Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-56737/USCOURTS-ca9-12-56737-0/pdf.json

Parties Involved:
Bank of Manhattan, N.A.
Appellee
Federal Deposit Insurance Corporation
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BANK OF MANHATTAN, N.A.,

Plaintiff-Appellee,

v.

FEDERAL DEPOSIT INSURANCE

CORPORATION, in its capacity as

Receiver for First Heritage Bank,

N.A.,

Defendant-Appellant.

No. 12-56737

D.C. No.

2:10-cv-04614-

GAF-AGR

OPINION

Appeal from the United States District Court

for the Central District of California

Gary A. Feess, District Judge, Presiding

Argued and Submitted

August 28, 2014—Pasadena, California

Filed March 4, 2015

Before: Diarmuid F. O’Scannlain, Johnnie B. Rawlinson,

and Jay S. Bybee, Circuit Judges.

Opinion by Judge O’Scannlain;

Dissent by Judge Rawlinson

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2 BANK OF MANHATTAN V. FDIC

SUMMARY*

FDIC

The panel affirmed the district court’s summary judgment

in favor of the Bank of Manhattan, N.A. on its breach of

contract claim, and held that the Federal Deposit Insurance

Corporation, in its role of receiver of a closed bank, may not

breach underlying asset contractual obligations without

consequence.

The panel held that the Financial Institutions Reform,

Recovery, and Enforcement Act of 1989, 12 U.S.C.

§ 1821(d)(2)(G)(i)(II), did not immunize the FDIC from

breach of pre-receivership contract claims. The panel

concluded that the district court did not err in rejecting the

FDIC’s claimed statutory defense and entering judgment

against the FDIC for its breach of a participation agreement.

Dissenting, Judge Rawlinson would reverse the district

court’s ruling that FIRREA did not preempt Bank of

Manhattan’s claim based on this court’s prior opinion in

Sahni v. American Diversified Partners, 83 F.3d 1054 (9th

Cir. 1996). 

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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BANK OF MANHATTAN V. FDIC 3

COUNSEL

J. Scott Watson, Federal Deposit Insurance Corporation,

Arlington, Virginia, argued the cause on behalf of DefendantAppellant. Minodora D. Vancea, Federal Deposit Insurance

Corporation, Arlington, Virginia, filed the opening and reply

briefs. With her on the opening brief were Watson, Colleen

J. Boles, and Lawrence H. Richmond, Federal Deposit

Insurance Corporation, Arlington, Virginia. With her on the

reply brief were Boles, Watson, and Kathryn R. Norcross,

Federal Deposit Insurance Corporation, Arlington, Virginia.

Richard W. Esterkin, Morgan, Lewis & Bockius LLP, Los

Angeles, California, argued the cause and filed the brief on

behalf of Plaintiff-Appellee.

OPINION

O’SCANNLAIN, Circuit Judge:

We must decide whether the Federal Deposit Insurance

Corporation, in its role of receiver of a closed bank, may

breach underlying asset contractual obligations without

consequence.

I

A

In December 2007, Professional Business Bank (“PBB”)

sold to First Heritage Bank, N.A. (“Heritage”) a fifty percent

participation interest in a commercial loan PBB had made to

Al’s Garden Art, Inc. The terms of the PBB-Heritage

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4 BANK OF MANHATTAN V. FDIC

Participation Agreement (“Agreement”) imposed two

contractual limitations on Heritage’s interest in the loan. 

First, Heritage could not transfer its interest in the loan

without PBB’s prior written consent. Second, the Agreement

granted PBB a right of first refusal, such that it could elect to

repurchase Heritage’s loan interest upon the latter’s receipt

of any bona fide third-party offer.

Within one year of executing its agreement with PBB, the

Office of the Comptroller of the Currency closed Heritage

and appointed the Federal Deposit Insurance Corporation

(“FDIC”) to act as receiver for Heritage’s assets. By

operation of 12 U.S.C. § 1821(d)(2)(A), the FDIC became

successor in interest to all of Heritage’s assets and liabilities. 

