(Slip Opinion) OCTOBER TERM, 2019 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is 

being done in connection with this case, at the time the opinion is issued. 

The syllabus constitutes no part of the opinion of the Court but has been 

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

RODRIGUEZ, AS CHAPTER 7 TRUSTEE FOR THE BANKRUPTCY 

ESTATE OF UNITED WESTERN BANCORP, INC. v. 

FEDERAL DEPOSIT INSURANCE CORPORATION, 

AS RECEIVER FOR UNITED WESTERN BANK 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE TENTH CIRCUIT 

No. 18–1269. Argued December 3, 2019—Decided February 25, 2020 

The Internal Revenue Service (IRS) allows an affiliated group of corporations to file a consolidated federal return. See 26 U. S. C. §1501. The 

IRS issues any refund as a single payment to the group’s designated 

agent. The tax regulations say very little about how the group members should then distribute that refund among themselves. If a dispute arises and the members have no tax allocation agreement in 

place, federal courts normally turn to state law to resolve the distribution question. Some courts, however, have crafted their own federal 

common law rule, known as the Bob Richards rule. See In re Bob Richards Chrysler-Plymouth Corp., 473 F. 2d 262. The rule initially provided that, in the absence of an agreement, a refund belongs to the

group member responsible for the losses that led to it. But it has since 

evolved, in some jurisdictions, into a general rule that is always followed unless an agreement unambiguously specifies a different result.

Soon after United Western Bank suffered huge losses, its parent,

United Western Bancorp, Inc., was forced into bankruptcy. When the 

IRS issued the group a $4 million tax refund, the bank’s receiver, respondent Federal Deposit Insurance Corporation (FDIC), and the parent corporation’s bankruptcy trustee, petitioner Simon Rodriguez, 

each sought to claim it. The dispute wound its way through a bankruptcy court and a federal district court before the Tenth Circuit examined the parties’ tax allocation agreement, applied the more expansive version of Bob Richards, and ruled for the FDIC. 
 

2 RODRIGUEZ v. FDIC 

Syllabus 

Held: The Bob Richards rule is not a legitimate exercise of federal common lawmaking. Federal judges may appropriately craft the rule of

decision in only limited areas, Sosa v. Alvarez-Machain, 542 U. S. 692, 

729, and claiming a new area is subject to strict conditions. One of the 

most basic is that federal common lawmaking must be “ ‘necessary to

protect uniquely federal interests.’ ” Texas Industries, Inc. v. Radcliff 

Materials, Inc., 451 U. S. 630, 640. The Bob Richards rule has not 

satisfied this condition. The federal courts applying and extending Bob 

Richards have not pointed to any significant federal interest sufficient

to support the Bob Richards rule. Nor have the parties in this case. 

State law is well-equipped to handle disputes involving corporate property rights, even in cases, like this one, that involve federal bankruptcy 

and a tax dispute. Whether this case might yield the same or a different result without Bob Richards is a matter the court of appeals may 

take up on remand. Pp. 4–6. 

914 F. 3d 1262, vacated and remanded. 

GORSUCH, J., delivered the opinion for a unanimous Court. 
 

 

 

 

 

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Cite as: 589 U. S. ____ (2020) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the 

preliminary print of the United States Reports. Readers are requested to 

notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that 

corrections may be made before the preliminary print goes to press. 

SUPREME COURT OF THE UNITED STATES 

No. 18–1269 

SIMON E. RODRIGUEZ, AS CHAPTER 7 TRUSTEE FOR THE 

BANKRUPTCY ESTATE OF UNITED WESTERN 

BANCORP, INC., PETITIONER v. FEDERAL 

DEPOSIT INSURANCE CORPORATION, AS 

RECEIVER FOR UNITED WESTERN BANK 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE TENTH CIRCUIT 

[February 25, 2020]

 JUSTICE GORSUCH delivered the opinion of the Court. 

This case grows from a fight over a tax refund. But the 

question we face isn’t who gets the money, only how to decide the dispute. Should federal courts rely on state law,

together with any applicable federal rules, or should they

devise their own federal common law test? To ask the question is nearly to answer it. The cases in which federal 

courts may engage in common lawmaking are few and far 

between. This is one of the cases that lie between. 

