First American Title named as defendant in six class action complaints


January 22, 1985, SANTA ANA, CALIFORNIA

The First American Financial Corporation said today that its subsidiary, First American Title Insurance Company, has been named as one of six defendants in six class action complaints recently filed in three U.S. District Courts. The complaints allege that the Company and five other major title insurance companies conspired to fix the prices and terms of title search services and real estate settlement services in connection with real estate transactions in 13 states. The actions seek injunctive relief and treble damages in unspecified amounts.

The allegations in these suits are essentially similar to those set forth in the Federal Trade Commission complaint filed against the six concerned title companies on January 7, 1985, and stem from the Company's participation in state-sanctioned insurance rating bureaus. The Company's position is that such participation in such rating bureaus is part of the business of insurance which, under the federal McCarran-Ferguson Act, is exempt from antitrust laws.

The Company, therefore, considers that these suits are without merit and intends vigorously to defend its position. It believes that the only expenses it will incur in connection with the actions are legal fees for their defense and that these costs will not have a material adverse effect on its earnings. In the event of an adverse result in these actions, however, the Company at this time cannot determine whether such result would have a material adverse effect on its financial condition.

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