The opinion of the court was delivered by: Baylson, J.
MEMORANDUM RE: FDIC'S MOTION TO DISMISS
Presently before the Court is Defendant Federal Deposit Insurance Corporation's ("FDIC") Motion to Dismiss, which asserts that this Court lacks subject matter jurisdiction to hear claims for equitable relief against the FDIC under the Financial Institutions Reform, Recovery, andEnforcement Act of 1989 ("FIRREA"). The motion further suggests that Plaintiff, Radian Insurance, Inc. ("Radian"), has failed to state a claim with respect to its negligence and negligent misrepresentation claims. This case arises from a dispute over a series of insurance polices issued by Radian to Defendant Deutsche Bank National Trust Company ("Deutsche Bank") to cover mortgages that were originated and serviced by Indymac, for which the FDIC has since been appointed Receiver and Conservator. For the reasons set forth below, this Court finds that it lacks subject matter jurisdiction over the equitable claims and that the tort claims requesting damages must be dismissed due to the economic loss doctrine.
I. Background Information
In a previous Memorandum, this Court addressed several Motions to Dismiss by other Defendants in this case. (Doc. 107). That Memorandumoutlined, in significant detail, the complicated facts in this case. See Radian Ins., Inc. v. Deutsche Bank Nat'l Trust Co., - F. Supp. 2d -, 2009 WL 2096261, at *1-3 (E.D. Pa. July 15, 2009). As such, the Court will not repeat those details here, but will merely summarize the facts particularly relevant to the instant motion.
In this action, Radian seeks a declaratory judgment on its right to rescind three Insurance Policesthat it had issued to Deutsche Bank. The Polices insured against default certain mortgages involved in a securitization. Id. at 1. Those mortgages, which were originated and serviced by Defendant Indymac, were then pooled into three separate Trusts for which Defendant Deutsche Bank was the Trustee. Id. Deutsche Bank issued Certificates from the Trusts, backed by the mortgages, and sold those Certificates to investors. Id. Besides the Radian insurance for the underlying mortgages, Deutsche Bank also obtained insurance for the Certificates issued from each Trust, which was provided by Defendants Financial Guaranty Insurance Company ("FGIC"), Ambac Assurance Corporation ("Ambac"), and MBIA Insurance Corporation ("MBIA") (collectively, the "Certificate Insurers"). Id. at 2. In its Complaint, Radian argued that Deutsche Bank breached warranties made in the Policies by misrepresenting certain facts about the eligibility of the underlying mortgages for insurance coverage, thus giving Radian a right to rescind. Id.
Radian first filed its Complaint in this Court on June 26, 2008. As to IndyMac, that Complaint appeared to assert two Counts: one for rescission of the Policies (Count I) and one for a declaration of rights (Count II). As noted earlier, the FDIC was appointed Receiver for IndyMac Bank, F.S.B. and as Conservator for IndyMac Federal Bank, F.S.B. on July 11, 2008.*fn1
Id. at 3. On August, 29, 2008, the Court granted the FDIC's Motion to Intervene and Stay, allowing any parties with claims against the IndyMac entities to file administrative claims with the FDIC, as required under FIRREA, 12 U.S.C. §§ 1821(d)(3), (d)(5), and (d)(6). Id. Accordingly, Radian filed a Proof of Claim with the FDIC on October 14, 2008 (Am. Compl. Ex. E), and the FDIC disallowed that claim on April 6, 2009. (Am. Compl. Ex. F). The FDIC then filed its initial Motion to Dismiss on April 15, 2009. (Doc. 47). Around the same time, the Certificate Insurers filed their Motions to Dismiss or Stay pending arbitration (Docs. 31, 38, 39), and Deutsche Bank filed a Motion to Dismiss (Doc. 35).
The Court held an initial oral argument on all open motions on June 15, 2009. (Doc. 96). Based on that argument, the Court allowed Radian to file an Amended Complaint as to the FDIC, as Radian contended the jurisdictional issues could be cured by amendment. (Doc. 98). On June 23, 2009, Radian filed an Amended Complaint, which repleaded the initial Counts for equitable relief and added two new Counts for negligence and negligent misrepresentation. (Doc. 103). At the same time, Radian filed a supplemental brief asserting this Court had jurisdiction over all claims. (Doc. 101). The FDIC responded with a Motion to Dismiss the Amended Complaint on July 8, 2009. (Doc. 105).
In the earlier Memorandum addressing the other Defendants' Motions to Dismiss, this Court said that it would decide the issue of jurisdiction over the FDIC at a later time. Radian Ins., 2009 WL 2086261, at *3, n.4. This Court granted the Certificate Insurers' Motions to Stay the litigation pending arbitration due to a mandatory arbitration provision in the Radian Insurance Policies, to which the Certificate Insurers were third party beneficiaries. Id. However, this Court agreed to retain jurisdiction to hear questions of interpretation, as required by the arbitration provision. Id. at 12-14.*fn2 The case was then placed on administrative suspense status. The parties have since fully briefed the FDIC's Motion to Dismiss the Amended Complaint. The Court held oral argument on the FDIC's Motion to Dismiss on August 27, 2009.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because the parties are citizens of different states and the amount in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.
