Rathbun v. Indymac Mortgage Services, 916 F. Supp. 2d 1174

Background

Rathbun and IndyMac Bank entered a 2005 deal creating a home equity line of credit encumbering Rathbun's Lot 20 (and allegedly Lot 21).
Rathbun alleges IndyMac wrongfully encumbered Lot 21, limiting Rathbun's ability to obtain other loans when markets were favorable and he needed funds.
IndyMac was closed by the OTS and placed in receivership with the FDIC on July 11, 2008; OneWest was formed in 2009 to purchase IndyMac assets from the FDIC.
Rathbun sued OneWest as IndyMac’s successor in interest, asserting multiple claims including fraud, misrepresentation, slander of title, and TILA/CMPI claims.
OneWest moved for judgment on the pleadings, arguing FIRREA deprives district courts of jurisdiction over claims based on a failed institution’s conduct and that the FDIC/OneWest agreements limit liability.
Leaning on FIRREA § 1821(d)(13)(D), the court ultimately held all Rathbun claims relate to IndyMac’s conduct and must be pursued through the FDIC’s administrative process, precluding judicial jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does FIRREA bar jurisdiction over Rathbun's claims against OneWest as successor for IndyMac's conduct?	Rathbun argues the claims are not subject to FIRREA's bar on the purchasing bank.	OneWest argues §1821(d)(13)(D) bars any claim relating to IndyMac’s acts, regardless of defendant identity.	Yes; FIRREA's jurisdictional bar applies to claims based on IndyMac’s acts.
Are Rathbun's claims subject to the FDIC-administered administrative process, barring district court review?	Plaintiff could seek relief outside the administrative process (arguably via setoff/defenses).	All such claims must exhaust administrative remedies before any court review.	Yes; all claims fall within FIRREA’s administrative-exhaustion regime.
Does the Master Purchase Agreement/Servicing Purchase Agreement shield OneWest from liability for FIRREA-governed claims?	Rathbun contends no shield is provided for pre-failure claims.	The agreements release OneWest from liabilities subject to FIRREA processes.	The agreements release OneWest from FIRREA claims, but since Rathbun's claims are FIRREA-barred, dismissal remains proper.
Can Rathbun pursue a Setoff claim independent of monetary claims, avoiding FIRREA's bar?	Setoff is an affirmative defense and should survive independent of the administrative process.	Setoff is inextricably linked to IndyMac’s pre-failure damages and is barred.	No; Setoff is dependent on IndyMac claims and barred by §1821(d)(13)(D).
Does due process require notice of the FDIC administrative claims process to avoid dismissal?	Rathbun lacked notice and should not be penalized without notice.	Notice issues do not defeat FIRREA’s exclusive administrative framework.	No; failure to provide notice does not defeat FIRREA’s jurisdictional requirements.

Key Cases Cited

Benson v. JPMorgan Chase Bank, N.A., 673 F.3d 1207 (9th Cir. 2012) (FIRREA bar applies to claims against a purchasing bank for the failed institution’s conduct)
McCarthy v. FDIC, 348 F.3d 1075 (9th Cir. 2003) (notice-based exception to time limits; due process concerns do not override FIRREA)
Bolduc v. Beal Bank, SSB, 994 F. Supp. 82 (D. N. H. 1998) (affirmative-defense framing does not control FIRREA exhaustion requirement)
RTC v. Midwest Federal Savings Bank, 36 F.3d 785 (9th Cir. 1993) (mutual mistake as affirmative defense; FIRREA still limits jurisdiction)
Village of Oakwood v. St. Bank & Trust Co., 539 F.3d 373 (6th Cir. 2008) (jurisdictional bar analysis for claims against a failed institution)
American First Federal, Inc. v. Lake Forest Park, Inc., 198 F.3d 1259 (9th Cir. 1999) (claims against successor banks and scope of FIRREA)
American Natl. Insurance Co. v. FDIC, 642 F.3d 113 (D.C. Cir. 2011) (jurisdiction and administrative-process framework under FIRREA)
National Union Fire Insurance Co. v. City Savings, FSB, 28 F.3d 376 (3d Cir. 1994) (preemptive judicial determinations and reliance on FIRREA structure)