January 5, 2016
from the United States District Court for the Eastern
District of Wisconsin. No. 2:13-cv-00693-NJ - Nancy Joseph,
WOOD, Chief Judge, and Kanne and ROVNER, Circuit Judges.
ROVNER, Circuit Judge.
Real Estate Settlement Procedures Act (RESPA) sets forth
specific procedures that a mortgage lender or mortgage
servicing company must follow in response to a borrower's
request for information. Ocwen Loan Servicing, LLC failed to
follow the letter of the procedure when responding to the
plaintiffs Daniel and Natalie Diedrichs' request for
information. The Diedrichs sued, but the district court
granted summary judgment for Ocwen, finding that the
Diedrichs had failed to set forth sufficient facts, which, if
taken as true, would establish that they were injured by the
RESPA violation. The Diedrichs appealed and we affirm.
2007, Natalie and Daniel Diedrich executed a note to Decision
One Mortgage Company in the amount of $184, 000. To secure
the note, they executed a mortgage. At the time of the
relevant events, Ocwen serviced the Diedrichs' loan.
Ocwen began foreclosure proceedings in September, 2010. The
Diedrichs dispute that they defaulted under the terms and
conditions of the note and mortgage, but that is not the
subject of the dispute in this case. Ocwen and the Diedrichs
entered into a loan modification agreement dated May 20,
2011, which was to be implemented beginning July 1, 2011.
After the Diedrichs began making payments pursuant to the
loan modification agreement, they alleged that they became
concerned about whether their escrow account was being
correctly administered and whether they were being charged
improper litigation fees.
around February 22, 2013, the Diedrichs sent Ocwen a letter
in which they requested eight types of standard information
about their account including the names of employees working
on their account, the history of payments made from their
escrow account including the date, amount and payee, a
statement of interest rates applied to their account, and
other general inquiries. (R. 37-3, p.35). Neither party
disputes that this letter constituted a qualified written
request for information under RESPA, 12 U.S.C. §
2605(e)(1)(B).  In a letter dated March 7, 2013, Ocwen
responded to the Diedrichs' request with a form letter
that set forth its policies regarding how and when it would
respond to requests for information, but it did not directly
respond with the information requested. Id. p.38.
Ocwen sent another later dated March 30, 2013, stating that
it would take another fifteen days, as permitted by RESPA, to
review the inquiry. Id. p.39. Finally, on April 22,
2013, Ocwen sent the Diedrichs a letter stating that it could
not identify a problem with their account and asking the
Diedrichs to send another letter identifying which month and
report they disputed, the explanation for the dispute, and
all evidence showing that payment for the month was received
on time or that the information reported was incorrect.
on Ocwen's failure to respond to their request for
information, the Diedrichs filed a complaint against Ocwen
alleging violations of Wisconsin laws regarding mortgage
loans (Wise. Stat. § 224.77 and § 138.052) and the
federal Real Estate Settlement Procedures Act, 12 U.S.C.
§§ 2605(e)(1) & (2), which sets forth in
specific detail how a mortgage servicer such as Ocwen must
respond to such an information request. The parties consented
to disposition by the magistrate judge who granted
Ocwen's motion to dismiss the claim under Wisconsin
statute, § 138.052(7s)(a) and 12 U.S.C. §
2605(e)(1). That left in play RESPA § 2605(e)(2) and
Wisconsin statutes § 224.77(1), and § 138.052(7)
which became the subjects of dueling cross motions for
summary judgment before a second magistrate
§ 2605(e)(2) requires a lender to respond to a qualified
written request for information from a borrower within a
particular time frame and in a particular manner. Wisconsin
statute § 224.77(1) essentially points back to the
alleged RESPA violation by prohibiting mortgage bankers and
brokers from violating any federal statute that regulates
their practice. Wise. Stat. § 224.77(1)(k). Both parties
moved for summary judgment on these remaining claims, and the
magistrate judge granted Ocwen's motion for summary
judgment on all counts. The district court found that
Ocwen's responses to the written inquiries were
insufficient and therefore violated the RESPA requirements,
but the court determined that the Diedrichs' allegations
of damages were "conclusory and vague" and that
they had "failed to come forth with any evidence that
would connect their alleged [injury] to Ocwen's failure
to respond to their qualified written request for
information." Order at 14 (R. 59, p.14). The district
court also dismissed the claim under Wisconsin law for the
same reason, that is, that the Diedrichs failed to establish
they were an aggrieved party as required under the Wisconsin
statute. Order at 19 (R. 59, p.19). After filing an
unsuccessful motion for reconsideration pursuant to Federal
Rules of Civil Procedure 59(e) and 60(b)(6), the Diedrichs
appealed and we affirm.
begin, as we always must, with the question of standing. The
jurisdiction of federal courts is limited to
"Cases" and "Controversies" as described
in Article III, Section 2 of the Constitution. There is no
case or controversy if the plaintiff lacks standing to
challenge the defendant's alleged misconduct. Lujan
v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). In
order to have standing, "[t]he plaintiff must have (1)
suffered an injury in fact, (2) that is fairly traceable to
the challenged conduct of the defendant, and (3) that is
likely to be redressed by a favorable judicial
decision." Spokeo, Inc. v. Robins, 136 S.Ct.
