Filed 4/29/14
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
GREGORY SAFFER, B246412
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC415844)
v.
JP MORGAN CHASE BANK et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County. Michael
L. Stern, Judge. Judgment vacated.
Shegerian & Associates and Carney R. Shegerian for Plaintiff and Appellant.
Jackson Lewis, Mark R. Attwood and Sherry L. Swieca for Defendants and
Respondents.
________________________________
INTRODUCTION
Plaintiff and appellant Gregory Saffer worked for Washington Mutual Bank
(WaMu) between May 2007 and January 2008. In September 2008, WaMu failed. In
short order, the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver
for the bank, and JP Morgan Chase Bank, N.A. (JPMC) purchased some of WaMu’s
assets and liabilities. The FDIC published notices informing creditors that claims against
WaMu had to be submitted to the FDIC by the end of December 2008. In June 2009,
Saffer filed suit against WaMu, “Chase Manhattan Bank,” his former supervisor at
WaMu, and WaMu’s former CEO. The suit alleged the defendants constructively
discharged Saffer in violation of public policy and in breach of express or implied
employment contracts. JPMC successfully compelled the suit to arbitration. Once in the
arbitral forum, JPMC moved to dismiss the action. JPMC asserted neither the arbitrator
nor any court had subject matter jurisdiction to adjudicate Saffer’s claims because he
failed to exhaust his administrative remedies pursuant to the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, 12 U.S.C. § 1811, et seq. (FIRREA).1
The arbitrator agreed and dismissed the case. The trial court subsequently confirmed the
arbitration award.
Saffer now appeals the order compelling binding arbitration and the order
confirming the arbitration award. Saffer contends the arbitration agreement was
unenforceable. He also argues the arbitrator’s award should have been vacated because
the arbitrator substantially prejudiced his rights by denying him discovery, and exceeded
her powers by dismissing the case without a hearing on the merits. JPMC contends no
court, including this court, has subject matter jurisdiction to entertain Saffer’s claims, and
his complaint should accordingly be dismissed.
1 All further undesignated statutory references are to FIRREA.
2
We conclude Saffer’s failure to timely comply with the mandatory administrative
exhaustion requirements of FIRREA created a jurisdictional bar to his claims. For that
reason we vacate the judgment and remand to the trial court with directions to enter an
order of dismissal against Saffer for lack of subject matter jurisdiction.
FACTUAL AND PROCEDURAL BACKGROUND
Saffer began working for WaMu in late May 2007 as a mortgage loan consultant.
At some point near the beginning of his employment, Saffer signed a “Binding
Arbitration Agreement.” In the agreement, Saffer and WaMu agreed “that arbitration
shall be in lieu of any and all lawsuits or other civil legal proceedings relating to [his]
employment.”
In January 2008, Saffer’s employment with WaMu ended.
In September 2008, the Office of Thrift Supervision seized WaMu and appointed
the FDIC as the bank’s receiver. At essentially the same time, the FDIC sold certain of
WaMu’s assets and liabilities to JPMC.2
On October 1 and October 31, 2008, the FDIC published notices in the Wall Street
Journal informing creditors of WaMu that any claims against WaMu had to be submitted
in writing to the FDIC by December 30, 2008, the “bar date.” The notices warned:
“Under federal law, with certain limited exceptions, failure to file such claims by the Bar
Date will result in disallowance by the Receiver, the disallowance will be final, and
further rights or remedies with regard to the claims will be barred. 12 U.S.C. Section
1821 (d)(5)(C)(d)(6).”
In June 2009, Saffer filed suit against WaMu, “Chase Manhattan Bank,” the
former CEO of WaMu, and his former WaMu supervisor, Susan Wolf. Saffer asserted
claims for wrongful termination in violation of public policy; breach of express and
implied-in-fact contracts not to terminate employment without good cause; breach of the
2 On October 1, 2013, we granted JPMC’s unopposed request that we take judicial
notice of several facts which are matters of public record regarding the receivership of
WaMu and the FDIC’s published notices to WaMu creditors. (Evid. Code, § 452, subd.
(h).)
3
implied covenant of good faith and fair dealing; failure to pay wages in violation of the
Labor Code and Industrial Welfare Commission Work Orders; false representations and
fraudulent inducement; and negligent hiring, retention, and supervision. The complaint
alleged Saffer refused to engage in “fraudulent schemes aimed to defraud clients,” WaMu
and Chase Manhattan Bank constructively discharged him in retaliation, and all
defendants negligently hired, retained, or supervised employees who illegally retaliated
against him. The complaint further alleged WaMu and Chase Manhattan Bank breached
an oral agreement not to terminate him except for good cause, and did not pay all wages
due to him. The complaint asserted the defendants, including Wolf, knowingly made
false representations to him about WaMu’s financial position to induce him to accept
employment with WaMu.
In July 2009, JPMC answered the complaint, identifying itself as “JP Morgan
Chase Bank, N.A., as acquirer of certain assets and liabilities of Washington Mutual
Bank from the FDIC acting as receiver.” Wolf subsequently also answered the
complaint.3 In October 2009, JPMC filed a petition to compel arbitration. Saffer
opposed the petition, arguing he was fraudulently induced to sign the agreement, and it
was unenforceable due to procedural and substantive unconscionability. Following an
evidentiary hearing, the trial court granted the petition to compel arbitration in April
2010.
The parties proceeded to arbitration under the auspices of the American
Arbitration Association. The record does not reveal what took place over the next two
years. In June 2012, JPMC informed the arbitrator and Saffer it would move to dismiss
the complaint for lack of subject matter jurisdiction, based on FIRREA. In response,
Saffer noticed the deposition of JPMC’s person most knowledgeable regarding FIRREA.
JPMC objected to the notice and sought a protective order preventing the deposition,
which the arbitrator issued. In August 2012, JPMC moved to dismiss the complaint,
3 We hereafter include Wolf when using the shorthand “JPMC.”
4
arguing Saffer’s failure to exhaust administrative remedies with the FDIC in accordance
with FIRREA barred him from pursuing his claims in the arbitration or in any court.
In September 2012, Saffer filed a claim with the FDIC. He also opposed JPMC’s
motion to dismiss, arguing FIRREA was not applicable because he never received proper
notice of the FDIC’s receivership of WaMu. He further contended the time to file a
claim with the FDIC should be equitably tolled.
In November 2012, the arbitrator concluded the court and the arbitrator lacked
subject matter jurisdiction to hear Saffer’s claims and dismissed the case. Saffer
subsequently filed a motion to vacate the arbitration ruling in the superior court. Saffer
contended his rights were substantially prejudiced by the arbitrator’s refusal to allow
discovery to determine whether the FDIC could have resolved his claims. He further
argued the arbitrator should have waited until the FDIC issued a response to his claim.
