American National Insurance Company (ANICO) vs. JPMorgan and FDIC - Brief of Appellants

Case: 10-5245 Document: 1284528 Filed: 12/22/2010 Page: 1
(Not Yet Scheduled for Oral Argument)
IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT
______________________________
No. 10-5245
______________________________
AMERICAN NATIONAL INSURANCE COMPANY,

AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY,
FARM FAMILY LIFE INSURANCE COMPANY,
FARM FAMILY CASUALTY INSURANCE COMPANY and
NATIONAL WESTERN LIFE INSURANCE COMPANY,
Appellants
v.
JPMORGAN CHASE & CO.,

JP MORGAN CHASE BANK, N.A., and
FDIC, as Receiver for Washington Mutual Bank, Henderson, Nevada,
Appellees
______________________________
ON APPEAL FROM THE UNTIED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA
______________________________
BRIEF OF APPELLANTS
______________________________
Gregory Stuart Smith

D.C. Bar No. 472802
913 East Capitol Street, S.E.
Washington, D.C. 20003
Telephone: 202.460.3381; Fax: 877.809.9113
Email: gregsmithlaw@verizon.net
Counsel for Appellants
Certificate as to Parties, Rulings and Related Cases
(A) The parties to this appeal are American National Insurance Company,
American National Property and Casualty Company, Farm Family Life
Insurance Company, Farm Family Casualty Insurance Company, and
National Western Life Insurance Company, Appellants, and JPMorgan
Chase & Co., JP Morgan Chase Bank, N.A., and the FDIC, as Receiver for
Washington Mutual Bank, Henderson, Nevada, Appellees.
(B) This is an appeal from an Order entered on April 13, 2010, granting
Appellees’ Motions to Dismiss the Complaint and denying Appellants’
Motion to Dismiss the FDIC-Receiver and for Remand, see JA-323-330
[Order, Docket #118; Memorandum Opinion, Docket #117, reported as Am.
Nat’l Ins. Co. v. JPMorgan Chase & Co., et al., 705 F. Supp. 17 (D.D.C.
2010)], and an Order entered on July 19, 2010, denying Appellants’ Motion
to Alter or Amend Judgment and Request for Leave to File Amended
Complaint, by the Honorable Rosemary M. Collyer, United States District
Judge. JA-362-63 [Order, Docket # 124].
(C) There are no related cases.
/s/ Gregory S. Smith

Gregory S. Smith
Counsel for Appellant
i
TABLE OF CONTENTS
CERTIFICATE AS TO PARTIES, RULINGS and RELATED CASES ........... i
TABLE OF CONTENTS ..................................................................................... ii
TABLE OF AUTHORITIES ............................................................................... iv
GLOSSARY .................................................................................................... ix
STATEMENT OF SUBJECT MATTER AND

APPELLATE JURISDICTION ........................................................................... 1
STATEMENT OF ISSUES PRESENTED FOR REVIEW ................................ 1
PERTINENT STATUTES ................................................................................... 2
STATEMENT OF THE CASE ............................................................................ 3
STATEMENT OF THE FACTS ......................................................................... 8
SUMMARY OF ARGUMENTS ...................................................................... 12
ARGUMENT AND CITATIONS OF AUTHORITY ..................................... 14
I. FIRREA does not apply to Appellants’ action because

Appellants seek only general damages against JPMC
arising from JPMC’s own misconduct and allege no
wrongdoing by WMB or the FDIC-Receiver .................................. 15
A. Appellants’ claims against JPMC could not have

been prosecuted under FIRREA and therefore
are not subject to FIRREA’s “jurisdictional bar” .............. 16
B. Constitutional Due Process Clause prevents the

FDIC-Receiver from extending FIRREA’s exclusive
remedy provision to Appellants’ lawsuit ........................... 27
ii
C. Congress did not grant the FDIC-Receiver

authority over claims by creditors of a failed
bank against third parties ................................................... 29
D. Extension of FIRREA to claims against third parties

conflicts with positions taken by the FDIC-Receiver
in other similar circumstances ........................................... 34
II. Appellants injuries are “fairly traceable” to JPMC’s

actions in executing its plan to obtain the assets of
WMB, freed of obligations to bondholders,
by purchase from the FDIC-Receiver .............................................. 37
III. Even if FIRREA and “Intervening Causes” Could Bar

Portions of Appellants’ Claims, the District Court Erred
in Dismissing this Entire Case With Prejudice, Without
Explanation, and in Denying Appellants’ Motion for Leave
to Amend to Assert Claims and Damages Against JPMC that
Pre-Dated the FDIC’s Appointment as WMB’s Receiver
and Sale of its Assets to JPMC ........................................................ 44
CONCLUSION ................................................................................................. 50
CERTIFICATE OF COMPLIANCE WITH

TYPEFACE AND LENGTH LIMITATIONS ................................................. 51
CERTIFICATE OF SERVICE ......................................................................... 52
iii
TABLE OF AUTHORITIES
CASES PAGE(S)
Allen v. Wright, 468 U.S. 737 (1984) ................................................................... 38
Am. Nat'l Ins. Co. v. JPMorgan Chase & Co., et al.,

705 F.Supp. 17 (D.D.C. 2010)................................................... 14-15, 37-38
America's Community Bankers v. FDIC,

200 F.3d 822 (D.C. Cir. 2000).................................................................... 39
American First Federal, Inc. v. Lake Forrest Park, Inc.,

198 F.3d 1259 (11th Cir. 1999) .............................................................. 25-26
Aquaplex, Inc. v. Rancho La Valencia, Inc.,

298 S.W.3d 768 (Tex. 2009) ...................................................................... 40
*Auction Co. v. FDIC, 141 F.3d 1198 (D.C. Cir. 1998)

......................................................................................12, 17- 20, 23, 26, 28
Bank One v. Elms, 764 F. Supp. 85 (N.D. Tex. 1991).......................................... 22
*Bank of New York v. First Millennium, 607 F.3d 905 (2d Cir. 2010)............ 22-23
Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (2003) ......................................... 28
*Bennett v. Spear, 520 U.S. 154 (1997) .......................................................... 42-43
Boddie v. Connecticut, 401 U.S. 371 (1971) ........................................................ 28
Caribbean Broadcasting Sys., Ltd. v. Cable & Wireless PLC,

148 F.3d 1080 (D.C. Cir. 1998).................................................................. 47
Center for Auto Safety v. National Highway Traffic Safety Admin.,

253 U.S. App. D.C. 336, 793 F.2d 1322 (D.C. Cir. 1986) ......................... 39
Chaudry v. Nuco-Steel-Indiana, 546 F.3d 832 (7th Cir. 2008) ............................. 45
iv
Coal. On Sensible Transp., Inc. v. Dole,

631 F. Supp. 1382 (D.D.C. 1986)............................................................... 43
Coit Independence Joint Venture v. FSLIC.,

489 U.S. 561 (1988)........................................................................ 27, 29, 36
Cuomo v. Clearing House Ass’n, L.L.C., 129 S. Ct. 2710 (2009) ........................ 28
Damiano v. FDIC, 104 F.3d 328, 335 n.13 (11th Cir. 1997) ................................ 37
Dew v. Crown Derrick Constructors, Inc., 208 S.W. 3d 448,

(Tex. 2005) ................................................................................................. 40
diSibio v. Mission Nat’l Bank, 127 F. App’x 950

(9th Cir. Apr. 11, 2005) ........................................................................ 24, 26
FDIC v. Jenkins, 888 F.2d 1537 (11th Cir. 1989) ................................................ 31
FDIC v. McFarland, 243 F.3d 876 (5th Cir. 2001) .............................................. 22
*Firestone v. Firestone, 76 F.3d 1205 (D.C. Cir. 1996) ........................... 44-45, 49
First Assembly of God, Inc. v. Texas Utilities Elec. Co.,

52 S.W.3d 482 (Tex. App.—Dallas 2001) ................................................. 43
*Freeman v. FDIC, 56 F.3d 1394 (D.C. Cir. 1995) ......................17, 19-20, 28, 37
Fulani v. Brady, 935 F.2d 1324 (D.C. Cir. 1991)................................................. 39
Grant Thornton L.L.P. v. Office of Comptroller,

514 F.3d 1328 (D.C. Cir. 2008).................................................................. 15
Greenfield v. Shuck, 867 F. Supp. 62 (D. Mass. 1994) ................................... 33-34
Henrichs v. Valley View Dev., 474 F.3d 609 (9th Cir.),

cert. denied, 552 U.S. 1037 (2007) ................................................. 21, 34-35
Hickey v. NCNB Texas Nat. Bank,

763 F. Supp. 896 (N.D. Tex. 1991) ............................................................ 22
v
Hoxeng v. Topeka Broadcomm,

911 F. Supp. 1323 (D. Kan. 1996)......................................................... 23-24
Hudson United Bank v. Chase Manhattan Bank of

Connecticut, N.A., 43 F.3d 843 (3d Cir. 1994)........................................... 21
Info. Handling Servs., Inc. v. Def. Automated Printing Servs.,

338 F.3d 1024 (D.C. Cir. 2003).................................................................. 38
In re Purcell, 141 Bankr. 480 (Bankr. D.Vt. 1992), aff’d,

150 Bankr. 111 (D. Vt. 1993) ..................................................................... 37
Lane v. Haliburton Corp., 529 F.3d 548 (5th Cir. 2008)....................................... 40
Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982) ........................................ 28
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ..................................... 38, 42
Moustakis v. City of Fort Lauderdale,

388 Fed. Appx. 820 (11th Cir. 2009) ......................................................... 30
National Union Fire Ins. Co. of Pittsburgh v. City Savings,

28 F.3d 376 (3d Cir. 1994) ................................................................... 17, 29
O’Melveny & Myers v. FDIC, 512 U.S. 79 (1994)............................................... 30
*Rosa v. RTC, 938 F.2d 383 (3d Cir. 1991) ......................................................... 21
Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26 (1976)) .................................. 39
Stop the Beach Renourishment, Inc. v. Fl. Dep’t of Envr. Protection, et al,
78 U.S.L.W. 4578, 130 S. Ct. 2592 (2010) ................................................ 29
Suess v. United States, 33 Fed. Cl. 89 (Ct. Cl. 1995) ........................................... 31
Team Bank v. Barfield, 145 F.R.D. 69 (N.D. Tex. 1992) ..................................... 22
Tozzi v. U.S. Dep't of Health & Human Servs.,

271 F.3d 301 (D.C. Cir. 2001).................................................................... 39
vi
Village of Oakwood v. State Bank & Tr. Co.,

