Zucker v. Rodriguez

United States Court of Appeals
For the First Circuit

No. 17-1749

CLIFFORD A. ZUCKER, in his capacity as plan administrator of R&G
Financial Corp.,

Plaintiff, Appellant,

v.

ROLANDO RODRIGUEZ; MARIA VINA; CONJUGAL PARTNERSHIP RODRIGUEZ-
VINA; NELIDA FUNDORA; ANDRES I. PEREZ; JOSEPH R. SANDOVAL;
JACQUELINE MARIE CATES-ELLEDGE; CONJUGAL PARTNERSHIP SANDOVAL-
CATES; VICENTE GREGORIO; CARMEN A. MARTINEZ; CONJUGAL
PARTNERSHIP GREGORIO-MARTINEZ; MELBA ACOSTA; XL SPECIALTY
INSURANCE COMPANY; VICTOR J. GALAN; CONJUGAL PARTNERSHIP GALAN-
FUNDORA; FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of
R-G Premier Bank of Puerto Rico,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

[Hon. Pedro A. Delgado-Hernández, U.S. District Judge]

Before

Lynch, Stahl, and Kayatta,
Circuit Judges.

Alfred S. Lurey, with whom Stephen E. Hudson, Todd C. Meyers,
Kilpatrick Townsend & Stockton, LLP, Carlos A. Rodríguez-Vidal,
and Goldman Antonetti & Córdova, L.L.C., were on brief for
appellant.
Joseph Brooks, Counsel, Federal Deposit Insurance
Corporation, with whom Colleen J. Boles, Assistant General
Counsel, and Kathryn R. Norcross, Senior Counsel, were on brief
for appellee Federal Deposit Insurance Corporation.
 Andrew W. Robertson, Zwerling, Schachter & Zwerling, LLP,
Roberto A. Cámara-Fuertes, and Ferraiuoli LLC on brief for
appellees Joseph R. Sandoval, Jaqueline Marie Cates-Elledge, and
Conjugal Partnership Sandoval-Elledge.
Andrés Rivero, Alan H. Rolnick, M. Paula Aguila, Bryan L.
Paschal, and Rivero Mestre LLP, on brief for appellees Rolando
Rodriguez, Andres I. Perez, Vicente Gregorio, Melba Acosta-Febo,
and Victor J. Galan.

March 27, 2019
 LYNCH, Circuit Judge. In 2010, R&G Financial

Corporation, a holding company, entered Chapter 11 bankruptcy

after its primary subsidiary, R-G Premier Bank of Puerto Rico (the

Bank), failed. Weeks prior, Puerto Rican regulators had closed

the Bank and named the Federal Deposit Insurance Corporation (FDIC)

as the Bank's receiver. The Bank's failure was one of the largest

in Puerto Rico's history, costing the FDIC's Deposit Insurance

Fund at least $1.2 billion.

Two years after the Bank's failure, Clifford Zucker, the

plan administrator (the Administrator) for the Chapter 11 estate

of R&G Financial (the Holding Company), filed this suit against

six of the Holding Company's former directors and officers (the

Directors) and their insurer, XL Specialty Insurance Company.1

The Administrator's complaint alleged that negligence and breach

of fiduciary duties owed to the Holding Company caused the Bank's

failure and the Holding Company's resultant loss of its investment

in the Bank. The FDIC intervened to defend its interests as the

Bank's receiver, arguing that the claims asserted belonged to it

and not to the Administrator. We affirm the district court's

dismissal of the complaint, albeit on different reasoning. See

1 The other defendants are the Directors' spouses and the
legal conjugal partnerships formed between the Directors and their
spouses.

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Zucker v. Rodriguez, No. 12-CV-1408, 2017 WL 2345683, at *1 (D.P.R.

May 30, 2017).2

The FDIC and the Directors argue that the

Administrator's complaint must be dismissed because the claims he

has asserted for the Holding Company are the FDIC's under 12 U.S.C.

§ 1821(d)(2)(A), a provision of the Financial Institutions Reform,

Recovery, and Enforcement Act of 1989 (FIRREA). That provision

provides that as receiver of a bank, the FDIC "shall . . . succeed

to . . . all rights, titles, powers, and privileges of the insured

depository institution, and of any stockholder . . . of such

institution with respect to the institution and the assets of the

institution." We agree that, under § 1821(d)(2)(A), the FDIC

succeeded to the Administrator's claims, and affirm on that ground.

I.

