United States District Court, E.D. Louisiana
ORDER & REASONS
E. FALLON, U.S. DISTRICT COURT JUDGE
the Court is Defendant FDIC's Motion to Dismiss for Lack
of Subject Matter Jurisdiction. R. Doc. 26. The Motion is
unopposed in the record, but Plaintiff did record his
opposition during oral argument on Wednesday, December 18,
2019. Having considered the parties' arguments and the
relevant law, the Court now rules as follows.
August 14, 2014, Plaintiff Russell Kelly filed a
“Petition for Damages, Predatory Lending, and Racial
Discrimination” against First NBC Bank in the Civil
District Court for the Parish of Orleans, seeking damages for
alleged torts and misrepresentations by First NBC. On
September 3, 2014, the parties filed a joint motion to
dismiss, and the matter was dismissed with prejudice. R. Doc.
9-4. Later, on April 28, 2017, First NBC was declared
insolvent and FDIC-R was appointed as Receiver of First NBC,
succeeding to all rights, titles, powers and privileges of
year later, Plaintiff Russell Kelly filed two Motions: (1) on
October 26, 2018, he filed a “Motion to Enforce
Settlement, ” and (2) on November 9, 2018, he filed an
“Amended Motion to Enforce Settlement Agreement, Change
of Possession of Property Restraining Order and Transfer of
Deed, ” in which he sought a temporary restraining
order against First NBC. R. Doc. 9-7. FDIC-R removed the
action to this Court on November 29, 2018. R. Doc. 1.
January 17, 2019, Kelly filed a motion for a temporary
restraining order and preliminary injunction, seeking relief
from eviction from a home located at 6060 Cartier Avenue. R.
Doc. 5. Kelly had owned that property from 2007 until he lost
it to FDIC-R through foreclosure. On December 6, 2017, Gaea
Development, LLC purchased the property from FDIC-R at
auction. The property was sold subject to a lease between
Kelly and FDIC-R, which had expired on November 30, 2018. The
Court denied Kelly's motion for a temporary restraining
order and preliminary injunction during a hearing on January
22, 2019. R. Doc. 8.
March 7, 2019, this case was stayed pending exhaustion of
administrative remedies pursuant to the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989.
R. Doc. 12. On April 17, 2019, Plaintiff Kelly filed a Motion
to Lift Stay, R. Doc. 18, and Motion for Return of
Plaintiff's $1, 500 Damage Deposit, R. Doc. 19.
Intervenor Gaea Development, LLC filed an opposition to the
Motion for Return of Plaintiff's $1, 500 Damage Deposit.
R. Doc. 20. Because the 180-day stay period expired on
September 7, 2019 and nothing new had been filed in this
matter, the Court scheduled a status conference to check in
with the parties. R. Doc. 21. At the September 26, 2019
telephone status conference, counsel representing FDIC-R and
Gaea Development, LLC participated, but Plaintiff did not,
even though Plaintiff was given timely notice of the
conference. R. Doc. 23. During the status conference, the
Court instructed FDIC-R to file a motion to dismiss in this
matter. R. Doc. 23.
to the Court's instruction at the September 26, 2019
status conference, FDIC-R has filed a motion to dismiss the
claims of Plaintiff for lack of subject matter jurisdiction.
R. Doc. 26 at 1. Specifically, FDIC-R argues the Financial
Institutions Reform, Recovery and Enforcement Act of 1989
(“FIRREA”) sets forth a mandatory administrative
procedure that requires all claims involving the assets of a
failed depository institution (like First NBC) to be
submitted to the receiver (in this case, FDIC-R) for review
and approval. R. Doc. 26 at 1 (citing 12 U.S.C. §
1821(d)(3)-(5)). Moreover, FIRREA requires that claims must
be submitted on or before the claims bar date set by the
FDIC-R and any claim not filed by the bar date must be
disallowed by FDIC-R as untimely. R. Doc. 26 at 1 (citing 12
U.S.C. § 1821(d)(5)(C)(i)). Additionally, if FDIC-R
disallows a claim, then the claimant must seek judicial
relief within 60 days of the disallowance; otherwise, the
“disallowance shall be final, and the claimant shall
have no further rights or remedies with respect to such
claim.” R. Doc. 26 at 1-2 (quoting 12 U.S.C. §
1821(d)(6)). FDIC-R argues that because Plaintiff failed to
timely submit his proofs of claim and failed to timely
recommence judicial proceedings in accordance with FIRREA, he
cannot seek judicial relief. R. Doc. 26 at 2. Moreover, even
if Plaintiff had complied with the administrative review
process, FIRREA would still divest the Court of subject
matter jurisdiction over Plaintiff's claims for
injunctive relief against FDIC-R and for rescission of the
sale of property sold by FDIC-R as part of its receivership.