539 F.3d 373 (6th Cir. 2008) ................................................................. 24-26
Warth v. Seldin, 422 U.S. 490 (1975) ................................................................... 39
White v. Chase Bank USA, NA, 2010 U.S. Dist. LEXIS 102908
(S.D. Ohio Sept. 28, 2010) ......................................................................... 25
Wilson v. FDIC, 827 F. Supp. 120 (E.D.N.Y. 1993) ............................................ 37
Wyeth v. Levine, 129 S. Ct. 1187 (2009) .............................................................. 28
STATUTES PAGE(S)
12 U.S.C. § 1819 (b) ............................................................................................ 1,5
12 U.S.C. § 1821(c) .............................................................................................. 16
12 U.S.C. § 1821(d) .......................................... 2, 3, 6, 16-23, 25, 27, 30-31, 34-35
12 U.S.C. § 1821(d)(2).................................................................................... 30, 31
12 U.S.C. § 1821(d)(3).................................................................................... 16, 19
12 U.S.C. § 1821(d)(5)................................................................................ 2, 16, 20
12 U.S.C. § 1821(d)(6).................................................................2, 6, 16-18, 20, 27
12 U.S.C. § 1821(d)(10) ............................................................................. 2, 16, 20
12 U.S.C. § 1821(d)(11) ................................................................................... 3, 16
12 U.S.C. § 1821(d)(13) ..................................................... 3, 17- 23, 25, 27, 34-35
28 U.S.C. § 1291 .................................................................................................... 1
28 U.S.C. § 1332 .................................................................................................... 1
28 U.S.C. § 2401(a) ............................................................................................. 18

vii
RESTATEMENT (SECOND) TORTS § 442) ................................................................ 40
RESTATEMENT (SECOND) TORTS § 449) ................................................................ 40
Financial Institutions Reform Recovery and Enforcement Act

of 1989 (“FIRREA”) ................................................... 1, 6. 12-36, 43-44, 46
RULES PAGE(S)
Fed. R. Civ. P. 12 (b)(1)........................................................................................ 15
Fed. R. Civ. P. 12 (c)............................................................................................. 15
Fed. R. Civ. P. 15 ............................................................................................ 44, 49
FED. R. Civ. P. 19.................................................................................................. 43
Fed. R. Civ. P. 59 .......................................................................................44, 47-49
viii
GLOSSARY
District Court – District Court for the District of Columbia, Judge Rosemary M. Collyer
FDIC-Receiver – Federal Deposit Insurance Corporation, as Receiver for Washington

Mutual Bank, Henderson, Nevada
FIRREA – Financial Institutions Reform Recovery and Enforcement Act of 1989
JPMC –JPMorgan Chase & Co. and JP Morgan Chase Bank, N.A., collectively
JPMC & Co. – JPMorgan Chase & Co.
JPMC Bank – JP Morgan Chase Bank, N.A.
OTS – Office of Thrift Supervision
Washington Mutual – Washington Mutual, Inc. and Washington Mutual Bank,

collectively (pre-receivership)
WMI – Washington Mutual, Inc.
WMB – Washington Mutual Bank
ix
STATEMENT OF SUBJECT MATTER

AND APPELLATE JURISDICTION
The District Court based subject matter jurisdiction upon 12 U.S.C. §
1819(b)(2) and, perhaps, 28 U.S.C. § 1332. 1 This Court has appellate jurisdiction
under 28 U.S.C. § 1291. This is an appeal from a final order and judgment. The
United States District Court for the District of Columbia entered an Order on April
13, 2010 disposing of all parties’ claims. On May 10, 2010, Appellants filed a
motion seeking to alter or amend that judgment and for leave to amend their
complaint, which the District Court denied in an Order dated July 19, 2010.
Appellants timely filed their Notice of Appeal the following day, on July 20, 2010.
STATEMENT OF ISSUES PRESENTED FOR REVIEW
I. Whether the district court erred in holding that the Financial Institutions
Reform Recovery and Enforcement Act of 1989 (“FIRREA”) applies to
claims asserted against private third parties by private parties for
damages caused by the third parties’ own wrongdoing.
II. Whether the district court erred in finding that the FDIC-Receiver’s sale
of bank assets, which was merely the intended final step in a chain of
events set in motion by the Defendants, necessarily constitutes an
intervening superseding cause as a matter of law, such that no reasonable
jury could find that Appellants’ injuries were “fairly traceable” to the
actions of the Defendants.
III. Whether the district court erred in failing to provide a reason for
dismissing this case with prejudice, and in refusing to grant Appellants’
motion for leave to file an Amended Complaint, which would have
1
Appellants dispute the FDIC-Receiver’s intervention and jurisdiction arising from
12 U.S.C. 1819(b)(2). JPMC raised diversity as a ground for removal, no ruling
was made as to this ground.
1
addressed issues identified by the district court in its decision that

dismissed Appellants’ state court Petition.
PERTINENT STATUTES
12 U.S.C. § 1821(d)(5), Procedures for determination of claims.
(A) Determination period. (i) In general. Before the end of the 180-
day period beginning on the date any claim against a depository
institution is filed with the Corporation as receiver, the Corporation
shall determine whether to allow or disallow the claim and shall notify
the claimant of any determination with respect to such claim.
***
(D) Authority to disallow claims. (i) In general. The receiver may
disallow any portion of any claim by a creditor or claim of security,
preference, or priority which is not proved to the satisfaction of the
receiver.
12 U.S.C. § 1821(d)(6), Provision for agency review or judicial determination of

claims.
(A) In general. Before the end of the 60-day period beginning on the earlier
of—
(i) the end of the period described in paragraph (5)(A)(i) with respect
to any claim against a depository institution for which the Corporation
is receiver; or
(ii) the date of any notice of disallowance of such claim pursuant to
paragraph (5)(A)(i),
the claimant may . . . file suit on such claim . . . in 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
District Court for the District of Columbia (and such court shall have
jurisdiction to hear such claim).
12 U.S.C. § 1821(d)(10), Payment of claims.
2
(A) In general. The receiver may, in the receiver's discretion and to the
extent funds are available, pay creditor claims which are allowed by the
receiver. . . .
12 U.S.C. § 1821(d)(11), Depositor preference.
(A) In general. [A]mounts realized from the liquidation or other resolution

of any insured depository institution by any receiver appointed for such
institution shall be distributed to pay claims (other than secured claims to the
extent of any such security) in the following order of priority:
(i) Administrative expenses of the receiver.

(ii) Any deposit liability of the institution.
(iii) Any other general or senior liability of the institution
(which is not a liability described in clause (iv) or (v)).
(iv) Any obligation subordinated to depositors or general creditors
(which is not an obligation described in clause (v)).
(v) Any obligation to shareholders or members arising as a result of
their status as shareholders or members (including any depository
institution holding company or any shareholder or creditor of such
company).
12 U.S.C. § 1821(d)(13)(D), Limitation on judicial review.
Except as otherwise provided in this subsection, no court shall have

