Auction Company Amer v. FDIC

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

__________

Filed April 24, 1998

No. 96-5343

Auction Company of America,

Appellant

v.

Federal Deposit Insurance Corporation, as Manager

of the FSLIC Resolution Trust Fund,

Appellee

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Before: Wald, Williams and Rogers, Circuit Judges.

ON PETITION FOR REHEARING

ORDER

Per Curiam: Upon consideration of the petition for rehear-
ing of the Federal Deposit Insurance Corporation ("FDIC")
and of the response to the foregoing, it is

ORDERED, by the Court, that the petition is denied, for
the reasons set forth in the opinion of the Court filed herein
this date.

OPINION

Williams, Circuit Judge: Appellee FDIC petitions for re-
hearing of the decision in Auction Co. v. FDIC, 132 F.3d 746
(D.C. Cir. 1997) ("Auction Co. I"). The FDIC objects that
the panel has (1) wrongly asserted that a contract with the
FDIC as Receiver will support Tucker Act jurisdiction, and
(2) wrongly identified the source of judicial jurisdiction over
Auction Company's suit. We deny the petition for the follow-
ing reasons.

* * *

Auction Co. I held that the FDIC counted as "the United
States" for the purposes of the catch-all federal statute of
limitations for any "civil action commenced against the United
States," 28 U.S.C. s 2401(a). See 132 F.3d at 750. The
panel opinion reasoned that since s 2401(a) had originated as
part of the Tucker Act, the scope of "United States" in
s 2401(a) should be the same as its scope in the Tucker Act.
Id. at 749-50. That Act provides jurisdiction for suits against
the United States whenever "a federal instrumentality acts
within its statutory authority to carry out [the government's]
purposes" as long as no other specific statutory provision bars
jurisdiction. Butz Engineering Corp. v. United States, 499
F.2d 619, 622 (Ct. Cl. 1974); see also L'Enfant Plaza Proper-
ties, Inc. v. United States, 668 F.2d 1211, 1212 (Ct. Cl. 1982).

That the FDIC as Receiver "counts as the United States
for the Tucker Act," as we held in Auction Co. I, 132 F.3d at
750, does not, standing alone, establish Tucker Act jurisdic-
tion over the FDIC as Receiver. As we just observed, such
jurisdiction depends also on there being no specific statutory
bar to Tucker Act jurisdiction, a limitation that does not
affect the s 2401(a) analysis. Since the possible existence of
a specific bar to Tucker Act jurisdiction is not relevant to the
conclusion that the FDIC as Receiver counts as the United
States, that section of the panel opinion should not be taken
to suggest that no specific statutory bar exists. The FDIC
points to 12 U.S.C. s 1821(d)(13)(D) as such a bar; nothing in
the panel opinion should be taken to say that that section
never operates to preclude jurisdiction. We spell out below

the extent to which it does, so far as is necessary to identify
the source of jurisdiction in this case.

* * *

As we noted in Auction Co. I, the FDIC argued that the
district court had jurisdiction over this action pursuant to
s 1821(d)(6), which allows suit in district court following
administrative review of claims against depositories. The
panel rejected that suggestion and agreed with Auction Com-
pany's theory of jurisdiction, which looked to the FDIC's sue-
or-be-sued clause for a waiver of immunity and found subject
matter jurisdiction based on the Financial Institutions Re-
form, Recovery and Enforcement Act of 1989's ("FIRREA")
"deemer" clause, 12 U.S.C. s 1819(b)(2)(a). See 132 F.3d at
751.

The FDIC's petition for rehearing reiterates its theory of
jurisdiction, arguing that Auction Company's account cannot
be correct because the jurisdiction-precluding effect of
s 1821(d)(13)(D) extends to this case, allowing only such
jurisdiction as is granted in s 1821(d)(6).1 Although we will
not attempt to define fully the concept of "claims" as it
appears in subsections (d)(13)(D) and (d)(6) of 12 U.S.C.
s 1821, we will make clear the grounds for our rejection of
the FDIC's view of those sections as they apply to this case.

