Auction Company Amer v. FDICAuction Company Amer v. FDIC
AUCTION COMPANY OF AMERICA, Appellant,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, as Manager of the
FSLIC Resolution Trust Fund, Appellee.
No. 96-5343.
United States Court of Appeals,
District of Columbia Circuit.
Argued Oct. 21, 1997.
Decided Dec. 19, 1997.
Rehearing Denied April 28, 1998.
Appeal from the United States District Court for the District of Columbia (No. 94cv02006).
Alan M. Grayson, McLean, VA, argued the cause and filed the briefs for appellant.
J. Scott Watson, Counsel, Federal Deposit Insurance Corporation, argued the cause for appellee. With him on the brief were Ann S. DuRoss, Assistant General Counsel, Federal Deposit Insurance Corporation, Robert D. McGillicuddy, Senior Counsel, Roberta H. Clark, Counsel, Federal Deposit Insurance Corporation, and Robert P. Fletcher, Washington, DC.
Before: WALD, WILLIAMS and ROGERS, Circuit Judges.
Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.
STEPHEN F. WILLIAMS, Circuit Judge:
Auction Company of America ("Auction Company") seeks damages for breach of contract from the Federal Deposit Insurance Company ("FDIC") as statutory successor to the Resolution Trust Corporation ("RTC"). It filed the first of three suits (and the one both parties regard as controlling for limitations purposes) four years and one day after the cause of action accrued. The filing was too late under the District of Columbia's three-year limitations period for contract actions,
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Auction Company's claim is that it entered into a contract with the RTC, as receiver for certain failed thrifts, to auction off key thrift assets. On September 18, 1990, after a number of actions that according to Auction Company impeded its efforts to organize the auction, the RTC terminated the contract and thereby breached it. Four years and one day later, on September 19, 1994, Auction Company filed its first complaint.
That complaint's caption named the RTC as defendant, but also said that the suit was against the RTC in its corporate capacity ("RTC-Corporate"). The RTC responded with a motion to dismiss, arguing that it was a legal entity distinct from the RTC as Receiver and could not be sued for contractual liabilities of the RTC as Receiver. In briefing the motion it also asserted that the statutory provisions for administrative determination of claims against depository institutions, see
All three actions were consolidated before the district court. The FDIC moved for judgment on the pleadings under Rule 12(c), seeking dismissal on the grounds that the District of Columbia three-year statute of limitations for contracts applied. Auction Company suggested instead the six-year limitations period for civil actions against the United States. See
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28 U.S.C
In O'Melveny the FDIC as Receiver sued the counsel of a failed savings and loan for malpractice and breach of fiduciary duty in failing to expose frauds in the management of the S&L. The lawyers defended on the grounds that the management was fully aware of its own frauds, and that knowledge of those frauds must therefore be imputed to the S&L, and thence to the FDIC as Receiver. The argument was a possible winner for the lawyers under California's imputation law, but the FDIC argued that state law should be displaced by federal common law. Immediately after the Court's declaration that the FDIC was not the United States, it twice discounted the significance of the remark, noting that: (1) even if the FDIC were the United States it would be begging the question to assume that it was asserting its own rights rather than those of the S&L; and (2) even if federal law governed in the sense explained in United States v. Kimbell Foods, Inc.,
Creating federal common law is one thing, applying a federal statute quite another. State law will generally fill the gaps in a comprehensive federal statutory scheme such as the FDIC's enabling legislation, but it will not do so to the exclusion of another applicable federal statute. See id. at 85,
So we turn to the statute itself.