Six months later, and without first seeking PBB’s consent or

providing PBB with an opportunity to repurchase Heritage’s

interest in the Al’s Garden Art loan, the FDIC sold Heritage’s

interest under the Agreement to Commerce First Financial,

Inc. (“CFF”).

B

Al’s Garden Art defaulted on its loan obligations, and

PBB filed suit in state court seeking to collect on the loan. 

Shortly thereafter, CFF brought a breach of contract action

against PBB to enforce the rights it acquired from the FDIC. 

In response, PBB counterclaimed against CFF and filed a

third party complaint against the FDIC, alleging that the

FDIC’s failure to satisfy the Agreement’s pre-receivership

contractual provisions constituted breach of contract.

The case was removed to the United States District Court

for the Central District of California, where the FDIC filed a

motion to dismiss on the grounds that the Financial

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BANK OF MANHATTAN V. FDIC 5

Institutions Reform, Recovery, and Enforcement Act of 1989

(“FIRREA”) preempted PBB’s claims. In its February 18,

2011 order, the district court denied the motion, concluding

that FIRREA does not permit the FDIC to breach contracts

without consequence. As the FDIC conceded breach of

contract in the absence of its statutory defense, the district

court granted PBB’s motion for summary judgment in its

October 4, 2011 order.1 The FDIC timely appealed.2

II

Conceding that its actions otherwise constituted a breach

of the Agreement, the FDIC asserts that FIRREA frees the

agency from complying with any pre-receivership

contractual provisions related to the transfer of a failed

bank’s assets. In relevant part, FIRREA provides that the

FDIC, acting as receiver, may “transfer any asset or liability

of the institution in default . . . without any approval,

assignment, or consent with respect to such transfer.” 12

U.S.C. § 1821(d)(2)(G)(i)(II). The district court held that

section 1821(d)(2)(G)(i)(II) does not immunize the FDIC

from damage claims if it elects to breach pre-receivership

contractual arrangements. We review a district court’s

statutory interpretation de novo. See Miranda v. Anchondo,

684 F.3d 844, 849 (9th Cir. 2012).

1 On May 31, 2012, Bank of Manhattan acquired PBB and was

thereafter substituted in the case.

 

2

 We have jurisdiction pursuant to 28 U.S.C. § 1291.

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6 BANK OF MANHATTAN V. FDIC

A

This case does not arise in a precedential vacuum. We

have considered on two prior occasions the scope of authority

granted to the FDIC under 12 U.S.C. § 1821(d). In Sahni v.

American Diversified Partners, we considered whether

section 1821(d) preempted a California state statute requiring

the consent or approval of all general partners prior to a

transfer of the bulk of a partnership’s assets. 83 F.3d 1054,

1059 (9th Cir. 1996). We determined that “[b]ecause

Congress specifically exempted the FDIC from having to

obtain any consent when effectuating the sale or transfer of

receivership assets pursuant to 12 U.S.C. § 1821(d),” state

statutes purporting to require prior approval or consent for

FDIC asset transfers are preempted by FIRREA. Id. 

However, as the dispute between the FDIC and Bank of

Manhattan involves contractual rather than statutory transfer

limits, Sahni is inapposite.

More relevant to the FDIC’s section 1821(d) powers in

the private-contract context is our analysis in Sharpe v. FDIC,

126 F.3d 1147 (9th Cir. 1997). In Sharpe, the plaintiffs sued

the FDIC as receiver for breaching a contract executed by

Pioneer Bank, the FDIC’s predecessor in interest, whereby

the Bank agreed to pay the Sharpes a certain sum of money

in exchange for a promissory note and deed of trust. Id. at

1150–51.

The Sharpe Court considered two questions pertinent to

the instant case. First, we assessed whether 12 U.S.C.

