Federal Deposit Insurance Corporation, a United States Corporation v. Bank of Boulder, a Colorado Corporation

persons during juvenile involved the course of the and the develop institution a case entire offense plan are to be considered.” U.S. and contract. II, Rec. supp. vol. ad- 3Bl.l(a) (n. 2). Thus, S.G. persons in- point dendum at 3. A system in is used offense, volved in the other than juvenile controlled may acquire points and participants, may be considered. up illus- move his release date. par- Id. Those trating what the term ticipating sports “otherwise exten- acquire points tend to means, application sive” note further rapidly, more sports but as a condition of provides “a fraud that only participation, involved three juvenile agree must com- participants but unknowing plete used the sports program, servic- even if sufficient many es of points outsiders could be acquired prior considered to the end of the Likewise, extensive.” Id. we hold that a season. at 3-4. Id. The district court de- drug conspiracy which nothing involved defen- termined that guidelines per- in the (four dant partici- and three subordinates mitted him possible to consider an earlier pants directly indirectly or controlled release. Rec. vol. VI at 12. We resolve defendant), upon and relied point the know- ground pre- on the in the stated ing services of at drug suppliers least two report, sentence namely, the defendant was supply hundreds of customers over a required complete sports season as a period three-week likewise could be con- participation condition of his camp— Although sidered extensive. agree we voluntary arrangement. was not a Ac- with the defendant cordingly, four con- defendant was released in Feb- participants involved, trolled were ruary hold 1987 and committed the instant of- this defendant organizer was an years fense within two of that time. activity leader of a criminal that was exten- judgment The district court’s is AF- 3Bl.l(a). sive under § FIRMED and the case is REMANDED so findings district court attach its

D. concerning disputed presen- to the matters report. tence disputes Defendant next his crimi history computation. nal In June juvenile,

while a defendant was sentenced community placement for his cocaine

possession activities, and distribution not to five-years.

exceed placed Camp He was

Kilpatrick thirty-four for weeks and was supervised probation

released on in Febru ary 1987. The instant offense occurred in FEDERAL DEPOSIT INSURANCE January dispute 1989. Defendant does not CORPORATION, a United “juvenile two-level score for a sentence corporation, Plaintiff-Appellant, States of at sixty days” confinement least “the where defendant was released from such years confinement within five of his BOULDER, BANK OF a Colorado commencement of the instant offense.” corporation, Defendant-Appellee. 4Al.l(b) 4A1.2(d)(2)(A).

U.S.S.G. & §§ No. 86-1071. Rather, questions he an additional two- points committing the instant Appeals, offense United States Court of years within two after his release. Id. Tenth Circuit. 4Al.l(e). Aug. According defendant, he should have been released November but

stayed Camp Kilpatrick to finish the captain.

