SERGE MARQUIS, ET AL., PLAINTIFFS, APPELLEES, v. FEDERAL DEPOSIT INSURANCE CORPORATION, AS LIQUIDATING AGENT OF HILLSBOROUGH BANK TRUST COMPANY, DEFENDANT, APPELLANT. ELTREX INTERNATIONAL CORPORATION, ET AL., PLAINTIFFS, APPELLEES, v. FEDERAL DEPOSIT INSURANCE CORPORATION, AS LIQUIDATING AGENT OF HILLSBOROUGH BANK TRUST COMPANY, DEFENDANT, APPELLANT. MICHAEL M. MILLS, PLAINTIFF, APPELLEE, v. FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR NASHUA TRUST COMPANY, DEFENDANT, APPELLANT. JAMES P. GOODRICH, PLAINTIFF, APPELLEE, v. FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR DARTMOUTH BANK, DEFENDANT, APPELLANT.
Nos. 92-1113, 92-1179, 92-1216 to 92-1218.United States Court of Appeals, First Circuit.Heard April 9, 1992.
Decided May 15, 1992. Order on Rehearing and Rehearing En Banc Denied June 4, 1992.
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Michael H. Krimminger, Counsel, with whom Ann S. Duross, Asst. Gen. Counsel, and Richard J. Osterman, Jr., Sr. Counsel, Washington, D.C., were on brief, for appellant F.D.I.C.
Jay L. Hodes, with whom Heather M. Jeans and Bossie, Kelly
Hodes, P.A., Manchester, N.H., were on brief, for appellees Serge Marquis, et al.
Eleanor Dahar, with whom Victor W. Dahar, P.A., Manchester, N.H., was on brief, for appellees Eltrex Intern. Corp., et al.
Appeal from the United States District Court for the District of New Hampshire.
Before SELYA, Circuit Judge, COFFIN, Senior Circuit Judge, and YOUNG,[*] District Judge.
SELYA, Circuit Judge.
[1] These consolidated appeals raise an important question concerning the extent of the restrictions on the federal courts’ subject matter jurisdiction imposed by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Pub.L. No.
101-73,
103 Stat. 183, codified in scattered sections of 12 U.S.C. (Supp. II 1990). The Federal Deposit Insurance Corporation (FDIC) claims that FIRREA’s jurisdictional bar,
12 U.S.C. § 1821(d)(13)(D), requires federal courts to dismiss virtually all civil actions pending against a failed financial institution at the time the FDIC is appointed as receiver. The court below rejected this broadcast claim. After careful consideration of the relevant portions of the Act, we hold that FIRREA does not require courts automatically to dismiss all actions instituted against a failed bank prior to the FDIC’s appointment as receiver of the institution.
[2] I. BACKGROUND
[3] The nature of this proceeding does not demand an exegetic discussion of particular facts.
[1] It suffices to recount seven events common to the four underlying cases:
1. The plaintiff (or co-plaintiffs, in two of the cases) sued an FDIC-insured financial institution in a New Hampshire state court.
2. The pleadings stated one or more claims for money damages, chargeable against the institution’s assets, arising out of some challenged banking practice.
3. The financial institution was declared insolvent while the litigation was pending.
4. The FDIC was appointed as receiver, see 12 U.S.C. § 1821(c)(3)(A), and thereupon removed the case to federal district court. See 12 U.S.C. § 1819(b)(2)(B).
5. Once removal was perfected, the FDIC sought dismissal, contending that the court lacked subject matter jurisdiction to adjudicate the creditors’ claims unless and until those claims were timely filed with, and processed through, the administrative mechanism embodied in FIRREA. See 12 U.S.C. § 1821(d)(3)-(10).
6. The district court denied the motion for dismissal, 779 F. Supp. 6 (but, eventually, stayed proceedings to permit resort to, and operation of, FIRREA’s administrative claims review process).
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7. At the FDIC’s request, the district court certified its ruling regarding subject matter jurisdiction for interlocutory appeal.[2]
[4] Because of the importance of the jurisdictional question, and its unsettled nature, we accepted appellate jurisdiction,
see 28 U.S.C. § 1292(b) (1988), and expedited the appeals.
[5] II. ISSUE PRESENTED
[6] In this case, our inquiry reduces to a single question: do the federal courts retain subject matter jurisdiction over actions pending against failed financial institutions once the FDIC has been appointed as receiver? We answer this query in the affirmative, noting, moreover, that our ensuing discussion applies equally to the Resolution Trust Corporation (RTC) in those instances where the RTC is appointed as the receiver of a failed financial institution in place of the FDIC,
see 12 U.S.C. § 1441a(b)(4). Ancillary to this response, we also examine, and comment upon, the federal courts’ powers to stay litigation pending completion of FIRREA’s administrative claims review process (ACRP).
[7] III. ANALYSIS
[8] FIRREA’s text comprises an almost impenetrable thicket, overgrown with sections, subsections, paragraphs, subparagraphs, clauses, and subclauses — a veritable jungle of linguistic fronds and brambles. In light of its prolixity and lack of coherence, confusion over its proper interpretation is not only unsurprising — it is inevitable.
