Montgomery County Ex Rel. Becker v. MERSCORP Inc.

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 14-4315
_____________
MONTGOMERY COUNTY, PENNSYLVANIA,
RECORDER OF DEEDS, By and Through Nancy J. Becker,
In Her Official Capacity as the Recorder of Deeds of
Montgomery County, Pennsylvania, On Its Own Behalf and
On Behalf of All Others Similarly Situated
v.
MERSCORP INC; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC,
Appellants
_____________
APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA
(D.C. Civil No. 11-cv-06968)
District Judge: Honorable J. Curtis Joyner
____________
Argued: June 25, 2015
____________
Before: CHAGARES, KRAUSE and BARRY, Circuit Judges
(Opinion Filed: August 3, 2015)
____________
Robert M. Brochin, Esq. (Argued)
Brian M. Ercole, Esq.
Morgan, Lewis & Bockius
200 South Biscayne Boulevard
5300 Southeast Financial Center
Miami, FL 33131
-AND-
Peter Buscemi, Esq.
Morgan, Lewis & Bockius
1111 Pennsylvania Avenue, N.W.
Suite 800 North
Washington, DC 20004
-AND-
Franco A. Corrado, Esq.
Joseph B.G. Fay, Esq.
Morgan, Lewis & Bockius
1701 Market Street
Philadelphia, PA 19103
-AND-
Nicholas C. Vance, Esq.
GlaxoSmithKline
5 Crescent Drive
Navy Yard Corporate Center
Philadelphia, PA 19112
-AND-
Andrew C. Whitney, Esq.
Morgan, Lewis & Bockius
1701 Market Street
Philadelphia, PA 19103
Counsel for Appellants
Joseph C. Kohn, Esq. (Argued)
Craig W. Hillwig, Esq.
William E. Hoese, Esq.
Robert J. LaRocca, Esq.
Kohn, Swift & Graf
One South Broad Street
Suite 2100
Philadelphia, PA 19107
-AND-
Jonathan W. Cuneo, Esq.
Jennifer E. Kelly, Esq.
Cuneo, Gilbert & LaDuca
507 C Street, N.E.
Washington, DC 20002
-AND-
Charles J. LaDuca, Esq.
2
Cuneo, Gilbert & LaDuca
8120 Woodmont Avenue
Suite 810
Bethesda, MD 20814
-AND
William H. Lamb, Esq.
Maureen M. McBride, Esq.
James C. Sargent, Jr., Esq.
Lamb McErlane
24 East Market Street
P.O. Box 565
West Chester, PA 19381
-AND-
Gary E. Mason, Esq.
Jason S. Rathod, Esq.
Whitfield, Bryson & Mason
1625 Massachusetts Avenue, N.W.
Suite 605
Washington, DC 20036
Counsel for Appellee
David J. Bird, Esq.
Paige H. Forster, Esq.
Henry F. Reichner, Esq.
Reed Smith
225 Fifth Avenue
Suite 1200
Pittsburgh, PA 15222
Counsel for Amicus Appellant Federal Home Loan Mortgage
Corp
Gregory W. Happ, Esq.
331 East Washington Street
Medina, OH 44256
Counsel for Amicus Appellee National Association of
Independent Land Title Agents
Edward J. Hayes, Esq.
Lauren P. McKenna, Esq.
3
Robert S. Tintner, Esq.
Fox Rothschild
2000 Market Street
20th Floor
Philadelphia, PA 19103
Counsel for Amicus Appellant Pennsylvania Land Title
Association
David R. Fine, Esq.
Raymond P. Pepe, Esq.
K&L Gates
17 North Second Street
18th Floor
Harrisburg, PA 17101
Counsel for Amicus Appellant Pennsylvania Bankers
Association
Benjamin D. Geffen, Esq.