basketball season as team

presentence report indicates that when a

juvenile Camp Kilpatrick, is confined at

appointment liquidator of Dominion pursuant Bank of Denver to Colo.Rev.Stat. (1973 Supp.1989). ac- 11-5-105 & appointment pursuant cepted this to 12 1821(e) (1988). U.S.C. § receiver/liq- of furtherance its role as uidator of the FDIC consummated (P A) Assumption Purchase and '& transac- pursuant authority granted by 12 tion 1823(c)(2)(A)(1988). U.S.C. This P & A transaction allowed certain assets of the bank; healthy failed bank to to a be sold assets, including other and the Dominion by Bank of to be transferred (FDIC/Receiver) FDIC as Receiver (FDIC/Cor- corporate capacity in its FDIC poration). assuming essentially The bank purchased only those assets which it was Parker, Deposit Ira H. Federal Ins. interested and assumed all of the liabilities D.C., (John Corp., Washington, of counsel FDIC/Corporation pur- of Bank. Dominion M. Palmeri and Frederick W. Klann of remaining chased assets of the failed Steele, P.C., Denver, Colo., White and provided Dominion Bank and the funds briefs), plaintiff-appellant. him on the for paid with which FDIC/Receiver the assum- (Dean Richard L. Eason G. Panos ing bank for the difference between the brief) R. him on the of David Eason with purchased assets it and the liabilities it Eason, Wilson, Denver, Colo., Sprague & required, assumed. As the entire P A& defendant-appellee. for approval transaction received the (John Crotty J. Gill and Michael F. City County District Court for the Ass’n, Washington, American Bankers Denver. D.C., brief, amicus curiae Ameri- on the for 5, 1984, FDIC/Corporation On October Ass’n.) can Bankers attempted to draw on the letter of credit acquired during P A it had & HOLLOWAY, Judge, Before Chief However, transaction. Bank of Boulder SEYMOUR, McKAY, LOGAN, pay- refused to twice honor demand for ANDERSON, TACHA, BALDOCK, and 18, 1985, ment. On March the FDIC BRORBY, Judges. Circuit brought against suit Bank of Boulder in payment order to obtain on the letter of McKAY, Judge. Circuit 10, 1985, April credit. On Bank of Boulder by This case involves an action the Fed- grant- filed a motion to dismiss which was (FDIC) Corporation Deposit eral Insurance v. Bank ed FDIC the district court. seeking enforce a letter of credit issued Boulder, (D.Colo.1985). the defendant Bank Boulder. The district court concluded that the letter legally of credit could not be transferred to I. Facts and, thus, FDIC/Corporation; there was no Id. jurisdiction for the claim. 30, 1982, the Bank of Boulder On June standby issued a letter of credit to Domin- $27,- ion of Denver in the amount of Bank appeal then filed an September 000. On Dominion of the district court’s decision this court. Bank of Denver was declared insolvent and panel The appeal that heard the reversed ordered closed State Bank- Colorado decision, though the district court’s a dis- pursuant ing Commissioner to Colo.Rev. majority sent was filed. The concluded (1973 Supp.1989). Stat. 11-5-102 & The that federal common law allowed the trans- FDIC/Corpo- Commissioner then tendered to FDIC an fer of the letter credit to among er, sev- choose Boulder, v. Bank ratiоn. Cir.1988). liquidate either ways Bank of Boulder eral alternative rehearing and a petition for as a filed a to another bank or sell bank then en rehearing en banc. for suggestion major The two alternatives going concern. suggestion grant court voted banc in which straight liquidation, include a rehearing en banc. the bank the assets of simply sells depositors en banc of the bank pays before the off the only issue now can in- from the FDIC proceeds is whether court from the FDIC/Re- transaction, a letter of fund, P A and a & surance transaction, A a P & course of ceiver assuming purchases most which an letter is nontrans- notwithstanding that the and continues the failed bank’s full brief- After state law. under ferable Liq- going concern. as a operate bank the argument be- parties and oral ing both the effects on has several bad uidation court, determined have we the en banc fore the community, the result of banking as was correct panel majority original that Depositors lose confi- closure of the bank. court the district the decision and that pub- The specific bank. dence reversed. must be in the entire general lic in loses сonfidence gen- also community. Liquidation banking Review II. Standard FDIC’s major loss to the erally involves question of whether FDIC/Cor The Thus, is not liquidation fund. insurance purchase a authority to poration has alternative. the favored P A of a & in the course credit letter of re of law. question is a We transaction alternative, major The other novo. In re law de questions of view transaction,1 in assumption and purchase 1263, 1266 Ruti-Sweetwater, Inc., F.2d 836 receiver, the as parties: volves three Thus, Cir.1988). con we are not (10th bank, When FDIC as insurer. suming and trial of the by the conclusions strained receiver, it simulta appointed FDIC is to review the record court; required we are the failed as the receiver neously acts judgment. independent our own light deposits. the insurer and as bank Distiller Distrib., Inc. v. Glenmore State Church, Episcopal All Souls FDIC v. See Cir.1984); 405, (10th Ocel ies, 412 738 F.2d Cir.1985), 658, (10th cert. de 662 769 F.2d Indus., F.2d 847 Sparrow v. Corp. ot Oil 1184, 1010, 89 S.Ct. nied, U.S. 106 475 Cir.1988). (10th 1458, 1464 Leach, 772 (1986); FDIC v. 300 L.Ed.2d of a Purchase Mechanics (6th Cir.1985); The v. 1262, III. Gunter 1264 F.2d Transaction Assumption (11th Cir.), 862, 865 Hutcheson, F.2d 674 60, 826, 74 103 denied, cert. a bank declares agency a state When (1982), on other overruled L.Ed.2d 63 the FDIC as receiv- appoints insolvent the differ- balance provided needed funds to suggest curiae amicus of Boulder and 1. Bank the liabili- the assets received between many ence alternatives available other there suggestion problem with this of an appointed receiver ties assumed. it is FDIC when to trans- require to would FDIC/Receiver and amicus claim is that it bank. Bank insolvent acquired as receiver any it of credit fer letter these alternatives any Assuming assets. the letter of required assuming bank. not be nontransferable, presents are avail- alternatives scenario it is true these While is given able, only point that FDIC is out of a very problem need transfer we similar Finally, it will what method FDIC/Corporation. to determine discretion sole of credit assistance transac- bank structure failed that FDIC will use there will times note that (1988); 1823(c)(2)(A) Su- see 12 U.S.C. a P & A tions. sole discretion in its determine 1252, FDIC, fact, F.2d Drugs Corp. v. per X the P & A is appropriate. In transaction Cir.1988). by far—than more used often— years 1984 For calendar other addition, merely alternative. suggested alternatives In 1988, commercial bank through similar, different, problem. although create through percent handled failures —or suggests that example, Bank FDIC/Receiver —were For (1984- Rep. Ann. See FDIC P & A transactions. the failed bank’s assets all transfer could 1988). assuming while FDIC, 86, grounds, Langley v. ceiver is authorized to offer the assets of (1987); 108 S.Ct. 98 L.Ed.2d 340 FDIC/Corpo- the failed bank for sale to (6th Cir.1978); Ashley, v. 585 F.2d 1823(d)(1988). ration 12 U.S.C. Ulti- Godshall, ‍​​​​​‌‌​​‌​‌‌​‌​​‌‌​​‌​‌​‌‌‌​‌​‌​‌​​​‌​‌‌‌​‌​‌‌‌‍F.2d FDIC v. 222 n. 4 then, mately, FDIC/Corporation finances (4th Cir.1977); Freeling v. Sebring, 296 by providing the P & A transaction (10th Cir.1961); FDIC v. pays funds with which Hudson, (D.Kan. assuming FDIC, Langley bank. Cf. 1986). aWhen state bank fails and FDIC U.S. 98 L.Ed.2d 340 appointment receiver, is tendered statutorily obligated accept ap FDIC/Corporation acquires After 1821(e)(1988). pointment. 12 U.S.C. A, the nontransferred assets in the P & it acting FDIC cannot avoid in two attempts liquidate to enforce and these as capacities in A a P & transaction. recoup outlay thereby sets to its cash transaction, assuming In a P & A minimize the loss the insurance fund. buys the assets of the failed bank doing, FDIC/Corporation may bring so ac highest banking quality. that are of the prosecute right. tions and claims in its own assuming also assumes the de- Assoc., See FDIC Braemoor posit liabilities of failed bank. As a 550, (7th Cir.1982); 552 Ashley, FDIC v. result, deposit the amount of liabilities that 157, (6th Cir.1978); 585 F.2d 159-64 FDIC greater the bank assumes is than the value Godshall, 220, (4th 558 F.2d 222-23 Cir. purchases. of the In аssets order to 1977); Hudson, 496, F.Supp. 643 497 make the of the failed bank at- (D.Kan.1986). assuming tractive to the FDIC/Re- implemented order for a P & A to be pays assuming ceiver cash FDIC, P A costly the & must be less an amount sufficient to cause the assets major liquidat- than the other alternative of purchases equal the bank to be to the liabil- ing bank.2 12 U.S.C. assumes, ities it less some credit for the 1823(c)(4)(A)(1988). Making the determi- § going concern value of the failed bank. nation of whether a P A& would be less paid by The cash FDIC/Receiver to the expensive simple liquidation than a re- assuming paid FDIC/Corpora- bank is from quires quick review failed bank’s tion’s insurance fund. In consideration for books and This funds, records. review of assets FDIC/Corporation these acquires quick usually overnight must be assets of failed bank that are not — —be- requires cause a P & A assuming transferred bank. transaction FDIC/Corporation’s “purchase” reopen quickly of the non- bank order to maintain transferred going authorized 12 the concern value of the failed bank. 1823(c)(2)(A) U.S.C. FDIC/Re- Langley, 108 S.Ct. at 401.3 court, approved Conversely, points 2. A P & A also be every in the extraor- FDIC out that Court, including dinary Supreme the United States case when the FDIC determines that the that has considered the time frame issue has con operation continued of an insured bank is “es- cluded such that transactions are done at a provide adequate banking sential to services in quick enough pace that a detailed review of 1823(c)(4)(A) community.” 12 U.S.C. [the] possible. Langley, assets is not 401; 108 S.Ct. at (1988); Wood, 156, (6th see FDICv. F.2d 758 161 Leach, 1262, (6th FDIC v. 772 F.2d 1264 Cir.1985). Cir.1985); FDIC Merchants Nat'l Bank Mo bile, (11th Cir.1984); 725 F.2d Gunter v. 3. Bank of Boulder and amicus curiae argue that Hutcheson, (11th Cir.1982); overnight. P & A transactions do not occur Sarvis, (D.Colo. F.Supp. FDIC v. banks, They closely claim that FDIC observes 1988); Ritchie, F.Supp. FDIC v. banks, particularly failing long periods (D.Neb.1986); FDIC v. National Union Fire Ins. prior argument time failure. Co., (W.D.La.1986). We continues, FDIC is familiar with the assets of all courts, agree are inclined to with these and with failing prior banks to the actual P & A transac- FDIC, the current that P & A transactions must tion; required and a close review of assets is not completed extraordinary speed. When night place. before the fails, transaction takes a bank FDIC must make the decision Bank and amicus curiae cite a book written reopen through whether to the bank a P & A support former very quickly. FDIC director to their сlaim. transaction If the bank is closed Cir.1989); Financial v. Sumner proceed FDIC chose case In this Cir.1979). Corp., 602 P A transac- of a & mechanism through the transaction, of this As a result tion. (Fourth) also contains Section acquired the letter FDIC/Corporation grant of feder exception general an believe We the failed bank. Jurisdic jurisdiction over cases. al of credit this letter the transfer that any suit to "except that tion is vested two upheld for must be in its Corporation party hold both We that independent reasons. capacity as receiver of a State bank federal statutory and the or obli rights which involves the transfer law allow creditors, common stockhold depositors, gations of FDIC/Corporation. credit to State law ers and State bank under such the laws to arise under deemed

