Norman Shaw v. Bank of America, 946 F.3d 533

Background

In 2006 Shaw refinanced his Solana Beach home with a $1.26M loan originated by Washington Mutual (WaMu); LaSalle allegedly became trustee and WaMu later went into FDIC receivership, with JPMorgan acquiring assets under a Purchase & Assumption agreement.
Shaw defaulted in 2009, sent rescission notices under TILA to WaMu, JPMorgan/Chase, and Bank of America (later successor U.S. Bank), and received no rescission.
Shaw initiated a bankruptcy adversary TILA action (dismissed for lack of jurisdiction), then filed a district-court action seeking rescission under TILA.
U.S. Bank moved to dismiss, arguing Shaw failed to exhaust administrative remedies with the FDIC as required by FIRREA; the district court granted the motion and entered judgment.
Shaw later contacted the FDIC after dismissal/while appeal was pending, but the Ninth Circuit held subject-matter jurisdiction must exist when the suit is commenced and post-filing contacts do not cure nonexhaustion.
The Ninth Circuit affirmed: FIRREA applied, Shaw’s TILA rescission claim was a “claim” relating to acts of a failed institution, exhaustion was required and not met, futility is not an exception, and denial of additional discovery was not an abuse of discretion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FIRREA strips jurisdiction absent administrative exhaustion	Shaw: FIRREA doesn't apply to his TILA rescission claim	Bank: FIRREA requires exhaustion before suit because FDIC was receiver for WaMu	FIRREA applies; exhaustion is jurisdictional and required
Whether Shaw's TILA rescission claim is a "claim" under FIRREA (i.e., "susceptible of resolution")	Shaw: Rescission isn't susceptible of FIRREA resolution because TILA claims run against current holders or loan never entered receivership	Bank: FIRREA looks to factual basis, not holder identity or whether asset passed through receivership	Court: Claim is a FIRREA "claim"—FDIC can determine, allow, or disallow and statute focuses on acts/omissions, not asset location
Whether the claim "relates to any act or omission" of the failed institution	Shaw: Later holders committed independent misconduct; claim is against successors	Bank: Rescission depends on WaMu's alleged TILA disclosure failures; claim is functionally against the failed bank	Court: Element met—the claim relates to WaMu's acts/omissions; FIRREA covers it
Whether exhaustion may be excused (futility) or cured by post-filing FDIC contact; whether discovery denial was proper	Shaw: Filing would have been futile; later FDIC communications show exhaustion; needs discovery to prove futility or exhaustion	Bank: FIRREA has no futility exception; exhaustion must precede suit; post-filing contacts don't retroactively cure jurisdictional defect	Court: No futility exception to statutory exhaustion (Weinberger); post-filing communications irrelevant to jurisdiction at filing; denial of discovery not an abuse of discretion

Key Cases Cited

Rundgren v. Washington Mut. Bank, F.A., 760 F.3d 1056 (9th Cir. 2014) (FIRREA exhaustion is jurisdictional and outlines the three-element test)
Benson v. JPMorgan Chase Bank, N.A., 673 F.3d 1207 (9th Cir. 2012) (FIRREA distinguishes claims by factual basis, not identity of party sued)
Rosa v. Resolution Trust Corp., 938 F.2d 383 (3d Cir. 1991) (origin of "susceptible of resolution through the claims procedure" analysis)
In re Parker N. Am. Corp., 24 F.3d 1145 (9th Cir. 1994) (statutory scheme may show certain claims are not susceptible to FIRREA procedures)
McCarthy v. FDIC, 348 F.3d 1075 (9th Cir. 2003) (post-receivership claims still may be susceptible to administrative process)
Willner v. Dimon, 849 F.3d 93 (4th Cir. 2017) (securitization or transfer before receivership does not avoid FIRREA exhaustion)
Weinberger v. Salfi, 422 U.S. 749 (U.S. 1975) (statutorily specified exhaustion cannot be excused by judicially created futility)