Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-35468/USCOURTS-ca9-13-35468-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MTB ENTERPRISES, INC., a Utah

corporation; MICHAEL T. BILANZICH,

an individual; HAIRWARE USA, INC.,

a Utah corporation,

Plaintiffs-Appellants,

v.

ADC VENTURE 2011–2, LLC, a

Delaware LLC,

Defendant-Appellee.

No. 13-35468

D.C. No.

1:12-cv-00331-

EJL

OPINION

Appeal from the United States District Court

for the District of Idaho

Edward J. Lodge, District Judge, Presiding

Submitted March 23, 2015*

Seattle, Washington

Filed March 23, 2015

Before: M. Margaret McKeown, Richard C. Tallman,

and John B. Owens, Circuit Judges.

Opinion by Judge McKeown

* The panel unanimously concludes that this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).

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2 MTB ENTER. V. ADC VENTURE 2011–2

SUMMARY**

Subject Matter Jurisdiction

The panel dismissed for lack of subject matter jurisdiction

an appeal from the district court’s order dismissing claims

arising when financial institution ANB Financial failed.

The panel held that the venue provision in the Financial

Institutions Reform, Recovery, and Enforcement Act of 1989,

12 U.S.C. § 1821(d)(6)(A), is a jurisdictional limitation on

federal court review. The panel further held that Congress

vested two federal district courts with jurisdiction over this

lawsuit: the United States District Court for the Western

District of Arkansas, where the failed bank’s principal place

of business was located, and the United States District Court

for the District of Columbia. The panel concluded that

because the plaintiffs filed their complaint in the United

States District Court for the District of Idaho, that court

lacked subject matter jurisdiction.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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MTB ENTER. V. ADC VENTURE 2011–2 3

COUNSEL

Geoffrey J. McConnell and Chad M. Nicholson, Meuleman

Mollerup LLP, Boise, Idaho; and Sean N. Egan, Salt Lake

City, Utah, for Plaintiff-Appellant.

Larry E. Prince and A. Dean Bennett, Holland & Hart LLP,

Boise, Idaho, for Defendant-Appellee.

OPINION

McKEOWN, Circuit Judge:

INTRODUCTION

This case is about a bank loan gone awry—and where

parties can sue to recoup their losses when a financial

institution fails. Under the Financial Institutions Reform,

Recovery, and Enforcement Act of 1989 (“FIRREA” or “the

Act”), claimants in cases involving failed institutions must

file suit either in the district in “which the depository

institution’s principal place of business is located or the

United States District Court for the District of Columbia (and

such court shall have jurisdiction to hear such claim).” 

12 U.S.C. § 1821(d)(6)(A)(ii). The question of first

impression in our circuit is whether this procedural provision

is jurisdictional or simply a venue requirement subject to

waiver. We conclude that this section sets out the subjectmatter jurisdiction of the court.

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4 MTB ENTER. V. ADC VENTURE 2011–2

BACKGROUND

In 2007, as the real estate boom edged toward its prerecession peak, MTB Enterprises, Inc., entered into a

financing arrangement in which ANB Financial agreed to

provide it with a $17 million loan and line of credit to

develop a real estate parcel called Sundance Ranch in Canyon

County, Idaho. A year later, ANB balked on honoring the

final $6 million in payouts, and thereafter failed as a financial

institution. MTB’s construction project was left to languish. 

In the aftermath, the Federal Deposit Insurance Corporation

(“FDIC”) was appointed as receiver and transferred the

construction loan, along with ANB’s other assets and certain

liabilities, to a new entity—ADC Venture, 2011–2, LLC.

The bank loan inspired an alphabet soup of claims and

lawsuits. In 2008, MTB filed an administrative claim with

the FDIC and a lawsuit in the United States District Court for

the District of Idaho, which named the FDIC and ANB as

codefendants. The FDIC rejected the administrative claim. 

The civil case was transferred to the Western District of

Arkansas, where ANB Financial was headquartered. Soon

after, MTB voluntarily dismissed its lawsuit without

prejudice.

In 2012, MTB filed a new suit against ADC

Venture—without the FDIC as a defendant—in the District

of Idaho. MTB alleged that ADC Venture assumed the

obligations of its predecessor and therefore was liable for

breach of contract and resulting damages from the failed

construction venture. The district court dismissed MTB’s

claims, finding that ADC Venture did not assume liability

stemming from the 2007 loan.

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MTB ENTER. V. ADC VENTURE 2011–2 5

ANALYSIS

ADC Venture now argues, for the first time on appeal,

that we lack subject-matter jurisdiction over this lawsuit

under FIRREA. We consider this issue because defects in

subject-matter jurisdiction “may be raised at any time.”

Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, __,

131 S. Ct. 1197, 1202 (2011).

In the wake of “the savings and loan crisis of the 1980s,

Congress passed FIRREA to give the FDIC power to take all

actions necessaryto resolve the problems posed by a financial

institution in default.” Benson v. JPMorgan Chase Bank,

N.A., 673 F.3d 1207, 1211 (9th Cir. 2012) (internal quotation

marks omitted). The Act “provides detailed procedures to . . .

ensure that the assets of a failed institution are distributed

fairly and promptly among those with valid claims against the

institution, and to expeditiously wind up the affairs of failed

banks.” Id. (quoting McCarthy v. FDIC, 348 F.3d 1075, 1079

(9th Cir. 2003)). Jilted bank borrowers—or “claimants,” in

the parlance of the statute—must, among other things,

exhaust administrative remedies and comply with FIRREA’s

directives on when and where to file suit.

