815 F.3d 204
5th Cir.2016Background
- R. Allen Stanford donated to St. Jude, ALSAC, and Le Bonheur before the SEC found his business a Ponzi scheme; the court appointed Ralph Janvey as federal receiver over Stanford’s companies in Feb. 2009.
- The receiver sued many transferees for fraudulent transfers but did not sue the three petitioning charities; instead he assigned his claims against them to the Official Stanford Investors Committee (OSIC).
- OSIC sued the charities in federal court under Texas law, invoking 28 U.S.C. § 754 to assert federal-question jurisdiction based on the receiver’s federal appointment and the receiver’s assignment.
- The charities moved to dismiss for lack of subject-matter jurisdiction, arguing § 754 permits suits by a federal receiver only, not by an assignee; the district court denied dismissal, analogizing OSIC to a Chapter 11 unsecured-creditors’ committee and concluding § 754 supplied jurisdiction.
- Petitioners sought mandamus from this court to overturn the district court; the panel treated the petition as a motion for reconsideration and denied it, holding petitioners failed to show clear and indisputable error under mandamus standards.
Issues
| Issue | Plaintiff's Argument (OSIC) | Defendant's Argument (Charities/Petitioners) | Held |
|---|---|---|---|
| Whether 28 U.S.C. § 754 supplies federal jurisdiction for claims assigned by a federal receiver | § 754’s grant of capacity and ability to sue in any district permits the receiver to assign claims and OSIC to sue in federal court (analogy to bankruptcy creditor committees) | § 754 permits the federal receiver to sue in any district but does not let the receiver assign that federal-jurisdictional right to a non-receiver assignee | Denied mandamus; court declined to rule on the ultimate § 754 question because the petitioners failed to show clear and indisputable error—issue remains for appeal or later resolution |
| Whether a receiver may assign a statutory right to sue in federal court to a non-fiduciary assignee (assignability of jurisdiction) | Assignment is permissible here; OSIC acts to benefit receivership akin to bankruptcy committee authority | The statutory right to sue in federal court is personal to the receiver and not assignable absent statutory authorization | Court did not decide; mandamus denied for failure to show clear and indisputable error |
| Whether mandamus relief is appropriate (i.e., was the district court’s ruling a clear and indisputable error) | Petitioners urged immediate relief because the jurisdictional error is decisive and novel | Mandamus requires no other adequate remedy, a clear and indisputable right, and appropriateness; petitioners cannot show the second prong | Mandamus denied because petitioners failed to demonstrate clear and indisputable error; the panel expressly disclaimed any final ruling on the § 754 merits |
Key Cases Cited
- La. World Exposition v. Fed. Ins. Co., 858 F.2d 233 (5th Cir.) (analogizing receiver/committee authority in related contexts)
- Official Comm. of Unsecured Creditors of Cybergenics Corp. v. Chinery, 330 F.3d 548 (3d Cir.) (authority on creditor-committee suits in bankruptcy)
- In re Enron Corp., 319 B.R. 128 (Bankr. S.D. Tex.) (bankruptcy committee authority cited by district court)
- Nat’l Enters., Inc. v. Smith, 114 F.3d 561 (6th Cir.) (holding RTC’s statutory right to sue in federal court could not be assigned)
- In re Lloyd’s Register N. Am., Inc., 780 F.3d 283 (5th Cir.) (mandamus standard discussion)
- In re Occidental Petroleum Corp., 217 F.3d 293 (5th Cir.) (discussing error vs. clear-and-indisputable standard for mandamus)
- In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. en banc) (mandamus standard and standards for clear legal error)