Wmi Liquidating Trust v. Federal Deposit Insurance Corporation
110 F. Supp. 3d 44
D.D.C.2015Background
- WMI Liquidating Trust sues the FDIC under the APA seeking review of the FDIC’s denial of proposed golden parachute payments to claimants.
- FDIC regulations prohibit golden parachute payments and authorize limited exceptions under 12 C.F.R. § 359.4.
- Plaintiff sought regulatory approval for settlements tied to employment contracts and benefit plans; the FDIC denied the application in full.
- The statutory framework includes 12 U.S.C. § 1828(k) and related FDIC regulations (e.g., 12 C.F.R. § 359).
- The court grants partial relief by remanding to the FDIC for clarification and reconsideration of certain components, and dismisses count two as duplicative.
- The FDIC’s consideration hinges on two-step analysis: first certification under § 359.4(a)(4), then weighing factors under § 359.4(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FDIC’s denial was arbitrary and capricious under the APA. | WMI argues FDIC departed from policy and failed to adequately justify its denial. | FDIC reasonably interpreted and applied § 359.4 and its guidance to the record. | Remand to clarify rationale and address § 359.4(a)(4) deficiencies. |
| Whether the certification under § 359.4(a)(4) was properly required and assessed. | FDIC improperly denied on the basis of certifications lacking sufficient knowledge. | Certification requirements are mandatory and must be satisfied; the FDIC may rely on the certifications. | Remand needed to determine if failure to meet § 359.4(a)(4) alone suffices to deny. |
| Whether the FDIC properly weighed the § 359.4(b) factors in permissibility analysis. | FDIC misapplied or overemphasized certain factors against the payments. | FDIC reasonably considered managerial/fiduciary roles, duration, and other factors. | Remand to reassess Retention Bonus component and related reasoning. |
| Whether count two is duplicative and should be dismissed. | Count two seeks the same relief as count one. | Count two is duplicative and should be dismissed for judicial economy. | Count two dismissed as duplicative. |
Key Cases Cited
- Int'l Union, United Mine Workers of Am. v. Mine Safety & Health Admin., 626 F.3d 84 (D.C. Cir. 2010) (arbitrary-and-capricious review requires reasoned analysis and adherence to policy)
- Marsh v. Oregon Natural Res. Council, 490 U.S. 360 (S. Ct. 1989) (requirement that agency action reflect careful consideration of relevant factors)
- Batchelor v. Cornerstone Bank, 2013 WL 5309578 (E.D.N.C. 2013) (certifications under § 359.4(a)(4) are mandatory to deny payments)
- Knyal, 2003 WL 26465939 ((D.D.C. 2003)) (FDIC ‘may’ consider § 359.4(b)(1)-(3) factors; none controlling)
- Sara Lee Corp. v. Am. Bakers Ass’n Ret. Plan, 512 F. Supp. 2d 32 (D.D.C. 2007) (courts give deference to agency expertise in specialized areas)
- Jicarilla Apache Nation v. U.S. Dep’t of Interior, 613 F.3d 1112 (D.C. Cir. 2010) (harmless-error consideration in APA review when appropriate)
- Fogo De Chao (Holdings) Inc. v. U.S. Dep’t of Homeland Sec., 769 F.3d 1127 (D.C. Cir. 2014) (court about deference to agency interpretations of statutes and regulations)
- American Bioscience, Inc. v. Thompson, 269 F.3d 1077 (D.C. Cir. 2001) (formal and narrow scope of review under APA; reasoned decisionmaking required)