Section 1821(d)(13)(D) states in relevant part:

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
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1 The FDIC suggests also that our analysis of the jurisdictional
issue was unnecessary. This underestimates the imperatives of
limited federal jurisdiction. Federal courts have an independent
obligation to assure themselves of jurisdiction, even when the
parties fail to challenge it. See, e.g., FW/PBS, Inc. v. Dallas, 493
U.S. 215, 231 (1990); Floyd v. District of Columbia, 129 F.3d 152,
155 (D.C. Cir. 1997). Establishing the existence of federal jurisdic-
tion may be easy, but it is never unnecessary and never dictum.
See American Nat'l Red Cross v. S.G. & A.E., 505 U.S. 247, 255 n.5
(1992). Here the parties offer mutually incompatible theories of
jurisdiction, which would warrant a look from us if warrant were
needed.

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.

The only clause of the subsection that "otherwise pro-
vide[s]" jurisdiction is 12 U.S.C. s 1821(d)(6), which provides
for administrative determination of "any claim against a
depository institution for which the Corporation is receiver"
and thereafter for adjudication in district court. These two
subsections would seem to set up a standard exhaustion
requirement: (d)(6)(A) routes claims through an administra-
tive review process, and (d)(13)(D) withholds judicial review
unless and until claims are so routed. Their wording, howev-
er, creates a difficult interpretative problem: the jurisdiction-
precluding language of (d)(13)(D) can accommodate quite a
broad reading--broad enough to cover contracts between
private parties and the FDIC as Receiver for a failed deposi-
tory institution. But (d)(6)(A) is quite narrow--it allows
judicial review, after administrative determination, of "any
claim against a depository institution for which the Corpora-
tion is receiver." Thus, for claims that are not "against a
depository institution" but that do fall within (d)(13)(D), the
effect of the two sections, on a plain language approach,
would be not to impose an administrative exhaustion require-
ment but to foreclose judicial jurisdiction altogether, a result
troubling from a constitutional perspective and certainly not
the goal of FIRREA. See generally, e.g., Hudson United
Bank v. Chase Manhattan Bank of Connecticut, 43 F.3d 843,
848-49 (3d Cir. 1994) ("Congress did not intend FIRREA's
claims process to immunize the receiver, but rather wanted to
require exhaustion of the receivership claims process before
going to court."); Homeland Stores, Inc. v. RTC, 17 F.3d
1269, 1273-74 (10th Cir. 1994) (assuming that "Congress
intended those 'claims' barred by s 1821(d)(13)(D) to parallel
those contemplated under FIRREA's administrative claims
process"). A claim based on a contract with the FDIC as
Receiver for a particular depository is one of the types of

actions that fall into the gap. Such a contract might be either
(1) one entered into in the first instance by the FDIC as
Receiver, or (2) one inherited from a depository institution
and accepted by the receiver, rather than being rejected
pursuant to s 1821(e)(1) and (2). Such claims, particularly of
the first sort, do not appear to be claims "against a depository
institution" but they would, superficially, be ones "relating to
any act or omission of ... the Corporation as receiver." How
should a court resolve the problem? The obvious solution is
to read (d)(6)(A) and (d)(13)(D) to apply to the same
"claims." 2 We have called this a "plausible" method of
reconciliation, Nat'l Trust for Historic Preservation v. FDIC,
995 F.2d 238, 240 (D.C. Cir. 1993), vacated 5 F.3d 567,
reinstated in relevant part 21 F.3d 469 (D.C. Cir. 1994), and
other courts agree. See, e.g., Rosa v. RTC, 938 F.2d 383, 394
(3d Cir. 1991) (stating that (d)(13)(D) bar applies only to
claims "susceptible of resolution through the claims proce-
dure"); see also Henderson v. Bank of New England, 986
F.2d 319, 321 (9th Cir. 1993) (same, quoting Rosa).

