United States Court of Appeals 

for the Federal Circuit 

__________________________ 

FRANK P. SLATTERY, JR., (ON BEHALF OF HIMSELF 

AND ON BEHALF OF ALL OTHER SIMILARLY SITUATED 

SHAREHOLDERS OF MERITOR SAVINGS BANK), 

Plaintiff-Cross Appellant, 

AND

STEVEN ROTH, 

AND INTERSTATE PROPERTIES, 

Plaintiffs-Cross Appellants, 

v. 

UNITED STATES, 

Defendant-Appellant. 

__________________________ 

2007-5063,-5064,-5089 

__________________________ 

Appeal from the United States Court of Federal 

Claims in Case No. 93-CV-280, Senior Judge Loren A. 

Smith. 

___________________________ 

Decided: January 28, 2011 

___________________________ 

THOMAS M. BUCHANAN, Winston & Strawn, LLP, of 

Washington, DC, argued for plaintiff-cross appellant 

Frank P. Slattery, Jr., (on behalf of himself and on behalf 

of all other similarly situated shareholders of Meritor 
SLATTERY v. US 2

Savings Bank) on rehearing en banc. With him on the 

brief were PETER KRYN DYKEMA, ERIC W. BLOOM and 

JACOB R. LOSHIN. 

BRADLEY P. SMITH, Sullivan & Cromwell LLP, of New 

York, New York, argued for plaintiffs-cross appellants 

Steven Roth and Interstate Properties on rehearing en 

banc. With him on the brief were RICHARD J. UROWSKY 

and JENNIFER L. MURRAY. 

JEANNE E. DAVIDSON, Director, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, of Washington, DC, argued for defendantappellant on rehearing en banc. With her on the brief 

were MICHAEL F. HERTZ, Deputy Assistant Attorney 

General, KENNETH M. DINTZER, Assistant Director, F.

JEFFERSON HUGHES and WILLIAM G. KANELLIS, Trial 

Attorneys. 

DOROTHY ASHLEY DOHERTY, Federal Deposit Insurance Corporation, of Washington, DC, for amicus curiae 

Federal Deposit Insurance Corporation on rehearing en 

banc. With her on the brief was JOHN M. DORSEY III. 

__________________________ 

Before RADER, Chief Judge, NEWMAN, LOURIE, BRYSON, 

GAJARSA, LINN, DYK, PROST, MOORE, and O’MALLEY, 

Circuit Judges, on rehearing en banc. 

Opinion for the court filed by Circuit Judge NEWMAN, in 

which Chief Judge RADER and Circuit Judges LOURIE, 

BRYSON, LINN, and MOORE join. Dissenting opinion filed 

by Circuit Judge GAJARSA, in which Circuit Judges DYK, 

PROST, and O’MALLEY join. 
3 SLATTERY v. US

NEWMAN, Circuit Judge. 

This suit is brought on behalf of shareholders of the 

Meritor Savings Bank, formerly the Philadelphia Savings 

Fund Society. The cause originated in 1982, when the 

Western Savings Fund Society, a Pennsylvania bank, was 

failing, and the Federal Deposit Insurance Corporation 

(FDIC) sought a solvent bank to merge with Western, to 

provide new capital and to assume Western’s liabilities; 

the merger would thereby avoid failure of Western and 

the accompanying draw on the FDIC insurance fund. The 

Philadelphia Savings Fund Society and the FDIC agreed 

to the merger, upon mutual undertakings and specifically 

including certain accounting procedures necessary to 

enable the merged bank to comply with statutory and 

regulatory capital requirements. The merger terms were 

embodied in several contracts, including a Merger Assistance Agreement and a Memorandum of Understanding. 

The events that culminated in the seizure and sale of 

Meritor in 1992 are set forth in the prior opinions of this 

court and the Court of Federal Claims. 

The Court of Federal Claims found that the government had breached its contracts with the acquiring bank, 

and assessed damages. Slattery v. United States, 53 Fed. 

Cl. 258 (2002) (liability); Slattery v. United States, 69 Fed. 

Cl. 573 (2006) (damages); Slattery v. United States, 73 

Fed. Cl. 527, modified, 2006 WL 3930812 (Dec. 18, 2006) 

(final order) (Slattery I). The appeal and cross-appeal 

were heard by a panel of the Federal Circuit, with decision reported at Slattery v. United States, 583 F.3d 800 

(Fed. Cir. 2009) (Slattery II). The United States requested rehearing en banc, challenging the jurisdiction of 

the Court of Federal Claims and the Federal Circuit. We 

granted the petition in order to review the question of 

jurisdiction.
SLATTERY v. US 4

The government denies jurisdiction on several 

grounds. The principal ground for which rehearing was 

requested is that the Court of Federal Claims does not 

have jurisdiction of breach of contract claims when the 

federal entity that incurred the breach does not receive 

appropriated funds. Thus the government argues that 

this claim is not within the court’s Tucker Act jurisdiction 

because the Federal Deposit Insurance Corporation is 

currently supported by fees from member banks, not by 

congressional appropriations, and there is no specific 

appropriation with respect to payment of this judgment. 

The government states that this court’s precedent, including the precedent of our predecessor the Court of Claims,1

establishes this exception to Tucker Act jurisdiction. 

The Court of Federal Claims, receiving this argument, 

distinguished the FDIC from those government entities 

whose violation of statute or breach of contract had been 

deemed to be outside of Tucker Act jurisdiction. Slattery 

I, 53 Fed. Cl. at 270–74. On appeal, the Federal Circuit 

agreed that the Court of Federal Claims possessed jurisdiction. Slattery II, 583 F.3d at 807–12, 829–32. In view 

of the potential reach of this jurisdictional challenge, and 

perceived conflict in precedent, we granted the government’s petition for rehearing en banc, vacated our decision in Slattery II, and requested additional briefing on 

the following questions: 

(a) Is the Federal Deposit Insurance Corporation 

a nonappropriated fund instrumentality, and 

if so, what is the effect on the jurisdiction of 

 1 In South Corp. v. United States, 690 F.2d 1368, 

1369 (Fed. Cir. 1982) (en banc), the precedent of the Court 

of Claims was adopted by the Court of Appeals for the 

Federal Circuit. The Court of Federal Claims is the 

successor to the Trial Division of the Court of Claims. 
5 SLATTERY v. US

the Court of Federal Claims over this suit 

against the United States? 

(b) What is the appropriate standard for determining whether an entity is a nonappropriated fund instrumentality? 

Slattery v. United States, 369 F. App’x 142 (Fed. Cir. 

2010) (Order). The Federal Deposit Insurance Corporation has participated in this rehearing as amicus curiae

and has filed briefs and presented argument. 

On review of the history and application of the Tucker 

Act, we confirm that the Court of Federal Claims has 

jurisdiction of this cause. We conclude that the source of 

a government agency’s funds, including funds to pay 

judgments incurred by agency actions, does not control 

whether there is jurisdiction of a claim within the subject 

matter assigned to the court by the Tucker Act. The 

jurisdictional criterion is not how the government entity 

is funded or its obligations met, but whether the government entity was acting on behalf of the government. We 

also confirm that a claim that is within the subject matter 

of the Tucker Act is not excluded from the jurisdiction of 

the Court of Federal Claims, or jurisdiction of the district 

courts under the “Little” Tucker Act, unless such jurisdiction has been unambiguously withdrawn or withheld by a 

statute specifying such exclusion. Thus we confirm that 

Tucker Act jurisdiction does not depend on and is not 

limited by whether the government entity receives or 

draws upon appropriated funds. Conflicting precedent 

shall no longer be relied upon. 
SLATTERY v. US 6

I 

HISTORY OF THE TUCKER ACT

The history of the Tucker Act is the history of judicial 

determination of claims against the United States and the 

procedures for payment of such claims. 

Before 1855 claims against the federal government 

required direct petition to Congress. In 1855, to improve 

and expedite the treatment of claims, Congress created a 

Court of Claims to hear “any claim against the United 

States founded upon any law of Congress, or upon any 

regulation of an executive department, or upon any contract, express or implied, with the government of the 

United States.” Court of Claims Act, ch. 122, §1, 10 Stat. 

612 (1855). This Act provided that the court would investigate each claim and report its findings and proposed 

decision to Congress; Congress would then review the 

court’s proposal, and finally decide the claim. Any payment to the claimant was implemented by specific legislative enactment. For detailed exposition of this history see 

Wilson Cowen, Philip Nichols, Jr., and Marion T. Bennett, 

The United States Court of Claims, A History, Part II

(1978), reprinted in 216 Ct. Cl. (1978), and authorities 

cited therein. 

As the number of claims against the federal government increased, and with the increasing congressional 

burdens of the era, President Lincoln recommended that 

the Court of Claims be empowered to render final judgments, rather than only make recommendations to Congress. See Cong. Globe, 37th Cong., 2d Sess. app. 2 (1861) 

(President’s annual message to Congress, stating: “It was 

intended by the organization of the Court of Claims 

mainly to remove this branch of business from the Halls 

of Congress; but while the court has proved to be an 

effective and valuable means of investigation, it in great 
7 SLATTERY v. US

degree fails to effect the object of its creation, for want of 

power to make its judgments final.”). President Lincoln’s 

recommendation was implemented by the Amended Court 

of Claims Act of 1863, ch. 92, 12 Stat. 765 (1863), which 

authorized the Court of Claims to enter final judgments, 

see §§3, 5, 7, 12 Stat. at 765–66, and also to adjudicate 

government counterclaims and setoffs, see §3, 12 Stat. at 

765. The statute included the right of appeal to the 

Supreme Court. See §5, 12 Stat. at 766; H.R. Rep. No. 37-

34, at 3 (2d Sess. 1862) (“[The Court of Claims] judgments 

are made final in all such cases, subject to the right of 

appeal by either party to the Supreme Court on all questions of law, where the amounts exceed three thousand 

dollars.”). 

The 1863 Act provided that judgments of the Court of 

Claims would be paid from a general appropriation for 

that purpose: 

[I]n all cases of final judgments by said court, or 

an appeal by the said supreme court where the 

same shall be affirmed in favor of the claimant, 

the sum due thereby shall be paid out of any general appropriation made by law for the payment 

and satisfaction of private claims, on presentation 

to the Secretary of the Treasury of a copy of said 

judgment, certified by the clerk of said court of 

claims, and signed by the chief justice, or, in his 

absence, by the presiding judge, of said court. 

§7, 12 Stat. at 766. This provision, now codified as 

amended at 28 U.S.C. §2517(a), removed the need for a 

special congressional appropriation to pay each individual 

judgment. See Floyd D. Shimomura, The History of 

Claims Against the United States: The Evolution from a 

Legislative Toward a Judicial Model of Payment, 45 La. 

L. Rev. 625, 652–53 (1985). 
SLATTERY v. US 8

The Act of 1863 had initially also provided, in Section 

14, that “no money shall be paid out of the Treasury for 

any claim passed upon by the Court of Claims until after 

an appropriation therefor shall be estimated for by the 

Secretary of the Treasury.” §14, 12 Stat. at 768. Section 

14 was repealed by Act of March 17, 1866, ch.19, §1, 14 

Stat. 9, after the Supreme Court held in Gordon v. United 

States, 69 U.S. (2 Wall.) 561 (1864), that “under the 

Constitution, no appellate jurisdiction over the Court of 

Claims could be exercised by this court.” The Court later 

explained that it was contrary to the Constitution to 

subject a judicial decision to “revision of a Secretary and 

Congress,” Gordon v. United States, 117 U.S. 697, 703 

(1886), citing Hayburn’s Case, 2 U.S. (2 Dall. 409) 408 

(1792), and United States v. Ferreira, 54 U.S. (13 How.) 40 

(1851). See generally Cowen et al., supra, at 23–24 & 

nn.77–78. 

The debate during enactment of the 1863 Act had focused on whether the Appropriations Clause prohibited 

Congress from delegating its authority to settle claims, 

and also on the provision whereby Congress would “appropriate in gross a sum to pay private claims.” Cong. 

Globe, 37th Cong., 3d Sess. 416–17 (1863) (statement of 

Sen. Hale); see also Cong. Globe, 37th Cong., 2d Sess. 

1671–73 (1862) (statement of Rep. Diven) (stating other 

objections). Senator Trumbull explained the general 

appropriation provision: 

The provision is that the judgments are to be paid 

out of any general appropriation which Congress 

may make for the purpose of paying them. Congress will still make the appropriation for the 

purpose of paying them as it does now; but the bill 

goes on the supposition that instead of taking up 

each case and making a specific appropriation to 

pay $10,000 to A B, and then in another bill an 
9 SLATTERY v. US

appropriation of $10,000 to C D, we shall have a 

general appropriation to pay the judgments rendered by the Court of Claims, and those judgments will be paid out of that general 

appropriation. 

Cong. Globe, 37th Cong., 3d Sess. 304 (1863). Senator 

Doolittle further explained that 

as the bill now stands, it provides and seems to 

anticipate that there shall be a general fund appropriated by Congress from year to year to pay 

the private claims that may be found due against 

the Government; and it provides that these claims 

are to be paid out of that general fund. 

Id. at 398. 

Following the 1863 enactment, Congress made periodic general appropriations for payment of the judgments 

of the Court of Claims, initially on an annualized basis, 

e.g., Act of June 25, 1864, ch. 147, 13 Stat. 145, 148, and 

then by a standing appropriation that created a Judgment 

Fund to pay all Court of Claims judgments for which a 

specific appropriation did not exist, e.g., Supplemental 

Appropriation Act, 1957, Pub. L. No. 84-814, §1302, 70 

Stat. 678, 694–95 (1956). See generally Shimomura, 45 

La. L. Rev. at 660–61, 686–87. 

In Glidden Co. v. Zdanok, 370 U.S. 530 (1962), the 

Supreme Court reviewed this history and explained how 

the general judgment fund implements the prompt payment of judgments against the United States: “A judgment creditor . . . simply files in the General Accounting 

Office a certificate of the judgment signed by the clerk 

and the chief judge of the Court of Claims, and is paid.” 

Id. at 569. The Court observed that the possibility that 

judgments against the government might not be funded 
SLATTERY v. US 10

did not affect the court’s judicial power, id. at 570; the 

Court recognized that the funding of payment of judgments was unrelated to Tucker Act jurisdiction. 

The Judgment Fund had been limited to payments up 

to $100,000, but Congress removed the cap, so that the 

Fund covers claims of any amount. Supplemental Appropriations Act, 1977, Pub. L. No. 95-26, ch. 14, 91 Stat. 61, 

96–97. The Cowen et al. History explains that this “permanent and indefinite appropriation,” S. Rep. No. 95-64, 

at 206 (1977), to fund judgments of the Court of Claims 

fulfilled the promise of the Act of 1863 by rendering the 

court’s judgments final in every meaningful respect. 

Cowen et al., supra, at 161–62. 

These enactments concerning payment of judgments 

did not deal with the jurisdiction of the Court of Claims; 

the Judgment Fund was designed to facilitate the payment by the United States of its obligations, along with 

the grant of authority to the Court of Claims to render 

final judgments. There is no indication that this mode of 

payment of judgments of the Court of Claims affected the 

court’s jurisdiction, or was intended for this purpose. 

However, some later decisions viewed as “jurisdictional” 

the source of funds to pay judgments arising from activities of federal entities, leading to the present jurisdictional challenge. 

The next relevant legislative action after the Acts of 

1863 and 1866 was the Act, introduced by Representative 

John Randolph Tucker of Virginia, that enlarged the 

jurisdiction of the Court of Claims to include not only the 

classes of claims set forth in the 1855 Court of Claims Act, 

but also “claims founded upon the Constitution of the 

United States.” Act of March 3, 1887, ch. 359, 24 Stat. 