JPMC opposed the motion, arguing that neither the arbitrator nor the courts had
jurisdiction to entertain Saffer’s claims. However, instead of asserting the trial court
should dismiss the action, JPMC contended there was no basis to vacate or review the
arbitrator’s award and it should be confirmed. In December 2012, the trial court
confirmed the arbitrator’s award. This appeal followed.4
4 Saffer filed his notice of appeal after the trial court entered an order denying his
motion to vacate the arbitration award and confirming the award. However, no judgment
was entered on the order at that time, making the appeal premature. (Cinel v. Christopher
(2012) 203 Cal.App.4th 759, 766; Cummings v. Future Nissan (2005) 128 Cal.App.4th
321, 326-327.) On November 12, 2013, we informed the parties of the absence of an
appealable order or judgment in the record, and invited them to either augment the record
with a judgment, or file letter briefs on the issue of this court’s jurisdiction to entertain
the appeal. On November 27, 2013, appellant augmented the record with a judgment
entered nunc pro tunc. We therefore treat Saffer’s notice of appeal as filed immediately
after entry of judgment. (Cal. Rules of Court, rule 8.104(d).)
5
DISCUSSION
I. The Case Must Be Dismissed for Lack of Subject Matter Jurisdiction
On appeal, Saffer contends the trial court erred in granting JPMC’s petition to
compel arbitration and subsequently in confirming the arbitration award. JPMC
disagrees, but also contends neither the trial court, nor this court has subject matter
jurisdiction to entertain any aspect of Saffer’s claims. Subject matter jurisdiction may be
raised for the first time on appeal. (Totten v. Hill (2007) 154 Cal.App.4th 40, 46
(Totten).) In addition, an alleged lack of subject matter jurisdiction must be addressed
whenever it comes to a court’s attention. (In re Gloria A. (2013) 213 Cal.App.4th 476,
481; Totten, supra, at p. 46.) A respondent may raise the issue in a respondent’s brief.
(Totten, supra, at pp. 46-47.)
Saffer’s first argument is that the trial court erred in compelling him to arbitrate
his claims. However, if indeed the courts of this state lack subject matter jurisdiction
over Saffer’s claims, any issues regarding arbitrability are moot; even if the arbitration
agreement was unenforceable, the trial court would still lack the ability to adjudicate his
claims. Thus, we independently consider JPMC’s jurisdictional challenge.5 We
conclude the action must be dismissed due to a lack of subject matter jurisdiction,
resulting from Saffer’s failure to timely exhaust his administrative remedies with the
FDIC as required by FIRREA.
5 We note that in at least two unpublished federal district court decisions, courts
have refused to allow arbitration to proceed when the claims related to the actions or
omissions of a failed financial institution, and the plaintiffs had not yet exhausted
mandatory administrative remedies under FIRREA or a similar statute. (Multibank 2010-
1 SFR Venture LLC v. Saunders (D.Nev. Nov. 14, 2011, No. 2:11-CV-1245 JCM
(CWH)) 2011 WL 5546960 [enjoining arbitration against purchaser of failed bank’s
assets where plaintiffs had not first exhausted administrative remedies pursuant to
FIRREA]; NCUA Bd. v. Lormet Cmty Fed. Credit Union (N.D.Ohio Nov. 18, 2010,
No. 1:10 CV 1964) 2010 WL 4806794 [concluding claims falling within the purview of
the Federal Credit Union Act, which has limitations on judicial review nearly identical to
those of FIRREA, may not be arbitrated; defendant could not avoid administrative claims
procedure by relying on an arbitration provision].)
6
A. FIRREA Background
Under FIRREA, the FDIC has “authority to ‘act as receiver or conservator of a
failed institution for the protection of depositors and creditors.’ [Citation.] [FIRREA]
provides detailed procedures to allow the FDIC to consider certain claims against the
receivership estate, see 12 U.S.C. § 1821, (d)(3)-(10), ‘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,’ [Citation]. [¶]
FIRREA requires that a plaintiff exhaust these administrative remedies with the FDIC
before filing certain claims.” (Benson v. JPMorgan Chase Bank, N.A. (9th Cir. 2012)
673 F.3d 1207, 1211 (Benson); 2974 Properties, Inc. v. Resolution Trust Corp. (1994)
23 Cal.App.4th 871, 877 (2974 Properties).)
Once the FDIC is appointed receiver, it must promptly publish notice to the
institution’s creditors to present claims to the receiver by a specified date, known as the
“bar date.” (See, e.g., Intercontinental Travel Marketing v. F.D.I.C. (9th Cir. 1994)
45 F.3d 1278, 1281 (Intercontinental).) The notice must be republished one and two
months later. (§ 1821, subd. (d)(3)(B).) The FDIC must also mail a similar notice to
known creditors. (§ 1821, subd. (d)(3)(C).) Within 180 days of the filing of a claim, the
FDIC must determine whether to allow or disallow the claim, and notify the claimant of
the determination. (§ 1821, subd. (d)(5)(A).) Within 60 days after a claim is disallowed,
or after 180 days of the claim’s filing, the claimant may either seek administrative review
of the claim, “or file suit on such claim (or continue an action commenced before the
appointment of the receiver) in the district or territorial court of the United States for the
district within 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).” (§ 1821, subd. (d)(6)(A).) Judicial review of a
disallowed claim is de novo. (§ 1821, subd. (d)(5)(E); Brady Dev. Co. v. Resolution
Trust Corp. (4th Cir. 1994) 14 F.3d 998, 1003 (Brady).) If the claimant fails to seek
administrative or judicial review within the 60-day period, “the claim shall be deemed to
be disallowed . . . as of the end of such period, such disallowance shall be final, and the
7
claimant shall have no further rights or remedies with respect to such claim.” (§ 1821,
subd. (d)(6)(B).)
Section 1821, subdivision (d)(13)(D) states: “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 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.” Thus,
“[f]ailure to comply with the claims procedure bars any lawsuit against a failed
depository institution.” (Robbins v. Foothill Nissan (1994) 22 Cal.App.4th 1769, 1778.)
It is undisputed that Saffer did not exhaust administrative remedies under FIRREA
before filing suit. However, Saffer contends this failure is not fatal to his claims, or this
appeal, for several reasons. He contends judicial action on his claims is not barred
because exhaustion of administrative remedies does not implicate fundamental
jurisdiction under California law. He thus asserts exhaustion was a procedural defense
JPMC could, and did, waive. Saffer also argues he was not required to exhaust
administrative remedies under FIRREA because (1) his claims—employment claims—
were not susceptible of resolution by the FDIC; (2) he did not receive adequate notice of
the claims bar date or the receivership; and (3) he was not required to exhaust as to JPMC
or as to Wolf.
B. Failure to Exhaust Administrative Remedies Under FIRREA Deprives
Courts of Subject Matter Jurisdiction
A threshold question is whether Saffer’s failure to exhaust his administrative
remedies under FIRREA calls into question the courts’ subject matter jurisdiction over
his claims. We conclude that it does.
i. Subject Matter Jurisdiction Principles
Subject matter jurisdiction is a fundamental requirement for judicial consideration
of claims. “The California Supreme Court has defined subject matter jurisdiction thusly:
‘Subject matter jurisdiction . . . is the power of the court over a cause of action or to act in
8
a particular way.’ [Citations.] By contrast, the lack of subject matter jurisdiction means
the entire absence of power to hear or determine a case; i.e., an absence of authority over
the subject matter. [Citations.] Where the evidence is not in dispute, a determination of
subject matter jurisdiction is a legal question subject to de novo review.” (Dial 800 v.
Fesbinder (2004) 118 Cal.App.4th 32, 42.) Subject matter jurisdiction may not be
“ ‘ “conferred by consent, waiver, agreement, acquiescence, or estoppel.” ’ [Citation.]”