shall 12 U.S.C. the United States.” Jurisdiction IY. Federal has held (Fourth) (1988). The Sixth Circuit instant court dismissed district apply exception for this in order First, it concluded grounds. on two case “First, the must be met: three conditions be trans- could not of credit the letter in its party to suit’ be a ‘such FDIC must therefore, FDIC/Corporation; ferred to receiver оf a state bank.... capacity aas not sue enforce could only the Second, involve suit must Second, the district letter of credit. credi obligations depositors, rights or if it was found court it stockholders, state bank tors, and the letter of on the brought suit Third, such involve the suit must self. ... juris- subject matter no federal there was law.” In rights obligations finding. only the first We reverse diction. Corp., 872 Banking Indus. re Southern a letter However, hold that we because also, (6th Cir.1989); see F.2d FDIC/Corpo- to be credit can transferred agree with Nichols, 885 F.2d at We subject federal ration, hold that also we holding adopt and its Circuit’s the Sixth case. exists this jurisdiction matter three-part test. (Fourth) 12 U.S.C. case, go no we need Under To resolve this granted the Congress specifically (1988), requirement. We the first further than following powers: FDIC FDIC/Corporation the transfer hold that Thus, FDIC/Corporation, not defend, sued, was valid. complain and and be To sue and the FDIC/Receiver, brought suit this equity, or or State of law any court not fulfilled. exception is prong first of a civil nature All Federal. suits Conse Nichols, F.2d at 636-37. to which equity law or common Cf. exists for this jurisdiction quently, federal be party shall shall be Corporation suit. the laws to arise deemed dis- States, the United States