Public Interest Law Center of Philadelphia
1709 Benjamin Franklin Parkway
United Way Building, 2nd Floor
Philadelphia, PA 19103
Counsel for Amicus Appellees Pennsylvania Legal Aid
Network, Community Legal Services Inc, Housing Alliance of
Pennsylvania, National Association of Consumer Advocates
and Consumer Credit Counseling Service of Delaware Valley
Max Weinstein, Esq.
Legal Services Center of Harvard Law School
122 Boylston Street
Jamaica Plain, MA 02130
Counsel for Amicus Appellees Legal Services Center of
Harvard Law School, Rebecca Tushnet, Joseph William
Singer, David Reiss and Melanie Leslie
Jeffrey S. Shank, Esq.
John M. Smith, Esq.
Gingrich Smith Klingensmith and Dolan
4
222 South Market Street
Suite 201
Elizabeth, PA 17022
Counsel for Amicus Appellee Pennsylvania Recorder of
Deeds Association
Carmen P. Belefonte, Esq.
Saltz, Mongeluzzi, Barrett & Bendesky
20 West Third Street
P.O. Box 1670
Media, PA 19063
-AND-
Simon B. Paris, Esq.
Saltz, Mongeluzzi, Barrett & Bendesky
1650 Market Street
One Liberty Place, 52nd Floor
Philadelphia, PA 19103
Counsel for Amicus Appellee Thomas J. Judge, Sr.
Louis B. Kupperman, Esq.
Obermayer, Rebmann, Maxwell & Hippel
1617 John F. Kennedy Boulevard
One Penn Center, 19th Floor
Philadelphia, PA 19103
-AND-
Joshua D. Snyder, Esq.
Boni & Zack
15 St. Asaphs Road
Bala Cynwyd, PA 19004
Counsel for Amicus Appellees Counsel of Bucks, County of
Chester and Joseph J. Szafran
Rigel C. Farr, Esq.
Louis B. Kupperman, Esq.
Joshua D. Snyder, Esq.
Daniel P. Finegan, Esq.
William J. Leonard, Esq.
Obermayer, Rebmann, Maxwell & Hippel
1617 John F. Kennedy Boulevard
5
One Penn Center, 19th Floor
Philadelphia, PA 19103
Counsel for Amicus Appellee Richard T. Loughery
____________
OPINION OF THE COURT
____________
BARRY, Circuit Judge
In 2011, Appellee Nancy J. Becker, the Recorder of
Deeds for Montgomery County, Pennsylvania (“the
Recorder”), brought this action on behalf of herself and other
similarly situated county recorders of deeds in Pennsylvania
against MERSCORP, Inc. and Mortgage Electronic
Registration Systems, Inc., entities associated with the MERS
System (“MERS”), a national electronic registry system for
mortgage loans. The Recorder sought to recover millions of
dollars in unpaid recording fees, contending that the MERS
entities have unlawfully failed to pay such fees in violation of
Pennsylvania law, 21 Pa. Cons. Stat. Ann. § 351. Because
we conclude that § 351 does not create a duty to record all
land conveyances, a key premise on which the Recorder’s
claims were and are based, we will reverse.
We will also deny the Recorder’s motion for
certification of two issues to the Supreme Court of
Pennsylvania. The answer to the issue of state law that
decides this case, at least before us, is so clear that we would
be abdicating our responsibilities by punting. We recognize,
of course, that were the Supreme Court at some point to
answer the question differently, that decision would control.
Cf. County of Ramsey v. MERSCORP Holdings, Inc., 776
F.3d 947, 951 (8th Cir. 2014) (declining to certify issue to the
state’s highest court); Union County, Ill. v. MERSCORP, Inc.,
735 F.3d 730, 735 (7th Cir. 2013) (same).
I.