The following facts are taken from the complaint, except

where otherwise noted. Cooper v. Charter Commc'ns Entm'ts I, LLC,

760 F.3d 103, 105 (1st Cir. 2014).

A. The Bank and the Holding Company

The Bank was established in 1983 as a federal savings

bank and became a subsidiary of the Holding Company in 1994.3 Like

2 The district court's order captioned the case as Zuker
v. Rodriguez, No. 12-CV-1408.
3 See Executive Summary, Office of Inspector General,
Material Loss Review of R-G Premier Bank of Puerto Rico, Hato Rey,
Report No. MLR-11-009 (Dec. 2010),
https://www.fdicoig.gov/sites/default/files/publications/11-

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other savings and loan, or thrift, institutions, the Bank's primary

lending activity was home mortgages. See Executive Summary, OIG

Report; see also United States v. Winstar Corp., 518 U.S. 839,

844-45 (1996) (plurality opinion) (describing the thrift

industry). In the 2000s, the Holding Company, with its

subsidiaries, was Puerto Rico's second-largest residential

mortgage loan originator and servicer. As the Holding Company's

primary subsidiary, the Bank did most of this lending.4 Indeed,

from 2009 until the Bank's failure, the Bank's assets made up over

ninety percent of the Holding Company's assets. See OIG Report

at 3 n.2.

The Holding Company and the Bank had separate boards,

but the same individuals served on both boards. See id. at 3.

The entities also shared a CEO.5 Victor Galán, a defendant here,

009.pdf (last visited Mar. 6, 2019) [hereinafter OIG Report].
This report, the authenticity of which is not disputed, is
extensively quoted in the Administrator's complaint, has "merge[d]
into th[at] pleading[]," and may be properly considered on a motion
to dismiss. See Alt. Energy, Inc. v. St. Paul Fire & Marine Ins.
Co., 267 F.3d 30, 33 (1st Cir. 2001) (quoting Beddall v. State St.
Bank & Tr. Co., 137 F.3d 12, 17 (1st Cir. 1998)).
4 In 2005, the Bank accounted for sixty-six percent of the
Holding Company's assets. See OIG Report at 3 n.2.
5 See Complaint at 5, FDIC v. Galán-Alvarez, No. 12-CV-
1029 (D.P.R. Jan. 18, 2012). The district court took judicial
notice of this complaint filed by the FDIC against officers and
directors of the Bank for grossly negligent conduct that led to
the Bank's failure. Zucker, 2017 WL 2345683, at *4 n.4. We do
the same. See E.I. Du Pont de Nemours & Co. v. Cullen, 791 F.2d
5, 7 (1st Cir. 1986) (Breyer, J.) (taking judicial notice of the

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was the Holding Company's President and Chief Executive Officer

(CEO) until 2006. He remained Chairman of both boards until

December 2008, and he controlled at least fifty-eight percent of

the Holding Company's stock during the relevant period. Rolando

Rodríguez, also a defendant, took over as President and CEO of the

Holding Company in 2007. Galán and Rodríguez also served as CEOs

of the Bank while leading the Holding Company. See Complaint at

5, Galán-Alvarez, No. 12-CV-1029.

Also among the director defendants are Joseph Sandoval,

Vincente Gregorio, Andres Pérez, and Melba Acosta-Febo, each of

whom served at some relevant time as Executive Vice President and

Chief Financial Officer (CFO) of the Holding Company. The record

does not say what roles, if any, these defendants held at the Bank.

B. Mid-2000s Accounting Fraud Scheme

While Galán and Sandoval were at the helm, the Holding

Company and the Bank engaged in an accounting fraud scheme with

two other major lending institutions in Puerto Rico -- First

BanCorp and Doral Financial Corporation (Doral) -- and their

subsidiary banks. The accounting scheme, which ran from 2002

until 2005, involved a series of transactions in which the Holding

Company or the Bank transferred interest in non-conforming

mortgage loans to First BanCorp, Doral, or to their subsidiary

complaint in a relevant case on a motion to dismiss).

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banks. The participants then improperly recorded these

transactions on their books as true sales; with proper accounting,

the transactions would have been categorized as secured lending

transactions. Categorizing the transactions as true sales allowed

the participants to account for the sales as gains. Ultimately,

because of the scheme, each bank holding company reported greater

assets than it actually had and appeared healthier than it actually

was on capital- and risk-related measures.

In 2005, investors questioned assumptions disclosed in

Doral's 2004 Form 10-K used to calculate the "gains" from its

transactions with the Holding Company and the Bank. In April of

that year, the Holding Company publicly acknowledged that because

of the accounting scheme, it would need to restate its consolidated

financial statements for 2003 and 2004. The consolidated

statements presented aggregated financial information for the

Holding Company and its subsidiaries, including the Bank. The

errors in the consolidated financial statements were sizable, in

dollar terms: for example, for 2004, the Holding Company misstated

its net income as $160.2 million when it had actually suffered a

loss of $15.9 million.

C. The Bank's Failure

The Administrator's complaint alleged that negligence

and breach of fiduciary duties by the Directors in the aftermath

of this accounting scheme led to years-long delays in the

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correction of the consolidated financial statements for 2002

through 2004 and in the preparation and issuance of new

consolidated financial statements for 2005 through 2008.6 These

delays, the complaint said, led to the failure of the Bank and to

resulting losses to the Holding Company.

