The Firm has been retained by Vincent Roggio in this long-running litigation dating back to the origin of the Great Recession. In September 2008, both Washington Mutual Bank (WaMu) and Lehman Brothers failed. WaMu was closed and placed into FDIC receivership and Lehman Brothers filed for bankruptcy. WaMu was the biggest bank failure in United States history. Roggio alleges that prior to its failure WaMu wrongfully destroyed his credit standing with the credit rating agencies, causing the unraveling of his extensive business interests. When WaMu sought to foreclose in New Jersey state court on two mortgages (totaling $6 million), Roggio counterclaimed seeking millions of dollars in damages for the harm to his credit. Upon WaMu's failure, FDIC became its receiver pursuant to the Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA).
Simultaneously with the closing of WaMu, FDIC, as its receiver, entered into a purchase & assumption agreement (Agreement) with JPMorgan Chase Bank, N.A. (Chase), whereby Chase obtained WaMu's assets for $1.8 billion. Under the terms of the Agreement, however, WaMu's liabilities—including Roggio's borrower claims—remained with FDIC. Chase substituted itself in the New Jersey courts to continue the foreclosure actions initiated by WaMu.
As required by FIRREA, Roggio timely filed an administrative claim with FDIC seeking compensation for the destruction of his credit. Following the exhaustion of the administrative claims process, FIRREA provides for de novo judicial consideration of a denied claim, but significantly provides exclusive jurisdiction over such claims either in the U.S. District Court for the District of Columbia or the federal district court where the failed bank had its principal place of business. After FDIC denied his claim, Roggio, proceeding pro se, timely filed suit in the D.D.C. in September 2009.
FDIC urged the D.D.C. to stay consideration of Roggio's borrower claims while the foreclosure actions and Roggio's borrower claims proceeded in New Jersey state court where only Chase was a party. Because Chase did not assume WaMu's liabilities, it lacked any interest in Roggio's borrower claims related to WaMu's alleged wrongdoing. Under FIRREA, a bank ceases to exist the moment FDIC becomes its receiver. As a result, there was no party in the New Jersey cases with whom to litigate Roggio's borrower claims.
Nevertheless, at the conclusion of the state foreclosure proceedings, FDIC moved in the D.D.C. that Roggio's borrower claims should be dismissed on collateral estoppel/issue preclusion grounds. FDIC argued that Roggio's borrower claims were resolved in the New Jersey courts. FDIC neglected to note that under FIRREA the New Jersey courts lacked jurisdiction over his claims.
In October 2020, the D.D.C. agreed with FDIC and dismissed the borrower claims. In November 2020, Roggio, still proceeding pro se, filed a timely Motion for Reconsideration which is pending. In April 2021, Roggio retained The Madden Law Group PLLC. On April 30, 2021, Jerry Madden filed a Motion to Supplement the Motion for Reconsideration, arguing that any resolution of the borrower claims in the New Jersey courts are void and, therefore, cannot as a matter of law serve as a ground for collateral estoppel/issue preclusion. The motion urges the D.D.C. to vacate its dismissal and proceed to consideration of Roggio's borrower claims.
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