Court Opinion

ID: 2658349
Source: CourtListenerOpinion
Date Created: 2014-03-28 18:18:28.305123+00
Date Added: 2024-06-11T09:13:43.305283
License: Public Domain

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

0SAMA A. ALKASABI er al., )
Plaintiffs, §
v. g Civil Case No. 12-02021 (RJL)
WASHINGTGN MIJTUAL BANK, F.A. §
et al., § § l L E D
Defendants.  g.,;g¢;\g 2 q 20th
MEMQRANDIJM 0P1NION Cw"<~ U-S- D‘“"“* & B““'““'°‘°Y

' " z c ti D'~t `“t of Co\umbia
march LL, 2014 [# 4] °°‘"“"" `° `°"“

Plaintiffs Osama A. Alkasabi and Nadia Haddada, proceeding pro se, brought this
suit against defendants Washington Mutual Bank, F.A., Washington Mutual Bank
(together, "WAMU"), and the Federal Deposit insurance Corporation ("FDIC"), as
receiver for WAMU, in connection with plaintiffs’ purchase of two condominiums in La
Jolla, California. See generally Compl. [Dkt. # 1]. Plaintiffs, borrowers from WAMU, a
failed bank, allege that WAMU misrepresented that Certificates of Occupancy for the
properties would be issued by the city before the loans closed. Before the Court is
defendant FDIC’s Motion to Dismiss the complaint for lack of subject matter jurisdiction
and for failure to state a claim. See FDIC-Receiver’s Mot. to Dismiss and Mem. P. & A.
in Supp. ("Def.’s Mot.") [Dkt. # 4]. Upon consideration of the pleadings, record, and

relevant law, I find that this Court lacks subject matter jurisdiction, and therefore FDIC’s

motion is GRANTED, and all claims against defendants WAMU and the FDIC are
dismissed.l
BACKGROUND

Plaintiffs’ suit stems from their purchase of two condominiums at the Seahaus
development in La Jolla, California. See Compl. 11 35. On June l, 2005, plaintiffs
borrowed $l,l99,925 from WAMU to purchase one unit, id. 11 9 and Ex. D (Deed of
Trust), and on July 24, 2006, plaintiff Alkasabi borrowed $1,216,224 from WAMU to
purchase a second unit, ia’. 11 10 and Ex. E (Deed of Trust).

On December l4, 2012-more than eight years after the first condominium
purchase and seven years after the second_plaintiffs filed their two-count complaint
initiating this action, alleging that they did not receive "marketable title to their Seahaus
Units because of the absence of a Certificate of Occupancy from the City of San Diego."
Compl. 11 35. In the first count, entitled "Fraud and Deceit: Negligent Misrepresentation
of Fact," plaintiffs allege that the issuance of Certificates of Occupancy was a condition
precedent to closing the two loan transactions, ia’. 1111 40, 52, but such certificates were not

1 Plaintiffs also named JP Morgan Chase Bank, National Association ("Chase") as a defendant in
their complaint in connection with Chase’s September 25, 2008 purchase of WAMU’s assets
from the FDIC. See Compl. 1]1[ l, 14. Plaintiffs allege that Chase is "liable for its own [p]ost-
[p]urchase conduct by committing [p]ost-[p]urchase [n]egligent [m]isrepresentations and
wrongful acts . . . from September 25, 2008, to present." Ia'. 1[ l5. On July 31, 20l3, plaintiffs
filed a Notice of Partial Voluntary Dismissal [Dkt. # 10] pursuant to Fed. R. Civ. P. 4l(a)(l),
dismissing with prejudice their claims against defendant Chase relating to the second
condominium property (5460 La Jolla Blvd., Unit G30l), pursuant to a Confidential Settlement
Agreement and General Release applicable to that property. The docket in this case does not
reflect that Chase was ever served, so to the extent any claims remain against Chase regarding
the first condominium property (5470 La Jolla Blvd., Unit H30l), plaintiffs shall within 30 days
of the Order accompanying this Memorandum Opinion show cause in writing why the action
should not be dismissed for failure to effect service pursuant to Fed. R. Civ. P. 4(m), or failure to
prosecute pursuant to Local Civil Rule 83.23.