1. Motion to Dismiss for Lack of Subject Matter Jurisdiction (Fed. R. Civ. P. 12(b)(1))
"Lack of subject matter jurisdiction voids any decree entered in a federal court and the continuation of litigation in a federal court without jurisdiction would be futile." Steel Valley Auth. v. Union Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987); Dunson v. McNeil-PPC, Inc., 346 F. Supp. 2d 735, 737 (E.D. Pa. 2004). On a motion to dismiss pursuant to Rule 12(b) (1), the plaintiff bears the burden of persuading the Court that subject matter jurisdiction exists. Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991). In determining whether subject matter jurisdiction exists, "the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Mortensen v. First Fed. Savings and Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). Moreover, "no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Id.
Congress has discretion to restrict subject matter jurisdiction of federal district courts. Arbaugh v. Y&H Corp., 546 U.S. 500, 516 n.11 (U.S. 2006). "If the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue." Id. at 515-16; see also Beazer East, Inc. v. Mead Corp., 525 F.3d 255, 260 (3rd Cir. 2008) (citing Arbaugh, 546 U.S. at 515-16).
2. Motion to Dismiss for Failure to State a Claim (Fed. R. Civ. P. 12(b)(6))
When deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court may look only to the facts alleged in the complaint and its attachments. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). The Court must accept as true all well-pleaded allegations in the complaint and view them in the light most favorable to the plaintiff. Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir. 1985).
A valid complaint requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Iqbal clarified that the Court's decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), which required a heightened degree of fact pleading in an antitrust case, "expounded the pleading standard for 'all civil actions.'" 129 S.Ct. at 1953.
The Court in Iqbal explained that, although a court must accept as true all of the factual allegations contained in a complaint, that requirement does not apply to legal conclusions; therefore, pleadings must include factual allegations to support the legal claims asserted. Id. at 1949, 1953. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 1949 (citing Twombly, 550 U.S. at 555); see also Phillips v. County of Allegheny, 515 F.3d 224, 232 (3d Cir. 2008) ("We caution that without some factual allegation in the complaint, a claimant cannot satisfy the requirement that he or she provide not only 'fair notice,' but also the 'grounds' on which the claim rests." (citing Twombly, 550 U.S. at 556 n.3)). Accordingly, to survive a motion to dismiss, a plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556).
FDIC, as Receiver for IndyMac, provides several reasons for dismissing the Complaint. First, FDIC argues that this Court lacks subject matter jurisdiction because the anti-injunction provision in FIRREA, 12 U.S.C. § 1821(j), bars a court from hearing claims for equitable relief against the FDIC. The FDIC argues that rescission and declaratory judgment are equitable remedies and that permitting the suit would violate the statute, which seeks to prevent any restraints on the FDIC performing its duties as conservator or receiver.*fn3
The FDIC also argues that this Court must dismiss the new tort claims in Counts III and IV, which allege negligence and negligent misrepresentation and seek damages. According to the FDIC, Radian failed to exhaust the administrative remedies with regard to those claims, and even if Radian did exhaust those claims, the Eastern District of Pennsylvania is not the proper venue under FIRREA. Furthermore, the FDIC suggests that these Counts should be dismissed for failure to state a claim. Specifically, the FDIC argues: (1) Radian failed to allege a duty owed by IndyMac to Radian; (2) the gist of the action doctrine bars the tort claims; and (3) the economic loss doctrine bars the tort claims.
Radian responds that the § 1821(j) bar does not apply to suits initiated pre-receivership; Radian relies on another section of the statute, § 1821(d)(6)(A), which establishes a procedure to exhaust administrative remedies for claims against the depository institution before pursuing those claims in federal court. Under Radian's interpretation of the statute, that provision provides an exception to § 1821(j), allowing claims filed pre-receivership to continue. Radian insists that it has exhausted its administrative remedies for the equitable claims through its Proof of Claim and can therefore continue its action initiated pre-receivership. Furthermore, even if § 1821(d)(6)(A) does not apply directly to § 1821(j), Radian suggests that this Court should still recognize an exception to the bar for claims filed pre-receivership.
As to the FDIC's arguments for dismissing the new damages claims, Radian responds that its Proof of Claim included claims for damages, and thus the new Counts have been properly exhausted as well. Radian also contends that is has sufficiently pleaded facts as to IndyMac's duties to Radian. Moreover, Radian argues that the gist of the action doctrine does not bar these claims because there is no contract between Radian and IndyMac, and Radian should therefore be able to pursue its tort claims. Similarly, Radian suggests that an exception to the economic loss doctrine exists for parties who are not in privity of contract where the party misrepresenting information supplies that information knowing that a third party will likely rely on it.
IV. Relevant Statutory Provisions
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA")
A. 12 U.S.C. § 1821(j): Limitation on Court Action
Except as provided in this section, no court may take any action, except at the request of the Board of Directors by regulation or order, to restrain or affect the exercise of powers or functions of the Corporation as a conservator or receiver.
B. 12 U.S.C. § 1821(d)(6)(A): Provision for agency review or judicial determination of claims
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 request administrative review of the claim in accordance with subparagraph (A) or (B) of paragraph (7) or file suit on such claim (or continue an action commenced before the appointment of the receiver) 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)."
C. 12 U.S.C. § 1821(d)(13)
Additional Rights and Duties: 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 ...