Minter v. Wells Fargo Bank, N.A., No. 13-2131 (4th Cir. 2014)
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Plaintiffs filed a class action suit against defendants, alleging that they violated Section 8 of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2607, by creating a joint venture (Prosperity) to skirt RESPA's prohibition on kickbacks while failing to disclose this business arrangement to its customers. The court concluded that the district court did not abuse its discretion denying plaintiffs' claims because plaintiffs' failed to move for judgment as a matter of law before the jury reached its verdict and because of the highly deferential lenses through which the court must review the issues before it. Accordingly, the court affirmed the judgment of the district court.
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PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-2131 DENISE MINTER, Individually and on behalf of a class of consumers similarly situated; JASON ALBOROUGH; RACHEL ALBOROUGH; LIZBETH T. BINKS, Plaintiffs Appellants, and FRANK LAROCCA; CATHERINE LAROCCA; MEHDI IRANPOUR; KENNETH PFEIFER; ANGELA PFEIFER, NAFISI; FOROUGH Intervenors/Plaintiffs, v. WELLS FARGO PROSPERITY CORPORATION, Corporation; BANK, N.A.; LONG & FOSTER REAL ESTATE, INC.; MORTGAGE COMPANY; WALKER JACKSON MORTGAGE formerly doing business as Prosperity Mortgage WELLS FARGO VENTURES, LLC, Defendants Appellees. Appeal from the United States District Court for the District of Maryland, at Baltimore. William M. Nickerson, Senior District Judge. (1:07-cv-03442-WMN) Argued: May 14, 2014 Decided: August 5, 2014 Before NIEMEYER and WYNN, Circuit Judges, and Robert J. CONRAD, Jr., United States District Judge for the Western District of North Carolina, sitting by designation. Affirmed by published opinion. Judge Wynn wrote the opinion, in which Judge Niemeyer and Judge Conrad joined. ARGUED: Cyril Vincent Smith, ZUCKERMAN SPAEDER LLP, Baltimore, Maryland, for Appellants. William M. Jay, GOODWIN PROCTER LLP, Washington, D.C., for Appellees. ON BRIEF: William K. Meyer, ZUCKERMAN SPAEDER LLP, Baltimore, Maryland; Richard S. Gordon, Benjamin H. Carney, GORDON, WOLF & CARNEY CHTD., Baltimore, Maryland, for Appellants. Irene C. Freidel, Brian M. Forbes, K&L GATES LLP, Boston, Massachusetts; Andrew Jay Graham, John A. Bourgeois, KRAMON & GRAHAM, P.A., Baltimore, Maryland, for Appellees Wells Fargo Bank, N.A., and Wells Fargo Ventures, LLC. David L. Permut, Sabrina M. Rose-Smith, GOODWIN PROCTER LLP, Washington, D.C., for Appellee Prosperity Mortgage Company. Jay N. Varon, Jennifer M. Keas, FOLEY & LARDNER LLP, Washington, D.C., for Appellees Long & Foster Real Estate, Incorporated, and Walker Jackson Mortgage Corporation. 2 WYNN, Circuit Judge: In this class action suit, Plaintiffs Denise Minter, Jason and Rachel Alborough, and Lizbeth Binks brought suit on behalf of a group of consumers alleging that Wells Fargo and Long & Foster Real Estate (collectively, Defendants ) violated Section 8 of the Real Estate Settlement Procedures Act ( RESPA ), 12 U.S.C. § 2607. created a Specifically, Plaintiffs allege that Defendants joint venture, Prosperity Mortgage Company ( Prosperity ), to skirt RESPA s prohibition on kickbacks while failing to disclose this business arrangement to its customers. After a trial on a portion of Plaintiffs claims, the jury returned a verdict that foreclosed Plaintiffs untried kickback claims. Plaintiffs moved for a new trial on the kickback claims but were denied. Due in large part to Plaintiffs failure to move for judgment as a matter of law before the jury reached its verdict, as well as the highly deferential lenses through which we must district review court the did issues not Plaintiffs challenges. before abuse its us, we conclude discretion as that to the any of Accordingly, we affirm. I. In 1993, Wells Corporation, a Foster Estate, Real Fargo subsidiary and formed and Walker affiliate Prosperity 3 of Jackson Defendant Mortgage Mortgage Long Company as & a joint venture.1 Prosperity was created as a mortgage lender that funded its loans via a wholesale line of credit provided by Wells Fargo[.] J.A. 205. Plaintiffs Denise Minter and Jason and Rachel Alborough, along with a class of similarly situated consumers, purchased their homes with a Long & Foster realtor and obtained mortgages through Prosperity in 2006 and 2007. In late 2007, Plaintiffs brought this class action suit alleging that Wells Fargo and Long & Foster organization created formed to Prosperity facilitate as a unlawful sham or referral a front fees and kickbacks in violation of RESPA, as