Under FIRREA, a claimant must sue in the district court

“within which the [failed bank’s] principal place of business

is located or the United States District Court for the District

of Columbia . . . .” 12 U.S.C. § 1821(d)(6)(A)(ii). The

statute goes on to state, parenthetically, “(and such court shall

have jurisdiction to hear such a claim).” Id. At issue is

whether that rule is jurisdictional.

In recent years, the Supreme Court has refined its

approach to subject-matter jurisdiction and, in its words,

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6 MTB ENTER. V. ADC VENTURE 2011–2

sought “to bring some discipline to the use of th[e] term”

jurisdictional. Henderson, 131 S. Ct. at 1202. A

jurisdictional rule is one that “governs a court’s adjudicatory

capacity, that is, its subject-matter or personal jurisdiction.” 

Id. In the case of a federal statute, a provision is

jurisdictional if it contains a “‘clear’ indication that Congress

wanted the rule to be ‘jurisdictional.’” Id. at 1203 (quoting

Arbaugh v. Y&H Corp., 546 U.S. 500, 515–16 (2006)). The

Court noted that “Congress, of course, need not use magic

words in order to speak clearly on this point. Context,

including this Court’s interpretation of similar provisions in

many years past, is relevant.” Id. (internal quotation marks

omitted).

In this case, Congress in fact invoked the “magic words”

in two provisions, leaving little doubt that FIRREA’s

strictures are jurisdictional. Section 1821(d)(13)(D),

denominated as “Limitation on judicial review,” provides that

“[e]xcept as otherwise provided in this subsection, no court

shall have jurisdiction over . . . any claim relating to any act

or omission of . . . the [FDIC] as receiver.” 12 U.S.C.

§ 1821(d)(13)(D). This jurisdiction-stripping provision

“applies to § 1821(d) as a whole”—the subsection that also

encompasses the venue provision. In re Lewis, 398 F.3d 735,

743 (6th Cir. 2005). Section 1821(d)(6)(A) contains its own

reference to jurisdiction and provides that when claimants file

suit in either of the two prescribed district courts, “such court

shall have jurisdiction to hear such claim.” 12 U.S.C.

§ 1821(d)(6)(A)(ii). Taken together, these provisions

underscore the jurisdictional nature of § 1821(d)(6)(A).

Not surprisingly, in the face of this statutory scheme, the

First Circuit and an array of district courts have reached the

same conclusion. See Lloyd v. FDIC, 22 F.3d 335, 337 (1st

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MTB ENTER. V. ADC VENTURE 2011–2 7

Cir. 1994); see, e.g., Friederichs v. Gorz, 624 F. Supp. 2d

1058, 1061–62 (D. Minn. 2009) (citing cases) (“While

ostensibly a venue provision, Section 1821(d)(6)(A) has been

interpreted as jurisdictional, since FIRREA divests courts of

jurisdiction over all claims not brought in accordance with its

strictures.”). Likewise, we and other courts have interpreted

other provisions within the same statutory subsection as

jurisdictional. See, e.g., Rundgren v. Wash. Mut. Bank,

760 F.3d 1056, 1060–61 (9th Cir. 2014) (interpreting

administrative exhaustion requirements in § 1821(d)(13)(D)

as jurisdictional); Miller v. FDIC, 738 F.3d 836, 843–45 (7th

Cir. 2013) (interpreting 60-day statute of limitations in

§ 1821(d)(6)(B) as jurisdictional).

We join the chorus and hold that the venue provision in

§ 1821(d)(6)(A) is a jurisdictional limitation on federal court

review—a conclusion that MTB acknowledges is correct.1

Accordingly, Congress has vested two federal district courts

with jurisdiction over this lawsuit: the United States District

Court for the Western District of Arkansas, where the failed

bank’s principal place of business is located, and the United

States District Court for the District of Columbia. MTB,

however, filed this complaint in the United States District

Court for the District of Idaho.2 Because that court lacked

1

In supplemental briefing, MTB candidly wrote “that the law of this

Circuit and elsewhere appears to indicate that this provision is a

jurisdictional limitation on Federal Court review.” MTB also confirmed

that ANB Financial’s principal place of business is Benton County,

Arkansas.

2 MTB suggests that it is excused from complying with

§ 1821(d)(6)(A)(ii) because it already did so in its initial 2008 lawsuit,

which was transferred to the Western District of Arkansas. However, 

nothing in FIRREA suggests that § 1821(d)(6)(A)(ii) applies only the first

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8 MTB ENTER. V. ADC VENTURE 2011–2

subject-matter jurisdiction from the start, this case must be

dismissed.3

DISMISSED.

time around. A claimant always must comply with § 1821(d)(6)(A)(ii)

when it brings a federal suit subject to FIRREA.

3

In light of our holding, we need not consider whether FIRREA’s

administrative exhaustion requirement and 60-day statute of limitations

pose additional jurisdictional barriers to MTB’s action. See

§ 1821(d)(13)(D)(ii), (d)(6)(B).

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