T rust C0., 952 F.2d 879, 882-83 (5th Cir. l992) (same); Intercontinental Travel Mktg.,
Inc. v. FDIC, 45 F.3d 1278, 1285 (9th Cir. 1994) (same).

Second, and more importantly, plaintiffs have failed to show that they did not
receive notice of the appointment of the receiver, and thus they fail to meet this sole
statutory exemption. As an initial matter, nowhere in their administrative complaint,
their complaint in this action, or their opposition brief do plaintiffs allege when they first
learned of the FDIC’s appointment as receiver for WAMU. Accordingly, they have
failed to meet their burden to show lack of notice of the FDIC’s appointment "in time to
file [an administrative] claim before [the Claims Bar Date]," 12 U.S.C. §
l82l(d)(5)(C)(ii) (emphasis added). See Def.’s Mot. at 8 ; Reply in Supp. of FDIC-
Receiver’s Mot. to Dismiss ("Def’s Reply") [Dkt. # 9], at 5; Khadr, 529 F.3d at 1115
("the party claiming subject matter jurisdiction . . . has the burden to demonstrate that it
exists").6

In any event, plaintiffs cannot dispute that they did, in fact, receive adequate
notice of the appointment of the FDIC as receiver through publication notice and inquiry
notice. The FDIC published notice of its appointment in newspapers of general
circulation in October and December of 2008, and such constructive publication notice is
sufficient for parties, such as plaintiffs here, who were not known, identifiable creditors.
See Tillman v. Resolutz'on T rust Corp., 37 F.3d 1032, 1036 (4th Cir. 1994) (holding that

publication in.local newspapers precluded claimant’s defense of lack of notice of

6 In their opposition brief, plaintiffs allude to declarations they purportedly made that they did
not receive "actual" or mailed notice of the FDIC’s appointment as receiver, see Pls.’ Opp’n at
14-15, but no such declarations are in the record.

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receiverShip); Mullane v. Cent. Hanover Bank & T rust Co., 339 U.S. 306, 317 (1950)
(holding that statutory notice by newspaper publication was sufficient, as a matter of due
process, as to trust beneficiaries whose interests or whereabouts could not with due
diligence be ascertained).7 Moreover, the collapse of WAMU-the largest bank failure
in U.S. history-was widely publicized in 2008,8 and therefore at the very least plaintiffs

were on inquiry notice of the receivership and the administrative claims process, See
Elmco Props., Inc. v. Second Nat’l Fea'. Sav. Assoc., 94 F.3d 914, 921-22 (4th Cir. 1996)

(a claimant "may not complain of its lack of formal notice if it actually knew enough

7 As discussed earlier, FIRREA requires the FDIC to mail a notice of the Claims Bar Date to (l)
"any creditor shown on the institution’s books," and (2) "claimant[s] not appearing on the
institution’s books" but whose names and addresses the FDIC later discovers. 12 U.S.C. §
l82l(d)(3)(C) (emphasis added). Plaintiffs here were debtors, not creditors, on WAMU’s books
at the time the bank failed and went into receivership, and they only became claimants known to
the FDIC when they asserted a claim against the assets of WAMU--i.e. when they filed their
administrative claim with the FDIC on August 22, 20l2. See Nat’l Union Fire Ins. C0. v. City
Sav., F.S.B., 28 F.3d 376, 386-87 (3d Cir. 1994) (observing that FIRREA does not define
"claim" or "creditor," and applying the Bankruptcy Code’s definitions of those terms to interpret
FIRREA (citing Offz`ce & Prof’l Emps. Int’l Union, L0cal 2 v. FDIC, 962 F.2d 63, 68 (D.C. Cir.
1992))); ll U.S.C. § 101(5) (defining "claim" as "right to payment" or "right to an equitable
remedy for breach of performance if such breach gives rise to a right to payment"); ll U.S.C. §
l0l(l0)(A) (defining "creditor" as an "entity that has a claim against the debtor"). Accordingly,
plaintiffs were not known, identifiable creditors on WAMU’s books requiring mailed notice
under 12 U.S.C. § l82l(d)(3)(C) or as a matter of constitutional due process, See also Elmco
Props., Inc. v. Secona' Nat’l Fea'. Sav. Assoc., 94 F.3d 914, 921 (4th Cir. 1996) (contrasting the
case at bar, in which mailed notice was required because the receiver was aware of plaintiff’s
claim against the failed bank’s assets soon after becoming receiver, with Tillman v. Resolution
T rust Corp. , 37 F.3d 1032 (4th Cir. l994), in which publication notice was deemed sufficient
because the claimant was not one the receiver discovered before the Claims Bar Date where the
claimant, whose claim was not based on a standard creditor-debtor arrangement, did not assert
his claim against the failed bank until 30 months after that bank entered receivership); Def.’s
Reply at 6-7.

