California Judge Tosses Out Title Industry Lawsuit.

NEW YORK -- A federal judge in the Northern District of California has thrown out a lawsuit by the American Land Title Association against 18 insurance companies or insurance-related corporations which alleged the firms were selling title insurance products illegally.

These products, ALTA claimed, were being marketed as "mortgage impairment" or "lien priority" insurance, which in fact are a type of title insurance.

While not ruling on the substantive issues, Judge Phyllis J. Hamilton granted the defendants' motion for summary judgment.

In the ruling, the judge said insurance regulation is an issue that is left up to the states. "Each individual state must decide who can be licensed to sell title insurance policies within its borders. Each state has a strong interest in having the issue decided in its own courts, not in a Federal District Court in California.

"Any individualized issues regarding the lien priority policies can be more efficiently resolved in the individual state courts, which are more familiar with the laws of insurance regulation of their particular states," Judge Hamilton wrote.

The executive vice president of ALTA, Jim Maher, said the group would prefer to have a single court ruling that would apply nationwide. Right now it is considering whether to proceed in select jurisdictions nationwide. As of now, it is not appealing Judge Hamilton's ruling.

Meanwhile, the co-founders of one defendant, Group9 Inc., Langhorne, Pa., said the product it offers is not even being marketed as a title insurance ...