[9] Our concern here is with
12 U.S.C. § 1821(d) (Supp. II 1990), reproduced in the Appendix. This section deals, generally, with the FDIC’s powers and duties when acting as a receiver of a failed financial institution. In the interest of affording context, it may be noted that section 1821(d) trails directly in the wake of statutory descriptions of the FDIC’s responsibilities for insuring deposits,
12 U.S.C. § 1821(a); intervening in bank liquidations,
12 U.S.C. § 1821(b); and becoming the receiver for failed depository institutions,
12 U.S.C. § 1821(c). Section 1821(d), then, is a relatively small piece of the statutory puzzle — but one which exemplifies the larger interpretive problem: section 1821(d) is comprised of nineteen separately numbered fascicles, most with myriad subparts, occupying seven pages of the United States Code. It is, in short, an avalanche of words.
A.
[10] We begin our analysis with the rudiments of the statutory scheme. We think that FIRREA makes participation in the administrative claims review process mandatory for all parties asserting claims against failed institutions, regardless of whether lawsuits to enforce those claims were initiated prior to the appointment of a receiver.[3] See Meliezer v. RTC, 952 F.2d 879,882 (5th Cir. 1992) (“Although FIRREA does not explicitly mandate exhaustion of administrative remedies before judicial intervention, the language of the statute and indicated congressional intent make clear that such is required.”); FDIC v. Shain, Schaffer Rafanello, 944 F.2d 129, 132 (3d Cir. 1991) (in enacting FIRREA, “Congress expressly withdrew jurisdiction from all courts over any claim to a failed bank’s assets that are made outside the procedure set forth in section 1821.”); see also RTC v. Elman, 949 F.2d 624, 627 (2d Cir. 1991); RTC v. Mustang Partners, 946 F.2d 103, 106 (10th Cir. 1991) (per curiam); Coston v.
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Gold Coast Graphics, Inc., 782 F. Supp. 1532, 1537
(S.D.Fla. 1992). But see FDIC v. Grillo, 788 F. Supp. 641, 647 (D.N.H. 1992) (holding that “utilization of the administrative adjudication procedure is not mandatory or exclusive”). Accordingly, we rule that, where a claimant has been properly notified of the appointment of a federal insurer as receiver, 12 U.S.C. § 1821(d)(3)(B)-(C), and has nonetheless failed to initiate an administrative claim within the filing period, 12 U.S.C. § 1821(d)(3)(B)(i), the claimant necessarily forfeits any right to pursue a claim against the failed institution’s assets in any court. See 12 U.S.C. § 1821(d)(5)(C)(i).
[11] To this point, our analysis comports with the FDIC’s views. But at the next crossroad, we head in different directions. The FDIC not only urges that claimants must exhaust the remedies afforded by the ACRP, but says that, while the ACRP runs its course, preexisting actions must be dismissed (even though, as a practical matter, claimants can file new lawsuits if not fully satisfied with the outcome of the administrative proceedings
see 12 U.S.C. § 1821(d)(6)(A)). This is the matter’s crux.
B.
[12] The FDIC bases its argument on the following statutory provision:
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 [FDIC] has been appointed receiver, including assets which the [FDIC] may acquire from itself as such receiver; or (ii) any claim relating to any act or omission of such institution or the [FDIC] as receiver.
[13]
12 U.S.C. § 1821(d)(13)(D). The jurisdictional bar of section (d)(13)(D) reaches all claims seeking payment from the assets of the affected institution; all suits seeking satisfaction from those assets; and all actions for the determination of rights vis-a-vis those assets.
See Rosa v. RTC, 938 F.2d 383,
393 (3d Cir.),
cert. denied, ___ U.S. ___,
112 S.Ct. 582,
116 L.Ed.2d 608 (1991). Starting from this baseline, the FDIC asserts that, with respect to suits pending against financial institutions at the time an FDIC receivership ensues, no jurisdiction inheres until after the ACRP, described in subsections (d)(3)-(10), has run its course.
[4]
[14] Quite plainly, Congress intended the ACRP to provide a streamlined method for resolving most claims against failed institutions in a prompt, orderly fashion, without lengthy litigation.
See H.R. Rep. No. 101-54(I), 101st Cong., 1st Sess., at 418-19,
reprinted in 1989 U.S. Code Cong. Admin. News 86, 214-15 (“The claims determination procedure . . . creates a system which . . . enables the FDIC to dispose of the bulk of claims against failed financial institutions expeditiously and fairly.”). In the FDIC’s view, this intent would be thwarted if pending actions were allowed to proceed in the district court in lieu of, or concurrent with, the processing of administrative claims premised on the same nucleus of operative facts.
[15] This interpretation, however, seems inconsistent with other parts of FIRREA. The single sentence which is most difficult to harmonize with the FDIC’s reading of the statute is the provision which states that, subject to the 90-day stay described elsewhere in the statute,
see 12 U.S.C. § 1821(d)(12)(A), “the filing of a claim with the receiver shall not prejudice any right of
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the claimant to continue any action which was filed before the appointment of a receiver.” 12 U.S.C. § 1821(d)(5)(F)(ii). What could be more prejudicial to a claimant’s right “to continue” a pending action than the outright dismissal of the action?
[16] The FDIC’s attempted answer strikes us as lame. It argues that
12 U.S.C. § 1821(d)(5)(F)(ii) and its counterpart,
12 U.S.C. § 1821(d)(8)(E)(ii) (providing a similar disclaimer of prejudice with reference to parties proceeding under FIRREA’s expedited claims procedures), do not serve to insulate pre-receivership suits from dismissal, but merely protect pre-receivership litigants from actual prejudice, such as time bars, pending completion of the ACRP. That asseveration, however, fails to explain why Congress used the verb “continue” rather than a verb such as “recommence” or “refile.” Indeed, the FDIC’s recension of the law simply reads the word “continue” out of the statute.
