case fourteen dash four two nine seven fifteen three three two four and seventeen three one six two national credit union ministration board versus stand just so that it all oral argument not to exceed fifteen minutes per side and mr rob away for the national credit seven both give n c u a when it brings in action as liquidating agent special tools to maximize recoveries on the claims of thought credit unions for the benefit of the national credit union share insurance fund and or to ensure that those who contribute to credit union failures are accountable for the losses that result first and see his extended statute which is subsection before gives in to a new limitations period for any action brought as either conservative or liquidating agent and that new period starts when n c a a is appointed to the capacity in which the action is brought as a result and who has fraud claims who are time this a matter of federal statutory law second subsection b two g of the statute authorizes n c u a to seek an asset freeze injunction and unlike an ordinary private litigant and seaway does not need to prove the reparable or immediate injury nor does it need to prove fraud this record was well within its discretion to order an asset freeze on this record now unless the court has otherwise i'll begin with our appeal which concerns the timeliness of the fraud and conversion claims would be great  so we believe that the the our primary proposition with regard to the statute is that the the new limitations period starts from the time that ensue is appointed the capacity in which the action is brought we think that is the most natural reading of the statutory text subsection b fourteen a and b read together with you a practical question which is is there any tort the e u would bring as a liquidating as a liquidator that you would have the same cause of action as a conservative or not the same not that there would be this different cause of action your honor enlisted arisen in the meantime but there would be practical reasons that would bring certain claims as the quitting agent wouldn't bring as conservatory and particular the type of claim that raises that concern are usually tort claims against former officers and directors of the credit union when n c who is acting as conservatory is primarily focused on keeping the credit union going as a going concern it may need those people's sorts of claims that might threaten ongoing business relationships that the conservator would abstain from bringing to keep the business going but the liquidation liquidate an agent would bring because it is focused on maximizing recoveries and on the resulting assets you know i find this very difficult what's complicated about it is you've got this later of point you know they could've of course separated these things out so you'd have three later of and that would mean a life a lot easier for us but they didn't so you have  one and you have later of and then you have begins and you know if you think of it this way you know a race begins a clock starts in use you know say a race begins and you say the race begins when there's a blue or red flag you'd start when either one of those is waved you wouldn't wait till the second one so it just seems very funny when it's it's a beginning issue that you wouldn't start when the first of them come up so i think i understand the point your honor and my response would be that there are actually only two times not three that are relevant to any particular suit because any particular suit is only going to be brought in one capacity either it's conservative or the cutting edge and so when the court to have the time comes for the court to comply the statute there's only one possible time going to roman at one and one possible time in a room and two and you pick the later of those two you would never say with regard to one cause of action you never have to look at all three there's always there's only always two the only two that are after a negligent say operations heart transplant that's one option then the next one is it starts after the patient dies it would seems we're in then i consider that not a terrible analogy because i think of conservatories ship is rehabilitation and i think of liquidation is death and you just don't know when the death is going to happen i mean the whole point of rehabilitation is to postpone it forever perhaps or at least a long time which it seems very strange to me about your approach is you you could have a world in which you know something some problems have happened your conservative conservative or you perhaps know about some other issues you could actually have the whole litigation start and then you have a new accrual because as it turns out the company the thrift ultimately is liquidated and then we start all over again that just seems very strange to me particularly with some causes of action that were there at the beginning and that normally was that you limitations the incentive system is to get people to file these things sooner rather than later there are a couple points in your question on your honor which i'll try to address one is the question whether this effectively creates i think what you're getting at is an unlimited structure of limitations because no matter how long the conservatorship when i'm trying to look at context i'm trying to amusing context to figure out what to do with this strange language and the context is rehabilitation and death death doesn't always follow from me a bill taishan and sometimes it happens long after i am it's not so much that i'm accusing the board of wanting to set up a system where they can manipulate things that's not my point we just know sometimes conservatorship works and sometimes it doesn't well that's true your honor and i think that's actually a good reason why congress would have wanted in light of its overall goal of maximizing recoveries to protect the share insurance fund would have wanted the liquidating agent maybe conservatorship was expected to succeed maybe it didn't and now the great unit has failed in the agency has to reassess and bring and bring claims and the overall purpose of the statute is to maximize recoveries on behalf of the fun and so i think they'll be a good reason for congress to take that approach you