jurisdiction over—
(i) any claim or action for payment from, or any action seeking a
determination of rights with respect to, the assets of any depository
institution for which the Corporation has been appointed receiver,
including assets which the Corporation may acquire from itself as
such receiver; or
(ii) any claim relating to any act or omission of such institution or the
Corporation as receiver.
STATEMENT OF THE CASE
On February 16, 2009, Appellants American National Insurance Company,
American National Property and Casualty Insurance Company, Farm Family Life
3
Insurance Company, Farm Family Casualty Insurance Company, and National
Western Life Insurance Company, and four other insurance companies not parties
to this appeal 2 filed an Original Petition (the “Petition”)3 in Galveston County,
Texas, 122nd Judicial District Court, against JPMorgan Chase & Co. (“JPMC &
Co.”) and JP Morgan Chase Bank (“JPMC Bank”) (together referred to as
“JPMC”). Appellants alleged that JPMC obtained an unlawful profit of at least
$1.9 billion through a scheme to strip away the contract rights of Washington
Mutual Bank (“WMB”) bondholders, including these Texas-based Appellants, and
other stakeholders to the assets of WMB. Appellants asserted three Texas state
law causes of action: Count One accused JPMC of “Tortious Interference with
Existing Contract,” Count Two accused JPMC of “Breach of Confidentiality
Agreement,” and Count Three accused JPMC of “Unjust Enrichment.” No federal
claim for relief was asserted.
JPMC filed an Original Answer, Pleas to the Jurisdiction, Verified Plea and
Other Defenses on March 20, 2009. Five days later, on March 25, 2009, the FDIC,
2
These other four insurance companies had held only bonds and stock in
Washington Mutual, Inc. (“WMI”), which is in Chapter 11 bankruptcy proceedings
in the U.S. District Court for the District of Delaware. On February 18, 2010, all
claims related to WMI bonds and stocks were dismissed with prejudice. Joint
Appendix (“JA”)-239 – 245 (Docket #105). Following dismissal, four original
plaintiffs no longer had an interest in the case, and the remaining five Appellants
limited their claims to damages to their WMB bond interests. Id.
3
JA-033 – 064 (Petition, “Pet.”).
4
as Receiver for Washington Mutual Bank, Henderson, Nevada (the “FDIC-
Receiver) filed a Plea of Intervention in the Galveston County District Court. The
FDIC-Receiver intervened as “defendant” despite the fact that it was not named in
the Petition as a defendant and no wrongdoing was alleged to have been committed
by the FDIC-Receiver.
Under Texas’ liberal rules of intervention, the FDIC-Receiver was added as
a party immediately, subject to possible later challenges in the Texas state court
action. However, that same day, on March 25, 2009, before any challenges could
be filed, the FDIC-Receiver filed a Notice of Removal in the United States District
Court for the Southern District of Texas, thereby depriving the Galveston County
122nd Judicial District Court of jurisdiction to evaluate the FDIC-Receiver’s
intervention. The FDIC-Receiver then argued that, because it was now a “party” to
this action, federal jurisdiction could be grounded in “federal question”
jurisdiction. According to the FDIC-Receiver, federal jurisdiction was exclusive,
pursuant to 12 U.S.C. § 1819(b)(2)(A), which states that all civil suits “to which
the [FDIC], in any capacity, is a party shall be deemed to arise under the laws of
the United States.”
A few days later, on April 1, 2009, the FDIC-Receiver filed its Motion of
Intervenor-Defendant FDIC-Receiver to Transfer or Dismiss for Improper Venue.
In this filing, the FDIC-Receiver claimed that, since it was a “party” to this federal
5
action, the venue of the Southern District of Texas also was improper under the
FIRREA’s special venue provision, 12 U.S.C. § 1821(d)(6)(A), which it said
“protects the FDIC” from having to “defend actions at various locations throughout
the country.” Although the FDIC-Receiver had in reality invited itself to this
litigation by filing an intervention, the FDIC-Receiver now claimed that, since it
was a “party” to this federal litigation, the FIRREA venue provision mandated
dismissal or transfer to the U.S. District Court for the District of Columbia, or the
U.S. District Court sitting in the location of Washington Mutual Bank’s principal
place of business.
On April 21, 2009, Appellants filed a Motion to Remand and a Response to
the FDIC-Receiver’s Motion to Transfer. Additional filings were made in the
months that followed. On August 24, 2009, this case was reassigned to U.S.
District Judge Kenneth M. Hoyt. On September 3, 2009, Judge Hoyt denied
Plaintiffs’ Motion to Remand. 4 On September 9, 2009, Judge Hoyt denied a
motion to reconsider, and ordered this case transferred to the U.S. District Court
for the District of Columbia. 5
After transfer, the case was ultimately assigned to Judge Rosemary M.
Collyer. An Initial Scheduling Conference was held on November 6, 2009, and a
4
JA-198.
5
JA-199 – 203, 204.
6
briefing schedule was established for the filing of dispositive motions and briefs.
On December 7, 2009, Appellants filed their Motion to Dismiss the FDIC as a
Party and for Remand, or in the Alternative Dismissal Without Prejudice.6 That
same day, JPMC and the FDIC-Receiver filed separate Motions to Dismiss.7 On
March 9, 2010, the District Court heard oral arguments on the various motions to
dismiss, and took the matters under advisement. JA-246 – 322. Supplemental
briefing ensued. No discovery was conducted at any time.
On April 13, 2010, the district court issued an Order denying Appellants’
Motion to Dismiss the FDIC as a Party and for Remand and granting the separate
Motions to Dismiss that had been filed by JPMC and the FDIC-Receiver.8 On
May 10, 2010, Appellants filed a Motion to Alter or Amend Judgment and Request
for Leave to File Amended Complaint (“Amended Complaint”).9 On July 19,
2010, the district court issued an Order denying this Motion. 10 On July 20, 2010,
Appellants filed their Notice of Appeal. 11
6
Docket # 88.
7
Docket # 87 and 89.
8
JA-330 (Docket # 118); JA-323 – 329 (Docket # 117).
9
Docket #119; see JA-331 – 361 (Amended Complaint, “Am. Com.”).
10
JA-362 – 363 (Docket #124).
11
JA-364 – 365 (Docket #125).
7
STATEMENT OF THE FACTS
In 2004, JPMC & Co. recognized a weakness in its market share in fast-
growing areas of the South and West coast regions of the United States. 12 WMI
and WMB, collectively (“Washington Mutual”), possessed a strong branch
banking presence in those areas.13 In 2004, JPMC & Co. set a goal to acquire
Washington Mutual’s banking franchise and geographic market.14 In the months
and years that followed, JPMC & Co. developed and executed a scheme designed
to achieve this end.15
By the spring of 2008, circumstances were ripe for JPMC & Co. to obtain
the valuable assets of WMB through a purchase transaction. 16 Washington Mutual
faced financial stress due to market forces. 17 JPMC & Co. had previously obtained
information from Washington Mutual under a promise of confidentiality as a result
12
JA-038, 040, 334 (Pet., ¶ 24, 30; Am. Com. ¶ 10).
13
JA-041, 334 (Pet., ¶ 33; Am. Com. ¶ 10).
14
JA-041, 042, 334 (Pet., ¶ 35, 36; Am. Com. ¶ 11).
15
JA-042 – 053, 334 – 337 (Pet., ¶ 37-69; Am. Com. ¶ 11, 12 – 23).
16
JA-036, 037, 040, 336 (Pet., ¶ 20, 30; Am. Com. ¶ 17).
17
JA-044, 336 (Pet., ¶ 41, 42; Am. Com. ¶ 17).
8
of recent due diligence. 18 Therefore, in the spring of 2008, JPMC & Co. set in
motion a plan to obtain the valuable assets of WMB by way of a FDIC-Receiver,
free of obligations to bondholders, including Appellants, and other stakeholders. 19
During the spring and summer of 2008, JPMC & Co. executed a plan that
included, among other things, such unlawful means as:
• accessing Washington Mutual’s confidential financial information from
“due diligence” under false pretenses, and by other breaches of trust and
fair dealing; 20
• negotiating with Washington Mutual in bad faith while at the same time
negotiating with the FDIC (using improperly-obtained information); 21
18
JA-038 – 043, 336 – 338 (Pet., ¶ 23, 25, 31, 32, 37; Am. Com. ¶ 20 – 25). See
JA-044 (Pet.¶ 38) (In announcing the WMB purchase on October 2, 2008, a JPMC
executive boasted, “During the last few years . . . we kept track of banks that
would complement our franchise and help us . . . Washington Mutual consistently
was at the top of the list.”).
19
JA-036, 037, 040, 041, 044, 337 – 338 (Pet., ¶ 20, 21, 32, 43; Am. Com. ¶ 22,
23, 26).
20
JA-048, 050, 337 – 338, 341 – 345 (Pet., ¶ 55, 58; Am. Com. ¶ 24 – 26, 36 – 40,
45 – 50).
21
JA-049 – 050, 339 – 345, 348 – 349 (Pet., ¶ 58; Am. Com. ¶ 31– 33, 36 – 41, 45
– 52, 64).
9
• disclosing JPMC & Co.’s negotiations with the FDIC-Receiver to outside
parties, and preventing and/or deterring potential suitors from negotiating
with Washington Mutual; 22
• using Washington Mutual’s confidential information to present
misleading estimates of Washington Mutual’s financial health to rating
agencies and negatively affecting WMB’s credit ratings; 23
• disclosing confidential and misleading information to news media; 24
• leaking confidential information and misinformation to the public and
inciting depositors to withdraw funds from WMB; 25
• disclosing confidential information to JPMC & Co. investors; 26
• pressuring government regulators to seize WMB and sell its assets to
JPMC, despite the fact that JPMC had agreed to not use Washington
22
JA-040 – 041, 046, 339, 348 (Pet., ¶ 32, 46; Am. Com. ¶ 29, 30, 62).
23
JA-046, 340, 341, 344 (Pet., ¶ 46; Am. Com. ¶ 34, 35, 55, 56).
24
JA-040 – 041, 046 – 047, 050, 346 – 347 (Pet., ¶ 32, 46, 52, 60; Am. Com. ¶ 57
– 59).
25
JA-046, 340, 341, 346 (Pet., ¶ 46; Am. Com. ¶ 57 – 60, 63).
26
JA-040 – 041, 046 – 047, 051, 346 – 347 (Pet., ¶ 32, 61; Am. Com. ¶ 61).
10
Mutual’s confidential information beyond the permitted uses in the
confidentiality agreement; 27 and
• using confidential information in breach of its promise and trust in order
to craft a bid to the FDIC-Receiver that would ensure obtaining the assets
at a below-market value “fire-sale” price. 28
By late September of 2008, JPMC & Co. had succeeded in influencing the
financial and business circumstances faced by Washington Mutual to the point
where government regulators saw no reasonable option but to seize WMB and sell
its assets to the only “available” purchaser—JPMC.29 Therefore, on September 25,
2008, WMB was seized by the Office of Thrift Supervision (“OTS”) and placed
into an FDIC receivership. 30 JPMC & Co. used its wholly owned subsidiary,
JPMC Bank, to purchase WMB assets from the FDIC-Receiver. 31 The assets
27
JA-046, 049 – 051, 337, 344, 349 (Pet., ¶ 46, 48, 58, 61; Am. Com. ¶ 24, 47, 66).
28
JA-037, 040, 047 – 050, 337, 340, 345 – 347 (Pet., ¶ 21, 22, 32, 53, 58; Am.
Com. ¶ 61, 64 – 72).
29
JA-036 – 037, 040 – 041, 044 – 046, 050 – 052, 345 – 348 (Pet., ¶ 20, 21, 32, 43,
45, 59, 46, 47, 48, 60, 62, 65; Am. Com. ¶ 53, 55, 57 – 63).
30
JA-052, 350 (Pet., ¶ 64; Am. Com. ¶ 70).
31
JA-052 – 053, 350 – 351 (Pet., ¶ 67; Am. Com. ¶ 72).
11
obtained by JPMC were freed of obligations to bondholders, and the price paid by
JPMC Bank for the WMB assets was far below the fair value of the assets. 32
Shortly after the deal, JPMC & Co. admitted, in fourth quarter financial
reports, that the fair value of the assets it obtained from WMB was $1.3 billion
more than the $1.9 billion it had paid, and booked an extraordinary gain in that
amount. This gain was in addition to a $581 million extraordinary gain reported in
October 15, 2008 as being the result of WMB’s acquisition.33
SUMMARY OF ARGUMENTS
I. The District Court erred in finding that Appellants’ claims against
JPMC were subject to the claims process and “jurisdictional bar” of FIRREA. As
this Court has already held in Auction Co. v. FDIC, 141 F.3d 1198, 1201 (D.C. Cir.
1998), FIRREA’s jurisdictional bar extends only as far as the scope of the
administrative claims process. FIRREA’s administrative claims process extends
only to claims and actions against, and actions seeking a determination of rights
with respect to, the assets of failed financial institutions for which the FDIC serves
as receiver. This case is based on JPMC’s misconduct, not any successor liability
on the part of JPMC or misconduct of the FDIC-Receiver. FIRREA’s
administration process and jurisdictional bar cannot govern claims against third
32
JA-052 – 053, 351 (Pet., ¶ 67, 68; Am. Com. ¶ 75).
33
JA-053, 351 (Pet., ¶ 68; Am. Com. ¶ 75).
12
parties based on injuries caused by the third parties’ misconduct, such as the
Appellants’ claims in the instant case.
Moreover, application of the jurisdictional bar where there exists no
administrative procedure, such as in the instant case, violates the Due Process
Clause. Due Process prevents the FDIC-Receiver from extending FIRREA’s
exclusive remedy provision to the Appellants’ lawsuit.
II. The District Court erred in ruling that the Appellants did not allege
sufficient facts in their Petition to support a finding that JPMC’s actions were a
substantial cause of the chain of events that resulted in the loss of the Appellants’
contract rights in their WMB bonds through the sale of assets by the FDIC-
Receiver. To the contrary, Appellants’ Petition describes JPMC’s plan to obtain
WMB’s assets, stripped of obligations to bondholders such as Appellants, through
the FDIC-Receiver. Appellants explained the steps, and the unlawfulness of each
step, that JPMC took to bring about its intended result. The FDIC-Receiver’s sale
of WMB assets to JPMC was merely the final step in a chain of events intended
and caused by JPMC. Therefore, the Appellants’ injuries are “fairly traceable” to
JPMC’s unlawful actions.
III. The District Court erred in failing to explain why its dismissal was
being entered with prejudice, and abused its discretion by refusing to grant
Appellants leave to amend their state court petition. It is an abuse of discretion for
13
a district court to deny leave to amend a complaint unless there is sufficient reason,
such as undue delay, bad faith, dilatory motive, repeated failure to cure
deficiencies by previous amendments, or futility of amendment. Here, such
grounds did not exist.
In fact, the Appellants’ Amended Complaint addressed issues identified in
the District Court’s Memorandum Opinion. Particularly, Appellants, in their
Amended Complaint, included facts that became known since the filing of the
Petition and expanded on their allegations that the Appellants suffered injuries
before the FDIC-Receiver was even created as a result of JPMC’s misconduct.
However, the District Court dismissed the action with prejudice, without
explaining why a dismissal with prejudice was needed.
ARGUMENT AND CITATIONS OF AUTHORITY
The District Court dismissed Appellants’ lawsuit on two grounds. The
District Court concluded that FIRREA’s exclusive claims process bars Appellants’
lawsuit because “Plaintiffs’ claims against JPMorgan Chase directly ‘relate’ to an
‘act’ of the FDIC-Receiver: the agency’s ‘fire sale’ of Washington Mutual Bank’s
assets” and Appellants did not file a proof of claim against JPMC with the FDIC-
Receiver.34 Am. Nat’l Ins. Co. v. JPMorgan Chase & Co., et al., 705 F. Supp. 17,
34
As noted in prior pleadings, although not required, Appellants did in fact file a
proof of claim with the FDIC-Receiver. See Declaration of James Roquemore,
submitted in support of Plaintiffs’ Response and Opposition to Motion of the
14
20 (D.D.C. 2010). In addition, the District Court concluded that Appellants
lacked standing to sue JPMC because Appellants’ injuries were not “fairly
traceable” to JPMC’s action. Id. The District Court found that Appellants’
injuries were not “fairly traceable” to JPMC’s actions based on a mistaken finding
that “[t]he FDIC-Receiver is a necessary party because Appellants’ injuries depend
on the independent intervening sale by the FDIC-Receiver.” Id. Appellants
sought to correct these legal errors in their motion to alter or amend the judgment,
and for leave to amend, but were rejected. Accordingly, reversal is warranted.
I. FIRREA does not apply to Appellants’ action because Appellants

seek only general damages against JPMC arising from JPMC’s
own misconduct and allege no wrongdoing by WMB or the FDIC-
Receiver.
The District Court concluded that FIRREA applied to bar Appellants’ action
against JPMC. Am. Nat’l Ins. Co., 705 F. Supp. at 20. This legal interpretation of
FIRREA is subject to de novo review, see Grant Thornton L.L.P. v. Office of
Comptroller, 514 F.3d 1328, 1331 (D.C. Cir. 2008) (“We review the . . .
interpretation of FIRREA and related statutory provisions de novo”), and should be
reversed. FIRREA does not apply to this lawsuit because FIRREA does not
FDIC-Receiver to Dismiss the petition Pursuant to Federal Rules of Civil