MERS is a national electronic loan registry system that
permits its members to freely transfer, among themselves, the
promissory notes associated with mortgages, while MERS
6
remains the mortgagee of record in public land records as
“nominee” for the note holder and its successors and assigns.1
MERS facilitates the secondary market for mortgages by
permitting its members to transfer the beneficial interest
associated with a mortgage—that is, the right to repayment
pursuant to the terms of the promissory note—to one another,
recording such transfers in the MERS database to notify one
another and establish priority, instead of recording such
transfers as mortgage assignments in local land recording
offices. It was created, in part, to reduce costs associated
with the transfer of notes secured by mortgages by permitting
note holders to avoid recording fees.
In the Recorder’s class action complaint, she sought a
declaratory judgment and permanent injunction establishing
that the MERS entities failed to record mortgage assignments
in violation of Pennsylvania state law, 21 Pa. Cons. Stat. Ann.
§ 351, and brought claims for violation of § 351, civil
conspiracy to violate § 351, and unjust enrichment, based on
failure to pay recording fees.2 The Recorder contends that
1
MERSCORP, Inc., now known as MERSCORP Holdings,
Inc., is the parent company that owns and operates the
system, while Mortgage Electronic Registration Systems, Inc.
is the entity that serves as mortgagee of record in local land
recording offices. Additional background and explanation of
how MERS operates is set forth in the District Court’s
opinion.
2
The Recorder did not plead a quiet title claim, but the
District Court nevertheless “construed the pleadings to
raise [one] without express invocation.” (App. 70.) We
take no position on whether the Court acted properly in so
doing because it is clear that the Recorder cannot maintain
a quiet title claim, as she does not claim an interest in land,
only an interest in recording fees. See, e.g., Nat’l Christian
Conference Ctr. v. Schuylkill Twp., 597 A.2d 248, 250 (Pa.
Commw. Ct. 1991) (“The Center does not have an interest
to support an action to quiet title because it has no
possessory rights in the [land] . . . .”); Moore v. Com.,
Dep’t of Envtl. Res., 566 A.2d 905, 907 (Pa. Commw. Ct.
1989) (“[I]n order to prevail in an action to quiet title,
7
MERS “create[s] confusion amongst property owners,
damage[s] the integrity of Pennsylvania’s land records, and
den[ies] [the Recorder] and the Class millions of dollars in
uncollected fees.” (App. 134.)
Section 351 provides as follows:
All deeds, conveyances, contracts, and other
instruments of writing wherein it shall be the
intention of the parties executing the same to
grant, bargain, sell, and convey any lands,
tenements, or hereditaments situate in this
Commonwealth, upon being acknowledged by
the parties executing the same or proved in the
manner provided by the laws of this
Commonwealth, shall be recorded in the office
for the recording of deeds in the county where
such lands, tenements, and hereditaments are
situate. Every such deed, conveyance, contract,
or other instrument of writing which shall not
be acknowledged or proved and recorded, as
aforesaid, shall be adjudged fraudulent and void
as to any subsequent bona fide purchaser . . . .
In its motions to dismiss and for summary judgment,
MERS argued that § 351 does not impose a duty to record all
land conveyances and that, even if § 351 imposed such a
duty, the transfers of promissory notes among MERS
members do not constitute assignments of the mortgage itself
and thus are not conveyances of land. It also argued that the
Recorder lacked a right of action, and that, in any case,
MERSCORP, Inc. and Mortgage Electronic Registration
Systems, Inc., were not the correct parties against which a
duty to record could be enforced.
In a series of opinions, the District Court rejected these
plaintiff must establish title by a fair preponderance of the
evidence.”) see also Albert v. Lehigh Coal & Nav. Co., 246
A.2d 840, 843 (Pa. 1968); White v. Young, 186 A.2d 919,
921 (Pa. 1963).
8
arguments.3 In its opinion and order filed on October 19,
2012, the Court held that § 351’s language providing that
conveyances “shall be recorded” was clear, indicating that all
conveyances must be recorded. Montgomery Cnty., Pa. v.
MERSCORP, Inc., 904 F. Supp. 2d 436, 443-45 (E.D. Pa.