[17] It is also difficult to imagine why Congress would have felt a need to provide for stays of pending suits,
12 U.S.C. § 1821(d)(12), if such suits were automatically to be dismissed. Once again, the FDIC has an answer — but not a good one. It contends that withdrawing cases from the courts by automatic dismissal does not make a nullity of the 90-day stay provision, since
12 U.S.C. § 1821(d)(12) applies not only to actions brough
against insolvent financial institutions but also to actions brought
by those institutions (and thus, the subsection serves to furnish the FDIC with an opportunity to freeze litigation for a brief period in order to familiarize itself with claims which it bears the burden of pursuing, if it so chooses). But, the stay provision applies to actions in which the institution is “a party,”
id., not merely to actions in which the institution is “a plaintiff.” And, the FDIC has pointed to nothing in FIRREA’s compendious legislative history that suggests Congress was thinking along the lines of a plaintiff/defendant dichotomy in fashioning FIRREA’s stay provisions.
C.
[18] The sockdolager is that the jurisdictional bar upon which the FDIC relies contains a specific exemption allowing retention of cases if, and to the extent that, jurisdiction is “otherwise provided in this subsection.” 12 U.S.C. § 1821(d)(13)(D). The reference to “this subsection,” when read in context, is clearly a reference to section 1821(d) in its entirety.[5] Accord Simms v. Biondo, 785 F. Supp. 322, 325 (E.D.N.Y. 1992). Section 1821(d)’s grant of jurisdiction is variously expressed. See, e.g., 12 U.S.C. § 1821(d)(6)(A) (conferring district court jurisdiction to entertain suits based upon disallowed claims); 12 U.S.C. § 1821(d)(7)(A) (conferring district court jurisdiction to entertain suits based on claims which, after initial disallowance, have undergone administrative review); 12 U.S.C. § 1821(d)(8)(C) (conferring district court jurisdiction to entertain suits based on claims disallowed under the expedited claims procedure). In addition to these express grants of jurisdiction over disallowed claims, however, section 1821(d) also implies the existence of jurisdiction in other circumstances. See, e.g., 12 U.S.C. § 1821(d)(13)(B) (a provision that vests the FDIC, qua receiver, with “all the rights and remedies available” to the failed institution to pursue appealable judgments, and thus allows for continued appellate jurisdiction). In much the same manner, we think that subsections (d)(5)(F)(ii), (d)(8)(E)(ii), and (d)(12) coalesce to show Congress’ discernible intent to preserve jurisdiction over civil actions filed against failed institutions prior to the FDIC’s appointment as receiver.
[19] Subsection (d)(5)(F)(ii) is part of the rubric that establishes the ACRP.
[6] It states that, “[s]ubject to paragraph (12),
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the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the receiver.”12 U.S.C. § 1821(d)(5)(F)(ii). The provision to which this subsection refers is entitled “Suspension of Legal Actions.” It provides in relevant part:
After the appointment of a . . . receiver for an insured depository institution, the . . . receiver may request a stay for a period not to exceed —
. . . . .
(ii) 90 days . . . in any judicial action or proceeding to which such institution is or becomes a party.
[20]
12 U.S.C. § 1821(d)(12)(A). The next subparagraph commands courts to grant all such stays, when and if requested.
12 U.S.C. § 1821(d)(12)(B). We read these sections, in combination, as constructing a scheme under which courts will retain jurisdiction over pending lawsuits — suspending, rather than dismissing, the suits — subject to a stay of proceedings as may be appropriate to permit exhaustion of the administrative review process as it pertains to the underlying claims.
[21] In our opinion, reading FIRREA in this fashion is as faithful as possible to the statute’s text, harmonizes its various provisions, and is consistent with the policies which Congress sought to advance. Faced with a national banking crisis, Congress wanted to facilitate takeovers of insolvent financial institutions and smooth the modalities by which rehabilitation might be accomplished. To this end, FIRREA was designed to create an efficient administrative protocol for processing claims against failed banks. This objective would be disserved by forcing the courts to dismiss all pending litigation, only to have the cases refiled when and if administrative settlement proved impracticable. It is difficult to conceive of anything less efficient than dismissing a suit that has been, say, two years in process, only to have an identical suit started afresh some six months later. By staying all proceedings in a pending action until the administrative claims process has run its course, efficacy will be promoted. At that point, suits based upon resolved claims can be dismissed outright, whereas suits based upon claims still unresolved can simply be resumed, thereby dispelling the need to retrace steps already completed.
[22] By the same token, other policies which Congress obviously sought to advance in enacting FIRREA — fairness to claimants, minimization of expense, and thoughtful husbanding of scarce judicial resources — are also furthered by reading the statute as we do. Claimants will be spared the unnecessary costs of refiling cases and bringing them up to speed. Courts will similarly be spared the trouble of starting from ground zero in each and every case in which an administrative settlement does not materialize.
[23] In short, four powerful indicators of FIRREA’s meaning — the structure of the Act, its language, the underlying legislative intent, and common sense — unanimously counsel in favor of a construction of FIRREA that permits federal courts to retain subject matter jurisdiction in circumstances where a bank’s failure (and the FDIC’s appointment as receiver) postdates the institution of a suit against the bank.
D.
[24] We were informed, at oral argument, that in one of these cases the district court entered a supplemental stay extending the original stay from 90 days to 180 days to allow for completion of the ACRP. This raises the related question of whether the 90-day stay described in 12 U.S.C. § 1821(d)(12) limits the duration of stays that may be granted when FIRREA intercepts a pre-receivership suit. We do not believe that any such limitation exists.
