Texas Counties Denied Class Status in Merscorp Fee Suit

Dec. 14 (Bloomberg) -- A federal judge denied a request by Texas counties to proceed as a class in a lawsuit accusing mortgage registry Merscorp Inc. of shortchanging them on filing fees.

Merscorp contended “that Texas law does not permit a class consisting of all Texas counties” and such a class “is prohibited” under certain circumstances by federal rules of civil procedure, U.S. District Judge Reed O’Connor in Dallas said in an order filed yesterday.

O’Connor also canceled an evidentiary hearing set for Dec. 19, saying it wasn’t necessary because he threw out the class-status request “on legal grounds.”

Dallas County filed the initial complaint in 2011, alleging that Merscorp’s MERS registry was established by banks including Charlotte, North Carolina-based Bank of America Corp. to avoid paying filing fees as well as to ease transfers of mortgages.

The lawsuit is Dallas County v. Merscorp Inc., 11-cv-02733, U.S. District Court, Northern District of Texas (Dallas).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net