The trouble here started when the United Western Bank 

hit hard times, entered receivership, and the Federal Deposit Insurance Corporation took the reins. Not long after 

that, the bank’s parent, United Western Bancorp, Inc., 

faced its own problems and was forced into bankruptcy, led

now by a trustee, Simon Rodriguez. When the Internal 

Revenue Service issued a $4 million tax refund, each of 

these newly assigned caretakers understandably sought to

claim the money. Unable to resolve their differences, they 
 

 

 

 

 

 

 

 

 

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Opinion of the Court 

took the matter to court. The case wound its way through 

a bankruptcy court and a federal district court before eventually landing in the Tenth Circuit. At the end of it all, the 

court of appeals ruled for the FDIC, as receiver for the subsidiary bank, rather than for Mr. Rodriguez, as trustee for 

the corporate parent. 

How could two separate corporate entities both claim entitlement to a single tax refund? For many years, the IRS has

allowed an affiliated group of corporations to file a consolidated federal return. See 26 U. S. C. §1501. This serves as 

a convenience for the government and taxpayers alike. Unsurprisingly, though, a corporate group seeking to file a single return must comply with a host of regulations. See 26 

U. S. C. §1502; 26 CFR §1.1502–0 et seq. (2019). These regulations are pretty punctilious about ensuring the government gets all the taxes due from corporate group members. 

See, e.g., §1.1502–6. But when it comes to the distribution of 

refunds, the regulations say considerably less. They describe

how the IRS will pay the group’s designated agent a single

refund. See §1.1502–77(d)(5). And they warn that the IRS’s 

payment discharges the government’s refund liability to all 

group members. Ibid. But how should the members distribute the money among themselves once the government sends 

it to their designated agent? On that, federal law says little. 

To fill the gap, many corporate groups have developed “tax

allocation agreements.” These agreements usually specify 

what share of a group’s tax liability each member will pay, 

along with the share of any tax refund each member will receive. But what if there is no tax allocation agreement? Or 

what if the group members dispute the meaning of the terms 

found in their agreement? Normally, courts would turn to 

state law to resolve questions like these. State law is replete

with rules readymade for such tasks—rules for interpreting 

contracts, creating equitable trusts, avoiding unjust enrichment, and much more. 

Some federal courts, however, have charted a different 
 

Cite as: 589 U. S. ____ (2020) 3 

Opinion of the Court 

course. They have crafted their own federal common law

rule—one known to those who practice in the area as the 

Bob Richards rule, so named for the Ninth Circuit case from 

which it grew: In re Bob Richards Chrysler-Plymouth 

Corp., 473 F. 2d 262 (1973). As initially conceived, the Bob 

Richards rule provided that, in the absence of a tax allocation agreement, a refund belongs to the group member responsible for the losses that led to it. See id., at 265. With 

the passage of time, though, Bob Richards evolved. Now, 

in some jurisdictions, Bob Richards doesn’t just supply a 

stopgap rule for situations when group members lack an allocation agreement. It represents a general rule always to 

be followed unless the parties’ tax allocation agreement unambiguously specifies a different result. 

At the urging of the FDIC and consistent with circuit

precedent, the Tenth Circuit employed this more expansive

version of Bob Richards in the case now before us. Because 

the parties did have a tax allocation agreement, the court

of appeals explained, the question it faced was whether the

agreement unambiguously deviated from Bob Richards’s 

default rule. In re United Western Bancorp, Inc., 914 F. 3d 

1262, 1269–1270 (2019). After laying out this “analytical 

framework” for decision, id., at 1269 (emphasis deleted), the 

court proceeded to hold that the FDIC, as receiver for the

bank, owned the tax refund. 

Not all circuits, however, follow Bob Richards. The Sixth 

Circuit, for example, has observed that “federal common 

law constitutes an unusual exercise of lawmaking which 

should be indulged . . . only when there is a significant conflict between some federal policy or interest and the use of 

state law.” FDIC v. AmFin Financial Corp., 757 F. 3d 530, 

535 (2014) (internal quotation marks omitted). In the Sixth 

Circuit’s view, courts employing Bob Richards have simply 

“bypassed th[is] threshold question.” 757 F. 3d, at 536. 

And any fair examination of it, the Sixth Circuit has sub-
 

 

 

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Opinion of the Court 

mitted, reveals no conflict that might justify resort to federal common law. Ibid. We took this case to decide Bob 

Richards’s fate. 588 U. S. ___ (2019) 

Judicial lawmaking in the form of federal common law 

plays a necessarily modest role under a Constitution that

vests the federal government’s “legislative Powers” in Congress and reserves most other regulatory authority to the 

States. See Art. I, §1; Amdt. 10. As this Court has put it,

there is “no federal general common law.” Erie R. Co. v. 

Tompkins, 304 U. S. 64, 78 (1938). Instead, only limited

areas exist in which federal judges may appropriately craft 

the rule of decision. Sosa v. Alvarez-Machain, 542 U. S. 