could go back to my knowledge you have two sets of medical malpractise claims one for a bad operation one for death separated by five years potentially if it becomes a liquidator where i don't know what you mean by that so if so the new period starts running or it would have the opportunity to bring claims when it becomes a conservator but if the time expires under the statute to bring the if in this case it's a four year period if that four year period runs out and be a name in their point of the quitting agent on the fifth year they don't get another new period those claims are time barred and they're done why not under the language yeah yeah i didn't understand that from your position so there are actually a number so there are a number of cases on this point your honor of the only one case which we started our briefs has a discussion of it the fifth circuit has had several cases to me under the statutory language because what you're asking us to do is look at the text of the statute as a four starting point which if your argument is the later of the two so this debt if you become liquidating it in it says the statute of limitation begins to run and under your argument when you become the liquidating agent right why would it change so now you get do you only get three years and fifty one weeks in this case to file because it would have run earlier assuming the cause of action accrued before this no we get that we get the four years but if the we get the four years from the point is the quitting agent but if we had waited four years as conservator on the time had run out then it would be then then we would be done because  statute does not revive still claims and interpreted what we were to read that into this but just to make sure i'm i'm sure i'm afraid i'm missing something so just everything you just said they didn't bring the claims they were conservatory or they had a chance to bring them th didn't the statute runs out claims become stale i guess i had thought if you had to liquidate at that point in your five the period begins again am i wrong about that you are incorrect about that  in terms of how we ground that in the statute i would generally type back to the word claim because the if the if there is no claim for the agency to inherent in the new capacity if it's already gone but v idea this has been settled in a number of circuits not the circuit your honor but a number of other circuits including the tenth circuit in the in a case called revere and car and including the fifth circuit in a case called f d i c versus dawson that collects a number of other cases and i think that the courts considering the statute that way reading that limitation the statute were concerned about this possibility of indefinite limitations periods and so they held that so how do you decide what claims are forever barred and what claims are not forever bar you  look at whether the the preceeding entity which is out of the credit union or it would if in in a multiple capacity case it could be the agency acting as conservative when you look at whether the priest whether the claims would have been time barred as of the date of appointment there was actually a big issue in the credit suisse case your honor which was discussed in the briefs we never took the position that if the claims had been time barred before the credit union went into went under we could we could bring them but what buttons to go back to where you started that you had their types of claims that as a conservatory you would know about but would want to bring say fraud claims against officers you've got to work with the officers you're trying to rehabilitate you don't want to bring those claims things don't work out there's a liquidation that particular fact pattern time bar the fraud claims against the officers or not if the conservator has waited out the period for whatever reason good or bad then it's done and they can't reus if it would have been time bar decide to sue sometimes and not others with the same claim you're saying they don't have that option well they have they have the full the as a practical matter your honor it's unlikely for the conservatorship to last as long as you've been discussing it's a hypothetical but you said cases  disgusted so somewhere it has right no i mean it so that the cases that i was referring to your honor are cases in which the time ran out before the even the conservatorship or the receivership or the liquidation agency happened so if the time runs out before then then the claims are got let me tell me this you're giving you're giving great answer so thank you but this is really hard is there any way you can tell us that the date on which the cause of action accrues is really easy let's just say for the sake of argument the lower court was wrong about their way of handling it this is an easy one for you it is very easy your honor the easy one to win and not an easy one to preserve the issue you know the words let's say you're right about affirmative defenses and all that stuff this is still in the case is that an easy one for you to win that here every really sure your honor yes yes under jones versus bach in this case in this court's case and cataldo we did not have to plead  ok ok so you're right everything you say in your brief is right about the cause of action a cruel argument that the decision that there was a mistake made by the district court but that still leaves the question what are the facts going to show about the application of the discovery rule to this case and i realize the facts aren't there and i suspect you'll be careful about what's in the record and what's not but how much confidence do you have on behalf of your client as to that limitations period your honor you must understand what i'm going to try to avoid a hard question your honor if you find the statutory question difficult and would prefer to avoid it we will take that remain and we will we will do our best to when that other issue on remand then i think well i think we have a good chance of prevailing on it and can i ask one follow up on that  oh yeah you said in your brief i thought two thousand and twelve for the fraud so that is that correct twenty twelve was the time at which the agencies investigation was complete now it will of course be