Saffer v. JP Morgan Chase Bank, N.A.
171 Cal. Rptr. 3d 111
Cal. Ct. App.2014Background
- Saffer worked at Washington Mutual (WaMu) May 2007–Jan 2008; WaMu was seized by federal regulators in Sept 2008 and the FDIC was appointed receiver; JP Morgan Chase (JPMC) purchased certain WaMu assets/liabilities.
- FDIC published bar-date notices (Oct 2008) setting December 30, 2008, as the deadline for presenting claims to the receiver.
- Saffer sued WaMu and others in June 2009 alleging constructive discharge, breach of contract and related employment/wage torts; he had signed an arbitration agreement while employed.
- JPMC compelled arbitration; in arbitration JPMC moved to dismiss for lack of subject-matter jurisdiction because Saffer failed to exhaust administrative remedies under FIRREA (12 U.S.C. § 1811 et seq.). The arbitrator dismissed for lack of jurisdiction; the trial court confirmed the award.
- On appeal the California Court of Appeal held Saffer’s failure to timely present claims to the FDIC under FIRREA deprived state courts (and arbitrators) of subject-matter jurisdiction and therefore vacated the judgment and directed dismissal for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to exhaust FIRREA administrative remedies is a jurisdictional bar | Saffer: exhaustion is procedural and waivable; California law treats some exhaustion defenses as non-jurisdictional | JPMC: FIRREA’s statutory scheme and §1821(d)(13)(D) strip courts of jurisdiction absent exhaustion | Held: FIRREA exhaustion is jurisdictional here; failure to exhaust deprived courts (and arbitrator) of subject-matter jurisdiction |
| Whether Saffer’s employment/wage claims were exempt from FIRREA because they were non‑monetary or unsuited to FDIC process | Saffer: employment claims not susceptible of administrative resolution by FDIC | JPMC: claims relate to acts/omissions of failed institution and seek monetary relief—thus covered | Held: Claims related to pre‑receivership acts of WaMu and monetary in nature are within FIRREA’s scope and required exhaustion |
| Whether naming JPMC (successor purchaser) or Wolf (individual) avoids exhaustion | Saffer: claims against successor or individual defendant escape FIRREA; discovery could show JPMC assumed liability | JPMC: FIRREA bars claims that functionally relate to failed institution regardless of formal defendant; purchase-and-assumption evidence not in record | Held: Successor status does not avoid FIRREA exhaustion where claims rest on failed bank’s conduct; speculative discovery could not excuse exhaustion |
| Whether inadequate notice or late filing with FDIC excuses exhaustion | Saffer: he lacked adequate notice of receivership/bar date; his later FDIC claim (Sept 2012) cures defect | JPMC: publication notice and inquiry notice were sufficient; late claim does not retroactively create jurisdiction | Held: Publication and inquiry notice were sufficient; late-filed claim does not cure failure to exhaust before filing suit—no exception applies |
Key Cases Cited
- Benson v. JPMorgan Chase Bank, N.A., 673 F.3d 1207 (9th Cir. 2012) (FIRREA exhaustion required where claim functionally relates to failed institution)
- 2974 Properties, Inc. v. Resolution Trust Corp., 23 Cal.App.4th 871 (Cal. Ct. App. 1994) (FIRREA administrative claims process is mandatory prerequisite to court review)
- Abelleira v. District Court of Appeal, 17 Cal.2d 280 (Cal. 1941) (background on exhaustion doctrine under California law)
- Rosa v. Resolution Trust Corp., 938 F.2d 383 (3d Cir. 1991) (distinguishing claims not susceptible to claims procedure from those that are)
- Wujick v. Dale & Dale, Inc., 43 F.3d 790 (3d Cir. 1994) (late administrative filing after suit does not cure jurisdictional defect under FIRREA)