R. Doc. 26 at 2 (citing 12 U.S.C. § 1821(j)). FDIC-R
thus contends Plaintiff's claims must be dismissed with
prejudice for lack of subject matter jurisdiction. R. Doc. 26
did not timely file an opposition to this Motion. Plaintiff
did appear in-court for oral argument and explained the
series of events leading up to the alleged settlement he
reached with First NBC. Plaintiff also contends he met with
representatives of FDIC-R and submitted his claims to them in
June 2017 and in subsequent meetings, but has provided no
evidence to substantiate these claims. In fact, although
Plaintiff states that his emails regarding these meetings
with FDIC-R representatives are on the record, the Court only
has a record of several emails between Plaintiff and First
NBC representatives prior to First NBC being declared
insolvent in April 2017. See R. Doc. 1-4. Moreover,
even if Plaintiff did timely submit his claims to FDIC-R, he
does not explain why he did not timely recommence judicial
proceedings in accordance with FIRREA. Finally, even if
Plaintiff did comply with the administrative review process,
Plaintiff does not explain how the Court has subject matter
jurisdiction over his claims for injunctive relief against
FDIC-R and for rescission of the sale of property sold by
FDIC-R pursuant to 12 U.S.C. § 1821(j).
LAW AND ANALYSIS
sets forth the rights and duties that govern the receivership
of a failed depository institution. See 12 U.S.C.
§ 1821(d). Through FIRREA, Congress established a claim
administration and review process by which all claims
asserted against the assets of the failed institution must be
submitted to FDIC-R, which has sole discretion to determine
whether the claims will be allowed or disallowed. 12 U.S.C.
§ 1821(d)(3)-(5); see also Meliezer v. Resolution
Tr. Co., 952 F.2d 879, 881 (5th Cir. 1992) (“To
assure that [FDIC-R] could deal expeditiously with failed
depository institutions, Congress created a new claims
determination procedure by which the creditors of a failed
institution may be required to first present their claims to
the Receiver for administrative consideration before pursuing
a judicial remedy.”). “The primary purpose of
FIRREA's exhaustion scheme” is to allow FDIC-R
“to perform its statutory function of promptly
determining claims so as to quickly and efficiently resolve
claims against a failed institution without resorting to
litigation.” Meliezer, 952 F.2d at 883
(quoting Rosa v. Resolution Tr. Corp., 938 F.2d 383,
396 (3d Cir. 1991)).
to FIRREA's administrative claims process, the receiver
(in this case, FDIC-R) “promptly publishes a notice to
the depository institution's creditors to present their
claims, together with proof, to the receiver by a date
specified in the notice which shall not be less than 90 days
after the publication of such notices . . . .” 12
U.S.C. § 1821(d)(3)(B)(i). Notice must also be mailed to
any creditor shown on the failed institution's books, but
this requirement does not apply to anyone who is not so
listed at the time of FDIC-R's appointment. 12 U.S.C.
§ 1821(d)(3)(C); Jill Corp. v. Resolution Tr. Corp.
for C. Savings & Loan Ass'n, F.A., Civ.A. No.
91-1566, 1991 WL 148589, at *3 (E.D. La. July 29, 1991)
(holding that “§ 1821(d)(3)(C) [was] not
applicable to plaintiff” because it “was not
listed as a creditor on [the failed] institution's books
at the time of the [receiver's] appointment”).
FIRREA requires that claimants submit all of their claims