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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 29, 2004 Decided May 18, 2004

No. 03-5198

WELLS FARGO BANK, N.A., ET AL.,

APPELLANTS

v.

FEDERAL DEPOSIT INSURANCE CORPORATION,

APPELLEE

Consolidated with

03-5199, 03-5214

Appeal from the United States District Court

for the District of Columbia

(Nos. 01cv2440, 01cv2445)

Carol R. Van Cleef argued the cause and filed the briefs for

appellants. Gloria B. Solomon entered an appearance.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #03-5199 Document #822873 Filed: 05/18/2004 Page 1 of 9
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Lawrence H. Richmond, Counsel, Federal Deposit Insurance Corporation, argued the cause for appellee. With him

on the brief were Ann S. DuRoss, Assistant General Counsel,

and Colleen J. Boles, Senior Counsel.

Before: SENTELLE, ROGERS, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: Responding to a congressional mandate, the Federal Deposit Insurance Corporation imposed a

one-time assessment on certain financial institutions in order

to boost the amount of money in the fund that insures

savings-and-loan deposits. Several dozen financial institutions now challenge the method the FDIC used to calculate

how much money it needed to raise—a calculation that in turn

determined the assessment the FDIC imposed. The district

court disagreed with the institutions’ assertion that the relevant statute unambiguously precludes the FDIC’s method,

and therefore dismissed their complaint. For the same reason, we affirm.

I.

Reacting to the failure of hundreds of savings and loan

associations in the 1980s, Congress passed the Financial

Institutions Reform, Recovery, and Enforcement Act of 1989,

Pub. L. No. 101–73, 103 Stat. 183 (1989) (codified as amended

in scattered sections of 12 U.S.C.). Known as FIRREA and

designed to protect depositors against similar failures in the

future, the law amended the Federal Deposit Insurance Act

by, among other things, creating a Bank Insurance Fund to

cover deposits of commercial banks and a Savings Association

Insurance Fund to cover deposits of savings and loan associations. The two funds, administered by appellee Federal

Deposit Insurance Corporation (FDIC), and known as BIF

and SAIF, respectively, are financed by assessments levied

on the financial institutions whose deposits they insure.

Since its inception, SAIF has had a higher assessment rate

than BIF, largely because the savings and loan associations it

insures tend to be somewhat shakier than the banks insured

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by BIF. Congress recognized that this rate disparity could

impel healthy savings associations to transfer their deposits

to banks or even convert themselves into banks. Because

such transfers and conversions would risk leaving SAIF with

inadequate funds to insure members’ deposits, FIRREA not

only imposed fees on ‘‘conversion transactions’’ that transfer

deposits between BIF members and SAIF members, but also

temporarily prohibited such transactions. See 12 U.S.C.

§ 1815(d)(2) (2000). Neither the moratorium nor the fees,

however, applied to so-called ‘‘Oakar transactions,’’ under

which a member of one fund acquires deposits from a member of the other and continues to pay proportional assessments into both funds. See id. § 1815(d)(3)(A)-(B). For

example, a BIF member that acquired deposits from a SAIF

member as part of an Oakar transaction would pay SAIF

assessments on the acquired deposits and BIF assessments

on its other deposits. See generally Wells Fargo, N.A. v.

FDIC, 310 F.3d 202, 204–05 (D.C. Cir. 2002). Acquired

deposits, known as adjusted attributable deposit amounts, or

AADA, are adjusted over time according to a mathematical

formula that accounts for subsequent growth. See 12 U.S.C.

§ 1815(d)(3)(C).

Concerned that SAIF was undercapitalized, Congress

passed the Deposit Insurance Funds Act of 1996, Pub. L. No.

104–208, §§ 2701–11, 110 Stat. 3009 (1996) (‘‘Funds Act’’), the

statute at issue in this case. The Funds Act required the

FDIC to impose a one-time assessment on certain deposits,

and to do so at a rate that would immediately bring the level

of SAIF assets up to the ‘‘designated reserve ratio.’’ See

Funds Act § 2702(a) (codified at 12 U.S.C. § 1817 note

(2000)). FIRREA defines the designated reserve ratio as

‘‘1.25 percent of estimated insured deposits,’’ see 12 U.S.C.

§ 1817(b)(2)(A)(iv)(I), and the Funds Act incorporates that

definition, see Funds Act § 2710(6) (codified at 12 U.S.C.

§ 1821 note (2000)).

In a final rule, the FDIC described how it calculated the

rate for the one-time assessment. See 61 Fed. Reg. 53,834

(Oct. 16, 1996) (codified at 12 C.F.R. pt. 327 (2004)). The

agency first determined the total amount of SAIF-insured

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deposits—including, of importance to this case, AADA—to be

$688.1 billion. (In its calculations, the FDIC made other

adjustments not at issue in this appeal.) Next, the agency

calculated the balance SAIF would need in order to attain the

designated reserve ratio, that is, 1.25 percent of estimated

insured deposits. That balance was $8.6 billion, or $4.5 billion

more than SAIF’s balance at the time. Finally, the FDIC

calculated what assessment rate, when levied on the funds

that Congress designated for assessment (a designation not

challenged in this case), would produce the required $4.5

billion. That rate was 65.7 cents per one hundred dollars of

insured deposits.