Procedure 12(b)(1) and 12(c). JA-221 – 230. However, Appellants contend that
their claims against JPMC are not subject to the FIRREA claims administration
process or jurisdictional bar. The District Court has had no occasion to determine
the sufficiency of Appellants’ proofs of claims filed with the FDIC-Receiver with
respect to claims asserted against JPMC.
15
contemplate administration by the FDIC-Receiver of claims, such as the ones in
the instant case, that are asserted against third parties as a result of the third parties’
wrongdoing that injured creditors of a financial institution in receivership.
FIRREA provides no process in which to administer such claims. Because
FIRREA’s jurisdictional bar extends only as far as the scope of the claims process,
the jurisdictional bar cannot apply to this lawsuit.
A. Appellants’ claims against JPMC could not have been

prosecuted under FIRREA and therefore are not subject to
FIRREA’s “jurisdictional bar”.
Congress gave the FDIC-Receiver authority to act as receiver “for the
purpose of liquidation or winding up the affairs of an insured Federal depository
institution or District bank . . .” 12 U.S.C. § 1821(c)(2)(A)(ii). To this end,
FIRREA established a procedure for review of claims against failed financial
institutions and claims against the FDIC as receiver for such financial institutions.
See 12 U.S.C. § 1821(c)(1) (appointment to act as receiver), (d)(3)(A) (FDIC-
Receiver may determine claims), (d)(5) (procedures for determination of claims –
FDIC shall determine whether to allow or disallow “any claim against a depository
institution” for which the FDIC is receiver); (d)(6) (providing for judicial review of
“any claim against a depository institution for which the Corporation is receiver”);
(d)(10) (providing for payment of “creditor claims which are allowed by the
receiver”); and (d)(11) (establishing priority of payment of claims). If a claimant
16
does not exhaust the administrative claims procedure of § 1821(d)(3) – (d)(11),
then 12 U.S.C. § 1821(d)(13)(D) precludes judicial review.
FIRREA thus applies to “claims and actions against, and actions seeking a
determination of rights with respect to, the assets of failed financial institutions for
which the FDIC serves as receiver[.]” Freeman, v. FDIC, 56 F.3d 1394, 1399 –
1400 (D.C. Cir. 1995). The FIRREA jurisdictional bar, 12 U.S.C. §
1821(d)(13)(D), does not extend further than (1) the scope of the claims
administration process created by § 1821(d)(3) – (11); see Auction Co. v. FDIC,
141 F.3d 1198, 1200 (D.C. Cir. 1998) (12 U.S.C. § 1821(d)(6)(A) and (d)(13)(D)
apply to the same “claims”); or (2) the limits of the Due Process Clause of the
United States Constitution; see Freeman., 56 F.3d at 1403 (“in some
circumstances, the jurisdictional bar of § 1821(d) might also implicate due process
concerns by denying an aggrieved party any avenue of relief, administrative or
judicial.”) (emphasis in original); Auction Co., 141 F.3d at 1201 (constitutional
problem exists if jurisdictional bar is interpreted to be broader than claims
process); National Union Fire Ins. Co. of Pittsburgh v. City Savings, 28 F.3d 376,
390 (3d Cir. 1994) (when a party seeks damages, “a complete bar of jurisdiction
[imposed by 12 U.S.C. § 1821(d)(13)(D)], in both administrative proceedings and
17
courts of law, would as applied to that party constitute a deprivation of property
without due process of law”). 35
This Court, in Auction Co. considered whether the jurisdictional bar of 12
U.S.C. § 1821(d)(13)(D) applied to a contract action brought against the FDIC
under the Tucker Act, set forth in 28 U.S.C. § 2401(a). This Court reasoned that
12 U.S.C. § 1821(d)(6)(A) and (d)(13)(D) “set up a standard exhaustion
requirement: (d)(6)(A) routes claims through an administrative review process, and
(d)(13)(D) withholds judicial review unless and until claims are so routed.” 141
F.3d. at 1200. This Court determined that the “obvious solution” to the
“interpretive problem” regarding the scope of (d)(13)(D) “is to read (d)(6)(A) and
(d)(13)(D) to apply to the same claims.” Id.
Auction Co. thus held that 12 U.S.C. § 1821(d)(13)(D)(ii) did not apply to
bar the plaintiff’s action. This Court interpreted the phrase, “claim relating to any
act or omission of . . . the Corporation as receiver” to mean “claim relating to any
act or omission of . . . the Corporation as receiver for such institution.” Id. at 1201
(emphasis in original). Thus, a claim against the FDIC in its corporate capacity –
or by extension any claim against any third party – would not be subject to
FIRREA. The Court found it necessary to imply such language so as to avoid the
result—not intended by Congress—of granting immunity for a class of claims. Id.
35
The Due Process limitations on FIRREA’s jurisdictional bar are discussed
below.
18
As this Court stated, “We are confident that Congress did not intend such a result,
which would raise serious constitutional questions.” Id.
In contrast, in Freeman, the FDIC, as receiver, obtained a note that was
secured by the plaintiffs’ home. The FDIC sought to foreclose on the plaintiffs’
home. The plaintiffs filed suit to enjoin the FDIC and for damages against the
FDIC for the wrongful foreclosure. The plaintiffs argued that their claims were not
subject to FIRREA because the plaintiffs were “debtors” of the failed financial
institution, and FIRREA referred only to “creditor” claims.
The Court compared the scope of the FIRREA claims process, 12 U.S.C. §
1821(d)(3) – (5), with the jurisdictional bar, 12 U.S.C. § 1821(d)(13)(D), and
found that that FIRREA covered the actions by the debtors because the debtors’
suit sought “a determination of rights with respect to” an asset of a failed bank for
which the FDIC served as receiver, i.e. the loan by the bank to the debtors upon
which the FDIC sought to foreclose. Id. at 1399 – 1400. The Court noted that
Congress’ “core purpose” in enacting FIRREA was 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.
at 1401 (citations and punctuation omitted). The Court concluded that the debtors’
claims, which sought a determination of their rights and obligations under the loan
19
held by the FDIC, could have been administered by the FDIC’s administrative
claims process. Id. at 1404.
Auction Co. and Freeman show that the phrase “related to” as used in 12
U.S.C. § 1821(d)(13)(D)—contrary to JPMC’s and the FDIC’s interpretation—
extends FIRREA’s reach only to such claims that are susceptible to administration
by the claims administration process of § 1821(d)(5) – (11). The only claims that
are susceptible to administration are claims and actions against, and actions
seeking a determination of rights with respect to, the assets of failed financial
institutions for which the FDIC serves as receiver. Freeman, 1399 – 1400.
Claims against third parties based on their own wrongdoing are not susceptible to
administration by a FDIC receivership under FIRREA.
For example, Section 1821(d)(5)(A)(i) (Procedures for determination of
claims) contemplates the filing of claims only against a depository institution:
Before the end of the 180-day period beginning on the date any claim
against a depository institution is filed with the Corporation as
receiver, the Corporation shall determine whether to allow or disallow
the claim and shall notify the claimant of any determination with
respect to such claim.
(Emphasis added). Similarly, Section 1821(d)(6) (Provision for agency review or
judicial determination of claims) references only “claims against a depository
institution” in the entire section providing for judicial review of the FDIC
receivership claims review process. Section 1821(d)(10)(A) (Payment of claims),
20
gives the FDIC-Receiver the authority to, “in the receiver’s discretion and to the
extent funds are available, pay creditor claims which are allowed by the receiver . .
.” (emphasis added).
FIRREA makes no provision for determination of, payment for, or judicial
review of claims against third parties. Claims against third parties such as JPMC,
based upon their own misconduct, are therefore not susceptible of administration
by the FIRREA claims process. Accordingly, FIRREA’s jurisdictional bar found
in 12 U.S.C. § 1821(d)(13)(D) does not apply to such claims against third parties.
It is not remarkable that several other Circuits that have considered whether
claims against third parties are subject to FIRREA have concluded that such claims
may proceed independently of the receivership claims administration process. See,
e.g., Henrichs v. Valley View Dev., 474 F.3d 609, 614 (9th Cir.), cert. denied, 552
U.S. 1037 (2007) (FIRREA’s “requirement to exhaust administrative remedies
applies only in an action against the FDIC as receiver . . . the statute does not reach
assignees of assets once owned by the FDIC.”); Rosa v. RTC, 938 F.2d 383, 394
(3d Cir. 1991) (lawsuit against purchaser of assets from FDIC not subject to
FIRREA’s jurisdictional bar); Hudson United Bank v. Chase Manhattan Bank of
Connecticut, N.A., 43 F.3d 843, 847, n.10 (3d Cir. 1994) (“with respect to [Section
1821(d)(13)(D), its subsection] (i) applied only to claims against failed institutions
while (ii) applied to claims against failed institutions specified in (i) as well as to
21
claims against the receiver of such institutions”); FDIC v. McFarland, 243 F.3d
876, 887 (5th Cir. 2001) (“It would be absurd . . . to interpret section
1821(d)(13)(D) as assignable to the current holder. . . . When the FDIC
relinquishes ownership, the procedures governing its role as a receiver no longer
apply”); Bank One v. Elms, 764 F. Supp. 85 (N.D. Tex. 1991) (FIRREA does not
apply to suit against acquirer of assets from FDIC); Hickey v. NCNB Texas Nat.
Bank, 763 F. Supp. 896 (N.D. Tex. 1991) (same); Team Bank v. Barfield, 145
F.R.D. 69, 72 (N.D. Tex. 1992) (same).
For example, Bank of New York v. First Millennium, 607 F.3d 905 (2d Cir.
2010), involved a failed internet-only bank that was seized and put into an FDIC
receivership. The bank had been funded by investors who purchased notes issued
by a trust. The trust filed an interpleader action in New York because of
competing claims to its funds by the trust’s investors and the FDIC.
The FDIC argued for an expansive reading of the “relating to” language
found in 1821(d)(13)(D)(ii) (“[e]xcept as otherwise provided in this subsection, no
court shall have jurisdiction over . . . any clam relating to any act or omission of
[an] institution [in receivership] or the Corporation as receiver.”). 607 F.3d at 920
– 21. The court concluded that the FDIC’s reading was “erroneous” and
explained:
[1821(d)(13)(D)(ii)] is not an isolated edict, but is part of FIRREA’s

statutory scheme, which was intended to force plaintiffs with claims
22
against failed depository institutions to exhaust administrative