505. Representative Bayne remarked that the statutory 

purpose was “to give the people of the United States what 
11 SLATTERY v. US

every civilized nation of the world has already done—the 

right to go into the courts to seek redress against the 

Government for their grievances.” 18 Cong. Rec. 2680 

(Mar. 3, 1887). 

Justice Holmes called the Tucker Act a “great act of 

justice.” United States v. Emery, Bird, Thayer Realty Co., 

237 U.S. 28, 32 (1915). In United States v. Mitchell, 463 

U.S. 206 (1983), the Court observed that “government 

liability in contract is viewed as perhaps ‘the widest and 

most unequivocal waiver of federal immunity from suit,’” 

id. at 215 (quoting Developments in the Law—Remedies 

Against the United States and Its Officials, 70 Harv. L. 

Rev. 827, 876 (1957)), and that “the Act makes absolutely 

no distinction between claims founded upon contracts and 

claims founded upon other specified sources of law,” id. at 

216. 

Tucker Act jurisdiction remained undiluted until several cases arose concerning claims against military post 

exchanges and other operations at military bases. In 

these cases the Court of Claims implemented the statutes 

and regulations that absolved the government of liability 

for claims against “nonappropriated fund instrumentalities” of the military services.

A. The Nonappropriated Fund Instrumentality (NAFI) 

The military post exchanges and other entities such 

as officers clubs are described in military statutes and 

regulations by the term “nonappropriated fund instrumentality.” This term is defined as operations “for the 

comfort, pleasure, contentment, or physical or mental 

improvement of members of the Armed Forces,” 10 U.S.C. 

§2488(f). See Paul J. Kovar, Legal Aspects of Nonappropriated Fund Activities, 1 Mil. L. Rev. 95, 95–103 (1958) 

(explaining military origin and usage of the term “nonap-
SLATTERY v. US 12

propriated fund instrumentality”). Among the statutes 

directed to these activities, 10 U.S.C. §4779(b) provides 

that “[n]o money appropriated for the support of the Army 

may be spent for post gardens or Army exchanges.” The 

Court of Claims, applying the military provisions, held 

that claims arising from violation of law or contract by 

these instrumentalities could not be remedied by suit 

under the Tucker Act. 

The status of the post exchanges came to the attention of the Supreme Court in Standard Oil Co. of California v. Johnson, 316 U.S. 481 (1942), on an issue of state 

taxation. The California courts had required Standard 

Oil to pay the state tax on gasoline sales to post exchanges, holding that the exchanges were not an instrumentality of the federal government because “an army 

post exchange ‘is not instituted by the aid of funds from 

the United States nor are its avails paid into the treasury. 

. . . Neither the government nor the officers of the post 

wherein the exchange is located are liable for its debts.’” 

Standard Oil Co. of Cal. v. Johnson, 19 Cal. 2d 104, 107–

08 (1941) (quoting People v. Standard Oil Co., 218 Cal. 

123, 128 (1933)), rev’d, 316 U.S. 481 (1942). In reversing, 

the Court held that the post exchanges “are arms of the 

government deemed by it essential for the performance of 

governmental functions. They are integral parts of the 

War Department, share in fulfilling the duties entrusted 

to it, and partake of whatever immunities it may have 

under the constitution and federal statutes.” Standard 

Oil, 316 U.S. at 485. The Court stated this conclusion 

even as it observed that “the government assumes none of 

the financial obligations of the exchange.” Id.

The Court’s recognition of the government’s disclaimer of liability for obligations of the post exchanges 

was cited by the Court of Claims in negating Tucker Act 

jurisdiction of claims for breach of contract by the ex-
13 SLATTERY v. US

changes. Thus in Borden v. United States, 116 F. Supp. 

873 (Ct. Cl. 1953), the Court of Claims held that the 

United States could not be sued under the Tucker Act to 

redress a breached employment obligation with a civilian 

employee of a post exchange, citing Standard Oil and 

Army Regulation 210-65 ¶35(h)(1): 

¶35(h)(1) Exchange contracts are solely the obligation of the exchange. They are not Government 

contracts and the distinction between exchange 

contracts and Government contracts will be observed and clearly indicated at all times. 

116 F. Supp. at 877. The court mentioned the reliance of 

the Regulations on a theory of nonappropriated funds, 

and, citing several other decisions to the same effect, held 

that there was not Tucker Act jurisdiction of claims for 

breach of exchange contracts. 

The Court of Claims recognized that these holdings 

had the effect of insulating contracts of the military 

exchanges from suit anywhere, for the exchanges had 

been held immune from suit in other federal courts and in 

state forums in light of Standard Oil’s ruling that they 

were government entities. The court suggested that “this 

situation should be called to the attention of the Congress. 

It seems fair that either the Post Exchanges or the Government should be subject to suit and liable for any 

breach of contract that had been duly signed by the Army 

Exchange Service.” Id. at 878. 

Citing Borden and Standard Oil, in Pulaski Cab Co. 

v. United States, 157 F. Supp. 955 (Ct. Cl. 1958), the 

Court of Claims denied Tucker Act jurisdiction of a claim 

for breach of a contract between the Fort Leonard Wood 

Exchange and taxicab operators. The court observed that 

the contract included the proviso required by the Army 

regulations, placing the Pulaski Cab Company on notice 
SLATTERY v. US 14

that its contract was not with the government. The court 

held that “the United States has not consented to be sued 

upon a contract of this instrumentality which includes 

within its terms a specific declaration of governmental 

nonliability,” and dismissed the suit for lack of jurisdiction. Id. at 958. Judge Whitaker wrote in concurrence 

that it was “abhorrent . . . for the sovereign to do a wrong 

and to refuse redress for it,” but observed that in this case 

the contract itself stated that the government would not 

be liable. Id. (Whitaker, J., concurring). 

The Court of Claims again denied Tucker Act jurisdiction in Gradall v. United States, 329 F.2d 960 (Ct. Cl. 

1963), applying the military regulations to a claim that 

raised the question of whether post exchange employees 

were covered by the Economy Act of 1932. The court cited 

Pulaski Cab and Army and Air Force Regulations providing that “[t]he United States is not responsible for contract, tort and compensation claims against the Army and 

Air Force Exchange Systems and has not waived its 

immunity from suit on those claims. Any claim arising 

out of the activities of the A and AFES shall be payable 

solely from nonappropriated funds,” Gradall, 329 F.2d at 

963 (quoting AR-60-10, AFR 147-7A, Exchange Service, 

dated August 2, 1960, Section 1(7)). 

Again in Keetz v. United States, 168 Ct. Cl. 205 (1964) 

(per curiam), the court referred to “the recurring question 

of the legal status of an employee of an Armed Forces Post 

Exchange.” Id. at 206. The court held that since prior 

cases established that exchange employees are not employed by the United States, any violation of federal 

employment law by the exchanges is not subject to suit 

against the United States under the Tucker Act. Id. at 

207. 
15 SLATTERY v. US

These restrictions on access to Tucker Act redress for 

claims arising from actions of the military exchanges were 

widely perceived as unfair, for they deprived aggrieved 

persons of all legal recourse, in that the exchanges successfully invoked sovereign immunity to bar suit in the 

district courts and state courts. The inequity was magnified because the United States could and did bring suit on 

behalf of the exchanges, while an aggrieved contracting 

party had no remedy when the exchange was the breaching party. E.g., United States v. Howell, 318 F.2d 162 (9th 

Cir. 1963) (suit by the United States against a cleaning 

concession for breach of a contract with a post exchange).2

Issues of nonappropriated funds continued to be 

raised with respect to Tucker Act jurisdiction of agency 

actions, and governmental challenges to jurisdiction 

began to appear in wider contexts. In National State 

Bank of Newark v. United States, 357 F.2d 704 (Ct. Cl. 

1966), the Court of Claims rejected the government’s 

challenge to jurisdiction of a claim based on contracts 

with the Federal Housing Authority (FHA). The FHA had 

been established under the National Housing Act of 1934 

to provide a federal system of mortgage insurance and 

thereby “encourage improvement in housing standards 

and conditions.” Id. at 708–09 & n.6. The government 

argued that there was not Tucker Act jurisdiction because 

the National Housing Act only allowed the FHA to issue 

debentures on mortgages assigned to it, but not to obligate Treasury funds, and also because Congress specifically authorized the FHA to “sue and be sued” in the 

district courts. Id. at 710. The Court of Claims held that 

because the FHA was “doing work of the government,” its 

 2 By legislation in 1970 the Congress remedied this 

“inequitable ‘loophole’ in the Tucker Act,” as it was described in United States v. Hopkins, 427 U.S. 123, 126 

(1976). See Part II.A, post. 
SLATTERY v. US 16

contracts were subject to the jurisdiction of the Tucker 

Act. Id. at 708 (quoting Keifer & Keifer v. Reconstruction 

Fin. Corp., 306 U.S. 381, 389 (1939)). The court stated 

that “[b]y using the FHA to carry out [the purposes of the 

National Housing Act], the United States submits itself to 

suit under the Tucker Act unless there is some specific 

provision to the contrary.” Id. at 706–07. 

In addressing the government’s argument that “only 

the FHA Housing Insurance Fund is liable for insurance 

benefits, and that a judgment by [the Court of Claims] 

would assess the general revenues of the Treasury,” the 

court explained that there was “nothing in the insurance 

benefits provisions to indicate any intention to extract 

from the Tucker Act’s broad coverage claims based on the 

acts of the Housing Insurance Fund.” Id. at 712. Responding to the argument that the congressional authorization to “sue and be sued” was a limited waiver of 

sovereign immunity only in the district courts, the Court 

of Claims held that the bank’s claim for breach of contract 

was subject to Tucker Act jurisdiction independent of 

whether the FHA could be sued in the district courts. Id. 

at 710–11. 

Soon after the Bank of Newark decision, the Court of 

Claims decided Kyer v. United States, 369 F.2d 714 (Ct. 

Cl. 1966). The Court of Claims had initially limited its 

denial of Tucker Act jurisdiction to activities whose authorizing statutes and regulations denied government 

responsibility, whereas the court had generally declined 

to apply the nonappropriated fund theory to negate jurisdiction in other areas of government activity, as illustrated in Bank of Newark. However, the court in Kyer

applied the nonappropriated fund theory more broadly. 

Mr. Kyer had a sales commission contract with the 

Grape Crush Administrative Committee of the Secretary 
17 SLATTERY v. US

of Agriculture, whereby Mr. Kyer, as broker, would locate 

purchasers of industrial alcohol derived from surplus 

grapes. His suit for breach of contract was initially filed 

in state court and removed to federal district court, and 

was dismissed on the government’s claim of sovereign 

immunity, the government stating that the Grape Crush 

Committee was an “integral part of the Department of 

Agriculture and of the United States,” id. at 716. Mr. 

Kyer then brought suit in the Court of Claims, where the 

government argued that the government was not subject 

to suit because the Grape Crush Committee was a nonappropriated fund instrumentality. Id. at 717. The Court of 

Claims held that the contract was not subject to Tucker 

Act jurisdiction because Tucker Act claims are paid from 

the Judgment Fund, and the Grape Crush Committee was 

“neither supported by appropriations nor authorized, in 

any manner, to obligate such funds,” id. The court stated: 

While the terms of [the Tucker Act] are broad, its 

words must be read in conjunction with and must 

be regarded as limited by another statute which 

provides that our judgments are paid only from 

appropriated funds. [footnote 15] Thus, to remain within the framework of our jurisdiction, it 

is essential that the contract sued on be one which 

could have been satisfied out of appropriated 

funds. 

[footnote 15]: 28 U.S.C. §2517 (1964)

states, in part: “(a) Every final judgment 

rendered by the Court of Claims against 

the United States shall be paid out of any 

general appropriation therefor, on presentation to the General Accounting Office of 

a certification of the judgment by the clerk 

and chief judge of the court.” 
SLATTERY v. US 18

Kyer, 369 F.2d at 718 & n.15. 

This description of the Judgment Fund as “limiting” 

Tucker Act jurisdiction came to be raised by the government whenever a government entity received support 

from a source other than congressional appropriation. In 

most cases Tucker Act jurisdiction was sustained, despite 

the entity’s self-supporting activity or fee-based income, 

because the court found that Congress had not separated 

the agency from appropriated funds. Examples are the 

United States Postal Service as held in Butz Engineering 

Corp. v. United States, 499 F.2d 619 (Ct. Cl. 1974); the 

Saint Lawrence Seaway Development Corporation as held 

in Breitbeck v. United States, 500 F.2d 556 (Ct. Cl. 1974); 

the General Services Administration as held in Convery v. 

United States, 597 F.2d 727 (Ct. Cl. 1979); the Office of 

the Comptroller of the Currency as held in L’Enfant Plaza 

Properties, Inc. v. United States, 668 F.2d 1211 (Ct. Cl. 

1982); and the Agency for International Development as 

held in McCarthy v. United States, 670 F.2d 996 (Ct. Cl. 

1982). 

Tucker Act jurisdiction was sustained when the 

agency had access to appropriated funds, even if such 

funds were not used. Examples include DeMauro Construction Corp. v. United States, 568 F.2d 1322, 1328–29 

(Ct. Cl. 1978) (contract with Corps of Engineers for construction of a dam in Okinawa not excluded from Tucker 

Act jurisdiction in view of the Corps’ access to appropriated funds in connection with the project), and Norris 

Industries, Inc. v. United States, 681 F.2d 751 (Ct. Cl. 

1982) (Tucker Act jurisdiction applies in view of access to 

appropriated funds for sales under the Foreign Military 

Sales Act).3

 3 The Tucker Act is not available when the breaching entity is not part of the federal government or not 
19 SLATTERY v. US

In each case the government had argued that because 

the government entity was not supported by appropriated 

funds it was excluded from Tucker Act jurisdiction. For 

example, in Breitbeck the issue arose in a pay claim by 

employees of the Saint Lawrence Seaway Development 

Corporation, a government entity that was intended to be 

self-sustaining and was authorized to charge user fees 

and issue revenue bonds. The Court of Claims rejected 

the government’s argument that there was no Tucker Act 

jurisdiction because the Seaway was a nonappropriated 

fund instrumentality, and observed that the Seaway “is 

‘an agency selected by the Government to accomplish 

purely Governmental purposes,’” Breitbeck, 500 F.2d at 

558 (quoting Cherry Cotton Mills, Inc. v. United States, 

327 U.S. 536, 539 (1946)). The court remarked that “it 

would be anomalous to hold that suits for retirement pay 

 

acting as its agent, or when jurisdiction has been explicitly disclaimed. Such situations are illustrated in Chas. 

H. Tompkins Co. v. United States, 230 Ct. Cl. 754, 756 

(1982), the court explaining that the National Trust for 

Historic Preservation in the United States, a charitable 

nonprofit corporation, “is not a federal instrumentality 

and performs no [federal governmental] functions.” In 

Green v. United States, 229 Ct. Cl. 812, 814 (1982), the 

court held that the United States could not be sued for 

actions of Amtrak because Congress expressly provided 

that “[t]he Corporation will not be an agency or establishment of the United States Government.” In Porter v. 

United States, 496 F.2d 583, 587–91 (Ct. Cl. 1974), the 

court held that the Government of the Trust Territory of 

the Pacific Islands, established by the United States as 

trustee under an agreement with the United Nations, was 

neither part of the United States nor an agent authorized 

to bind the United States. The FDIC statute provides 

that entities such as “bridge depository institutions” 

chartered to assist the FDIC in dealing with insured 

institutions that are in default, are not agencies of the 

United States, see 12 U.S.C. §1821(n)(6)(A). 
SLATTERY v. US 20

could be brought under the Tucker Act but that actions 

for regular pre-retirement pay could lie only against the 

Corporation itself.” Id. at 559. The court distinguished 

Kyer on the ground that there was “no such clear cleavage 

between the Corporation’s own funds and those of the 

United States that one can say that Congress wished to 

cut the agency entirely loose from appropriated funds.” 