§ 1821(j)—which precludes courts from taking “any action

. . . to restrain or affect the exercise of powers or functions of

the [FDIC] as a conservator or receiver”—deprives courts of

jurisdiction over breach of contract claims against the FDIC. 

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BANK OF MANHATTAN V. FDIC 7

Sharpe, 126 F.3d at 1154–55. Determining that it does not,

we noted that the “statute clearly contemplates that the FDIC

can escape the obligations of contracts” only through the

prescribed mechanism of 12 U.S.C. § 1821(e), which “allows

the FDIC to disaffirm or repudiate any contract it deems

burdensome and pay only compensatory damages.” Id. at

1155. In so concluding, we stated that “FIRREA does not

authorize the breach of contracts” or “preempt state law so as

to abrogate state law contract rights.” Id. As such, the

Sharpe panel determined that courts retain jurisdiction over

equitable claims related to contractual breaches. Id.

The second question the Sharpe Court decided was

whether parties to a contract breached by the FDIC were

properly considered creditors subject to FIRREA’s

administrative claims process. Holding that such parties are

not “creditors” under FIRREA, we reasoned that to rule

otherwise “would effectively preempt state contract law.” Id.

at 1156. We so concluded because FIRREA “does not

indicate that Congress intended to preempt state law so

broadly.” Id.

The Sharpe panel supported its conclusion regarding the

narrow scope of the FDIC’s powers under section 1821(d) by

explicitly adopting the D.C. Circuit’s reasoning in Waterview

Management Co. v. FDIC, 105 F.3d 696 (D.C. Cir. 1997). 

See Sharpe, 126 F.3d at 1156–57. In Waterview, the D.C.

Circuit addressed nearly the same question presented here:

whether section 1821(d)(2)(G)(i)(II) preempts prereceivership purchase-option contracts. The Waterviewcourt

held that section 1821(d) does not preempt such contracts

because “[p]re-receivership contracts are properly governed

by section 1821(e), entitled ‘Provisions relating to contracts

entered into before appointment of conservator or receiver,’

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8 BANK OF MANHATTAN V. FDIC

which permits repudiation of such contracts and provides for

the payment of damages.” Waterview, 105 F.3d at 700. Put

differently, the D.C. Circuit’s reasoning—whichwe explicitly

adopted in Sharpe—concluded that section 1821(d) merely

permits the transfer of a failed bank’s assets without prior

approval, while section 1821(e) governs the mechanism by

which such transfers are executed if the disputed assets are

burdened by pre-existing contractual obligations. Id. at 701.

B

The reasoning3of Sahni, Sharpe, and Waterview is clear:

while section 1821(d)(2)(G)(i)(II) preempts state statutes

requiring prior approval or consent for the transfer of

receivership assets, it does not extend to the sphere of private

contracts. Instead, section 1821(e) governs the FDIC’s

treatment of assets burdened by pre-receivership contractual

limitations. Should the FDIC violate pre-receivership

contracts rather than repudiate them under section 1821(e),

Sharpe and Waterview make clear that section

1821(d)(2)(G)(i)(II) does not afford the agency immunity

from subsequent actions for breach of contract.

To rule otherwise would permit the FDIC to succeed to

powers greater than those held by the insolvent bank, an

implausible result when FIRREA provides that the FDIC, as

receiver, “shall . . . succeed to all rights, titles, powers, and

privileges of the insured depository institution.” 12 U.S.C.