(Totten, supra, 154 Cal.App.4th at p. 47.) As noted above, “ ‘[t]he adequacy of the
court’s subject matter jurisdiction must be addressed whenever that issue comes to the
court’s attention.’ [Citation.]” (Id. at p. 46; In re Gloria A., supra, 213 Cal.App.4th at
p. 481.) Thus, it may be considered for the first time on appeal (People v. Lara (2010)
48 Cal.4th 216, 225 (Lara)), and requires no particular procedural vehicle. (Great
Western Casinos, Inc. v. Morongo Band of Mission Indians (1999) 74 Cal.App.4th 1407,
1417-1418.) “[A]ny judgment or order rendered by a court lacking subject matter
jurisdiction is ‘void on its face . . . ’ [Citation.]” (Varian Medical Systems, Inc. v.
Delfino (2005) 35 Cal.4th 180, 196 (Varian).)
ii. Failure to exhaust FIRREA administrative remedies deprives courts of
subject matter jurisdiction
It is now well established that “exhaustion of the act’s administrative review
process is a precondition to litigation against the [FDIC] to recover a debt owed by a
failed bank.” (Neman v. Commercial Capital Bank (2009) 173 Cal.App.4th 645, 651
(Neman).) “[S]ection 1821(d)(13)(D) denies jurisdiction to any court, state or federal, to
consider claims except in accordance with section 1821(d) . . . [S]ection 1821(d) grants
jurisdiction to certain courts only, and then in only two cases: [¶] (a) Judicial review of
the receiver’s determination of the claimant’s appeal if it seeks administrative review,
(§ 1821(d)(7)(A); and [¶] (b) Over suits filed or continued by a claimant following the
receiver’s denial of a claim, or the expiration of 180 days after the filing of a claim.
(§ 1821(d)(6)(A).)” (2974 Properties, supra, 23 Cal.App.4th at p. 878.)
9
As our colleagues in Division Seven explained in 2974 Properties: “The
exhaustion of administrative remedies is mandatory when, as here, Congress imposes an
exhaustion requirement by statute. [Citations.] [¶] Further, the relevant case law
interpreting section 1821(d) confirms that completion of the claims process is a
mandatory prerequisite to judicial review. [Citations.] [¶] . . . . ‘Congress expressly
withdrew jurisdiction to resolve claims to a failed bank’s assets from all courts, except as
provided in 12 U.S.C., § 1821(d). . . . [T]he administrative procedure exhaustion
requirement of FIRREA is statutory, not judicial. [Citation.] We are therefore not at
liberty to ignore the statutory command.’ [Citation.] . . . .[U]nless a claimant has
exhausted the administrative claims process, no court has jurisdiction to hear the claim.”
(2974 Properties, supra, 23 Cal.App.4th at pp. 878-880, italics in original, fn. omitted.)
Likewise, numerous federal authorities conclude the failure to exhaust FIRREA
administrative remedies prior to filing suit on a covered claim deprives courts of subject
matter jurisdiction to consider the claim. (See e.g., Acosta-Ramírez v. Banco Popular De
Puerto Rico (1st Cir. 2013) 712 F.3d 14, 19; Aber-Shukofsky v. JPMorgan Chase & Co.
(E.D.N.Y. 2010) 755 F.Supp.2d 441, 446 (Aber-Shukofsky) [“[T]he Second Circuit has
consistently held that courts lack subject matter jurisdiction to hear a claim against a
failed bank taken into receivership by the FDIC unless the plaintiff has exhausted the
administrative claims process”]; Althouse v. Resolution Trust Corp. (3d Cir. 1992) 969
F.2d 1544, 1545-1546; Elmco Properties, Inc. v. Second Nat. Fed. Sav. Ass’n (4th Cir.
1996) 94 F.3d 914, 919 (Elmco); Farnik v. F.D.I.C. (7th Cir. 2013) 707 F.3d 717, 721-
722 (Farnik); Bueford v. Resolution Trust Corp. (8th Cir. 1993) 991 F.2d 481, 484;
Intercontinental, supra, 45 F.3d at p. 1278; Damiano v. F.D.I.C. (11th Cir. 1997) 104
F.3d 328, 333; Freeman v. F.D.I.C. (D.C. Cir. 1995) 56 F.3d 1394, 1399-1400.)
10
iii. California Cases Regarding Administrative Exhaustion Are Not
Controlling on the Question of Whether Failure to Exhaust FIRREA
Procedures Implicates Subject Matter Jurisdiction
Despite section 1821(d)(13)(D) and the many authorities interpreting it, Saffer
contends that under California law, a failure to exhaust administrative remedies does not
deprive the court of subject matter jurisdiction and the defense can be waived. We
disagree.
In Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280 (Abelleira), the
California Supreme Court described exhaustion of administrative remedies as a
“jurisdictional prerequisite . . . to the courts.” (Id. at p. 293.) In Green v. City of
Oceanside (1987) 194 Cal.App.3d 212 (Green), the court rejected the argument that
Abelleira determined exhaustion of administrative remedies implicated subject matter
jurisdiction. Instead, the Green court described Abelleira as making it “abundantly clear
that the exhaustion doctrine does not implicate subject matter jurisdiction but rather is a
‘procedural prerequisite’ ‘originally devised for convenience and efficiency’ and now
‘followed under the doctrine of stare decisis. . .’ [Citation.] It is ‘jurisdictional’ only in
the sense that a court’s failure to apply the rule in a situation where the issue has been
properly raised can be corrected by the issuance of a writ of prohibition.” (Green, at
p. 222.) The Green court thus concluded the defense of failure to exhaust administrative
remedies could be waived by the defendant’s failure to raise it before or during trial.
(Id. at pp. 222-223.) Subsequently, other courts have adopted similar reasoning and
concluded the failure to exhaust administrative remedies does not deprive a court of
subject matter jurisdiction, and the defense may be waived. (See e.g., Cummings v.
Stanley (2009) 177 Cal.App.4th 493, 505-506 (Cummings); Mokler v. County of Orange
(2007) 157 Cal.App.4th 121, 135-136 (Mokler).)
However, these cases concerned administrative exhaustion schemes that were
neither mandatory, nor part of a statute that explicitly stripped courts of jurisdiction in the
absence of compliance with the relevant exhaustion requirements. For example, in
Green, the plaintiff was terminated from employment with the City of Oceanside.
11
An agreement between the city and an employee association to which the plaintiff
belonged provided an internal grievance procedure, including various administrative
appeals. The plaintiff did not challenge his termination through the employees’
grievance procedure but filed suit in the superior court. The court found the internal
grievance procedure was simply a “procedural prerequisite,” creating only a “potential
procedural defense” that could be waived. (Green, supra, 194 Cal.App.3d at pp. 222-
223.)
Similarly, in Mokler, a county employee was terminated; internal grievance
procedures were available to her to challenge the termination. (Mokler, supra, 177
Cal.App.4th at p. 131.) The grievance procedures expressly provided that they were
subject to waiver by mutual consent. (Id. at p. 136.) The County did not raise the
employee’s failure to exhaust administrative remedies until after a full trial on the merits;
the court concluded the defense was waived. (Ibid.) Likewise, in Cummings, the
relevant statute provided an elector “may” seek a writ of mandate prior to an election to
challenge the eligibility of candidates on an election ballot. (Cummings, supra, 177
Cal.App.4th at p. 505.) The court concluded the defendant waived an administrative
exhaustion defense by failing to raise it in the trial court. (Id. at pp. 505-506.)