United actu- argues it was that Bank of Boulder original jurisdic- have courts shall trict brought suit ally FDIC/Receiver tion thereof.... simply of credit. We letter enforce the inconsistent this contention note that provided Congress has Thus, hold that we FDIC/Receiv- position that with the Bank’s for cases jurisdiction subject matter federal on the entitled draft courts er would circuit Two involving the FDIC. rejected FDIC’s Boulder Bank of of credit. to be jurisdiction this grant found have letter, presumably because on the drafts indicating Congress’ desire expansive, very acting in thought that was the Bank generally involving FDIC should cases If capacity. FDIC/Receiver corporate its federal courts. by the and decided heard Bank, the draft actually submitted Nichols, FDIC v. does not time, A the P & transaction going the nature of any virtually amount of prior the fail- dramatically de- review of assets allow the bank careful value of concern familiarity FDIC has some Even ure of bank. creased. if banks, we believe these the assets of then Bank should have honored the draft. part states: or of thе assets of “[A]ll draft, Since Bank did not honor the we corpora- failed be sold to the [a bank] FDIC/Corporation must assume liquidator_” tion the ... Colo.Rev. presented the on the draft letter. 11-5-106(1) (Supp.1989). Stat. It is at FDIC/Corporation party seeking is the now arguable provision least that this creates enforcement of the letter. Because we power liqui- in FDIC/Receiver —as entity hold that is the dator—to transfer all of the assets of a letter, suing to enforce the also hold FDIC/Corporation. How- subject jurisdiction that federal matter ex- ever, we choose not to base our decision on ' ists. ground. this We believe that to-overcome prohibition against the clear the transfer of Statutory V. Federal Law legislature letters of the Colorado specifically provides Colorado law that a clearly must state more that FDIC/Receiv- normally assignable. letter of credit is not power er has the to transfer otherwise right “The to draw under a credit can be FDIC/Corpo- nontransferable assigned only or transferred when the note, however, ration. We that Colorado expressly designated credit is as transfer is far from clear on this issue. assignable.” able Colo.Rev.Stat. Ultimately, we conclude that Col 4-5-116(1) (1973). However, it is uncon general orado’s restriction on the transfer notwithstanding provision, tested that preempted by of letters of credit is may validly posses obtain law in the sion of a letter of credit from a failed bank case of a transfer by operation fact, law. Colorado law FDIC/Receiver to provides accepts ap that when the regard course of a P & A. preemp With pointment liquidator tion, of a failed Supreme Court has stated: banking the state commissioner shall file a Congress entirely has not dis [W]here evidencing appointment certificate placed regulation specific area, in a assets, business, possession “the all the pre-empted state law is to the extent that property every of such kind actually conflicts with federal law. nature, situated, wheresoever shall be Such a conflict arises when ... state law deemed transferred from such bank and accomplish “stands as an obstacle to the deposit the commissioner to the federal in ment purposes ‍​​​​​‌‌​​‌​‌‌​‌​​‌‌​​‌​‌​‌‌‌​‌​‌​‌​​​‌​‌‌‌​‌​‌‌‌‍and execution of the full corporation surance or its successor.” objectives Congress.” of 11-5-105(3) (Supp.1989). Colo.Rev.Stat. § & Elec. v. Energy Gas State Re Pacific provision long- This is consistent with the Comm’n, sources Conserv. & Dev. recognized principle anti-assignment 190, 204, 1713, 1722, U.S. provisions passing do not bar of claims (1983). Here, L.Ed.2d 752 the federal stat by operation of law. United v. Aet States controlling ute FDIC states: Co., Casualty Surety na & In order merger to facilitate a or consoli- (1949). 94 L.Ed. 171 S.Ct. dation of an insured bank ... with an Thus, undisputed it is that FDIC/Receiver insured institution or the sale of assets could enforce the letter of credit. of such assumption insured bank and the FDIC/Corporation Because it was of such insured bank’s liabilities an attempted to enforce the letter of institution, acquisition insured or the of however, question presented- by this bank, the stock of such insured the Cor- appeal is whether FDIC/Receiver can authorized, poration is in its sole discre- rights transfer its under the letter of credit upon tion and such terms and conditions FDIC/Corporation. Initially to we note as the may prescribe Board Directors interpreted spe- that Colorаdo could —(i) purchase any such assets or as- cifically provide for such a transfer any sume such liabilities.... immediately statute. The Colorado statute following 1823(c)(2)(A)(1988). the section that allows FDIC/Re- U.S.C. This stat- liquidator ceiver to become clearly gives FDIC/Corporation of a failed bank ute the au- for this cash extra cash. In return of a failed the “any thority purchase assets” FDIC/Corporation is entitled to the purchase outlay, of a in order to facilitate Thus, assuming failed remaining bank. assets of the bank. an limited to although actually purchases is not two language the statute there are hold A, we inter- any they assets. in a P are so & and sales transferable 1823(c)(2)(A) power in creates a that section one could not occur without the twined that assets, any other. under nontransferable including assets holding support cases our Several federal in order to law, from FDIC/Receiver authorizes the federal FDIC statute Conse- P A transaction. a & facilitate un the transfer of assets—nontransferable preempts hold that this statute quently, we law—from FDIC/Receiver der state the transfer- restrictiоn on any Colorado See, FDIC/Corporation. e.g., Chatham from FDIC/Re- ability of letters FDIC, Ventures, Inc. v. in the course ceiver' to Cir.1981), denied, cert. P of a & A. (1982); 2234, 72 L.Ed.2d 845 above argues that the Bank of Boulder (N.D. Rectenwall, F.Supp. fact that section holding ignores the Rectenwall, Ind.1951). found the court authori grant FDIC/Receiver does nonassignable a tort claim that was FDIC/Corporation. ty sell the assets transferred to state law could be under weak argument particularly We find precursor FDIC/Corporation under Colo. language of consider the to current section statute 11-5-106(1) grants Rev.Stat. adequacy might said of the Whatever authority to sell FDIC/Receiver used, is nonetheless language FDIC/Corpo failed bank of a statutory em- that the scheme apparent any part of the assets ration. “[A]ll contemplates the in this section bodied corpora to the may be sold failed bank] [a every transferability of as- unrestricted liquidator].” by the tion [FDIC/Receiver where at least of an insured set 11-5-106(1) (Supp.1989). Colo.Rev.Stat. § accomplish assumption necessary to power granted the is also by another in- deposit liabilities its banks the assets “to offer [failed] sured bank. 12 U.S.C. Corporation....” sale Another Rectenwall, at 274. F.Supp. 1823(d) the same con district court reached identifies argument Boulder’s Bank transferability of a concerning the clusion misunderstanding of fundamental Bank’s very FSLIC similar claim tort P A A & of P & transactions. the nature Fielding, 309 See FSLIC statute. indepen- of two do not consist transactions (D.Nev.1969), cert. de Instead, P A& purchases and sales. dent 567, S.Ct. nied, 400 U.S. up very two inter- are made transactions L.Ed.2d FDIC/Receiv- purchases sales. twined consistently of law has been This rule quality assets to highest er sells cases. by more recent federal applied in assuming The assuming bank. (D.Kan. Hudson, F.Supp. 496 of the failed assume all agrees to turn specifi in this circuit 1986), a district court However, for in order liabilities. bank’s claim cally noted that “defendants willing take on to assuming bank to be bring right to a tort receiver, FDIC’s liabilities, must these all of assignable under Kansas law is not action in cash between provide the difference corporation_ as a the FDIC [How as- liabilities purchased actions, in these ever,] applies federal law going con- amount for the an sumed—less assignable, ... tort law claims in and difference of the bank. cern value not allow it”. law although state As a FDIC/Corporation. comes cash Hudson, F.Supp. at 498. In FDIC v. is financed result, transaction the entire (E.D.Cal. Hurdman, F.Supp. P be no Main There would FDIC/Corporation. 1987), tort claim was held that a provide the court FDIC/Corporation did & if A assignable pursuant to the FDIC to a res- ken to the matter under consideration. Illinois, cue without reference to state law. The Milwaukee v. 313- pointed court out: 1784, 1790-91, 101 S.Ct. 68 L.Ed.2d 114 (1981). Thus, congressional purpose creating following in we include the dis- [T]he by applica- the FDIC inhibited cussion federal would be common law as an alter- Moreover, tion of state law strictures. native basis for our decision. Even if our assignability failing free of assets from correct, preemption analysis were not realistically insured banks to the FDIC necessary that it would then believe frequent addresses the need of the FDIC apply federal common law with the same operate emergency conditions in result as shown hereafter. A rescue situations. need the FDIC Supreme The United States Court has assignability asset-by- determine on an thrеe-pronged enunciated a test to deter- surely asset basis would slow a rescue mine whether a federal common law rule is down, operation dispatch when re- was supersede conflicting needed to state law. quired. Foods, Inc., In United v. Kimbell States Hurdman, F.Supp. Main at 268. See 59 L.Ed.2d 711 Abraham, also FDIC (1979), Supreme explained Court (E.D.La.1977).4 requirements creating three a federal We believe that the rule of law an- common law rule. regard nounced these cases [First,] programs “by federal their assignability equally appli- of tort claims is nature are and must be uniform in char- assignability of cable to the letters of cred- throughout acter the Nation” necessitate purpose assignment it. The in both controlling formulation rules_ federal cases is to allow col- [Second, a]part from consider- assigned lect on the assets in order to uniformity, ations of we must also deter- defray part of the losses sustained application mine whether of state law language insurance fund. of the cases specific objectives would frustrate scope reasoning, is universal thus so, programs. If we must fash- including particularly letters of special ion rules solicitous of those feder- discussing speed the need for in ac- [Third], al interests. our choice-of-law complishing P A a & transaction. Conse- inquiry consider the extent must quently, statutory we hold that federal law application of a federal rule would preempts contradictory state law and al- disrupt relationships predi- commercial lows nontransferable letters of credit to be cated on state law. transferred from FDIC/Receiver Foods, 728-29, Kimbell 440 U.S. at FDIC/Corporation in the course of at 1458-59. operations, including P A rescue & transac- tions. We first consider the need for a national- ly allowing uniform rule

VI. Federal Common Law acquire nontransferable assets of failed banks the course of P & A transactions. Although we conclude that fed areWe convinced that such a rule is need- statutory provides eral a clear answer rule, FDIC/Corpo- ed. Without such a case, presented by to the issue we also subjected ration is to all transfer restric- requires believe that federal common law transferability uniform rule of tions and is faсed with an enormous admin- of letters of FDIC/Corporation trying credit to in istrative burden in the course of to determine recognize P & A transactions. or P Specifi- We that whether not to finance a & A. cally, resort to federal common FDIC/Corporation law is neces would have to de- sary Congress plainly spo- where transferability has not termine the every status of Analogously, contrary recent preempted. Fifth Circuit case held that state law was See power Cowden, that fiduciary appointments has the to transfer FDIC/Receiver CNBTexas Nat'l Bank v. held an insolvent (5th Cir.1990). 1499-1501 federally-created bridge bank to a and FDIC, 401; Gilman ley, asset of one terms Because the asset. Cir.1981); FDIC another, F.2d 694-95 terms from the differ (E.D.Mich. Stone, to able not be FDIC/Corporation would 1983). failed bank’s of the limit evaluation its the failed quick review of to a