Between 2005 and 2010, the Holding Company and its

subsidiaries, including the Bank, desperately needed to replenish

the capital eroded during the accounting fraud and subsequent class

action litigation.7 These capital shortages were exacerbated by

the 2008 collapse of the housing market in Puerto Rico and

elsewhere. In 2006 and 2007, in an apparent effort to raise

capital, the Holding Company had sold off several other non-bank

subsidiaries. However, it retained ownership of its wholly owned

mortgage lending business, R&G Mortgage Corporation, and the Bank.8

Further capital-raising efforts faltered because, without up-to-

date consolidated financial statements, it was impossible, the

Administrator's complaint alleged, for the Holding Company and its

6 The restated 2002 through 2004 statements were not
issued until the fall of 2007. The 2005 to 2007 statements were
not issued until 2009. The 2008 statements were issued in 2010.
7 Several class actions related to the accounting fraud
were filed in federal court in New York and Puerto Rico. After
the suits were consolidated, the class actions were resolved by a
court-approved settlement.
8 It also kept a portion of R&G Investments Corporation.

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subsidiaries to access capital markets or private capital

sufficient to remain solvent.

The Bank failed on April 30, 2010 when Puerto Rican

regulators closed it and named the FDIC as its receiver. By that

time, the Holding Company had made R&G Mortgage a subsidiary of

the Bank. The Holding Company had transferred all of its stock

interests in R&G Mortgage to the Bank to satisfy debt owed by R&G

Mortgage to the Bank. When the Bank closed, its liabilities

exceeded its assets by at least $1.2 billion. See OIG Report at

1. This $1.2 billion difference is the estimated loss to the

FDIC's Deposit Insurance Fund because of the Bank's failure. Id.

Having lost its only significant operating subsidiary,

the Holding Company filed for Chapter 11 bankruptcy in May 2010.

D. Procedural Histories of the Administrator's Action and the
FDIC's Action

The Administrator initiated this proceeding in the

Holding Company's Chapter 11 case in May 2012. The complaint's

Counts I through IV alleged that the Directors acted negligently

and breached their fiduciary duties to the Holding Company by

failing to implement and maintain effective internal controls over

financial reporting. Counts V and VI alleged that the Directors

breached a fiduciary duty of care owed to the Holding Company by

failing to provide complete and accurate financial reports to the

Holding Company's board. (Recall that the financial statements

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of the Holding Company and the Bank were consolidated.) Count XI

of the complaint was brought against XL Specialty Insurance Company

and alleged that the claims asserted fell within the coverage

provided to the Directors by XL. Finally, Counts VII through X

of the complaint were ultimately withdrawn and are discussed below.

The sole injury alleged in the complaint was the Holding

Company's loss of its interest in the Bank when the Bank failed.

"The loss of [the Bank] caused severe injury to [the Holding

Company]," the complaint stated, "in an amount to be proven at

trial but not less than $278 million."

Once the reference to the bankruptcy court was withdrawn

and the case was in federal district court, the FDIC moved to

intervene to protect its interests as receiver of the Bank. Its

motion informed the district court of an action filed by the FDIC

alleging that gross negligence by officers and directors of the

Bank in the supervision of the Bank's lending practices led to the

Bank's failure. See Complaint at 2-4, Galán-Alvarez, No. 12-CV-

1029.

The FDIC's complaint named as defendants three of the

defendants in this case -- Galán and Rodríguez, in their capacities

as CEO of the Bank, and XL Specialty Insurance Company. See id.

at 1-2. As stated above, Galán and Rodríguez led the Bank, the

Holding Company, and both entities' boards. Further, the same XL

Specialty Insurance policy insured the officers and directors of

- 10 -
the Holding Company, defendants here, and the officers and

directors of the Bank, defendants in the FDIC's action. Compare

Complaint at 4, Galán-Alvarez, No. 12-CV-1029, with Complaint at

36, Zucker v. Rodriguez, No. 12-00270-MCF (Bankr. P.R. May 11,

2012).

After the district court granted the FDIC leave to

intervene, the FDIC and the Directors moved to dismiss.9 They

argued that the Administrator lacked standing to assert his claims

because the claims belong to the FDIC under 12 U.S.C.

§ 1821(d)(2)(A), which we quoted earlier.10

The Administrator then filed a notice of withdrawal of

various claims that he admitted the FDIC had succeeded to under

§ 1821(d)(2)(A). These claims, in Counts VII through X of the

complaint (and parts of Counts V and VI) alleged that the Directors

had failed to implement adequate risk controls and good lending

practices at the Bank. These claims overlapped with the claims

brought by the FDIC in its action.

