Boulware v. Crossland Mortgage Corporation

In this 4th circuit case decided 5/22/02, Boulware sought to certify a class to challenge Crossland Mortgage Corporation's alleged overcharge for credit reports. Crossland was charging $65 for the credit report when it cost Crossland $15 or less to obtain it. Boulware claimed that Crossland kept the $50 over-charge for itself without performing additional services. She did not allege that the credit reporting agency or any other third party received payment from Crossland beyond that owed to it for services actually performed.

The district court found that Boulware did not allege any split or kickback of the overcharge from Crossland to a third party. It thus dismissed Boulware's com- plaint and denied class certification. The 4th Circuit agreed with the Seventh Circuit that § 8(b) is a prohibition on kickbacks rather than a broad price control provision. It therefore affirmed the judgment.

The court says § 8(b) only prohibits overcharges when a "portion" or "percentage" of the overcharge is kicked back to or "split" with a third party. Compen- sating a third party for services actually performed, without giving the third party a "portion, split, or percentage" of the overcharge, does not violate § 8(b). By using the language "portion, split, or percentage," Congress was clearly aiming at a sharing arrangement rather than a unilateral overcharge.