United States District Court, E.D. Pennsylvania
STENGEL, C. J.
a putative class action brought by homeowners claiming
violations of the Real Estate Settlement Procedures Act, 12
U.S.C. § 2607 (RESPA). The plaintiffs filed a Motion to
Strike several of the defendants' affirmative defenses.
plaintiffs claim the defendants carried on a "captive
reinsurance scheme" in which the defendants enjoyed
kickbacks, referrals, and fees that are prohibited by RESPA.
Plaintiffs allege that the defendant insurers, lenders, and
reinsurers have colluded to create a scheme that violates
RESPA. Plaintiffs maintain that the lenders, as a general
practice, form subsidiary companies that become the
reinsurers. These lenders then systematically refer
homeowners to the insurers to buy mortgage insurance. In
exchange for a constant stream of profit-producing
homeowner-borrowers, the insurers then pay a kickback to the
reinsurer who, as a subsidiary, is really just an extension
of the lender. Plaintiffs claim this "pay-to-play"
scheme harms homeowners because, by colluding, the insurers,
reinsurers, and lenders, were able to reduce competition in
the mortgage insurance market, thereby increasing the premium
payments the homeowner-plaintiffs are required to pay to
maintain their mortgage insurance.
months ago, in allowing plaintiffs to amend their claims, I
held that RESPA was violated each time an allegedly illegal
kickback, fee, or referral was given or received. White
v. PNC Fin. Servs. Grp., Inc., 11-cv-7928, 2017 WL
85378, at *13 (E.D. Pa. Jan. 10, 2017). I also held that the
continuing violations doctrine applied to plaintiffs'
claims, thereby saving them from RESPA's one-year statute
of limitations. Id. at *6. Following that decision,
defendant The PNC Financial Services Group, Inc.
("PNC") filed an interlocutory appeal. The Third
Circuit rejected PNC's attempt to appeal my decision.
(Doc. No. 264). The case then proceeded to discovery, which
is where it stands now.
plaintiffs move to strike PNC's following affirmative
First Defense Plaintiffs' claims and those of
the putative class are or may be barred by the applicable
statute of limitations. Without in any way limiting the
foregoing, PNC specifically reserves all rights to challenge
the Court's determination that RESPA's one-year
statute of limitations is subject to the "continuing
violation" doctrine. Further, even under the continuing
violation theory asserted by Plaintiffs, PNC asserts that any
period PMI premium paid prior to December 31, 2010 is barred
by the RESPA limitations period. PNC asserts the same
principles with respect to the unjust enrichment claim. (Doc.
No. 265, Answer at 50-51).
Third Defense Plaintiffs' RESPA claims fail
because PNC did not make any referrals to the Mortgage
Insurers after December 31, 2010. (Answer at 51).
Seventh Defense Plaintiffs' claims against PNC are
barred because Plaintiffs paid mortgage insurance rates filed
with and/or approved by state regulators. (Answer at
Eighth Defense Plaintiffs lack standing under
Article III and RESPA to bring some or all of their claims in
this case, including claims related to reinsurance agreements
that are inapplicable to their loans. (Answer at 52).
to Rule 12(f) of the Federal Rules of Civil Procedure, a
party may move to "strike from a pleading an
insufficient defense or any redundant, immaterial,
impertinent, or scandalous matter." The pleading
standard for an affirmative defense is set forth in Rule
8(c), which requires a party to "affirmatively state any
avoidance or affirmative defense." An affirmative
defense is "[a] matter asserted by defendant which,
assuming the complaint to be true, constitutes a defense to
it." In re Sterten, 546 F.3d 278, 284 n.9 (3d
Cir. 2008) (alteration in original) (citing
BLACK'S LAW DICTIONARY 60 (6th ed. 1990)).
striking of a pleading is "a 'drastic remedy' to
be used sparingly because of the difficulty of deciding a
case without a factual record." Dann v. Lincoln NatT
Corp., 274 F.R.D. 139, 142 (E.D. Pa. 2011) (quoting
BJ Energy, LLC v. PJM Interconnection, LLC, Nos.
08-3649, 09-2864, 2010 WL 1491900, at *1 (E.D. Pa. Apr. 13,
2010)). Accordingly, a motion to strike will not be granted
if "the sufficiency of a defense depends on disputed
issues of fact. Even when the facts are not in dispute, Rule