956 F.3d 1304
11th Cir.2020Background
- In 2011 BBX’s predecessor (Bancorp) sold BankAtlantic to BB&T under an SPA that obligated Bancorp/BBX to make large severance payments to five executives, with BB&T to reimburse BBX.
- At the time the Bank and Bancorp were in “troubled” condition and subject to consent orders and the FDIC’s golden-parachute regulations, which bar certain post-termination payments absent regulatory approval.
- BBX applied for approval; the FDIC concluded the SPA payments were golden parachutes, would only concur to payments up to 12 months’ salary (change-in-control exception), and required BBT to seek approval before reimbursing BBX.
- The FRB approved 12 months’ salary under the change-in-control exception and took no action on amounts above 12 months because FDIC concurrence was withheld.
- BBX sued the FDIC and FRB under the APA and the Fifth Amendment; the district court dismissed claims against the FRB for lack of standing and granted summary judgment for the FDIC. The Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue the FRB | BBX: FRB’s timing/substantive action caused injury; FRB rubberstamped FDIC and required BBT to seek approval | FRB: FDIC’s veto, not FRB action/inaction, caused the injury; FRB’s decision approving 12 months did not harm BBX | No standing: BBX’s injury not fairly traceable to the FRB; dismissal affirmed |
| Whether the FDIC’s classification of the SPA payments as golden parachutes was arbitrary and capricious | BBX: statute/regulations shouldn’t apply indefinitely to payments tied to past service or where executives performed well; SPA obligations aren’t covered | FDIC: statute targets qualifying payments/agreements received after a troubled determination; SPA payments fit the statutory/regulatory definition | Affirmed: FDIC’s application of the statute to the SPA was reasonable and consistent with the statute |
| Whether denying amounts above 12 months’ salary under regulator’s-concurrence exception was arbitrary and capricious | BBX: FDIC failed to adequately consider executives’ lack of wrongdoing/responsibility and positive performance | FDIC: applicant must first certify no misconduct; then FDIC permissibly weighed §359.4(b) discretionary factors (managerial responsibility, tenure/compensation, other considerations) and legislative intent to deny excess payments | Affirmed: FDIC reasonably applied discretionary factors and did not act arbitrarily |
| Requirement that BBT obtain approval before reimbursing BBX; due process claim | BBX: FDIC’s reimbursement-approval requirement was arbitrary and violated BBX’s property/due-process rights | FDIC: reimbursement constitutes indirect golden-parachute payments; FDIC explained rationale; procedural safeguards sufficient | Affirmed: FDIC provided reasoned basis; no due-process violation shown |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires injury, causation, redressability)
- Chevron U.S.A. Inc. v. NRDC Inc., 467 U.S. 837 (agency statutory interpretation framework)
- Strickland v. Alexander, 772 F.3d 876 (11th Cir.) (ministerial action and standing principles)
- Loggerhead Turtle v. Cty. Council of Volusia Cty., Fla., 148 F.3d 1231 (11th Cir.) (causation in standing when third-party action intervenes)
- United States v. Mead Corp., 533 U.S. 218 (deference to agency gap-filling)
- Sierra Club v. Johnson, 436 F.3d 1269 (11th Cir.) (agency interpretations of their own regulations given weight)
- Miccosukee Tribe of Indians of Fla. v. United States, 566 F.3d 1257 (11th Cir.) (deferential arbitrary-and-capricious standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment "genuine dispute" standard)