§ 1821(d)(2)(A). It is true that “some provision in the

extensive framework of FIRREA” might, in theory, afford the

3

“Well-reasoned dicta is the law of the circuit.” Enying Li v. Holder,

738 F.3d 1160, 1164 n.2 (9th Cir. 2013) (citing United States v. Johnson,

256 F.3d 895, 914 (9th Cir. 2001) (en banc)).

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BANK OF MANHATTAN V. FDIC 9

FDIC as receiver greater powers than those possessed by a

failed financial institution. O’Melveny & Myers v. FDIC,

512 U.S. 79, 86–87 (1994). However, in light of Sahni,

Sharpe, and Waterview, we conclude that section

1821(d)(2)(G)(i)(II) is not such a provision. Therefore, we

agree with the Sharpe panel that FIRREA “does not preempt

state law so as to abrogate state law contract rights,” since “it

cannot be the case that the FDIC is in a better position when

it breaches a contract than when it chooses to repudiate

pursuant to § 1821(e).” Sharpe, 126 F.3d at 1155, 1157.4

C

Despite the clear statement of the Sahni, Sharpe, and

Waterview decisions that “FIRREA does not authorize the

breach of contracts,” Sharpe, 126 F.3d at 1155, the FDIC

argues that subsequent case law has limited those cases such

that the quoted language is no longer good law. Its arguments

are unpersuasive.

4 The dissent is correct in observing that 12 U.S.C. § 1821(e)—which

expressly governs “[p]rovisions relating to contracts entered into before

appointment of conservator or receiver”—limits the FDIC’s liability to

“actual direct compensatory damages,” and specifically precludes

recovery of “damages for lost profits or opportunity.” 12 U.S.C.

§ 1821(e)(3). However, section 1821(e)(3)’s damages limitations are

triggered only when the FDIC properly repudiates pre-receivership

contracts pursuant to section 1821(e)(1). See 12 U.S.C. § 1821(e)(3)(A)

(conditioning section 1821(e)(3)’s protections on “the disaffirmance or

repudiation of any contract pursuant to paragraph (1)”). As the FDIC did

not repudiate the Agreement, section 1821(e)(3) is inapposite.

Furthermore, the FDIC in this case seeks blanket immunity for the

breach of pre-receivership contracts, not a mere limitation on the form or

amount of damages Bank of Manhattan can recover. As such, section

1821(e)(3)’s recovery limitations are immaterial to the case before us.

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10 BANK OF MANHATTAN V. FDIC

This Court has revisited the Sharpe decision on several

occasions. However, our subsequent decisions have never

purported to limit the conclusion that section 1821(d)(2)(G)

does not permit the FDIC to breach pre-receivership contracts

without consequence. Rather, these decisions all addressed

subsidiary questions while leaving untouched Sharpe’s

reasoning as to whether FIRREA authorizes the unrestrained

breach of contract. See, e.g., McCarthy v. FDIC, 348 F.3d

1075, 1077–81 (9th Cir. 2003) (addressing whether debtors

are subject to FIRREA’s administrative claim exhaustion

requirements); Battista v. FDIC, 195 F.3d 1113, 1115,

1119–20 (9th Cir. 1999) (considering whether parties to a

repudiated contract were entitled to payment in cash rather

than receiver’s certificates).5 Accordingly, Sharpe’s

conclusion that FIRREA does not permit the FDIC to avoid

liability for the breach of pre-receivership contracts is still

good law.

5 Most recently, we addressed the merits of the Sharpe opinion in

Deutsche Bank National Trust Co. v. FDIC, 744 F.3d 1124 (9th Cir.

2014). The Deutsche Bank panel reviewed a district court order which

held, inter alia, that section 1821(d)(2)(G) “does not permit FDIC to

circumvent its statutory obligation either to honor a failed institution’s

contracts, or to repudiate them and pay damages.” Deutsche Bank Nat.

Trust Co. v. FDIC, 784 F. Supp. 2d 1142, 1151 (C.D. Cal. 2011). 

However,while the district court’s section 1821(d)(2)(G) ruling addressed

the same question we decide today, that issue was not presented to us in

the Deutsche Bank appeal. Instead, we confined our analysis to the

specific question certified by the district court for interlocutory appeal,

namely, whether the appellant’s claims “constitute[d] third-tier general

liabilities under 12 U.S.C. § 1821(d)(11)(A)(iii) rather than claimspayable

outside the strictures of § 1821(d).” Deutsche Bank, 744 F.3d at 1129. 