remedies before coming to federal court. . . . Courts interpreting the
broad language of (d)(13)(D)(ii) have universally concluded that this
provision bars only claims that could be brought under the
administrative procedures of §1821(d), not any claim at all involving
the FDIC.
Id. (citing Auction Co., among other cases). The court concluded that the
interpleader action was not an administrative claim that could be administered by
FIRREA because the noteholders – like Appellants in the instant case – “assert no
claims against the FDIC as receiver for [the failed bank].” Id. at 920. The
noteholders were therefore not bound by the jurisdictional limitations or other
procedural requirements of § 1821(d). Id.
Hoxeng v. Topeka Broadcomm, 911 F. Supp. 1323 (D. Kan. 1996) also is
similar to the instant case in material respects. Hoxeng involved a claim brought
against an agent of the FDIC for tortiously interfering with a contract to purchase
receivership property. The FDIC had obtained rights to property through a default
on a loan issued by the predecessor to a bank in receivership, and hired the
defendant to facilitate a sale of the property. The defendant arranged a contract
with the plaintiff for the property, but later caused that contract to be breached in
favor of a higher bidder. The plaintiff sued the defendant (the FDIC’s agent) for
tortious interference with a contract. In upholding a jury verdict in favor of the
plaintiff, the court held that the neither the receivership claims process nor the
jurisdictional bar of FIRREA applied to the claims against the agent. Id. at 1337.
23
The court found it significant that although the underlying contract involved FDIC
receivership property, the plaintiff did not, in the lawsuit, present himself as a
creditor of the failed bank, nor did he make any claim against the assets of the
bank. Further, the plaintiff made no claim relating to any act or omission of the
FDIC as receiver. Id. at 1337 – 1338. The lawsuit was therefore not subject to
FIRREA’s jurisdictional bar.
Before the District Court, below, JPMC and FDIC-Receiver primarily relied
on two wholly distinguishable cases in a mistaken attempt to extend FIRREA to
claims against third parties. 36 First, in Village of Oakwood v. State Bank & Tr. Co.,
539 F.3d 373 (6th Cir. 2008) “uninsured depositors” sued a purchaser of assets
from the FDIC receivership in district court. The depositors claimed that the
purchaser was liable because of its: “1) status as a successor to [the failed bank in
receivership]; 2) role in aiding and abetting the FDIC’s alleged breach of fiduciary
36
JPMC also cited below an unpublished case, diSibio v. Mission Nat’l Bank, 127
F. App’x 950, 951 (9th Cir. Apr. 11, 2005) (unpublished). In diSibio a pro se
litigant alleged that an assuming bank reduced interest rates on her account. The
court upheld dismissal, holding that the claims were subject to the receivership
claims administration process. Five months later, in an amendment to its opinion,
the court explained that dismissal of the action was appropriate because the
plaintiff’s claims “were based on [the failed institution’s] actions; those claims
were defaulted because they had to be raised before the RTC before [the plaintiff s]
could proceed to federal court.” diSibio v. Mission Nat’l Bank, 2005 U.S. App.
LEXIS 19514 *2 (9th Cir. Sept. 7, 2005) (emphasis added). However, here, unlike
diSibio and the other cases cited by JPMC, the claims of the Appellants are not
based on allegations of actionable wrongdoing by the failed bank (here, WMB) or
the FDIC-Receiver.
24
duty to the uninsured depositors; 3) position as a constructive trustee; and 4)
breach of contract with the uninsured depositors.” Village of Oakwood, 519 F.
Supp. 2d 730, 732-733 (N.D. Ohio 2007). No claim of wrongdoing was made
against the purchaser, except for assisting the FDIC in defrauding the depositors
and in breaching a contract, the liabilities for which it did not assume. The court
concluded that “all of their claims against [the acquiring bank] are directly related
to acts or omissions of the FDIC as the receiver of [the failed bank],” and that 12
U.S.C. § 1821(d)(13)(D)(ii) therefore barred their claims. Village of Oakwood,
539 F.3d at 386 (emphasis added).
Second, in American First Federal, Inc. v. Lake Forrest Park, Inc., 198 F.3d
1259 (11th Cir. 1999), a successor bank purchased a note from an RTC-
receivership and then sought to foreclose on the note. The defendant
counterclaimed, and sought to offset the amounts owed under the note by damages
alleged to have arisen as a result of the failed bank’s wrongful failure to release the
balance of the original loan. Id. at 1261. The court held that the defendant’s
counterclaim, which stemmed from the failed bank’s misconduct, “clearly” was a
claim “against the assets of the failed institution” to which FIRREA and its
exclusive remedy provision applied to bar the claim. Id. at 1265. Compare White
v. Chase Bank USA, N.A., 2010 U.S. Dist. LEXIS 102908, *16 – 17 (S.D. Ohio
Sept. 28, 2010) (FIRREA did not apply to claim against Chase Bank for unfair
25
collection practices relating to a debt acquired from the WMB FDIC receivership
because the unfair collection claim arose out of “the conduct of Chase Bank
directly (rather than challenging the conduct of Chase Bank as a successor to
Washington Mutual)”).
Even under Village of Oakwood’s or American First Federal’s broad
interpretation of FIRREA as extending to claims against third parties when the
claims “directly relate” to the actions of FDIC as receiver or where the claims rest
on a successor liability theory, the facts here are wholly distinguishable. Here,
unlike American First Federal, Appellants do not allege that JPMC is liable for the
Appellants’ injuries because of its status as successor to WMB. Further,
Appellants do not allege that JPMC “aid[d] and abet[ted]” any breach of duty by
the FDIC or that the FDIC was a wrongdoer in any capacity, let alone the principal
wrongdoer, as was alleged in Village of Oakwood. Village of Oakwood, 519 F.
Supp. 2d at 732 – 733. Instead, Appellants allege that JPMC’s own misconduct
caused injuries to Appellants.
It is doubtful the existing authority in this Circuit, as set forth in Auction
Co., supra, would extend FIRREA to cover claims against third parties under any
circumstances. However, in the circumstances of the instant case – where JPMC’s
own misconduct caused the injuries of the Appellants – no case exists in this
Circuit or in any other Circuit, including Village of Oakwood, American First
26
Federal, or the unpublished diSibio, that warrants extending FIRREA’s
administrative claims process and jurisdictional bar to claims against a private third
party for injuries caused to another private party as a result of the third party’s
unlawful conduct.
B. Constitutional Due Process Clause prevents the FDIC-Receiver

from extending FIRREA’s exclusive remedy provision to
Appellants’ lawsuit.
Under FIRREA, the only avenue for judicial review of a “claim” is provided
in 12 U.S.C. § 1821(d)(6). Section 1821(d)(6) contemplates judicial review of
only “claim[s] against a depository institution for which the[FDIC]is receiver[.]”
Because Appellants’ claims are not against a depository institution for which the
FDIC is receiver, nor are they against the FDIC-Receiver, FIRREA provides no
avenue for review of Appellants’ claims. Thus, if FIRREA’s jurisdictional bar
applied to Appellants’ claims against JPMC, then judicial review would be wholly
precluded. 12 U.S.C. § (d)(13)(D) (“Except as otherwise prided in this subsection,
no court shall have jurisdiction . . .”).
The result of the JPMC’s and the FDIC-Receiver’s interpretation of
FIRREA would be to completely preempt and bar Appellants’ claims. This was
not Congress’ intent or FIRREA’s purpose. See Coit Independence Joint Venture
v. FSLIC, 489 U.S. 561, 587 (1988) (the enabling legislation of FSLIC and the
Bank Board, predecessors to FDIC-Receiver, does not preempt state law); id. at
27
589 (Blackmun, J., concurring) (there is no “sound policy justification” for using
the doctrine of exhaustion of administrative remedies as a basis for preempting
state law). See Wyeth v. Levine, 129 S. Ct. 1187, 1194 – 95 (2009) (no preemption
of traditional state law claims will occur unless Congress’ purpose is “clear and
manifest”); Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8 (2003) (“a state claim
may be removed to federal court in only two circumstances—when Congress
expressly so provides . . . or when a federal statute wholly displaces the state-law
cause of action through complete pre-emption”). Cf. Cuomo v. Clearing House
Ass’n, L.L.C., 129 S. Ct. 2710 (2009) (rejecting federal agency’s interpretation of
National Banking Act, holding that a “reasonable interpretation” of the Act did not
preempt state law enforcement against national banks).
Application of FIRREA to Appellants’ action against JPMC would violate
Appellants’ rights under the Due Process Clause of the Fifth Amendment of the
U.S. Constitution. See Logan v. Zimmerman Brush Co., 455 U.S. 422, 428 – 31
(1982) (cause of action is a property right protected by the Due Process Clause);
Boddie v. Connecticut, 401 U.S. 371, 375 – 80 (1971)). See also Freeman v.
FDIC, 56 F.3d at 1403 (“in some circumstances, the jurisdictional bar of § 1821(d)
might also implicate due process concerns by denying an aggrieved party any
avenue of relief, administrative or judicial”); Auction Co., 141 F.3d at 1201
(granting immunity to all claims arising from all acts the FDIC takes “as
28
receivership,” except to the extent that those claims could be handled by an
administrative process open only to claims “against a depository institution,”
would raise serious constitutional questions); National Union Fire Ins. Co. of
Pittsburgh v. City Savings, 28 F.3d at 390 (barring damage claims in both
administrative proceedings and courts of law would constitute a deprivation of
property without due process of law) (citing Coit Independence Joint Venture, 489
U.S. at 583-587).
Texas state law provides Appellants the right to bring the causes of action
asserted in the Petition. Appellants’ right to seek redress from JPMC is wholly
independent of any right to file a proof of claim with the WMB receivership based
on WMB’s obligation to Appellants. To bar Appellants from asserting the claims
in the instant action without compensation would mean that FIRREA would effect
a taking without just compensation in violation of the Due Process Clause of the
United States Constitution. See, e.g., Stop the Beach Renourishment, Inc. v. Fl.
Dep’t of Envr. Protection, et al, 78 U.S.L.W. 4578, 130 S. Ct. 2592, 2601 (2010)
(slip op.) (acknowledging that the Takings Clause is not limited to the legislative
branch and can apply to judicial decree).
C. Congress did not grant the FDIC-Receiver authority over

claims by creditors of a failed bank against third parties.
Congress limited the FDIC-Receiver’s authority to pursue claims against
third parties to claims owned by the “insured depository institution, and of any
29
stockholder, member, accountholder, depositor, officer, or director of such
institution with respect to the institution and the assets of the institution.” 12
U.S.C. § 1821(d)(2)(A)(i). Notably absent from Section 1821(d)(2)(A)(i) is
reference to claims owned by creditors of an insured depository institution. This is
because Congress intended not to grant the FDIC-Receiver the right to pursue or
preclude claims owned by creditors of a depository institution.
The canon of statutory construction – inclusio unius est exclusio alterius –
the “inclusion of one is the exclusion of the other” – applies to § 1821(d)(2)(A)(i).
See O’Melveny & Myers v. FDIC, 512 U.S. 79, 86 (1994) (applying canon); see
also Moustakis v. City of Fort Lauderdale, 388 Fed. Appx. 820, 821 (11th Cir.
2009) (defining and applying the principle of “inclusio unius est exclusio alterius”)
(citation omitted). As the Supreme Court stated in O’Melveny:
[The FDIC] argues that section 1821(d)(2)(A)(i) should be read as a

nonexclusive grant of rights to the FDIC receiver, which can be
supplemented or modified by federal common law; and that FIRREA
as a whole, by demonstrating the high federal interest in this area,
confirms the courts’ authority to promulgate such common law. This
argument is demolished by those provisions of FIRREA which
specifically create special federal rules of decision regarding claims
by, and defenses against, the FDIC as receiver. Inclusio unius,
exclusion alterius.
O’Melveny & Myers, 512 U.S. at 86 (citations omitted) (emphasis in original). The
Court warned, “To create additional ‘federal common-law’ exceptions is not to
‘supplement this scheme, but to alter it.’” Id. at 87.
30
The legislative history of 12 U.S.C. § 1821(d)(2)(A)(i) demonstrates that
bondholder actions against third parties were not intended to be included under
FIRREA. When that section was originally enacted by Congress prior to FIRREA,
the term “stockholder” was not included. The term was only added when the
section was amended as part of the FIRREA legislation in 1989. See Suess v.
United States, 33 Fed. Cl. 89, 94-95 (Ct. Cl. 1995). If § 1821(d)(2)(A)(i) merely
listed examples of a much more expansive group, no purpose would have been
served by Congress’ decision to add “shareholders” to the list. Significantly,
Congress could have – but did not – amend § 1821(d)(2)(A)(i) to include
“bondholders.” Congress’ action in including “stockholders” represents a
conscious exclusion of “bondholders,” under the legal doctrine “inclusio unius est
exclusio alterius” set forth by the Supreme Court.
Further, the legislative history of FIRREA demonstrates that Congress did
not intend to give the FDIC control over bondholder actions against third parties.
In 1989, Congress rejected an amendment to FIRREA that “would have given the
FDIC priority in claims against directors, officers, attorneys, and other third party
agents of a failed savings institution over shareholders, depositors, and creditors.”
See FDIC v. Jenkins, 888 F.2d 1537, 1538 n. 1 (11th Cir. 1989) (discussing
legislative history) (emphasis added). As the Congressional Record reports:
Of most concern to the conferees was that portion of section 214 of S.

