JOSEPH F. BIANCO, District Judge:
Plaintiffs Bonnie Aber-Shukofsky ("Shukofsky"), Dayna Murray ("Murray"), Joyce Patrick ("Patrick"), Paula Klabacha ("Klabacha"), Michelle Holmlund ("Holmlund") and Victoria Markee ("Markee") (collectively "plaintiffs") brought this putative class action on behalf of themselves, and on behalf of individuals similarly situated, against defendants JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. (collectively "Chase" or "defendants"), as successors in interest to Washington Mutual, Inc. ("WaMu"), for alleged violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and related state wage and labor laws in New York, California, Washington and Pennsylvania.
Presently before the Court is defendants' motion to dismiss the second amended complaint under Rule 12(b)(1) of the Federal Rules of Civil Procedure. First, defendants contend that the Court lacks jurisdiction over plaintiffs' claims because they relate to alleged acts or omissions of WaMu before it failed and, thus, plaintiffs' claims must be brought under the mandatory administrative process required under the Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA"). Furthermore, defendants contend that because plaintiffs have failed to invoke and exhaust their administrative remedies under FIRREA, plaintiffs' claims are barred. Second, in the alternative, defendants contend that the Court should dismiss the second amended complaint and compel arbitration because WaMu's binding arbitration policy and plaintiffs' signed arbitration agreements covered plaintiffs' employment and the claims in this suit.
For the reasons set forth below, the Court grants defendants' motion for lack of subject matter jurisdiction. Specifically, the Court concludes the following: (1) plaintiffs' claims directly relate to acts or omissions of WaMu as a failed institution under FIRREA; and (2) the Court lacks jurisdiction over such claims because plaintiffs failed to invoke and exhaust their administrative remedies provided by FIRREA. Accordingly, defendants' motion to dismiss is granted, and plaintiffs' second amended complaint is dismissed in its entirety.
The following facts are taken from the second Amended Complaint ("Am. Compl.") and are not findings of fact by the Court, but rather are assumed to be true for the purpose of deciding this motion.
From September 2000 until June 2008, plaintiffs worked at WaMu in various underwriting positions and in various locations. (Am. Compl. ¶¶ 10, 14, 18, 22, 26, 30.) Plaintiffs allege that WaMu and defendants, as successors in interest, improperly classified them as exempt, and failed to properly pay underwriters for all hours worked and overtime compensation under the FLSA and state wage and hour laws in New York, California, Washington and Pennsylvania. (Id. ¶¶ 1-8, 92-156.)
Shukofsky and Murray worked for WaMu in the State of New York, where they also reside. (Id. ¶¶ 3, 9, 13.) Shukofsky was employed by WaMu from May 2003 through November 2004 and again from July 2005 through December 2007. (Id. ¶ 10.) Murray was employed by WaMu from June 2005 through February 20, 2008. (Id. ¶ 14.)
Patrick and Klabacha worked for WaMu in the State of California, where they also reside. (Id. ¶ 4, 17, 21.) Patrick was employed by WaMu from October 2003 through June 30, 2008. (Id. ¶ 18.) Klabacha was employed by WaMu from December 1, 2006 through March 2007. (Id. ¶ 22.) Holmlund worked for WaMu in the State of Washington, where she also resides. (Id. ¶ 5, 25.) Holmlund was employed by WaMu from January 2001 through June 2008. (Id. ¶ 26.) Markee worked for WaMu in the State of Pennsylvania, where she is also a resident. (Id. ¶ 6, 29.) Markee was employed by WaMu from September 2000 through May 2008. (Id. ¶ 30.)
On September 25, 2008, the Office of Thrift Supervision seized WaMu and placed it into receivership with the FDIC. (Id. ¶ 35.) That same day, the FDIC, as receiver of WaMu, sold to defendants certain of WaMu's assets and liabilities. (Id.)