contested on remand with that was a reasonable investigation and whether it  should have found that if there were twenty twelve was when the agency finished its review of the books and records and you understand your honour's that this was a large failure of a large credit union that had a lot of collateral consequences and mr gist of it was not top of the list but we did finish that review in two thousand and twelve so that would be our view is i think that would be our position as to when the statute would or when did and i'm sorry just and i'll leave the scope is i'll take your word for when did when did they know the guy who got fourteen years that you reference in your brief that the defendant was allegedly conspiring to reduce yeah yeah when the when was he sentenced when did he plead maybe even more importantly and why wouldn't that put you on notice that at least there was something to investigate i don't know your honor but if you were to measure accrual from that point that's if that's if you can measure it we talked about we would have no problem up ok with the fraud was not discovered until the conservat that's why they went to liquidation a week later they can't we came in we looked around we saw up this mess we had put them into liquidation almost immediately but you know if if you know all you need six days yeah i'm going to six days the discovery rule yeah ok all right and just really quick this has nothing to with anything and i should have been able to figure this out on my own but it's the board the board the government and at the right yes your honor so are you a government lawyer or not your honor so when the board so the the n c u a at the border and who is an independent agency in the executive branch and they can hire fire outside firms for their work is that it and because they have one when they say when they sue is conservative or a liquidating agent they have all the rights of a private entity and traditionally that the they have hard outside firms to do these types of cases so that the costs of them are borne ultimately by the share insurance fund rather than bought it by d o j and the treasury brilliant you get paid like a private lawyer but you get to define government work as  thought of that i never quite figured that one out very glad to be here very good so we've been really obsessed about this one issue will i mean is there something you really want to say about anything else that you don't trust us to figure out on our own i put i don't want to emphasize trust i'd would like to address the s f raised an injunction because that's my client's appeal but it's clear that the panel is most interested or has been to this point interested in hearing argument on the statue limitations issue in the extender statute i guess i have goes back to the the concern over the lack of a hearing in this case that there really isn't any developed record as to what what evidence was presented because there was no evidence presented what the evidence that was presented was an a davit by russell who has an individual who reviewed the account and basically came to the conclusion that the loans had not been repaid i don't think that's an issue in dispute but that isn't the basis for inch issuing an injunction in a kid there still has to be all of the elements of rule sixty five that would be complied with i would just point out there's been the argument made here that there is no need to establish any type of harm to the board before an injunction can be issued under the credit union act i think that's that's that's untrue it doesn't need to be in imminent or irreparable but it's clear that it does still have to have some evidence of  harm to the board no evidence was ever presented to the district court on that issue and i would point out that page five in six of the transcript of the hearing that was held that was an evidentiary hearing of the district court i made the point that he was ruling on this issue as if it was a discovery issue which has a totally different standard than a rule sixty five injunction so he that the district court judge clearly applied the wrong legal standard in issuing the asset freeze injunction that in and of itself that is grounds to reverse the injunction unless there are other questions on the asset freeze because i do think that as a practical matter what happens if you win on the asset freeze so what would reply brief pointed out that it that's what i mean like who cares well if you care i don't know the answer whether or not the asset freeze injunction is still in place at this point in time given the fact that there is a bankruptcy proceeding at this point i  don't know the answer to that whether the bankruptcy court would trump the district court's injunction over those assets that might need to be something would have to be flushed out and and remain because when the injunction heard and briefed that the bankruptcy hadn't been filed yet so it may very well be that there's a question as to whether or not the asset freeze injunction has been mooted in essence by the by the bankruptcy filing let's say the fraud claims are avik once she was dismissed from the case but the all the subsequent injunction orders imposed an injunction as to the assets of mr joseph own individual e or jointly so it could arguably still single example i ask that it's not right so right yes i may have missed one other question in this tricky statutory interpretation question which i think everyone has to acknowledge is not a piece of cake right and you've got the other option of claim accruing let's just say for the sake of argument that judge nugent kind of didn't get right what's an affirmative defense and how this all works and that the board really has a right to t hat option ok so that at a minimum whatever else happens in the case you need to remain and on that issue what's your confidence level on that one well the minute i'm trying to figure out how relevant is very tricky stuff to interpretation cases to both of you well as i was beginning to say i may have misconstrued the board's position in this case because i think they argued in oral argument now today that they are not looking to reset once the liquidators is appointed so the under that they are what they said is if the four years