well as a variety of other state and federal law claims.2 In particular, Plaintiffs alleged that Defendants created Prosperity to allow Long & Foster to refer mortgage clients to Wells Fargo in exchange for kickbacks. Plaintiffs also alleged that Prosperity performed little to no 1 At that time, the parties to the joint venture were Norwest Mortgage, Inc. and Walker Jackson Mortgage Corporation, which was then known as Prosperity Mortgage Corporation. Norwest Mortgage later became Wells Fargo. For the purposes of this opinion, the companies current names, Wells Fargo and Long & Foster, will be used. 2 Plaintiffs also alleged violations of the Racketeer Influenced and Corrupt Organizations Act, the Maryland Consumer Protection Act, and derivative tort claims, but none of these are the subject of this appeal. Before trial, the parties stipulated to dismiss most of the counts in the complaint, and Plaintiffs proceeded only on their RESPA and RESPA conspiracy claims. Later, the district court found that RESPA does not support a cause of action for conspiracy and granted Defendants summary judgment on the conspiracy claim. Thus, the only remaining claims on appeal are the three RESPA claims. 4 real work in connection with the mortgage transactions and that Wells Fargo was the real lender. Plaintiffs asserted three RESPA violations: 1. The Section 8(a) claim alleged that Wells Fargo paid kickbacks to Long & Foster in exchange for settlement services. 2. The Section 8(c) claim alleged that Wells Fargo and Long & Foster operated Prosperity as a sham lender, i.e., not a bona fide provider of settlement services, to funnel Long & Foster real estate customers to Wells Fargo for mortgage products. 3. The Section 8(c)(4) claim alleged that Defendants, as members of an affiliated business arrangement as defined by RESPA, did not comply with RESPA s requirement to provide borrowers with valid affiliated business arrangement disclosures. J.A. 206, 250, 292-301, 1036-37, 1095-97.3 Plaintiffs claims. The moved district to certify court a class bifurcated for all Plaintiffs of their proposed class into two separate classes: (1) the Timely Class, including all the class members whose claims were brought within RESPA s one-year statute of limitations, and (2) the Tolling Class, for 3 The district court and the parties refer to the claims as Section 8 claims in light of the Section s location in the statute as enacted by Congress, RESPA, Pub. L. No. 93533, 88 Stat. 1724, but these references correspond to subsections of 12 U.S.C. § 2607. Section 8(a) sets out RESPA s prohibition on kickbacks while Section 8(c) provides exemptions from that prohibition. In this case, Plaintiffs alleged direct violations of Section 8(a) s prohibition as well as Section 8(c) claims, which assert that Defendants failed to meet the requirements for the Section 8(c) exemptions from Section 8(a). In this appeal, we are not asked to decide whether Section 8(a) and Section 8(c) provide separate claims, and we therefore take no position on that issue. 5 all class members whose claims were brought after the statute of limitations period expired. Thereafter, the district court certified Plaintiffs Section 8(c) and 8(c)(4) claims, but did not certify the Section 8(a) claims because only those Prosperity clients who were referred [to Prosperity] by Long & Foster may proceed under [the Section 8(a)] particular claim sub-set of and certifying members would a sub-class unnecessarily for that complicate and obscure the central inquiry into Prosperity s legitimacy as a lender. J.A. 260-61. The district court noted that [s]hould Plaintiffs fail under their Section 8(c) claims, the Court may entertain further theory. J.A. briefing 261. The with respect district to court the also Section chose 8(a) not to certify the Tolling Class on any of the claims because it did not have a representative member. In response, Plaintiffs amended their complaint to include a new named plaintiff, Lizbeth Binks, as a representative of the Tolling Class, and renewed their motion to certify the Tolling Class on all their claims. The district court reiterated that it would not certify the Section 8(a) claims for either the Tolling or the Timely Class. After completing a class certification analysis, the district court certified the Tolling Class on its Section 8(c) and 8(c)(4) claims only. 6 Defendants then moved for summary judgment on the Timely and Tolling Classes claims. The district court denied their motions due to factual disputes that could not be resolved at the summary judgment stage.4 and 8(c)(4) claims, Before trial on the Section 