Id. The court also distinguished Abbott v. United States, 

112 F.Supp. 801 (Ct. Cl. 1953), where the court held that 

it did not have jurisdiction to receive employee pay claims 

arising from operations of the Panama Canal Company. 

The Abbott court pointed out that Canal employees are 

not subject to the Federal Classification Act or the general 

pay schedule, and concluded that “Congress seems to have 

wanted to cut [the Canal] loose from the United States as 

far as possible.” Id. at 804. 

Butz Engineering concerned the newly independent 

United States Postal Service. The court held that there 

continued to be Tucker Act jurisdiction, observing that 

“Congress has shown it is capable of unequivocally cleaving a public service or corporation from all governmental 

nexus when it so desires.” 499 F.2d at 624. The court 

cited the example of the Securities Investors Protection 

Corporation, whose legislation provided that it “’shall not 

be an agency or establishment of the United States Government,’” id. (citing 15 U.S.C. §78ccc(a)(1) (1970)); the 

court contrasted that legislation with the absence of such 

a provision with respect to the Postal Service. 

The court in Butz Engineering again distinguished 

Kyer, and held that the Kyer Judgment Fund “limitation” 

on jurisdiction did not apply because the Postal Service 

Reorganization Act shows that “the United States was to 

continue responsible for USPS activities.” Id. at 625. The 

court explained that a government entity can be legislatively required to pay its own judgments, or to reimburse 
21 SLATTERY v. US

the Treasury for judgments paid, without affecting Tucker 

Act jurisdiction of the claim. Such an arrangement was 

established for the Postal Service. See 39 U.S.C. §409(h) 

(“A judgment against the Government of the United 

States arising out of activities of the Postal Service shall 

be paid by the Postal Service out of any funds available to 

the Postal Service, subject to the restriction specified in 

section 2011(g).”). 

In some cases, including cases involving issues other 

than government contracts, the courts have held that 

there is Tucker Act jurisdiction of claims against the 

United States based on activities of a governmental 

entity, unless Congress specifically stated its intention to 

withdraw Tucker Act jurisdiction. In the Regional Rail 

Reorganization Act Cases, 419 U.S. 102 (1974), the Supreme Court examined whether the Regional Railroad 

Reorganization Act of 1973 should be construed to bar 

action under the Tucker Act for a claim concerning the 

taking of property. The district court had looked to 

whether the Rail Act “affirmatively provided the Tucker 

Act remedy,” and, finding no such provision, concluded 

that there was not Tucker Act jurisdiction. The Court 

held that the district court had made the wrong inquiry, 

and that: 

The question is not whether the Rail Act expresses an affirmative showing of congressional 

intent to permit recourse to a Tucker Act remedy. 

Rather, it is whether Congress has in the Rail Act 

withdrawn the Tucker Act grant of jurisdiction to 

the Court of Claims to hear a suit involving the 

Rail Act “founded . . . upon the Constitution.” 

Id. at 126. The Court explained that although the Rail 

Act provisions were “said plainly to evince Congress’ 

determination that no federal funds beyond those ex-
SLATTERY v. US 22

pressly committed by the Act were to be paid for the rail 

properties,” id. at 127, the statute “suggests that Congress . . . gave no consideration to withdrawal of the 

Tucker Act remedy,” id. at 129. The Court cited the canon 

that “repeals by implication are disfavored,” id. at 133 

(citing, e.g., Mercantile Nat’l Bank v. Langdeau, 371 U.S. 

555, 565 (1963)), and held that a partial repeal of the 

Tucker Act could not be inferred. 

The Court reiterated the requirement of an “unambiguous intention” of Congress to withdraw access to the 

Tucker Act, in reviewing jurisdiction of the constitutional 

claim in Presault v. Interstate Commerce Commission, 494 

U.S. 1, 12 (1990) (“Congress did not exhibit the type of 

‘unambiguous intention to withdraw the Tucker Act 

remedy’ that is necessary to preclude a Tucker Act claim.” 

(quoting Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1019 

(1984))). See also Ruckelshaus, 467 U.S. at 1017 (“A 

withdrawal of jurisdiction would amount to a partial 

repeal of the Tucker Act. This Court has recognized, 

however, that repeals by implication are disfavored.”). In 

Lion Raisins, Inc. v. United States, 416 F.3d 1356, 1363–

68 (Fed. Cir. 2005), the Federal Circuit rejected the 

applicability of a “nonappropriated funds” theory to 

jurisdiction of constitutional takings claims, citing Presault and the Regional Rail Reorganization Act Cases. A 

similar contention was rejected in the context of statutory 

violations, see El-Sheikh v. United States, 177 F.3d 1321, 

1324–25 (Fed. Cir. 1999) (rejecting application of nonappropriated funds theory to claim for statutory violation in 

employee’s Fair Labor Standards Act suit). In several 

contract cases, the Court of Claims likewise described the 

applicable test as providing that “when a federal instrumentality acts within its statutory authority to carry out 

defendant’s purposes, the United States submits itself to 

liability under the Tucker Act unless ‘some specific provi-
23 SLATTERY v. US

sion to the contrary’ exists.” Butz Engineering, 499 F.2d 

at 622; Breitbeck, 500 F.2d at 558 (same); Convery, 597 

F.2d at 729 (same). In Convery the court distinguished 

Kyer and held that the United States was subject to 

Tucker Act jurisdiction for contracts of the General Services Administration; the court stated that “we think this 

is an appropriate case for directing attention to the Regional Rail Reorganization Act Cases, 419 U.S. 102, 125-

36 (1974), wherein the Supreme Court made it abundantly clear that stronger and more explicit statutory 

language than that relied on by defendant is required to 

deprive a claimant of his Tucker Act remedy.” Convery, 

597 F.2d at 730. 

In other cases in which the Federal Circuit applied 

the Kyer statement that the Judgment Fund statute is a 

“limitation” on the Tucker Act, the court found no jurisdiction based on the fact that the agencies in question 

were not supported by appropriated funds. These cases 

held that there was not Tucker Act jurisdiction over 

breach of contract by the Federal Housing Finance Board 

(Furash & Co. v. United States, 252 F.3d 1336 (Fed. Cir. 

2001)), the Federal Prison Industries (Core Concepts of 

Fla., Inc. v. United States, 327 F.3d 1331 (Fed. Cir. 2003)), 

and the United States Mint (AINS, Inc. v. United States, 

365 F.3d 1333 (Fed. Cir. 2004)). In each case the court 

reasoned that each of these entities receives support from 

sources other than congressional appropriation, and 

therefore that Tucker Act suit is not available, although 

there was no legislative withholding of such jurisdiction. 

In Furash the court held that the Federal Housing 

Finance Board is a nonappropriated funds instrumentality because there is “no situation in which appropriated 

funds would be used to make up a deficiency” in the 

Board’s housing finance operations. 252 F.3d at 1340. In 

Core Concepts the court held that Congress intended that 
SLATTERY v. US 24

the Federal Prison Industries would be self-sufficient, and 

thus “providing a ‘firm indication’ that it intended to 

absolve appropriated funds from liability for FPI’s actions,” 327 F.3d at 1337. In AINS the court held that the 

U.S. Mint is a nonappropriated funds instrumentality 

because it “does not receive its monies by congressional 

appropriation” and it “derives its funding primarily 

through its own activities”; the court observed that 

“[t]here does not appear to be any mechanism whereby 

the Mint could receive appropriated funds without a 

statutory amendment,” for it was intended to be “selffinancing and distinct from the general fund.” 365 F.3d at 

1343. 

The Kyer line of cases is here invoked by the government for application to the Federal Deposit Insurance 

Corporation, as requiring that “[j]urisdiction under the 

Tucker Act is ‘limited, however, by the general requirement that judgments awarded against the government be 

paid out of appropriated funds,’” Gov’t Br. 9 (quoting Core 

Concepts, 327 F.3d at 1334). The government argues that 

“absent an express statutory provision establishing that 

the agency will be funded by public monies,” there can be 

no Tucker Act jurisdiction of the FDIC’s breaches of 

contract. Id. at 28–29. 

Recognizing the importance of this Tucker Act issue 

both in general and as applied to a major governmental 

entity such as the Federal Deposit Insurance Corporation, 

we turn to the application of statute and precedent to this 

jurisdictional issue and to its application to the agency 

involved in this case. 
25 SLATTERY v. US

II 

THE FEDERAL DEPOSIT INSURANCE CORPORATION

The government raises several arguments to support 

its position that there is not Tucker Act jurisdiction of 

claims based on contract breaches by the Federal Deposit 

Insurance Corporation. 

A. The 1970 amendment to the Tucker Act 

In 1970 Congress overturned the judicial rulings that 

had denied jurisdiction of contract breaches by certain 

military-related instrumentalities, and added the following sentence to the Tucker Act: 

For the purpose of this paragraph, an express or 

implied contract with the Army and Air Force Exchange Service, Navy Exchanges, Marine Corps 

Exchanges, Coast Guard Exchanges, or Exchange 

Councils of the National Aeronautics and Space 

Administration shall be considered an express or 

implied contract with the United States. 

Pub. L. No. 91-350, §1(b), 84 Stat. 449 (1970) (now codified at 28 U.S.C. §1491(a)(1)). The same amendment was 

added to the “Little” Tucker Act, 28 U.S.C. §1346(a)(2). 

The government argues that this amendment, because of its explicit terms, means that all other federal 

entities that do not receive appropriated funds are excluded from the jurisdiction of the Tucker Act. The government states that because Congress listed only the 

military and NASA exchanges in the amendment as 

enacted, although an earlier draft included all nonappropriated fund activities, this means that every other nonappropriated fund activity was intended to be excluded 

from Tucker Act jurisdiction. On this interpretation of 

the 1970 amendment, the government argues that con-
SLATTERY v. US 26

tracts with the Federal Deposit Insurance Corporation are 

not subject to Tucker Act jurisdiction. 

Broader language had indeed been proposed during 

the legislative inquiry, but this history does not support 

the government’s theory that Congress intended to narrow, rather than restore, the Tucker Act’s scope. A bill 

introduced by Senator Tydings on March 14, 1968 included any “nonappropriated fund activity of or under a 

department, agency, or Armed Force of the United 

States.” S. 1363, 90th Cong. (1968). At the first Senate 

hearings on the proposed bill, as summarized by Senator 

Tydings: 

All of the witnesses agreed that there was no rational policy ground that would justify the continuation of the anachronistic immunity from 

suits of nonappropriated fund activities, when 

Congress has already waived such protection from 

suits on contracts of the U.S. Government itself, 

and the courts have held the nonappropriated 

fund activities to be instrumentalities of the 

United States for purposes other than suit. 

115 Cong. Rec. 3163 (1969). The hearing record is unremitting in its criticism of the decisions removing “nonappropriated fund activities” from access to judicial remedy. 

However, during the hearings, concerns emerged about 

subjecting “all” nonappropriated fund activities to the 

Tucker Act when the nature and extent of such activities 

were unknown, and also because some such activities 

were subject to specific jurisdictional statutes or not 

under government control. See id. (naming the American 

Red Cross and the Tennessee Valley Authority as examples). 

A second Senate hearing again showed agreement 

with respect to suits based on actions of the military 
27 SLATTERY v. US

exchanges, but repeated the concern about certain “procurement activities of groups not subject to control by the 

responsible officials of the Government.” S. Rep. No. 91-

268, at 5 (1969). Recognizing the difficulty of definition, 

Senator Tydings asked each witness whether Congress 

should attempt a definition of “nonappropriated fund 

activities,” but those testifying found such specificity 

unnecessary. The committee report explained that the 

purpose of the bill was to correct the “injustice and inequity” worked by the judicial “loophole” to the Tucker Act, 

id. at 2, and several written submissions attached to the 

report pointed up the uncertainty of definition of the 

“nonappropriated fund activities” the bill would cover. 

The Department of Justice recommended limiting this 

term to activities “subject to the supervision and control” 

of a department or agency. Id. at 11. The Department of 

Agriculture expressed concern about possible liability for 

contracts made by “informal associations of employees for 

recreational purposes.” Id. at 12. NASA suggested that 

clarity was needed for certain “semiofficial activities, such 

as bowling leagues, employee clubs, and baseball teams, 

operating incidentally to Government agencies.” Id. at 

15. No universally satisfactory definition emerged, and 

the Senate eventually passed the bill without restrictive 

definition, the Senate Committee on the Judiciary reporting that “a legislative definition of a nonappropriated 

fund activity was clearly not necessary. . . . [A]ny attempt 

to limit the courts in their determination of what is and 

what is not a ‘nonappropriated fund activity . . .’ would 

ultimately serve to create additional loopholes through 

which clever defendants may ultimately retreat into the 

anachronism of governmental immunity that the bill 

seeks to eradicate.” Id. at 6. 

However, during the House hearings concern about 

the absence of a definition for “nonappropriated fund 
SLATTERY v. US 28

activity” was the subject of an extensive record, see Jurisdiction of U.S. Courts—Nonappropriated Fund Activities: 

Hearings Before Subcommittee No. 4 of the House Committee on the Judiciary on S. 980, 91st Cong. (1969). 

Congressman Wiggins expressed particular concern about 

the vagueness of the term in his questioning of several 

witnesses. A colloquy between Lt. Col. Benjamin Rosker 

of the Air Force Judge Advocate General Department and 

Congressman Wiggins is illustrative: 

MR. WIGGINS: Let me restate the question. I 

am worried about the definition of “nonappropriated funds.” Every time I think of one, you give 

me another one; then I think of another possibility. But let’s suppose we took all the guesswork 

out of the matter and said we are going to solve 

the problem of the PX’s for all branches of the 

armed services. How much of the problem are we 

solving if we do that? 

COLONEL ROSKER: If I understand you correctly, I think you are suggesting that there be a 

limitation on suits only against the PX’s. 

MR. WIGGINS: I am just throwing that out now 

as a way of avoiding the possibility of open-ended 

definition. 

COLONEL ROSKER: Naturally from a dollar 

standpoint, the PX’s spend a massive percent of 

the dollars involved as far as expenditures of nonappropriated funds. But I think that the whole 

concept is that each and every one of these funds 

really serve just as much a governmental purpose 

as the other. 

MR. WIGGINS: I understand what you are saying, but that assumes we can identify the funds 
29 SLATTERY v. US

we are talking about. But with this very vague 

definition, we may not be able to do that. 

Id. at 18–19. 

In the House, the concern was eventually resolved by 

limiting the bill to the military exchanges, as Congressman Wiggins had suggested to Colonel Rosker. The 

House Report explained that the Committee had 

concluded that the complete removal of sovereign 

immunity for all nonappropriated fund activities 

would be undesirable for several reasons: 

First, since not every nonappropriated fund activity has sufficient assets to reimburse the United 

States, the cost of the judgment would in some 

cases be imposed on the taxpayer—a result which 

is inconsistent with the very concept of nonappropriated fund activities. 

Second, the broad inclusion of all nonappropriated 

fund activities might create serious definitional 

questions, making it difficult to predict the outer 

limits of the liability of the Federal Government. 

Third, data concerning all of the nonappropriated 

fund activities of the United States is unavailable. 