Accordingly, that decision did not disturb Sharpe’s determination that

FIRREAdoes not authorize the FDIC to breach pre-receivership contracts

without consequence.

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BANK OF MANHATTAN V. FDIC 11

D

Finally, the FDIC advances two novel arguments related

to the viability of pre-receivership contracts in light of

Congress’s passage of FIRREA. First, the agency contends

that because FIRREA predates the Agreement, the written

consent and right of first refusal provisions are invalid and

unenforceable in light of the Supreme Court’s recognition

that “no contract can properly be carried into effect, which

was originally made contrary to the provisions of law.” 

Louisville &Nashville R.R. Co. v. Mottley, 219 U.S. 467, 485

(1911) (citation omitted). The FDIC’s argument is premised

upon the contention that the Agreement’s consent and right

of first refusal provisions conflict with § 1821(d)(2)(G)

insofar as they limit the transferability of FDIC receivership

assets. However, the Waterview decision expressly

determined “that there is no conflict between the continued

enforcement of pre-receivership [contracts] and 12 U.S.C.

§ 1821(d)(2)(G)(i)(II).” 105 F.3d at 700. Accordingly, such

argument is unpersuasive.

In a similar vein, the FDIC asserts that because Sahni held

that section 1821(d)(2)(G) preempts state statutes requiring

prior consent or approval, contractual obligations must also

be preempted. In support of its claim, the FDIC cites Norfolk

& Western Railway Co. v. American Train Dispatchers’

Ass’n, 499 U.S. 117 (1991), which reasoned that a “contract

has no legal force apart from the law that acknowledges its

binding character.” Id. at 130. As the Sharpe and Waterview

decisions demonstrate that FIRREA acknowledges the

“binding character” of pre-receivership contracts, our

decision today in no way conflicts with Norfolk.

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12 BANK OF MANHATTAN V. FDIC

III

It is undisputed that the FDIC transferred Heritage’s

interest in the Al’s Garden Art loan in contravention of the

Agreement’s consent and right of first refusal provisions. As

section 1821(d)(2)(G)(i)(II) does not immunize the FDIC

from breach of pre-receivership contract claims, we conclude

that the district court did not err in rejecting the FDIC’s

claimed statutory defense and entering judgment against the

FDIC for its breach of the Agreement.

AFFIRMED.

RAWLINSON, Circuit Judge, dissenting:

I respectfully dissent. In my view, our prior opinion in

Sahni v. American Diversified Partners, 83 F.3d 1054 (9th

Cir. 1996) dictates the outcome of this case. Because there is

no principled distinction between preemption of a state

statute and preemption of state common law, I would reverse

the district court’s decision.

This case involves the once familiar scenario of a failed

bank that has been taken over by the Federal Deposit

Insurance Corporation (FDIC) acting as receiver. Congress

enacted the Financial Institutions Reform, Recovery and

Enforcement Act of 1989 (FIRREA) to facilitate the takeover

of failed banks by the FDIC. See Deutsche Bank Nat’l Trust

Co. v. FDIC, 744 F.3d 1124, 1128 (9th Cir. 2014). By

enacting this legislation, Congress sought to avoid a

prolonged transition period during which bank depositors

were deprived of access to their funds. See id. It was

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BANK OF MANHATTAN V. FDIC 13

Congress’ intent that the FDIC be able “to move quickly and

without undue interruption.” Id. As part of FIRREA,

Congress acted with the intent to impose “a broad limit on the

power of courts to interfere with the FDIC’s efforts.” (citation

and alteration omitted).

In Sahni, the plaintiff sued the FDIC, seeking to rescind

the sale of certain limited partnerships that were sold by the

FDIC as part of the liquidation of a failed bank. See Sahni,

83 F.3d at 1056. Plaintiff asserted that the FDIC’s sale of the

partnerships violated California Corporations Code § 15509,

which specified that consent of all limited partners was

required before disposing of the assets. See id. at 1059. We

held that 12 U.S.C. § 1821(d), a section of the FIRREA

statute, preempted the state statute requiring consent. See id.;

see also 12 U.S. C. § 1821(d)(2)(G)(i)(II) (providing that the

FDIC as receiver may “transfer any asset or liability of the

institution in default (including assets and liabilities

associated with any trust business) without any approval,

assignment, or consent with respect to such transfer”).