774 that would have . . . given the FDIC priority in claims against
31
directors, officers, attorneys, and other third party agents of a failed

savings institution over shareholders, depositors, and creditors. . . .
[G]iving the FDIC an absolute priority would undermine fraud

enforcement, would be potentially unfair to private plaintiffs who
were innocent victims of wrongdoing, and would be at cross purposes
with the thrust of the savings and loan legislation.
If the FDIC was granted an absolute priority, private parties would

have little chance of recovery and as a result would no longer bring
fraud suits against bank officers and others guilty of wrongdoing. . . .
[T]he Securities and Exchange Commission . . . argued persuasively
that granting such a priority would therefore have a serious adverse
impact on enforcement efforts. Private actions, the SEC stated, are a
necessary supplement to the enforcement efforts of the SEC and the
Department of Justice, which do not have the resources to enforce the
law on their own. . . .
The Judiciary Committee conferees – on a bipartisan basis and

supported by Banking Committee conferees – insisted that all of
proposed new subsection (o), including the priority provision, be
deleted from the final legislation. The Senate conferees thereafter
agreed to recede and the provision is not included in the conference
report.
FIRREA Act of 1989, 1989 FIRREA Legis. Hist. 50; 135 Cong. Rec. H. 4974-
5005, *H4985 (Aug. 3, 1989 (cited in Statement of Rep. Glickman, member of the
Committee on the Judiciary).
If the FDIC was not intended to have priority over claims by injured private
plaintiffs against third parties, as this legislative history shows, it follows that the
Congress did not intend to give the FDIC authority to administer, control or
preempt private parties’ claims against third party wrongdoers. It also follows that
FDIC-Receiver lacks legal authority to immunize JPMC for its own misconduct.
32
The instant case exemplifies the type of case that concerned Congress in its
drafting of FIRREA. Appellants are private plaintiffs who were innocent victims
of wrongdoing who suffered direct injury as a result of JPMC’s misconduct. The
FDIC-Receiver’s efforts to extend its jurisdiction over the instant case undermines
Appellants’ efforts to investigate JPMC’s wrongdoing (the FDIC has shown no
inclination to investigate Appellants’ allegations), is fundamentally unfair to
Appellants, and is contrary to the public policy that supports private actions as a
means to punish and deter wrongdoers in commercial transactions.
Greenfield v. Shuck, 867 F. Supp. 62 (D. Mass. 1994), is instructive. In
Greenfield, noteholders alleged that a failed bank’s directors misrepresented the
bank’s condition in an effort to secure badly needed capital. Id. at 67. At issue on
appeal was who was entitled to a priority to assets of third party wrongdoers as
between the Resolution Trust Corporation (“RTC”) (the predecessor of the FDIC)
and noteholders. The court found that the noteholders asserted direct claims, and
refused to allow the RTC to stay the proceedings, reasoning:
When, as here, subordinated noteholders are allegedly fraudulently

induced to purchase subordinated notes, their action against the
officers and directors arises not from the contract represented by the
security but from the tortious violation of statutory and common law
norms. They ask recovery not against the assets of the corporation but
against the tortfeasor themselves. The relative priorities established in
the notes themselves are immaterial to such causes of action. Equity
and common sense dictate this result.
Id. at 73.
33
Here, as in Greenfield, Appellants have asserted direct claims against JPMC
for the injuries caused by the wrongdoing of JPMC, and do not seek any recovery
from the assets of WMB. FIRREA provides no basis to prevent Appellants from
moving this case forward by “promptly addressing the merits of the underlying
claims against [JPMC].” Greenfield at 73, n. 18.
D. Extension of FIRREA to claims against third parties conflicts

with positions taken by the FDIC-Receiver in other similar
circumstances.
In 2007, the FDIC asserted to the United States Supreme Court a position in
stark contradiction to the one posited in the instant case. 37 In Henrichs v. Valley
View Development, the FDIC sought to uphold the Ninth Circuit’s decision
reported at 474 F.3d 609 (9th Cir. 2007). In the underlying case, a plaintiff had
challenged an adverse state court judgment regarding the right to assets distributed
by the FDIC. The plaintiff contended, among other things, that the state court
lacked jurisdiction because of the jurisdictional bar of FIRREA, 12 U.S.C.
§1821(d)(13)(D). The Ninth Circuit held that “because the FDIC was neither a
party to the state court lawsuit nor did it retain an interest in the previously
37
See JA-129-147 (Brief for the Federal Deposit Insurance Corporation in
Opposition to Petition for Writ of Certiorari, Henrichs v. Valley View Dev., No. 07-
76, U.S. Supreme Court); see Henrichs v. Valley View Dev., 474 F.3d 609 (9th
Cir.), cert. denied, 128 S.Ct. 647 (2007).
34
assigned note, FIRREA does not confer exclusive federal jurisdiction over [the
plaintiff’s] claims.” Id. at 614.
The FDIC, in seeking to uphold the Ninth Circuit’s decision, explained the
limited scope of FIRREA with respect to claims against third parties:
Section 1821(d)(13)(D) applies only in an action against the FDIC. . .

It does not apply in an action . . . against a private party who owns an
asset that was formerly held by an FDIC receivership . . . Section
1821(d)(13)(D) does not apply to claims that are not susceptible of
resolution through the administrative procedure, such as claims
against a private party who hold an asset that was once held by an
FDIC receivership[.]38
Consistent with this position, in the instant case on December 10, 2008, the
FDIC-Receiver sent to Appellants a letter “to creditors/claimants giving notice of
filing of claims to the FDIC as Receiver of Washington Mutual Bank.” 39 This
letter, with a subject reference of “Notice to Creditor – Proof of Claim,” stated:
The records of the Failed Institution (or information that has come to
the attention of the Receiver) indicate that you may have a claim
against the Failed Institution. If, in fact, you do not have a claim
against the Failed Institution, please disregard this notice. 40
Thus, Appellants in the instant case were specifically instructed by the
FDIC-Receiver to “disregard this notice” with regard to any claim not against
38
JA-140 – 141.
39
JA-232 – 236.
40
Id. (emphasis added).
35
WMB, including presumably claims against JPMC. In addition, on the Proof of
Claim form attached to the FDIC-Receiver’s letter, the FDIC-Receiver allowed
only for claims against WMB to be asserted. 41 Therefore, two months later, on
February 16, 2009, in accordance with the FDIC-Receiver’s instruction not to file
Proofs of Claims for claims that are not “against the Failed Institution,” Appellants
filed their Petition asserting claims against solely JPMC & Co. and JPMC Bank,
private third parties.
In 2009, the FDIC-Receiver again asserted the position that claims against
third parties were not covered by FIRREA. On this occasion, WMI submitted a
proof of claim against JPMC to the FDIC-Receiver for WMB. The FDIC-Receiver
rejected WMI’s claims because:
The claims presented are unproven to the satisfaction to the Receiver

since they . . . fail to state claims against the receivership [and]
appear to assert claims against a third party[.]42
The FDIC-Receiver should be bound by its prior legal positions regarding
the scope of FIRREA – that FIRREA does not apply to claims against third parties
that are based the misconduct of the third party. At minimum, the FDIC-Receiver
should be bound by its representation to Appellants that claims not “against the
Failed Institution” need not be submitted to the FDIC-Receiver. See Coit, 489 U.S.
41
JA-234 (“The undersigned, (2) [person making claim] says that the Washington
Mutual Bank now in liquidation is justly indebted to (3) [owner of claim] . . .”).
42
JA-238 (emphasis added).
36
at 587 (doctrine of exhaustion of administrative remedies does not apply where
administrative process is inadequate); Damiano v. FDIC, 104 F.3d 328, 335 n.13
(11th Cir. 1997) (“The RTC also should fulfill its statutory duty of mailing a copy
of the published notice setting out the administrative claims process and the claims
bar date to the plaintiff. . . . Failure to do so raises serious constitutional concerns
regarding the sufficiency of notice under the Due Process Clause) (citing Freeman
v. FDIC, 56 F.3d at 1403); In re Purcell, 141 Bankr. 480 (Bankr. D.Vt. 1992),
aff’d, 150 Bankr. 111 (D. Vt. 1993) (failure of FDIC to give notice to debtor and
debtor’s subsequent failure to follow administrative claims procedure did not
deprive bankruptcy court of jurisdiction); Wilson v. FDIC, 827 F. Supp. 120
(E.D.N.Y. 1993) (defective and misleading notice sent by the FDIC excused
noncompliance with the exhaustion of remedies requirement).
II. Appellants’ injuries are “fairly traceable” to JPMC’s actions in

executing its plan to obtain the assets of WMB, freed of
obligations to bondholders, by purchase from an FDIC-Receiver.
Appellants have standing to sue JPMC for their injuries. The District Court
erroneously found that “Plaintiffs’ injuries depend on the independent intervening
sale by the FDIC-Receiver.”43 Am. Nat’l Ins. Co., 705 F. Supp. at 20. However,
43
In addition to erring in its analysis of standing, the District Court ignored the
injuries that the Appellants suffered before the FDIC-Receiver came into existence.
See Plaintiffs’ Motion to Alter or Amend Judgment and Request for Leave to File
Amended Complaint, p. 12 [Docket # 119]; JA-340 – 341, 348 (Am. Com., ¶ 35,
62).
37
because the sale of assets by the FDIC-Receiver was merely the last of a chain of
events that was set in motion by JPMC, and which was substantially caused by
JPMC’s actions, the FDIC-Receiver’s sale is neither independent nor intervening,
and Appellants’ injuries are “fairly traceable” to JPMC’s misconduct.
Issues of standing are reviewed de novo. Info. Handling Servs., Inc. v. Def.
Automated Printing Servs., 338 F.3d 1024, 1029 (D.C. Cir. 2003). At the pleading
stage, “general factual allegations of injury resulting from the defendant’s conduct
may suffice” to establish standing. Lujan v. Defenders of Wildlife, 504 U.S. 555,
561 (1992). Courts must “presume[s] that general allegations embrace those
specific facts that are necessary to support the claim” on a motion to dismiss. 44 Id.
As noted in Allen v. Wright, 468 U.S. 737 (1984), in order to establish
standing,
A plaintiff must allege personal injury fairly traceable to the