8 See, e.g., Eric Dash & Andrew Ross Sorkin, Government Seizes WaMu and Sells Some Assets,
N.Y. TIMES, Sept. 25, 2008, available at
http://www.nytimes.corn/2008/09/26/business/26wamu.html?pagewanted=all ("Washington
Mutual . . . was seized by federal regulators on Thursday night, in what is by far the largest bank
failure in American history.").

12

about the situation to place it on ‘inquiry notice’ as to the details of the administrative
process," and "a claimant’s knowledge that a bank has entered receivership triggers such
inquiry notice"). Accordingly, plaintiffs do not satisfy the late-filed claims exception
under Section l82l(d)(5)(C)(ii) because they have not shown they were unaware of the
FDIC’s appointment as receiver.

III. The Discovery Rule Does N0t Apply

Plaintiffs next argue that they meet the late-filed claims exception for a different
reason-the application of the "discovery rule" for claims accrual. Under the discovery
rule, a cause of action accrues (and the statute of limitations begins running) "‘when the
plaintiff has knowledge of (or by the exercise of reasonable diligence should have
knowledge of) (l) the existence of the injury, (2) its cause in fact, and (3) some evidence
of wrongdoing."’ Gola'man v. Bequai, 19 F.3d 666, 671-72 (D.C. Cir. 1994) (quoting
Knight v. Furlow, 553 A.2d l232, 1234 (D.C. 1989)) (emphasis added); see also Kij"afi v.
Hilton Hotels Ret. Plan, 701 F.3d 7l8, 729 (D.C. Cir. 20l2) (in cases where it is not
"obvious" when "‘the factual and legal prerequisites for filing suit are in place,"’ the
discovery rule applies, "which provides that the statute of limitations begins when the
plaintiff ‘discovers, or with due diligence should have discovered,’ the injury supporting
the legal claim" (citations omitted and emphasis added)).

Here, invoking the discovery rule and relying on a First Circuit case, Heno v.
FDIC, 20 F.3d 1204 (lst Cir. 1994), plaintiffs argue that they did not discover their injury
(i.e. their claim did not accrue) until after the Claims Bar Date, and as a result they were

not able to meet that filing deadline. See Compl. 1111 24-26; P1s.’ Opp’n at ll; Heno, 20
13

F.3d at 1209 (deferring to FDIC’s interpretation of the late-filed claims exception, 12
U.S.C. § l82l(d)(5)(C)(ii), as permitting late filing by not only claimants who did not
receive notice of the appointment of the receiver in time to file a claim before the Claims
Bar Date, but also claimants who could not file their claim in time because it did not
come into existence until after that date). l find plaintiffs’ argument unpersuasive.
Plaintiffs’ alleged injury is the absence of Certif`icates of Occupancy for the two