1540, 1547 (2016) (citing Lujan, 504 U.S. at
plaintiff has the burden of establishing these elements and
must support each element "with the manner and degree of
evidence required at the successive stages of the
litigation." Lujan, 504 U.S. at 561. The
Supreme Court elaborated as follows:
At the pleading stage, general factual allegations of injury
resulting from the defendant's conduct may suffice, for
on a motion to dismiss we "presum[e] that general
allegations embrace those specific facts that are necessary
to support the claim." In response to a summary judgment
motion, however, the plaintiff can no longer rest on such
"mere allegations, " but must "set forth"
by affidavit or other evidence "specific facts, "
which for purposes of the summary judgment motion will be
taken to be true.
Lujan, 504 U.S. at 561 (internal citations omitted).
In short, for purposes of demonstrating whether the
plaintiffs have standing to assert their claims before this
court, we look to see whether they have set forth sufficient
factual allegations supporting their claim that they suffered
an injury in fact, that was fairly traceable to Ocwen's
violation of the RESPA statute. See Id. at 560-61.
raised by the parties or not, a court must assure itself that
the plaintiff has standing, such that there exists a case or
controversy as required by Article III of the Constitution.
See Steel Co. v. Citizens for a Better Env't,
523 U.S. 83, 94 (1998). Consequently, we asked the parties to
submit supplemental briefing on the issue of standing in
light of the Supreme Court's recent decision in
Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), which
was issued after the completion of briefing in this case. In
Spokeo, the Supreme Court clarified the requirements
for standing set forth in Lujan and noted that the
injury must be concrete-that is "de facto ... it must
actually exist." Spokeo, 136 S.Ct. at 1548. The
Court elaborated that "concrete" is not necessarily
"tangible, " but a plaintiff cannot "allege a
bare procedural violation, divorced from any concrete harm,
and satisfy the injury-in-fact requirement of Article
III." Id. at 1549.
order to survive dismissal for lack of standing, the
plaintiffs' complaint must contain sufficient factual
allegations of an injury resulting from the defendants'
conduct, accepted as true, to state a claim for relief that
is plausible on its face. Aschroft v. Iqbal 556 U.S.
662, 678 (2009), citing Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007). The alleged injury must be concrete and
not just a procedural violation divorced from any harm.
Spokeo, 136 S.Ct. at 1548.
requirement of facial plausibility means "enough to
raise a right to relief above the speculative level."
Twombly, 550 U.S. at 555. "The plausibility
standard is not akin to a 'probability requirement/ but
it asks for more than a sheer possibility that a defendant
has acted unlawfully." Iqbal, 556 U.S. at 678.
"[A] well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of those facts is
improbable, and that a recovery is very remote and
unlikely." Twombly, 550 U.S. at 556 (internal
citations omitted). Legal conclusions or bare and conclusory
allegations, however, are insufficient to state a claim.
Iqbal, 556 U.S. at 678, 680. Nevertheless, even with
the heightened pleading requirements of Iqbal and
Twombly, the pleading requirements to survive a
challenge to a motion to dismiss remain low.
case, the injury requirement for standing overlaps with the
injury requirement under the statute. In other words, as the
court explained in Spokeo, the plaintiffs must have
suffered a concrete injury in order to allege standing as a
constitutional matter. Spokeo, 136 S.Ct. at 1548.
And in this case, the statute does not grant statutory
damages for bare procedural violations; it requires an actual
injury. Consequently, there is no need to perform a separate
Spokeo analysis to demonstrate whether a procedural
injury alleged under the statute is sufficiently concrete to
pass muster for Article III standing. The injury must be
"actual, " both for standing purposes and for
purposes of the statute.
RESPA section at issue, 12 U.S.C. § 2605, imposes a duty
on loan servicers to respond to borrower
inquiries. The district court found that Ocwen
"violated RESPA by failing to properly respond to the
Diedrichs' qualified written request for
information." Order at 19 (R. 59, p. 19). Ocwen does not
dispute this portion of the court's finding. The district
court, however, found that "the Diedrichs have failed to
put forth evidence of damages stemming from the
violation" Id. If they have no injury under the
statute, then they fail the first part of the requirement for
remedy portion of the statute indicates that the statute was
intended to redress actual damages caused by the
failure of the loan servicer to provide information to the
borrower. It states as follows:
(f) Damages and costs
Whoever fails to comply with any provision of this section
shall be liable to the borrower for each such failure in the
In the case of any action by an individual, an amount equal