The Bureau of the Budget has not compiled such 

data nor can such data be obtained from the various Government agencies under which nonappropriated fund activities are conducted. Clearly, 

Congress ought not to expose the Federal Government to liability for all nonappropriated fund 

activities unless such data is assembled. 

H.R. Rep. No. 91-933, at 3 (1970). The House version was 

duly enacted into law. 
SLATTERY v. US 30

The legislative record belies the government’s argument that the specificity of this amendment means that 

Congress intended to exclude from the jurisdiction of the 

Tucker Act every government entity that does not receive 

support from appropriated funds except for the military 

and NASA Exchanges. In McDonald’s Corp. v. United 

States, 926 F.2d 1126 (Fed. Cir. 1991), the court reviewed 

this legislative history, and rejected the government’s 

position that “[a]ny organization not explicitly named, 

and which obligated any insubstantial amount of nonappropriated funding, would retain an immunity that Congress found to be a loophole in need of closing, thereby 

creating a new, although smaller, loophole in the bulwark 

Congress concluded should be solid.” Id. at 1132. 

The clearly stated purpose of the amendment was to 

restore access to the courts where such access had been 

removed, not to extend the removal into new, unknown 

areas. “Going behind the plain language of a statute in 

search of a possibly contrary congressional intent is a step 

to be taken cautiously even under the best of circumstances.” Am. Tobacco Co. v. Patterson, 456 U.S. 63, 75 

(1982). Nonetheless, this argument is again pressed. 

Legislative action to close a much-criticized loophole 

cannot reasonably be understood as an endorsement of 

the loophole itself, and certainly not an endorsement of its 

future application. Nothing in the 1970 amendment or its 

history suggests that Congress approved of the reasoning 

behind the judicial decisions it was overturning. It cannot 

be inferred that Congress, by omitting the longterminated Grape Crush Administrative Committee from 

the 1970 amendment,4 intended to endorse the ruling 

 4 The Grape Crush Administrative Committee was 

terminated in December 1964 pursuant to 7 U.S.C. 

§608c(16) (1964). See Kyer, 369 F.2d at 719 n.18. 
31 SLATTERY v. US

that Kyer applied to this Committee. The Court has 

cautioned that it is “impossible to assert with any degree 

of assurance that congressional failure to act represents 

affirmative congressional approval of the [courts’] statutory interpretation,” Cent. Bank of Denver, N.A. v. First 

Interstate Bank of Denver, N.A., 511 U.S. 164, 186 (1994). 

“We walk on quicksand when we try to find in the absence 

of corrective legislation a controlling legal principle.” Id.

(quoting Helvering v. Hallock, 309 U.S. 106, 121 (1940)). 

In assessing the 1970 legislation, the legislative record shows that the proponents of that legislation were 

principally concerned with the narrow problem of the 

military post exchanges, and they eventually directed 

their solution to this problem. Although Congress ultimately decided to leave unchanged the general line of 

judicial authority, the decision not to legislate in areas 

whose boundaries could not be defined did not constitute 

an endorsement of all judicial rulings relating to instrumentalities for which no agency was able to provide a 

precise definition. There is a difference between Congress’ choosing not to upset a preexisting line of judicial 

authority and choosing to adopt that line of authority as a 

legislative mandate that would render it immune to 

subsequent efforts at judicial modification. The 1970 

legislation did the former, but not the latter. Congress 

did not abrogate the Kyer line of authority, but that is not 

to say that it approved of that line of authority, much less 

adopted it. 

The government argues that even if the legislative 

history of the 1970 amendment is not helpful to it, the 

Supreme Court thereafter endorsed the exclusion of 

nonappropriated fund instrumentalities from the Tucker 

Act despite the amendment, citing United States v. Hopkins, 427 U.S. 123 (1976), and Army & Air Force Exchange Service v. Sheehan, 456 U.S. 728 (1982). See Gov’t 
SLATTERY v. US 32

Br. 11; Reply Br. 23. However, in neither of these decisions did the Court depart from the 1970 amendment or 

apply it to activities other than the military exchanges. 

Hopkins involved a pay claim by a discharged employee of 

a post exchange, and the Court granted certiorari to 

resolve a conflict concerning whether Tucker Act contract 

actions include employment contracts with exchanges. 

See 427 U.S. at 124 (resolving conflicting rulings between 

Young v. United States, 498 F.2d 1211 (5th Cir. 1974) and 

Hopkins v. United States, 513 F.2d 1360 (Ct. Cl. 1975)). 

The Court observed that the 1970 amendment returned 

the military exchanges to the Tucker Act, 427 U.S. at 

125–26, and held that this included employment contracts 

with the military exchanges, id. at 126. 

Similarly in Sheehan, the Court was not concerned 

with nonappropriated fund entities beyond those listed in 

the 1970 amendment. Sheehan involved the question of 

whether a military exchange’s violation of its own regulations could be deemed a breach of an implied-in-fact 

contract, thus bringing a discharged employee’s claim 

within the jurisdiction of the Tucker Act. The Court 

noted that the 1970 amendment closed a jurisdictional 

“loophole.” 456 U.S. at 734 n.4. There was no discussion 

of the status of other nonappropriated fund instrumentalities under the Tucker Act. 

The legislative and judicial histories of the 1970 

amendment stress the restoration of the full scope of the 

Tucker Act’s waiver of immunity, without imposing 

limitations grounded in the source of the government 

entity’s funds. The amendment and its history contain no 

support for the theory that Tucker Act jurisdiction was 

intended to be withheld from all entities that do not 

receive appropriated funds except the military and NASA 

exchanges. No congressional intent, or national purpose, 
33 SLATTERY v. US

supports the government’s proposed view of the 1970 

amendment. 

B. The “sue and be sued” clause and corporate status 

The FDIC is authorized by statute “[t]o sue and be 

sued, and complain and defend, by and through its own 

attorneys, in any court of law or equity, State or Federal.” 

12 U.S.C. §1819(a)(Fourth); see also id. at 1819(b)(2)(a). 

The government argues that suit for breach of contract 

must be pursued against the FDIC in district court. 

However, it is well established that the potential availability of a remedy in district court does not of itself 

withdraw jurisdiction under the Tucker Act. 

In Butz Engineering the Court of Claims explained 

that authorization to a government agency to sue and be 

sued in the district court is not a negation of Tucker Act 

jurisdiction. The court stated that “it is well settled that 

an agency’s ‘sue-and-be-sued’ clause does not nullify the 

concurrent liability of the United States as principal.” Id.

at 625. See also Bank of Newark, 357 F.2d at 711 (“[W]e 

have concurrent jurisdiction with ‘any court of competent 

jurisdiction, State or Federal,’ to entertain plaintiffs’ 

claims. Our jurisdiction is derived from the Tucker Act 

and that of the other courts is derived from the FHA’s ‘to 

sue and be sued’ clause.” (quoting 12 U.S.C. §1702)). 

A similar sue and be sued provision relating to the 

savings-and-loan insurance fund was considered in Far 

West Federal Bank, S.B. v. Director, Office of Thrift Supervision, 930 F.2d 883, 889 (Fed. Cir. 1991), the court 

holding that the statutory authorization for suit by and 

against the Office of Thrift Supervision in district court 

did not remove the Tucker Act jurisdiction of the Court of 

Federal Claims with respect to contracts made by the 

Office. We discern no basis for viewing the sue and be 
SLATTERY v. US 34

sued clause for the Federal Deposit Insurance Corporation differently from the Federal Savings and Loan Insurance Corporation—or indeed differently from any other 

federal agency as to this aspect. 

With respect to the corporate status of the FDIC, it is 

established beyond dispute that the jurisdictional criterion is not whether the government entity is incorporated, 

but whether it is acting on authority of the United States. 

See, e.g., Cherry Cotton Mills, 327 U.S. at 539 (“That the 

Congress chose to call it a corporation does not alter its 

characteristics so as to make it something other than 

what it actually is, an agency selected by Government to 

accomplish purely Governmental purposes.”); Nat’l Cored 

Forgings Co. v. United States, 132 F. Supp. 454, 458 (Ct. 

Cl. 1953) (“When a Government corporation acting within 

the scope of its statutory authority makes a contract as 

the agent of the United States, the United States may be 

sued in this court as principal on the contract.”); Crooks 

Terminal Warehouses, Inc. v. United States, 92 Ct. Cl. 

401, 414 (1941) (holding that the Federal Surplus Commodities Corporation had authority to bind the government by contract, for “the corporation was created solely 

to perform governmental objectives and it so acted,” and 

thus claims for breach of contract are within Tucker Act 

jurisdiction). 

No provision of the FDIC statute, and no precedent, 

suggests that either the “sue and be sued” provision or the 

agency’s corporate status, or both together, are a withdrawal of Tucker Act jurisdiction. Any such withdrawal 

must be specific and unambiguous. Regional Rail Cases, 

419 U.S. at 126. 
35 SLATTERY v. US

C. Payment of FDIC judgments 

The government argues that “[i]f Congress did not 

stipulate that Federal funds may be used to pay a judgment against a government instrumentality, the Court of 

Federal Claims does not possess jurisdiction to hear the 

claim.” Gov’t Br. 10. The government’s theory relies on 

the Kyer holding that access to the Judgment Fund is a 

“limitation” on Tucker Act jurisdiction. See id. at 9 (citing 

Judgment Fund statute, 28 U.S.C. §2517(a)). 

In most of the cases since Kyer, the Court of Claims 

distinguished Kyer on its facts. For example, in L'Enfant 

Plaza Properties, Inc. v. United States, 668 F.2d 1211 (Ct. 

Cl. 1982), the court described Kyer as holding that: “The 

jurisdictional grant under the Tucker Act is limited by the 

fact that judgments awarded by this court are to be paid 

out of appropriated monies. 28 U.S.C. §2517 (1976). 

Jurisdiction can only be exercised, therefore, over cases in 

which appropriated funds can be obligated.” 668 F.2d at 

1212. However, that court distinguished Kyer on its facts 

and concluded that “[j]urisdiction under the Tucker Act 

must be exercised absent a firm indication by Congress 

that it intended to absolve the appropriated funds of the 

United States from liability for acts of the Comptroller,” 

id., citing the Regional Rail Reorganization Act Cases. 

The court explained that although the Comptroller had 

not recently been supported by appropriated funds, the 

relevant legislation did not “preclude Congressional 

appropriation of funds to the Comptroller,” id., whether or 

not funds were actually appropriated. On this reasoning 

the court held that the jurisdictional “limitation” in Kyer

did not apply. 

The government cites Wolverine Supply, Inc. v. United 

States, 17 Cl. Ct. 190 (1989), as requiring that there is not 

Tucker Act jurisdiction of this claim against the FDIC. 
SLATTERY v. US 36

Gov’t Br. 10. In Wolverine Supply, the Claims Court (as 

the Court of Federal Claims was previously named) held 

that because the contract for construction of a recreational area at an Air Force base stated that the contract 

was to be paid from nonappropriated funds, the court did 

not have jurisdiction under the Tucker Act. This case 

illustrates the continuing inconsistency flowing from the 

Kyer statement that “to remain within the framework of 

our jurisdiction, it is essential that the contract sued on 

be one which could have been satisfied out of appropriated 

funds.” Kyer, 369 F.2d at 718. 

The inclusion of the Judgment Fund as a jurisdictional “limitation” of claims within the scope of the Tucker 

Act has received scholarly criticism. It has been described 

as requiring a “second layer of appropriations” as a condition of bringing claims against the government. See Evan 

C. Zoldan, The King is Dead, Long Live the King!: Sovereign Immunity and the Curious Case of Nonappropriated 

Fund Instrumentalities, 38 Conn. L. Rev. 455, 490 (2006). 

This purported restriction on Tucker Act jurisdiction is in 

tension with the Court’s reminder in Mitchell that no 

“second waiver” of immunity is required for jurisdiction 

under the Tucker Act. See 463 U.S. at 218 (“[A] court 

need not find consent to suit in ‘any express or implied 

contract with the United States.’ The Tucker Act itself 

provides the necessary consent.” (quoting 28 U.S.C. 

§1491)). The Court in Mitchell stressed that “by giving 

the Court of Claims jurisdiction over specified types of 

claims against the United States, the Tucker Act constitutes a waiver of sovereign immunity with respect to 

those claims.” Id. at 212 (footnote omitted). The Court 

stated that: ”If a claim falls within the terms of the 

Tucker Act, the United States has presumptively consented to suit.” Id. at 216. 
37 SLATTERY v. US

Neither the Tucker Act, nor Supreme Court precedent, nor most of the jurisprudence of the Court of Claims 

and the Federal Circuit, limits jurisdiction over the claim 

by the source of funds to pay any judgment on the claim. 

As the government acknowledges, the purpose of the 

Judgment Fund statute, 28 U.S.C. §2517(a), is to provide 

a fund to pay judgments of the Court of Claims and its 

successor court “instead of requiring specific bills for each 

successful claimant,” Reply Br. 6. Nonetheless the government argues that §2517(a) requires that the United 

States cannot be sued under the Tucker Act unless there 

is a specific—not a general—appropriation to pay the 

judgment, “ensuring that judgments were paid only by 

appropriations specifically for that purpose.” Id. at 7. 

The government’s citation of authority for this argument suggests a misunderstanding of the history of 

§2517(a), for in its opening and reply briefs the government presents the following quote from Williams v. 

United States, 289 U.S. 553, 562–63 (1933), as a binding 

holding of the Supreme Court: “no money shall be paid 

out of the treasury for any claim passed upon by the court 

of claims till after an appropriation therefor shall be 

estimated for by the Secretary of the Treasury.” Gov’t Br. 

9; Reply Br. 8–9. The quoted words indeed appear in 

Williams, for the Court was quoting Section 14 of the 

Amended Court of Claims Act of 1863, which, as Williams

also states, was repealed in 1866. See Williams, 289 U.S. 

at 564 (“At the next session of Congress section 14 was 

repealed.”). Since 1866, §2517(a) has not contained the 

restriction now attributed to it. 

The purpose of the Judgment Fund was to avoid the 

need for specific appropriations to pay judgments 

awarded by the Court of Claims. The government argues 

that the Judgment Fund is not available for FDIC 

breaches because neither the FDIC statute, nor any other 
SLATTERY v. US 38

statute, provides such a specific appropriation. According 

to the government, “if Congress intended that the Government would be liable for judgments against the FDIC 

in its capacity as insurer of banks, it would have made 

that obligation clear – as it did when it established the 

[FSLIC Resolution Fund] to fund judgments against the 

FSLIC in Winstar-related litigation.” Gov’t Br. 22. The 

government thus argues that although the Tucker Act 

does provide jurisdiction of actions for breach of contracts 

with the FSLIC, it does not provide jurisdiction for contracts with the counterpart FDIC. 

The distinction between the FSLIC (for savings and 

loan institutions) and the FDIC (initially for savings 

banks) does not support a jurisdictional distinction under 

the Tucker Act. Jurisdiction of claims arising from 

breaches by either agency tracks the unchallenged Tucker 

Act jurisdiction of the Winstar cases, which initially arose 

on FSLIC contracts, and came to include FDIC contracts. 

No challenge was raised to Tucker Act jurisdiction based 

on the source of funding of these agencies, either before or 

after the FSLIC exhausted its fee-raised funds and its 

liabilities were resolved by the Resolution Trust Fund 

using funds appropriated for the purpose. The jurisdiction of the Court of Federal Claims did not depend on 

whether the FSLIC had exhausted its insurance fund 

when the breach occurred or when the action was brought 

or resolved; jurisdiction depended on whether the statutory conditions of the Tucker Act were met, as to subject 

matter and as to parties. See Kontrick v. Ryan , 540 U.S. 