assets curiae claim and amicus of Boulder Bank Instead, FDIC/Corpo- records. bank’s concerning law and international that state in examine detail forced to ration would of credit transferability of letters the to determine every asset the terms federal com- and thus no already uniform asset whether applies, law which state agree that the is needed. We law rule mon transferability, and whether itself restricts letters of for transfers general rule may to other laws refers the asset parties ordinary commercial credit between transferability. asset’s impact However, as we dis- and uniform. is clear to then have lo- FDIC/Corporation would earlier, Colorado we believe cussed applica- all laws cate, review, interpret transfers between concerning rules trans- every possible to find asset to the ble FDIC/Corporation dur- FDIC/Corpo- require To fer restriction. Thus, at from clear. ing & A are far a P stringent all under to do this ration not be uniform. law least Colorado asking the P A is of a & time constraints letter of agree Also, parties both handling Hence, ‍​​​​​‌‌​​‌​‌‌​‌​​‌‌​​‌​‌​‌‌‌​‌​‌​‌​​​‌​‌‌‌​‌​‌‌‌‍option of impossible. to FDIC/Receiver “transferable” credit A the P & method through bank failures for a receiver failed appointed it is when runs result Such a foreclosed. would be conclude that step to It is a small bank. policies behind counter to directly enforce the could also stability рromoting of the creation FDIC— assisting FDIC/Re- of credit when system. banking and confidence in the course duties fulfilling its in ceiver determining, under difficulty that state A. we conclude of a P & A, P whether of a & constraints the time clear or uni- are not laws and international is evident is transferable not an asset form. credit did indi- The letter this case. FDIC/Corpo- permitting rule A uniform it was nontransferable. its face that cate on nontransferable otherwise acquire ration V, is some there section As discussed the need for eliminates in a P & A assets would make question whether Colorado failed bank’s examination detailed nontransferable this letter estimates varying laws. Cost and of clearly although it is FDIC/Corporation, greater accu- and with quickly made can be parties. Al- other non-transferable imple- thereby be A’s can P & racy, and subject made letter was though the with the nec- risks and with fewer mented in the UCP discussion UCP,5 fail to find A is an P & essary speed. Because under situation specific concerning the tool, a uniform such extremely valuable from FDIC/Receiv- transfer question—the P advantages of the obvious rule furthers Instead, the UCP FDIC/Corporation. tоer de- A’s and interests &on restriction blanket merely contains a Indeed, the program. posit insurance A in a P & implement In order transfer. failing of assets assignability free would have case, realistically FDIC insured banks applied to state law determine which had to frequent need addresses interpret review then the letter conditions emergency operate The need for the UCP. law and Colorado A need situations. rescue A a P & implementation of expeditious asset-by- assignability anon to determine FDIC, of its in either suggests surely a rescue slow asset basis would examine expected cannot capacities, down, re- dispatch was operation locate all of a the assets all quired. Lang- restrictions. transfer possible Revision). (1974 No. 290 merce Publication Documen- Practice Customs 5. Uniform Credits, of Corn- Chamber tary International Hurdman, handling fail- Main 268. & alternatives A] Moreover, P more Hutcheson, & A’s will be cost effec- ure.” Gunter v.

tive because transfer restrictions will not (11th Cir.1982). preclude recovery to the insurance fund. Finally, under we must Kimbell Foods we address under Kim- second issue application consider whether the of a feder- transfer bell Foods is whether disrupt al rulе relation- would commercial specific frustrate the restrictions would ships predicated are on state law. We con- objectives federal of the FDIC. We hold application vinced that of a federal rule application of state transfer restric- acquire permitting FDIC/Corporation to significantly tions interferes frustrates non-transferable letters of credit deposit objectives with the of the federal disrupt P course of & A’s would not com- above, program. insurance As discussed relationships predicated mercial on state only a P & A transac- there are times when only law. rule would come into effect public, tion will serve the interests of the an after insured bank has failed. Parties fund, depos- the failed the insurance bank’s reasonably expect carry cannot on nor- itors, and the failed bank’s creditors. If relationships point, mal commercial at that against transfer restrictions enforced eventuality and it is that the doubtful FDIC/Corporation, may not be able to plays significant failure role in the and P collect on the nontransferable assets ordinary expectations commercial expensive. light more & A’s become Indeed, parties. potential damage congressional requirement that P & A’s parties’ outweighed expectations is far costly liquidation, increasing be less than prevent very goals the cost of P & A’s could well the interference with many P P & A’s cases. Elimination of & stability and confidence in the national option for

A’s as an FDIC/Receiver would banking system that result if would great cause a interference in the effective FDIC/Corporation were not allowed to ac- performance of the FDIC’s mission sta- quire in P nontransferable assets & A’s. banking industry. bilize the Moreover, application of the rule we Furthermore, if a P A is even & estimat- adopt simply FDIC/Corpo- means that costly liqui- ed to less than full-scale ration, FDIC/Receiver, not is entitled to notwithstanding application dation of trans- enforce the terms of the letter of credit. restrictions, FDIC/Corpo- fer the fact that parties agree Both that FDIC/Receiver can every ration would be forced to examine enforce the letter. Because the issuer analyze vary- asset in detail review and go beyond must the letter itself to honor ing possible laws locate restriсtions payment, FDIC/Receiver’s demands for A, delay implementation the P & the mere transfer the letter thereby diluting advantages. its Because FDIC/Corporation part P as a of a & A— A’s, speed is the essence of P & FDIC/Cor- requiring pay thus the issuer to FDIC/Cor- poration may forgo have to an exhaustive poration rather than FDIC/Receiver —does examination and enter P & A’s at a sub- place a substantial burden on the is- risk of loss to the insurance fund. stantial particularly suer. This is true when the Or, FDIC/Corporation may be forced to FDIC/Corporation’s true nature of crucial implement choose not to P & A’s because a financing role in a P A& is understood. reasonably accurate cost estimate cannot Corporation merely FDIC/ assists be made within the limited time demand. liquidator. FDIC/Receiver in its role as concerning appropriate “[DJecisions a transfer to from dealing failure method with bank must likely upset any FDIC/Receiver is not extraordinary speed.... made expectations. ‍​​​​​‌‌​​‌​‌‌​‌​​‌‌​​‌​‌​‌‌‌​‌​‌​‌​​​‌​‌‌‌​‌​‌‌‌‍reasonable commercial How- Subjecting the FDIC the additional bur- ever, important it is to note that our hold- considering impact possibly den of ing rights variable on the limited to transfers state law involved significantly impair could the FDIC’s abili- FDIC/Receiver to ty liquidation to choose between course of P A’s. We do not & address the [P Thus, federal sub- FDIC/Receiver. from the business on other transfers of effect for suit. jurisdiction exists this ject matter parties. expectations trans- if Colorado’s that Finally, note that this district court The decision against enforced were by fer restrictions not transferred could be letter of credit case, of Bank in this FDIC/Corporation FDIC/Corporation to unexpected likely receive an would Boulder REVERSED. the letter that We assume benefit. issued, parties the was understood of credit concurring: Judge, LOGAN, Circuit bankrupt, a Bank went Dominion that if con- ultimate majority’s cred- with the agree the I to enforce the power receiver requires that it clusion, I not think FDIC/Corpo- do If but appointed. be it would preemp- statutory letter of to either federal to enforce resort allowed is not ration law. federal of assist- common federal fulfilling its function tion or while credit 1823(c)(2)(A), seems FDIC/Receiver, statute, of Boulder then Bank U.S.C. ing to honor transfer to FDIC/Cor- obligation permit the clearly of its tо freed be will Bank. a failed bank of any of Dominion of poration the receiver of drafts FDIC/Receiver; not have Colora- by Boulder could of over Clearly, Bank taken expectation clearly to con- seems statutory commercial reasonable scheme had a do Bank if Dominion Colo. result. See the identical template on state law based Thus do of Boulder- I bankrupt, Bank to Rev.Stat. 11-5-105 went §§ of under the in which liability is a case all of relieved not believe to an obstacle as credit. law ‘stands “state of the full execution accomplishment and ” VII. Conclusion Congress.’ of objectives purposes (quot- pro- supra, at statutory opinion, law majority federal holdWe Energy transfer Elec. v. State & concerning ing Gas clear rule vides a Pacific Comm’n, & Dev. by FDIC/Receiver of Conserv. credit Resources of letters during of rescues U.S. S-Ct. (1983)). of credit—nontransferable Letters L.Ed.2d banks. transferable law—must from FDIC/Receiver Judge, with whom BALDOCK, Circuit addition, Pof & A’s. course during Judges, BRORBY, Circuit TACHA if even alternative in the we hold dissenting in concurring part join, provide not law does statutory federal part. issue, federal transfer clear answer that Colo. decision in the court’s I concur a uniform requires common 11-5-106(1)1 (Supp.1989) does Rev.Stat. § of letters of allowing transfer rule of credit this letter operate make FDIC/Corpo- from FDIC/Receiver credit credit) from assignable (documentary P A. We also aof & in the course ration given FDIC-corporation FDIC-receiver FDIC/Corpo- case was in this hold that assign- against such provision express letter of to enforce sought ration and Colo.Rev. the UCP contained in it ment validly transferred that was the order acting liquidator, as such poration is (Supp.1989) pro- 11-5-106 1. Colo.Rev.Stat. jurisdiction competent of of record a court part: vides approving such loan. (1) be first obtained shall security. With pledged as or sold Assets compe- record a court of order of banking Upon closed on institution respect to any part of the assets or inability jurisdiction, the demands all to meet tent account banking corpora- by action of depositors be sold its or such institution board, liqui- or its banking directors or action or board tion suspension, inadequacy or capital banking of its permission event with the dator may bоrrow such institution liquidator of board. corpora- deposit insurance the federal from as 1 at ch. Colo.Sess.Laws any part of the assets all and furnish tion 17§ ch. by I Colo.Sess.Laws amended corporation se- said institution of said curity at 541. but, same, said if cor- loan 1478 (1974). However, 4-5-116(1)2 forges The two stat federal common law.