[25] It is beyond cavil that, absent a statute or rule to the contrary, federal district courts possess the inherent power to stay pending litigation when the efficacious management of court dockets reasonably requires such intervention.
See Landis v. North Amer. Co., 299 U.S. 248,
254-55,
57 S.Ct. 163,
165-66,
81 L.Ed. 153 (1936);
In re Ramu Corp., 903 F.2d 312,
318 (5th Cir. 1990);
Harmon Kardon, Inc. v. Ashley
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Hi-Fi, 602 F.2d 21, 23 (1st Cir. 1979); see also HMG Property Investors, Inc. v. Parque Indus. Rio Canas, Inc., 847 F.2d 908, 915-16 (1st Cir. 1988) (discussing federal courts’ “inherent power to provide themselves with appropriate instruments required for the performance of their duties”) (quoting Ex Parte Peterson, 253 U.S. 300, 312, 40 S.Ct. 543, 547, 64 L.Ed. 919 (1920)). Of course, stays cannot be cavalierly dispensed: there must be good cause for their issuance; they must be reasonable in duration; and the court must ensure that competing equities are weighed and balanced. See, e.g., Ainsworth Aristocrat Int’l Pty. Ltd. v. Tourism Co. of P.R., 818 F.2d 1034, 1039 (1st Cir. 1987); Providence Journal Co. v. FBI, 595 F.2d 889, 890 (1st Cir. 1979) Chang v. Univ. of R.I., 107 F.R.D. 343, 344 (D.R.I. 1985).
[26] In our judgment, FIRREA cannot be read to foreclose district courts from granting stays above and beyond the 90-day automatic stay described in section 1821(d)(12). Moreover, given Congress’ insistence that virtually all claims against failed financial institutions should be subjected to administrative scrutiny once the FDIC steps in as a receiver, we see no reason why, in the vast majority of leftover pre-receivership cases, district judges would not, upon request of a party, hold pending litigation in abeyance until the administrative review process has run its course, or 180 days has passed, whichever first occurs.
[7] See Simms, 785 F. Supp. at 325 (staying pending action as suggested herein);
Coston, 782 F. Supp. at 1533,
1536 (Congress intended that pending actions be stayed until the ACRP was completed);
In re FDIC, 762 F. Supp. 1002,
1004-05 (D.Mass. 1991) (although FIRREA does not explicitly provide for a stay greater than 90 days, a stay for the duration of the claims processing period is necessarily implied);
Tuxedo Beach Club Corp. v. City Fed. Sav. Bank, 737 F. Supp. 18,
20 (D.N.J. 1990) (Congress intended 180 day stay);
see also Bank of New England v. Callahan, 758 F. Supp. 61,
64 (D.N.H. 1991) (staying action for duration of claims processing period);
cf. Fillinger v. Cleveland Soc’y for the Blind, 587 F.2d 336,
338 (6th Cir. 1978) (staying suit to permit exhaustion of administrative and arbitral remedies under newly enacted statute).
[27] IV. CONCLUSION
[28] We need go no further. We hold that FIRREA did not strip the federal courts of subject matter jurisdiction over civil actions pending against a failed financial institution at the time the FDIC takes over as the institution’s receiver. The court may, however, in its discretion — and ordinarily should — stay proceedings for more than the 90 days specified in
12 U.S.C. § 1812(d)(12) so as to permit exhaustion of the mandatory administrative claims review process.
[8] Hence, we affirm the district court’s refusal to dismiss the underlying actions for want of subject matter jurisdiction and remand the cases to the court below for further proceedings not inconsistent herewith. Costs shall be taxed in appellees’ favor.
[29]
So Ordered.
APPENDIX
12 U.S.C. § 1821(d) (Supp. II 1990)
(d) Powers and duties of Corporation as conservator or
receiver
(1) Rulemaking authority of Corporation
The Corporation may prescribe such regulations as
the Corporation determines to be appropriate
regarding the conduct of conservatorships or
receiverships.
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(2) General powers
(A) Successor to institution
The Corporation shall, as conservator or receiver,
and by operation of law, succeed to —
(i) all rights, titles, powers, and privileges of
the insured depository institution, and of any
stockholder, member, accountholder, depositor,
officer, or director of such institution with respect
to the institution and the assets of the institution;
and
(ii) title to the books, records, and assets of any
previous conservator or other legal custodian of such
institution.
(B) Operate the institution
The Corporation may, as conservator or receiver
—
(i) take over the assets of and operate the insured
depository institution with all the powers of the
members or shareholders, the directors, and the
officers of the institution and conduct all business
of the institution;
(ii) collect all obligations and money due the
institution;
(iii) perform all functions of the institution in
the name of the institution which is consistent with
the appointment as conservator or receiver; and
(iv) preserve and conserve the assets and property
of such institution.
(C) Functions of institution’s officers, directors, and
shareholders
The Corporation may, by regulation or order,
provide for the exercise of any function by any
member or stockholder, director, or officer of any
insured depository institution for which the
Corporation has been appointed conservator or
receiver.
(D) Powers as conservator
The Corporation may, as conservator, take such
action as may be —
(i) necessary to put the insured depository
institution in a sound and solvent condition; and
(ii) appropriate to carry on the business of the
institution and preserve and conserve the assets and
property of the institution.
(E) Additional powers as receiver
The Corporation may, as receiver, place the
insured depository institution in liquidation and
proceed to realize upon the assets of the
institution, having due regard to the conditions of
credit in the locality.