443, 455 (2004) (statutory requirements are not properly 

described as “jurisdictional” unless they “delineat[e] the 

classes of cases (subject-matter jurisdiction) and the 

persons (personal jurisdiction) falling within a court’s 

adjudicatory authority”). 
39 SLATTERY v. US

The principles and the factual premises are virtually 

identical in this suit and in the many suits arising from 

breached contracts of the FSLIC. The Tucker Act challenge now presented was not raised in United States v. 

Winstar Corp., 518 U.S. 839 (1996), which arose on contracts with the FSLIC. The government now proposes 

that the reason why jurisdiction was proper when the 

FSLIC was the breaching entity is that the FSLIC obligations were met by congressional appropriation after the 

FSLIC exhausted its fee-derived funds. See 12 U.S.C. 

§1821a(a) (creating FSLIC Resolution Fund to resolve 

assets and liabilities of the FSLIC); id. §1821a(c) (authorizing appropriations necessary to meet any shortfall in 

the FSLIC Resolution Fund). These expedients have no 

relation to jurisdiction, and were not so characterized by 

Congress or in any Winstar decision. 

The appropriation provisions of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) 

were an appropriation to pay governmental obligations, 

not a prohibition on Tucker Act jurisdiction for breaches 

by the agency. Tucker Act jurisdiction of the many claims 

for breach of contract by the FSLIC did not depend on 

how the government met its obligations, either before or 

after the FSLIC funds were exhausted. Absent specific 

statutory provision addressing jurisdiction, Tucker Act 

jurisdiction is not affected by how the agency meets its 

obligations or how any judgment establishing those 

obligations is satisfied. 

D. The full faith and credit of the United States 

Congressional pronouncements stress the full faith 

and credit of the United States in connection with the 

FDIC. See Slattery II, 583 F.3d at 810–11. However, the 

government states that “these congressional pronouncements are irrelevant” to the FDIC’s regulatory obliga-
SLATTERY v. US 40

tions. Reply Br. 15. This position is contrary to the 

opinions of the Attorney General and the Comptroller 

General, issued when the question arose with respect to 

the FSLIC. A Comptroller General letter stated, in 

response to an inquiry from Congress: 

2. Comptroller General letter concludes that 

FSLIC obligations are obligations of the United 

States backed by its full faith and credit since no 

general liability of the United States has been 

statutorily disclaimed. Conclusion is based on 

analysis that FSLIC is an instrumentality of the 

United States, has been designated by Congress to 

carry out a program of insurance and regulation, 

and issues notes and guarantees under statutory 

authority. Analysis used is based on series of Attorney General opinions. 

* * * * 

Your second question asks whether the promissory notes and assistance guarantees issued by 

FSLIC are backed by the full faith and credit of 

the United States. Applying the criteria contained in a long line of Attorney General opinions, 

we are of the opinion that FSLIC’s promissory 

notes and assistance guarantees are obligations of 

the United States, backed by its full faith and 

credit. A detailed analysis of this issue also is enclosed. 

68 Comp. Gen. 14, 1988 WL 223985 (Oct. 11, 1988). 

The Comptroller General letter cited a series of rulings of the Attorney General concerning obligations of the 

United States with respect to various governmental 

activities; e.g., 42 Op. A.G. 327 (1966) (guarantees of the 

Import-Export Bank, a government corporation, are 
41 SLATTERY v. US

obligations of the United States); 42 Op. A.G. 21 (1961) 

(loan guarantees made by the Development Loan Fund 

under the Mutual Security Act of 1954 are obligations of 

the United States despite corporate status of the Fund); 

41 Op. A.G. 424 (1959) (loan guarantees issued by the 

Secretary of Defense under the Armed Services housing 

mortgage insurance program are obligations of the United 

States); 41 Op. A.G. 403 (1959) (guarantees by the Interstate Commerce Commission are obligations of the United 

States despite absence of an explicit pledge of the full 

faith and credit of the United States); 41 Op. A.G. 363 

(1958) (contracts entered by Secretary of Commerce to 

insure loans and mortgages pursuant to the Merchant 

Marine Act of 1936 are binding obligations of the United 

States, despite need for future appropriations); 41 Op. 

A.G. 138 (1953) (contracts between Public Housing Administration and local public housing agencies are binding obligations of the United States). In Bank of Newark, 

357 F.2d at 711–12, the Court of Claims observed that the 

debentures of the Housing Insurance Fund were backed 

by the full faith and credit of the United States, in discussing Tucker Act jurisdiction. 

The Attorney General’s and Comptroller General’s 

rulings contravene the government’s position concerning 

the FDIC. The FDIC is an agency of the United States. 

12 U.S.C. §1819(b)(1); see 12 U.S.C. §1813(z) (“The term 

‘Federal banking agency’ means the Comptroller of the 

Currency, the Director of the Office of Thrift Supervision, 

the Board of Governors of the Federal Reserve System, or 

the Federal Deposit Insurance Corporation.”). FDIC 

directors are appointed by the President and confirmed by 

the Senate, and the FDIC is required to report annually 

to Congress and quarterly to the Treasury. See id.

§§1812(a), 1827. The FDIC has free use of the United 

States mails “in the same manner as the executive de-
SLATTERY v. US 42

partments of the Government,” id. §1820(a), and is exempt from state and federal income taxes, id. §1825. The 

FDIC is empowered to regulate bank management, operations, capital, accounting, and executive compensation. 

The FDIC is authorized to issue subpoenas, block the 

hiring of unapproved executives, prevent or require 

remedial action such as mergers, terminate a bank’s 

deposit insurance, and liquidate or otherwise resolve 

failed or failing banks, see id. §§1814–1818, 1819, 1820, 

1821, 1823, 1828 1831i, 1831o, 1831p-1, and is granted 

“such incidental powers as shall be necessary to carry out 

the powers” specifically granted, id. §1819(a)(Seventh). 

The FDIC is authorized “[t]o make contracts.” Id.

§1819(a)(Third). The government’s argument that the full 

faith and credit of the United States does not apply to the 

FDIC’s contractual obligations, including the notes, 

guarantees, and promises made for the purpose of averting bank failure, are without foundation. The legislative 

purpose, judicial precedent, and the views of the Comptroller General and the Attorney General, are contrary to 

this position. 

E. The self-supporting structure of the FDIC 

The government also argues that the FDIC is selfsupporting without congressional appropriations, and 

that this too negates Tucker Act jurisdiction. When the 

FDIC was created in 1933, it was funded with an appropriation of $150 million. The FDIC was authorized to 

charge fees to the banks that it insures, and it has since 

its inception been funded by these fees, and repaid the 

initial appropriation. See Gov’t Br. 13, 15–16. Thus the 

government argues that appropriated funds do not support the FDIC. 
43 SLATTERY v. US

The FDIC is authorized to borrow from the Treasury, 

with borrowing limits that have periodically been increased, from $3 billion in 1950 to $5 billion in 1989, then 

to $30 billion in 1991, then to $100 billion in 2009, with a 

temporary increase to $500 billion through the end of 

2010 if needed and approved by Treasury, see 12 U.S.C.A. 

§1824(a)(3)(A) (West 2009). The government argues that 

although the FDIC has now exhausted its funds it has not 

borrowed from the Treasury, instead meeting its current 

shortfall by requiring member banks to make advance 

payments. None of these expedients excludes or withdraws Tucker Act jurisdiction of claims within the subject 

matter set forth in the Tucker Act. 

In view of the conflicts in precedent that led to this en 

banc rehearing, we resolve the conflicts as follows: 

III 

RESOLUTION OF CONFLICTS

Over the long history of the Tucker Act, the courts 

have respected the nation’s intention to provide a broad 

waiver of immunity for claims against the government. 

Apart from the Court of Claims’ explanation of its ruling 

in Kyer with respect to the Grape Crush Administrative 

Committee and the extension of this ruling to cases 

falling directly within the rule articulated in Kyer, the 

government’s argument that Tucker Act jurisdiction is 

limited by access to the Judgment Fund, or varies with 

the self-sufficiency of the activity, is devoid of support. 

We resolve “the confusion generated by the ‘less than 

meticulous’ uses of the term ‘jurisdictional’ in our earlier 

cases,” Eberhart v. United States, 546 U.S. 12, 16 (2005), 

and hold that the source of funding of an agency’s activities or for payment of its judgments is not a limitation on 

Tucker Act jurisdiction. The Judgment Fund statute is 

not properly deemed “jurisdictional,” for it “does not speak 
SLATTERY v. US 44

in jurisdictional terms or refer in any way to the jurisdiction of the [court].” Zipes v. Trans World Airlines, Inc., 

455 U.S. 385, 394 (1982). 

The Court explained in Kontrick v. Ryan, 540 U.S. at 

455, that statutory requirements are not “jurisdictional” 

unless they “delineat[e] the classes of cases (subjectmatter jurisdiction) and the persons (personal jurisdiction) falling within a court’s adjudicatory authority.” The 

Court elaborated in Arbaugh v. Y&H Corp., 546 U.S. 500, 

515–16 (2006) that “when Congress does not rank a 

statutory limitation on coverage as jurisdictional, courts 

should treat the restriction as nonjurisdictional in character.” “In light of the important distinctions between 

jurisdictional prescriptions and claim-processing rules,” 

the Court has “encouraged federal courts and litigants to 

‘facilitat[e]’ clarity by using the term ‘jurisdictional’ only 

when it is apposite.” Reed Elsevier, Inc. v. Muchnick, 130 

S. Ct. 1237, 1244 (2010) (alteration in original). The 

Court’s “recent cases evince a marked desire to curtail 

such ‘drive-by jurisdictional rulings,’” id. (quoting Steel 

Co. v. Citizens For A Better Env’t, 523 U.S. 83, 91 (1998)), 

that “miss the ‘critical difference[s]’ between true jurisdictional conditions and nonjurisdictional limitations on 

causes of action,” id. (alteration in original). 

Applying these precepts, the overreach of the statement in Kyer is apparent, for the Judgment Fund statute 

does not speak in jurisdictional terms. Section 2517(a) 

originated in the Amended Court of Claims Act of 1863, 

for the purpose of removing the need for a specific congressional appropriation to pay each judgment. This 

statute neither restricted nor enlarged the jurisdiction of 

the Court of Claims; it is applied after the court has 

entered final judgment, to provide a mechanism whereby 

that judgment “shall be paid out of any general appropriation therefor.” The contrary statement in the Kyer
45 SLATTERY v. US

decision and the cases that relied on Kyer shall no longer 

be applied as precedent. We reaffirm the guidance of 

Mitchell, 463 U.S. at 216, that ”[i]f a claim falls within the 

terms of the Tucker Act, the United States has presumptively consented to suit”; exceptions require an unambiguous statement by Congress, see Regional Rail 

Reorganization Act Cases, 419 U.S. at 126–36; Presault,

494 U.S. at 12 (“Congress did not exhibit the type of 

‘unambiguous intention to withdraw the Tucker Act 

remedy’ that is necessary to preclude a Tucker Act claim.” 

(quoting Ruckelshaus, 467 U.S. at 1019)). 

On this en banc review, we hold that (1) when a government agency is asserted to have breached an express 

or implied contract that it entered on behalf of the United 

States, there is Tucker Act jurisdiction of the cause unless 

such jurisdiction was explicitly withheld or withdrawn by 

statute, and (2) the jurisdictional foundation of the Tucker 

Act is not limited by the appropriation status of the 

agency’s funds or the source of funds by which any judgment may be paid. 

Thus jurisdiction of this claim was properly exercised 

by the Court of Federal Claims. The decision in Slattery 

II, reported at Slattery v. United States, 583 F.3d 800 

(Fed. Cir. 2009), is reinstated; Part I, the jurisdictional 

section of Slattery II, is modified to resolve conflicting 

precedent as set forth herein. We remand to the Court of 

Federal Claims for further proceedings as set forth 

therein. 

JUDGMENT REINSTATED; CASE REMANDED
United States Court of Appeals 

for the Federal Circuit 

__________________________ 

FRANK P. SLATTERY, JR., (ON BEHALF OF HIMSELF 

AND ON BEHALF OF ALL OTHER SIMILARLY SITUATED 

SHAREHOLDERS OF MERITOR SAVINGS BANK), 

Plaintiff-Cross Appellant, 

AND 

STEVEN ROTH, 

AND INTERSTATE PROPERTIES, 

Plaintiffs-Cross Appellants, 

v. 

UNITED STATES, 

Defendant-Appellant. 

__________________________ 

2007-5063, -5064, -5089 

__________________________ 

Appeal from the United States Court of Federal 

Claims in Case No. 93-CV-280, Senior Judge Loren A. 

Smith. 

__________________________ 

GAJARSA, Circuit Judge, dissenting, with whom DYK, 

PROST, and O’MALLEY, Circuit Judges, join.

It has been settled law for more than half a century 

that the Tucker Act’s waiver of sovereign immunity does 

not apply to contracts entered into by nonappropriated 

fund instrumentalities (“NAFIs”) of the federal govern-
2

ment. This settled law is recognized and endorsed by 

Congress and the Supreme Court. It is also settled law 

that no federal court may enlarge its jurisdiction; only 

Congress may do so. Nevertheless, the court today overturns and eviscerates the vast body of NAFI law in one 

fell swoop. The court is wrong to do so, and I therefore 

dissent. 

A. 

The central question here is what entities are included in the phrase “the United States” as used in the 

Tucker Act’s reference to claims founded “upon any express or implied contract with the United States.” 28 

U.S.C. § 1491(a)(1). The term “United States” in that part 

of the Tucker Act is ambiguous as to whether it includes 

each and every Federal agency.1 For more than sixty 

years the Supreme Court, our predecessor court, and our 

court have held that the term “United States” in the 

Tucker Act does not include NAFIs. The majority today 

eliminates the NAFI doctrine. The majority holds “that 

Tucker Act jurisdiction does not depend on and is not 

limited by whether the government entity receives or 

draws upon appropriated funds. Conflicting precedent 

shall no longer be relied upon.” Majority Op. at 5. The 

sole question is whether “the government entity was 

acting on behalf of the government.” Id. 

 1 Notably, the term “United States” in the earlier 

part of the Tucker Act referring to “any claim against the 

United States” does not include separate Federal agencies. The Tucker Act does not authorize suit against 

Federal agencies, only the United States itself. Hansen v. 

United States, 214 Ct. Cl. 823, 1977 WL 25876 at *1 (Ct. 

Cl. 1977) (unpublished); see also United States v. Sherwood, 312 U.S. 584, 588 (1941). This clearly suggests that 

the term “United States” elsewhere in the statute does 

not include all Federal agencies 
3

But the NAFI doctrine is not ours to eliminate; it is a 

long-standing doctrine of sovereign immunity born of the 

Supreme Court and recognized by Congress. As a court of 

appeals, we lack authority to abandon the doctrine. If we 

had a clean slate upon which to write new law, we could 

pursue a different path; however, we do not, and this 

court is not the legislative branch. The issue before this 

court—whether the Tucker Act waives the sovereign 

immunity of the United States for contractual commitments of the FDIC—is one of statutory construction. 

While the Tucker Act does not use the term “nonappropriated funds instrumentality,” the statute and its 

legislative history must be read in the context of the 

Supreme Court’s decisions. 

The genesis of the NAFI doctrine is found in the Supreme Court’s decision in Standard Oil Co. of California 

v. Johnson, 316 U.S. 481 (1942). In Standard Oil, the 

Court reviewed a California statute that imposed a license tax on the sale of motor vehicle fuel. 316 U.S. at 

482. The statute exempted “any motor vehicle fuel sold to 

the government of the United States or any department 

thereof for official use of said government.” Id. The 

question before the Court was whether a military post 

exchange qualified for the statute’s exemption. Id. at 483. 

