Bloom v. Federal Deposit Insurance, 738 F.3d 58

Background

Suit began in 2005 by four named plaintiffs asserting state and federal claims against Washington Mutual Bank (WMB) and affiliates for allegedly improper mortgage prepayment fees; TILA claims required >$100 in fees and were dismissed as to the named plaintiffs in 2007.
WMB failed in 2008; the FDIC was appointed receiver and the District Court later certified a class to proceed on non-TILA claims and stayed the case for FDIC administrative exhaustion.
Plaintiffs filed a class claim with the FDIC; the FDIC rejected the class claim as not cognizable under its administrative process but processed and denied the named plaintiffs’ individual claims.
After the stay, FDIC moved to decertify the class and for partial judgment; plaintiffs sought to add William Bloom (who alleged a $120 fee) as a named plaintiff to support a TILA class claim and to join JPMorgan as a defendant.
The District Court (May 13, 2010) decertified the class for lack of numerosity (only four named plaintiffs exhausted administratively), granted partial judgment in part to FDIC, and denied motions to add Bloom and JPMorgan. Bloom appealed only the decertification and partial judgment orders, not the denial of his intervention.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Bloom’s notice of appeal permits review of denial of his intervention and class decertification	Bloom’s appeal seeks review of the District Court’s decertification and partial judgment; he contends he may appeal those rulings	FDIC contends Bloom did not appeal denial of intervention and so is a nonparty who cannot appeal class decertification	Bloom’s notice did not appeal denial of intervention; court cannot infer intent to appeal that portion; appeal insufficient to review intervention denial and decertification as a party
Whether an unnamed, nonparty putative class member can appeal a decertification order without having intervened below	Bloom argues his interest as a putative class member allows appeal	FDIC argues only parties or intervenors may appeal; nonparties lack standing to appeal absent narrow exceptions	Nonparty appeal denied: unnamed putative class membership is not by itself an "interest affected" that permits appeal without prior intervention
Whether Bloom was bound by the decertification judgment such that he could appeal as a person bound	Bloom argues decertification prejudices his ability to pursue relief collectively	FDIC argues decertification was procedural and did not bind Bloom’s individual rights	Court held Bloom was not bound; decertification was procedural and did not resolve merits; Bloom remains free to sue individually so the "bound" exception does not apply
Whether exceptions for nonparty appeals apply (bound or interest affected)	Bloom invokes nonparty appeal doctrine	FDIC denies both exceptions apply here	Court found neither exception satisfied and dismissed the appeal

Key Cases Cited

United Airlines, Inc. v. McDonald, 432 U.S. 385 (1977) (approved post-judgment intervention process for unnamed putative class members seeking to appeal class determinations)
Devlin v. Scardelletti, 536 U.S. 1 (2002) (an unnamed class member may appeal certain class-related settlements when bound by the judgment)
Official Comm. of Unsecured Creditors of WorldCom, Inc. v. SEC, 467 F.3d 73 (2d Cir. 2006) (nonparty may appeal only if bound or if it has an interest affected by the judgment)
R Best Produce, Inc. v. DiSapio, 540 F.3d 115 (2d Cir. 2008) (Rule 3 liberal construction of notice-of-appeal designation but requires clear intent to appeal specific orders)
New Phone Co. v. City of New York, 498 F.3d 127 (2d Cir. 2007) (appellate jurisdiction requires that the notice of appeal clearly indicate intent to appeal the challenged decision)

Disposition: Appeal dismissed for lack of appellate standing/jurisdiction; court did not decide the FIRREA exhaustion question.