condominiums as of the closing dates of the two loan transactions in June 2005 and July
2006. But plaintiffs do not allege any facts, let alone sufficient ones, indicating that they
exercised due diligence in ascertaining the alleged injury underlying their legal claim for
misrepresentation. Instead, plaintiffs make only the conclusory assertion that they
"exercised due diligence by filing [their administrative claim] with the FDIC." Compl. jj
26. But filing an administrative claim after purportedly discovering one’s injuries, seven
to eight years after those injuries occurred, has absolutely nothing to do with the exercise
of diligence in ascertaining the injuries in the first place. See Compl. 1111 24-29 (asserting
that plaintiffs discovered the alleged misrepresentations on March 29, 2012 and May 18,
2012; plaintiffs filed their claim with the FDIC on August 22, 20l2). As defendant FDIC
points out, plaintiffs could have ascertained their injury with even minimal diligence at
any point over that seven to eight year span: they could have requested the Certif`icates of
Occupancy from the seller, their own real estate agent, or the City of San Diego. See

Def.’s Mot. at 12-13. As a result, plaintiffs cannot invoke the discovery rule here.9

9 For the same reasons, plaintiffs cannot invoke the discovery rule to avoid the District of
Columbia’s three-year statute of limitations for negligent misrepresentation claims, D.C. Code §

14

IV. Equitable Tolling Does Not Apply

For much the same reasons, equitable tolling_which "permits a plaintiff to avoid
the bar of the limitations period if despite all due diligence she is unable to obtain vital
information bearing on the existence of her claim," Smith-Haynie v. District of Columbz'a,
155 F.3d 575, 579 (D.C. Cir. 1998)_does not apply to salvage plaintiffs’ claim here.

See id. (observing that "the ‘discovery rule’ and ‘equitable tolling’ are often treated as the

same doctrine").

As an initial rnatter, whether equitable tolling is potentially available depends on
whether the Claims Bar Date itself (as opposed to exhaustion of the FIRREA
administrative claims process overall) is jurisdictional. Compare Holland v. Florida, 560
U.S. 631, 645-46 (2010) (non-jurisdictional statutes of limitation may be equitably
tolled), with Dolan v. Unz`ted States, 560 U.S. 605, 610 (2010) (court may not extend a
jurisdictional deadline for equitable reasons). Some federal courts of appeals have
determined that the Claims Bar Date is jurisdictional.l° Our Circuit Court, however, has
indicated in dicta that this deadline should not be treated as jurisdictional and thus might

be subject to equitable tolling in certain circumstances. See Freeman, 56 F.3d at 1403

12-301(8), which applies to plaintiffs’ claims in this case under D.C.’s choice-of-law rules. See
A.I. Trade Fin., Inc. v. Petra Inz"l Banking Corp., 62 F.3d 1454, 1463 (D.C. Cir. 1995);
Youkelsone, 910 F. Supp. 2d at 222-23. Plaintiffs’ alleged injury was readily ascertainable when

the loans closed in June 2005 and July 2006, triggering the start of the three-year statute of
limitations. Yet they did not file the instant complaint until December 2012, well outside that
period. Accordingly, even if l did not find, as I do, that this Court lacks subject matter

jurisdiction, plaintiffs’ time-barred complaint would be subject to dismissal under Rule 12(b)(6).

10 See Althouse v. Resolutz`on T rust Corp., 969 F.Zd 1544, 1546 (3d Cir. 1992); Paul v. FDIC, 91
F.3d 110, 112-13 (11th Cir. 1996). But see Carlyle Towers Condomim`um Assoc. v. FDIC, 170
F.3d 301, 306-10 (2d Cir. 1999) (fmding the Claims Bar Date is not jurisdictional and is instead
"akin to a statute of limitations" that could be subject to equitable tolling).

15

n.2. But I need not decide this issue, however, because even assuming that the Claims
Bar Date is not jurisdictional and thus could potentially be subject to equitable tolling,
plaintiffs here have not alleged any facts sufficient to meet the due diligence requirement
for equitable tolling. See Norman v. United States, 467 F.3d 773, 776 (D.C. Cir. 2006)
(noting that courts apply equitable tolling "‘only in extraordinary and carefully

757

circumscribed circumstances (citation omitted), and declining to decide whether
equitable tolling applied to the F ederal Tort Claims Act’s statute of limitations because
plaintiff had failed to meet the due diligence requirement for such relief).