(F) Organization of new institutions
The Corporation may, as receiver —
(i) with respect to savings associations and by
application to the Director of the Office of Thrift
Supervision, organize a new Federal savings
association to take over such assets or such
liabilities as the Corporation may determine to be
appropriate; and
(ii) with respect to any insured bank, organize a
new national bank under subsection (m) of this
section or a bridge bank under subsection (n) of this
section.
(G) Merger; transfer of assets and liabilities
(i) In general
The Corporation may, as conservator or receiver —
(I) merge the insured depository institution with
another insured depository institution; or
(II) subject to clause (ii), transfer any asset or
liability of the institution in default (including
assets and liabilities associated with any trust
business) without any approval, assignment, or
consent with respect to such transfer.
(ii) Approval by appropriate Federal banking agency
No transfer described in clause (i)(II) may be made
to another depository institution (other than a new
bank or a bridge bank established pursuant to
subsection (m) or (n) of this section) without the
approval of the appropriate Federal banking agency
for such institution.
(H) Payment of valid obligations
The Corporation, as conservator or receiver,
shall pay all valid obligations of the insured
depository institution in accordance with the
prescriptions and limitations of this chapter.
(I) Subpoena authority
(i) In general
The Corporation may, as conservator, receiver, or
exclusive manager and for purposes of carrying out
any power, authority, or duty with respect to an
insured depository institution (including
determining any claim against the institution and
determining and realizing upon any asset of any
person in the course of
Page 1157
collecting money due the institution), exercise any
power established under section 1818(n) of this
title, and the provisions of such section shall apply
with respect to the exercise of any such power under
this subparagraph in the same manner as such
provisions apply under such section.
(ii) Authority of Board of Directors
A subpoena or subpoena duces tecum may be issued
under clause (i) only by, or with the written
approval of, the Board of Directors or their
designees (or, in the case of a subpoena or subpoena
duces tecum issued by the Resolution Trust
Corporation under this subparagraph and section
1441a(b)(4)[3] of this title, only by, or with the
written approval of, the Board of Directors of such
Corporation or their designees).
(iii) Rule of construction
This subsection shall not be construed as limiting
any rights that the Corporation, in any capacity,
might otherwise have under section 1820(c) of this
title.
(J) Incidental powers
The Corporation may, as conservator of receiver —
(i) exercise all powers and authorities
specifically granted to conservators or receivers,
respectively, under this chapter and such incidental
powers as shall be necessary to carry out such
powers; and
(ii) take any action authorized by this chapter,
which the Corporation determines is in the best
interests of the depository institution, its
depositors, or the Corporation.
(3) Authority of receiver to determine claims
(A) In general
The Corporation may, as receiver, determine
claims in accordance with the requirements of this
subsection and regulations prescribed under
paragraph (4)(A).
(B) Notice requirements
The receiver, in any case involving the
liquidation or winding up of the affairs of a
closed depository institution, shall —
(i) promptly publish a notice to the depository
institution’s creditors to present their claims,
together with proof, to the receiver by a date
specified in the notice which shall be not less than
90 days after the publication of such notice; and
(ii) republish such notice approximately 1 month
and 2 months, respectively, after the publication
under clause (i).
(C) Mailing required
The receiver shall mail a notice similar to the
notice published under subparagraph (B)(i) at the
time of such publication to any creditor shown on
the institution’s books —
(i) at the creditor’s last address appearing in
such books; or
(ii) upon discovery of the name and address of a
claimant not appearing on the institution’s books
within 30 days after the discovery of such name and
address.
(4) Rulemaking authority relating to determination of
claims
The Corporation may prescribe regulations regarding
the allowance or disallowance of claims by the
receiver and providing for administrative
determination of claims and review of such
determination.
(5) Procedures for determination of claims
(A) Determination period
(i) In general
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.
(ii) Extension of time
The period described in clause (i) may be extended
by a written agreement between the claimant and the
Corporation.
(iii) Mailing of notice sufficient
The requirements of clause (i) shall be deemed to
be satisfied if the notice of any determination with
respect to any claim is mailed to the
Page 1158
last address of the claimant which appears —
(I) on the depository institution’s books;
(II) in the claim filed by the claimant; or
(III) in documents submitted in proof of the
claim.
(iv) Contents of notice of disallowance
If any claim filed under clause (i) is disallowed,
the notice to the claimant shall contain —
(I) a statement of each reason for the
disallowance; and
(II) the procedures available for obtaining
agency review of the determination to disallow the
claim or judicial determination of the claim.
(B) Allowance of proven claims
The receiver shall allow any claim received on
or before the date specified in the notice
published under paragraph (3)(B)(i) by the
receiver from any claimant which is proved to the
satisfaction of the receiver.
(C) Disallowance of claims filed after end of filed
period
(i) In general
Except as provided in clause (ii), claims filed
after the date specified in the notice published
under paragraph (3)(B)(i) shall be disallowed and
such disallowance shall be final.
(ii) Certain exceptions
Clause (i) shall not apply with respect to any
claim filed by any claimant after the date specified
in the notice published under paragraph (3)(B)(i) and
such claim may be considered by the receiver if —
(I) the claimant did not receive notice of the
appointment of the receiver in time to file such
claim before such date; and
(II) such claim is filed in time to permit
payment of such claim.
(D) Authority to disallow claims
The receiver may disallow any portion of any
claim by a creditor or claim of security,
preference, or priority which is not proved to the
satisfaction of the receiver.
(E) No judicial review of determination pursuant to
subparagraph (D)
No court may review the Corporation’s
determination pursuant to subparagraph (D) to
disallow a claim.
