(FIRREA), an administrative claims process was established for the settlement of claims and liquidation of assets of the failed institution. Taking the floor of the wrong court, the plaintiffs never had a chance. With the deadline passed to file claims in the administrative process, the plaintiffs got slammed because "FIRREA operates as a jurisdictional bar to claims that parties did not submit to the FDIC's administrative process." Willner v. Dimon, 849 F.3d 93, 2017 U.S. App. LEXIS 2737. A final example of a litigant lacking standing arises when plaintiffs make claims in another court after their bankruptcy. Remember that bankruptcy spawns a new creature, the "estate," which basically becomes the owner of all assets of the debtor, even contingent claims. Before, the North Carolina Court of Appeals was a plaintiff's claim against his employer. Wiley and Gilman v. L3 Communications, 795 S.E. 2d 580, 2016 N.C. App. LEXIS 1314, cert. denied, 797 S.E. 2d 17, 2017 N.C. LEXIS 185. The defendant had failed to answer and award in favor of Gilman, a plaintiff. If you think time had run out for the defendant, think again. Heaving from half-court, the defendant swished a miracle shot using Rule 12(b)(1). Judge Richard Dietz for the appellate panel found that Gilman lacked standing to sue for labor law violations because he had a pending Chapter 13 bankruptcy and had failed to inform the bankruptcy court (in his schedules or otherwise) of the existence of his legal claims. Those claims against the defendant would have been property of the estate and could have been pursued by Gilman or the trustee--for the estate. So, the claims were not Gilman's and thus Gilman had no standing. The judgment was vacated by the appellate court citing an old case, High v. Pearce, 220 N.C. 266, 271, 17 S.E.2d 108, 112 (1941): "[w]here there is no jurisdiction of the subject matter the whole proceeding is void ab initio and may be treated as a nullity anywhere, at any time, and for any purpose." Boom. Subject matter jurisdiction is what I'm sayin'. Those lacking privity? Ones who have not exhausted their contractual remedies? Ones whose claims are moot? Ones who can't link their damages to the wrong? Depending on the cause of action, such barriers also may prove insurmountable, resulting in dismissal for lack of subject matter jurisdiction. What's cool about challenging subject matter jurisdiction using the litigant's shortcomings is that, unlike cousin 12(b) (6), other stuff can be presented to the court without converting the motion to a summary judgment. But, there is a catch. A dismissal based on lack of subject matter jurisdiction typically is without prejudice. Nonetheless, while some plaintiffs might return to the locker room to cook up a new game plan (for example, send a new demand to the business), others may lack a route to rehabilitation, or the game clock expired. So, pull out your Converse Chucks, dust off your hornbooks, and scrutinize all your 12(b) defenses. An early or late dunk based on lack of subject matter jurisdiction could be your game changer. |