8(c) Plaintiffs suggested that the individual Section 8(a) claims, although not certified as a class, should be tried in the same trial. The district court rejected that request, stating that [f]ollowing the upcoming trial, the Court will solicit proposals from the parties related to scheduling a trial of Plaintiffs individual § 8(a) claims. J.A. 1097. See also J.A. 1100 n.2 ( Plaintiffs individual claims under § 8(a) will be tried at a later date. ). Before trial, Defendants moved to decertify both the Timely and the Tolling Classes. The district court decertified the Tolling court s Class due to the 4 concerns about the tolling However, the district court noted that it would consider decertifying the Tolling Class at a later point: While the Court concludes that summary judgment should be denied . . . as to Binks claim, after delving into the arguments regarding tolling, . . . the Court finds it must at least consider the option to which it alluded when certifying the Tolling Class, i.e., exercising its discretion to decertify that class should issues of manageability begin to overwhelm the advantages of certification. The Court will delay that determination, however, until after the completion of the Petry trial. J.A. 780 (citation omitted). 7 doctrine s individualized application.5 The district court also amended the Timely Class by limiting it to class members who were referred to Prosperity by Long & Foster and excluding any class members whose loans were not transferred to Wells Fargo but were instead sold to others. Also before trial, Plaintiffs moved to exclude evidence and argument about whether Plaintiffs had suffered economic injury, including testimony from one of Defendants experts, Dr. Marsha Courchane. The district court agreed, ruling that Dr. Courchane s testimony and other evidence of a lack of economic damages was minimally relevant and deemed the probative value of the expert testimony substantially outweighed by a danger of unfair J.A. prejudice, 1119-20. reconsider that confusion, However, ruling if misleading the court Plaintiffs the stated jury, or that open[ed] the delay. it door evidence of economic injury during their case-in-chief[.] 1120. would to J.A. Later, the district court ruled that Defendants would be allowed to ask about whether Plaintiffs shopp[ed] around for their mortgages and whether they chose Prosperity because it was 5 After the trial, the district court entered Administrative Order Number 5. That order explained the re-definition of the classes, stayed the decertification of the classes until notice was provided, and severed the individual 8(a) claims of the Timely Class representatives, Minter and the Alboroughs, from the individual Section 8(a) claims of the Tolling Class representative, Binks, and ordered that those claims shall be subject to separate proceedings, if necessary. J.A. 1267-69. 8 offering better rates[,] lower costs, or better service. 1162 (quotation marks omitted). evidence is relevant J.A. The court explained that this background on the Named Plaintiffs claims[,] distinct from unfairly prejudicial evidence of their lack of economic harm. Id. After resolving these motions, the district court held the trial on Plaintiffs Section 8(c) and Section 8(c)(4) claims. During this trial, several matters arose to become the bases for the issues now on appeal. First, throughout the trial, Plaintiffs objected to Defendants questions regarding whether Plaintiffs suffered economic harm from using Prosperity, whether Prosperity s loans were competitive in the market, and whether Prosperity gave the named Plaintiffs the best deal. Second, during closing arguments, Long & Foster s counsel stated that I think the only thing I agree [with] for sure is that Long & Foster did refer the named plaintiffs to Prosperity. dispute about that. and Wells financially Fargo J.A. 1686. stated beneficial that deals There s no Third, counsel for Prosperity the in named their Plaintiffs loans. And received finally, during his closing argument, Wells Fargo s counsel implied that Plaintiffs attorney had a financial interest in the case. After the district court instructed the jury and deliberations concluded, the jury returned a verdict in favor of Defendants. Specifically, the jury decided that Plaintiffs did 9 not prove by a preponderance of the evidence that Prosperity was a sham and not a bona fide provider of settlement services. In addition, the jury decided that Plaintiffs did not prove that Long & Foster referred or affirmatively influenced Plaintiffs to use Prosperity influenced services. or that Plaintiffs Prosperity to use referred Wells or Fargo affirmatively for settlement Accordingly, the district court entered judgment in favor of Defendants.6 Thereafter, Plaintiffs moved for a new trial under Federal Rule of Civil Procedure 59(a). motion and Defendants claims issued and under § an order against 8(a) of Named The district court denied the entering judgment Plaintiffs [RESPA], 12 on in Named U.S.C. § favor of Plaintiffs 2607[,] i.e., claims that had not yet been tried (as opposed to the Section 8(c) claims, which had been tried). 