9 One of the Directors instead filed a motion for judgment
on the pleadings. The district court addressed this motion with
the motions to dismiss. Zucker, 2017 WL 2345683, at *2.
10 The Directors' motion also argued other grounds for
dismissal not reached by the district court. Zucker, 2017 WL
2345683, at *2 & n.2. On appeal, Sandoval continues to press one
of these grounds, but our disposition of the case makes it
unnecessary to reach that argument.

- 11 -
 In its order allowing the Administrator to withdraw

these claims and dismissing the remainder of the complaint, the

district court read § 1821(d)(2)(A) to allocate to the FDIC all

claims that shareholders like the Holding Company might assert

derivatively on behalf of the Bank under the relevant state law.

Zucker, 2017 WL 2345683, at *3. Concluding that the

Administrator's claims were derivative under Puerto Rican law and

that the claims therefore belonged to the FDIC, the district court

dismissed the Administrator's complaint for lack of standing. Id.

at *12.

II.

We hold, based on our interpretation of the text of

§ 1821(d)(2)(A), the persuasive value of the FDIC's interpretation

of this provision (which it administers), and our rejection of the

Administrator's interpretive arguments, that the Administrator's

claims belong to the FDIC and were thus properly dismissed.11

We begin with a close look at the structure of federal

savings and loan regulation and at FIRREA. The savings and loan

industry has long been highly "regulated and . . . closely

supervised" by the federal government. Winstar, 518 U.S. at 844

11 The district court dismissed the complaint for lack of
standing. Zucker, 2017 WL 2345683, at *1. We affirm the
dismissal on the ground that the Administrator cannot state a claim
upon which relief can be granted because his claims belong to the
FDIC.

- 12 -
(quoting Fahey v. Mallonee, 332 U.S. 245, 250 (1947)). Indeed,

in enacting FIRREA, Congress described the thrift industry as a

"federally-conceived and assisted system," one whose purpose is

"to provide citizens with affordable housing funds." H.R. Rep.

No. 101-54(I), at 292 (1989). "Every thrift," Congress explained,

"is chartered by the government and consequently, voluntarily

assumes an enormous public responsibility in return for deposit

insurance and other government benefits." Id. at 294.

That system was born in the Great Depression. After

forty percent of the country's home mortgages were defaulted on

and almost two thousand savings institutions failed, Congress

created federal agencies authorized to charter and to regulate

thrifts and established federal insurance for thrift deposits.12

See Winstar, 518 U.S. at 844; see also Home Owners' Loan Act of

1933, ch. 64, 48 Stat. 128 (1933) (codified as amended at 12 U.S.C.

§§ 1461-1468); National Housing Act of 1934, ch. 847, 48 Stat.

1246, 1255 (1934) (codified as amended at 12 U.S.C. §§ 1701-1749).

12 Deposit insurance stabilizes financial institutions, and
the wider economy, by guaranteeing deposits in the event of bank
failure. See, e.g., Kenneth E. Scott & Thomas Mayer, Risk and
Regulation in Banking: Some Proposals for Federal Deposit
Insurance Reform, 23 Stan. L. Rev. 857, 858 (1971); see also Levin
v. Miller, 763 F.3d 667, 674 (7th Cir. 2014) (Hamilton, J.,
concurring) (describing FDIC's "vital roles in socializing losses
to protect depositors and stabilize the economy"). Insurance not
only replaces deposits that would be lost, but it also reassures
the public about the security of their deposits, thereby preventing
dangerous bank runs. Scott & Mayer, supra, at 858.

- 13 -
 Federal deposit insurance has been funded primarily by

premiums collected from banks. See Kenneth E. Scott & Thomas

Mayer, Risk and Regulation in Banking: Some Proposals for Federal

Deposit Insurance Reform, 23 Stan. L. Rev. 857, 864 (1971) ("The

purpose of charging insurance premiums . . . is to require the

banking and [savings and loan] industries to cover the costs they

impose on the economy."). But it is ultimately "backed by the

full faith and credit of the United States government," making the

taxpayers the final guarantors of losses. Levin v. Miller, 763

F.3d 667, 674 (7th Cir. 2014) (Hamilton, J., concurring); see also

id. (describing deposit insurance as a form of "socializing

losses") (citing Joseph E. Stiglitz, Freefall: America, Free

Markets, and the Sinking of the World Economy (2010)). Indeed,

Congress has on several occasions appropriated money to make up

for shortfalls in the thrift deposit insurance fund. See, e.g.,

12 U.S.C. § 1441b(f)(2)(E) (authorizing use of Department of

Treasury funds to address insolvencies at thrift institutions

after the savings and loan crisis); see also Cheryl D. Block,

Measuring the True Cost of Government Bailout, 88 Wash. U. L. Rev.

149, 166-69 (2010) (discussing the role of federal funds in

supporting deposit insurance).