There are two possible ways to produce such a harmonious
reading of "claims". One may either read (d)(6)(A) broadly,
ignoring the phrase "against a depository institution," or read
(d)(13)(D) narrowly, implying the phrase "against a deposito-
ry institution" on the basis of the statute's general focus on
such claims. See Office and Professional Employees Inter-
national Union v. FDIC, 962 F.2d 63, 68 (D.C. Cir. 1992)
("OPEIU"). The circuits have split on which approach to
take. Compare Stamm v. Paul, 121 F.3d 635 (11th Cir. 1997)
(applying s 1821(d)(6) to claim against receiver); Home Capi-

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2 Even such a harmonious reading would not necessarily limit the
net effect of (d)(6)(A) and (d)(13)(D) to the imposition of an exhaus-
tion requirement on a specific class of suits against the FDIC. For
example, it may well be that Congress intended entirely to prevent
parties from maintaining declaratory judgment actions against the
receiver, see Nat'l Union Fire Insurance Co. v. City Savings, 28
F.3d 376, 385-86 (3d Cir. 1994); cf. Nat'l Trust for Historic Preser-
vation v. FDIC, 21 F.3d 469, 471-73 (D.C. Cir. 1994) (Wald, J.,
concurring) (discussing operation of anti-injunction provision of
s 1821(j), and noting existence of claims procedure as alternative to
injunctive relief).

tal Collateral, Inc. v. FDIC, 96 F.3d 760 (5th Cir. 1996)
(same); Hudson, 43 F.3d at 848-49 (same) with Homeland,
17 F.3d at 1275 (holding administrative review process inap-
plicable to claims accruing after RTC's appointment as receiv-
er).

Our circuit has not taken a position on the issue, although
we have indicated that bankruptcy law is a useful aid in
understanding FIRREA. See OPEIU, 962 F.2d at 68. A
bankruptcy-modeled approach would draw a distinction be-
tween claims against the depository, which accrue before the
appointment of the receiver and are subject to administrative
determination,3 and claims against the receiver, which accrue
after appointment and are not. See, e.g., Matter of M.
Frenville Co., Inc., 744 F.2d 332, 335 (3d Cir. 1984) (noting
that post-petition claims are not subject to automatic stay);
11 U.S.C. 361(a)(1). But this case does not require us to
decide how far the bankruptcy distinction should guide us in
interpreting FIRREA. Section 1821(d)(13)(D) cannot apply
to Auction Company's suit regardless of how broadly "claim"
is read.

Section 1821(d)(13)(D)(ii), as discussed, bars jurisdiction
(except as otherwise provided in subsection (d)) over "any
claim relating to any act or omission of such institution or the
Corporation as receiver." Whatever may be the scope of
"claim," we think it is clear that the reference to "the
Corporation as receiver" in (d)(13)(D)(ii) means the Corpora-
tion as receiver for such institution (i.e., a particular institu-
tion of the sort referred to in (d)(13)(D)(i)). Omitting this
restriction would change s 1821(d)(13)(D) from an exhaustion
requirement to a grant of immunity for all claims arising from
acts the FDIC takes "as receiver"--except to the extent that
those claims could be handled by an administrative process
open only to claims "against a depository institution." We

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3 Claims based on contracts rejected by the receiver pursuant to
s 1821(e)(1) and (2) would fall into this category. Cf. 11 U.S.C.
ss 365(g), 502(g) (providing that rejection of an executory contract
by bankruptcy trustee is treated as breach occurring immediately
before filing of bankruptcy petition).

are confident that Congress did not intend such a result,
which would raise serious constitutional questions. See, e.g.,
Nat'l Union Fire Ins. Co. v. City Savings, 28 F.3d 376, 390
n.16 (3d Cir. 1994).

In this case, however, the FDIC did not act as receiver for
any particular depository. The contract it entered into relat-
ed to the assets of an unspecified number of unnamed deposi-
tories and provided that the assets could be unilaterally
withdrawn at any time up to 48 hours before the auction. We
refuse to conceive of this arrangement as a contract between
Auction Company and the FDIC as Receiver for a quantum
flux of probabilistic depositories whose identities are revealed
only by the filing of a lawsuit. A federal receivership is not
Schroedinger's cat. If the FDIC enters into a transaction
whose economic realities are impossible to square with the
notion that the FDIC is acting as receiver for a particular
depository, liability for its acts will run to the FDIC directly,
unmediated by exhaustion requirements governing claims
against depositories. If the FDIC acts as a generic receiver,
it must expect to be sued as such.

* * *

With this clarification, the petition for rehearing is hereby
denied.

So ordered.