31. Appellants Br. at Addendum Plaintiffs timely appealed. II. Plaintiffs first challenge the district court s rejection of their Rule 59(a) motion for a new trial. A district court s denial of a motion for a new trial is reviewed for abuse of 6 The district court later entered an amended judgment that reflected the exclusions from the class that were discussed above. 10 discretion, and will not exceptional circumstances. be reversed save in the most FDIC v. Bakkebo, 506 F.3d 286, 294 (4th Cir. 2007) (quoting Figg v. Schroeder, 312 F.3d 625, 641 (4th Cir. 2002)). Rule 59 states that [t]he court may, on motion, grant a new trial on all or some of the issues . . . after a jury trial, for any reason for which a new trial has heretofore been granted in an action 59(a)(1). at We law have in federal recognized court[.] that, Fed. under this R. Civ. rule, P. the district court must set aside the verdict and grant a new trial[] if . . . (1) the verdict is against the clear weight of the evidence, or (2) is based upon evidence which is false, or (3) will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict. Knussman v. Maryland, 272 F.3d 625, 639 (4th Cir. 2001) (quoting Atlas Food Sys. & Servs., Inc. v. Crane Nat l Vendors, Inc., 99 F.3d 587, 594 (4th Cir. 1996)). Plaintiffs brought three RESPA claims: Section 8(c) and Section 8(c)(4) claims. Section 8(a), The Section 8(c) and Section 8(c)(4) claims proceeded to trial, but the Section 8(a) claims did not but were instead adjudicated after trial. Appellants Rule 59 motion is unusual in that Plaintiffs are not seeking a new trial for the purpose of re-trying their Section 11 8(c) claims. Instead, they are seeking only a first trial on their [Section] 8(a) claims[.] Appellants Br. at 49. Plaintiffs Rule 59(a) motion specifically challenged the jury s negative answer to Question Three of the verdict form: Have Plaintiffs proved, by a preponderance of the evidence, that Long & Foster Real Estate, Inc. referred or affirmatively influenced the Plaintiffs to use Prosperity Mortgage Company for the provision of settlement services? J.A. 1212. Because Plaintiffs Section 8(a) claim also required Plaintiffs to prove that Long district & Foster court referred that held Plaintiffs jury s the to Prosperity, finding on this the issue undermined both the Plaintiffs tried and untried RESPA claims. Plaintiffs thus seek to overturn the jury s finding on this question and attain a trial on the Section 8(a) claims. On appeal, Plaintiffs make two arguments for reversal of the district court s denial of their Rule 59 motion: 1) Long & Foster s counsel referral issue made from a judicial dispute, and admission 2) against the clear weight of evidence. the that removed the jury s verdict was We disagree with both. A. First, Plaintiffs argue that the district court abused its discretion by finding that Long & Foster s counsel s statement 12 in closing argument that Long & Foster referred the named Plaintiffs to Prosperity was not a judicial admission. A judicial admission is a representation that is conclusive in the case unless the court allows it to be withdrawn. Meyer v. Berkshire Life Ins. Co., 372 F.3d 261, 264 (4th Cir. 2004) (quoting Keller v. United States, 58 F.3d 1194, 1198 n.8 (7th Cir. 1995) (further defining judicial admissions as formal concessions in the pleadings, or stipulations by a party or its counsel, that are binding upon the party making them )). Judicial admissions include intentional and unambiguous waivers that release the opposing party from its burden to prove the conclusion of law. may constitute statements a are facts necessary Id. at 264-65. binding to the waived [A] lawyer s statements admission deliberate, establish of clear, a and party[] if the unambiguous[.] Fraternal Order of Police Lodge No. 89 v. Prince George s Cnty., Md., 608 F.3d 183, 190 (4th Cir. 2010) (quoting Meyer, 372 F.3d at 265 n.2). to whether We review the district court s determination as a particular statement constitute[d] admission . . . [for] abuse of discretion. a judicial Meyer, 372 F.3d at 264 (quotations omitted) (alterations in