defendant's allegedly unlawful conduct and likely to be redressed by
the requested relief.
44
There is no serious dispute that the Appellants were injured. Appellants allege
they were harmed by JPMC’s actions during the summer of 2008, culminating with
the sale of WMB assets by the FDIC-Receiver, which were intended to interfere
with the Appellants’ WMB bond contracts. The District Court mis-described the
Appellants’ injuries, stating that “[t]he gravamen of Plaintiffs’ Complaint is that
the sale by the FDIC-Receiver ‘interfere[d] with’ [the Plaintiffs’] ‘rights under the
bond contracts’ by ‘strip[ping] away the source of revenue from which’
Washington Mutual Bank and Washington Mutual, Inc. ‘were to meet their
obligations under the bond contracts.” American Nat’l, 705 F. Supp. 2d at 19
(emphasis added).
38
Id. at 751. An injury is not “fairly traceable” to challenged conduct nor
“redressable” when the injury “depends not only on that conduct, but on
independent intervening or additional causal factors.” Fulani v. Brady, 935 F.2d
1324, 1329 (D.C. Cir. 1991) (quoting Simon v. E. Ky. Welfare Rights Org., 426
U.S. 26, 41– 42 (1976)).
The presence of intervening actors in a chain of events that leads from the
wrongful act to the harm, however, will not automatically defeat standing. Warth
v. Seldin, 422 U.S. 490, 504 – 05 (1975) (“The fact that the harm to petitioners
may have resulted indirectly does not in itself preclude standing.”). See also
Fulani, 935 F.2d at 1334 (Mikva, J. dissenting) (cases cited therein providing
examples of indirect harm establishing standing). Rather, causation fails only
where “tenuous links” connect the challenged conduct and the asserted injury.
Center for Auto Safety v. Nat’l Highway Traffic Safety Admin., 793 F.2d 1322,
1335 (D.C. Cir. 1986).
Where an alleged injury flows not directly from the wrongful conduct of a
defendant, but rather from independent actions of third parties, all that need be
shown to establish standing is that the defendant’s action is “at least a substantial
factor motivating the third parties’ actions.” Tozzi v. U.S. Dep’t of Health &
Human Servs., 271 F.3d 301, 308 (D.C. Cir. 2001) (injury due to lost sales is
traceable to Department’s “dioxin upgrade” regarding plaintiff’s products). See

39
America's Community Bankers v. FDIC, 200 F.3d 822, 827 (D.C. Cir. 2000) (in
order to establish standing for suit against FDIC, plaintiffs did not have to show
that FDIC was the “direct actor in injurious conduct,” but only “indirect causation
through authorization”). It is not necessary to establish a “tort” standard of
causation to the question of traceability. 45 Tozzi v. U.S. Dep’t of Health & Human
Servs., 271 F.3d at 308.
45
In any event, Appellants can establish causation under tort law. Under Texas
state law, which governs this Petition, to constitute an “intervening cause” an event
must be “not reasonably foreseeable.” Lane v. Haliburton Corp., 529 F.3d 548,
566 (5th Cir. 2008) (citing RESTATEMENT (SECOND) TORTS § 449). The Texas
Supreme Court has explained:
Where the negligent conduct of the actor creates or increases the risk
of a particular harm and is a substantial factor in causing the harm, the
fact that the harm is brought about through the intervention of another
force does not relieve the actor of liability, except where the harm is
intentionally caused by a third person and is not within the scope of
the risk created by the actor’s conduct.
Dew v. Crown Derrick Constructors, Inc., 208 S.W. 3d 448, 453 n.6 (Tex. 2005)
(quoting RESTATEMENT (SECOND) TORTS § 442 B). In addition, Texas law permits
causation to be shown by proof of evil motive or intent to cause harm to the
Appellants. See Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768, 775–
76 (Tex. 2009) (evidence of evil motive or intent alone was sufficient to support a
finding of causation). Here, Appellants alleged that JPMC’s actions, before the
FDIC was ever appointed as WMB’s receiver, were ill-motivated, and were
designed to harm Appellants by negating their rights under their bond contracts.
40
Here, Appellants allege that JPMC designed a plan to obtain the assets of
WMB, stripped of obligations to bondholders, from an FDIC receivership. 46 In
furtherance of that plan, JPMC made false promises (but nevertheless undertook
duties) to Washington Mutual and its stakeholders, including Appellants, regarding
its intentions to negotiate in good faith and to maintain the confidences of the
information obtained.47 However, JPMC actively worked in secret to prevent
potential suitors and investors from negotiating with Washington Mutual and took
actions to destabilize Washington Mutual’s financial health.48 These actions,
JPMC’s disclosures to media outlets and credit reporting agencies, misuse of
confidential information, and undue influence upon government regulators,
46
JA-060 (Pet., ¶ 92) (describing JPMC’s scheme “to bring about a regulatory
seizure of WMB and obtain the sale of WMB assets from federal regulators to
JPMC at a below-market price under terms that would sever the Plaintiffs’
contractual rights under the Bonds”).
47
JA-062 (Pet., ¶ 103) (“Defendants used fraud, duress, and took undue advantage
by way of false pretenses, deceit, breached trust, and broken promises, in order to
obtain the WMB assets at below market prices out of the FDIC receivership,
unencumbered of Plaintiffs’ contractual rights to payment”).
48
JA-062 (Pet., ¶ 99) (JPMC’s actions “prevent[ed] WMI from obtaining a
purchaser for itself or improving its financial health enough so that it could
weather the market turmoil”).
41
substantially caused the government seizure of WMB and the sale of assets by the
FDIC-Receiver. 49
The mere fact that the FDIC’s sale of WMB’s assets to JPMC was the last
step in a chain of events that was initiated by JPMC will not defeat causation for
standing purposes. In Bennett v. Spear, 520 U.S. 154, 168 – 69 (1997), for
example, landowners claimed that an improper opinion by the Fish and Wildlife
Service (the “Department”) would cause compliance actions by third parties that
would harm the landowners. The Department contended that the proximate cause
of the landowners’ harm was not the Department’s act in issuing its biological
opinion, but instead the cause was the actions of other agencies that may make
independent decisions based on the Department’s opinion. Id. at 169. The Court
rejected the Department’s argument and held that the landowners had standing to
sue the agency because their injury was fairly traceable to the improper opinion,
despite the fact that no injury would occur except for the actions of third parties.
The Court’s reasoning is applicable here:
[The defendant] wrongly equates injury “fairly traceable” to the

defendant with injury as to which the defendant’s actions are the very
last step in the chain of causation.
Id. at 169 – 170 (quoting Lujan, 504 U.S. at 560 – 61). The Court explained,
“While, as we have said, it does not suffice if the injury complained of is the result
49
See JA-037, 038, 040, 041, 046 – 051 (Pet., ¶ 21, 22, 32, 46, 32, 46, 48, 52, 53,
58, 60, 61)
42
of the independent action of some third party not before the court, that does not
exclude injury produced by determinative or coercive effect upon the action of
someone else.” Id. at 169 (citations omitted).
Here, JPMC’s actions produced and caused a determinative and coercive
effect upon the parties and events that resulted in the accomplishment of JPMC’s
goal established months earlier – the sale of WMB assets through a receivership at
a “fire sale” price, free of obligations to bondholders such as Appellants. At a
minimum, it was inappropriate for the District Court to foreclose this argument as
a matter of law, since “[p]roximate cause is typically a question of fact.” See, e.g.
First Assembly of God, Inc. v. Texas Utilities Elec. Co., 52 S.W.3d 482, 493 (Tex.
App.—Dallas 2001) (lack of proximate cause may be established as matter of law
only where the circumstances are such that reasonable minds cannot arrive at
different conclusions). Appellants’ injuries are fairly traceable to JPMC’s actions
and, accordingly, Appellants have standing to sue JPMC.50
50
For this reason, and because FIRREA does not apply to the claims asserted by
the Plaintiffs against JPMC, the FDIC-Receiver is neither indispensable nor
necessary to this lawsuit. See Fed. R. Civ. P. 19(a)(1). Cf. Coal. On Sensible
Transp., Inc. v. Dole, 631 F. Supp. 1382, 1386 (D.D.C. 1986) (declining to find a
party indispensible even though that party "has an interest in [the] suit and may be
affected by it").
43
III. Even if FIRREA and “Intervening Causes” Could Bar Portions of

Appellants’ Claims, the District Court Erred in Dismissing this
Entire Case With Prejudice, Without Explanation, and in
Denying Appellants’ Motion for Leave to Amend to Assert Claims
and Damages Against JPMC that Pre-Dated the FDIC’s
Appointment as WMB’s Receiver and Sale of its Assets to JPMC.
In Firestone v. Firestone, 76 F.3d 1205 (D.C. Cir. 1996), this Court
established the rule for amendments in this Circuit, favoring decisions on the
merits:
Although the grant or denial of leave to amend is committed to a

district court’s discretion, it is an abuse of discretion to deny leave to
amend unless there is sufficient reason, such as “undue delay, bad
faith or dilatory motive . . . repeated failure to cure deficiencies by
[previous] amendments . . . [or] futility of amendment.”
Id. at 1208 (emphasis added and citations omitted).
In Firestone, certain plaintiffs who had lost in the district court “appeal[ed]
both the order dismissing the complaint with prejudice, and the order denying the
[Fed. R. Civ. P.] 59(e) and 15(a) motions.” Id. This Circuit did not find that the
dismissal itself had been improperly entered, but did conclude that the district court
had abused its discretion in entering that dismissal with prejudice, and also in
denying the plaintiffs leave to amend. In particular, the Court noted that:
[W]e find error in the district court’s complete failure to provide

reasons for refusing to grant leave to amend…. [W]hile the decision to
grant or deny leave to amend is within the trial court’s discretion,
outright refusal to grant the leave without any justifying reason
appearing for the denial is not an exercise of discretion; it is merely
abuse of that discretion and inconsistent with the Federal Rules….
44
[A] proper exercise of discretion requires that the district court