2012). The Court also observed that the statute appeared
under a heading, “NECESSITY OF RECORDING AND
COMPULSORY RECORDING,” while other statutes
appeared under a heading, “INSTRUMENTS SUBJECT TO
RECORD,” and used the words “may be recorded,”
indicating significance in the use of the term “shall” in § 351,
instead of “may.” Id. In its opinion and order filed on July 1,
2014, the Court granted the Recorder’s request for a
declaratory judgment and denied the MERS entities’ motion
for summary judgment. Montgomery Cnty., Pa. v.
MERSCORP, Inc., 16 F. Supp. 3d 542, 565 (E.D. Pa. 2014).
The Court stated: “We . . . declare that Defendants’ failure to
create and record documents evincing the transfers of
promissory notes secured by mortgages on real estate in the
Commonwealth of Pennsylvania is, was and will in the future
be, in violation of the Pennsylvania Recording law – most
particularly 21 P.S. § 351.” Id. On September 8, 2014, the
Court certified its July 1, 2014 order for interlocutory appeal.
We granted permission to appeal, and now reverse.
II.
The District Court had jurisdiction pursuant to 28
U.S.C. § 1332, and we have jurisdiction over this
interlocutory appeal pursuant to 28 U.S.C. § 1292(b). We
exercise plenary review over a district court’s decision to
grant or deny summary judgment, Post v. St. Paul Travelers
Ins. Co., 691 F.3d 500, 514 (3d Cir. 2012), and summary
judgment is appropriate when “the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). “Our review of the district court's interpretation of
state law is plenary.” Borman v. Raymark Indus., Inc., 960
F.2d 327, 329 (3d Cir. 1992).
3
The District Court did, however, dismiss the Recorder’s
conspiracy claim.
9
Where the highest court of a state has interpreted a
state statute, “we apply the interpretation of state law by the
state’s own courts.” Kollar v. Miller, 176 F.3d 175, 179 (3d
Cir. 1999). “[W]hen there is no decision from the state's
highest court directly on point,” however, “we are charged
with predicting how that court would resolve the question at
issue.” Colliers Lanard & Axilbund v. Lloyds of London, 458
F.3d 231, 236 (3d Cir. 2006). In doing so, we take into
consideration any opinions of the state’s intermediate courts,
as well as “[t]he policies underlying applicable legal doctrine,
current trends in the law and decisions of other courts.” City
of Erie, Pa. v. Guar. Nat. Ins. Co., 109 F.3d 156, 160 (3d Cir.
1997).
III.
MERS raises several arguments on appeal, only one of
which we need address to resolve the issues in this case.
MERS contends that § 351 does not impose a duty to record
all land conveyances, and that the statute’s “shall be
recorded” language, when read in context, indicates not that
every conveyance must be recorded, but only that
conveyances must be recorded in the county where the
property is situated in order to preserve the property holder’s
rights as against a subsequent bona fide purchaser. We agree.
No Pennsylvania court has yet addressed whether
§ 351 creates a duty to record all land conveyances, and, as
counsel for the Recorder acknowledged at oral argument,
there is no decision of any Pennsylvania court applying § 351
in a manner consistent with the Recorder’s preferred
interpretation.4 The primary purpose of Pennsylvania’s land
4
There are, however, decisions of Pennsylvania courts
referring to recording as “optional” and “not obligatory.” See
Pepper’s Appeal, 77 Pa. 373, 377 (Pa. 1875) (“Thus it
appears that the language of the Acts of Assembly providing
for the recording of written instruments has not generally
been mandatory. . . . It is optional whether or not to record.”);
see also Easton Rd. Enters. Inc. v. Mellon Bank, Case No.
3220, 2007 WL 2024758 (Pa. Com. Pl. June 8, 2007) (stating
10
recording statutes is “to give public notice in whom the title
resides; so that no one may be defrauded by deceptious
appearance of title.” Salter v. Reed, 15 Pa. 260, 263 (Pa.