CONCLUSION

Thus, for the foregoing reasons, the Court GRANTS defendant FDIC’s Motion to
Dismiss. A separate Order consistent with this decision accompanies this Memorandum

Opinion.

 

United States District Judge

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issued, id. 11 46. Further, plaintiffs allege that WAMU knew that no certificates had been
issued at the time the loans were being negotiated, ia'. $Hl 37-38, made statements that
such certificates had been issued while knowing, or being reckless in not knowing, that
such statements were false, ia’. 1111 4l, 43-44, and thereby induced plaintiffs to enter into
the loan contracts, ia'. 1111 35, 59. Plaintiffs also assert that they did not discover that
Certificates of Occupancy had not been issued until March 29, 2012 and May l8, 2012,
when the Superior Court of San Diego County issued rulings in a related case. Ia’. 1111 24,

48.2 In the second count, plaintiffs seek a declaratory judgment that the FDIC (and

Chase) assumed WAMU’s alleged liability for the claim alleged in the first count. See ia’.

1111 60-61.

Between the time when the loans closed and when plaintiffs initiated this action,
WAMU collapsed. On September 25, 2008, the U.S. Department of the Treasury’s
Office of Thrift Supervision declared WAMU insolvent and appointed the FDIC as

receiver pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act

("FIRREA"), Pub. L. No. 101-73, 103 Stat. 183 (1989) (codified in various sections of

2 On May 2l, 20l0, plaintiffs Alkasabi and Haddada, as well as other individuals, initiated an
action in state court in Califomia against the builders of the Seahaus condominiums and various
lenders. See Compl. 1111 27, 36; see also Register of Actions, Sarnecky v. CBL Partners LTD,
Case No. 37-20l0-00092634-CU-OR-CTL (Super. Ct., San Diego County), available at
https://roa.sdcourt.ca.gov/roa/faces/CaseSearch.xhtml. That state court action appears to include
claims that the builders "fraudulently constructed the Seahaus La Jolla project in a manner that
violated the City of San Diego building code requirements," Compl. 11 36, as well as
allegations-similar to those in the instant case_that lenders made negligent misrepresentations
and "represented the issuance of a certificate of occupancy for the project was a condition
precedent to funding certain loans used to purchase individual units," Compl. 11 28 (quoting San
Diego Superior Court’s March 29, 2012 Order in Sarnecky v. CBL Partners LTD). Chase is a
defendant in that state court action, but the FDIC is not a party to it. See Def.’s Mot. at 3.

3

Title 12 of the U.S. Code). See Compl. 11 2; Decl. of Wi1liam A. Starnes ("Starnes
Decl.") [Dkt. # 4-1], at 11 3 and Ex. A (Order Appointing FDIC as Receiver); 12 U.S.C. §
l82l(c). Pursuant to FIRREA’s administrative claims process for handling creditors’
claims against failed banks that are in receivership with the FDIC, discussed infra, the
FDIC set December 30, 2008 as the deadline for filing claims against the WAMU
receivership (hereinafter "Claims Bar Date"). See Compl.1] 22; Starnes Decl. 11 5. Also
pursuant to FIRREA’s statutory requirements, the FDIC published notice of its
appointment as receiver (and of the Claims Bar Date) in newspapers of general
circulation in October and December of 2008, Starnes Decl. 11 5 and Ex. B (Publication
Notices).3
Nearly four years after the Claims Bar Date, on August 22, 20l2, plaintiffs filed

an administrative claim with the FDIC raising the misrepresentation claim that forms the
basis of the instant suit. Compl. 11 2l; Starnes Decl. 1[ 6 and Ex. C (Administrative
Complaint). On October 16, 20l2, the FDIC disallowed plaintiffs’ claim as untimely
f`lled. Compl. 11 22 and Ex. C (Notice of Disallowance); Starnes Decl. 11 7 and Ex. D
(Notice of Disallowance). Thereafter, within the 60 day time limit allowed by statute to

seek judicial review, plaintiffs filed their complaint in this case on December l4, 20l2.

