Supreme Court right to strike down HUD rule?
RESPA makes it illegal for any person to “give … [or] accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service … other than for services actually performed.” HUD regulations under the law state that a provider of real estate settlement services is “liable … when it charges a fee that exceeds the reasonable value of goods, facilities, or services provided,” even when that fee is not split among multiple providers. HUD’s theory, believe it or not, was that the “portion” of a fee in excess of the reasonable value for services actually provided could be viewed as “split” from the rest of the charge, thus constituting a basis for liability under the statute.
Trial lawyers liked the HUD rule, since it gave them access to more potentially deep pockets, but the Supreme Court was not pleased. Justice Scalia, who has written extensively on the subject of statutory interpretation, found HUD’s regulation to be “manifestly inconsistent with the statute HUD purported to construe.” All eight of Scalia’s colleagues on the court agreed. The decision was unanimous.
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