(F) Legal effect of filing
(i) Statute of limitation tolled
For purposes of any applicable statute of
limitations, the filing of a claim with the receiver
shall constitute a commencement of an action.
(ii) No prejudice to other actions
Subject to paragraph (12), the filing of a claim
with the receiver shall not prejudice any right of
the claimant to continue any action which was filed
before the appointment of the receiver.
(6) Provision for agency review or judicial determination
of claims
(A) In general
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).
(B) Statute of limitations
If any claimant fails to —
(i) request administrative review of any claim in
accordance with subparagraph (A) or (B) of paragraph
(7); or
(ii) file suit on such claim (or continue an action
commenced before the appointment of the receiver),
before the end of the 60-day period described in
subparagraph (A), the claim shall be deemed to be
disallowed (other than any portion of such claim
which was allowed by the receiver) as of the end
of such period, such disallowance
Page 1159
shall be final, and the claimant shall have no
further rights or remedies with respect to such
claim.
(7) Review of claims
(A) Administrative hearing
If any claimant requests review under this
subparagraph in lieu of filing or continuing any
action under paragraph (6) and the Corporation
agrees to such request, the Corporation shall
consider the claim after opportunity for a hearing
on the record. The final determination of the
Corporation with respect to such claim shall be
subject to judicial review under chapter 7 of
title 5.
(B) Other review procedures
(i) In general
The Corporation shall also establish such
alternative dispute resolution processes as may be
appropriate for the resolution of claims filed under
paragraph (5)(A)(i).
(ii) Criteria
In establishing alternative dispute resolution
processes, the Corporation shall strive for
procedures which are expeditious, fair, independent,
and low cost.
(iii) Voluntary binding or nonbinding procedures
The Corporation may establish both binding and
nonbinding processes, which may be conducted by any
government or private party, but all parties,
including the claimant and the Corporation, must
agree to the use of the process in a particular case.
(iv) Consideration of incentives
The Corporation shall seek to develop incentives
for claimants to participate in the alternative
dispute resolution process.
(8) Expedited determination of claims
(A) Establishment required
The Corporation shall establish a procedure for
expedited relief outside of the routine claims
process established under paragraph (5) for
claimants who —
(i) allege the existence of legally valid and
enforceable or perfected security interests in assets
of any depository institution for which the
Corporation has been appointed receiver; and
(ii) allege that irreparable injury will occur if
the routine claims procedure is followed.
(B) Determination period
Before the end of the 90-day period beginning on
the date any claim is filed in accordance with the
procedures established pursuant to subparagraph
(A), the Corporation shall —
(i) determine —
(I) whether to allow or disallow such claim; or
(II) whether such claim should be determined
pursuant to the procedures established pursuant to
paragraph (5); and
(ii) notify the claimant of the determination, and
if the claim is disallowed, a statement of each
reason for the disallowance and the procedure for
obtaining agency review or judicial determination.
(C) Period for filing or renewing suit
Any claimant who files a request for expedited
relief shall be permitted to file a suit, or to
continue a suit filed before the appointment of
the receiver, seeking a determination of the
claimant’s rights with respect to such security
interest after the earlier of —
(i) the end of the 90-day period beginning on the
date of the filing of a request for expedited relief;
or
(ii) the date the Corporation denies the claim.
(D) Statute of limitations
If an action described in subparagraph (C) is
not filed, or the motion to renew a previously
filed suit is not made, before the end of the
30-day period beginning on the date on which such
action or motion may be filed in accordance with
subparagraph (B), the claim shall be deemed to be
disallowed as of the end of such period (other
than any portion of such claim which was allowed
by the receiver), such disallowance shall be
final, and the claimant shall have no further
rights or remedies with respect to such claim.
(E) Legal effect of filing
(i) Statute of limitation tolled
For purposes of any applicable statute of
limitations, the filing of a claim with the receiver
shall constitute a commencement of an action.
Page 1160
(ii) No prejudice to other actions
Subject to paragraph (12), the filing of a claim
with the receiver shall not prejudice any right of
the claimant to continue any action which was filed
before the appointment of the receiver.
(9) Agreement as basis of claim
(A) Requirements
Except as provided in subparagraph (B), any
agreement which does not meet the requirements set
forth in section 1823(e) of this title shall not
form the basis of, or substantially comprise, a
claim against the receiver or the Corporation.
(B) Exception to contemporaneous execution requirement
Notwithstanding section 1823(e)(2) of this
title, any agreement relating to an extension of
credit between a Federal home loan bank or Federal
Reserve bank and any insured depository
institution which was executed before the
extension of credit by such bank to such
institution shall be treated as having been
executed contemporaneously with such extension of
credit for purposes of subparagraph (A).
(10) Payment of claims
(A) In general
The receiver may, in the receiver’s discretion
and to the extent funds are available, pay
creditor claims which are allowed by the receiver,
approved by the Corporation pursuant to a final
determination pursuant to paragraph (7) or (8), or
determined by the final judgment of any court of
competent jurisdiction in such manner and amounts
as are authorized under this chapter.
(B) Payment of dividends on claims
The receiver may, in the receiver’s sole
discretion, pay dividends on proved claims at any
time, and no liability shall attach to the
Corporation (in such Corporation’s corporate
capacity or as receiver), by reason of any such
payment, for failure to pay dividends to a
claimant whose claim is not proved at the time of
any such payment.