On January 20, 2010, plaintiffs Shukofsky and Murray filed the instant action. On March 19, 2010, plaintiffs filed an amended complaint. On April 27, 2010 plaintiffs filed a second amended complaint. On July 9, 2010, defendants moved to dismiss as to all claims. Plaintiffs filed their opposition on August 9, 2010. Defendants filed a reply on August 27, 2010. Oral argument was held on October 15, 2010. This matter is fully submitted and the Court has considered all the submissions of the parties.
"A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000). In reviewing a motion to dismiss under Rule 12(b)(1), the court "must accept as true all material factual allegations in the complaint, but [it is] not to draw inferences from the complaint favorable to plaintiffs." J.S. ex rel. N.S. v. Attica Cent. Schs., 386 F.3d 107, 110 (2d Cir.2004) (citation omitted). Moreover, the court "may consider affidavits and other materials beyond the pleadings to resolve the jurisdictional issue, but [it] may not rely on conclusory or
Defendants move to dismiss plaintiffs' second amended complaint as barred by FIRREA. Defendants contend that plaintiffs' claims relate to alleged acts or omissions of WaMu and the Court lacks jurisdiction over such claims because plaintiffs failed to invoke and exhaust their administrative remedies provided by FIRREA.
FIRREA provides an administrative review process for all claims asserted against assets of a failed institution. If the financial institution has failed, pursuant to 12 U.S.C. § 1821(d)(3)-(5), subsequent claims must be presented first to the FDIC for an administrative determination on whether they should be paid. Under 12 U.S.C. § 1821(d)(3)(B), and upon its appointment as receiver, the FDIC is required to publish notice that the failed institution's creditors must file claims with the FDIC by a date not less than ninety days after the date of publication. Once a claim is filed, the FDIC then has to render a determination within 180 days. 12 U.S.C. § 1821(d)(5)(A)(I). Section 1821(d)(6) of FIRREA governs appeals of the FDIC's determinations as receiver. Claimants have sixty days after the 180 day claim determination period or sixty days after a claim is disallowed, to request an administrative review of that decision, or to bring suit within the appropriate federal district court. See 12 U.S.C. § 1821(d)(6)(A).
The administrative review process provided by FIRREA is a prerequisite to judicial review. Until such time as the claim is disallowed by the FDIC, section 1821(d)(13) expressly revokes the jurisdiction of all federal courts to decide claims against the assets of a failed institution. Section 1821(d)(13)(D) provides in full:
12 U.S.C. § 1821(d)(13)(D) (emphasis added).
Accordingly, if a claimant fails to comply with the statutory time limitations, "the claim shall be deemed to be disallowed. . ., such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim." 12 U.S.C. § 1821(d)(6)(B)(ii).
For the reasons set forth below, the Court finds that plaintiffs' claims, under 12 U.S.C. § 1821(d)(13)(D)(ii), constitute "claim[s] relating to any act or omission of such [failed] institution," and plaintiffs failed to invoke and exhaust their administrative remedies provided by FIRREA. Thus, this Court lacks jurisdiction over plaintiffs' claims.
Given FIRREA's clear language, the 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. See Bank of New York v. First Millennium Inc., 607 F.3d 905, 920-21 (2d Cir.2010); Carlyle Towers Condominium Ass'n, Inc. v. FDIC, 170 F.3d 301, 307 (2d Cir.1999); Caires v. JPMorgan Chase Bank, No. 3:09-cv-02142 (VLB), 745 F.Supp.2d 40, 46, 2010 WL 3941841, at *5 (D.Conn.2010) ("The Second Circuit has held that section 1821(d)(13)(D), when read in conjunction with the rest of section 1821(d), creates a requirement that all claims be presented to the FDIC before a claimant may seek judicial review." (citations and quotation marks omitted)); see also Resolution Trust Corp. v. Elman, 949 F.2d 624, 627 (2d Cir.1991) ("[T]he statute means just what it says, and accordingly. . . a claimant must first present its case. . . under the administrative procedure erected by FIRREA before seeking relief in the federal courts.")