iran as a conservatory then they can become a liquidator and reset it but what what they said and i think what judge s confident for the reason that i'm the date that the conservative or the board was appointed the conservative or of st paul credit credit union all of the least the evidence that they've presented in support of their  of their fraud claim was all known and were available to the board on day one on april twenty three twenty ten all of the jurors avik alone and i wish you'd told us enough for me because the reality is application of discovery rule may require evidence and so given what judge nugent did he didn't get that evidence so your point i understand of lee you're going to oppose their position i got it that makes well but the point that i'm trying to make is that the evidence that the board itself presented in its complaint was sufficient to tell the court that if that evidence was available to the board that's an allegation in the complaint and that can't be the basis to dismiss a complaint on it will be certain information or i don't why couldn't they have discovered those in two thousand and twelve for example well they i'm sure they'd the did but the argument that they're making that they didn't complete their investigation until two thousand and twelve is not the standard for the discovery really discoverable is when did they have information available to them that would allow them to know and perhaps make further inquiry an investigation to determine whether they've got a fraud when all of that was available to the board on motion based on the evidence that was attached to the complaint that the board alleges is the basis for their fraud claim and that's the application they're not arguing that mr gerson that made oral representations or misrepresentations their sole basis is that these words do they go in and appoint just the liquidating aging or even themselves right away or do they come in as a conservatory and try to save it before they liquidate i can't say that i know the definitive answer there your honor i would i would suspect that they can be appointed liquidator before the conservative or ship but i don't know if that is if it must needs to go lockstep conservatory and then maybe a day later a week later a year later ten years later they could they could convert to  on day one whether they can come in and see that the institution is so financially unstable that liquidation is a foregone conclusion if you can the quit right away because their debt that were if you wait that would be my whole point my  is adopted as far as the resetting of the statute based on the when the liquidator gets appointed there is an indefinite statute you would never know when the statute runs because the conservatory could could be in existence for a week a month now they say if the cause of action accrues during a conservatory hip and or your runs the claim die and they can't bring it as a liquidating it then then that's what we have here because the four year statu ran before they were appointed the liquidator while they were no it didn't i thought the for your statute ran six days before they filed this suit according to you yes they were they were appointed the conservative or on claim a new does that make sense but if it but if they're appointed to liquidating agent during the period then i understand their argument to be the claim starts to run a new the statue of limitations i'm sorry starts to run a new for say i don't agree with an argument but even if that argument were to be correct we would still prevail in this case because the statute the for your stance you ran before they were appointed a liquidator so  if that's their argument that they were appointed to liquidator in two thousand and ten a week after they were the conservatory yes april for april thirtieth two thousand and ten their argument is then it starts anew because the claim was never extinguished so the statute of limitations starts anew on april thirtieth so the claim would be time well that's is out how i understand there are you ok all right i i because i had i'm sorry but that goes but that goes back to the thing we were talking about before using the language of the statute to make that work that's right it would have to allow for the board to make the decision that they're not going to bring a claim as a conservative or and instead wait until they are appointed as is is liquidator to begin this they gave a pretty practical reason i mean a lot of times when you liquidate you're going to go after your officers but as a conservatory you definitely don't want to so why doesn't that make sense that we should try let board try and then if it fails they get the same time to bring the claim against their offer well i think that's that opens up that the concern that judge nugent recognized in the other cour credit suisse have recognized and that is then the in the statute is eat you would never know when the statute runs until the board decides that they'd they have decided to liquidate and and those board members or or officers of the institution are no longer useful to let me ask you can the board appoint someone else's conservat or i would submit that the argument that the way the statute is written is to encourage the board to maximize the recovery actually plays in favor of bringing these claims sooner rather than later the argue it was made that maximizing the recovery should delay the rig the statute running i would submit that is just the opposite that if that really is the true intention of the statute it would be to encourage the board to bring claims sooner rather than later and if they have to make a business decision to keep somebody on longer because they think that they can be useful to them it's like no other any other litigant you make a business decision or a strategic decision not to sue someone timely or soon or you run the risk that your claim is going to be barred and so i don't think that helps them to say that there were maybe some circumstances where a board member or an officer of the of the institution might be useful to keeping the board or the institution from of that argument is that you're taking away the ability of the board to prioritize what they want to do is just not feasible to think they can sue