original). In this case, during closing arguments, Long & Foster s counsel stated: 13 First of all, at the outset, I would just ask you to ask yourselves if your assessment of the witnesses, of the documents, of their credibility, of what you heard in this case really matches what [Plaintiffs counsel] told you. It s your job to weigh what occurred here. And frankly, I m sure you won t be surprised, I have a lot of differences, and differences of recollection, differences in what was said. I think the only thing I agree way [sic] for sure is that Long & Foster did refer the named plaintiffs to Prosperity. There s no dispute about that. J.A. 1686. Plaintiffs did not object, move for judgment as a matter of law, or seek to amend the jury verdict form after this alleged admission. After deliberations, the jury found that Plaintiffs proven had affirmatively not influenced that Long Plaintiffs & to Foster use referred or Prosperity. Plaintiffs then moved for a new trial, arguing for the first time after the jury s verdict, that counsel s statement during argument had constituted a judicial admission that Long & Foster had referred the plaintiffs to Prosperity. The district court recognized that [t]aken alone, [Long & Foster s counsel s] statement could possibly be considered an admission[,] but rejected the motion for a new trial. 1353. The district court explained that giving due regard to the context of this litigation and considerations of fairness, the Court is troubled by the fact that the supposed admission is being raised for the first time post-verdict. While the time between [Long & Foster counsel s] statement and submission of the case to the jury was indeed short, the Court believes it was a sufficient amount of time for Plaintiffs to reconsider the task with which the jury would be charged in light of counsel s statement, 14 J.A. and to raise the supposed admission with the Court and with counsel. Obviously, Plaintiffs did not and, . . . the conclusion which urges itself at this time is that it occurred to no one at the trial that the remarks in question constituted an admission of the nature here urged. As a result, the Court believes it would be decidedly unfair and inconsistent with the purpose of motions under Rule 59 to allow Plaintiffs to do now, what they failed to do at trial. J.A. 1353-54 (quotation marks, citations, and footnote omitted). On appeal, Plaintiffs claim that this ruling was an abuse of discretion. We disagree. The record reflects that Plaintiffs had ample opportunity to raise the alleged admission but failed to do so. And the fact that it occurred to no one at trial that this isolated remark constituted a binding admission undercuts the notion that the statement was sufficiently deliberate and clear so as to have preclusive effect. In the face of Plaintiffs failure to undertake any steps whatsoever at trial to have the statement deemed an admission or have the issue removed from the jury s province, it simply cannot be said that an error occurred in the conduct of the trial that was so grievous as to have rendered the trial unfair. Bristol Steel & Iron Works v. Bethlehem Steel Corp., 41 F.3d 182, 186 (4th Cir. 1994) (quotation marks omitted). Accordingly, we conclude that the district court did not abuse its discretion on this issue. 15 B. Second, Plaintiffs contend that the district court abused its discretion by denying their motion for a new trial because the jury s verdict was against the clear weight of the evidence. While a party is not required to make a Rule 50 motion for judgment as a matter of law before moving for a new trial, when, as here, a party does not do so, our scope of review is exceedingly confined, being limited to whether there was any evidence to support the jury s verdict, irrespective of its sufficiency, or whether plain error was committed which, if not noticed, would result in a manifest miscarriage of justice. Bristol Steel, 41 F.3d at 187 (quotation marks and citations omitted); accord Nichols v. Ashland Hosp. Corp., 251 F.3d 496, 502 (4th Cir. 2001). In other words, when reviewing the evidence through the medium of a motion for a new trial after failure to move for judgment as a matter of law, we do not review sufficiency in its technical sense. What is at issue is whether there was an absolute absence of evidence to support the jury s verdict. Bristol Steel, 41 F.3d at 187 (quotation marks and citations omitted). decision Therefore, unless there we must affirm was an absolute the district absence of court s evidence supporting the jury s finding that Plaintiffs did not prove by a preponderance of the evidence that Long & Foster referred or 16 affirmatively influenced them to use Prosperity for settlement services. Id. Under RESPA s regulations, [a] referral includes any oral or written action directed to a person which has the effect of affirmatively influencing the selection by any person of a provider of a settlement service or business incident to or part of a settlement service when such person will pay for such settlement service or business incident thereto or pay a charge attributable in whole or in part to such settlement service or business. 