(11) Distribution of assets
(A) Subrogated claims; claims of uninsured depositors
and other creditors
The receiver shall —
(i) retain for the account of the Corporation such
portion of the amounts realized from any liquidation
as the Corporation may be entitled to receive in
connection with the subrogation of the claims of
depositors; and
(ii) pay to depositors and other creditors the net
amounts available for distribution to them.
(B) Distribution to shareholders of amounts remaining
after payment of all other claims and expenses
In any case in which funds remain after all
depositors, creditors other claimants, and
administrative expenses are paid, the receiver
shall distribute such funds to the depository
institution’s shareholders or members together
with the accounting report required under
paragraph (14)(C).
(12) Suspension of legal actions
(A) In general
After the appointment of a conservator or
receiver for an insured depository institution,
the conservator or receiver may request a stay for
a period not to exceed —
(i) 45 days, in the case of any conservator; and
(ii) 90 days, in the case of any receiver, in any
judicial action or proceeding to which such
institution is or becomes a party.
(B) Grant of stay by all courts required
Upon receipt of a request by any conservator or
receiver pursuant to subparagraph (A) for a stay
of any judicial action or proceeding in any court
with jurisdiction of such action or proceeding,
the court shall grant such stay as to all parties.
(13) Additional rights and duties
(A) Prior final adjudication
The Corporation shall abide by any final
unappealable judgment of any court of competent
jurisdiction which was rendered before the
appointment of the Corporation as conservator or
receiver.
(B) Rights and remedies of conservator or receiver
In the event of any appealable judgment, the
Corporation as conservator or receiver shall
—
Page 1161
(i) have all the rights and remedies available to
the insured depository institution (before the
appointment of such conservator or receiver) and the
Corporation in its corporate capacity, including
removal to Federal court and all appellate rights;
and
(ii) not be required to post any bond in order to
pursue such remedies.
(C) No attachment or execution
No attachment or execution may issue by any
court upon assets in the possession of the
receiver.
(D) 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 which the Corporation may acquire
from itself as such receiver; or
(ii) any claim relating to any act or omission of
such institution or the Corporation as receiver.
(14) Statute of limitations for actions brought by
conservator or receiver
(A) In general
Notwithstanding any provision of any contract,
the applicable statute of limitations with regard
to any action brought by the Corporation as
conservator or receiver shall be —
(i) in the case of any contract claim, the longer
of —
(I) the 6-year period beginning on the date the
claim accrues; or
(II) the period applicable under State law; and
(ii) in the case of any tort claim, the longer of
—
(I) the 3-year period beginning on the date the
claim accrues; or
(II) the period applicable under State law.
(B) Determination of the date on which a claim accrues
For purposes of subparagraph (A), the date on
which the statute of limitation begins to run on
any claim described in such subparagraph shall be
the later of —
(i) the date of the appointment of the Corporation
as conservator or receiver; or
(ii) the date on which the cause of action accrues.
(15) Accounting and recordkeeping requirements
(A) In general
The Corporation as conservator or receiver
shall, consistent with the accounting and
reporting practices and procedures established by
the Corporation, maintain a full accounting of
each conservatorship and receivership or other
disposition of institutions in default.
(B) Annual accounting or report
With respect to each conservatorship or
receivership to which the Corporation was
appointed, the Corporation shall make an annual
accounting or report, as appropriate, available to
the Secretary of the Treasury, the Comptroller
General of the United States, and the authority
which appointed the Corporation as conservator or
receiver.
(C) Availability of reports
Any report prepared pursuant to subparagraph (B)
shall be made available by the Corporation upon
request to any shareholder of the depository
institution for which the Corporation was
appointed conservator or receiver or any other
member of the public.
(D) Recordkeeping requirement
After the end of the 6-year period beginning on
the date the Corporation is appointed as receiver
of an insured depository institution, the
Corporation may destroy any records of such
institution which the Corporation, in the
Corporation’s discretion, determines to be
unnecessary unless directed not to do so by a
court of competent jurisdiction or governmental
agency, or prohibited by law.
(16) Contracts with State housing finance authorities
(A) In general
The Corporation may enter into contracts with
any State housing finance authority for the sale
of mortgage-related assets (as such terms are
defined in section 1441a-1 of this title) of any
depository institution in default (including
assets and liabilities associated with any trust
business), such contracts to be effective in
accordance with their terms without any further
Page 1162
approval, assignment, or consent with respect
thereto.
(B) Factors to consider
In evaluating the disposition of mortgage
related assets to any State housing finance
authority the Corporation shall consider —
(i) the State housing finance authority’s ability
to acquire and service current, delinquent, and
defaulted mortgage related assets;
(ii) the State housing finance authority’s ability
to further national housing policies;
(iii) the State housing finance authority’s
sensitivity to the impact of the sale of mortgage
related assets upon the State and local communities;
(iv) the costs to the Federal Government associated
with alternative ownership or dispositions of the
mortgage related assets;
(v) the minimization of future guaranties which may
be required of the Federal Government;
(vi) the maximization of mortgage related asset
values; and
(vii) the utilization of institutions currently
established in mortgage related asset market
activities.
(17) Fraudulent transfers
(A) In general
The Corporation, as conservator or receiver for
any insured depository institution, and any
conservator appointed by the Comptroller of the
Currency or the Director of the Office of Thrift
Supervision may avoid a transfer of any interest
of an institution-affiliated party, or any person
who the Corporation or conservator determines is a
debtor of the institution, in property, or any
obligation incurred by such party or person, that
was made within 5 years of the date on which the
Corporation or conservator was appointed
conservator or receiver if such party or person
voluntarily or involuntarily made such transfer or
incurred such liability with the intent to hinder,
delay, or defraud the insured depository
institution, the Corporation or other conservator,
or any other appropriate Federal banking agency.