Stat. § subjects, speak provides utes to different and do not an when a federal statute 11-5-106(1) swer, if is read as a rule of authority supple conflict without § rather than a administration substantive ment the field with federal common law. controlling assignment property Illinois, rule City Milwaukee v. 451 U.S. See Carlstrom, 304, 312-14, 1784, 1789-91, of bank assets. Moran v. See 101 S.Ct. 68 1176, (Colo.1989)(court (1981); 775 P.2d 1182-83 Corp. L.Ed.2d 114 v. Mobil Oil potentially conflicting 618, 625, should harmonize Higginbotham, 436 U.S. 98 S.Ct. possible give so as to (1978). statutes whenever 56 L.Ed.2d 581 statute). poten Even if the effect each approach in court’s is marked contrast 11-5-106(1) and tial conflict between developed courts federal com which have § 4-5-116(1) irreconcilable, was viewed prevail; mon law to allow the FDIC to § 4-5-116(1) concerning assignment of let other courts have done so when feder § prevail because it is ters credit would statutory preemption al was not an avail particular the later more enactment. See, Leach, ground. e.g., able FDIC v. Employees (12 Retirement 1262, (6th Cir.) See Public Assn. F.2d U.S.C. 385, (Colo.1978) Greene, v. 580 P.2d 1823(e)does not failure of considera bar § (when conflict, later enactment defense, statutes tion but federal common law controls); Moran, (when does); 775 P.2d at 1183 Wood, 156, v. 758 F.2d conflict, specific statutes more statute con (6th Cir.1985) 1823(e) (§ grant does not trols). in FDIC holder due course status which law, would be unavailable under state but I also concur in the court’s decision that does), denied, federal common law cert. jurisdiction to consider we have FDIC-cor 944, 308, 106 S.Ct. 88 L.Ed.2d 286 poration’s claim under 12 U.S.C. (Fourth) corporate in because FDIC its ca pacity acquired documentary opinion What the court’s is the drives capacity in its as receiver. itself notion that the undertakes presence of an intra-FDIC transfer “[T]he assumption in transactions a fire-drill deprive does not the district court of sub atmosphere expected and cannot to re ject jurisdiction.” matter See FDIC view or abide state law restrictions con Nichols, 633, 636-37 Cir. cerning assignment of letters of credit.3 1989). Thus, jurisdiction we have to con sure, Supreme Langley To be in Court appeal. sider the FDIC, 396, 108 S.Ct. dissent, however, (1987), respectfully