The Court held that the military post exchange was a 

federal instrumentality entitled to “whatever immunities 

it may have under the Constitution and federal statutes.” 

Id. at 485. In classifying the post exchange as a federal 

instrumentality, the Court focused on the fact that “[t]he 

government assumes none of the financial obligations of 

the exchange.” Id. at 485. 

In the years following Standard Oil, the Court of 

Claims interpreted the decision as imposing a limitation 

on Tucker Act jurisdiction. In Borden v. United States, 

116 F. Supp. 873 (Ct. Cl. 1953) and Pulaski Cab Co. v. 
4

United States, 157 F. Supp. 955 (Ct. Cl. 1958), the Court 

of Claims held it lacked jurisdiction to adjudicate breach 

of contract actions against military exchanges. See Borden, 116 F. Supp. at 877 (“[I]n light of [Standard Oil] . . . 

we reluctantly reach the conclusion that plaintiff cannot 

sue the United States on a contract of employment which 

is signed by the Army Exchange Service . . . .”); Pulaski 

Cab, 157 F. Supp. at 958 (“We conclude that the United 

States has not consented to be sued upon a contract of 

this instrumentality . . . .”). The Court of Claims reached 

a similar conclusion in Keetz v. United States, 168 Ct. Cl. 

205 (1964) (per curiam), though it recognized the inequities engendered by dismissing the plaintiff’s suit. Id. at 

205 (“We are aware that plaintiff is placed in somewhat of 

a difficult position . . . . However, we believe that in these 

situations (especially where the question of the waiver of 

sovereign immunity is involved) it is up to Congress to 

remedy this apparent harsh result, and the courts should 

refrain from legislating by judicial fiat.”). 

In Kyer v. United States the Court of Claims extended 

the NAFI doctrine beyond the realm of military exchanges 

by holding that the Grape Crush Administrative Committee (“Committee”), appointed by the Secretary of Agriculture, was a NAFI. 369 F.2d 714, 717-18 (Ct. Cl. 1966).2 

According to the Court of Claims, because the Committee 

was “neither supported by appropriations nor authorized, 

in any manner, to obligate such funds,” it was a NAFI. 

 2 The majority recognizes that Kyer’s extension 

of the NAFI concept beyond military exchanges is the 

direct ancestor of the NAFI doctrine, citing its progeny: 

Furash & Co. v. United States, 252 F.3d 1336 (Fed. Cir. 

2001), Core Concepts of Florida, Inc. v. United States, 327 

F.3d 1331 (Fed. Cir. 2003), and AINS, Inc. v. United 

States, 365 F.3d 1333 (Fed. Cir. 2004). Majority Op. at 

23-24. The majority then attempts to distinguish Kyer

and ultimately overturns it. 
5

Id. at 718. The court then held it lacked jurisdiction to 

adjudicate a breach of contract action against the Committee because “to remain within the framework of our 

jurisdiction, it is essential that the contract sued on be 

one which could have been satisfied out of appropriated 

funds.” Id. The Court of Claims reasoned that because 

its Tucker Act jurisdiction “must be read in conjunction 

with and must be regarded as limited by” 28 U.S.C. § 

2517, which “provides that [Court of Claims] judgments 

are paid only from appropriated funds,” any suit against a 

NAFI for breach of contract is beyond its jurisdiction. Id.

at 717-18. 

It was against the backdrop of this history that Congress in 1970 amended the original Tucker Act to include 

a provision directly relevant to the NAFI doctrine and 

today’s ruling. As discussed above, the original Tucker 

Act provided the Court of Federal Claims with jurisdiction 

to hear, inter alia, a claim against the United States 

founded “upon any express or implied contract with the 

United States.” 28 U.S.C. § 1491(a)(1) (originally enacted 

as Tucker Act, ch. 359, 24 Stat. 505 (1887)). But Congress 

amended the original Tucker Act by adding the sentence: 

“For the purpose of this paragraph, an express or implied 

contract with the Army and Air Force Exchange Service, 

Navy Exchanges, Marine Corps Exchanges, Coast Guard 

Exchanges, or Exchange Councils of the National Aeronautics and Space Administration shall be considered an 

express or implied contract with the United States.” Act 

of July 23, 1970, Pub. L. No. 91-350, § 1(b), 84 Stat. 449 

(“1970 Act”). As a textual matter, the amendment applies 

only to the enumerated entities in light of the canon 

expressio unius est exclusio alterius (the express mention 

of one thing excludes all others). See, e.g., Tenn. Valley 

Authority v. Hill, 437 U.S. 153, 188 (1978) (because the 

Endangered Species Act of 1973 “create[d] a number of 
6

limited ‘hardship exemptions’” and “no exemptions . . . for 

federal agencies,” the Court found “under the maxim of 

expressio unius est exclusio alterius . . . that these were 

the only ‘hardship cases’ Congress intended to exempt”); 

cf. Nat’l R.R. Passenger Corp. v. Nat’l Ass’n of R.R. Passengers, 414 U.S. 453, 458 (1974) (noting the “frequently 

stated principle of statutory construction . . . that when 

legislation expressly provides a particular remedy or 

remedies, courts should not expand the coverage of the 

statute to subsume other remedies”). This appropriately 

narrow construction is further consistent with the general 

rule that “a waiver of the Government’s sovereign immunity will be strictly construed, in terms of its scope, in 

favor of the sovereign” and that such a waiver “must be 

unequivocally expressed in [the] statutory text,” Lane v. 

Pena, 518 U.S. 187, 192 (1996). That Congress intended 

and understood the amendment as extending Tucker Act 

jurisdiction only to the listed NAFI entities—to the exclusion of all others—is unequivocally confirmed by the 

amendment’s legislative history. 

Congress amended the Tucker Act in 1970 in part due 

to its concern that the NAFI doctrine created an inequitable loop-hole in the Tucker Act. Indeed, the original 

Senate bill sought to eliminate the NAFI doctrine entirely. It provided that “an express or implied contract 

with a nonappropriated fund activity of or under the 

United States or a department or agency of the United 

States shall be considered an express or implied contract 

with the United States.” S. 980, 91st Cong. (1st Sess. 

1969). The Senate report stated that:

S. 980 will fill a gap in the Tucker Act’s waiver of 

immunity of the United States to claims based 

upon contracts with departments or agencies of 

the Government. . . . The courts have repeatedly 

held . . . that the Federal Government’s liability to 
7

suit under [the Tucker Act] only exists with respect to contract obligations to be paid out of appropriated funds. See, e.g., Kyer v. United States, 

369 F.2d 714 (Ct. Claims 1966); Pulaski Cab Co. v. 

United States, 157 F. Supp. 955 (Ct. Claims 1968); 

Keetz v. United States, 168 Ct. Claims 205 (1964); 

Borden v. United States, 116 F. Supp. 873 (Ct. 

Claims 1953). 

. . . . 

Despite [the] consistent identification of the 

nonappropriated fund activity with its parent department or agency and the United States, contractors with such activities have found it 

impossible to get a “day in court” when they allege 

breach of contract by such activities. Your committee believes that there is no rational reason to 

continue the immunity from contract suit presently afforded nonappropriated fund activities. . . . 

 . . . . 

 . . . In so doing, S. 980 will erase an anachronistic and baseless distinction between suits on 

contracts of the United States to be paid out of 

appropriated funds and those to be paid out of 

nonappropriated funds. 

S. Rep. No. 91-268, at 2-3, 5 (1969). 

The House, however, strongly disagreed with the 

Senate’s proposed elimination of the entire NAFI doctrine. The House report stated: 

In evaluating the proposal as passed by the Senate, your committee concluded that the complete 

removal of sovereign immunity for all nonappropriated fund activities would be undesirable for 

several reasons: 
8

 First, since not every nonappropriated fund 

activity has sufficient assets to reimburse the 

United States [for the cost of a judgment, as required by S. 980], the cost of the judgment would 

in some cases be imposed on the taxpayer—a result which is inconsistent with the very concept of 

nonappropriated fund activities. 

 Second, the broad inclusion of all nonappropriated fund activities might create serious definitional questions, making it difficult to predict the 

outer limits of the liability of the Federal Government. 

 Third, data concerning all of the nonappropriated fund activities of the United States is unavailable. The Bureau of the Budget has not 

compiled such data nor can such data be obtained 

from the various Government agencies under 

which nonappropriated fund activities are conducted. Clearly, Congress ought not to expose the 

Federal Government to liability for all nonappropriated fund activities unless such data is assembled. 

H.R. Rep. No. 91-933, at 3 (1970), reprinted in 1970 

U.S.C.C.A.N. 3477, 3479 (emphasis in original).3 Accordingly, the House amended the bill, limiting the NAFI 

exclusion to military post exchanges and NASA exchange 

councils. Id. The House version of the bill passed, 1970 

Act § 1(b), 84 Stat. at 449, and the NAFI doctrine, albeit 

limited by the Congress, remains in effect today, 28 

 3 The majority cites to the same language but refuses to accept its import: namely, that the House explicitly rejected the Senate’s complete elimination of the 

NAFI doctrine. 
9

U.S.C. § 1491(a)(1). By making clear that some NAFIs 

are within the definition of the “United States” for purposes of the Tucker Act, Congress made quite clear that 

other NAFIs are excluded. The majority’s conclusion—

premised on its interpretation of the legislative history to 

support its rationale that Congress eliminated all 

NAFIs—is illogical, just like talking about the shining 

moonlight on a sunny afternoon. There is simply no 

support for the majority’s assertion that “[t]he legislative 

and judicial histories of the 1970 amendment stress the 

restoration of the full scope of the Tucker Act’s waiver of 

immunity, without imposing limitations grounded in the 

source of the government entity’s funds.” Majority Op. at 

32. 

Consistent with this background, this court has repeatedly interpreted the 1970 Act as “a narrow exemption 

from the [NAFI] doctrine for certain entities,” which left 

“the doctrine intact for all other non-appropriated fund 

instrumentalities unrelated to the post exchanges and 

exchange councils.” Furash & Co. v. United States, 252 

F.3d 1336, 1339 (Fed. Cir. 2001); see also Lion Raisins, 

Inc. v. United States, 416 F.3d 1356, 1365 (Fed. Cir. 

2005); AINS, Inc. v. United States, 365 F.3d 1333, 1338-39 

(Fed. Cir. 2004); El-Sheikh v. United States, 177 F.3d 

1321, 1325 (Fed. Cir. 1999); McDonald's Corp. v. United 

States, 926 F.2d 1126, 1129-33 (Fed. Cir. 1991). In doing 

so, this court correctly reasoned that had Congress intended to eliminate the doctrine entirely, it would have 

adopted the Senate bill, not the House’s amended version. 

Congress’s action, therefore, speaks volumes. By leaving 

the doctrine in place, Congress ratified the Supreme 

Court decisions and our decisions defining it. 4 

 4 The majority’s contrary argument—that Congress’s choosing to enact only a narrow exception to the 
10

Our analysis is confirmed by the Supreme Court’s 

consistent teaching that a narrow statutory exception, 

crafted in response to specific judicial decisions, demonstrates Congress’s awareness of those decisions. More 

specifically, the Court teaches that such an exception 

“lends powerful support” to the continued viability of the 

larger rule. Square D Co. v. Niagara Frontier Tariff 

Bureau, Inc., 476 U.S. 409, 418-19 (1986). For example, 

in Maislin Industries, U.S., Inc. v. Primary Steel, Inc., the 

Court held that a statutory exception, exempting motor 

contract carriers from the decades-old filed-rates doctrine, 

“demonstrat[ed] that Congress is aware of the requirement and has deliberately chosen not to disturb it with 

respect to motor common carriers.” 497 U.S. 116, 135 

(1990). Similarly, in Square D, the Court refused to 

overturn a long-standing judicial doctrine when Congress 

specifically addressed a particular application, but declined to alter the larger rule. 476 U.S. at 418-20. Such 

rules of interpretation are corollary to the strong disfavor 

shown reversals of long-standing law. See Ill. Brick Co. v. 

Illinois, 431 U.S. 720, 736 (1977) (“[W]e must bear in 

mind that considerations of stare decisis weigh heavily in 

the area of statutory construction, where Congress is free 

to change this Court’s interpretation of its legislation”); cf.

Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 

U.S. 722, 739 (2002) (courts must use caution before 

adopting changes that disrupt settled expectations). 

Moreover, we are not alone in considering the significance of the 1970 Act, as the Supreme Court addressed 

the act in United States v. Hopkins, 427 U.S. 123 (1976). 

 

NAFI doctrine offers no guidance as to the continued 

viability of the doctrine itself—cites no authority, Majority Op. at 31, and is consistent only with the majority’s 

studied indifference to precedent binding upon this court, 

infra. 
11

In Hopkins, the Court considered whether a civilian 

employee of the Army and Air Force Exchange Service 

could sue the United States for breach of an employment 

contract with the exchange. Id. at 124. The Court first 

noted that its Standard Oil decision had formed “the 

basis of a series of decisions by the Court of Claims to the 

effect that it lacked jurisdiction over claims concerning 

the activities of nonappropriated fund instrumentalities.” 

Id. at 125 (citing Borden, Pulaski, and Kyer). The Court 

took no exception with the Court of Claims’ interpretation 

of Standard Oil, specifically defined a nonappropriated 

fund instrumentality as “one which does not receive its 

monies by congressional appropriation,” id. at 125 n.2, 

and stated that “[t]he nonappropriated-fund status of the 

exchanges places them in a position whereby the Federal 

Government, absent special legislation, does not assume 

the obligations of those exchanges in the manner that 

contracts entered into by appropriated fund agencies are 

assumed,” id. at 127. The Court then found such “special 

legislation” in the 1970 Act, which specifically addressed 

Keetz’s call for a Congressional remedy to the NAFI 

doctrine’s apparent harsh result by providing that contracts with military exchanges shall be considered contracts with the United States. See id. at 125-26 (“The 

purpose of the bill was clearly to provide a remedy to 

‘contractors’ with nonappropriated fund instrumentalities.”). According to the Court, the 1970 Act waived the 

sovereign immunity of the United States and conferred 

jurisdiction on the Court of Claims for breach of contract 

claims against military exchanges. Id. The Supreme 

Court therefore recognized that the 1970 Act was, as we 

subsequently stated, “a narrow exemption from the 

[NAFI] doctrine for certain entities.” Furash, 252 F.3d at 

1339. 
12

Our statutory construction of the Tucker Act finds 

further support in the legislative history of the Contract 

Disputes Act, 41 U.S.C. §§ 601-613 (“CDA”). The CDA 

permits contractors to sue the federal government for 

breach of contract and applies “to any express or implied 

contract (including those of the non-appropriated fund 

activities described in sections 1346 and 1491 of title 28) 

entered into by an executive agency for . . . (2) the procurement of services.” Id. § 602. 

Following the CDA’s passage, a question was raised 

whether the Tucker Act’s NAFI doctrine applied with 

equal vigor to the CDA. We addressed this question in 

Furash and, in doing so, considered the CDA’s legislative 

history. See 252 F.3d at 1342-44. We concluded that “for 

CDA jurisdiction to be foreclosed, Congress must make 

clear that the activity in question was intended to operate 

without appropriated funds, the same standard that is 

used under the Tucker Act.” Id. at 1342. To bolster our 

conclusion, we turned to the CDA’s legislative history, 

“which makes clear that Congress did not intend for the 

CDA to apply to non-appropriated fund instrumentalities 

except for those specifically identified in the [Tucker] 

Act.” See id. at 1343-44. We pointed to a Senate report, 

which explicitly addressed the NAFI doctrine: 

The bill expressly states its applicability to those 

nonappropriated fund activities over which the 

courts presently have jurisdiction under 28 U.S.C. 