While this shuffle expanded the function of
Does the Little Tucker Act treat the FDIC as Receiver as the United States? Jurisdiction over contract claims, under either Tucker Act, exists only for contracts "with the United States." If a contract with the FDIC as Receiver supports jurisdiction under either Tucker Act, then it counts as a contract with the United States, and the FDIC as Receiver must be "the United States" for the Tucker Acts. So the key question turns out to be whether a contract with the FDIC as Receiver will allow a Tucker Act suit. If that is so, then the equivalent meaning of "United States" in the Little Tucker Act and its statute of limitations allows us to conclude that the FDIC as Receiver is the United States for the purposes of
The answer to the question is yes; the Act may be invoked whenever "a federal instrumentality acts within its statutory authority to carry out [the government's] purposes" as long as no other specific statutory provision bars jurisdiction. Butz Engineering Corp. v. United States,
As the FDIC as Receiver counts as the United States for the Tucker Act, it does so for the Tucker Act (and general federal) statute of limitations. The FDIC appears to take refuge in the idea that the captioning of the lawsuit somehow outweighs the functional identity of the United States and its instrumentalities for the purposes of
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This is not a Tucker Act suit, however, nor one under the APA. The FDIC could have argued, though it did not, that what distinguishes a suit against an agency from a suit against the United States is not the captioning of the complaint but the operative waiver of immunity.
The FDIC's theory of jurisdiction, however, is wrong. As we observed earlier, supra n. 1, Auction Company is not suing to enforce a contract with a defunct depository but to enforce one made initially and exclusively with the RTC. Accordingly, we examine this alternative argument on the basis of Auction Company's jurisdictional theory. Auction Company finds a waiver of sovereign immunity in FDIC's enabling legislation, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), which empowers it to sue and be sued "in any court of law or equity, State or Federal."
The FDIC's argument, given these propositions, would be that when an agency is sued in its own name pursuant to a sue-or-be-sued clause, recovery is limited to funds within the agency's control, and the suit is not against the United States. A suit is against the United States, the argument goes, only if recovery would come from general Treasury funds. This position finds some support in the case law, beginning with suits against the Department of Housing and Urban Development but now reaching the FDIC and other agencies. See, e.g., Licata v. United States Postal Service,
If we followed the analysis of these decisions, the FDIC could make the argument that this suit seeks funds under FDIC control and hence is not against the United States, pointing perhaps to
A demonstration of the confusion requires a brief trip into the origins of the distinction between suits against the United States and those against an agency. In Federal Housing Administration, Region No. 4 v. Burr,
As later cases picked up Burr, however, the doctrine changed shape. Marcus Garvey Square,
It is at this point that confusion becomes evident. The practical weakness of the idea that recovery of funds within an agency's control is not recovery against the United States is, we think, well exposed by the Fourth Circuit's observation that "[t]he funds appropriated to HUD ... clearly originate in the public treasury, and they do not cease to be public funds after they are appropriated." Portsmouth,
The logical fallacy is just as clear. To ascertain whether a suit is against the United States, rather than a federal agency, the Marcus Garvey court and similar cases have turned to the test enunciated in Dugan and Land. See, e.g., Portsmouth,
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So we find the argument the FDIC did not make no more persuasive than the one it did. Focusing on the waiver of immunity is valuable, however, because it permits a deeper understanding of the nature of
According to the FDIC, it should be: A suit under the sue-or-be-sued clause, naming the FDIC as Receiver, should be subject to the appropriate state statute of limitations. A Tucker Act suit naming the United States should be subject to
More specifically,
So ordered.
Notes
These decisions have often been cursory or unclear in their treatment of the Receiver/Corporate distinction, but the FDIC gives us no persuasive reason why the distinction makes a difference here. The RTC as Receiver did not inherit this contract from defunct depositories; it entered into the contract in furtherance of its statutory mission, and the rights and obligations at issue are its rights and obligations, not those of the depositories. Cf. O'Melveny,
We address this argument despite the FDIC's failure to raise it because, in some guises, it has jurisdictional overtones. See, e.g., Falls Riverway Realty, Inc. v. City of Niagara Falls,
The effects are similar because, regardless of the origin of the funds, their loss forces the Government "to choose between allowing its interests to be served less well and spending more money to make up the shortfall." Kauffman,
Distinguishing between suits against agencies and those against the United States would frequently be necessary if Tucker Act jurisdiction were preemptive--that is, if Tucker Act jurisdiction by its mere existence barred jurisdiction granted by another statute. It does not. If a separate waiver of sovereign immunity and grant of jurisdiction exist, district courts may hear cases over which, under the Tucker Act alone, the Court of Federal Claims would have exclusive jurisdiction. See Bowen v. Massachusetts,
Tort claims are different; the Federal Tort Claims Act provides the exclusive avenue for relief where it applies. See