An adverse ruling for county recorders, in which a U.S. District Court judge dismissed a suit brought by county clerks against MERS over alleged unpaid recording fees, has been appealed to the Sixth Circuit Court of Appeals.

In the case, Christian County Clerk v. MERS, a district court judge in the Western District of Kentucky granted MERS a dismissal of the suit based on the fact that the recording statute which was allegedly violated by MERS granted no private right of action to county clerks.

In the case, the county clerks in Washington and Christian County, Kentucky sued MERS and its creators, alleging that the MERS business model of avoiding recording fees violated Kentucky recording laws and unjustly enriched MERS members.  The clerks sought recovery of the back fees with interest and other penalties.

MERS sought dismissal of the suit, challenging the county clerks' standing, their right to sue under Kentucky's recording statute, and several other defenses. 

The district court found that the county clerks passed the hurdle of standing but had no private right of action under Kentucky's recording statute-- those statutes granted a private right of action only to property owners or holders of other interests in property, the court found. 

The district court did not rule on the merits of MERS's defense beyond these two defenses-- the court deemed it unnecessary to consider those defenses, since the lack of a private right of action alone merited dismissal, the court ruled.

[For more detail on the district court ruling in the case, see First Round Goes to MERS in County Recorder Suits Over Unpaid Fees, Source of Title, 2/23/2012]