(B) Right of recovery
To the extent a transfer is avoided under
subparagraph (A), the Corporation or any
conservator described in such subparagraph may
recover, for the benefit of the insured depository
institution, the property transferred, or, if a
court so orders, the value of such property (at
the time of such transfer) from —
(i) the initial transferee of such transfer or the
institution-affiliated party or person for whose
benefit such transfer was made; or
(ii) any immediate or mediate transferee of any
such initial transferee.
(C) Rights of transferee or obligee
The Corporation or any conservator described in
subparagraph (A) may not recover under
subparagraph (B) from —
(i) any transferee that takes for value, including
satisfaction or securing of a present or antecedent
debt, in good faith; or
(ii) any immediate or mediate good faith transferee
of such transferee.
(D) Rights under this paragraph
The rights under this paragraph of the
Corporation and any conservator described in
subparagraph (A) shall be superior to any rights
of a trustee or any other party (other than any
party which is a Federal agency) under title 11.
(18) Attachment of assets and other injunctive relief
Subject to paragraph (19), any court of competent
jurisdiction may, at the request of —
(A) the Corporation (in the Corporation’s
capacity as conservator or receiver for any insured
depository institution or in the Corporation’s
corporate capacity with respect to any asset
acquired or liability assumed by the Corporation
under this section or section 1822 or 1823 of this
title); or
(B) any conservator appointed by the Comptroller
of the Currency or the Director of the Office of
Thrift Supervision,
issue an order in accordance with Rule 65 of the
Federal Rules of Civil Procedure, including an order
placing the assets of any person designated by the
Corporation or such conservator under the control of
the court and appointing a trustee to hold such
assets.
Page 1163
(19) Standards
(A) Showing
Rule 65 of the Federal Rules of Civil Procedure
shall apply with respect to any proceeding under
paragraph (18) without regard to the requirement
of such rule that the applicant show that the
injury, loss, or damage is irreparable and
immediate.
(B) State proceeding
If, in the case of any proceeding in a State
court, the court determines that rules of civil
procedure available under the laws of such State
provide substantially similar protections to such
party’s right to due process as Rule 65 (as
modified with respect to such proceeding by
subparagraph (A)), the relief sought by the
Corporation or a conservator pursuant to paragraph
(18) may be requested under the laws of such
State.
(e) Provisions relating to contracts entered into before
appointment of conservator or receiver
(1) Authority to repudiate contracts
In addition to any other rights a conservator or
receiver may have, the conservator or receiver for
any insured depository institution may disaffirm or
repudiate any contract or lease —
(A) to which such institution is a party;
(B) the performance of which the conservator or
receiver, in the conservator’s or receiver’s
discretion, determines to be burdensome; and
(C) the disaffirmance or repudiation of which
the conservator or receiver determines, in the
conservator’s or receiver’s discretion, will
promote the orderly administration of the
institution’s affairs.
(2) Timing of repudiation
The conservator or receiver appointed for any
insured depository institution in accordance with
subsection (c) of this section shall determine
whether or not to exercise the rights of repudiation
under this subsection within a reasonable period
following such appointment.
(3) Claims for damages for repudiation
(A) In general
Except as otherwise provided in subparagraph (C)
and paragraphs (4), (5), and (6), the liability of
the conservator or receiver for the disaffirmance
or repudiation of any contract pursuant to
paragraph (1) shall be —
(i) limited to actual direct compensatory damages;
and
(ii) determined as of —
(I) the date of the appointment of the
conservator or receiver; or
(II) in the case of any contract or agreement
referred to in paragraph (8), the date of the
disaffirmance or repudiation of such contract or
agreement.
(B) No liability for other damages
For purposes of subparagraph (A), the term
“actual direct compensatory damages” does not
include —
(i) punitive or exemplary damages;
(ii) damages for lost profits or opportunity; or
(iii) damages for pain and suffering.
(C) Measure of damages for repudiation of financial
contracts
In the case of any qualified financial contract
or agreement to which paragraph (8) applies,
compensatory damages shall be —
(i) deemed to include normal and reasonable costs
of cover or other reasonable measures of damages
utilized in the industries for such contract and
agreement claims; and
(ii) paid in accordance with this subsection and
subsection (k) of this section except as otherwise
specifically provided in this section.
(4) Leases under which the institution is the lessee
(A) In general
If the conservator or receiver disaffirms or
repudiates a lease under which the insured
depository institution was the lessee, the
conservator or receiver shall not be liable for
any damages (other than damages determined
pursuant to subparagraph (B)) for the
disaffirmance or repudiation of such lease.
ORDER OF THE COURT
June 4, 1992.
The petition for rehearing en banc filed by the Federal Deposit
Insurance Corporation is, under this court’s internal operating
procedures, considered both by the panel and by the full court.
Panel rehearing is hereby denied for the following reason.
The FDIC’s argument to the effect that
12 U.S.C. § 1821(d)(6)(A) requires a stay of pre-receivership litigation
until the statutory claims review process is completed has
Page 1164
no bearing on these appeals (as here, the district court granted,
rather than denied, a supplemental stay). The instant petition,
therefore, amounts to no more than a request for an advisory
opinion — a request that we decline to honor. We take no view of
whether, in an appropriate case, section 1821(d)(6)(A) may
require a supplemental stay pending completion of the
administrative claims review process.