provide reasons.
Id. at 1209 (emphasis added and citations omitted).
The instant case is quite similar. The District Court granted the Defendants’
Motions to Dismiss in an Order dated April 13, 2010. The Court’s Order,
however, then went further. It also declared the case closed, and stated that “[t]his
is a final appealable order.” In sum, as in Firestone, the District Court dismissed
the case with prejudice without explaining, in its accompanying Memorandum
Opinion, why a dismissal with prejudice needed to be entered.51
On May 10, 2010, Appellants filed a Motion to Alter or Amend Judgment
and Request for Leave to File Amended Complaint. Just as in Firestone,
Appellants’ motion sought relief under Rules 59(e) and 15. Appellants noted that
terminating a case on the same day that a motion to dismiss was granted was a
“somewhat unorthodox practice.” Docket #119, at 8 (quoting Chaudry v. Nuco-
Steel-Indiana, 546 F.3d 832, 838 – 39 (7th Cir. 2008)). Appellants also specifically
cited Firestone and its progeny, and this Circuit’s requirement that a district court
51
In their earlier filings, Appellants had noted that their Petition filed in Texas
state court had never been amended since its removal to federal court and that their
state court Petition should not be judged by federal pleading standards. In their
responses to the Motions to Dismiss filed by JPMC and the FDIC, Appellants had
specifically requested as alternative relief that they be granted leave to amend their
initial pleading. See Docket #95, at 34; Docket #96, at 38.
45
must provide and articulate reasons why a dismissal was being entered with
prejudice before finally closing out a case. Docket #119, at 8.
Appellants also noted that the theory underpinning the District Court’s
dismissal was incorrect. Appellants acknowledged that “some of Plaintiffs’
damages arose from injuries incurred after WMB’s sale.” Id. at 4 (emphasis in
original). However, Appellants noted that they alleged conduct by JPMC & Co.
that caused Appellants harm before WMB was seized. Id. Accordingly,
Appellants noted that “this Court at most should have dismissed only a portion of
Appellants’ claims – the portion arising from damages that post-dated WMB’s
sale.” Id. Thus, even if JPMC’s and the FDIC-Receiver’s FIRREA and
intervening cause arguments were fully accepted, the FDIC-Receiver’s sale of
assets to JPMC could not possibly bar claims arising from JPMC’s misconduct that
caused Appellants injury before the FDIC-Receiver came into existence. Compare
id. at 10 (“The FDIC-Receiver’s conduct could not possibly have become a factor
until September 25, 2008 – the date WMB was seized by the Office of Thrift
Supervision and the FDIC as receiver for WMB came into existence.”) with id.
(“JPMC & Co’s complained-of conduct began years before the regulatory seizure
of WMB.”).
To the extent that this distinction was not clear in the Petition, Appellants
also simultaneously filed a “Motion for Leave to Amend Pleading,” id. at 11, after
46
noting that, in this “amended pleading … Plaintiffs will allege that the value of
Plaintiffs’ WMB bonds declined significantly prior to the government seizure of
WMB.” Id. at 6. See also id. at 7 (“Plaintiffs … show in their proposed amended
complaint … that Plaintiffs suffered harm independent of the FDIC which occurred
prior to the date that the FDIC took control of WMB’s assets.”). Appellants noted
that they “have not yet amended their Petition even once,” id. at 11, and noted how
the law bent strongly in favor of allowing such amendments absent good cause,
since “the purpose of pleading is to facilitate a proper decision on the merits.” Id.
at 12 (citing Caribbean Broadcasting Sys., Ltd. v. Cable & Wireless PLC, 148 F.3d
1080, 1084 (D.C. Cir. 1998)).
After receiving opposition briefs from both JPMC and the FDIC-Receiver, 52
the District Court issued an Order on July 29, 2010, denying Appellants’ motions.
Docket #124. Significantly, this Order did not state why the original dismissal had
been entered with prejudice. This requirement, established by this Circuit in
Firestone and other cases, was omitted. Instead, the District Court’s Order stated
simply that, since Appellants had not established any intervening change in the
law, new evidence, or manifest injustice in the earlier order, relief under Rule 59(e)
52
These opposition briefs were filed on June 21, 2010. On May 14, JPMC and the
FDIC had filed a Consent Motion for Order Extending Briefing Schedule, asking
that the filing date for their opposition briefs be extended to June 4, 2010, and for
Appellants’ replies to be extended to June 21, 2010. The Court ordered that the
opposition briefs be filed on June 21, 2010 and did not provide for reply briefs.
47
was inappropriate. The Court then said that the Rule 15 motion for leave to amend
also had to be denied, since “a party must first hurdle this Rule 59(e) bar before
amending a complaint.” Docket # 124, at 2. The Court did not declare the
Amended Complaint’s allegations to be futile, and never addressed at all the basic
question of why Appellants’ claims arising from JPMC’s alleged private
misconduct and damages occurring before the FDIC even had been appointed as a
receiver for WMB should not be allowed to proceed.
As noted, the decision to dismiss, set forth in the April 13, 2010 Order of
dismissal, was expressly premised on the District Court’s belief that “the FDIC-
Receiver’s sale of [WMB]’s assets is a necessary link in the chain of causation
resulting in Plaintiff’s injuries.” Docket # 117, at 5. See also id. (“Each of
Plaintiffs’ three causes of action against JPMorgan Chase depends on the effect of
that sale on the bond obligations owed Plaintiffs.”); id. at 6 (“Plaintiffs’ injuries
depend on the FDIC-Receiver’s sale of Washington Mutual Bank’s assets to
JPMorgan Chase…. That being the case…”). Even if this finding was true under
the Petition (which it was not), it clearly was not the case under the Amended
Complaint, which plainly articulates the actionable wrongs and damages caused to
Appellants by JPMC prior to the WMB sale. The Court never stated otherwise,
and dismissal of this case with prejudice was therefore unwarranted.
48
The District Court’s decisions must be reversed. As in Firestone, this was
not a proper exercise of discretion, but rather an absence of discretion – with the
District Court’s “failure to provide reasons for refusing to grant leave to amend”
constituting a reversible “abuse of that discretion,” since it was “inconsistent with
the spirit of the Federal Rules.” 76 F.3d at 1209. Here, the District Court did not
explain why its dismissal was being entered with prejudice. 53 Accordingly, as in
Firestone, the original dismissal order should be vacated, the denial of Appellants’
Rule 59(e) and 15(a) motions should be reversed, and this case should be
remanded with instructions to allow Appellants to file their Amended Complaint.
53
Stated differently, the district court’s April 13, 2010 Order had to be altered or
amended under Rule 59(e), in order to provide this Circuit’s required (but absent)
reasons why the dismissal was being entered with prejudice. Once that Rule 59(e)
threshold was crossed, Rule 15(a)’s liberal provision governing amendments to
pleadings then also needed to be applied – but that Rule was never even considered
by the district court in this case.
49
CONCLUSION
For the foregoing reasons, the District Court’s dismissal of this case should
be reversed, and this case should be remanded to the District Court with
instructions to permit the filing of Appellants’ Amended Complaint.
Respectfully submitted,
__/s/ Gregory S. Smith__________

Gregory S. Smith
D.C. Bar. No. 472802
913 East Capitol Street, S.E.
Washington, D.C. 20003
Telephone: (202) 460-3381
Facsimile: (877) 809-9113
gregsmithlaw@verizon.net
Counsel for Appellants
50
CERTIFICATE OF COMPLIANCE WITH

TYPEFACE AND LENGTH LIMITATIONS
This Brief’s format is Microsoft Word, 14 point, Times New Roman font.
Exclusive of the Table of Contents, Table of Authorities, Statement with
respect to Oral Argument, this Certificate of Compliance, and the Certificate of
Service, this Brief contains 12,084 words.
I understand that a material misrepresentation can result in the Court’s
striking the brief and imposing sanctions. If the Court so directs, I will provide an
electronic version of the Brief and/or a copy of the word or line print-out.
/s/ Gregory S. Smith

Gregory S. Smith
Counsel for Appellant
51
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing Brief of Appellants and
accompanying Public Appendix and Sealed Supplement are being served upon all
parties. The Brief and Public Appendix are served by filing a copy of the same
with this Court’s Electronic Case Filing (ECF) system, which will provide
electronic service on counsel of record in this case, as allowed by the Federal Rules
of Appellate Procedure, D.C. Cir. Rule 25(c), and this Court’s May 15, 2009
Administrative Order ECF-2(D). The Sealed Supplement is being separately
served on opposing counsel by sending a copy of the same in the U.S. mail, with
prepaid first-class postage attached, as follows:
Stacey R. Friedman, Esq.

Bruce Edward Clark, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
John Joseph Clarke, Jr., Esq.

DLA Piper
1251 Avenue of the Americas
New York, NY 10020-1104
Joseph Brooks, Esq.

Lawrence Richmond, Esq.
Federal Deposit Insurance Corporation
3501 Fairfax Drive, Room D-7010
Arlington, VA 22226
This 22nd day of December, 2010.

______/s/___________
Gregory S. Smith
52

American National Insurance Company (ANICO) vs. JPMorgan and FDIC - Brief of Appellants

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American National Insurance Company (ANICO) vs. JPMorgan and FDIC - Brief of Appellants

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Case: 10-5245 Document: 1284528 Filed: 12/22/2010 Page: 1

(Not Yet Scheduled for Oral Argument)

IN THE UNITED STATES COURT OF APPEALS

AMERICAN NATIONAL INSURANCE COMPANY,

JPMORGAN CHASE & CO.,

ON APPEAL FROM THE UNTIED STATES DISTRICT COURT

Gregory Stuart Smith

Certificate as to Parties, Rulings and Related Cases

American National Property and Casualty Company, Farm Family Life

Insurance Company, Farm Family Casualty Insurance Company, and

National Western Life Insurance Company, Appellants, and JPMorgan

Washington Mutual Bank, Henderson, Nevada, Appellees.

Appellees’ Motions to Dismiss the Complaint and denying Appellants’

Motion to Dismiss the FDIC-Receiver and for Remand, see JA-323-330

[Order, Docket #118; Memorandum Opinion, Docket #117, reported as Am.

to Alter or Amend Judgment and Request for Leave to File Amended

Complaint, by the Honorable Rosemary M. Collyer, United States District

Judge. JA-362-63 [Order, Docket # 124].

(C) There are no related cases.

/s/ Gregory S. Smith

CERTIFICATE AS TO PARTIES, RULINGS and RELATED CASES ........... i

TABLE OF CONTENTS ..................................................................................... ii

TABLE OF AUTHORITIES ............................................................................... iv

STATEMENT OF SUBJECT MATTER AND

STATEMENT OF ISSUES PRESENTED FOR REVIEW ................................ 1

PERTINENT STATUTES ................................................................................... 2

STATEMENT OF THE CASE ............................................................................ 3

STATEMENT OF THE FACTS ......................................................................... 8

SUMMARY OF ARGUMENTS ...................................................................... 12

ARGUMENT AND CITATIONS OF AUTHORITY ..................................... 14

I. FIRREA does not apply to Appellants’ action because

A. Appellants’ claims against JPMC could not have

B. Constitutional Due Process Clause prevents the

C. Congress did not grant the FDIC-Receiver

D. Extension of FIRREA to claims against third parties

II. Appellants injuries are “fairly traceable” to JPMC’s

III. Even if FIRREA and “Intervening Causes” Could Bar

CERTIFICATE OF COMPLIANCE WITH

CERTIFICATE OF SERVICE ......................................................................... 52

Allen v. Wright, 468 U.S. 737 (1984) ................................................................... 38

Am. Nat'l Ins. Co. v. JPMorgan Chase & Co., et al.,

America's Community Bankers v. FDIC,

American First Federal, Inc. v. Lake Forrest Park, Inc.,

Aquaplex, Inc. v. Rancho La Valencia, Inc.,

*Auction Co. v. FDIC, 141 F.3d 1198 (D.C. Cir. 1998)

Bank One v. Elms, 764 F. Supp. 85 (N.D. Tex. 1991).......................................... 22

Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (2003) ......................................... 28

*Bennett v. Spear, 520 U.S. 154 (1997) .......................................................... 42-43

Boddie v. Connecticut, 401 U.S. 371 (1971) ........................................................ 28

Caribbean Broadcasting Sys., Ltd. v. Cable & Wireless PLC,

Center for Auto Safety v. National Highway Traffic Safety Admin.,

Chaudry v. Nuco-Steel-Indiana, 546 F.3d 832 (7th Cir. 2008) ............................. 45

Coal. On Sensible Transp., Inc. v. Dole,

Coit Independence Joint Venture v. FSLIC.,

Dew v. Crown Derrick Constructors, Inc., 208 S.W. 3d 448,

diSibio v. Mission Nat’l Bank, 127 F. App’x 950

FDIC v. Jenkins, 888 F.2d 1537 (11th Cir. 1989) ................................................ 31

FDIC v. McFarland, 243 F.3d 876 (5th Cir. 2001) .............................................. 22

*Firestone v. Firestone, 76 F.3d 1205 (D.C. Cir. 1996) ........................... 44-45, 49

First Assembly of God, Inc. v. Texas Utilities Elec. Co.,

Fulani v. Brady, 935 F.2d 1324 (D.C. Cir. 1991)................................................. 39

Grant Thornton L.L.P. v. Office of Comptroller,

Greenfield v. Shuck, 867 F. Supp. 62 (D. Mass. 1994) ................................... 33-34

Henrichs v. Valley View Dev., 474 F.3d 609 (9th Cir.),