879 F.3d 347
D.C. Cir.2018Background
- Lynn Feldman, Chapter 7 trustee, sought recovery of ~$12 million in alleged fraudulent transfers tied to a Pennsylvania Ponzi scheme; transfers involved customers who had mortgages with Washington Mutual.
- Washington Mutual failed and the FDIC became receiver on September 25, 2008; the FDIC set a December 30, 2008 bar date and published notice in national newspapers.
- Feldman sent an October 8, 2008 letter to a Washington Mutual subsidiary president notifying the bank of her avoidance claims and requesting proof of defenses; she did not file a proof of claim with the FDIC until August 3, 2009.
- The FDIC disallowed her late proof of claim as untimely; Feldman then sued the FDIC in district court, alleging she lacked mailed notice of the bar date and thus could invoke FIRREA’s late‑filed claim exception.
- The district court dismissed for lack of subject‑matter jurisdiction under Rule 12(b)(1), concluding Feldman was not on the bank’s books, her October 8 letter did not give the FDIC notice, and publication put her on inquiry notice.
- The D.C. Circuit reversed, holding the district court prematurely resolved factual disputes about notice at the pre‑discovery stage and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court had jurisdiction to hear Feldman’s suit given her untimely claim under FIRREA | Feldman: her Oct. 8 letter put the bank/FDIC on notice or at least she lacked mailed notice of the bar date, so she qualifies for the late‑filed exception; dismissal without letting her administratively exhaust was improper | FDIC: Feldman wasn’t on bank records; FDIC published notice; inquiry/constructive notice and untimely filing deprive courts of jurisdiction | Reversed: factual disputes about notice made dismissal under Rule 12(b)(1) premature; plaintiff entitled to reasonable inferences and opportunity to present evidence; remand for proceedings |
| Whether Feldman’s Oct. 8, 2008 letter triggered FDIC’s mailing obligation under 12 U.S.C. §1821(d)(3)(C) | Feldman: letter to a bank officer sufficed to put the FDIC on notice even if the bank had failed | FDIC: letter was to an individual no longer an executive and the bank no longer existed, so it did not trigger statutory mailing duty | Court: cannot resolve factual dispute pre‑discovery; reasonable inferences could support Feldman, so dismissal was premature |
| Whether publication/inquiry notice sufficed as constitutionally adequate notice to deny late‑filed exception | Feldman: publication did not constitute actual mailed notice; relying on publication raises due process concerns | FDIC: widely publicized failure (largest bank failure) meant constructive/inquiry notice was adequate | Court: appellate precedent disfavors treating publication alone as sufficient; cannot decide on current record; due process concern noted; trial court must develop record |
| Appropriate preliminary procedure when jurisdictional facts are disputed on motion to dismiss | Feldman: court must resolve factual disputes with adequate process and give plaintiff benefit of reasonable inferences pre‑discovery | FDIC: jurisdictional defects are clear and warrant dismissal | Court: where factual challenge exists, district court must go beyond pleadings, allow plaintiff opportunity to present evidence, and not resolve credibility at threshold; dismissal was improper |
Key Cases Cited
- Phoenix Consulting v. Republic of Angola, 216 F.3d 36 (D.C. Cir. 2000) (court must resolve factual disputes relevant to jurisdiction and allow plaintiff opportunity to present evidence)
- Herbert v. National Academy of Sciences, 974 F.2d 192 (D.C. Cir. 1992) (district court may consider evidentiary material on jurisdictional facts but must accord benefit of reasonable inferences)
- In re Swine Flu Immunization Prod. Liability Litigation, 880 F.2d 1439 (D.C. Cir. 1989) (standard for resolving factual attacks on jurisdiction at the pleadings stage)
- Freeman v. FDIC, 56 F.3d 1394 (D.C. Cir. 1995) (actual mailed notice can cure due process concerns under FIRREA)
- Campbell v. FDIC, 676 F.3d 615 (7th Cir. 2012) (publication alone may raise due process concerns when denying late‑filed claims)
- National Union Fire Ins. Co. v. City Savings, FSB, 28 F.3d 376 (3d Cir. 1994) (courts reluctant to treat publication as sufficient notice to bar FIRREA claims)
- McCarthy v. FDIC, 348 F.3d 1075 (9th Cir. 2003) (dismissal for failure to exhaust administrative FIRREA remedies inappropriate where notice is disputed)
- Carlyle Towers Condo. Ass’n v. FDIC, 170 F.3d 301 (2d Cir. 1999) (similar principle on administrative exhaustion and disputed notice)