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 8                                  UNITED STATES DISTRICT COURT
 9                                NORTHERN DISTRICT OF CALIFORNIA
10                                           SAN JOSE DIVISION
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12   STEVEN THOMPSON, et al.,            )                     Case No.: C 09-5385 PVT
                                         )
13                     Plaintiffs,       )                     ORDER TO SHOW CAUSE WHY CASE
                                         )                     SHOULD NOT BE TRANSFERRED TO
14         v.                            )                     EITHER THE WESTERN DISTRICT OF
                                         )                     WASHINGTON OR THE DISTRICT OF
15   WASHINGTON MUTUAL,                  )                     COLUMBIA ; AND
                                         )
16                     Defendant.        )                     ORDER CONTINUING CASE
     ___________________________________ )                     MANAGEMENT CONFERENCE
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18          This case is currently scheduled for Case Management Conference on April 20, 2010.
19   Having reviewed the file herein,
20          IT IS HEREBY ORDERED that, no later than May 5, 2010, Plaintiffs shall file a brief
21   showing cause why this action should not be transferred to either the Western District of Washington
22   or the District of Columbia. In responding to this order, Plaintiffs should also indicate whether they
23   have a preference between those two districts in the event the court transfers the case.
24          IT IS FURTHER ORDERED that the Case Management Conference is CONTINUED to
25   2:00 p.m. on May 25, 2010.
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27          I.      BACKGROUND
28          Plaintiffs originally filed suit against Washington Mutual in the Superior Court of California,


                                                 ORDER, page 1
 1   County of Monterey, based on their claim that Washington Mutual’s reckless actions in connection
 2   with Plaintiffs’ attempt to sell their home caused the buyers to back out of the deal. The Federal
 3   Deposit Insurance Corporation (“FDIC”) stepped in and halted the proceedings because Washington
 4   Mutual is in receivership and the FDIC needed to review the claim first. After review, the FDIC
 5   disallowed the claim and informed Plaintiffs that, pursuant to 12 U.S.C. Section 1821, U.S. District
 6   Court is the proper court in which to file a lawsuit. The FDIC also informed Plaintiffs that the
 7   lawsuit must be filed within 60 days. Plaintiffs filed the instant action on November 16, 2009.
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 9          II.     LEGAL STANDARDS
10          A.      DISMISSAL FOR LACK OF SUBJECT MATTER JURISDICTION
11          “Federal courts are courts of limited jurisdiction. They possess only that power authorized by
12   Constitution and statute, which is not to be expanded by judicial decree. It is to be presumed that a
13   cause lies outside this limited jurisdiction... .” See Kokkonen v. Guardian Life Ins. Co. of America,
14   511 U.S. 375, 377 (1994) (citations omitted). A district court may sua sponte raise the question of
15   subject matter jurisdiction. See Hernandez v. McClanahan, 996 F.Supp. 975, 977 (N.D.Cal. 1998).
16          Where subject matter jurisdiction does not exist, the appropriate disposition is dismissal. See
17   FED .R.CIV .PRO . 12(h)(3) (“If the court determines at any time that it lacks subject-matter
18   jurisdiction, the court must dismiss the action”). The only exception to this mandate of dismissal is
19   when it would be in the interest of justice to transfer the action to another court in which the action
20   could have been brought at the time it was filed. See 28 U.S.C. § 1631 (“Section 1631”).
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            B.      JURISDICTION UNDER THE FINANCIAL INSTITUTION REFORM , RECOVERY , AND
22                  ENFORCEMENT ACT OF 1989
23          The Financial Institutions Reform and Recovery Enforcement Act of 1989 (“FIRREA”)
24   governs actions against failed depository institutions that have been placed in receivership. See 12
25   U.S.C. §§ 1821(d)(3)-(13). FIRREA puts broad restraints on judicial review; once the FDIC is
26   appointed as receiver, a claimant must submit a claim to the FDIC before a federal court has
27   jurisdiction. See Henderson v. Bank of New Eng., 986 F.2d 319, 321 (9th Cir. 1993).
28          Section 1821(d)(13)(D) provides that:


                                                  ORDER, page 2
 1          “Except as otherwise provided in this subsection, no court shall have jurisdiction
            over-
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            “(i) any claim or action for payment from, or any action seeking a determination of
 3          rights with respect to, the assets of any depository institution for which the [FDIC]
            has been appointed receiver ... or
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            “(ii) any claim relating to any act or omission of such institution or the [FDIC] as
 5          receiver.” (Emphasis added.)
 6          In section 1821(d)(6)(A), Congress limited the subject-matter jurisdiction of federal district
 7   courts to review administrative claims. Section 1821(d)(6)(A) provides:
 8          “Before the end of the 60-day period beginning on the earlier of-
 9              “(i) the end of the [180-day period the Receiver has to make a determination
                 on a claim]; or
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                “(ii) the date of any notice of disallowance of such claim pursuant to
11               paragraph (5)(A)(i),
12                  “the claimant may request administrative review of the claim ... or file suit on such
                    claim (or continue an action commenced before the appointment of the receiver) in
13                  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
14                  District Court for the District of Columbia (and such court shall have jurisdiction to
                    hear such claim).”
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16          Thus, after a claimant submits its claim directly to the appointed receiver of the failed
17   institution–here the FDIC, and the receiver has completed its review of the claim, the claimant has
18   60 days to appeal the administrative decision by filing suit against the FDIC1 in either the district
19   court for the district within which the depository institution’s principal place of business is located or
20   the United States District Court for the District of Columbia, which are the only two courts that have
21   jurisdiction over such appeals.
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23          III. DISCUSSION
24          Under FIRREA, other than the United States District Court for the District of Columbia, the
25   only court that has jurisdiction over Plaintiffs’ appeal of the FDIC’s disallowance of their claims is
26   the United States District Court for the Western District of Washington. See, e.g., Haller v.
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28          1
                    The court notes that Plaintiffs did not name the FDIC in their complaint. However,
     Plaintiffs may still amend their complaint to add the FDIC as an additional Defendant.
                                                  ORDER, page 3
 1   Washington Mut. Bank, 2010 WL 551407, *3 (D.N.J. 2010) (finding that any appeal of the FDIC’s
 2   disallowance of claims against Washington Mutual must be brought in either the Western District of
 3   Washington or the District of Columbia, because Washington Mutual’s principal place of business is
 4   Seattle, Washington).
 5          Because this court lacks jurisdiction over Plaintiffs’ claims, it must either dismiss the case, or
 6   transfer it to a court in which the action could have been brought at the time it was filed. See
 7   FED .R.CIV .PRO . 12(h)(3); and 28 U.S.C. § 1631. It appears from the complaint that, at the time this
 8   case was filed, it could have been brought in either the Western District of Washington or the
 9   District of Columbia. Thus, transfer to one of those courts rather than dismissal appears to be
10   warranted.
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12          IV.       CONCLUSION
13          Plaintiffs filed this action in the wrong district court. Thus, absent a showing by Plaintiffs to
14   the contrary, it appears transfer to either the Western District of Washington or the District of
15   Columbia is warranted.
16   Dated: 4/15/10
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                                                   PATRICIA V. TRUMBULL
18                                                 United States Magistrate Judge
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 2   copies mailed on   4/15/10   to:
 3   Steven Thompson
     Post Office Box 92214
 4   Henderson, NV 89009
 5   Aster Kifle-Thompson
     Post Office Box 92214
 6   Henderson, NV 89009
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                                           /s/ Donna Kirchner   for
 8                                        MARTHA BROWN
                                          Courtroom Deputy
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                                        ORDER, page 5