everybody on the same day well i'm not saying they had to sue and i'm going to go they have to go after the big fish first and then the smaller fish later they had they had four years to do that i mean i it understand you said they might have waited too long but to say to say that a shorter construction of a statute of limitations maximize tommy i just yeah you know they get the construction of the statute really though should be more definitive than just saying that there may be a time in the future when they decide that he an officer or someone else's that was useful to them no longer is  injunction i think this is covered in the briefs but there was evidence that was not available to us concerning the fraud at the time you know for some time after conservatorship in the quotation in particular the two things that are alleged to be fraudulent here are the the the  guarantees to p and c nothing in the complaint suggests or shows that we would have known about those at the time of conservatorship and also it would be the fact that his business was failing we learned about that through the hardship affidavit that he filed that's record excerpt thirty dash one and the accompanying financial statements those are dashed two and dash three so to summarize that the short answer is you don't care if we decide the first point because you think you'll win under the second your honor the agency has an institutional interest in this construction of the statute and i think  is this the position of the united states grief counselors united states i mean if we get that issue should we ask for whether they want to participate as an amicus or is this i don't know how this works or do you have to clear your position by them as is so i have when i say that the agency has the interest that is my instruction from my client which is actually i got that but in terms of d o j i take it a matter of not looking for inside information but i've been in the situation before where we do an interesting tricky issue and the federal government has an interest but not participate in tell the supreme court and then we learn about this really sophisticated engine not of not sophisticated your position but they have  insight and it's the government sometimes they get some deference that private litigators don't i guess the question i have is do we know this is what the object thinks or should we ask i don't think you should ask your honor the we the agency litigates for itself at a ll stages except for the supreme court if the case goes up to the supreme court the practice has been to defer to the solicitor general's office at that stage it's never been resolved whether we have formally the authority of the supreme court but the practice has been to differ and so that would but i don't think you need to ask you a different opinion here ok can i can i just i thought judge the parsing to characterize what i think is your position about the limitations period running if you've been a conservatory can you just restate it again just so i make sure i understand what you mean by if the period is ron maclean you can't we started by being a point as a liquidator and you're standing in tell us how it applies to the dates here just to make sure we're on the same page so as of the first appointment to the capacity is conservatorship and if the four year period started running or would have started running if we brought an actual service that just give us that date so we have it on the context of the date it's april twentieth or twenty first  ok ok so all right until two thousand and ten and then a week later we were appointed liquidating agent and our position is that at that time all the fraud claims were could still have been brought they were still viable and so we get a new four year period starting from that da i see so as long as the four year period hasn't run in your capacity as conservative or you can be a liquidator all the way up the last day and it starts again but if it's after the four years they're gone  applies to anything you and you could have brought it all well there's different time periods on it for different types of claims but snow will all tort claims all torkel if you're took them get a minimum of three years or more under state law what about a tort claim that was only for some reason identifiable in the liquidating setting oh then would be under roman it to which is it accrues later so if there is it later discovery so for example if we had found only out only only later that  you know i don't know mr it would have found out about mr refuse only later and if we had had no opportunity discuss a little bit of a fanciful hypothetical which you could imagine a situation where we was only discovered later and then roman at two would give us the i would have to it has to occ april twenty third in this case i think i'm right you're pointing conservatory april thirtieth your appointed liquidating agent april twenty ninth i may have the dates wrong you bring the claim two thousand and fourteen it's timely because it reset april thirtieth because the claim was still viable correct that's the position over it's three years and three hundred sixty four days and your appointed liquidating agent the day before all those claims you're on it resets for four years that is that is an extreme hypothetical you honor but that is our position it's a very smart approach that in the op i put in the manual here's what we do but let's not let's the answer to the earlier question to your posing counsel about whether the board  and does appoint somebody other than itself as the conservatory idea yes they can there's at least one other conservator who can be under statute which is that if it's a state credit union it's federally insured they can appoint the state agency instead a board itself i believe they would have discretion to appoint another party as well as a matter of practice the agency tends to appoint itself and it and the other party other question as far as the petition is concerned yes we can go straight into liquidation that has happened ok thank you very much for both of your excellent briefs an excellent oral arguments thanks for answering our questions which we always appreciate the case will be submitted and certainly call the next case thank you