12 C.F.R. § 1024.14(f)(1) (2011). The district court provided this definition to the jury during its final instructions. We cannot say that there is an absolute absence of evidence supporting the jury s determination that Long & Foster did not refer the plaintiffs to Prosperity. For example, Long & Foster executive George Eastment testified that it was Long & Foster s independently contracted real estate agents who were responsible for referring Plaintiffs to Prosperity, not Long & Foster itself. contact is not Specifically, he stated that Long & Foster s with the buyers and sellers, rather the independent contractors who are agents . . . have the contact with the buyers and sellers[.] J.A. 1495. He later reiterated that [a]gents who were affiliated with Long & Foster made the referral. The company itself did not make the referral. 1511. 17 J.A. Further evidence supported Defendants theory that the actions of Long & Foster real estate agents did not qualify as a referral under RESPA because Long & Foster s agents actions did not affirmatively influenc[e] Plaintiffs to choose Prosperity. 12 C.F.R. § 1024.14(f)(1). For example, Long & Foster real estate agent Konstantino Tsamouras testified that Prosperity was not the only lender he recommended to Plaintiffs. The record supports this testimony, reflecting that Tsamouras recommended loan officers from both Prosperity and Bank of America to the Alboroughs, and First Mortgage. that Tsamouras referred other individuals to Further, the named Plaintiffs testified that they shopped around and conducted an independent search for a lender before deciding to use Prosperity and selected Prosperity because it offered the best deal. See J.A. 1526-30, 1563-69, 1570-71. Undoubtedly, the evidence would have supported a verdict going the other way. But in light of Plaintiffs failure to move for judgment as a matter of law before the jury did its job and the ensuing high bar Plaintiffs face, we cannot conclude that there was an absolute absence of evidence supporting the jury s verdict. Bristol Steel, 41 F.3d at 187. must district affirm the court s motion for a new trial. 18 denial of the We therefore Plaintiffs III. Plaintiffs also challenge the district court s decision to admit testimony regarding the economic harm, or lack thereof, that they suffered services. We due review to a using trial Prosperity's court s settlement rulings on the admissibility of evidence for abuse of discretion, and we will only overturn irrational. 2011) an evidentiary ruling that is arbitrary and United States v. Cole, 631 F.3d 146, 153 (4th Cir. (quotation marks omitted). See also Myers, 589 F.3d 117, 123 (4th Cir. 2009). United States v. To be admissible, evidence must be relevant a low barrier requiring only that evidence be worth consideration by the jury[.] United States v. Leftenant, 341 F.3d 338, 346 (4th Cir. 2003) (quotation marks omitted). Under Federal Rule of Evidence 403, determining whether the probative value of evidence is substantially outweighed by the danger of unfair prejudice, misleading the jury, or confusion of the issues is within the district court s broad discretion. United States v. Love, 134 F.3d 595, 603 (4th Cir. 1998). We will not overturn a Rule 403 decision except under the most extraordinary discretion has of circumstances, been plainly where abused. omitted) (alteration in original). [a Id. trial court s] (quotation marks When reviewing the district court s decision to admit evidence under Rule 403, we must look 19 at the evidence in a light most favorable to its proponent, maximizing its probative value and minimizing its prejudicial effect. United States v. Udeozor, 515 F.3d 260, 265 (4th Cir. 2008) (quotation marks omitted). Before trial, the district court excluded Dr. Courchane s expert testimony regarding Prosperity s loan prices and all other testimony, evidence, or argument about whether Plaintiffs suffered economic injury. The district court explained that Plaintiffs were not required to establish economic injury to prove their RESPA claims and that the probative value