Although these cases, like the instant one, concerned “administrative exhaustion,”
the strictures of FIRREA and its explicit stripping of jurisdiction from the courts render
Green and its progeny inapposite to the case at bar. Unlike administrative remedies set
forth in a contract between the parties, or a permissive statutory procedure, FIRREA’s
exhaustion requirements are set forth by federal statute, they are mandatory, they do not
allow for waiver by consent, and they explicitly state courts do not have jurisdiction to
consider claims subject to exhaustion unless the claimant first follows the administrative
procedures. (See Rosa v. Resolution Trust Corp. (3d Cir. 1991) 938 F.2d 383, 395 (Rosa)
[noting: “[W]e are not confronted with a judicially created exhaustion requirement, but
with one that is mandated by statute. Further, Congress made this statutory exhaustion
requirement explicitly jurisdictional.”].)
12
This is consistent with the purpose of the statute. As explained in 2974
Properties, “In FIRREA, Congress enacted a comprehensive and mandatory statutory
scheme to enable the RTC [the predecessor to the FDIC], when acting as receiver for a
failed institution, to carry out its fundamental functions of conserving and preserving the
assets of the failed institution, and ultimately making pro rata distributions of those assets
to the creditors of the institutions. . . . [¶] The administrative claims process . . . provides
a centralized mechanism for consideration and resolution of the bulk of claims against
insolvent thrifts without the delay and expense of litigation, by requiring that all claims
be submitted to the receiver within a finite time period, and by allowing the receiver the
initial opportunity to review and resolve the claims.” (2947 Properties, supra, 23
Cal.App.4th at pp. 876-877, fns. omitted.)
Moreover, the California Supreme Court’s analysis in Lara, supra, 48 Cal.4th 216,
supports the conclusion that the FIRREA administrative exhaustion requirements
implicate subject matter jurisdiction. The court explained: “A lack of jurisdiction in its
fundamental or strict sense results in ‘ “an entire absence of power to hear or determine
the case, an absence of authority over the subject matter or the parties.” [Citation.]
On the other hand, a court may have jurisdiction in the strict sense but nevertheless lack
“ ‘jurisdiction’ (or power) to act except in a particular manner, or to give certain kinds of
relief, or to act without the occurrence of certain procedural prerequisites.” [Citation.]
When a court fails to conduct itself in the manner prescribed, it is said to have acted in
excess of jurisdiction.” ’ [Citations.] [¶] . . . [¶] Whether the failure to follow a statute
makes subsequent action void or merely voidable ‘ “has been characterized as a question
of whether the statute should be accorded ‘mandatory’ or ‘directory’ effect. If the failure
is determined to have an invalidating effect, the statute is said to be mandatory; if the
failure is determined not to invalidate subsequent action, the statute is said to be
directory.” [Citation.]’ [Citation.] [¶] Whether a particular statute is intended to impose
a mandatory duty is a question of interpretation for the courts. [Citation.] ‘Unless the
Legislature clearly expresses a contrary intent, time limits are typically deemed
directory.’ [Citation.]” (Id. at pp. 224-225.)
13
As noted above, not only does FIRREA’s language indicate courts have no
jurisdiction unless the claims process is first followed, federal courts interpreting
FIRREA’s administrative exhaustion requirements have consistently interpreted the
procedures as creating a mandatory precondition to litigation, and as depriving courts of
subject matter jurisdiction if the claims procedures are not first followed. (In addition to
cases cited above see also, Tellado v. IndyMac Mortg. Servs. (3d Cir. 2013) 707 F.3d
275, Benson, supra, 673 F.3d at p. 1215; Brady, supra, 14 F.3d at pp. 1003, 1006-1007;
Interface Kanner, LLC v. JPMorgan Chase Bank (11th Cir. 2013) 704 F.3d 927, 934.)
Several state courts, including courts of this state, have come to the same conclusion.
(See e.g., 2947 Properties, supra, 23 Cal.App.4th at pp. 879-880; Neman, supra, 173
Cal.App.4th at p. 651; Thomas v. FDIC (Colo. 2011) 255 P.3d 1073, 1080-1082;
Schettler v. RalRon Capital Corp. (Nev. 2012) 275 P.3d 933, 934, 938; McLaughlin v.
F.D.I.C. (Mass. 1993) 612 N.E.2d 671, 673 [failure to timely file exhaust with FDIC fatal
to appeal]; Jinadu v. CenTrust Mortgage Corp. (Minn.Ct.App. 1994) 517 N.W.2d 84, 87-
88; Bobick v. Community & Southern Bank (Ga.Ct.App. 2013) 743 S.E.2d 518, 527-529.)
We agree with the many other courts that have concluded a failure to exhaust
FIRREA administrative remedies creates a jurisdictional bar and implicates a question of
subject matter jurisdiction. The reasoning of Green and its progeny is not applicable,
given FIRREA’s specific mandates.6 (See also Varian, supra, 35 Cal.4th at pp. 196-197
[without subject matter jurisdiction trial court actions are void, not merely voidable];
Totten, supra,154 Cal.App.4th at pp. 50-51, 54 [ERISA completely preempted state law
cause of action and trial court had no subject matter jurisdiction; trial court judgment
6 At least one court has concluded that while FIRREA’s administrative exhaustion
requirements are jurisdictional, certain time limits set forth in the statute are directory
claims processing rules. (See Miller v. FDIC (7th Cir. 2013) 738 F.3d 836 (Miller) and
Campbell v. Federal Deposit Insurance Corporation (Campbell) (7th Cir. 2012) 676 F.3d
615, 618; see also Carlyle Towers Condo Ass’n v. FDIC (2d Cir. 1999) 170 F.3d 301,
309-310.) As discussed in greater detail below, the reasoning of these cases does not aid
Saffer, since he completely failed to exhaust administrative remedies under FIRREA
prior to filing suit.
14
vacated and case dismissed].) Thus, unless Saffer’s claims were not subject to FIRREA’s
exhaustion requirements, any judicial action on his claims was invalid, other than
dismissal for lack of subject matter jurisdiction. JPMC could not waive the issue by
failing to promptly raise it.
C. Saffer’s Claims Were Subject to FIRREA Administrative Exhaustion
Requirements
Saffer argues he was not required to exhaust administrative remedies under
FIRREA before filing his claims. We find his contentions unavailing.
i. Saffer’s claims were not exempt from exhaustion because they were
employment claims
Saffer contends he was not required to file a claim with the FDIC because his
claims were not susceptible of resolution through the claims procedure. We disagree.
Saffer’s contention refers to a phrase employed by some courts to explain that FIRREA
“bars judicial review of any non-exhausted claim, monetary or nonmonetary, which is
‘susceptible of resolution through the claims procedure.’ [Citation.]” (Henderson v.
Bank of New England (9th Cir. 1993) 986 F.2d 319, 321, quoting Rosa, supra, 938 F.2d
at p. 394.) In Rosa, the court concluded the plaintiffs’ claims seeking nonmonetary
injunctive relief that would bar retroactive termination of an ERISA plan were not
susceptible of resolution through the claims procedure. As a result, the claims were not
subject to the jurisdictional bar.
