Hillside Metro Associates, LLC v. JPMorgan Chase Bank, N.A., 747 F.3d 44

Background

In April 2008 Hillside leased commercial premises to Washington Mutual (WaMu) for use as a bank branch; the space was never converted before WaMu’s collapse.
On September 25, 2008 the Office of Thrift Supervision closed WaMu and the FDIC was appointed receiver; the FDIC and Chase executed a Purchase and Assumption Agreement (PAA) transferring many WaMu assets/liabilities to Chase.
The PAA treated "Bank Premises" differently: most real property leases were assigned under §3.1, but leases categorized as "Bank Premises" were subject to Chase’s 90‑day option to accept or decline under §4.6(a).
Chase declined the Hillside lease; the FDIC then repudiated the lease under FIRREA §212(e), limiting Hillside’s recovery against the FDIC to pre‑repudiation rent. Hillside did not pursue that remedy.
Hillside sued Chase for unpaid rent, arguing the PAA assigned the lease to Chase; Chase and the FDIC argued Hillside lacked standing because it was neither a party nor an intended third‑party beneficiary of the PAA.
The District Court held the lease was not a "Bank Premises," ruled the lease was assigned to Chase under §3.1, and granted summary judgment for Hillside. The Second Circuit vacated and remanded with instructions to dismiss for lack of subject‑matter jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Hillside has prudential standing to enforce the PAA's assignment provisions	Hillside contends New York property law gives it a right to sue an assignee (privity of estate) and to have a court determine whether the PAA assigned the lease to Chase	Chase and FDIC argue Hillside is neither a party nor an intended third‑party beneficiary of the PAA; federal common law governs PAA interpretation and bars third‑party enforcement	Hillside lacks prudential standing; it cannot enforce the PAA because §13.5 disclaims third‑party rights and the PAA is a federal contract governed by federal common law
Whether a landlord can bypass FIRREA repudiation by suing the assuming bank	Hillside argues assignment (if found) would place it in privity with Chase and allow recovery from Chase	FDIC argues FIRREA authorizes repudiation and limits remedies to claims against the receiver; permitting suits against the assuming bank would undermine FIRREA’s objectives	Court holds FIRREA permits the FDIC to repudiate leases and limits the landlord’s remedy against the FDIC, not Chase; allowing Hillside’s suit would undercut FIRREA and the PAA’s disclaimer
Which law governs interpretation of the PAA	Hillside urges New York property rules should control the landlord/assignee relationship	Defendants assert federal common law governs interpretation of a federal government contract (the PAA)	Federal common law governs PAA interpretation; New York law governs the lease itself but not the PAA’s contractual rights
Whether the District Court may reach the merits (assignment question) before resolving standing	Hillside sought adjudication that the PAA assigned the lease	Defendants contend merits cannot be reached because plaintiff lacks prudential standing to enforce the PAA	The appeals court rejects deciding assignment on merits because Hillside lacks prudential standing; jurisdiction is lacking to resolve assignment question

Key Cases Cited

Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (U.S. 1998) (standing is threshold jurisdictional inquiry)
Kowalski v. Tesmer, 543 U.S. 125 (U.S. 2004) (distinguishing constitutional and prudential standing)
Warth v. Seldin, 422 U.S. 490 (U.S. 1975) (standing limits and prudential considerations)
Clearfield Trust Co. v. United States, 318 U.S. 363 (U.S. 1943) (federal common law governs federal commercial instruments/contracts)
Interface Kanner, LLC v. JPMorgan Chase Bank, N.A., 704 F.3d 927 (11th Cir. 2013) (landlord not intended third‑party beneficiary of PAA)
GECCMC 2005‑C1 Plummer St. Office L.P. v. JPMorgan Chase Bank, N.A., 671 F.3d 1027 (9th Cir. 2012) (landlord cannot sue under PAA as non‑intended beneficiary)
Deutsche Bank Nat’l Trust Co. v. FDIC, 717 F.3d 189 (D.C. Cir. 2013) (non‑contracting parties lack prudential standing to force contract interpretation)
Dobson v. Hartford Fin. Servs. Grp., Inc., 389 F.3d 386 (2d Cir. 2004) (use of general contract principles in applying federal common law)