The mortgagors sent an email to the former outside counsel for the Federal Deposit Insurance Corporation (FDIC) containing their proof of claim on a violation under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) in relation to the lending practices of the mortgagee. The receiver treated the email as a valid filing, despite the proper filing mechanisms of uploading claims documents on its website, via mail, or by fax. 12 C.F.R. § 380.34(b). Nonetheless, the district court for the District of Columbia dismissed the mortgagors’ complaint for failure to exhaust FIRREA’s administrative exhaustion requirement because the mortgagors improperly submitted their complaint. The district court denied the mortgagors leave to amend their complaint because no amendment could cure the jurisdictional defect that resulted from the failure to exhaust FIRREA’s administrative requirements. The district court remanded the case to the New Jersey state court. The mortgagors appealed.
In Sequeira v. FDIC, No. 24-5209, 2025 WL 2426914, 2025 U.S. App. LEXIS 21605 (D.C. Cir. Aug. 22, 2025) (unpublished opinion), the court affirmed both the district court’s dismissal of the mortgagors’ complaint and its refusal to amend their complaint. The court found that 12 C.F.R. § 380.34(b) requires that a FIRREA mortgagor file a claim pursuant to the receiver’s provided instructions. Because the mortgagors failed to do this, the court upheld the dismissal. The court also held that the district court did not err in considering matters outside the pleadings themselves when deciding whether the court possessed jurisdiction. Furthermore, the court held that the district court did not abuse its discretion in denying the mortgagors leave to amend their complaint because such amendments did not cure jurisdictional defects. Additionally, the court found the district court’s remand to New Jersey state court had been proper because a case may be removed only to “the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). Therefore, the court affirmed the district court’s holding.
By Conor Doris [email protected]
Edited By Charlie Cole [email protected]
Edited By Olivia Lewis [email protected]
Edited By Taylor O’Brien [email protected]