However, the Rosa court’s conclusion of “non-susceptibility” was not due to a
finding that the FDIC lacked the necessary substantive expertise in ERISA to review the
claims. Instead, the court determined section 1821(d)(13)(D)(i) addressed claims looking
directly to payments from assets, or in some respect determining rights with respect to
assets, and did not encompass purely injunctive claims relating to retroactive termination
of an ERISA plan. (Rosa, supra, 938 F.2d at p. 394.) The court also concluded the
claims procedure gave the Resolution Trust Corporation (RTC) the authority to allow or
disallow claims, and pay creditor claims, but the court was “at a loss to understand how
RTC would ‘determine,’ or ‘allow’ or ‘disallow,’ a claim seeking an order barring
15
retroactive termination of the plan, or how it would ‘pay’ such a claim if allowed.” (Id. at
pp. 394-395.) The court thus found the claims for injunctive relief did not require
exhaustion.
Unlike the Rosa plaintiffs’ claims, Saffer’s claims were monetary, and exclusively
concerned the pre-receivership acts of the failed bank, WaMu. Courts have concluded
that claims of varying subject matters required FIRREA exhaustion, including
employment-related claims, so long as they were claims relating to the acts or omissions
of a failed depository institution over which the FDIC was appointed receiver.
(Westberg v. F.D.I.C. (D.D.C. 2013) 926 F.Supp.2d 61, 69-70, fn. omitted (Westberg)
[plaintiffs’ “claim would have been susceptible to resolution through the administrative
procedure because it is an action that seeks a determination of rights with respect to the
assets of the failed bank for which the FDIC was appointed receiver, and thus, it is the
very type of action covered by Section 1821 (d)(13)(D).”]; cf. Am. Nat’l Ins. Co. v. FDIC
(D.C. Cir. 2011) 642 F.3d 1137, 1143-1144 [claim against a third-party bank for its own
wrongdoing is not a “claim” requiring exhaustion under FIRREA].)
For example, in Bueford v. Resolution Trust Corp., supra, 991 F.2d 481, the
plaintiff asserted age and race-based employment discrimination claims against her
former employer, a bank. While her suit was pending, the RTC was appointed receiver
of the bank. The Court of Appeals concluded she was required to comply with
FIRREA’s administrative exhaustion procedures. Because she had not done so, the trial
court properly dismissed her case for lack of subject matter jurisdiction. (Id. at pp. 483-
484.) In Demelo v. U.S. Bank Nat’l Ass’n (2013) 727 F.3d 117 (Demelo), the court
rejected the plaintiffs’ argument that their claims against a failed bank for violation of
state consumer protection laws were not “creditors’ claims” requiring FIRREA
exhaustion. (Id. at p. 123.) The court explained FIRREA “bars jurisdiction over
‘any claim relating to any act or omission’ of the failed financial institution. 12 U.S.C.
§ 1821(d)(13)(D)(ii). . . . We have given this provision the full scope that its text
demands and, in doing so, we have not limited it to creditors’ claims.” (Id. at pp. 122-
123.)
16
In Aber-Shukofsky, the district court dismissed the plaintiffs’ claims that WaMu
violated the Fair Labor Standards Act (FLSA), as well as state wage and labor laws.
The plaintiffs were former WaMu employees suing JPMC for alleged overtime wage
violations by WaMu. The plaintiffs failed to exhaust FIRREA administrative remedies
before filing suit, thus the court dismissed the action for lack of subject matter
jurisdiction. (Aber-Shukofsky, supra, 755 F.Supp.2d at pp. 443, 446.) The court rejected
arguments that FLSA “trumped” FIRREA, as well as the argument that a plaintiff need
not exhaust administrative remedies because he or she has reason to believe the FDIC
will disallow the claim. (Id. at p. 451.) (See also McMillian v. FDIC (11th Cir. 1996)
81 F.3d 1041, 1044-1045 [requiring exhaustion of WARN act claim; severance pay claim
was filed with the FDIC and disallowed; received judicial review]; Ladd v. Second Nat’l
Bank (N.D. Ohio 1996) 941 F.Supp. 87, 89-90 [failure to exhaust FIRREA administrative
remedies created a jurisdictional bar requiring dismissal of plaintiff’s claims that the
FDIC, as receiver, violated the Family and Medical Leave Act in connection with her
termination]; Jinadu v. CenTrust Mortgage Corp., supra, 517 N.W.2d at pp. 86-87
[because plaintiff failed to exhaust administrative remedies under FIRREA, trial court did
not have subject matter jurisdiction over employment discrimination and other
employment-related claims asserted against financial institution in receivership].)
We reject the argument that Saffer was not required to exhaust his administrative
remedies because his claims were not susceptible of resolution through the process, due
to their subject matter. Saffer’s claims concerned the acts or omissions of a depository
institution for which the FDIC was appointed receiver, and he sought a monetary
recovery. His claims were well within the realm of section 1821, subdivision (d)(13)(D).
(See also Benson, supra, 673 F.3d at p. 1213 [rejecting non-susceptibility argument;
plaintiffs offered no reason to believe FIRREA exhaustion would have been futile had
claims been timely submitted].)
17
ii. Naming JPMC as a defendant did not excuse Saffer from exhausting
FIRREA administrative remedies
Saffer further contends he was not required to exhaust administrative remedies to
pursue his claims against JPMC as the successor bank. Yet, several courts have
concluded FIRREA exhaustion requirements apply even when a claim is asserted against
a successor bank, rather than the failed bank or the FDIC. Section 1821(d)(13)(D)(ii)
withdraws jurisdiction over “any claim relating to any act or omission of [a failed]
institution or the Corporation as receiver.” Thus, as the Ninth Circuit Court of Appeals
explained in Benson, “ ‘Where a claim is functionally, albeit not formally, against a
depository institution for which the FDIC is receiver, it is a “claim” within the meaning
of FIRREA’s administrative claims process.’ [Citation.] . . . . [¶] . . . FIRREA’s
jurisdictional bar applies to claims asserted against a purchasing bank when the claim is
based on the conduct of the failed institution.” (Benson, supra, 673 F.3d at p. 1214,
fn. omitted, citing Am. Nat’l Ins. Co. v. FDIC, supra, 642 F.3d at p. 1144; see also
Demelo, supra, 727 F.3d at p. 122; Farnik, supra, 707 F.3d at pp. 722-725; Vill. of
Oakwood v. State Bank & Trust Co. (6th Cir. 2008) 539 F.3d 373, 386; American First
Fed., Inc. v. Lake Forest Park, Inc. (11th Cir. 1999) 198 F.3d 1259, 1263 [purchaser of
challenged asset stood in the shoes of the RTC and acquired its protected status]; Aber-
Shukofsky, supra, 755 F.Supp.2d at p. 448; Stewart v. JPMorgan Chase (Bankr. W.D.Pa.
2012) 473 B.R. 612, 625; Schettler v. RalRon Capital Corp., supra, 275 P.3d at p. 938.)
