Ninth Circuit Court of Appeals affirms Dismissal of Consumer Protection Act lawsuit against MERS


CONTACT: Sandra Troutman
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Reston, Virginia, July 1, 2014—MERSCORP Holdings, Inc. today announced the United States Court of Appeals for the Ninth Circuit affirmed a Washington federal court’s ruling that dismissed the plaintiffs’ Washington Consumer Protection Act (CPA) claims along with other claims alleged in a wrongful foreclosure complaint against MERS and its co-defendants.

In pdf Mickelson v. Chase Home Finance LLC (157 KB) , the plaintiffs sought to invalidate a completed foreclosure sale by alleging CPA claims against MERS as well as Deed of Trust Act (DTA) violations against the foreclosing trustee, Northwest Trustee Services, Inc. (NWTS). Under the DTA allegations, the plaintiffs allege the Trustee breached its duty of care and impartiality because the MERS signing officer who executed the assignment of the deed of trust to the foreclosing servicer and note-holder, Chase Home Finance LLC, was also an employee of NWTS. The plaintiffs claimed that the relationship between NWTS, MERS and Chase Home Finance LLC disqualified NWTS from serving as the trustee.

In its ruling, the Court held that “Although recent amendments to the DTA have lessened the duty of care a trustee owes the parties to a non-judicial foreclosure, NWTS’s signing agreement with MERS and its limited power of attorney for Chase Home Finance LLC (“Chase”) do not breach even the more rigorous pre-amendment standard. Those agreements did not compromise NWTS’s capacity to exercise its discretion as trustee.”

As for the CPA claims, the Court found that the plaintiffs “… do not plausibly allege that any of those defendants cause them any injury, which is required to prove a CPA claim.”

“We are pleased that the court found that the MERS signing officer’s role with the trustee does not breach the duty of care standards expressed under Washington law,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.

For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit


MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.