692, 729 (2004). These areas have included admiralty disputes and certain controversies between States. See, e.g., 

Norfolk Southern R. Co. v. James N. Kirby, Pty Ltd., 543 

U. S. 14, 23 (2004); Hinderlider v. La Plata River & Cherry 

Creek Ditch Co., 304 U. S. 92, 110 (1938). In contexts like 

these, federal common law often plays an important role.

But before federal judges may claim a new area for common 

lawmaking, strict conditions must be satisfied. The Sixth 

Circuit correctly identified one of the most basic: In the absence of congressional authorization, common lawmaking 

must be “‘necessary to protect uniquely federal interests.’” 

Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U. S. 

630, 640 (1981) (quoting Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398, 426 (1964)).

Nothing like that exists here. The federal government

may have an interest in regulating how it receives taxes 

from corporate groups. See, e.g., 26 CFR §§1.1502–6, –12, 

–13. The government also may have an interest in regulating the delivery of any tax refund due a corporate group. 

For example and as we’ve seen, the government may wish

to ensure that others in the group have no recourse against 

federal coffers once it pays the group’s designated agent. 

See §1.1502–77(d)(5). But what unique interest could the 

federal government have in determining how a consolidated 
Cite as: 589 U. S. ____ (2020) 5 

Opinion of the Court 

corporate tax refund, once paid to a designated agent, is distributed among group members? 

The Sixth Circuit correctly observed that Bob Richards 

offered no answer—it just bypassed the question. Nor have 

the courts applying and extending Bob Richards provided 

satisfactory answers of their own. Even the FDIC, which 

advocated for the Bob Richards rule in the Tenth Circuit, 

failed to point that court to any unique federal interest the

rule might protect. In this Court, the FDIC, now represented by the Solicitor General, has gone a step further, expressly conceding that federal courts “should not apply a 

federal common law rule to . . . put a thumb on . . . the scale” 

when deciding which corporate group member owns some 

or all of a consolidated refund. Tr. of Oral Arg. 40; see also 

id., at 32–36. 

Understandably too. Corporations are generally “creatures of state law,” Cort v. Ash, 422 U. S. 66, 84 (1975), and 

state law is well equipped to handle disputes involving corporate property rights. That cases like the one now before 

us happen to involve corporate property rights in the context of a federal bankruptcy and a tax dispute doesn’t 

change much. As this Court has long recognized, “Congress 

has generally left the determination of property rights in

the assets of a bankrupt’s estate to state law.” Butner v. 

United States, 440 U. S. 48, 54 (1979). So too with the Internal Revenue Code—it generally “‘creates no property

rights.’” United States v. National Bank of Commerce, 472 

U. S. 713, 722 (1985) (quoting United States v. Bess, 357 

U. S. 51, 55 (1958)). If special exceptions to these usual 

rules sometimes might be warranted, no one has explained 

why the distribution of a consolidated corporate tax refund

should be among them. 

Even if the Tenth Circuit’s reliance on Bob Richards’s analytical framework was mistaken, the FDIC suggests we 

might affirm the court’s judgment in this case anyway. The 
 

 

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Opinion of the Court 

FDIC points out that the court of appeals proceeded to consult applicable state law—and the FDIC assures us its result follows naturally from state law. The FDIC also suggests that the IRS regulations concerning the appointment

and duties of a corporate group’s agent found in 26 CFR 

§§1.1502–77(a) and (d) tend to support the court of appeals’s judgment. Unsurprisingly, Mr. Rodriguez disagrees

with these assessments and contends that, absent Bob 

Richards, the Tenth Circuit would have reached a different 

outcome. 

Who is right about all this we do not decide. Some, maybe

many, cases will come out the same way under state law or 

Bob Richards. But we did not take this case to decide how 

this case should be resolved under state law or to determine 

how IRS regulations might interact with state law. We took 

this case only to underscore the care federal courts should 

exercise before taking up an invitation to try their hand at 

common lawmaking. Bob Richards made the mistake of 

moving too quickly past important threshold questions at

the heart of our separation of powers. It supplies no rule of 

decision, only a cautionary tale. Whether this case might

yield the same or a different result without Bob Richards is 

a matter the court of appeals may consider on remand. See, 

e.g., Conkright v. Frommert, 559 U. S. 506, 521–522 (2010); 

Travelers Casualty & Surety Co. of America v. Pacific Gas 

& Elec. Co., 549 U. S. 443, 455–456 (2007); Gonzales v. 

Duenas-Alvarez, 549 U. S. 183, 194 (2007). 

The judgment of the court of appeals is vacated, and the

case is remanded for further proceedings consistent with

this opinion. 

It is so ordered.