of such evidence would be minimal. The district court warned that if Plaintiffs open the door to evidence of economic injury during their case-in-chief, [the court] will reconsider this decision. J.A. 1120. During trial, however, the district court ruled that it would allow Defendants to question Plaintiffs about whether they shopp[ed] around for their mortgages and whether they chose Prosperity because it offered better rates[,] lower costs, or better service marks omitted). questioning was than its competitors. The district relevant as court background J.A. 1162 explained (quotation that information on such the Plaintiffs claims, but it cautioned that Defendants would not be allowed to suggest from the Plaintiffs decisions to shop around or their decision to choose Prosperity because of its 20 rates and/or fees that Plaintiffs consequently did not suffer any economic harm. At trial, witnesses Id. over about how lenders. See Defendants Plaintiffs objections, Prosperity s J.A. witnesses prices Defendants compared 1538, 1568-1571, testified that, 1586-92, generally, offered lower prices on loans than Wells Fargo. 1638-39. ask with asked other 1638-39. Prosperity See J.A. 1592, In addition, the district court allowed Defendants to whether Plaintiffs involvement with Specifically, suffered Prosperity. during counsel asked Minter: financial See harm due to J.A. Wells cross-examination, 1536-38, Fargo s their 1570. defense You have absolutely no evidence that by doing your loan with Prosperity, and having Prosperity sell its loan on the secondary market to Wells Fargo, that you incurred any financial consequence one way or the other, negatively? J.A. 1538. Minter responded that she did not know and had not looked at Wells Fargo s rates. Id. Likewise, during cross- examination, Prosperity s defense counsel asked Jason Alborough if he decided to use Prosperity because he thought Prosperity was giving [him] the best deal[,] to which Jason Alborough responded that Prosperity s pricing was [o]ne of the factors that led him to use Prosperity. During distinguished Minter s between J.A. 1570. cross-examination, allowing 21 such the district questioning on court direct examination and allowing it on cross-examination, stating the fact of whether she has or has not suffered any economic damage is not off the table with respect to cross-examining her[,] although [i]t s off the table with respect to any element to be required to prove the plaintiffs case, and I ll instruct the jury in that respect. J.A. 1536. During Alborough s cross- examination, the district court allowed questioning on whether Alborough had received the best deal for [his] loan[,] saying He says he felt appropriate. cheated, J.A. 1570. I think this cross-examination is The district court later explained that: From my perspective, the evidence has not indicated from individual plaintiffs any financial loss. To the contrary, particularly with regard to Mr. Alborough, who was grilled at length as to why he s here as a plaintiff and never uttered a word that sounded to me as though there was any financial loss involved. Nor did that come from Miss Minter, in addition to which, as I ve already indicated, the jury s going to be instructed that financial loss is not an issue for them to be concerned about. So simply put, the door has not been opened, in my view. The ruling will be as before. Motion in limine sustained. J.A. 1640. The district court s decision to allow Defendants to adduce general testimony from their own witnesses and cross-examination testimony about Prosperity s competitive loan pricing did not constitute an abuse of discretion. 22 In particular, that testimony was relevant to determining whether Prosperity was a sham business and whether Prosperity independently priced its loans to be competitive in the market rather than being exclusively controlled by Wells Fargo and Long & Foster. Moreover, any potential prejudicial impact was mitigated by the district court s jury instructions that stated: [P]laintiffs are not required to prove they were overcharged by any of the defendants in connection with their loans, or that they incurred any financial detriment, or that they ve suffered any poor service as a result of their dealings with the defendants. Instead, for the plaintiffs to succeed on their claims, they re only required to prove that Prosperity was a sham because it was not a bona fide provider of settlement services. J.A. 1733. Given the Plaintiffs relevance claims and of this the line of district questioning court s to the mitigating instructions to the jury in the context of the trial as a whole which lasted seventeen days and had over twenty witnesses the district court s decision to allow this limited questioning about Plaintiffs economic harm was not an abuse of discretion. We therefore affirm these evidentiary rulings. IV. Finally, Plaintiffs contend that the district court erroneously failed to strike, or instruct the jury to disregard, Defendants improper statements during closing arguments. 