In this case, Plaintiff Bank of Manhattan, successor in

interest to Professional Business Bank, seeks to prosecute a

breach of contract action against the FDIC following the

FDIC’s takeover of a failed bank. That failed bank, First

Heritage, had entered into a Loan Purchase Agreement with

Professional Business Bank under which First Heritage

acquired a 50% interest in a loan that Professional Business

Bank made to one of its commercial customers. After

Heritage Bank failed and was placed into FDIC receivership,

FDIC sold the Loan Purchase Agreement as part of its

liquidation of Heritage Bank’s assets. Professional Business

Bank asserted in its action that the FDIC’s sale of the Loan

Purchase Agreement without Professional Business Bank’s

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14 BANK OF MANHATTAN V. FDIC

consent breached the Loan Purchase Agreement, which

provided Professional Business Bank rights of consent and

first refusal.

I cannot agree that the FDIC should be liable to

Manhattan Bank for damages when FIRREA expressly

provides that the FDIC may transfer assets without consent as

part of its liquidation of a failed financial institution. See

12 U.S.C. § 1821(d)(2)(G)(i)(II). More particularly, as we

recognized in Battista v. FDIC, 195 F.3d 1113, 1116 (9th Cir.

1999), even when the FDIC has completely repudiated a

contract, damages are limited to “actual direct compensatory

damages” rather than the anticipatorydamages represented by

a right of first refusal. See 12 U.S.C. § 1821(e)(3)(B)

(clarifying that the phrase “actual direct compensatory

damages does not include . . . damages for lost profits or

opportunity”).

I am not persuaded by the majority’s reliance on Sharpe

v. FDIC, 126 F.3d 1147 (9th Cir. 1997). Sharpe did not

involve the provision of FIRREA we address in this case, i.e.,

the ability of the FDIC as receiver to transfer assets without

approval. See id. at 1154 (addressing the issue of whether

12 U.S.C. § 1821(j) deprives the court of jurisdiction over

plaintiffs’ claim). In addition, the plaintiffs in Sharpe had,

before the receivership, fully performed their obligations

under the contract with the bank. See id. at 1152 (“Pursuant

to the settlement agreement, the Sharpes delivered a

reconveyance of the debtor’s deed of trust and the debtor’s

promissory note to Pioneer Bank”). Despite the bank’s

obligation to pay the Sharpes $510,000 via a wire transfer

once the documents were delivered, the bank tendered

payment in the form of two cashier’s check, which the FDIC

refused to honor after the bank was seized by bank regulators

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BANK OF MANHATTAN V. FDIC 15

on the same day payment was tendered. See id. at 1151–52. 

It was in this context, completed performance of a contract,

that we allowed plaintiffs’ claims to proceed. Nothing in the

holding or reasoning of Sharpe supports the notion of judicial

interference with the transfer of assets as expressly permitted

by 12 U.S.C. § 1821(d)(2)(G)(i)(II). And nothing in the

holding or reasoning of Sharpe calls into question the

provision of 12 U.S.C. § 1821(e)(3)(B) precluding the award

of damages for lost profits or opportunity, such as the right of

first refusal at issue in this case. Indeed, we have repeatedly

emphasized the limited holding of Sharpe. See Battista,

195 F.3d at 1119 (distinguishing Sharpe); see also McCarthy

v. FDIC, 348 F.3d 1075, 1078, 1081 (9th Cir. 2003)

(describing Sharpe as an “unusual case” “arising out of a

breach of contract fully performed by the aggrieved party but

not repudiated by the receiver”); 1077 (characterizing Sharpe

as arising in a “different context [ ] and . . . not controlling”);

Deutsche Bank, 744 F.3d at 1135 (“Given that we have

limited Sharpe’s reach even in the administrative exhaustion

context, it would be illogical for us to expand Sharpe to more

substantive provisions, such as 12 U.S.C. § 1821(d)(11), that

were not at issue or addressed in Sharpe. . . .”) (citations

omitted); 1137 (limiting Sharpe to its particular facts). It is

particularly telling that the decision in Sharpe did not even

attempt to distinguish Sahni.