1850); see Mancine v. Concord-Liberty Sav. & Loan Ass’n,
445 A.2d 744, 746 (Pa. Super. Ct. 1982) (citing Salter). The
consequence of failure to record is set forth in § 351 itself: if
a conveyance is not recorded in the appropriate place, it is
void as to any subsequent bona fide purchaser. No other
consequence for failure to record is set forth in Pennsylvania
law.
Significantly, § 351 does not specify who must record
a conveyance, when it must be recorded, or how a duty to
record would be enforced. Moreover, as the District Court
acknowledged, recording is not necessary to validly convey
property in Pennsylvania. See, e.g., Matter of Pentrack’s
Estate, 405 A.2d 879, 880 (Pa. 1979) (“Title to real estate
may be passed by delivery of a deed without recording.”);
Fiore v. Fiore, 174 A.2d 858, 859 (Pa. 1961) (holding that
“recording of the deed was not essential to its validity or the
transition of the title”). If recording of all conveyances is
required by § 351, as the Recorder suggests, it does not
follow that Pennsylvania courts would recognize unrecorded
conveyances as valid.
We find nothing in the history or context of § 351 to
compel a conclusion to the contrary. As both parties
acknowledge, the headings cited by the District Court,
“NECESSITY OF RECORDING AND COMPULSORY
RECORDING,” and “INSTRUMENTS SUBJECT TO
RECORD,” were created by the publisher’s editorial staff, not
the legislature, and do not reflect legislative intent. (See
Appellee’s Br. at 35 n.12.) The Recorder urges us to find that
§ 351 creates a duty to record conveyances by reading the
statute in pari materia with 21 Pa. Cons. Stat. Ann. § 356, a
statute addressing written agreements relating to “rights or
privileges of a permanent nature” in real property and
containing language similar to that of § 351 (i.e., “All
agreements . . . shall be recorded in the office for the
that “recording is not obligatory,” citing the Pennsylvania
Law Encyclopedia).
11
recording of deeds in the county or counties wherein such real
property is situate”). She argues that because the title of
§ 356 stated that it was an act “[R]equiring the recording of
certain written instruments pertaining to real property,” this
proves that § 356 was intended to impose a duty to record,
and that, by extension, § 351 must be interpreted the same
way. See Act of Apr. 24, 1931, P.L. 48, No. 40 (reproduced
at Addendum B to Appellee’s Br.) (emphasis added).
We find this argument unpersuasive. Section 356 was
enacted six years after § 351, and the use of “requiring” in the
title of § 356 does not itself establish that § 356 imposes a
duty to record. See 1 Pa. Cons. Stat. Ann. § 1924 (stating that
while titles and headings may be considered in statutory
interpretation, they do not control). In any event, the title of §
351 does not similarly use the term “requiring.” See Act of
May 12, 1925, P.L. 613, No. 327 (reproduced at Addendum
A to Appellee’s Br.) (“Regulating the recording of certain
deeds, conveyances, and other instruments of writing, and
fixing the effect thereof as to subsequent purchasers,
mortgagees, and judgment creditors.”) (emphasis added). In
addition, although the parties dispute whether § 351 and its
predecessor statutes rendered recording mandatory or
optional, both parties acknowledge that until 1998, § 351 co-
existed with another statute, 21 Pa. Cons. Stat. Ann. § 623,
that explicitly indicated that the recording of mortgage
assignments was optional. See Act of Apr. 9, 1849, P.L. 524,
No. 354 § 14 (reproduced at Ex. F to Appellants’ Br.). This
would make little sense if § 351 and its predecessor statutes
created a duty to record all land conveyances.
