Betty SIMON, Trustee, Appellant, v. Janet CEBRICK; Ronald Cebrick; State of New Jersey; Parliament Leasing Corporation; Clayton N. Sterling Associates, Inc., a N.J. Corp.; William T. Hiering, P.C.; Raymond A. Birchler, Realtor; General Medical New Jersey; Donald B. Whiteman, d/b/a Donald B. Whiteman Agency; AFCO Credit Corporation; Marta Ditchkus; Federal Deposit Insurance Corporation, as Receiver for the First National Bank of Toms River; Unknown Owners, Unknown Claimants, their heirs, devisees and personal representatives, and their or any of their successors in right, title and interest.
No. 94-5429.
United States Court of Appeals, Third Circuit.
Argued March 9, 1995. Decided April 26, 1995.
In this case, the district court went through the methodology step-by-step with government and defense counsel before imposing its sentence. Furthermore, the court listed several factors that warranted a more severe sentence. The court noted the defendant‘s prior offense “had not been fully taken into account” in determining the offense level for the instant convictions. App. at 151-52. Furthermore, the court stated most of the victims were elderly and the financial hardship the defendant caused was probably “irremediable.” Id. at 152-53. Finally, the court noted the defendant‘s conduct was “parasitic and outrageous” and he had not shown any remorse for his actions. Id. Thus, although the district court properly followed the
IV.
We hold that the sentencing court properly applied the methodology of
man, 15 F.3d 610, 613 (6th Cir.1994) (“[B]ecause the methodology ‘is meant to assist the court in determining the appropriate sentence,’ it will not always be necessary to follow the precise methodology called for under
Ann S. Duross, Asst. Gen. Counsel, Richard J. Osterman, Jr., Sr. Counsel, E. Whitney Drake (argued), Sp. Counsel, FDIC, Washington, DC, Jeanette F. Frankenberg, North Brunswick, NJ, for appellee FDIC.
Before: HUTCHINSON, ALITO and SAROKIN, Circuit Judges.
OPINION OF THE COURT
SAROKIN, Circuit Judge.
The question presented is whether mortgages held by the FDIC can be extinguished without the FDIC‘s consent through foreclosure of plaintiff‘s superior real estate tax liens. We hold that the district court correctly interpreted and applied
I.
On October 26, 1990, Betty Simon (“plaintiff“) purchased the tax title to a parcel of New Jersey real estate (hereinafter the “Cebrick Property“) by paying the sum of $4,801.37. Plaintiff subsequently purchased tax lien certificates for 1991, 1992, and 1993 for that property. At the time plaintiff purchased the tax lien certificates, the First National Bank of Toms River, New Jersey (the “Bank“) held mortgage liens against the Cebrick Property. The loans were made respectively in March 1987 for $200,000 and in August 1987 for $330,000. On May 22, 1991, the Comptroller of Currency closed the Bank. The Bank‘s assets were taken into receivership by the Federal Deposit Insurance Corporation (the “FDIC“). The FDIC is now the holder of the mortgages at issue in its capacity as receiver for the Bank. In 1993, the market value of the Cebrick Property, based upon plaintiff‘s valuation, was $251,328.54.
Under New Jersey law, plaintiff‘s tax liens are superior in right to the FDIC‘s mortgage liens.
The district court granted the FDIC‘s
II.
We exercise plenary review over a district court‘s order dismissing a complaint under
We have plenary review over the district court‘s legal conclusions, including the proper interpretation of a statute. Moody v. Sec. Pac. Business Credit, 971 F.2d 1056, 1063 (3d Cir.1992); Manor Care, Inc. v. Yaskin, 950 F.2d 122, 124 (3d Cir.1991); Juzwin v. Asbestos Corp., 900 F.2d 686, 689 (3d Cir.), cert. denied, 498 U.S. 896, 111 S.Ct. 246, 112 L.Ed.2d 204 (1990).
III.
In the instant case, the FDIC does not contest the municipality‘s authority to assess taxes against real property in which it has an interest, nor does it contest the superiority of plaintiff‘s tax liens over its mortgages. See
Enacted as part of the Financial Institutions Reform, Recovery and Enforcement
No property of the Corporation shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Corporation, nor shall any involuntary lien attach to the property of the Corporation.
On appeal, plaintiff contends that the district court erred by construing the language of
Long before the enactment of
More recently, the Ninth Circuit in Rust v. Johnson, 597 F.2d 174 (9th Cir.), cert. denied, 444 U.S. 964, 100 S.Ct. 450, 62 L.Ed.2d 376 (1979), relying on New Brunswick, held that the Supremacy Clause prevented the City of Los Angeles from foreclosing a special assessment tax lien against property in which the Federal National Mortgage Association held a mortgage. In the course of concluding that the city‘s lien could not be enforced without protecting the federal interest, the court held that the mortgage interest of federal instrumentalities should be treated the same as other property of the United States. 597 F.2d at 177.
When a court interprets a statute, “[i]t is not lightly to be assumed that Congress intended to depart from a long established policy.” United States v. Wilson, 503 U.S. 329, 336, 112 S.Ct. 1351, 1355, 117 L.Ed.2d 593 (1992) (quoting Robertson v. Railroad Labor Board, 268 U.S. 619, 45 S.Ct. 621, 69 L.Ed. 1119 (1925)). The New Brunswick line of cases exhibits a policy to protect federal mortgage interests from extinguishment through foreclosure of municipal tax liens. The express language of
Other circuits have similarly interpreted and applied
Plaintiff in the instant case relies on Birdville Independent School v. Hurst Assoc., 806 F.Supp. 122 (N.D.Tex.1992), in which a district court held that the phrase “property of the Corporation” under
Furthermore, plaintiff argues that the district court incorrectly interpreted and applied
Section 1821(d)(5) sets forth the procedure for filing claims against an institution that has been put under FDIC receivership. The statute provides that the Corporation shall determine within 180 days “whether to allow or disallow the claim and shall notify the claimant of any determination with respect to such claim.”