3 The FDIC published notices in the Wall Street Journal (Oct. l, 2008 and Oct. 3l, 2008), the
Seattle Times (Oct. l, 2008, Oct. 30, 2008, and Dec. l, 2008), and the Las Vegas Review Journal
and/or the Las Vegas Sun (Oct. l, 2008, Oct. 31, 2008, and Dec. l, 2008). See Starnes Decl. 1[ 5,
and Ex. B (Publication Notices).

STANDARD OF REVIEW

Defendant FDIC has moved to dismiss plaintiffs’ complaint for lack of subject
matter jurisdiction under Federa1Rule of Civil Procedure l2(b)(1) and for failure to state
a claim under Rule l2(b)(6). In such a situation, a court should consider the Rule
l2(b)(1) jurisdictional challenges before the Rule l2(b)(6) arguments. See United States
ex rel. Settlemz`re v. District of Columbia, 198 F.3d 913, 920-21 (D.C. Cir. 1999) (citing
Um'ted States ex rel. Kreindler & Kreindler v. United Techs. Corp., 985 F.2d 1148, 1155-
56 (2d Cir. 1993)).

On a motion to dismiss under Rule l2(b)(l), "the plaintiff bears the burden of
establishing the factual predicates of jurisdiction by a preponderance of the evidence."
Erby v. United States, 424 F. Supp. 2d l80, 182 (D.D.C. 2006) (citing, inter alia, Lujan v.
Defenders of Wila’lzfe, 504 U.S. 555, 561 (l992)); see also Khadr v. Um`ted States, 529
F.3d lll2, lll5 (D.C. Cir. 2008) ("the party claiming subject matter jurisdiction . . . has
the burden to demonstrate that it exists"). "[Plaintiffs’] factual allegations in the
complaint . . . will bear closer scrutiny in resolving a l2(b)(1) motion than in resolving a
l2(b)(6) motion for failure to state a claim." United States ex rel. Digital Healthcare,
Inc. v. Ajj‘iliated Computer Servs., Inc., 778 F. Supp. 2d 37, 43 (D.D.C. 201l) (citation
and internal quotation marks omitted). In deciding a l2(b)(1) motion, a court need not
limit itself to the complaint; rather, it "may consider such materials outside the pleadings

as it deems appropriate to resolve the question whether it has jurisdiction in the case."

Bank ofAmerz'ca, N.A. v. FDIC, 908 F. Supp. 2d 60, 76 (D.D.C. 2012) (citation and
internal quotation marks omitted).4
ANALYSIS

As a threshold issue, defendant FDIC argues that p1aintiffs’ complaint must be
dismissed for want of subject matter jurisdiction: since plaintiffs did not timely file their
administrative claim under FIRREA, they failed to exhaust the mandatory, jurisdictional
administrative claims process, and therefore this Court lacks subject matter jurisdiction
over these time-barred claims. Plaintiffs do not dispute that FIRREA provides this Court
with jurisdiction over only claims that have first been filed administratively with the
FDIC. Instead, they argue that they did, in fact, exhaust the administrative claims process
because their claim meets FIRREA’S late-filed claims exception, either on the ground
that they did not receive adequate notice, or, in the altemative, because their claim did not
accrue until after the Claims Bar Date had passed. See Pliantiffs [sic] Osama A. Alkasabi
and Nadia Haddada’s Oppositions and Objections to the FDIC-Receiver’s Motion to
Dismiss and Mem. P. & A. in Supp. ("Pls.’ Opp’n") [Dkt. # 8], at 8, 10-l l, l6. Next,
plaintiffs contend that their administrative claim was not untimely because the Claims

Bar Date should be equitably tolled. See Pls.’ Opp’n at l2-l3. For the reasons explained

