In the wake of "the savings and loan crisis of the 1980s, Congress passed FIRREA to give the FDIC power to take all actions necessary to 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. MTB Enterprises, Inc. v. ADC Venture 2011-2, LLC, 780 F. 3d 1256 (9th Cir. 2015).
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. MTB Enterprises, Inc. v. ADC Venture 2011-2, LLC, ibid.
In recent years, the Supreme Court has refined its approach to subject-matter jurisdiction and, in its words, 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, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006)). The Court noted that "Congress, of course, need not use magic words in order to speak clearly on this point. Context, including the [Supreme] Court's interpretation of similar provisions in many years past, is relevant." Id. (internal quotation marks omitted). MTB Enterprises, Inc. v. ADC Venture 2011-2, LLC, ibid.
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). MTB Enterprises, Inc. v. ADC Venture 2011-2, LLC, ibid.
[T]he venue provision in § 1821(d)(6)(A) is a jurisdictional limitation on federal court review. MTB Enterprises, Inc. v. ADC Venture 2011-2, LLC, ibid.
CAP Holdings, Inc. v. Lorden, 790 F. 3d 599 (5th Cir. 2015) answers the question "whether a tax sale conducted in violation of § 1825(b)(2) is void in its entirety, or void only as to the FDIC. Consulting precedent, the court concludes that a tax sale conducted in violation of § 1825(b)(2) is void in its entirety. See, e.g., Lee, 130 F.3d at 1143.
Section 1825(b)(2), as amended by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), provides:
No property of the Corporation shall be subject to levy, attachment, garnishment, foreclosure, or sale without consent of the Corporation, nor shall any involuntary lien attach to the property of the Corporation.12 U.S.C. § 1825(b)(2). [The Fifth Circuit] ha[s] considered the effect of a sale of FDIC property that was conducted "without consent of the" FDIC, and thus in violation of § 1825(b)(2), on at least three occasions. See First State Bank-Keene, 155 F.3d at 735-40; Trembling Prairie, 145 F.3d at 689-91; Lee, 130 F.3d at 1143. Each time, the court holds explicitly that such a sale is, simply, "null and void." First State Bank-Keene, 155 F.3d at 739; Trembling Prairie, 145 F.3d at 691; Lee, 130 F.3d at 1143. Accordingly, the defendants' argument that a tax sale conducted in violation of § 1825(b)(2) is void only as to the FDIC is found to be contrary to precedent. CAP Holdings, Inc. v. Lorden, ibid.
In Lee, at a tax sale, the defendant sold property on which the FDIC held a lien without first notifying the FDIC. Lee, 130 F.3d at 1140. After learning of the sale, the FDIC filed suit in the district court, arguing that, because it was not provided notice, the sale was void, denying its constitutional right to due process. Id. Agreeing, the district court granted summary judgment to the FDIC. Id. This court affirmed, but on a different ground: the tax sale had been conducted in violation of § 1825(b)(2). Id. at 1142-43. The Lee court emphasized that § 1825(b)(2) "represents the express will of Congress that the FDIC must consent to any deprivation of property initiated by a state." Id. at 1143. Furthermore, we stated, "the meaning of [§ 1825(b)(2)] is plain, ... a lien held by the FDIC is 'property' within the meaning of the statute, and ... said lien cannot be extinguished through a tax sale conducted without the consent of the FDIC." Id. Thus, the Lee court concluded, the tax sale at issue was "null and void." Id. CAP Holdings, Inc. v. Lorden, ibid.
THIS CASEBOOK contains a selection of 106 U. S. Court of Appeals decisions that analyze and apply provisions of the Financial Institutions Reform, Recovery, and Enforcement Act. The selection of decisions spans from 2004 to the date of publication.