After the FDIC imposed this assessment in late 1996,

several dozen financial institutions (which we will refer to

collectively as the Banks even though the group included

some savings and loan associations) complained to the agency

about its calculation of the assessment rate. They contended

that the Funds Act prohibited the FDIC from including

AADA, i.e., funds that BIF members had acquired from

SAIF members, in its calculation of the total amount of

SAIF-insured deposits. The reason, the Banks asserted, is

that in FIRREA Congress defined ‘‘SAIF reserve ratio’’—a

ratio that the Banks say lay at the heart of the calculations

the FDIC made in preparing for the assessment—using a

narrower phrase than what appears in the statutory definition

of designated reserve ratio. Specifically, whereas in FIRREA Congress defined designated reserve ratio simply as

‘‘1.25 percent of estimated insured deposits,’’ it defined SAIF

reserve ratio as ‘‘the ratio of the net worth of the [SAIF] to

the value of the aggregate estimated insured deposits held in

all [SAIF] members.’’ 12 U.S.C. § 1817(l)(7) (emphasis added). Since AADA are held by BIF members, the Banks

argued, they do not qualify as ‘‘insured deposits held in all

[SAIF] members.’’ According to the Banks, had the FDIC

excluded AADA, they would have paid over $800 million less

as part of the one-time assessment.

The FDIC’s Board of Directors issued a decision denying

the Banks’ refund request, largely on the ground that AADA

can constitute ‘‘insured deposits held in all [SAIF] members’’

because under FIRREA financial institutions can be memUSCA Case #03-5199 Document #822873 Filed: 05/18/2004 Page 4 of 9
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bers of both BIF and SAIF. Challenging this decision, the

Banks filed two separate suits in the United States District

Court for the District of Columbia, charging that the Funds

Act unambiguously required the FDIC to exclude AADA

from its calculation of SAIF-insured deposits. In two separate opinions, the district court rejected their argument and

granted the FDIC’s motion to dismiss, holding that the Funds

Act unambiguously required the FDIC to include AADA.

The court went on to hold that even were the statute ambiguous, the FDIC’s approach was reasonable. Most of the

Banks, appellants herein, now appeal, and because the two

cases present the same issue, we consolidated them and now

resolve them together.

II.

We review de novo the district court’s dismissal of the

complaint, see, e.g., Taylor v. FDIC, 132 F.3d 753, 761 (D.C.

Cir. 1997), and ‘‘therefore, in effect, review directly the decision of the [agency],’’ Lozowski v. Mineta, 292 F.3d 840, 845

(D.C. Cir. 2002). Because the Banks challenge the FDIC’s

interpretation of a statute the agency is charged with implementing, we proceed under the well-known framework set

forth in Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984). We thus begin by asking

‘‘whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the

end of the matter; for the court, as well as the agency, must

give effect to the unambiguously expressed intent of Congress.’’ Id. at 842–43. Normally, were we to find the statute

ambiguous, we would next ask ‘‘whether the agency’s answer

[to the precise question at issue] is based on a permissible

construction of the statute.’’ Id. at 843. In this case, however, the Banks make a Chevron step-one argument only,

asserting that the Funds Act unambiguously resolves the

question of whether the FDIC was to include AADA for

purposes of calculating the proper assessment rate. They

never argue that even if the Funds Act is ambiguous, they

should still prevail because the FDIC’s interpretation of the

statute is unreasonable. See Appellants’ Br. at 26 (‘‘[T]he

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Funds Act is not ambiguousTTTT Accordingly, there is no

basis for reaching Chevron step two in this case.’’). We thus

begin and end our analysis at Chevron step one.

The Banks assert that the Funds Act clearly required the

FDIC to exclude AADA in calculating the SAIF reserve ratio

because a key phrase in that ratio’s definition is ‘‘estimated

insured deposits held in all [SAIF] members.’’ 12 U.S.C.

§ 1817(l)(7) (emphasis added). ‘‘On its face,’’ the Banks

insist, ‘‘this phrase does not include any deposits held by BIF

members.’’ Appellants’ Br. at 18. The FDIC responds that

the Banks’ focus on the term ‘‘SAIF reserve ratio’’ is misplaced because the Funds Act does not use that term. Instead, it refers to the designated reserve ratio, which—

because it applies to BIF as well as SAIF—omits the words

‘‘held in all [SAIF] members’’ and simply uses the phrase

‘‘estimated insured deposits.’’ See Funds Act § 2710(6). According to the FDIC, ‘‘[f]ocusing on the real statutory language quickly demolishes the Banks’ ‘plain language’ argument.’’ Appellee’s Br. at 19. The Banks reply that even

though the Funds Act mentions only the designated reserve

ratio, that ratio ‘‘is not an independent concept,’’ but ‘‘must be

interpreted in tandem with the SAIF reserve ratio.’’ Appellants’ Reply Br. at 2.

