Aber-Shukofsky v. JPMorgan Chase & Co.
2010 U.S. Dist. LEXIS 132726
E.D.N.Y2010Background
- Plaintiffs allege WaMu and successors misclassified underwriters and failed to pay for all hours worked and overtime under FLSA and state laws (2000–2008).
- WaMu was seized by the Office of Thrift Supervision on September 25, 2008 and the FDIC became receiver.
- FDIC as receiver sold WaMu’s assets and liabilities to JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A.
- Plaintiffs worked in New York, California, Washington and Pennsylvania at WaMu as underwriters.
- Court grants dismissal for lack of subject matter jurisdiction under FIRREA because claims relate to WaMu pre-failure and were not exhausted administratively.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FIRREA exhaustion bars the claims | Plaintiffs argue FIRREA does not apply to claims against Chase as successor. | Chase contends FIRREA requires FDIC-administered exhaustion before suit. | Yes; FIRREA exhaustion applies and bars the claims. |
| Whether plaintiffs’ claims relate to WaMu as a failed institution | Shukofsky et al. contend claims concern WaMu’s post-failure liabilities. | Defendants argue the claims relate to WaMu’s acts before failure, making FIRREA applicable. | Yes; claims relate to WaMu as failed institution under FIRREA. |
| Whether Chase can be sued without FIRREA exhaustion despite successor status | Plaintiffs argue successor status does not trigger FIRREA exhaustion. | FIRREA applies regardless of who is sued, as long as claims relate to the failed institution. | No; successor status does not circumvent FIRREA exhaustion. |
| Whether the district court has subject matter jurisdiction under FIRREA | Plaintiffs contend court retains jurisdiction despite FIRREA. | Court must dismiss absent exhaustion. | Court lacks jurisdiction; FIRREA bars claims. |
Key Cases Cited
- Bank of New York v. First Millennium Inc., 607 F.3d 905 (2d Cir. 2010) (exhaustion required under FIRREA before federal review)
- Carlyle Towers Condominium Ass'n, Inc. v. FDIC, 170 F.3d 301 (2d Cir. 1999) (administrative exhaustion required under FIRREA)
- Village of Oakwood v. State Bank & Trust Co., 539 F.3d 373 (6th Cir. 2008) (claims barred if not exhausted against FDIC receiver; cannot evade FIRREA)
- Am. Nat'l Ins. Co. v. JPMorgan Chase & Co., 705 F. Supp.2d 17 (D.D.C. 2010) (exhaustion under FIRREA applicable to claims against successor entities)
- Cassese v. Washington Mut., Inc., 711 F. Supp.2d 261 (E.D.N.Y. 2010) (individuals must exhaust FIRREA claims; class-wide exhaustion not allowed)
- Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728 (1981) (FLSA rights do not override FIRREA framework)
- Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945) (recognizes supremacy of statutory framework governing claims)