1346 and 1491. Consideration was given to including all nonappropriated fund activities. However, 

since the court's present jurisdiction over nonappropriated fund contracts is limited to certain post 

exchanges, and as there appears to be no problem 

with remedies relating to other nonappropriated 

fund activities, it was deemed unnecessary to in-
13

clude all or any additional nonappropriated fund 

activities within the scope of the bill. 

Id. at 1343 (quoting S. Rep. No. 95-1118, at 18 (1978), 

reprinted in 1978 U.S.C.C.A.N. 5235, 5252). This legislative history led us to the “inescapable” conclusion “that 

Congress was aware of the non-appropriated funds doctrine and that it did not intend for the CDA to expand the 

court’s jurisdiction to reach non-appropriated fund activities other than those specifically identified in the Tucker 

Act and incorporated by reference in the CDA.” Id. at 

1343-44. 

The CDA’s legislative history not only confirms that 

the NAFI doctrine applies to the CDA, it also reinforces 

our court’s consistent view of the 1970 Act as “a narrow 

exemption from the [NAFI] doctrine for certain entities.” 

Id. at 1339. The Senate report states that, as of 1978, the 

Court of Claims’ “present jurisdiction . . . is limited to 

certain post exchanges.” S. Rep. No. 95-1118, at 18 (emphasis added). This is unequivocal congressional recognition that the 1970 Act is a narrow exemption to, not a 

broad abandonment of, the NAFI doctrine. Moreover, the 

Senate report states that “as there appears to be no 

problem with remedies relating to other nonappropriated 

fund activities, it was deemed unnecessary to include all 

or any additional nonappropriated fund activities within 

the scope of the bill.” Id. Again, this is unequivocal 

congressional recognition that NAFIs include more than 

military post exchanges and that the 1970 Act leaves 

these “additional” activities untouched. 

The CDA’s legislative history takes on greater importance when one considers that in the eight years between 

the 1970 Act and the CDA, the Court of Claims continued 

to expand the NAFI doctrine beyond military exchanges 

and did so relying on the same reasoning the majority 
14

abandons today. For instance, in McCloskey & Co. v. 

United States, the Court of Claims held that the District 

of Columbia Armory Board was a NAFI and that the 

United States, therefore, was not subject to suit in the 

Court of Claims for breach of a contract entered into by 

the Board. 530 F.2d 374, 378 (Ct. Cl. 1976). In explaining the scope of the Tucker Act, the court, quoting Kyer

extensively, reasoned that the Tucker Act is limited by 28 

U.S.C. § 2517. Similarly, in Novid Co. v. United States, 

the Court of Claims found that the Army Corp of Engineers acted as a NAFI when it entered into a construction 

contract that was not to be paid through general appropriations. 535 F.2d 5, 6-8 (Ct. Cl. 1976). Given the Army 

Corp of Engineers’ NAFI status, the court held that the 

United States could not be sued for breach of the construction contract. Id. Like McCloskey, the court again 

justified its decision with reference to Kyer’s reasoning. 

Id. Despite the continued growth of the NAFI doctrine 

and the Court of Claims’ continued reliance on Kyer’s 

reasoning, Congress “deemed [it] unnecessary to include 

all or any additional nonappropriated fund activities 

within the scope of the [CDA].” S. Rep. No. 95-1118, at 

18. 

To summarize: contrary to the majority, the text of 

the Tucker Act and the legislative history surrounding the 

1970 Act both confirm that the 1970 Act provided only a 

limited exception to the NAFI doctrine. Congress expressly revoked the NAFI doctrine for certain NAFIs 

(military and NASA exchanges), but it left all other 

NAFIs untouched. This interpretation is implicitly supported by the maxim of expressio unius est exclusio alterius and explicitly supported by the act’s legislative 

history and text. 

The rationale expounded by the majority is flawed because both Congress and the Supreme Court have en-
15

dorsed the NAFI doctrine. The doctrine serves to shield 

the public fisc from liability incurred by self-funded 

federal entities. Absent appropriations and specific 

statutory contractual authority, these federal entities are 

not endowed with the power to contractually bind the 

United States government. Abandoning the doctrine, as 

the majority has done today, opens a door to the Court of 

Federal Claims that both Congress and the Supreme 

Court have kept shut for the past six decades. 

B. 

In my view, under Supreme Court precedent and our 

precedent, the FDIC is clearly a NAFI because it receives 

no appropriated funds and is, moreover, a separate entity 

with independent authority to sue and be sued. Consequently, the FDIC is not subject to suit in the Court of 

Federal Claims in actions alleging breach of contract. 

In Hopkins, the Supreme Court described a NAFI as 

“one which does not receive its monies by congressional 

appropriation.” 427 U.S. at 125 n.2; see also Standard 

Oil, 316 U.S. at 485 (focusing on receipt of funds for 

operational purposes). Using this test as our starting 

point, our role is to determine whether Congress clearly 

intended to create an entity whose activities are to be 

independent of Treasury funds, particularly to the extent 

those activities give rise to the dispute lodged in the Court 

of Federal Claims. In making this determination, we 

must examine the governmental entity in question, the 

relevant activities of the entity, and the entity’s enabling 

statute. We look primarily to the source of the entity’s 

operational funds and its ability to sue and be sued as a 

separate entity. To the extent our prior cases have departed from the Supreme Court’s standard for determining NAFI status, I believe those cases were incorrectly 

decided. 
16

Turning to the case at hand, both parties rely upon 

and focus their arguments almost exclusively on the fourpart test set forth in AINS, 365 F.3d at 1342-43. While 

AINS summarizes the development and application of the 

NAFI doctrine in this court, to the extent it has been read 

to set forth a new rigid test for NAFI status, such a reading sweeps too broadly. And while I conclude that the 

FDIC would be a NAFI under the AINS test, I caution 

against elevating AINS above our obligation to assess the 

jurisdictional question posed in light of the Supreme 

Court’s directives in Hopkins and Standard Oil. 

Examining the pertinent facts here, the FDIC is 

clearly a NAFI such that breach of contract actions 

against it are not cognizable in the Court of Federal 

Claims. As a starting point, the FDIC does not receive 

funding through congressional appropriation. There is no 

provision within the FDIC’s enabling statute authorizing 

the appropriation of funds to the Deposit Insurance Fund 

(“DIF”), the fund the FDIC uses to perform its insurance 

and regulatory functions. Simply put, the FDIC is a selffunded entity.5 The FDIC receives its funding from 

 5 The majority attempts to establish that “the jurisdictional criterion is not whether the government entity is 

incorporated, but whether it is acting on authority of the 

United States.” Majority Op. at 34. The cases the majority cites for support involve entities that clearly fall 

outside the NAFI doctrine not because they deal with a 

corporation, but because they are funded by government 

appropriation. See Cherry Cotton Mills, Inc. v. United 

States, 327 U.S. 536 (1946) (Reconstruction Finance 

Corporation); National Cored Forgings v. United States, 

132 F.Supp. 454 (Ct. Cl. 1955) (same). The Supreme 

Court noted that “all of [the RFC’s] money comes from the 

Government; its profits, if any, go to the Government; 

[and] its losses the Government must bear.” Cherry 

Cotton Mills, 327 U.S. at 539. And Crooks Terminal 

Warehouses v. United States, 92 Ct. Cl. 401 (1941), cited 
17

assessments on member banks, 12 U.S.C. § 1817(b), and 

the FDIC’s enabling statute does not provide for the 

appropriation of general funds to defray the FDIC’s 

expenses. In fact, Congress strictly limited the FDIC’s 

ability to incur obligations, see id. § 1825(c)(5), and expected the FDIC to make special assessments upon member banks when it requires additional funds, see id. § 

1817(b)(5).6 Until the majority’s opinion today, this court 

has found such assessment powers significant to the 

NAFI analysis. For instance, in Furash we held that the 

Federal Housing Finance Board (“Finance Board”) was a 

NAFI because it was self-funded funded “through assessments against federal home loan banks, not from general 

fund revenues.” 252 F.3d at 1341. The Finance Board’s 

assessment powers were nearly identical to the FDIC’s, 

including the ability to make emergency assessments in 

the event of an asset deficiency. Compare 12 U.S.C. § 

1438(b)(2) (2006) (repealed 2008) with 12 U.S.C. § 

1817(b)(5). Similarly, we found the Federal Reserve 

Board to be a NAFI in part because it was self-funded 

through assessments. Denkler v. United States, 782 F.2d 

1003, 1005 (Fed. Cir. 1986). 

Not only is the FDIC self-funded, it is statutorily required to separate its money from the general fund of the 

United States. First, all funds collected through assess-

 

in the same discussion, similarly involved a government 

corporation that was operated via appropriated funds. It 

is the funding source, not corporate structure, that is 

relevant to determining NAFI status. 

6 In the face of the most recent financial crisis, 

the FDIC exercised its emergency assessment powers and 

required its member institutions to pre-pay three years of 

premia to capitalize the DIF. See 74 Fed. Reg. 59056 

(Nov. 17, 2009). Despite the significant strain the most 

recent financial crisis placed on the FDIC, the corporation 

did not request a loan from the Treasury. 
18

ments must be placed in the DIF, not the general fund of 

the United States. See 12 U.S.C. § 1821(a)(4)(D). Second, 

Congress provided that the DIF’s funds are not subject to 

apportionment. Pursuant to 12 U.S.C. § 1817(d), any 

“amounts received pursuant to [the FDIC’s assessment 

power] and any other amounts received by the [FDIC] 

shall not be subject to apportionment for the purposes of 

chapter 15 of Title 31 or under any other authority.” In 

Furash, we found that strikingly similar language in the 

Finance Board’s enabling statute supported classifying 

the Finance Board as a NAFI. See Furash, 252 F.3d at 

1341 (discussing 12 U.S.C. § 1422b(c)). Likewise, in Core 

Concepts of Florida, Inc. v. United States, we held that the 

Federal Prison Industries is a NAFI in part because its 

enabling statute made “clear that [Federal Prison Industries’s] funds are to be kept distinct from general federal 

revenues.” 327 F.3d 1331, 1336 (Fed. Cir. 2003). 

These provisions make clear that the FDIC is a selffunded entity. As a self-funded entity, the FDIC lacks 

authority to obligate appropriated funds.7 The United 

 7 Moreover, in creating the FDIC, Congress specifically authorized the corporate body “to make contracts.” 

Banking Act of 1933, Pub. L. No. 73-66, § 8, 48 Stat. 162, 

172 (codified at 12 U.S.C. § 1819); see also id. at 176 (“The 

Corporation may make such . . . contracts as it may deem 

necessary in order to carry out the provisions of this 

section.”). But unlike the Federal Savings and Loan 

Insurance Corporation, the FDIC’s authorizing statute 

omits any statement that the FDIC is an instrumentality 

of the United States. Compare 12 U.S.C. § 1819(a) with 

12 U.S.C. § 1725(c) (1988), repealed by FIRREA, Pub. L. 

No. 101-73, § 407, 103 Stat. 183, 363 (1989). And the 

FDIC was not given the statutory status of an “agency of 

the United States” until 1989, and even then only for the 

limited purpose of giving the federal district courts original jurisdiction over civil actions commenced by the FDIC. 
19

States is thereby not bound by the FDIC’s contractual 

commitments and cannot be sued in the Court of Federal 

Claims. See Lion Raisins, 416 F.3d at 1366. 

C. 

In passing, the majority suggests that the above 

precedent is inapplicable simply because the FDIC can 

borrow money from the Treasury. I, however, believe 

there is a fundamental distinction between allowing an 

entity to borrow funds from the Treasury and appropriating funds to that entity. In the former scenario, the entity 

retains its self-funded status, and it alone is responsible 

for its contractual commitments. In the latter scenario, 

the unfettered use of taxpayer dollars evidences congressional intent to share responsibilities for the entity’s 

contractual commitments. This distinction is the essence 

of the NAFI doctrine. 

Before demonstrating why borrowing is substantively 

different from receiving appropriations, it is fitting to 

examine the clear restrictions imposed upon the FDIC’s 

borrowing authority. First, any funds borrowed can only 

be used “for insurance purposes.” 12 U.S.C. § 1824(a). 

Second, while the FDIC may borrow from the Treasury to 

fund the DIF, such borrowing requires an agreed upon 

repayment schedule and a demonstration by the FDIC 

that its income from assessments will be sufficient for 

timely repayment of principal and interest. Id. § 1824(c). 

To ensure prompt repayment of any Treasury loan, Congress authorized the FDIC to levy “Emergency Special 

Assessments” on its member institutions if “necessary . . . 

to provide sufficient assessment income to repay amounts 

borrowed from the Secretary of the Treasury.” Id. § 

1817(b)(5). It is this assessment authority that led Sena-

 

See 103 Stat. at 216 (codified at 12 U.S.C. § 1819(b)(1)); 28 

U.S.C. § 1345. 
20

tor Michael Crapo during debate on the Helping Families 

Save Their Homes Act of 2009 to state that “[i]t is important to note that this borrowing authority is not coming 

from taxpayer dollars. The levies and the assessments 

that are made on the participants in the financial industry themselves, the depository institutions, are the source 

of the dollars that would cover this loan authority.” 155 

Cong. Rec. S5088, S5093 (May 5, 2009) (emphasis added). 

Finally, while the Secretary of the Treasury is “directed to 

loan” money to the FDIC, ultimately, the loan is purely 

discretionary and “subject to the approval of the Secretary 

of the Treasury.” 12 U.S.C. § 1824(a)(1). Moreover, if the 

Secretary does decide to loan the FDIC money, the statute 

requires that the FDIC pay interest on the loan “not . . . 

less than an amount determined by the Secretary . . . 

taking into consideration current market yields.” Id. § 

1824(a)(1). This requirement of interest payments is 

significant because it demonstrates both the FDIC’s 

independent operation and Congress’s intent to shield 

taxpayers from even indirect funding of the FDIC. Considerable weight must be given to the significant limits 

Congress placed on the FDIC’s ability to borrow from the 

Treasury.8

Even if the FDIC’s borrowing authority was largely 

unrestricted, borrowing is substantively different from 

receiving appropriations. Indeed, neither this court nor 

the Court of Federal Claims has found an instrumentality’s ability to borrow funds precludes application of the 

 8 The majority tries to import significance to the increase in the line of credit afforded the FDIC by Congress, 

from $3 billion to $500 billion. Majority Op. at 43. But 

the line of credit is a borrowing capacity granted the 

FDIC which must be repaid. See 12 U.S.C. § 1824(c). 

And the line of credit was not authorized until well-after 

after the creation of the FDIC. 
21

NAFI doctrine. For example, in AINS we held that the 

U.S. Mint was a NAFI even though the Mint’s enabling 

statute permits it to borrow money from the Treasury if 

needed. See 365 F.3d at 1344; 31 U.S.C. § 5136 (authorizing the Mint to borrow from the Treasury). The Court of 

Federal Claims has similarly distinguished between 

appropriated money and borrowed money. In Aaron v. 

United States, 51 Fed. Cl. 690, 692 (2002) judgment 

vacated in part on other grounds Aaron v. United States, 

52 Fed. Cl. 20 (2002), the court had to determine whether 

the Federal Prison Industries, Inc. (“FPI” a/k/a 

“UNICOR”) was a NAFI. The plaintiff argued that the 

FPI could not be a NAFI because it borrowed $20 million 

from the Treasury to purchase equipment. See id. The 

court rejected the plaintiff’s argument and found the FPI 

to be a NAFI because “[a]n appropriation is very different 

from a loan . . . which must be repaid.” Id. And, in 

McCloskey & Co. v. United States, the Court of Claims 

considered whether the District of Columbia Armory 

Board (“Armory Board”) was a NAFI. 530 F.2d 374, 375 

(Ct. Cl. 1976). The plaintiff entered into a contract with 

the Armory Board for the construction of RFK Stadium. 