Similarly, the case from the D.C. Circuit cited in Sharpe,

Waterview Mgmt Co. v. FDIC, 105 F.3d 696 (D.C. Cir. 1977)

does not grapple with our decision in Sahni. Rather, it

relegates our precedent to a footnote suggesting that the

partnership status of the bank’s interest is determinative. See

id. at 700 n.3. Neither does Waterview Mgmt. account for the

limitation in 12 U.S.C. § 1821(e)(3)(B) precluding liability

for lost profits or opportunity.

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16 BANK OF MANHATTAN V. FDIC

Because Sahni is inconsistent with the majority’s holding,

and because neither Sharpe nor Waterview Mgt. addresses the

rationale of Sahni or the prohibition on damages for lost

opportunities set forth in 12 U.S.C. § 1821(e)(3)(B), the

majority’s reliance on this trilogy of cases as representing a

clear statement limiting FIRREA’s preemption is simply not

compelling. Rather, we have consistently taken a contrary

view, acknowledging the broad powers conferred upon the

FDIC in FIRREA and the corresponding limited reach of

courts in this arena. See Sharpe, 126 F.3d at 1154; see also

McCarthy, 348 F.3d at 1079 (“[T]he § 1821(d) jurisdictional

bar is not limited to claims by creditors but extends to all

claims and actions against, and actions seeking a

determination of rights with respect to, the assets of failed

financial institutions for which the FDIC serves as receiver,

including debtors’ claims”); Deutsche Bank, 744 F.3d at 1128

(“Congress granted the FDIC broad powers in conserving

and disposing of the assets of the failed institution. To enable

the FDIC to move quickly and without undue interruption to

preserve and consolidate the assets of the failed institution,

Congress enacted a broad limit on the power of courts to

interfere with the FDIC’s efforts.) (citation and alteration

omitted) (emphases added).

Finally and significantly, allowing option holders to sue

the FDIC for damages due to lost opportunities is at cross

purposes with the heart of FIRREA. See United States v.

Banks, 506 F.3d 756, 763 (9th Cir. 2007) (interpreting a

statute in the context of its purpose). It is well known that

“Congress’ core purposes in enacting FIRREA [were] to

ensure that the assets of a failed institution are distributed

fairly and promptly among those with valid claims against the

institution, and to expeditiously wind up the affairs of failed

banks.” McCarthy, 348 F.3d at 1079; see also Deutsche

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BANK OF MANHATTAN V. FDIC 17

Bank, 744 F.3d at 1128 (noting Congress’ intent that the

FDIC be able “to move quickly and without undue

interruption”). Allowing breach of contracts actions to

proceed against the FDIC outside the strictures of FIRREA

would bring the windup of the affairs of failed banks to a

screeching halt, pending the outcome of litigation. This result

is the very antithesis of the limitation on court involvement

contemplated by Congress. See Deutsche Bank, 744 F.3d at

1128.

In sum, because no principled basis exists upon which to

distinguish our precedent as set forth in Sahni, because

Sharpe is a unique case that is limited to its particular facts,

because FIRREA does not countenance damages actions for

lost opportunities, and because allowing a breach of contract

action against the FDIC would be contrary to Congress’

purpose in enacting FIRREA, I would reverse the district

court’s ruling that FIRREA did not preempt Bank of

Manhattan’s claim. I respectfully dissent.

 Case: 12-56737, 03/04/2015, ID: 9444429, DktEntry: 39-1, Page 17 of 17