The savings and loan crisis of the 1980s was one such

occasion. Block, supra, at 167. Then, thousands of thrift

institutions failed, federal agencies lacked sufficient resources

- 14 -
to address the failures, and the existing deposit insurance fund

teetered toward insolvency. See Winstar, 518 U.S. at 846-47.

Congress responded with FIRREA. See Financial Institutions

Reform, Recovery, and Enforcement Act of 1989, Pub. L. 101-73, 103

Stat. 183 (1989). FIRREA not only "put the Federal deposit

insurance funds on a sound financial footing." Id. § 101

(codified at 12 U.S.C. § 1811 note). It also restructured and

expanded the government's regulatory and enforcement powers. See

Winstar, 518 U.S. at 856 (noting the "enormous changes in the

structure of federal thrift regulation" made in FIRREA); see also,

e.g., LaSalle Talman Bank, F.S.B. v. United States, 317 F.3d 1363,

1372–73 (Fed. Cir. 2003) (FIRREA made "a fundamental change in

savings and loan regulatory policy and procedure, for the greater

public benefit").

Relevant here, FIRREA transferred to the FDIC from a

predecessor agency the power to act as conservator or receiver of

a failed thrift institution. FIRREA, § 212 (codified at 12 U.S.C.

§ 1821); see also H.R. Rep. 101-45(I), at 329-31 (noting that these

powers were transferred). In doing so, Congress aimed "to give

the FDIC power to take all actions necessary to resolve the

problems posed by a financial institution in default." H.R. Rep.

101-45(I), at 329-31. The FIRREA provision at issue defines the

"General powers" of the FDIC as the "Successor to [the]

- 15 -
institution." 12 U.S.C. § 1821(d)(2). Again, the relevant

subparagraph reads:

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.

12 U.S.C. § 1821(d)(2)(A).

III.

In holding that the FDIC succeeded to the

Administrator's claims under § 1821(d)(2)(A), we first conclude

that § 1821(d)(2)(A)(i)'s language about the "rights . . . of any

stockholder . . . with respect to the institution and the assets

of the institution" plainly encompasses the Administrator's

claims. We reject the Administrator's favored reading of

§ 1821(d)(2)(A), which limits the provision's key language to

claims that shareholders may assert derivatively under state law

on behalf of the institution in receivership. There is no support

in the text of § 1821(d)(2)(A) for such a judicial gloss. Nor do

the Administrator's non-textual interpretive arguments, which we

evaluate in the next section, convince us to depart from our

reading of the plain language. And while the FDIC does not have

much of a track record of interpreting that text in this context,

- 16 -
it reads the provision it administers as we read it, not as the

Administrator does; the FDIC's arguments in support of its reading

are persuasive.

Our ruling is a limited one: it applies only to claims

like those before us. The claims are brought by a former bank

holding company to recover its interest in a wholly owned

subsidiary bank (a bank that made up over ninety percent of the

holding company's assets). And the holding company seeks to

recover from assets, like insurance, that the FDIC also seeks in

its own action related to the Bank's failure. We do not establish

any broader principles, and future claims by holding companies and

other shareholders of banks in FDIC receivership will need to be

evaluated on their own terms. With that overview in place, we

turn back once again to § 1821(d)(2)(A)'s text.

When the FDIC succeeded to "all rights, titles, powers,

and privileges of the insured depository institution, and of any

stockholder . . . of such institution with respect to the

institution and the assets of the institution," it succeeded to

the Administrator's claims. 12 U.S.C. § 1821(d)(2)(A)(i). We

reach that conclusion by applying the provision's terms to the

claims step-by-step. Cf. New Prime Inc. v. Oliveira, 139 S. Ct.

532, 537-38 (2019) (emphasizing the importance of step-by-step

reading).

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 First, the Holding Company was the Bank's sole

shareholder, so the Holding Company's right to bring legal claims

is a "right[] . . . of [a] stockholder" of the Bank. 12 U.S.C.

§ 1821(d)(2)(A)(i). As the FDIC emphasizes, although the claims

allege breach of duties owed to the Holding Company by the Holding

Company's officers and directors, the claims are not brought by

the Holding Company qua Holding Company. Instead, the suit

depends entirely on the Holding Company's position as a Bank

stockholder, as it seeks to recover for lost interest in the Bank.

The claims, as pleaded by the Administrator, necessarily require

the Administrator to prove that, but-for the malfeasance of the

Holding Company Directors, the assets of the Bank would have been

much greater, and that increase in Bank assets would have inured

to the benefit of the Holding Company as the Bank's parent

stockholder.

Second, it follows from that reading of the complaint

that the claims represent the assertion of a right of the

stockholder "with respect to . . . the assets of the institution"

in receivership. Id. That the claims depend on the Holding

Company's proving that malfeasance by its directors depressed the

Bank's assets means that the claims relate to or concern the assets

of the Bank. See, e.g., Khan v. United States, 548 F.3d 549, 556

(7th Cir. 2008) (defining "with respect to" as "pertaining to" or

"concerning"); cf. Lamar, Archer & Cofrin, LLP v. Appling, 138 S.