23 We review this issue for abuse of discretion. See Arnold v. Eastern Air Lines, Inc., 681 F.2d 186, 195, 197 (4th Cir. 1982), rev d on other grounds, 712 F.2d 899 (1983) (en banc); see also United States v. Baptiste, 596 F.3d 214, 226 (4th Cir. 2010). This standard is met only where there is a reasonable probability that the conduct improperly influenced the jury in reaching its verdict, i.e., the conduct effective[ly] subver[ted] . . . the jury s reason or . . . its commitment to decide the issues on the evidence received and the law as given it by the trial court. Arnold, 681 F.2d at 197. In analyzing this issue, we recognize that this question is one of judgment to be exercised in review with great deference for the superior vantage point of the trial judge and with a close eye review[.] to Id. the particular context of the trial under On appeal, we must consider the totality of the circumstances, including the nature of the comments, their frequency, their possible relevancy to the real issues before the jury, the manner in which the parties and the court treated the comments, the strength of the case (e.g. whether it is a close case), and the verdict itself. Id. (quoting City of Cleveland v. Peter Kiewit Sons Co., 624 F.2d 749, 756 (6th Cir. 1980)). Courts have found that the abuse of discretion standard was met where attorney misconduct permeated the trial and repeatedly 24 exposed the jury to improper comments. Cos., Inc., Cleveland, 994 F.2d permeated 624 155, F.2d the at entire closing argument ). 157 758 trial, See Bufford v. Rowan (5th Cir. (finding from 1993); that opening City of improprieties statement through By contrast, where the improper comments were an isolated occurrence during an opening statement in the course of a three-week trial, this Court the absence of described found no prejudice abuse as of discretion and self- evident. Ins. Co. of N. Am., Inc. v. U.S. Gypsum Co., Inc., 870 F.2d 148, 154 (4th Cir. 1989). In this case, defense counsel s remarks that Plaintiffs counsel was putting on a sham lawsuit and had an interest in the outcome Arnold, of 681 this F.2d at case were 196-97 inappropriate. (finding that J.A. 1700; tasteless and irrelevant comments about opposing counsel were improper under applicable professional standards and justified censure if for no other reason than to preserve some degree of respect among the attending public for the profession and the process ). However, these improper remarks about Plaintiffs counsel were made during closing argument only, rather than throughout the course of the seventeen-day trial. In the context of the full trial, it is unlikely that these comments alone influenced the jury in reaching disparaging its reference verdict. to Moreover, Plaintiffs 25 counsel defense counsel s did have not a direct bearing on the real issues before the jury: Prosperity was a sham provider of settlement whether services and whether Long & Foster referred Plaintiffs to Prosperity. The district court charged the jury that the statements, the objections, or the arguments that were made by counsel are not evidence in the case. J.A. 1731. Further, the improper comments did not permeate the trial, but rather were isolated, mildly offensive remarks made during closing arguments. Thus, it is not reasonably probable that such comments subverted the jury s commitment to decide the issues on the evidence received and the law as given it by the trial court. at 197. Arnold, 681 F.2d Accordingly, we conclude that the district court did not abuse its discretion in refusing to strike, or instruct the jury to disregard, the statements. V. For the foregoing reasons, we affirm the judgment of the district court.7 AFFIRMED 7 Plaintiffs also challenge the district court s decision to dismiss Binks s Section 8(a) claims along with Minter s and the Alboroughs claims. In response, Defendants contend that Plaintiffs abandoned Binks Section 8(a) claims. Plaintiffs did not challenge this dismissal below, and the district court had no opportunity to rule on it. Such a decision should have been made in the district court in the first instance, and we therefore do not address it. 26
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