A Refresher On When Subject Matter Jurisdiction Can Be Raised As An Issue: Anytime
We inaugurate a new sidebar category: Jurisdiction.
The next case, involving an employee’s appeal of a judgment confirming an adverse arbitration award, is a useful refresher on a fundamental point concerning lack of subject matter jurisdiction: it’s never too late to raise the issue. Saffer v. JP Morgan Chase Bank, Case No. B246412 (2nd Dist. Div. 8 April 29, 2014) (Bigelow, Flier, Grimes).
Following the financial meltdown of 2008, an employee of Washington Mutual Bank (WaMu) sued defendant JPMC Bank, which Bank had purchased some of WaMu’s assets and liabilities. Bank successfully moved to compel arbitration. The arbitrator, however, eventually concluded that both court and arbitrator lacked subject matter jurisdiction to hear employee’s claims, and dismissed employee’s case. Employee had failed to jump through the hoops necessary to exhaust administrative remedies under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).
Employee moved in the superior court to vacate the arbitration ruling. However, “instead of asserting the trial court should dismiss the action, “Bank contended the award should be confirmed. And it was.
The Court of Appeal agreed that the judgment should be vacated because the failure to exhaust administrative remedies resulted in a lack of subject matter jurisdiction. “[A]n alleged lack of subject matter jurisdiction must be addressed whenever it comes to a court’s attention.” In re Gloria A., 213 Cal.App.4th 476, 481 (2013).
So is the vacation of the adverse judgment a Pyrrhic victory for appellant? Loss for appellant is the better description, as the Court of Appeal stated that respondent shall recover its costs on appeal. The Court of Appeal ordered that the case be remanded to the trial court with directions to enter an order of dismissal for lack of subject matter jurisdiction. Even if the employee had once been wronged by WaMu, he is now without a remedy.
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