In Benson, the court noted section 1821(d)(13)(D)(ii) “distinguishes claims on
their factual bases rather than on the identity of the defendant: It asks whether claims
‘relate to any act or omission’ of a failed institution or the FDIC. Notably, the provision
does not make any distinction based on the identity of the party from whom relief is
sought.” (Benson, supra, 673 F.3d at p. 1212.) Since the Benson plaintiffs’ claims
18
concerned the actions of WaMu, rather than independent conduct of JPMC, the plaintiffs
were required to comply with FIRREA’s administrative exhaustion requirements.7
Here, all of Saffer’s claims challenge the actions or omissions of the failed bank,
WaMu. The complaint contains no allegations that involve actions taken by any party
after the receivership or the sale of WaMu’s assets. Instead, Saffer seeks legal recourse
for the conduct of WaMu and WaMu agents, before the FDIC was appointed receiver,
and before JPMC purchased WaMu assets. There are no allegations based on JPMC’s
own conduct, nor could there be given the time period relevant to Saffer’s claims. These
are squarely the kinds of claims that must first be presented to the FDIC under section
1821(d)(13)(D)(ii). (Tellado v. IndyMac Mortg. Servs., supra, 707 F.3d at pp. 280-281
[claim that was wholly dependent on failed bank’s wrongdoing was subject to FIRREA
exhaustion requirements].)
We also find instructive the reasoning of the Aber-Shukofsky court in its
determination that the plaintiffs before it were required to exhaust claims asserted against
JPMC. In that case, only WaMu was alleged to have violated state wage and hour laws
during the plaintiffs’ employment with WaMu, “well before WaMu’s failure and seizure
on September 25, 2008, the FDIC’s appointment as receiver, and WaMu’s acquisition by
defendants.” The court explained: “Section 1821(d)(13)(D)(ii) refers to ‘any claim
relating to any act or omission’ of a failed institution and does not make its application
contingent upon whom the claim is against. (emphasis added). Thus, the statutory
provision, by its plain language, applies with equal force to a successor in interest to the
failed institution. In short, given the plain language of FIRREA, the Court finds that
plaintiffs cannot evade FIRREA’s mandatory exhaustion requirement simply by asserting
claims against defendants, as third-party purchasers of the failed bank’s assets, for acts or
omissions that relate to WaMu.” (Aber-Shukofsky, supra,755 F.Supp.2d at p. 447;
Westberg, supra, 926 F.Supp.2d at p. 67.)
7 Although the Benson court ruled exhaustion would not be required as to claims
based on JPMC’s independent conduct, it concluded the plaintiffs had not adequately
pled any such claims. (Benson, supra, 673 F.3d at pp. 1216-1217.)
19
Saffer additionally contends there is a possibility JPMC contractually assumed
liability for claims such as his, but he was unable to determine whether this was the case
without discovery, which the arbitrator improperly denied. He acknowledges a “version”
of the purchase and assumption agreement between the FDIC and JPMC is available on
the FDIC website, and other courts have taken judicial notice of that agreement and its
legal effect. (See e.g., Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743,
753-757 [trial court did not abuse its discretion in taking judicial notice of purchase and
assumption agreement between JPMC and FDIC, as posted on FDIC website, as well as
the legal effect of the agreement as transferring certain assets but not certain liabilities;
collecting similar cases].) Yet, he asserts there could be collateral agreements or
modifications, thus “the completeness of the agreement should not be a matter for judicial
notice in this case.”
Several courts have rejected similar arguments regarding successor institutions.
For example, in Benson, the plaintiffs argued WaMu knowingly provided banking
services that facilitated a Ponzi scheme, and JPMC was liable “because it assumed
WaMu’s liabilities pursuant to a purchase and assumption agreement with the FDIC.”
(Benson, supra, 673 F.3d at p. 1215.) The court rejected this argument: “By relying on
WaMu’s alleged wrongdoing, plaintiffs’ claims plainly ‘relat[e] to any act or omission’
of a ‘depository institution for which the [FDIC] has been appointed receiver.’
§ 1821(d)(13)(D). And because plaintiffs did not exhaust administrative remedies, their
claims are jurisdictionally barred by FIRREA.” (Ibid.) Similarly, in Aber-Shukofsky, the
plaintiffs argued they were excused from the exhaustion requirements because JPMC
“accepted certain assets and liabilities as WaMu’s successors in interest,” and FIRREA
was intended to protect the FDIC, which was no longer operating as WaMu’s receiver.
(Aber-Shukofsky, supra, 755 F.Supp. at p. 446.) The court rejected this argument,
concluding section 1821(d)(13)(D)(ii) referred to any claim relating to any act or
omission of a failed institution, the plaintiff’s FLSA claims related solely to WaMu’s acts
or omissions, and the provision applied with equal force to a successor in interest to a
20
failed institution. (Aber-Shukofsky, supra, at p. 447.) We find the above-described
reasoning persuasive.8
8 We acknowledge some courts have looked to a relevant purchase and assumption
agreement as a factor in analyzing whether claims asserted against an institution that
purchased a failed bank’s assets from the FDIC were subject to FIRREA exhaustion
requirements. (See, e.g., Acosta-Ramírez v. Banco Popular de Puerto Rico, supra, 712
F.3d at pp. 18-19; Farnik, supra, 707 F.3d at p. 724; Caires v. JP Morgan Chase Bank
(D. Conn. 2010) 745 F.Supp.2d 40, 48-49; Fed. Hous. Fin. Agency v. JPMorgan Chase
& Co. (S.D.N.Y. 2012) 902 F.Supp.2d 476, 501-502; NCUA Bd. v. JPMorgan Chase
Bank, N.A. (D. Kan. Sept. 3, 2013, No. 13-2012-JWL) 2013 WL 4736374.)
Yet, in these cases, the claimants offered documents and legal argument to support
the contention that exhaustion was not required because the purchasing institution
assumed liability for their claims. This is necessary because, “ ‘[a]bsent an express
transfer of liability by [the receiver] and an express assumption of liability by [the
successor], FIRREA directs that [the receiver] is the proper successor to the
liability . . . .’ Payne v. Sec. Sav. & Loan Ass’n, F.A., 924 F.2d 109, 111–12 (7th Cir.
1991). This allows the receiver to ‘absorb liabilities itself and guarantee potential
purchasers that the assets they buy are not encumbered by additional financial
obligations.’ [Citation.]” (Farnik, supra, 707 F.3d at p. 724.)
Here, Saffer’s sole contention is that he required discovery to determine whether
JPMC assumed liability for his claims. His complaint did not allege JPMC expressly
assumed liability for his claims in a purchase and assumption agreement, or in a collateral
contract. He further asks us not to take judicial notice of the publicly available
documents relevant to this issue, and does not assert they suggest JPMC assumed liability
for claims like his. Although we do not review the arbitrator’s decision in this appeal, we
note the record from the arbitration proceedings does not include such publicly available
documents, or any affirmative suggestion that JPMC assumed liability for Saffer’s
claims, other than its failure, in litigation, to expressly disclaim successor liability. Even
were we persuaded to follow the approach of those courts that have considered a
purchase and assumption agreement in the exhaustion analysis, we would conclude the
record here neither establishes Saffer was excused from complying with FIRREA
exhaustion requirements, nor entitles him to an opportunity to further develop the factual
record. (See Farnik, supra, 707 F.3d at p. 725 [plaintiffs’ mere speculation about transfer
of liability was insufficient to avoid jurisdictional bar for failure to exhaust FIRREA
remedies].)