I from the L.Ed.2d 340 has indicated that FDIC-corporation may court’s such decision transactions evaluation of a failed upon documentary credit. great draw The bank’s assets “must be made ‘with FDIC-corporation speed, usually overnight, pre court decides that takes in order to assignment going free of restrictions created serve the concern value the failed FDIC-corporation interruption banking law because has bank and avoid an ” power purchase any asset of a failed services.’ Id. at 108 S.Ct. at 401 1823(c)(2)(A). (quoting Hutcheson, bank under 12 U.S.C. Hav- Gunter v. 674 F.2d ing question (11th Cir.), denied, decided the before on feder- cert. U.S. statutory preemption, (1982)). al the court then 74 L.Ed.2d 63 (1974) matter, provides 2. Colo.Rev.Stat. 4-5-116 3. As a factual the note backed part: documentary failing credit was contained in the (1) records; assignment. right snap part Transfer and bank’s no decision on the draw under a credit can be transferred or assigned only necessary. the FDIC was The FDIC decided to expressly when the credit is (in keep long this asset all likelihood before the designated assignable. as transferable or sale) failed bank’s assets were offered well- provision was enacted in This Colo- knowing if the asset was sold to another Code, the Uniform Commercial rado enacted documentary credit would be worth- including art. 5 which deals with letters of cred- assuming less to the bank. it. 1965 Colo.Sess.Laws ch. at 1401. § 155-5-116 as a matter of in due course holder read should be language But this Wood, 160-61 law); common holding U.S.C. Langley’s context of usu personal defense (same concerning in “fraud the of a defense 1823(e)4 bars § (FDIC 865, at 868 Gunter, did not 674 F.2d ry); the fraud even inducement 5 in the in fraud promise.” of express free of defense of an takes form the take 96, 90, at of federal common 108 S.Ct. at as a matter U.S. ducement 484 Langley, underly- Bank purposes Nat’l discussing law); the v. FDIC Merchants In 400. of Cir.) (FDIC (11th 1823(e) 634, indicated Mobile, the Court 639 725 F.2d ing 12 U.S.C. § 1823(e) 1823(e) is to allow claim that free of of purpose under that takes § § “[o]ne rely on unguaranteed in examiners participated and state 829, of evaluating denied, the worth 469 loan), in U.S. records cеrt. portion a bank’s of 91, at (1984). 484 U.S. Langley, 114, 57 L.Ed.2d assets.” 83 a bank’s 105 S.Ct. stated: Court 401. The at 108 S.Ct. case is in this documentary credit purchase evaluation kind of [for The last “that unqualified” asset “seemingly a not must be particular, in assumption], and condi subject undisclosed fact in [is] usually over- speed, great made “with the tions,” escape attention would which going the preserve night, in order to 92, at U.S. Langley, 484 the FDIC. See and failed bank the value concern in this a situation Nor is at 401. 108 S.Ct. banking servic- in interruption avoid an pre should be Boulder Bank of the which at Hutcheson, F.2d 674 es.” Gunter pay asserting its defense cluded state bank- FDIC nor the 866. Neither ato knowingly contributed ment because to make be able ing authorities the which affected misrepresentation con- records if bank evaluations reliable D’Oench, Duhme & Co. FDIC. See two are similar counting prepared allegedly firm which Summers, 2See J. White & S. Uniform borrower); false financial statements for 16-18, Commercial 19-3 at 19-4 Code § § (D.Kan. Hudson, F.Supp. FDIC v. 643 496 (“the general principle at 22 of freedom of 1986) (tort against officers, action bank’s 5.”) (1988); reigns in Article contract Colo. employees); and directors FDIC v. Abra 4-1-102(3) (1974) (effect Rev.Stat. ham, (E.D.La.1977) F.Supp. 439 1153 generally provisions may UCC be varied (tort directors; against action any former agreement). prevailed While FDIC has prohibition assignment state law on not an many theory in instances on a of federal issue); F.Supp. Fielding, FSLIC v. 309 law, preemption of state e.g., see NCNB (D.Nev.1969)(suit officers, against di Cowden, Texas Nat’l Bank v. 895 F.2d savings rectors and others associated with (5th Cir.1990), 1501-03 federal law association), denied, and loan cert. displace pri- should not be allowed to (1971); S.Ct. L.Ed.2d 621 agreement parties. vate between Rectenwall, (N.D. F.Supp. FDIC v. might handsomely by The FDIC benefit Ind.1951) (tort against action cashier who allowing judicially unilaterally it to and re- allegedly paid drafts when drawer’s ac acquires draft the instruments it counts were insufficient to cover the acquisition failed bank avoid the of drafts). A case cited the court which example, worthless assets. For additional action, quasi-tort did not involve a tort or might collateral be added to secure a Ventures, FDIC, Chatham 651 F.2d Inc. legal description worthless note or a better (5th Cir.1981), denied, cert. property might of real be added to mort- (1982), L.Ed.2d 845 gaged рroperty real about to be foreclosed. prohibition also did not involve a state law suggest merely But no one would be- assignment question. on of the note in The FDIC-Corporation power cause has the un- specifically court in that case noted that it 1823(c)(2)(A) der 18 U.S.C. “to “need not decide what result would obtain bank, of a ... assets” rights if state made the FDIC’s worth change express written terms of those less.” Id. at 358 n. 4. Yet, assets so as to increase their value. by ignoring that is what the court has done The language court holds that the assignment the source of the restriction in concerning assignment cases of tort actions private provision concerning case. The scope to the “is universal applicability of the UCP to this docu- reasoning, credit, including thus letters of credit, mentary hence the UCP restriction particularly discussing the need for assignment, on has read out been of the speed a P & A transaction.” Court’s parties’ agreement. Opinion Apart at 1474. from obvious dif- contract, ferences between a tort. assuming, arguendo, Even implications different arise from the as- assignment source оf the restriction was signment law, of tort actions and grounded letters cred- agree in state I do not that a judgment. it which should our concerning rule inform assignability “the of tort equally applicable documentary claims is commercial usefulness of a assigna- bility Opinion depends upon of letters of credit.” Court’s the doctrines of inde- deciding at 1474. pendence6 compliance.7 U.S.C. and strict Allow- relationship 6. The between the issuer and the 7. See page note 7 on beneficiary independent underlying is (Footnote 1481) p. 6 continued on to tort actions hard giving rise interest, ing conduct assign its beneficiary to ing the assignable. tort is if the ly will be affected express terms contrary to v. Recten Dolan, the statement J. principles. these impairs language 274, that the wall, at ¶ (1984 & 10.03 Credit Letters Law unre “contemplates the 1823(c)(2)(A) not be able issuer will An Supp.). an every transferability of asset stricted merely by de- responsibility discharge its necessary to where at least insured conform termining documents whether deposit of its assumption accomplish the the credit. the terms face with on their bank,” simply insured another examinе liabilities forced to be Rather, the issuer’will unlikely example, it For too broad. between transaction underlying contract would service personal decide beneficiary customer Nat’l Texas see NCNB terms of But assignable. with the compliance strict whether ap (fiduciary Bank, materi- This 1499-1503 required. should the credit Texas- issuer risk non-transferable (increases) pointments, ally alters by FDIC-receiver law, may diminishes and it also be transferred bargained for has under for bridge of credit.8 federally letters created with certainty associated Boulder, 1821(i)). tort ac F.2d While 865 mer 12 U.S.C. v. Bank See of J., Cir.1988) (Baldock, officers of bank (10th malfeasance the 1134, for 1143-46 tions mat as a assignable a transfer recognize may be dissenting). To and directors even requirement permissible law, is no there of law ter of federal operation a of recognizing a rule supply policies, but law must light to these federal i.e., transfer, from state law. voluntary uniform with subsequent at odds decision Foods, unnec- FDIC-corporation, 440 v. Kimbell FDIC-receiver States United See poli- 1458, state-law 59 these compromises 99 essarily S.Ct. U.S. commer- a national (1979) (holding fundamental are cies which 711 L.Ed.2d documentary See priority credits. the utility of to determine cial not rule is needed (allow- pro comment lending 4-5-116 federal arising Colo.Rev.Stat. of liens may de- assign 473-74, credit ing beneficiary D’Oench, at grams); secur- intended concurring) “real and J., of (Jackson, customer prive 686-87 the liabili ity”). as to many questions (“No doubt paper which to commercial parties ty of tort is not a documentary a Unlike will the hands of [FDIC] into the comes which constitutes instrument a commercial local law the by applying be solved best action exchange. Choses of a medium and the the makers to which reference with They commerce. facilitate do not generally contracted.”). presumably insured bank underly- exchanged. The regularly are not test, compliance a strict retain law would rado 6 continued Footnote compliance, upon substantial the bene- one based not the customer between transaction ficiary. the draft and UCP, provisions and defi- between deviation the General even when County c.; Board in nature. technical Nat’l Bank Colo trivial crеdit is nitions the (Colo.1981). Comm’rs, Coleman, P.2d 1385-87. American documents the insist issuer must 7. An comply beneficiary strictly on presented the risks involved generally know 8. Bankers documentary terms face with their documentary Bankers credit. they a issue limited re- have a will then The issuer credit. sponsibility charge fee a but rather philanthropists, not conform, is- the documents is a fee —if of credit. That issuing not, draft; issuer if honor must suer changing By risks involved. function Colo.Rev.Stat. draft. honor must credits, documentary both governing rules Cole- (1974 Supp.); American & 1989 § 4-5-114 assignment international, allowing thus Bank, 887 F.2d v. Intrawest man designa- express anof the absence credit in of a issuing is Cir.1989) (“The duty Bank (10th contribute transferability, court will tion of checking nature, confined ministerial the issuance fee associated increased to an against carefully what presented documents in- compensate for documentary credits Co. v. Arbest Constr. requires.”); letter of Dolan, Letters The Law (discussing J. See risk. creased Co., 584- & Trust Nat’l Bank First (1984) risk 10.03[3] Credit ¶ diversity jurisdiction, Cir.1985). In our compli- of strict in erosion litigation inherent the strict importance of have discussed principle). ance Colo- principle determined compliance agreements “Commercial traditionally preemption. tives to Bator, warrant P. are the Meltzer, domain of state law.” Aronson v. D. P. Mishkin Shapiro, & D. Hart Quick Co., 257, 263, Point Pencil and Weschsler’s The Federal Courts and L.Ed.2d 296 (3rd System 1988) Federal ed. presence of a restricting (“The uniform rule general proposition that state law assignment, express provision, absent an cannot impede contradict or or violate a argues forcefully against contrary feder- valid regulatory program easily al rule for the benefit of the FDIC. The stated. Whether under the circumstances provision concerning assignment UCC inis really however, contradiction may, exists states, fifty in all 2A use Uniform Laws raise difficult problems.”). and subtle (Master Ann. 5-116 Ed.1977 & 1990 national and international consistency con- Pamp.), and the UCP in use throughout cerning assignment documentary credits opinion the world. The on court’s give pause should us adopting before a rule ground much firmer ‍​​​​​‌‌​​‌​‌‌​‌​​‌‌​​‌​‌​‌‌‌​‌​‌​‌​​​‌​‌‌‌​‌​‌‌‌‍if the UCP and the disrupts relationships commercial prohibited assignment altogether, UCC but upon based established state law. that is not the case. Both the UCP and the right assign procеeds UCC allow for a beneficiary’s

