The Fourth Circuit Court of Appeals in West Virginia has dismissed the majority of a $10.6 million judgment against Rocket Mortgage and its affiliate, Amrock LLC, according to court documents.

The judgment, issued last week, was related to a 2012 class-action lawsuit that alleged the mortgage company had improper influence over appraisals.

At the time of the lawsuit, Rocket Mortgage was known as Quicken Loans and Amrock LLC was known as Title Source. The plaintiffs claimed that the companies shared home value estimates from refinance applications with appraisers, thus impacting the independence of the appraisals.

A district court awarded $10 million to 2,769 West Virginia borrowers in the suit against Rocket Mortgage. On appeal, the Fourth Circuit initially agreed with the class certification and damages. However, the Fourth Circuit’s decision was sent back for reconsideration after a Supreme Court ruling in 2021 in the case TransUnion LLC v. Ramirez, which requires proof of harm for each class member.

The Fourth Circuit ruled that the plaintiffs did not prove all class members were harmed by the appraisal practices. The court also found no evidence that the appraisers were influenced or that the appraisals were wrong because of Rocket Mortgage’s actions. The court agreed with the district court's decision to award damages on the named plaintiffs' statutory and conspiracy claims; however, it disagreed with the breach of contract claim.

"Based on TransUnion, we conclude that the plaintiffs have not established that the class members, as borrowers, suffered a concrete harm as a result of the defendants’ transmission to appraisers of their home-value estimates, and therefore we reverse the district court’s judgment to the extent that it certified the class and awarded its members damages," the ruling read. "Otherwise, we adopt and incorporate our earlier judgment on the merits of the individual plaintiffs’ claims, and remand for further proceedings consistent with this opinion."

The dismissal of some of the judgment in the class-action case comes as another Rocket Companies subsidiary, Rocket Homes, faces a lawsuit alleging that the company provided kickbacks for real estate brokers and agents for steering homebuyers to Rocket Mortgage for loans.

In a statement, Rocket called the lawsuit, filed last month in U.S. District Court for the Eastern District of Michigan by the Consumer Financial Protection Bureau, "false and a distortion of reality."

"The accusation that homebuyers paid more when working with Rocket Homes is a lie," the company said. "Additionally, the notion that Rocket Homes penalized real estate brokers or agents for helping clients compare rates and choose the best lender for them is also a lie."

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