American National Insurance v. Federal Deposit Insurance
395 U.S. App. D.C. 316
| D.C. Cir. | 2011Background
- WMB, a Washington Mutual subsidiary, was seized by the OTS and placed in FDIC receivership in September 2008, and its assets were sold to JPMC for $1.9 billion with liabilities left behind.
- WMB bondholders and WMI stockholders filed Texas state-law claims in Texas state court alleging JPMC wrongdoing to depress asset value and profit from the sale.
- FDIC intervened and the action was removed to federal court; the district court dismissed for lack of jurisdiction under FIRREA § 1821(d)(13)(D)(ii).
- Prior to ruling, plaintiffs dismissed claims premised on WMI harms, leaving claims solely about WMB bonds.
- The district court granted the FDIC/JPMC motions to dismiss and denied remand; plaintiffs appeal the dismissal orders.
- The DC Circuit reverses, holding FIRREA’s jurisdictional bar does not apply because the suit is not a “claim” nor an action for assets of the depository institution for which the FDIC is receiver.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FIRREA § 1821(d)(13)(D) bars the suit | Appellants argue the suit falls within § 1821(d)(13)(D)(ii) or (i) as a claim related to the FDIC-receiver's actions or to assets. | FDIC/JPMC contend the suit is barred as a claim or action relating to the depository institution’s assets or the FDIC as receiver. | No; § 1821(d)(13)(D) does not bar the suit. |
| Is the suit a FIRREA “claim” or otherwise subject to FIRREA exhaustion | The suit challenges JPMC’s conduct, not a claim against the depository institution for which the FDIC is receiver. | The broad reading of § 1821(d)(13)(D) would immunize the receiver; the suit should be exhausted administratively. | Not a FIRREA “claim”; not subject to FIRREA exhaustion. |
| Whether the suit seeks rights or payments with respect to assets of Washington Mutual | Plaintiffs seek damages from JPMC for the way assets were handled and sold, not payments from or rights to assets of the depository institution. | The action implicates assets controlled by the FDIC as receiver, triggering the jurisdictional bar. | The suit does not seek a determination of rights with respect to WMB assets; § 1821(d)(13)(D) does not bar it. |
Key Cases Cited
- Freeman v. FDIC, 56 F.3d 1394 (D.C. Cir. 1995) (FIRREA exhaustion framework; claims process)
- Auction Co. of Am. v. FDIC, 141 F.3d 1198 (D.C. Cir. 1998) (exhaustion and jurisdictional scope of FIRREA)
- Village of Oakwood v. State Bank & Trust Co., 539 F.3d 373 (6th Cir. 2008) (claims against FDIC-receiver must fall within FIRREA framework)
- Rosa v. Resolution Trust Corp., 938 F.2d 383 (3d Cir. 1991) (claims against assuming bank not necessarily within FIRREA bar)
- OPEIU, Local 2 v. FDIC, 962 F.2d 63 (D.C. Cir. 1992) (broad construction of § 1821(d)(6) language in context)
- Homeland Stores, Inc. v. Resolution Trust Corp., 17 F.3d 1269 (10th Cir. 1994) (claims constructive framework for FIRREA exhaustion)
- Hudson United Bank v. Chase Manhattan Bank of Conn., 43 F.3d 843 (3d Cir. 1994) (statutory interpretation of FIRREA exhaustion)
- O Melveny & Myers v. FDIC, 512 U.S. 79 (1994) (FDIC as receiver steps into the shoes of the failed bank)