Here, in papers and at oral argument, plaintiffs concede that pursuant to 12 U.S.C. § 1821(d)(13)(D)(ii), plaintiffs' claims relate to the acts or omissions of WaMu and that plaintiffs failed to comply with the administrative claims process provided by FIRREA. Even without plaintiffs' admission, the Court concludes that plaintiffs' claims only relate to acts and omissions of WaMu as a failed institution under FIRREA. According to the second amended complaint, only WaMu is alleged to have violated the FLSA and state wage and hour laws and each specific allegation of misconduct occurred 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. (Am. Compl. ¶¶ 1-8, 92-156.) Accordingly, the Court holds, pursuant to the plain meaning of FIRREA, that it lacks jurisdiction over plaintiffs' claims and plaintiffs "have no further rights or remedies with respect to such claim[s]," 12 U.S.C. § 1821(d)(6)(B)(ii). Thus, plaintiffs' claims are barred by FIRREA.
Notwithstanding the plain language, plaintiffs argue that their claims are not bound by FIRREA and, thus, the statute's exhaustion requirement and jurisdictional bar do not apply. In particular, plaintiffs argue that the requirement does not apply because FIRREA is designed to protect the FDIC, which is no longer operating as WaMu's receiver, and FIRREA's protections do not extend to defendants because defendants accepted certain assets and liabilities as WaMu's successors in interest.
Although the Second Circuit has never addressed this specific issue regarding FIRREA, the Sixth Circuit reached the same conclusion as this Court in Village of Oakwood v. State Bank & Trust Co., 539 F.3d 373 (6th Cir.2008). In Village of Oakwood, as in the instant action, plaintiffs argued that FIRREA did not apply because they had brought claims only against the assuming bank. Specifically, plaintiffs alleged that the assuming bank was the successor to the failed bank and that it had aided and abetted the FDIC in its alleged breach of fiduciary duty to the plaintiffs. The FDIC intervened, and both FDIC and the assuming bank challenged the court's jurisdiction because the plaintiffs had failed to exhaust their administrative remedies. Vill. of Oakwood v. State Bank & Trust Co., 519 F.Supp.2d 730, 734-35 (N.D.Ohio 2007), aff'd, 539 F.3d 373 (6th Cir.2008). The Sixth Circuit affirmed the district court's grant of summary judgment holding that plaintiffs' claims were barred because FIRREA required administrative claims to be filed with the FDIC, which the plaintiffs had not done, and plaintiffs could not evade FIRREA's jurisdictional bar by asserting claims against the assuming bank. See Vill. of Oakwood, 539 F.3d at 386. This Court finds the Sixth Circuit's analysis in Village of Oakwood to be persuasive.
Plaintiffs attempt to distinguish Village of Oakwood by arguing that the successor bank in that case did not contractually assume its predecessor's liabilities, and plaintiffs' claims against the successor bank were an attempt to indirectly attack the FDIC whereas, here, the FDIC is no longer acting as receiver. (Pls.' Resp. at 4-5.) Plaintiffs' argument is without merit. Although plaintiffs accurately characterize that the claims against the successor bank in Village of Oakwood were related to acts or omissions of the FDIC, it is a distinction without legal relevance. The clear defect in plaintiffs' argument is that there is no dispute that all of their claims against defendants "relate" to "acts or omissions" of WaMu as a failed institution under FIRREA. In short, 12 U.S.C. § 1821(d)(13)(D) expressly provides that "no court shall have jurisdiction over . . . any claim relating to any act or omission of such [failed] institution or the Corporation as receiver." (emphasis added). Thus, it is
That is precisely what plaintiffs have attempted here in suing only defendants.