- 18 -
Ct. 1752, 1760 (2018) (defining "respecting" and "relating to").

The claims in the Administrator's complaint therefore constitute

the assertion of rights of a stockholder with respect to the assets

of the Bank.

We add that the Holding Company's right to bring the

insurance coverage claim in Count XI is a "right[] . . . of [a]

stockholder . . . with respect to . . . the assets of the

institution" for another, independent reason: the coverage under

the insurance policy is an asset shared by the Holding Company and

the Bank, so the Holding Company's competing right to that coverage

is a claim of a stockholder with respect to an asset of the Bank.

12 U.S.C. § 1821(d)(2)(A)(i).

In sum, because the Administrator's claims assert

"right[s] . . . of [a] stockholder . . . of [the Bank] . . . with

respect to the [Bank] and the assets of the [Bank]," the FDIC as

receiver succeeded to those claims "by operation of law" under

§ 1821(d)(2)(A).

The Administrator urges us to read this language about

the rights of a stockholder as limited to claims that the Holding

Company might assert derivatively under state law on behalf of the

Bank. He argues that his claims are direct under Puerto Rico law

so that, under his reading, the FDIC did not succeed to them.

The most basic problem for the Administrator's

interpretation is that the direct-derivative distinction appears

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nowhere in the language of § 1821(d)(2)(A). Courts must avoid

reading into statutes concepts or exceptions absent from the text,

so we cannot assume, without a textual basis, that Congress

intended to place such a limitation on the FDIC's power. See,

e.g., Barnhart v. Sigmon Coal Co., 534 U.S. 438, 461–62 (2002)

("[C]ourts must presume that [Congress] says in a statute what it

means and means in a statute what it says there." (quoting Conn.

Nat'l Bank v. Germain, 503 U.S. 249, 253-54 (1992))); EPA v. EME

Homer City Generation, L.P., 572 U.S. 489, 508 (2014) (rejecting

an interpretation that would add to the statute an "unwritten

exception"); cf. United States v. Nunez, 146 F.3d 36, 40 (1st Cir.

1998) (rejecting "an unwritten limitation plucked from thin air"

in the sentencing guidelines).

The Administrator points to the majority opinion in

Levin v. Miller, 763 F.3d 667 (7th Cir. 2014), the only other

circuit case to engage with this textual question to date. There,

the majority read the phrase "rights . . . with respect to . . .

the assets of the institution" to refer, just "in other words," to

claims "that investors . . . would pursue derivatively." Id. at

672. Yet those concepts are not self-evidently synonymous, and

the Levin majority provided no further explanation. In

concurrence, Judge Hamilton disagreed with the majority's reading,

writing, "[i]f 'rights . . . of any stockholder' was meant to refer

only to derivative claims, it's a broad and roundabout way of

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expressing that narrower idea." Id. at 673 (Hamilton, J.,

concurring).13 We agree, and conclude that Levin's reasoning does

not supply a textual basis for the Administrator's interpretation.

The other circuit cases applying § 1821(d)(2)(A) that

the Administrator relies on also do not help him. Barnes v.

Harris, 783 F.3d 1185 (10th Cir. 2015) and Vieira v. Anderson (In

re Beach First Nat'l Bancshares, Inc.), 702 F.3d 772 (4th Cir.

2012) evaluated, using the direct-derivative distinction, whether

the FDIC had succeeded to claims brought by former bank holding

companies. But both did so without considering whether, under the

language of § 1821(d)(2)(A), the FDIC's ownership is limited to

derivative claims.

In fact, those cases are consistent with our holding

that § 1821(d)(2)(A) covers the Administrator's claims. The

Administrator concedes that Barnes is inconsistent with his

position. There, the court held that § 1821(d)(2)(A) allocated

to the FDIC claims that are, in all legally relevant respects,

indistinguishable from the Administrator's. Barnes, 783 F.3d at

13 The concurrence framed this point as one about avoiding
statutory surplusage. Levin, 763 F.3d at 673. The parties here
debate whether the Administrator's reading creates surplusage. We
find the Administrator's reading unpersuasive without resort to an
evaluation of those surplusage arguments. Cf. Rimini St., Inc. v.
Oracle USA, Inc., No. 17-1625, 2019 WL 1005828, at *7 (U.S. Mar.
4, 2019) (recognizing, even when there may be statutory redundancy,
a party may still "overstate[] the significance of statutory
surplusage" arguments).

