A team of litigators from Orrick scored a big win in a consumer class action filed against their client, Ocwen Financial Corporation in Weiner v. Ocwen Financial Corporation, No. 2:14-cv-02597. The lawsuit, filed in the U.S. District Court for the Eastern District of California in 2014, alleged that Ocwen improperly marked up certain types of property valuations and charged those costs to borrowers in violation of the mortgage contracts. The lawsuit also alleged that this conduct violated the civil RICO statute, resulting in a claim for treble damages. Plaintiff claimed damages of ~$70 million in marked up fees but trebled for a total of ~$210 million. A class trial on Plaintiff’s claims, including the RICO claim, was scheduled for March 2022.
The trial was on the horizon when the Supreme Court issued its decision in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). Following that decision, Orrick came up with a strategy to decertify the class based on the holding in TransUnion. Essentially, the Court in Weiner had already found that there was a factual dispute as to how many members of the class had paid the allegedly marked up fees. TransUnion, though, held that each individual class member needs to have standing at trial, and that class members who didn’t suffer concrete harm didn’t have standing. This meant that Plaintiff couldn’t satisfy the predominance requirement of Rule 23—Plaintiff’s burden to prove that each member of the class suffered monetary harm sufficient to demonstrate standing would entail an individualized inquiry.
Ocwen moved for decertification of the class on these grounds in September 2021. After vacating the impending trial date in December 2021, on August 3, 2022, the Court granted Ocwen’s motion for decertification and agreed that, following TransUnion, the questions of law and fact common to class members did not predominate over any questions affecting only individual members under Rule 23(b)(3).