even when right to draw

upon assignable. the credit is not 47; 4-5-116(2) art.

UCP Colo.Rev.Stat. §

(1989 Supp.). Both the UCP and the UCC assignment

allow for if the credit is ex-

pressly designated as transferable or as- America, UNITED STATES of

signable by the issuer. UCP art. Plaintiff-Appellant, 46(b); 4-5-116(1) (1974). Colo.Rev.Stat. § provisions the UCC and the UCP hardly potential stand as a bar LONG, Money, Jackie D. Robert F. efforts; the collection FDIC is free to insist Defendants-Appellees. its only accept that member banks assigna- security ble letters of credit loans. America, UNITED STATES of Moreover, assuming that Colorado law Plaintiff-Appellant, recognize would by operation a transfer FDIC-receiver, law to FDIC-receiver could GRIFFIN, Defendant-Appellee. Keith A. assigned proceeds have to FDIC-corpo- the. present rate. These alternatives within the 89-3942, Nos. 89-4007. suggest hardly scheme an un- United States Appeals, Court of problem solvable for the FDIC that would Eleventh Circuit. justify preemption either statute any creditor, or federal common Like law. Aug. terms, the FDIC wants to on collect its own Yazell, United States v. 348- 500, 504-05, 15 L.Ed.2d 404

(1966), provision but if the UCC con-

cerning assignment “significant is a accomplishment

threat” to the objectives

FDIC's pro- uniform preempted.

vision See Wallis v. Pan Co., 63, 68,

American Petroleum 16 L.Ed.2d 369 range options

Given the which was avail-

able FDIC to collect on this docu-

mentary credit, the FDIC has not shown a conflict objec-

sufficient with the FDIC’s notes seemingly unqualified tained 676, 459-61, 447, 62 S.Ct. FDIC, 315 U.S. condi- subject to undisclosed in fact face, itsOn 680-82, 956 86 L.Ed. tions. states: of credit the letter 91-92, at 108 S.Ct. at Langley, the “Uniform subject to credit This 1823(e) is not undеr The FDIC § 401-02. Documentary for and Practices Customs conditions, if even oral held to undisclosed Revision), (1974 Interna- Credits [UCP]” Langley, and known. fraudulent Brochure of Commerce Chamber tional cases Other 402-03. 93-96, at at 290. No. the FDIC the result justified have takes, letter of UCP referenced The 1974 in the inducement fraud free can be “A credit that: provides credit a part because personal defenses other designat- expressly it is only if transferred agreement must assumption issuing bank.” by the ‘transferable’ ed as Leach, 772 quickly. accomplished 46(b). art. UCP (FDIC free takes 1266-67 F.2d at 46(b) similar art. Although UCP including con- failure defenses personal concerning as- 4-5-116(1) § is a Colo.Rev.Stat. usury because sideration been, committee, (4) have contin- shall or 1823(e) provides: § 4. 12 U.S.C. execution, an of its uously, time from the Corpora- against Interests of Agreements of the bank. record official to diminish agreement which tends tion. No right, or interest title the broad Langley, or Court reaffirmed defeat 1823(e). acquired under this asset Corporation section, the FDIC afforded protection by distinction, security a loan or rejected discussed either Court Corpora- сases, Langley, against 792 F.2d FDIC v. valid see purchase, shall be several (1) Cir.1986), S.Ct. (5th aff’d, be in U.S. agreement shall such tion unless Hatmaker, (1987); by FDIC v. (2) been executed L.Ed.2d writing, have shall Gunter, Cir.1985); claiming an persons person or bank and 1823(e) only defense thereunder, barred including the ob- at interest adverse contract, pursuant to agreement acquisition side an oral contemporaneously with ligor, was contract an entire bank, (3) not a defense have been but by shall asset any contractual tied to due to fraud void of directors board approved 90-93, Langley, 484 U.S. committee, promise. approval which its loan bank or at 401-02. of said board the minutes reflected in shall be signment, 1823(c)(2)(A) FDIC-corporation the court never addresses the allows assignment fact that the source of the re- purchase acquire assets free of transfer law, striction in this case is not state but restrictions, ability upon the court relies private agreement incorpo- rather a involving assignability cases of tort rated the 1974 as the rule of decision. UCP against actions to the those who Surely parties right have the to have insolvency. have contributed bank’s documentary controlled Hurdman, v. Main See FDIC UCP, law, rather than even if the (E.D.Cal.1987) (tort against action ac concerning assignment.

Case Details

Case Name: Federal Deposit Insurance Corporation, a United States Corporation v. Bank of Boulder, a Colorado Corporation

Court Name: Court of Appeals for the Tenth Circuit

Date Published: Aug 20, 1990

Citation: 911 F.2d 1466

Docket Number: 86-1071

Court Abbreviation: 10th Cir.