21
iii. Saffer was not excused from exhaustion requirements because of a lack of
notice
Saffer additionally argues he was excused from following FIRREA’s claim
process because he failed to receive adequate notice of the receivership, or the bar date,
as a creditor of WaMu. We again disagree.
FIRREA requires the FDIC to provide two different kinds of notice. Under
section 1821(d)(3)(B)(i)-(ii), the FDIC must promptly publish notice to creditors to
present their claims to the receiver by the bar date, and republish the notice. The FDIC
must also mail a similar notice to any creditor shown on the failed institution’s books
either (i) to the creditor’s last address appearing in the books, or (ii) “upon discovery of
the name and address of a claimant not appearing on the institution’s books within 30
days after the discovery of such name and address.” (§ 1821(d)(3)(C)(ii).) As the First
Circuit Court of Appeals recently explained: “FIRREA only requires that the FDIC mail
notice to known creditors or claimants, see 12 U.S.C. § 1821(d)(3)(C).” (Demelo, supra,
727 F.3d at p. 124.) When, as here, the plaintiff’s claim is not advanced until after the
financial institution has failed, the claims “could not have been known to the FDIC at the
time of the receivership. Notice was given by publication, and notice by publication is
sufficient for inchoate claims.” (Ibid.; Elmco, supra, 94 F.3d at p. 921.) The FDIC was
not required to mail notice to Saffer after being appointed receiver of WaMu.
Moreover, we agree with the numerous courts concluding that even if the receiver
fails to mail the required notice of the claims process and bar date, a plaintiff is not
excused from exhausting administrative remedies. (Elmco, supra, 94 F.3d at p. 920;
Intercontinental, supra, 45 F.3d at pp. 1285-1286; Freeman v. F.D.I.C., supra, 56 F.3d at
p. 1402, Meliezer v. Resolution Trust Company (5th Cir. 1992) 952 F.2d 879, 882-883;
Ladd v. Second Nat’l Bank, supra, 941 F.Supp. at pp. 90-91.) “ ‘The only exception to
the strict requirement of exhaustion of remedies, [is] where the claimant does not receive
notice of the appointment of the receiver in time to file his claim.’ [Citation; 12 U.S.C.,
§ 1821(d)(5)(C).] This exception will only apply [if the plaintiff] did ‘not receive notice
of the fact of the appointment of a receiver. The exception does not apply to claimants
22
who are aware of the appointment of a receiver but who do not receive notice of the filing
deadline.’ [Citation.]” (RTC Mortg. Trust 1994-NZ v. Haith (8th Cir. 1998) 133 F.3d
574, 579.) Further when there is “sufficient inquiry notice of the receivership, the failure
to receive mailed notice does not avoid the jurisdictional bar of the statute.” (Ibid.) Even
where the claimant may not know the exact nature of the receiver’s role, knowledge of
the receiver’s involvement may sufficiently place the claimant on inquiry notice “as to
require further inquiry into the details of the administrative process.” (Ibid.)
Here, the FDIC published notice in the Wall Street Journal, a national publication,
on at least two occasions at the beginning and end of October 2008. Saffer’s claims
accrued no later than January 2008, when he resigned from WaMu. He did not file his
complaint until 2009, well after the failure of WaMu, the appointment of a receiver, and
the passing of the bar date. This case is thus similar to Tillman v. Resolution Trust Corp.
(4th Cir. 1994) 37 F.3d 1032 (Tillman), which the Elmco court described: “[T]he
claimant in Tillman was not one that the RTC discovered before its bar date. In fact,
Tillman did not assert his claims against the failed bank until 30 months after that bank
entered receivership. [Citation.] Also, his claim was not based on a standard creditor-
debtor arrangement, but on an alleged contract under which the bank had promised to
reimburse him for expenses he incurred in the course of unrelated litigation. As a result,
Tillman’s interest appears not to have been known to RTC or to have been of a type that
RTC should be required to discover on its own, and thus he fell within a class of
claimants for whom notification by publication is sufficient.” (Elmco, supra, 94 F.3d at
p. 921.)
The Elmco court found the Tillman approach consistent with Mullane v. Central
Hanover Tr. Co. (1950) 339 U.S. 306, 317, in which the Supreme Court explained notice
by publication is sufficient for those whose interests are contingent, future, or not likely
to come to a trustee’s attention in the normal course of business. This is in contrast to
those “with an identified, present property interest whose address is known or reasonably
ascertainable. . . . As to such parties mere constructive notice by publication is
insufficient. Mullane, 339 U.S. at p. 318.” (Elmco, supra, 94 F.3d at p. 921.)
23
Saffer had sufficient inquiry notice of the receivership. As a result, lack of notice
did not excuse him from exhausting his administrative remedies under FIRREA.
(See Demelo, supra, 727 F.3d at p. 124 [rejecting lack of notice argument and successor
liability arguments]; see also Schettler v. RalRon Capital Corp., supra, 275 P.3d at pp.
938-939 [successor in interest to FDIC entitled to benefit from exhaustion provisions,
despite FDIC’s failure to mail required notice to plaintiff]; Rathbun v. IndyMac Mortg.
Servs. (D.Mont. 2013) 916 F.Supp.2d 1174, 1180-1181 [successor bank had no duty to
provide notice; any FDIC failure to give notice did not render administrative claims
process inapplicable]; Bobick v. Community & Southern Bank, supra, 743 S.E.2d at pp.
528-529 [plaintiff required to exhaust post-receivership claims against failed institution;
failure to exhaust not excused by failure of FDIC to provide notice]; Taylor v. ANB
Bancshares, Inc. (W.D.Ark. 2009) 682 F.Supp.2d 970, 976-977 [rejecting equitable
tolling argument based on alleged inadequate notice by the FDIC].)
iv. Saffer’s late-filed claim was insufficient to meet the exhaustion
requirements
Similarly, to the extent Saffer contends his claim filed in September 2012 was
sufficient to satisfy the FIRREA exhaustion requirements, we disagree. In Wujick v. Dale
& Dale, Inc. (3d Cir. 1994) 43 F.3d 790, the Court of Appeals rejected the very
arguments Saffer makes here. In Wujick, the plaintiffs filed suit in Pennsylvania state
court against a failed depository institution. After filing their suit, they submitted an
administrative claim to the receiver. The receiver removed the case to federal court.
The appellate court concluded that at the time the plaintiffs filed suit, “no court had
subject matter jurisdiction over the suit because Plaintiffs had failed to exhaust the
administrative remedies mandated by section 1821(d)(13)(D) of FIRREA.” (Id. at
p. 793.) The court rejected the plaintiffs’ argument that their belated filing of a claim
should allow them to pursue their claims, under a “no harm, no foul” line of reasoning,
since Congress expressly withdrew jurisdiction from all courts over claims to a failed
bank’s assets made outside the FIRREA procedures. (Id. at pp. 793-794) The appellate
court directed the lower court to dismiss the claims. (Id. at p. 794; see also Althouse v.
24
Resolution Trust Corp., supra, 969 F.2d at p. 1546 [failure to file timely claim bars
claimant from receiving de novo review in court; to receive de novo review the
disallowance must be for other reasons]; Potter v. JPMorgan Chase Bank, N.A. (C.D. Ca.