4 Accordingly, l will deny plaintiffs’ request that defendant FDIC’s motion to dismiss be
converted into a motion for summary judgment on the ground that the FDlC attached an affidavit
and supporting documents to its motion, see Pls.’ Opp’n at 9-10, because those materials relate
solely to FDIC’s arguments for dismissal based on lack of subject matter jurisdiction under Rule
l2(b)(l). See Fed. R. Civ. P. l2(d); Ord v. District ofColumbia, 587 F.3d ll36, ll40 (D.C. Cir.
2009) ("because Rule l2(d)’s conversion mechanism applies only to motions under Rule
l2(b)(6) or l2(c), ‘the impropriety of transforming Rule l2(b)(l) motions into summary-
judgment motions is well-settled"’ (citation omitted)); Def.’s Reply at 2-4.

6

below, plaintiffs’ arguments are without merit. Accordingly, I find that this Court lacks
subject matter jurisdiction, and I do not reach the FDIC’s alternative arguments for

dismissal.

I. The FIRREA Claims Pr0cess is Jurisdictional
"‘Federal courts are courts of limited jurisdiction;"’ they have subject matter
jurisdiction only to the extent that it is conferred by statute or the Constitution. See Gunn
v. ]\linton, 133 S. Ct. 1059, 1064 (20l3) (quoting Kokkonen v. Guardian Life Ins. Co. of
Amerz`ca, 5 ll U.S. 375, 377 (1994)). Here, plaintiffs sue the FDIC pursuant to 12 U.S.C.
§ l82l(d)(6)(A)(ii), a provision of FIRREA, because the FDIC is acting as receiver for
WAMU under that statute. See Compl. 11 30. FIRREA "extends a special kind of federal
jurisdiction outside the scope of 28 U.S.C. § 133 l, the normal source of federal question
jurisdicti0n." Youkelsone v. FDIC? 910 F. Supp. 2d 2l3, 222 (D.D.C. 2012).
FIRREA-which "Congress enacted . . . ‘in the midst of the savings and loan

insolvency crisis to enable the FDIC . . . to expeditiously wind up the affairs of literally
hundreds of failed financial institutions throughout the country,"’ Westberg v. FDIC, 741
F.3d l30l, 1303 (D.C, Cir. 2014) (quoting Freeman v. FDIC, 56 F.3d l394, 1398 (D.C.
Cir. l995))_creates an administrative claims process under which the FDIC decides
creditors’ claims against the assets of failed banks that are in receivership with the FDIC.
See 12 U.S.C. § l82l(d)(3)-(l3);Am. Nat’llns. Co. v. FDIC, 642 F.3d ll37, 1141 (D.C.
Cir. 2011); Freeman, 56 F.3d at 1399-1400. When liquidating a failed bank’s assets, the
FDIC must "promptly publish a notice to the depository institution’s creditors to present

their claims . . . [to the FDIC] by a date specified in the notice"_i.e. the Claims Bar

7

Date. 12 U.S.C. § l82l(d)(3)(B). At the same time, the FDIC must also mail a similar
notice to (l) "any creditor shown on the institution’s books," and (2) "claimant[s] not
appearing on the institution’s books" but whose names and addresses the FDIC later
discovers. 12 U.S.C. § 182l(d)(3)(C). Once a claim is filed, the FDIC has 180 days to
allow or disallow it. 12 U.S.C. § 1821(d)(5)(A). Claims that are filed late, after the
Claims Bar Date, "shall be disallowed and such disallowance shall be f`inal." 12 U.S.C. §
1821(d)(5)(C)(i). There is one statutory exception to this rule, however: late-filed claims
"may be considered by the receiver if . . . the claimant did not receive notice of the
appointment of the receiver in time to file such claim before [the Claims Bar Date]," and
"such claim is filed in time to permit payment of such claim." 12 U.S.C. §
l821(d)(5)(C)(ii).

