The opinion of the court was delivered by: Margaret M. Morrow United States District Judge
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
On July 11, 2008, the Office of Thrift Supervision ("OTS") closed IndyMac Bank and appointed the Federal Deposit Insurance Corporation ("FDIC") as the bank's receiver pursuant to 12 U.S.C. § 1821(c)(2)(A). The FDIC made deposit insurance determinations for accounts held at IndyMac and notified depositors of the determinations via letter. Some depositors later filed actions in this district challenging the FDIC's deposit insurance determinations and/or alleging wrongful acts by IndyMac Bank, its former employees, or the FDIC as receiver. Gnei and Araham Nasoordeen are among the depositors who filed suit. The FDIC has now filed a motion seeking to dismiss plaintiffs' claims under § 1821(d), or in the alternative, to have summary judgment on the claims entered in its favor, under the doctrine of prudential mootness.*fn1 Plaintiffs have not opposed the motion.*fn2
Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the court finds that this matter is appropriate for decision without oral argument. The hearing scheduled for March 22, 2010 is vacated and taken off calendar.
I. FACTUAL AND PROCEDURAL BACKGROUND
On August 27, 2008, Araham V. and Gnei Z. Nasoordeen filed a complaint against the FDIC.*fn3 They allege that the FDIC failed to provide insurance coverage for at least $100,000.00 that they deposited in IndyMac accounts. Plaintiffs' eight-paragraph complaint does not allege any facts particular to the Nasoordeens.*fn4 On May 18, 2009, the court held a case management conference, at which it confirmed that the Nasoordeens sought to pursue claims based on alleged acts or omissions by IndyMac and its agents prior to the bank's failure.
A. Judicial Review of Claims Arising Out of the IndyMac Failure
There are at least two types of claims depositors can assert against the FDIC in the wake of IndyMac's collapse. First, depositors can dispute the FDIC's deposit insurance determination respecting their IndyMac account(s). The court's review of such a decision is limited by statute to examining whether the FDIC's determination was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. See 12 U.S.C. § 1821(f)(4) ("A final determination made by the [FDIC] regarding any claim for insurance coverage shall be a final agency action reviewable in accordance with [5 U.S.C. § 706], by the United States district court for the Federal judicial district where the principal place of business of the depository institution is located"); 5 U.S.C. § 706 ("To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall... (2) hold unlawful and set aside agency action, findings, and conclusions found to be... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law...").
Depositors may also have claims based on acts or omissions by IndyMac or its employees before the bank's failure that relate to the classification and insurance eligibility of their deposits. To assert this type of claim, the depositor must first exhaust the administrative claims procedure set forth in the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), 12 U.S.C. §§ 1821(d)(3)-(8). Specifically, individuals wishing to dispute alleged errors by IndyMac or former IndyMac employees must file a proof of claim with the FDIC within a specified period of time. Once a proof of claim is filed, the FDIC has 180 days to allow or disallow the claim, and notify the claimant of its decision. See 12 U.S.C. § 1821(d)(5)(A)(i) ("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").
If the FDIC disallows an individual's § 1821(d)(5)(A)(i) claim, or if the 180-day review period expires without a decision by the FDIC -- whichever occurs earlier -- a claimant may elect one of two courses of action. See, e.g., Helm v. Resolution Trust Corp., 43 F.3d 1163, 1165 (7th Cir. 1995) ("[Resolution Trust Corporation]*fn5 actions are largely governed by the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).... The RTC may find in favor of the claimant, or it may 'disallow' the claim, i.e., reject it. 12 U.S.C. § 1821(d)(5)(D).... FIRREA generally forbids federal judicial review of RTC actions. 'Except as otherwise provided in this subsection, no court shall have jurisdiction over... any claim relating to any act or omission of... the [RTC] as receiver." 12 U.S.C. § 1821(d)(13)(D). FIRREA further explicitly forbids judicial review of RTC disallowances made pursuant to § 1821(d)(5)(D). 'No court may review the [RTC's] determination... to disallow a claim.'
12 U.S.C. § 1821(d)(5)(E). However, FIRREA loosens the prohibition on federal jurisdiction in two circumstances: where the RTC has already reviewed its own disallowance, and where the claimant files a fresh suit in federal district court. But unless a claimant takes one of these two options, § 1821(d)(5)(E) bars any federal jurisdiction over a disallowed claim" (emphasis added)); see also Office & Professional Employees Int'l Union, Local 2 v. FDIC, 962 F.2d 63, 65 (D.C. Cir. 1992) ("A party dissatisfied with [the] FDIC's initial determination is given the choice between seeking administrative review (in which case the [FDIC's] second instance decision is subject to court challenge under the familiar 'arbitrary and capricious' standard) and proceeding directly to district court. [12 U.S.C. §§] 1821(d)(6), (7)").
The claimant's first option is to request that the FDIC internally review its decision to disallow the administrative claim. If the FDIC agrees to undertake an internal review, it will hold a hearing and make a final determination. Once the FDIC has completed its review, the claimant may -- if still unhappy with the FDIC's determination -- file suit in federal district court seeking judicial review. See 12 U.S.C. § 1821(d)(7)(A) ("If any claimant requests review under this subparagraph in lieu of filing or continuing any action under paragraph (6) and the [FDIC] agrees to such request, the [FDIC] shall consider the claim after opportunity for a hearing on the record. The final determination of the [FDIC] with respect to such claim shall be subject to judicial review under [5 U.S.C. § 706]"); see also Helm, 43 F.3d at 1165 ("First, if the RTC has itself reviewed a disallowance and again denied a claim, the federal courts may then review the disallowance. The claimant must request internal RTC review, and if the RTC agrees to the request, it will hold a hearing and make a determination. 12 U.S.C. § 1821(d)(7)(A). Only if that point is reached, and the complainant is still dissatisfied with the result, may the claimant then file suit in federal district court asking for judicial review of the RTC's disallowance. Id. The Administrative Procedure Act [5 U.S.C. § 706] would govern such judicial review").
A claimant must request administrative review of the disallowed claim within 60 days of the FDIC's final determination. See 12 U.S.C. § 1821(d)(6)(A) ("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 [FDIC] is receiver; or (ii) the date of any notice of disallowance of ...