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1194. As for Vieira, that case decided that the FDIC succeeded

to claims by a former holding company's trustee in bankruptcy

against the holding company's directors, reasoning that the claims

were based entirely on harms to the bank's assets. 702 F.3d at

779. Here, the FDIC stresses the Administrator's concession that

all of the Administrator's claims are based solely on the Bank's

failure. And the FDIC emphasizes its authority, indeed its

responsibility, to recover for the same Bank failure from a similar

set of defendants.

Finally, the Administrator argues that the FDIC's

position should be rejected because the FDIC had not, before this

litigation, advanced the reading of § 1821(d)(2)(A) that it

embraces now and that we adopt. But the FDIC has never changed

its fundamental position. In Levin, Vieira, and Barnes, as here,

the FDIC said that § 1821(d)(2)(A) allocated claims like the

Administrator's to the FDIC. That those past suits were framed

in state law terms does not preclude the FDIC from relying on the

plain language of § 1821(d)(2)(A) here.

In this litigation, the FDIC takes the position that

nothing in the language of § 1821(d)(2)(A) limits the claims to

which the FDIC succeeds to claims that state law classifies as

derivative. This litigation position, the FDIC says, largely

encompasses the reasoning of Judge Hamilton's concurring opinion

in Levin. See 763 F.3d at 673-74.

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 The FDIC adds that Congress confirmed, in a related

provision, that the FDIC should own actions like the Holding

Company's. The provision lays out FIRREA's priority scheme for

the payment of certain claims not allocated to the FDIC. This

scheme provides that claims of shareholders, "including any

depository institution holding company," cannot be satisfied until

after all other claims, by depositors and others. 12 U.S.C.

§ 1821(d)(11)(A)(v). The Administrator's interpretation, were it

applied here, would allow former bank holding companies to turn

this priority scheme on its head.

Finally, the FDIC says that, should we determine that

§ 1821(d)(2)(A) is ambiguous, then its litigation position is

entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134,

140 (1944).

In the end, there is no ambiguity in Congress's choice

not to limit the claims to which the FDIC succeeds to derivative

claims. Our conclusion that § 1821(d)(2)(A) covers the

Administrator's claims is consistent with the plain meanings of

the words Congress chose. Further, compared to the

Administrator's narrowing construction, our reading better

reflects § 1821(d)(2)(A)'s breadth. See Pareto v. FDIC, 139 F.3d

696, 700 (9th Cir. 1998) (stating that "Congress has transferred

everything it could to the FDIC"); see also Levin, 763 F.3d at 673

(Hamilton, J., concurring).

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 IV.

Ordinarily, our interpretive efforts stop when, as here,

the meaning of a provision's text is plain. See, e.g., NLRB v.

SW Gen., Inc., 137 S. Ct. 929, 942 (2017) ("The text is clear, so

we need not consider this extra-textual evidence."); Robb Evans &

Assocs., LLC v. United States, 850 F.3d 24, 34 (1st Cir. 2017)

("If the plain language of a statute elucidates its meaning, that

meaning governs."). But the Administrator makes two additional

interpretive arguments. Neither convinces us to depart from our

reading.

A. Absurdity and Avoidance

The Administrator first argues that our reading must be

avoided because it leads to an absurd result. State law, the

Administrator says, does not grant the subsidiary Bank standing to

bring his claims alleging breach of duties to the parent Holding

Company. As a result, the Administrator contends, if

§ 1821(d)(2)(A) is read to allocate his claims to the FDIC as that

Bank's receiver, his claims would disappear.

This resort to state law and the holding company form is

unconvincing. What the Administrator's argument misses is that

§ 1821(d)(2)(A) itself conveys, "by operation of law," the

relevant rights in the causes of action to the FDIC. For that

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simple reason, those rights are not lost, they are transferred,

and they now belong to the FDIC.14

Next, the Administrator objects that transferring his

right in the causes of action to the FDIC would violate the

Constitution's Takings Clause and should therefore be avoided.

But "[t]he canon [of constitutional avoidance] 'has no

application' absent 'ambiguity.'" Nielsen v. Preap, No. 16-1363,

2019 WL 1245517, at *13 (U.S. Mar. 19, 2019) (quoting Warger v.

Shauers, 574 U.S. 40, 50 (2014)). Given that the text of

§ 1821(d)(2)(A) "cuts clearly against" the Administrator's

reading, adopting that interpretation for reasons of

constitutional avoidance is not an option. Id.

There is no constitutional problem in any event. The

Takings Clause requires the government to provide "just

compensation" before taking private property for "public use,"

U.S. Const. amend. V, but only for deprivations of vested property

rights, see, e.g., Landgraf v. USI Film Prod., 511 U.S. 244, 266

14 As a policy matter, vesting the holding company's claims
in the FDIC is not absurd, it is sensible. That is especially
true where a former holding company and the FDIC seek to recover
for the same bank failure from the same pot of money (here, the
same insurance policy). Vesting the claims in FDIC prevents
holding companies that may have contributed to or failed to prevent
the collapse of their wholly owned subsidiary banks from recovering
"ahead of or on par with the FDIC" for the bank's failure. Levin,
763 F.3d at 673; see Barnes, 783 F.3d at 1195 (finding such a
result "consistent with the requirement that shareholders not
circumvent the interests of creditors and the FDIC").

