Zucker v. Rodriguez, 919 F.3d 649

Background

R&G Financial (Holding Company) owned R-G Premier Bank (Bank); the Bank constituted over 90% of R&G’s assets and shared officers/directors with the Holding Company.
From 2002–2005 the Holding Company/Bank engaged in an accounting scheme that materially overstated assets, leading to restatements and capital erosion.
The Bank failed and was closed by Puerto Rican regulators on April 30, 2010; the FDIC was appointed receiver and estimated losses to the Deposit Insurance Fund at $1.2 billion.
After the Holding Company filed Chapter 11, the Chapter 11 plan administrator (Zucker) sued former directors/officers and the insurer, alleging negligence and fiduciary breaches that caused the Bank’s failure and the Holding Company’s loss of its interest.
The FDIC intervened as receiver and moved to dismiss, arguing 12 U.S.C. § 1821(d)(2)(A) transferred the Holding Company’s claims (as a stockholder) to the FDIC; the district court dismissed and the First Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §1821(d)(2)(A) strips the plan administrator of claims the Holding Company asserted	Zucker: the Holding Company’s claims are direct under Puerto Rico law and thus not transferred to FDIC	FDIC: statute transfers “all rights…of any stockholder…with respect to the institution and the assets” to FDIC as receiver	Held for FDIC: §1821(d)(2)(A) covers the Holding Company’s claims and they vested in the FDIC by operation of law
Whether the statute’s scope is limited to state-law derivative claims	Zucker: phrase should be read to mean only derivative claims a shareholder brings on behalf of the bank	FDIC: statute’s plain language is not so limited; no textual basis for a derivative-only gloss	Held for FDIC: the direct/derivative distinction is not in the text and cannot be judicially grafted on
Whether transferring these claims produces absurd or unconstitutional results (Takings Clause)	Zucker: applying §1821(d)(2)(A) makes claims disappear or effects an uncompensated taking	FDIC: rights transfer "by operation of law" to FDIC; causes of action do not vest for Takings purposes until final judgment	Held for FDIC: transfer is by statute and not a constitutional taking; no absurdity warranting avoidance
Whether legislative history (rejected FIRREA amendment) undermines FDIC's reading	Zucker: rejection of proposed priority amendment suggests Congress did not intend FDIC ownership	FDIC: rejected amendment does not change clear statutory text; legislative inaction is unreliable	Held for FDIC: statutory text is clear; rejected amendment and selective floor statements do not overcome the text

Key Cases Cited

Cooper v. Charter Commc'ns Entm'ts I, LLC, 760 F.3d 103 (1st Cir. 2014) (pleading-standard and consideration of incorporated documents on motion to dismiss)
United States v. Winstar Corp., 518 U.S. 839 (1996) (background on federal thrift regulation)
Levin v. Miller, 763 F.3d 667 (7th Cir. 2014) (circuit treatment of §1821(d)(2)(A) and debate whether it covers only derivative claims)
Barnes v. Harris, 783 F.3d 1185 (10th Cir. 2015) (holding §1821(d)(2)(A) allocated similar holding-company claims to FDIC)
Vieira v. Anderson (In re Beach First Nat'l Bancshares, Inc.), 702 F.3d 772 (4th Cir. 2012) (evaluating FDIC succession to holding-company claims tied to bank assets)
Pareto v. FDIC, 139 F.3d 696 (9th Cir. 1998) (noting Congress transferred broad powers to FDIC under FIRREA)
Barnhart v. Sigmon Coal Co., 534 U.S. 438 (2002) (textualist canon: courts presume Congress means what it says)
Milner v. Department of Navy, 562 U.S. 562 (2011) (refusing to let ambiguous legislative history overcome clear statutory text)
Skidmore v. Swift & Co., 323 U.S. 134 (1944) (standard for deference to agency interpretations)