While the Recorder and the District Court accurately
observed that the Pennsylvania legislature used “may be
recorded” in other places in the recording statutes, see, e.g.,
21 Pa. Cons. Stat. Ann. §§ 383, 385, 404, suggesting that the
legislature’s use of “shall be recorded” in § 351 is
significant, the words must be understood in context. Section
351 does not issue a blanket command that all conveyances
must be recorded; it states that a conveyance “shall be
recorded” in the appropriate place, or else the party risks
losing his interest in the property to a bona fide purchaser. It
informs property owners of what steps they must take in order
12
to safeguard their interests, and does not in any way state or
imply that failure to record constitutes a violation of the
statute enforceable by a recorder of deeds.
Our interpretation is in accord with the decisions of
several other courts rejecting similar lawsuits brought under
similar statutes by local recording officials against MERS
entities. For example, in Union County, Illinois v.
MERSCORP, Inc., the Seventh Circuit interpreted an Illinois
law materially identical to Pennsylvania’s § 351 and held that
it created no mandatory duty to record.5 735 F.3d at 733-34.
The court rejected the local recording officials’ argument that
use of the language “shall be recorded” created a duty to
record all conveyances. As the court observed:
[A] moment's reflection will reveal the
shallowness of [the counties’] recourse to “plain
meaning,” a tired, overused legal phrase. For
suppose a department store posts the following
notice: “All defective products must be returned
to the fifth floor counter for refund.” Obviously
this is not a command that defective products be
returned; the purchaser is free to keep a
defective product, throw it out, or give it as a
present to his worst friend. There's an implicit
“if” in the command: If you want to return a
product and get a refund, here's where you have
to return it. Similarly, section 28 of the
Conveyances Act may just mean that if you
want to record your property interest you must
do so in the county in which the property is
located.
5
The Illinois law provided that:
Deeds, mortgages, powers of attorney, and
other instruments relating to or affecting the
title to real estate in this state, shall be recorded
in the county in which such real estate is
situated; but if such county is not organized,
then in the county to which such unorganized
county is attached for judicial purposes.
765 Ill. Comp. Stat. Ann. 5/28 (emphasis added).
13
Id. at 733. The court went on to observe that “the purpose of
recordation has never been understood to supplement
property taxes by making every landowner, mortgagee, etc.
pay a fee for a service he doesn’t want . . . . Recording is a
valuable service, provided usually for a modest fee—but
provided only to those who think the service worth the fee.”
Id. at 733-34. Likewise, the Eighth Circuit held in County of
Ramsey v. MERSCORP Holdings, Inc., that Minnesota’s
recording statute, also nearly identical to Pennsylvania’s law,
imposed no duty to record mortgage assignments.6 776 F.3d
at 950. Other decisions have likewise rejected similar
lawsuits against MERS entities on grounds that state law
imposed no duty to record mortgages and/or assignments of
mortgages. See, e.g., Harris Cnty., Tex. v. MERSCORP, Inc.,
--- F.3d ---, Case No. 14-10392, 2015 WL 3937927, *5-8 (5th
Cir. June 26, 2015) (Texas law imposes no duty to record);
Plymouth Cnty., Iowa v. MERSCORP, Inc., 774 F.3d 1155,
1159 (8th Cir. 2014) (Iowa law imposes no duty to record);
Brown v. MERS, Inc., 738 F.3d 926, 934 (8th Cir. 2013)
(Arkansas law imposes no duty to record); Jackson Cnty.,
Mo. ex rel. Nixon v. MERSCORP, Inc., 915 F. Supp. 2d 1064,
1070 (W.D. Mo. 2013) (Missouri law imposes no duty to
record).
Because we conclude that Pennsylvania’s § 351
imposes no duty to record all land conveyances, we will
reverse the July 1, 2014 order of the District Court which
granted the Recorder’s request for a declaratory judgment and
6
Minnesota’s law provided:
Every conveyance of real estate shall be
recorded in the office of the county recorder of
the county where such real estate is situated;
and every such conveyance not so recorded
shall be void as against any subsequent
purchaser in good faith and for a valuable
consideration of the same real estate, or any part
thereof, whose conveyance is first duly
recorded . . . .
