Daniel Wollschlager v. FDIC, 992 F.3d 574

The State Bank (Fentura Financial) hired banking executive Daniel Wollschlager during the 2008 recession and agreed to a golden‑parachute retirement payment if he was terminated early.
The bank was designated “troubled” by the FDIC in October 2009; an amended retirement agreement in December 2010 increased the payout to $245,000 (rescinding the original agreement).
Upon Wollschlager’s separation in 2011, Fentura paid $138,000 (one year’s salary) with FDIC and Federal Reserve approval, and later sought FDIC consent to pay the remaining ~$135,000 from the amended agreement plus $28,000 from a separation agreement.
The FDIC denied the second payment because (1) the total would be nearly two years’ salary contrary to FDIC guidance discouraging payments above 12 months’ salary, (2) Fentura had not obtained required preapproval for the agreements, and (3) Wollschlager had a relatively short three‑year tenure.
Wollschlager sued under the APA; the district court granted judgment on the administrative record for the FDIC, and the Sixth Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FDIC’s denial was arbitrary and capricious under the APA	FDIC failed to justify denying the second payment after approving the first	FDIC reasonably weighed statutory/regulatory factors (tenure, reasonableness, lack of preapproval, and guidance discouraging >12 months)	Denial was not arbitrary or capricious; agency gave adequate reasons
Whether the white‑knight exception required approval	Wollschlager: he was a white knight and the exception should apply	FDIC: white‑knight exception applies only to agreements made to hire, not to retain or to effect separation	Agreement before the FDIC was not made to hire; exception inapplicable
Whether FDIC waived or is estopped from denying the second payment after approving the first	Approval of the first payment waived FDIC’s right to assert lack of prior approval later	FDIC’s first approval was discretionary grace, not intentional relinquishment; no detrimental reliance	No waiver or estoppel; FDIC could deny later request
Whether FDIC failed to follow its own regulations or adequately consider white‑knight provision	FDIC ignored or misapplied its white‑knight rule	FDIC’s rationale is discernible; even if it didn’t expressly analyze white‑knight provision, any error was harmless because same factors apply	No reversible procedural error; decision stands

Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (standard for arbitrary and capricious review and no substitution of court judgment for agency discretion)
Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016) (agency must engage in reasoned decisionmaking)
Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971) (agency must consider relevant factors and articulate a rational connection between facts and decision)
BBX Capital v. Federal Deposit Ins. Corp., 956 F.3d 1304 (11th Cir. 2020) (upholding FDIC denial of payments exceeding 12 months’ salary after weighing discretionary factors)
Bowman Transp., Inc. v. Arkansas‑Best Freight Sys., Inc., 419 U.S. 281 (1974) (courts may uphold agency actions of less than ideal clarity if the path can reasonably be discerned)
Lyng v. Payne, 476 U.S. 926 (1986) (estoppel against the government requires detrimental reliance on a misrepresentation)
Glenn v. MetLife, 461 F.3d 660 (6th Cir. 2006) (appellate review standard for agency actions; review is de novo on the administrative record)
Nat'l Ass'n of Home Builders v. Defs. of Wildlife, 551 U.S. 644 (2007) (courts must account for prejudicial‑error rule; harmless error doctrine applies)