In addition to the Sixth Circuit, several other federal courts similarly have held that plaintiffs cannot evade FIRREA's mandatory exhaustion requirement simply by naming the acquiring bank as a defendant in the suit for acts or omissions that relate to the failed institution. See Am. First Fed., Inc. v. Lake Forest Park, Inc., 198 F.3d 1259, 1263 n. 3 (11th Cir.1999) ("AFF, having purchased the note from the RTC, stands in the shoes of the RTC and acquires its protected status under FIRREA. . . . Thus, if Lake Forest is barred [by Section 1821(d)] from asserting this claim against the RTC, it is similarly barred from asserting it against AFF.") (citations omitted);
Furthermore, a recent decision by the United States District Court for the Northern District of California is directly on point. The court, in an August 2010 opinion, dismissed two cases against defendant JPMorgan Chase Bank, N.A. as barred for failure to timely exhaust administrative remedies under FIRREA. See Benson, et al. v. JPMorgan Chase Bank, N.A., Nos. C-09-5272 MEJ, C-09-5560 MEJ, 2010 WL 3168390 (N.D.Cal. Aug. 10, 2010) reconsideration denied, 2010 WL 4010116 (N.D.Cal. Oct. 13, 2010). As in the instant action, defendant JPMorgan Chase moved to dismiss plaintiffs' claims as they related to alleged acts and omissions of WaMu before it failed and was taken over by the FDIC and no claims had been filed with the FDIC pursuant to FIRREA's administrative process. Id. at *3. Furthermore, the court confronted plaintiffs' very argument on this issue in the instant action—namely, that FIRREA is designed to protect the FDIC, against which no claims were asserted, and JPMorgan Chase was liable to them as a successor in interest. Id. After a thorough examination of FIRREA, including the language of 12 U.S.C. § 1821(d)(13)(D),
Benson, 2010 WL 3168390, at *6 (emphasis added) (quotations and omissions in original text) (citing Vill. of Oakwood v. State Bank & Trust Co., 539 F.3d at 386; diSibio v. Mission Nat'l Bank, 127 Fed.Appx. 950, 951 (9th Cir.2005); Am. First Fed., Inc. v. Lake Forest Park, Inc., 198 F.3d 1259, 1263 n. 3 (11th Cir.1999)).
The Court agrees with the well-reasoned analysis in Benson and the other federal courts noted above. Accordingly, the Court concludes that plaintiffs' claims are governed by FIRREA, irrespective of whether their suit is directed against WaMu, the FDIC or defendants, and thus, the Court is deprived of jurisdiction.
Despite plaintiffs' contention to the contrary, this holding is also consistent with the Second Circuit and other courts that have considered the purpose of FIRREA. See Bank of New York v. First Millennium Inc., 607 F.3d 905, 920-21 (2d Cir. 2010) (holding that § 1821(d)(13)(D)(ii), as part of FIRREA's statutory scheme, was "intended to force plaintiffs with claims against failed depository institutions to exhaust administrative remedies before coming to federal court." (citing Carlyle Towers, 170 F.3d at 307)); see also Vill. of Oakwood, 539 F.3d at 386 (allowing claims against the assuming bank "would encourage the very litigation that FIRREA aimed to avoid" by allowing claimants to avoid the provisions of (d)(6) and (d)(13) (emphasis added) (internal quotations and alterations omitted)); Benson, 2010 WL 3168390, at *7 (allowing such claims would "thwart FIRREA's purpose and permit creditors to evade the comprehensive administrative claims procedures envisioned by the statute. . . .") (citing Vill. of Oakwood, 519 F.Supp.2d at 738); Praxis Props., Inc. v. Colonial Sav. Bank, 947 F.2d 49, 64 (3d Cir.1991) (Congress's overriding purpose for requiring exhaustion of administrative procedures was to enable [the Receiver] to dispose of the bulk of claims against failed institutions expeditiously and fairly); see generally Vernon v. Resolution Trust Corp., 907 F.2d 1101,
The Court has considered plaintiffs' additional arguments and finds them to be equally unpersuasive. First, at oral argument plaintiffs cited Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981) and Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296 (1945) for the proposition that Congress intended that rights under the FLSA cannot be abridged and, thus, the FLSA trumps the FIRREA and all other Congressional statutes. However, neither of those cases involved the FLSA and a conflicting Congressional statute or could reasonably be interpreted to support plaintiffs' argument. Instead, these decisions simply held that claims under the FLSA may not be waived through a collective bargaining agreement between an employer and the workers' union or through a direct agreement between an individual worker and the employer. These cases are inapposite to the situation here where Congress clearly has the power to enact a separate statute such as the FIRREA that requires the FLSA claims, in this particular context, to be subjected to an administrative review procedure.
