Caires v. Federal Deposit Insurance Corporation
1:16-cv-02651
S.D.N.Y.Apr 18, 2017Background
- Plaintiff Richard Caires (pro se) alleges he obtained a $5 million construction loan related to a property he owns and seeks a declaration whether Washington Mutual, Inc. (WaMu) owned that Construction Loan on its books on September 25, 2008, the date the FDIC was appointed Receiver for WaMu.
- WaMu was closed on September 25, 2008; the FDIC was appointed Receiver and entered a Purchase & Assumption (P&A) agreement with JPMorgan Chase transferring WaMu’s assets (subject to exceptions) to Chase.
- Plaintiff is uncertain whether WaMu or some other lender originated the Construction Loan and contends either WaMu did not own the loan at the time of receivership or the FDIC failed to transfer it to Chase.
- Plaintiff filed this action seeking declaratory relief under 28 U.S.C. § 2201 and asserted a Fourteenth Amendment claim; he did not file a proof of claim with the FDIC by the December 30, 2008 bar date.
- After suit, the FDIC allowed the plaintiff to submit a late proof of claim (filed October 17, 2016), which is pending administrative adjudication; the court noted FIRREA’s administrative-claims regime was not exhausted prior to filing suit.
- The District Court dismissed the Amended Complaint without prejudice for lack of subject-matter jurisdiction under FIRREA and noted that, even if exhaustion were satisfied, venue for post-exhaustion litigation would be limited to the D.C. District or the Western District of Washington.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court has jurisdiction over declaratory claim about ownership/status of loan under FIRREA | Caires seeks declaration by court whether WaMu had the Construction Loan on its books on 9/25/2008; argues FDIC should answer | FDIC: FIRREA requires claimants to exhaust administrative proof-of-claim procedures before judicial review; §1821(d)(13)(D) divests courts of jurisdiction until exhaustion | Court: Dismissed for lack of subject-matter jurisdiction because plaintiff failed to exhaust FIRREA claims process |
| Whether post-receivership claims alleging FDIC acts/omissions are exempt from exhaustion | Caires contends any FDIC failure to transfer loan arose after appointment and thus should be judicially reviewable | FDIC: post-receivership acts/omissions that concern receiver’s handling of assets still fall within FIRREA exhaustion requirement | Court: Held exhaustion requirement applies to post-receivership claims challenging receiver’s acts/omissions; jurisdiction lacking |
| Whether late filing of administrative claim after suit cures jurisdictional defect | Plaintiff filed a proof of claim after filing suit and argues FDIC can adjudicate now | FDIC: subject-matter jurisdiction is determined at time complaint is filed; post-filing administrative submission does not cure defect | Court: Post-filing claim is immaterial to jurisdiction; dismissal stands |
| Proper forum for any post-exhaustion federal suit | Plaintiff sued in SDNY | FDIC: FIRREA limits post-exhaustion suits to D.C. District or the district of failed institution’s principal place of business (Western District of Washington) | Court: Even if plaintiff exhausted remedies, SDNY would not be proper; plaintiff must proceed in statutorily-designated districts |
Key Cases Cited
- Carlyle Towers Condo. Ass’n, Inc. v. F.D.I.C., 170 F.3d 301 (2d Cir.) (FIRREA’s exhaustion requirement deprives courts of jurisdiction until claimant follows administrative procedure)
- Vill. of Oakwood v. State Bank & Trust Co., 539 F.3d 373 (6th Cir.) (administrative process applies to many post-receivership claims)
- Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905 (2d Cir.) (§1821(d)(13)(D)(ii) bars claims that could be adjudicated through FIRREA procedures)
- United States v. Cotton, 535 U.S. 625 (Supreme Court) (subject-matter jurisdiction cannot be waived or conferred by consent)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Supreme Court) (pleading standard: plausibility required)
- Ashcroft v. Iqbal, 556 U.S. 662 (Supreme Court) (court need not accept legal conclusions as true)
- D.C. v. Carter, 409 U.S. 418 (Supreme Court) (Fourteenth Amendment generally inapplicable to federal actors)
- Jones v. IndyMac Fed. Bank, 348 F.3d 1075 (9th Cir.) (post-receivership claims arising from receiver acts are subject to FIRREA exhaustion)