act in her official capacity on behalf of herself and all other similarly situated Pennsylvania County Recorder of Deeds Offices, Plaintiff’s Complaint seeks to compel Defendants to record all mortgage assignments that were, are now and will in the future be, registered within the MERS “system” and pay the attendant recording fees . With that goal in mind, Plaintiff seeks 1 primarily equitable relief in the form of a declaration and/or permanent injunction compelling Defendants to record the disputed mortgage assignments, and an order quieting title and finding that Defendants were unjustly enriched. Plaintiff filed her complaint on November 7, 2011. Defendants moved to dismiss the complaint in its entirety for failure to state a claim upon which relief may be granted which was, for the most part denied, on October 19, 2012. 2 Contemporaneous to filing an Answer to Plaintiff’s Complaint, Defendants filed a Second Motion to Dismiss Plaintiff’s quiet title claim on December 10, 2012. Following the denial of this second motion on March 6, 2013, the Plaintiff filed the instant Motion to Certify Class on April 26, 2013. Specifically, the proposed class would consist of each county Recorder of Deeds in Pennsylvania in his or her official capacity and would therefore consist of 67 members in all. Not surprisingly, Defendants oppose the motion. Standards Applicable to Class Certification Requests “The class action is ‘an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.’” Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432, 185 L. Ed.2d 515, 521 (2013)(quoting Califano v. Yamasaki, 442 U.S. 682, 700-701, 99 S. Ct. 2545, 61 L. Ed.2d 176 (1979)). “In order to justify a departure from that rule, ‘a class representative must be part of the class and possess the same interest and suffer the same injury as the class members.’” Wal- Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2550, 180 L. Ed.2d 374, 388-389 (2011)(quoting, inter alia, East Texas Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403, 97 S. Ct. 1891, 52 L. Ed.2d 453 (1977)). The principles and procedures governing class actions are clearly delineated in Fed. R. Civ. P. 23. The initial prerequisites are set forth in Rule 23(a), which reads as follows: One or more members of a class may sue or be sued as representative parties on behalf of all members only if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Thereafter, under Rule 23(b), A class action may be maintained if Rule 23(a) is satisfied and if: (1) prosecuting separate actions by or against individual class members would create a risk of: (A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests; (2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or (3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include: (A) the class members’ interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action. Under these parameters, “the class action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every class member to be litigated in an economical fashion.” Carrera v. Bayer Corp., 727 F.3d 300, 306 (3d Cir. 2013)(quoting, General Telephone Company of the Southwest v. Falcon, 457 U.S. 147, 155, 102 S. Ct. 2364, 72 L. Ed. 2d 740 (1982)). It has been observed that the requirements set out in Rule 23 are not mere pleading rules - the party seeking certification bears the burden of establishing each element of Rule 23 by a preponderance of the evidence. Marcus v. BMW of North America, LLC, 687 F.3d 583, 591 (3d Cir. 2012). A party’s assurances to the court that it intends or plans to meet the requirements is insufficient and thus it has been said that “[t]he evidence and arguments a district court considers in the class certification decision call for rigorous analysis.” In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305, 318 (3d Cir. 2008). The trial courts are well-positioned to decide which facts and legal arguments are most important to each Rule 23 requirement and possess broad discretion to control proceedings and frame issues for consideration. Id., 552 F.3d at 310. “Careful application of Rule 23 accords with the pivotal status of class certification in large-scale litigation, because ‘denying or granting class certification is often the defining moment in class actions for it may sound the “death knell” of the litigation on the part of plaintiffs or create unwarranted pressure to settle nonmeritorious claims on the part of defendants.’” Id, (quoting Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 162 (3d Cir. 2001)). In conducting its rigorous analysis, the district courts “must resolve all factual or legal disputes relevant to class certification, even if they overlap with the merits - including disputes touching on elements of the cause of action.” Marcus v. BMW of North America, 687 F.3d 583, 591 (3d Cir. 2012)(quoting In re Hydrogen Peroxide, 552 F.3d at 307). Indeed, “Rule 23 gives no license to shy away from making factual findings that are necessary to determine whether the Rule’s requirements have been met.” Id. [...]