Minn. Stat. § 507.34 (emphasis added).
14
denied the MERS entities’ motion for summary judgment.7
7
In light of our interpretation of § 351, the Recorder’s unjust
enrichment claim fails as a matter of law. To prevail on a
claim for unjust enrichment in Pennsylvania, a plaintiff must
prove: “(1) benefits conferred on defendant by plaintiff; (2)
appreciation of such benefits by defendant; and (3)
acceptance and retention of such benefits under such
circumstances that it would be inequitable for defendant to
retain the benefit without payment of value.” Mitchell v.
Moore, 729 A.2d 1200, 1203 (Pa. Super. 1999) (quoting
Schenck v. K.E. David, Ltd., 666 A.2d 327, 328 (Pa. Super.
1995)). Here, there is no evidence that the Recorder
conferred any benefit on the MERS entities for which they
failed to pay value. See Harris Cnty., 2015 WL 3937927, at
*12-13 (holding that in the absence of a duty to record, there
could be no unjust enrichment claim (Texas law)); Cnty. of
Ramsey, 776 F.3d at 950-51 (same (Minnesota law));
Plymouth Cnty., 774 F.3d at 1159 (same (Iowa law)); Brown,
738 F.3d at 935 (same (Arkansas law)); Jackson Cnty., 915 F.
Supp. 2d at 1070-71 (same (Missouri law)); Fuller v. Mortg.
Elec. Registration Sys., Inc., 888 F. Supp. 2d 1257, 1274-75
(M.D. Fla. 2012) (same (Florida law)). As the Seventh
Circuit explained in Macon County, Ill. v. MERSCORP, Inc.,
742 F.3d 711, 714 (7th Cir. 2014):
There is no suggestion that the defendants in
this case have committed an unlawful act, only
that it is “unjust” that they should retain a
benefit provided them by their circumvention of
a method of mortgage protection that would
yield revenues for Macon County. But they are
not deriving any benefit from the County's
method, the recording system, beyond the
recording of the mortgage assignments to
MERSCORP—for which MERSCORP pays the
County's fee. Rather, the defendants are
bypassing the County's recording system, as
they are entitled to do because there is no
requirement that either the initial granting of a
mortgage or its assignment be recorded, let
alone that the assignment of a promissory note
be recorded.
15
We acknowledge the arguments of the Recorder and her
amici contending that MERS has a harmful impact on
homeowners, title professionals, local land records, and
various public programs supported in part by the fees
collected by Pennsylvania’s recorders of deeds. In this
appeal, however, we are not called upon to evaluate how
MERS impacts various constituencies or to adjudicate
whether MERS is good or bad. Just as the Seventh Circuit
observed in Union County, while the Recorder is critical of
MERS in several respects, “[her] appeal claims only that
MERSCORP is violating [state law] by failing to record its
transfer of mortgage debts, thus depriving the county
governments of recording fees. That claim—the only one
before us—has no merit.” 735 F.3d at 734-35.
IV.
We will reverse the July 1, 2014 order of the District
Court and deny the motion for certification. 8
8
The Recorder moved to certify two questions of law: first,
whether § 351 requires the recording of land conveyances,
and, second, whether a county’s Recorder of Deeds may bring
an action to enforce the requirements of § 351. Because we
have concluded that § 351 imposes no duty to record land
conveyances, we need not address whether a recorder has a
right of action under the statute. We note, however, that the
Recorder’s lack of an express or implied right of action under
§ 351 would provide an independent ground for judgment in
favor of MERS. See, e.g., Harris Cnty., 2015 WL 3937927, at
*4-6 (no right of action under Texas law); Christian Cnty.
Clerk ex rel. Kem v. Mortg. Elec. Registration Sys., Inc., 515
F. App’x 451, 456-58 (6th Cir. 2013) (not precedential) (no
right of action under Kentucky law); Fuller, 888 F. Supp. 2d
at 1270-71 (no right of action under Florida law).
16