FIRREA provides for de novo judicial review of the FDIC’s determinations of
administrative claims. See 12 U.S.C. § l82l(d)(6); Am. Nat’l Ins. Co., 642 F.3d at 1141;
Freeman, 56 F.3d at 1400. Section 182l(d)(6) provides that the U.S. District Court for
the District of Columbia (or the district court for the district where the failed bank has its
principal place of business) shall have jurisdiction over claims that are disallowed by the
FDIC, so long as the claimant files suit within 60 days of the disallowance. See 12
U.S.C. § l821(d)(6)(A). But FIRREA also includes a "broadly worded limitation on
judicial review," Westberg, 741 F.3d at 1303, in Section 182l(d)(13)(D):

Except as otherwise provided in this subsection, no court shall have
jurisdiction over--

(i) any claim or action for payment from, or any action
seeking a determination of rights with respect to, the assets of

8

any depository institution for which the Corporation has been
appointed receiver, including assets which the Corporation
may acquire from itself as such receiver; or

(ii) any claim relating to any act or omission of such
institution or the Corporation as receiver.

12 U.s.c. § 1821(<1)(13)(1)).5
As a result of the interplay of these provisions, our Circuit Court has interpreted
FIRREA as making the administrative claims process jurisdictional. See Westberg, 741

F.3d at 1303 (filing a claim under the FDIC’s administrative claims process "is a

jurisdictional exhaustion requirement that we cannot excuse"); Freeman, 56 F.3d at 1400.

In other words, the FDIC’s administrative claims review process is mandatory, and
therefore judicial review in this Court is unavailable unless plaintiffs first routed their
claim through that process. See Westberg, 741 F.3d at l308.
In this case, it is undisputed that plaintiffs filed an administrative claim with the

FDIC. But it is also undisputed that they filed that claim late-nearly four years after the
Claims Bar Date, to be exact-and the statute provides that late claims "shall be
disallowed and such disallowance shall be final." 12 U.S.C. § l82l(d)(5)(C)(i). The
threshold-and as it turns out, dispositive-question for this Court, therefore, is whether
plaintiffs’ late filing should be considered timely under some exception to the Claims Bar
Date such that plaintiffs can be considered to have met the exhaustion requirement.
Unfortunately for plaintiffs, the answer is no, and therefore this Court lacks subject

matter jurisdiction.

5 "The ‘ [e]xcept as otherwise provided’ clause refers back to section l82l(d)(6)," the provision
for judicial review. Westberg, 741 F.3d at 1303.

9

II. The Late-Filed Claims Excepti0n Does Not Apply

Defendant FDIC argues that plaintiffs have failed to show that they qualify for the
late-filed claims exception, 12 U.S.C. § 1821(d)(5)(C)(ii). See Def.’s Mot. at 8-9.
Plaintiffs counter that they meet this statutory exception because they allege they did not
receive adequate notice: first, they "never received [a]ctual [n]otice or [n]otice of the
Claim[s] Bar Date," including mailed notice under Section 182l(d)(3 )(C), and second,
they "never receive[d] [a]ctual [n]otice or [n]otice of the FDIC’s appointment as a
receiver in time to file such claim before [the C1aims Bar Date]." Pls.’ Opp’n at 10; id. at
15-l6. Plaintiffs’ arguments are unavailing.

First, plaintiffs’ contention that they never received notice of the Claims Bar Date
is irrelevant. As our Circuit Court has interpreted FIRREA, "[t]he only statutorily-
specified exemption from the strict requirements of the administrative claims process is
provided if ‘the claimant did not receive notice of the appointment of the receiver in time
to file . . . [a] claim."’ Freeman, 56 F.3d at 1402 (quoting 12 U.S.C. § l821(d)(5)(C))
(emphasis added in Freeman). Accordingly, even if plaintiffs were entitled to receive
notice of the Claims Bar Date under Section l82l(d)(3) but did not, that fact would be
irrelevant for purposes of determining whether the statutory late-filed claims exception
applies. See Freeman, 56 F.3d at 1402 (interpreting FIRREA to mean that the FDIC’s
failure to mail the notice required under 12 U.S.C. § l82l(d)(3)(C) does not relieve the
claimant of the obligation to exhaust administrative remedies, because the statute does

not provide for a waiver or exception under those circumstances); Meliezer v. Resolution

10