We need not resolve this dispute, for even assuming that

the Banks are correct, their argument suffers from a simple

but fatal flaw: it depends entirely on the erroneous assumption that the Funds Act unambiguously precludes financial

institutions from membership in both BIF and SAIF. The

argument depends entirely on this assumption because if

financial institutions could be members of both funds, then

the phrase ‘‘insured deposits held in all [SAIF] members’’

would encompass AADA even though AADA are held by BIF

members, as those BIF members could also be SAIF members. The assumption is flawed, and hence the argument’s

dependence on it fatal, because just last term we squarely

rejected the assumption, ruling in the identically named case

of Wells Fargo, N.A. v. FDIC that nothing in FIRREA

clearly precludes institutions from membership in both funds.

See 310 F.3d at 206. ‘‘[S]ection 1817(l)‘s definitions’’ of BIF

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and SAIF, we held, ‘‘do not prohibit institutions from being

members of both funds simultaneously.’’ Id. The Banks may

prevail, therefore, only if we find statutory language that we

deemed ambiguous last term to be unambiguous now.

Rather than urging us to overrule Wells Fargo, something

this panel obviously lacks authority to do, see LaShawn A. v.

Barry, 87 F.3d 1389, 1395 (D.C. Cir. 1996) (en banc), the

Banks argue that Wells Fargo is inapplicable to this case.

Their reasons for so thinking, however, are unpersuasive.

First, the Banks insist that this case involves a different

question than did Wells Fargo. Although the ultimate question in that case was indeed different—hardly surprising, as

one would hope parties wouldn’t re-litigate the exact issue

they lost on eighteen months ago—the intermediate question,

on which the ultimate question depended in that case and also

depends here, was identical: does the statute clearly bar

financial institutions from membership in both BIF and

SAIF? Our answer to that question in Wells Fargo must also

be our answer here, and that answer dooms the Banks’

Chevron step-one argument, the only argument they make.

Next, the Banks point out that in Wells Fargo we interpreted the language of FIRREA, while here we interpret the

language of the Funds Act. That makes no difference,

however, because the Funds Act draws its definitions of the

key terms—‘‘SAIF member’’ and ‘‘BIF member’’—from FIRREA: ‘‘[t]he terms ‘Bank Insurance Fund member’ and

‘Savings Association Insurance Fund member’ have the same

meanings as in’’ FIRREA. Funds Act § 2710(2). As we held

in Wells Fargo, those definitions do not unambiguously bar

financial institutions from belonging to both funds, meaning

that AADA can be ‘‘insured deposits held in all [SAIF]

members.’’

Finally, the Banks point out that in the Funds Act, Congress used a newly created term, ‘‘SAIF-assessable deposit,’’

to describe funds subject to the one-time assessment. See

Funds Act § 2710(8). Because the new term specifically

includes AADA, the Banks argue that the phrase ‘‘deposits

held in all [SAIF] members’’—which the Banks say the FDIC

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used in determining the size of the assessment—must not

include AADA. Otherwise, ‘‘it would not have been necessary

for Congress to create the new term.’’ Appellants’ Br. at 19.

Indeed, the Banks add, ‘‘Congress’s decision to create a new

term demonstrates its recognition that BIF-member AADA

was not a deposit held in a SAIF member for purposes of the

Funds Act.’’ Id.

Like the Banks’ basic argument, this contention rests on a

false premise. Although it is certainly true that ‘‘[w]hen

Congress uses different language in different places in the

same statute, a court must presume that Congress intended

the language to have different meanings,’’ id. at 19 (citing

Barnhart v. Sigmon Coal Co., 534 U.S. 438, 452 (2002)), that

rule has no applicability to this case. As noted above, the

Funds Act nowhere uses the term SAIF reserve ratio, which

contains the phrase ‘‘deposits held in all [SAIF] members.’’

The Act mentions only the designated reserve ratio, which

omits that phrase. Hence, the Banks’ assertion that we

should interpret the phrase as excluding AADA because it

appears in the same statute as the term ‘‘SAIF-assessable

deposits,’’ which explicitly includes AADA, fails, for in fact the

two do not appear in the same statute.

In any event, we disagree with the Banks’ argument that

Congress must have created the new term because it knew

that the phrase ‘‘deposits held in all [SAIF] members’’ unambiguously excluded AADA. Congress may instead have

reached the same conclusion we did in Wells Fargo, i.e., that

the phrase is ambiguous because FIRREA’s (and hence the

Funds Act’s) definitions of BIF member and SAIF member

do not preclude dual membership. Rather than use an

ambiguous phrase, Congress may have decided to create and

use an unambiguous one. To be sure, we cannot know

whether Congress made such a decision, but given the possibility that it did—a possibility we think no less plausible than

the Banks’ explanation for Congress’s action—we decline the

Banks’ invitation to declare unambiguous the language that

we deemed ambiguous just last term.

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The district court’s judgments are affirmed.

So ordered.

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