First, we reject plaintiff‘s attempt to meld the 180-day time limit in the claims evaluation process with the rights of the FDIC under
Second, we reject plaintiff‘s argument based on FIRREA‘s general tax exemption provision. Plaintiff relies on
Moreover, plaintiff cites to the recent Supreme Court decision in BFP v. Resolution Trust Corp., --- U.S. ---, 114 S.Ct. 1757, 128 L.Ed.2d 556 (1994), as support for her
Plaintiff also advances the FDIC‘s Tax Policy Statement as support for her position. Because the statute‘s language is clear, any reference to the FDIC‘s Tax Policy Statement is unnecessary. See Matagorda, 19 F.3d at 220 (stating that it need not rely on FDIC‘s Tax Policy Statement because statute‘s language is unambiguous); cf. First State Bank v. United States, 599 F.2d 558, 564 (3d Cir.1979) (holding that bank could not predicate claim on alleged violation of FDIC Manual which was issued only for internal operating purposes), cert. denied, 444 U.S. 1013, 100 S.Ct. 662, 62 L.Ed.2d 642 (1980).
In conclusion, we reject plaintiff‘s alternative reading of
IV.
We now turn to the question of whether the Tax Injunction Act (“TIA“),
The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.
We do not necessarily agree with plaintiff that the district court‘s application of
We do, however, reject the FDIC‘s reliance on FIRREA‘s removal provision. See Moe v. Confederated Salish and Kootenai Tribes of Flathead Reservation, 425 U.S. 463, 472, 96 S.Ct. 1634, 1641, 48 L.Ed.2d 96 (1976) (holding that jurisdictional statute is insufficient by itself to establish implied repeal of TIA). We also conclude that the express language of
Furthermore, we hold that the TIA does not oust the district court of jurisdiction because the FDIC in these particular circumstances qualifies for the federal instrumentality exception to the TIA. See Federal Deposit Ins. Corp. v. New Iberia, 921 F.2d 610, 613 (5th Cir.1991). Under a judicially-created exception to the TIA, the United States and its instrumentalities can initiate actions in federal court to protect themselves from “unconstitutional state exactions.” See Department of Employment v. United States, 385 U.S. 355, 358, 87 S.Ct. 464, 466-67, 17 L.Ed.2d 414 (1966); see also Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. at 470, 96 S.Ct. at 1640.
Congress enacted FIRREA as part of a comprehensive federal program to meet a financial crisis. The statute provides that the FDIC shall act as receiver for failed banking institutions. In its role as receiver, the FDIC‘s assets are protected from foreclosure while it is winding up the affairs of a failed banking institution.
In Bank of New England Old Colony, N.A. v. Clark, 986 F.2d 600 (1st Cir.1993), the First Circuit held that the FDIC was not a federal instrumentality for purposes of the TIA. The First Circuit‘s decision is distinguishable. First, only state tax issues were involved in Clark; the FDIC alleged only state law grounds for relief. 986 F.2d at 601, 602 n. 4. In contrast, the FDIC in the instant case has invoked the protection of a federal statute,
Similarly, the governmental role played by the FDIC in Federal Deposit Ins. Corp. v. New York, 928 F.2d 56 (2d Cir.1991), was minimal, and it is on this basis that the Second Circuit held that the FDIC could not invoke the federal instrumentality exception. In New York, the FDIC was the assignee of a bank‘s claims against a city and state for assessing taxes on interest payments in contravention of a federal statute. Without reaching the question of whether the FDIC is a federal instrumentality, the court held that the FDIC could not invoke the exception because by bringing suit the FDIC was attempting to protect the interests of a commercial lending institution rather than the federal government. New York, 928 F.2d at 59.
In conclusion, even if the TIA were applicable, because the FDIC sought the protection of
V.
For the first time in her reply brief,1 plaintiff raises the contention that the district court‘s application of
Plaintiff relies on Matagorda in which the Fifth Circuit confronted this precise issue. Even though it concluded that the delay involved did not constitute a compensable taking, the Fifth Circuit in Matagorda cautioned that “[u]nmitigated delay, coupled with distinct investment-backed expectations, may, at some point, infringe on the entire ‘bundle’ of rights enjoyed by the Appellants to the point that a compensable taking occurs.” 19 F.3d at 225. See also Donna Independent School District v. Balli, 21 F.3d at 101 (holding that delays in foreclosing property tax liens did not constitute compensable takings under Fifth Amendment). We agree with the Fifth Circuit in Matagorda that at some point a delay in the ability to exercise property rights may constitute a compensable taking.
Furthermore, we hold that any delay should be measured from the point at which plaintiff could first have foreclosed under state law until the district court‘s decision. Thus measured, the delay in the instant case consists of one year and seven months. Plaintiff argues that this delay constitutes a taking for which she should receive just compensation. The FDIC counters that plaintiff is being fairly compensated for the delay by the interest accruing at the rate of 17-18% per annum on the tax liens. The FDIC also stresses that plaintiff‘s liens have priority over the FDIC‘s liens and that the property is much more valuable—10 times more valuable—than plaintiff‘s liens. Finally, the FDIC suggested at oral argument that a compensable taking will occur when the tax liens plus accrued interest exceed the fair market value of the property.
Without adopting that formula, based upon the foregoing facts and circumstances, we hold that plaintiff has not established that she is presently deprived of a sufficient property interest to create a compensable taking.
VI.
For the foregoing reasons, the judgment of the district court is affirmed.
SAROKIN
CIRCUIT JUDGE