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(1994). And, for purposes of the Takings Clause, "[i]t is well

established that a party's property right in a cause of action

does not vest 'until a final, unreviewable judgment has been

obtained.'" Cooperativa de Ahorro y Credito Aguada v. Kidder,

Peabody & Co., 993 F.2d 269, 273 n.11 (1st Cir. 1993) (quoting

Hammond v. United States, 786 F.2d 8, 12 (1st Cir. 1986)); see

also Hoffman v. City of Warwick, 909 F.2d 608, 621 (1st Cir.

1990).15

B. Legislative History and Legislative Intent

The Administrator next argues that § 1821(d)(2)(A)

cannot be read to cover his claims based on his view of the

legislative history of a rejected amendment to FIRREA. We will

not "allow[] ambiguous legislative history to muddy clear

statutory language." Milner v. Dep't of Navy, 562 U.S. 562, 572

(2011); see also Barnhart, 534 U.S. at 457 (similar). The text

here is clear, and so this rejected amendment cannot change our

result.

We find the rejected amendment irrelevant in any event.

The Senate version of FIRREA initially included § 214(o), which

read:

15Other circuits have observed the same. See, e.g.,
Bowers v. Whitman, 671 F.3d 905, 914 (9th Cir. 2012); Sowell v.
Am. Cyanamid Co., 888 F.2d 802, 805 (11th Cir. 1989). The Court
of Federal Claims cases relied on by the Administrator are neither
binding nor, in the face of this settled law, persuasive.

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 In any proceeding related to any claim
acquired under [§ 1821] against an insured
financial institution's director, officer,
employee, agent, attorney, accountant,
appraiser, or any other party employed by or
providing services to an insured financial
institution, any suit, claim, or cause of
action brought by the Corporation shall have
priority over any such suit, claim, or cause
of action asserted by depositors, creditors,
or shareholders of the insured financial
institution . . . .

S. 774, 101st Cong. § 214(o) (1989). This, as the Administrator

reads it, would have given priority to the FDIC in proceedings

"related" to claims the FDIC had acquired as receiver. The

conference committee tasked with reconciling the House and Senate

versions of the bill cut § 214(o) from the final version of FIRREA.

The Administrator asks us to infer that the conference

committee's rejection of § 214(o)'s priority language means that

Congress could not have intended to give the FDIC ownership of

claims like his. Inferences of this sort are notoriously

unreliable and are to be avoided by courts. The fact that Congress

rejected a provision about one thing tells us little about what

Congress intended in enacting a provision about something else.

See generally William N. Eskridge, Jr., Interpreting Legislative

Inaction, 87 Mich. L. Rev. 67, 94 (1988) ("[L]egislative inaction

rarely tells us much about relevant legislative intent."); see

NLRB v. C & C Plywood Corp., 385 U.S. 421, 426-27 (1967) (rejecting

- 27 -
an inference from a rejected amendment). Congress might have

excluded § 214(o) for any number of reasons.

The Administrator urges that a floor statement by a

member of the conference committee demonstrates that the amendment

was rejected for relevant reasons. Courts do not attribute to

Congress as a whole the views expressed in individual legislators'

floor statements. See SW Gen., 137 S. Ct. at 943 ("[F]loor

statements by individual legislators rank among the least

illuminating forms of legislative history."). In any event, the

primary fear expressed in the floor statement was that § 214(o)

would reduce private parties' incentives to bring securities fraud

suits, undermining the federal government's ability to rely on

those parties to aid in anti-fraud efforts and "lead[ing] to more

fraud." 135 Cong. Rec. H4985, H4989 (daily ed. Aug. 3, 1989)

(statement of Rep. Staggers). But this action is not one alleging

fraud or one to enforce the securities laws. Moreover, we think

that allocating the Administrator's claims to the FDIC increases

incentives for bank holding companies not to engage in conduct

that leads to a bank's failure.

V.

The long history of extensive federal involvement in the

savings and loan industry reveals that the protection of depositors

and the stability of thrift institutions are paramount among

congressional concerns. A strong and solvent deposit insurance

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fund and an FDIC well-equipped to recover funds to address the

needs of failed banks are essential to achieving those goals. We

doubt that a Congress with these concerns would have intended to

allow a holding company that played a role in the failure of its

subsidiary bank to recover for that bank's failure at the expense

of the FDIC, the deposit insurance fund, and ultimately, ordinary

depositors and taxpayers. See Levin, 763 F.3d at 674 (Hamilton,

J., concurring); Barnes, 783 F.3d at 1195.

The judgment of the district court is affirmed.

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