Granite Re, Inc. v. Nat'l Credit Union Adm Board, 956 F.3d 1041

Citizens Community Credit Union issued Granite Re, Inc. a clean, irrevocable letter of credit for $385,000 to secure bonds Granite issued for Vortex Drain Tiling. Granite relied on the LOC to issue over $4 million in bonds.
The LOC (issued July 8, 2015) auto‑extended annually unless Citizens gave 30 days’ notice; Citizens gave notice May 25, 2017 it would not renew.
Granite presented a draft for payment on July 3, 2017; Citizens did not pay. The NCUAB had appointed itself conservator of Citizens on June 23, 2017 and on July 20 repudiated the LOC as burdensome.
Granite demanded $385,000 in damages; NCUAB invoked 12 U.S.C. § 1787(c)(3), arguing recoverable damages are limited to actual direct compensatory damages determined as of the conservator’s appointment and that Granite had $0 because no draft was presented before appointment.
Granite sued in federal district court for wrongful repudiation and wrongful dishonor under North Dakota UCC § 41‑05‑11. The district court dismissed, holding § 1787(c) preempted the state UCC and that Granite lacked recoverable damages because no draft had been presented before the conservatorship.
The Eighth Circuit reversed and remanded, holding (1) a clean letter of credit qualifies as a “contract” under § 1787(c), (2) Granite plausibly alleged recoverable actual direct compensatory damages determinable at the conservator’s appointment, and (3) preemption of the state UCC was premature.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a letter of credit is a "contract" under 12 U.S.C. § 1787(c)	LOC is not a contract under North Dakota contract law	§ 1787(c)’s phrase "any contract" uses the common‑law, expansive meaning and includes LOCs	LOC is a contract for purposes of § 1787(c)
Whether Granite can recover under § 1787(c)(3) despite not having presented a draft before the conservator’s appointment	Granite incurred actual direct compensatory damages before appointment by relying on the LOC (issued bonds and suffered losses)	Recoverable damages are $0 because no sight draft was presented before appointment	Granite plausibly alleged recoverable actual direct compensatory damages determinable as of appointment; dismissal was improper
Whether § 1787(c) preempts North Dakota UCC §41‑05‑11	No conflict; both statutes can yield the same recovery here	§ 1787(c) limits remedies and therefore preempts conflicting broader state remedies	Preemption is premature — court declined to hold state UCC preempted absent a showing state recovery would exceed § 1787(c) limits

Molzof v. United States, 502 U.S. 301 (statutory term defined by federal law)
Perrin v. United States, 444 U.S. 37 (give undefined statutory words ordinary meaning)
United States v. Shabani, 513 U.S. 10 (presume use of common‑law definitions)
Ali v. Federal Bureau of Prisons, 552 U.S. 214 (interpretation of the word "any")
Glick v. W. Power Sports, Inc., 944 F.3d 714 (12(b)(6) standard; Eighth Circuit procedural precedent)
Nat’l Credit Union Admin. Bd. v. Goldman, Sachs & Co., 775 F.3d 145 (interpretation of "contract" in § 1787(c))
Nashville Lodging Co. v. Resolution Trust Corp., 59 F.3d 236 (reliance damages under similar receivership statute)
DPJ Co. v. FDIC, 30 F.3d 247 (damages under FDIC receivership statutes)
Jennings v. Rodriguez, 138 S. Ct. 830 (avoidance of statutory interpretations raising serious constitutional doubts)
Murr v. Wisconsin, 137 S. Ct. 1933 (Takings Clause principles)
English v. General Elec. Co., 496 U.S. 72 (do not find preemption where conflict is not clear)
Rice v. Norman Williams Co., 458 U.S. 654 (hypothetical conflicts insufficient for preemption)