Second, in their papers and at oral argument, plaintiffs cited the class action settlements in Westerfield, et al. v. Washington Mutual Bank, Nos. 06-CV-2817 (CBA)(JMA), 08 Civ. 00287(CBA)(JMA), for the proposition that because the FDIC disallowed claims in prior actions which are factually similar, plaintiffs have "no reason to believe that the FDIC would reach a different conclusion" and, thus, plaintiffs have no obligation to make claims pursuant to FIRREA in the instant action.
The Notice of Disallowance provides:
(Id.) (emphasis added).
By its plain language, the FDIC's determination of one individual's claim does not apply to another individual within the same action let alone apply to plaintiffs in
Finally, to the extent plaintiffs more generally argue that the Court should look beyond the plain language of FIRREA to find jurisdiction, the Court rejects that argument pursuant to the well-settled principles of statutory construction. According to the Supreme Court, "canons of construction are no more than rules of thumb that help courts determine the meaning of legislation, and in interpreting a statute a court should always turn first to one, cardinal canon before all others." "We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there. When the words of a statute are unambiguous, then, this first canon is also the last: judicial inquiry is complete." Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992) (citations and quotation marks omitted); see also Estate of Barbara Pew v. Cardarelli, 527 F.3d 25, 30 (2d Cir.2008) ("We first look to the statute's plain meaning; if the language is unambiguous, we will not look farther." (citations and quotation marks omitted)). Consequently, as the Second Circuit has repeatedly emphasized, "[w]hen a statute's language is clear, our only role is to enforce that language according to its terms." Arciniaga v. Gen. Motors Corp., 460 F.3d 231, 236 (2d Cir. 2006), cert. denied 549 U.S. 1097, 127 S.Ct. 838, 166 L.Ed.2d 667 (2006) (citations and quotation marks omitted); see also Green v. City of N.Y., 465 F.3d 65, 78 (2d Cir. 2006) ("Statutory analysis begins with the text and its plain meaning, if it has one. Only if an attempt to discern the plain meaning fails because the statute is ambiguous, do we resort to canons of construction. If both the plain language and the canons of construction fail to resolve the ambiguity, we turn to the legislative history." (citations and quotation marks omitted)); Lee v. Bankers Trust Co., 166 F.3d 540, 544 (2d Cir.1999) ("It is axiomatic that the plain meaning of a statute controls its interpretation, and that judicial review must end at the statute's unambiguous terms. Legislative history and other tools of interpretation may be relied upon only if the terms of the statute are ambiguous." (citations omitted)).
Although plaintiffs argue that Congress intended for the FLSA to trump all other Congressional statutes and that plaintiffs can somehow opt out of FIRREA's mandatory administrative claims process based upon disallowances provided to other claimants, the Court finds that the plain and unambiguous language of the FLSA and the FIRREA provide no such thing. The plain language of FIRREA simply does not allow the Court to hear plaintiffs' claims. Therefore, the Court should not— and, thus, will not—consult other sources in order to strain the statutory provisions beyond their plain and unambiguous meaning. See, e.g., U.S. ex rel. Fullington v. Parkway Hosp., Inc., 351 B.R. 280, 286 n. 4 (E.D.N.Y.2006) ("The Supreme Court has emphasized the dangers in courts interpreting statutes by relying on remarks from floor debates or similar comments by lawmakers to discern legislative intent.") (citations omitted).
For the foregoing reasons, the Court dismisses the second amended complaint, for lack of subject matter jurisdiction, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure.
SO ORDERED.