Id. at 375-76. Congress authorized the Armory Board to 

issue bonds to pay for the construction of the stadium, but 

also provided that the Armory Board could borrow funds 

from the Treasury if the funds from bonds were insufficient. See id. at 376. Despite the ability to borrow funds, 

the court held that the Armory Board was a NAFI because Congress intended for the construction to be paid 

from non-appropriated funds. See id. at 377. 

The distinction between borrowing and appropriating 

is made even clearer when one considers Congress’s 

actions during the savings and loan crisis. In response to 

that crisis, Congress dissolved the Federal Savings and 

Loan Insurance Corporation (“FSLIC”) by passing the 
22

Financial Institutions Reform, Recovery and Enforcement 

Act of 1989 (“FIRREA”), Pub. L. 101-73, 103 Stat. 183. 

Prior to its dissolution, the FSLIC was to savings and 

loan institutions what the FDIC is today to commercial 

banks, i.e., it had “responsibility to insure thrift deposits 

and regulate all federally insured thrifts.” United States 

v. Winstar Corp., 518 U.S. 839, 844 (1996). The combination of high interest rates and inflation in the late 1970s 

and early 1980s caused hundreds of savings and loan 

institutions to fail. See id. at 845. Various legislative 

actions performed during the mid-1980s proved insufficient to ameliorate the crisis and “the multitude of already-failed savings and loans confronted FSLIC with 

deposit insurance liabilities that threatened to exhaust its 

insurance fund.” Id. at 846. In response, Congress 

passed FIRREA, which abolished the FSLIC and transferred its insurance functions to the FDIC. Id. at 856. 

Congress, however, did not transfer the FSLIC’s assets and liabilities to the FDIC. Instead, it created a 

separate fund—the FSLIC Resolution Fund—to house all 

of the FSLIC’s assets and liabilities. See 12 U.S.C. § 

1821a. Congress then provided that “[a]ny judgment 

resulting from a proceeding to which the [FSLIC] was a 

party prior to its dissolution or which is initiated against 

the [FDIC] with respect to the [FSLIC] or with respect to 

the FSLIC Resolution Fund shall be limited to the assets 

of the FSLIC Resolution Fund.” 12 U.S.C. § 1821a(d). In 

other words, all suits against the FSLIC or the FDIC (in 

its capacity as the FSLIC’s successor) were to be paid 

from the FSLIC Resolution Fund. This is why “past 

payments on Winstar judgments are withdrawn from the 

FSLIC Resolution Fund.” See Home Sav. of Am., F.S.B. v. 

United States, 69 Fed. Cl. 187, 191 (2005). 

In addition to the FSLIC’s existing assets, the FSLIC 

Resolution Fund is funded by (1) “[i]ncome earned on 
23

assets of the FSLIC Resolution Fund,” (2) “[l]iquidating 

dividends and payments made on claims received by the 

FSLIC Resolution Fund from receiverships,” and (3) 

“[a]mounts borrowed by the Financing Corporation.” 12 

U.S.C. § 1821a(b). Importantly, however, the FSLIC 

Resolution Fund also receives complete Treasury backup. 

Specifically, Congress provided that if the FSLIC Resolution Fund’s assets ever became “insufficient to satisfy the 

liabilities of the FSLIC Resolution Fund, the Secretary of 

the Treasury shall pay to the Fund such amounts as may 

be necessary, as determined by the [FDIC] and the Secretary, for FSLIC Resolution Fund purposes.” Id. § 

1821a(c). Treasury backing of the FSLIC Resolution 

Fund is mandatory, not discretionary. Id. (“[T]he Secretary of the Treasury shall pay to the Fund . . . .” (emphasis added)). 

The differences between the FDIC’s DIF and the 

FSLIC Resolution Fund are striking and underscore the 

distinction between a Congressional appropriation and a 

Congressional loan. Unlike loans authorized for the DIF, 

the FDIC has no obligation to repay any funds paid from 

the Treasury to the FSLIC Resolution Fund. See id. § 

1824 (requiring repayment plan and demonstration that 

the FDIC has sufficient income to repay Treasury loan for 

DIF). Moreover, we have held that to the extent the 

FSLIC Resolution Fund is depleted, the “Treasury is 

required to disburse funds to the [FSLIC Resolution 

Fund].” Landmark Land Co. v. United States, 256 F.3d 

1365, 1381 (Fed. Cir. 2001) (citing 12 U.S.C. § 1821a(c)); 

see also id. (“[E]ven if the FRF-FSLIC Fund were drained 

of all assets due to payment of damages for claims 

brought by the FDIC in the numerous Winstar-related 

cases, the government remains obligated to fully fund the 

FRF.”). In contrast, there is no statutory requirement 

that the Secretary of the Treasury lend money to the 
24

FDIC for the DIF. See 12 U.S.C. § 1824(a)(1) (authorizing 

Treasury loan “subject to the approval of the Secretary of 

the Treasury”). The FSLIC Resolution Fund, therefore, 

illustrates how Congress appropriates funds to an entity, 

while the DIF illustrates how Congress makes available a 

loan to an otherwise self-supporting institution. The 

distinction between the two is fundamental to the NAFI 

doctrine. In the former scenario Congress subjects itself 

to contractual liability under the Tucker Act because 

appropriations are implicated, while in the latter scenario 

such contractual liability does not exist. The majority 

fails to appreciate this legal distinction. 

D. 

The majority also finds support for its conclusion in 

congressional statements that “stress the full faith and 

credit of the United States in connection with the FDIC.” 

Majority Op. at 39. But these statements are directed to 

the FDIC’s obligations to depositors, not its contract 

obligations, see, e.g., Senate Concurrent Resolution 72 

(128 Congressional Record S4530) (Mar. 17, 1982), and 

they do not have the force of a statutory obligation in any 

event. The relevant inquiry is whether the FDIC’s current enabling statute contains an express commitment of 

appropriated funds. It does not. 

The savings and loan crisis once again provides a lucid example. Faced with the potential collapse of the 

entire savings and loan industry, Congress did not simply 

appropriate funds to the FSLIC. Instead, it passed 

FIRREA, dissolved the FSLIC, and created the FSLIC 

Resolution Fund with an express Treasury backup. It 

was politically expedient to provide the FSLIC with 

appropriated funds, but political expediency did not 

extirpate the need to amend FSLIC’s enabling statute. 

The same is true with the FDIC, A statutory authoriza-
25

tion is essential to appropriate funds. See AINS, 365 F.3d 

at 1342 (holding that an entity is a NAFI if, inter alia, it 

is entitled to use appropriated funds only through a 

statutory amendment). 

To the extent the majority gives congressional statements weight, it is relevant to note that Congress has 

consistently stated that the FDIC is a self-funded agency 

not dependent upon taxpayer funds. For example, during 

recent debate on the Continuing Extension Act of 2010, 

Senator Barbara Boxer aptly explained: “I think the 

American people have appreciated the FDIC over the 

years, because the FDIC was another way for taxpayers to 

be kept out of a problem, because it is an insurance fund. 

The banks are taxed and they put the money into the 

fund.” 156 Cong. Rec. S2341, S2353 (Apr. 15, 2010). 

Similarly, Representative Brad Sherman stated “the 

FDIC collects an insurance premium from the banks so it 

would be the financial system, not the American taxpayer, 

paying the cost of taking care of this risk.” 154 Cong. Rec. 

H10690, H10691 (Oct. 2, 2008). While these statements 

largely support my view of the FDIC, I cite them not for 

support, but to illustrate that the majority’s reliance on 

select Congressional statements is erroneous. 

If Congress wants to appropriate funds to the FDIC, it 

must do so through amending the FDIC’s enabling statute, not through generalized statements of support. 

When Congress sought to “bail out” the savings and loan 

industry, it amended the FSLIC’s enabling statute to 

create the FSLIC Resolution Fund and provide it express 

Treasury backup. Any comparable “bail out” of the FDIC 

would require a similar amendment to the FDIC’s enabling statute because the FDIC is otherwise barred from 

using appropriated funds. 
26

E. 

A finding by this court that the FDIC is a NAFI would 

not close the courthouse doors on plaintiffs like Frank 

Slattery. The FDIC’s enabling statute contains a “sue 

and be sued” provision. See 12 U.S.C. § 1819(a) (“[T]he 

Corporation shall become a body corporate and as such 

shall have power . . . [t]o sue and be sued, and complain 

and defend, by and through its own attorneys, in any 

court of law or equity, State or Federal.”). This provision 

is a waiver of the FDIC’s sovereign immunity. See Woodbridge Plaza v. Bank of Irvine, 815 F.2d 538, 542-43 (9th 

Cir. 1987) (“The ‘sue-and-be-sued’ language of 12 U.S.C. § 

1819 (Fourth) is a general waiver of sovereign immunity 

from claims brought against the FDIC.”). Accordingly, 

suits such as Mr. Slattery’s can be brought against the 

FDIC in district court. See Brief of the United States at 

25, n.3 (“Slattery could have brought suit against the 

FDIC in United States district court pursuant to 12 

U.S.C. § 1819(a).”). This is true, even if the plaintiff seeks 

money damages. See Far W. Fed. Bank v. Office of Thrift 

Supervision, 930 F.2d 883, 889 (Fed. Cir. 1991) (listing 

cases from eight circuits in which the FDIC’s “sue and be 

sued” clause permitted suits for money damages in district court). 

If Mr. Slattery had brought his suit in district court, 

any judgment he received against the FDIC would be paid 

from the DIF. See Karstens Prods., Inc. v. F.D.I.C., No. 

95-1392, 1995 WL 769019, at *4 (Fed. Cir. 1995) (unpublished) (“[I]n Far West [Federal Bank v. Office of Thrift 

Supervision, 930 F.2d 883, 890 (Fed. Cir. 1991)] we held 

that recovery in an action against the FDIC is limited to 

funds in the FDIC's possession and control and that such 

an action is not one against the United States.”). Importantly, the FDIC could not borrow from the Treasury if 

Mr. Slattery’s judgment exceeded the DIF’s assets be-
27

cause the FDIC's borrowing authority is limited to its 

insurance functions. See 12 U.S.C. § 1824(a) (“The Corporation is authorized to borrow from the Treasury . . . such 

funds as . . . are from time to time required for insurance 

purposes . . . .” (emphasis added)). Instead, the FDIC 

would need to impose an emergency assessment on insured depository institutions to satisfy the judgment. See

Id. §§ 1817(b)(5) (providing the FDIC with the authority 

to impose an emergency assessment “for any other purpose that the Corporation may deem necessary”); 

1817(b)(2)(B)(ii) (providing that in determining the 

amount to assess banks, the Director should take into 

account any “case resolution expenses”). Accordingly, Mr. 

Slattery can bring his suit against the FDIC; he simply 

must do so in district court and is limited to those funds 

that the FDIC has acquired through its corporate activities or can acquire through an emergency assessment. 

Likewise, a finding that the FDIC is a NAFI would 

not prevent depositors from bringing suits against the 

FDIC concerning their deposits. In the event of a bank 

failure, the FDIC must provide depositors with their 

insured deposits “as soon as possible.” Id. § 1821(f)(1). 

Recognizing that there were likely to be disputes over 

deposits, Congress provided the FDIC with discretion to 

promulgate regulations for resolving deposit disputes. 

See id. § 1821(f)(3). When the FDIC resolves a dispute, its 

determination is a “final determination” subject to appeal 

in the “United States district court for the Federal judicial 

district where the principal place of business of the depository institution is located.” 12 U.S.C. § 1821(f)(4). 

Therefore, if we correctly hold that the FDIC is a NAFI, 

we will not disrupt Congress’s prescribed method for 

resolving depositor disputes because our holding would 
28

only affect the Court of Federal Claims’ jurisdiction, not 

the district court’s.9

F. 

Because the majority rules that the FDIC is not a 

NAFI, the United States is now directly liable for the 

FDIC’s contractual commitments. Mr. Slattery and 

future plaintiffs like him can now sue the United States 

in the Court of Federal Claims and will receive money 

damages directly from the Judgment Fund. See

McCarthy v. United States, 670 F.2d 996, 1002 (Ct. Cl. 

1982) (“[O]ur judgments, when awarded against the 

United States, are normally payable not from appropriations to maintain the agency that incurred the liability, 

but from appropriations made for the purpose of paying 

Court of Claims and other court judgments, now normally 

standing appropriations.”). The FDIC, however, has no 

statutory obligation to reimburse the government for any 

 9 At this juncture, I note that the majority reinstates—in fragments—the panel opinion reported at 

Slattery v. United States, 583 F.3d 800 (Fed. Cir. 2009). 

Majority Op. at 45. Although I believe it would be best to 

vacate the panel opinion and allow the en banc opinion to 

speak unambiguously for this court, to the extent the 

majority intends to reinstate Parts II and III of the panel 

opinion, I continue to dissent from those sections because 

we lack jurisdiction to decide the issues presented. 

Though not addressed in the majority en banc opinion, to 

the extent the majority reinstates Part IV, I continue to 

concur in the decision to reverse the judgment of the 

Court of Federal Claims dismissing Roth’s claims, but 

only to the extent Roth asserts a constitutional takings 

claim against the Meritor receivership surplus. See Lion 

Raisins, Inc. v. United States, 416 F.3d 1356, 1368 (Fed. 

Cir. 2005) (“If there is a taking, the claim is ‘founded upon 

the Constitution’ and within the jurisdiction of the Court 

of Claims to hear and determine.’” (quoting United States 

v. Causby, 328 U.S. 256, 267 (1946)). 
29

damages paid out of the Judgment Fund. Accordingly, 

from this date forth, taxpayers, not the FDIC, shall bear 

the burden of the FDIC’s contractual commitments. 

The majority affords the FDIC complete insulation 

from liability. This insulation stands in stark contrast to 

Congress’s requirement that those NAFIs specifically 

identified in the 1970 Act reimburse the government for 

any liability incurred by their breach of contract. See 31 

U.S.C. § 1304(c)(2) (“The Exchange making the contract 

shall reimburse the Government for the amount paid by 

the Government.”); El-Sheikh, 177 F.3d at 1325 (discussing the reimbursement obligation). The Army and Air 

Force Exchange Service must reimburse the government 

if a suit is brought against the United States for its actions, but the FDIC has no similar obligation. No policy 

reason exists to justify this disparate treatment. The 

most logical conclusion is that Congress never envisioned 

the United States being held liable for the FDIC’s contractual commitments and therefore never saw a need to 

require reimbursement. 

Startlingly, under the majority’s analysis, taxpayers 

bear a heavier burden than they did when Congress 

bailed out the savings and loan industry in 1989. While 

the FSLIC Resolution Fund enjoys full Treasury backup, 

the backup is a “last resort,” only to be called upon if the 

FSLIC’s other assets are exhausted. See 12 U.S.C. § 

1821a(c) & (d). Under the majority’s holding, the FDIC 

need not exhaust any of its assets because the government is directly liable. In other words, the majority has 

by judicial fiat created a more direct bailout than the 1989 

Congressional bailout of the savings and loan industry. 

When Congress bails out a federal corporation, it requires 

the corporation to expend all its assets first; when the 

Federal Circuit bails out a federal corporation, it asks 
30

taxpayers to foot the entire bill. Because I do not support 

this alarming result, I dissent.