May 8, 2013, No. CV 13-863 CAS (AGRx)) 2013 WL 1912718, *7 (Potter) [under
FIRREA, no court has subject matter jurisdiction to hear a claim filed with FDIC after the
bar date, unless the claim meets statutory exception for claims that could not have been
filed before bar date].)
As noted above, federal courts have routinely found the failure to file a claim with
the FDIC, before instituting litigation in court, prevents a court from having subject
matter jurisdiction over covered claims. Saffer cites Carlyle, supra, 170 F.3d 301, for the
proposition that FIRREA does not create a jurisdictional bar for late-filed claims, but we
find Carlyle inapposite. In Carlyle, the court concluded FIRREA did not create a
jurisdictional bar for claims accruing after the bar date, and thus untimely filed with the
FDIC after the bar date. (Carlyle, at pp. 309-310.) The reasoning of Carlyle does not
apply here, since Saffer’s claims accrued well before the bar date, and he did not file a
claim with the FDIC before suing in court.
In Miller, supra, 738 F.3d 836 and Campbell, supra, 676 F.3d 615, the Seventh
Circuit Court of Appeals, citing Carlyle and recent United States Supreme Court
jurisprudence, including Henderson v. Shinseki (2011) ---U.S.---, 131 S.Ct. 1197, 1202-
1203, concluded that while FIRREA bars claimants from going directly to court without
first going through an administrative process, the time limits for submitting claims to the
FDIC are “claims processing rules” that are not jurisdictional, and thus may be subject to
waiver, estoppel, or tolling. (Miller, supra, 738 F.3d at pp. 846-847; Campbell, supra,
676 F.3d at p. 618.) Yet, Campbell and Miller do not conflict with the principle that
FIRREA creates a jurisdictional bar when, as here, there is a wholesale failure to exhaust
administrative remedies prior to filing suit, as to a claim arising well before the bar date.
As the Miller court explained, Carlyle and Campbell “involved the FDIC’s receivership-
specific deadline for submitting claims to the agency, and the opinions addressed whether
the failure to timely file deprived the district court of jurisdiction to entertain complaints
25
seeking judicial review of the disallowed claims.” (Miller, 738 F.3d at p. 846, italics
added.) Carlyle, Campbell, and Miller do not suggest a court may have subject matter
jurisdiction over a claim where the plaintiff has not filed any claim with the FDIC, timely
or untimely, prior to filing suit in court. Whether with a timely or untimely claim, “[a]
claimant must . . . first complete the claims process before seeking judicial review.”
(Henderson v. Bank of New England, supra, 986 F.2d at p. 321.)
As in Wujick, Saffer’s untimely filed claim with the FDIC does not satisfy the
FIRREA exhaustion requirements, and his claims were barred.9 Saffer’s claim arose well
before the December 2008 bar date. It was not impossible for him to file the claims
before the bar date because they had not yet arisen, or he had failed to discover them.
He did not pursue his administrative remedies prior to filing suit against WaMu. At the
time he filed suit, no court had subject matter jurisdiction over his claims due to the
failure to exhaust FIRREA remedies. (Robbins v. Foothill Nissan, supra, 22 Cal.App.4th
at p. 1786; Potter, supra, 2013 WL 1912718, *7-9; see also Bravo v. United States Nat’l
Ass’n (E.D.N.Y. Jan. 15, 2013, No. 12-CV-1183 (ENV) (LB)) 2013 WL 307824, fn.1.)
9 We also find persuasive the reasoning of the court in Potter, supra, 2013 WL
1912718. Potter considered whether FIRREA’s rules for filing timely claims with the
FDIC create a jurisdictional bar, in light of the United States Supreme Court’s decision in
Arbaugh v. Y&H Corp. (2006) 546 U.S. 500, 515-516, which indicated that “when
Congress does not rank a statutory limitation on coverage as jurisdictional, courts should
treat the restriction as nonjurisdictional in character.” The Potter court analyzed
FIRREA and concluded the statute’s language disallowing untimely claims “is best
construed to mean that courts lack power to consider untimely claims filed against a
failed bank not meeting FIRREA’s exceptions.” (Potter, at *7.) The court further
followed “the established rule that untimely claims only fall within FIRREA’s exception
when it would have been impossible to file them before the claims bar date,” because the
claims are based on events occurring after the bar date. (Id., at pp. *8-9.) Here, the claim
Saffer eventually filed with the FDIC did not meet FIRREA’s exception. His complaint
is entirely based on events occurring well before the bar date. He did not file a claim
with the FDIC before filing suit in court. FIRREA’s jurisdictional bar applied squarely to
his claims.
26
v. No Allegations Support Treating Wolf Differently
Finally, we must also reject Saffer’s argument that he was not required to follow
FIRREA claims procedures to pursue his claims against Wolf. Saffer’s complaint alleges
Wolf was his supervisor at WaMu, and that all defendants were acting as agents of the
other defendants. There are no specific allegations relating to Wolf. Thus, even though
Wolf was named as a defendant, it is clear the entire complaint alleges only claims
relating to actions or omissions of the failed bank, WaMu, and to the extent Wolf was
implicated, it was as an employee of WaMu. Exhaustion of those claims was necessary.
(Friederichs v. Gorz (D. Minn. 2009) 624 F.Supp.2d 1058, 1062, fn. 4 [plaintiffs had to
exhaust against defendant related to failed institution where complaint was “devoid of
any substantive allegations” against the related defendant]; Brabant v. JP Morgan Chase
Bank (D.Ariz. Jul. 2, 2012, No. CV 11-00848-TUC-JGZ) 2012 WL 2572281, *5
[FIRREA jurisdictional bar applied to claims against employees of the failed institution
where plaintiffs’ claims are based on the wrongdoing alleged to have been committed by
the individual as an employee of the failed institution].)
II. Conclusion
Saffer’s failure to exhaust FIRREA administrative remedies before filing suit
prevented the trial court from acquiring subject matter jurisdiction over his claims.
“[I]n the absence of subject matter jurisdiction, a trial court has no power ‘to hear or
determine [the] case.’ [Citation.]” (Varian, supra, 35 Cal.4th at p. 196.) We
acknowledge it would have been preferable for JPMC to raise Saffer’s failure to exhaust
under FIRREA much earlier in the process, rather than compelling the case to an
unauthorized arbitration. However, “ ‘[t]he administrative prerequisite to suit set forth in
[FIRREA] has been strictly construed and is considered an absolute and unwaivable
jurisdictional requirement . . . this court has no power to excuse a condition precedent to .
. . jurisdiction regardless of the reason the condition was not met.’ [Citation.] [¶] . . . .
The doctrines of waiver and estoppel do not apply to subject matter jurisdiction
determinations.” (Brady, supra, 14 F.3d at p. 1007; Intercontinental, supra, 45 F.3d at
p. 1286.) We therefore direct the trial court to vacate the judgment and order the action
27
dismissed. (2947 Properties, supra, 23 Cal.App.4th at pp. 880-881; Totten, supra, 154
Cal.App.4th at pp. 44, 54.)
DISPOSITION
The judgment entered in favor of JPMC is vacated and the matter is remanded to
the trial court with directions to enter an order of dismissal against Saffer for lack of
subject matter jurisdiction. Respondent shall recover its costs on appeal.
CERTIFIED FOR PUBLICATION
BIGELOW, P. J.
We concur:
FLIER, J.
GRIMES, J.
28