Eastern District Of Pennsylvania Holds That Plaintiffs Forfeited American Pipe Tolling By Filing Their Lawsuit Too Soon

A federal district court has dismissed with prejudice a Real Estate Settlement Procedures Act (RESPA) class action filed against JPMorgan Chase Bank N.A. and related entities on statute of limitations grounds a year after finding that the continuing violations doctrine applied to RESPA.

Plaintiffs claimed that defendants violated RESPA when JPMorgan created captive reinsurers to reinsure private mortgage insurance. Plaintiffs alleged that JPMorgan received kickbacks from the reinsurers, which did not assume any real risk and provided no real services. Defendants moved to dismiss the initial complaint on the basis that the claims were untimely under RESPA's one year statute of limitations. In response, plaintiffs relied (1) on the argument that the limitations period was tolled by the filing of an earlier class action called Samp v. JPMorgan Chase Bank, N.A., which asserted similar claims on behalf of the same putative class members, under the doctrine established by the Supreme Court in American Pipe American Pipe & Construction Co. v. Utah, and (2) on the doctrine of equitable tolling. While that motion was pending, the Third Circuit decided Cunningham v. M & T Bank Corp., in which it held that the equitable tolling doctrine did not save very similar RESPA claims, as plaintiffs in that suit knew or should have known of their claims at the time they were provided with certain disclosures regarding reinsurance. Plaintiffs in the JPMorgan case then moved to amend their complaint to abandon their reliance on equitable tolling, instead asserting that, under the continuing violations doctrine, their RESPA claims were triggered each time a kickback payment was made. The court found that this doctrine applied to such RESPA claims and allowed the amendment.

Defendants moved to dismiss the amended complaint, again asserting that the RESPA claims were time-barred. In its order, the court reiterated its position that the continuing violations doctrine could be applied to the RESPA claims and rejected defendants' argument that plaintiffs' knowledge of their claims more than one year before filing their complaint defeated the application...