United States Court of Appeals 

For the First Circuit 

No. 17-1749 

CLIFFORD A. ZUCKER, in his capacity as plan administrator of R&G 

Financial Corp., 

Plaintiff, Appellant, 

v. 

ROLANDO RODRIGUEZ; MARIA VINA; CONJUGAL PARTNERSHIP RODRIGUEZVINA; NELIDA FUNDORA; ANDRES I. PEREZ; JOSEPH R. SANDOVAL; 

JACQUELINE MARIE CATES-ELLEDGE; CONJUGAL PARTNERSHIP SANDOVALCATES; VICENTE GREGORIO; CARMEN A. MARTINEZ; CONJUGAL 

PARTNERSHIP GREGORIO-MARTINEZ; MELBA ACOSTA; XL SPECIALTY 

INSURANCE COMPANY; VICTOR J. GALAN; CONJUGAL PARTNERSHIP GALANFUNDORA; FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of 

R-G Premier Bank of Puerto Rico, 

Defendants, Appellees. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

[Hon. Pedro A. Delgado-Hernández, U.S. District Judge] 

Before 

Lynch, Stahl, and Kayatta, 

Circuit Judges. 

Alfred S. Lurey, with whom Stephen E. Hudson, Todd C. Meyers, 

Kilpatrick Townsend & Stockton, LLP, Carlos A. Rodríguez-Vidal, 

and Goldman Antonetti & Córdova, L.L.C., were on brief for 

appellant. 

Joseph Brooks, Counsel, Federal Deposit Insurance 

Corporation, with whom Colleen J. Boles, Assistant General 

Counsel, and Kathryn R. Norcross, Senior Counsel, were on brief 

for appellee Federal Deposit Insurance Corporation. 
Andrew W. Robertson, Zwerling, Schachter & Zwerling, LLP, 

Roberto A. Cámara-Fuertes, and Ferraiuoli LLC on brief for 

appellees Joseph R. Sandoval, Jaqueline Marie Cates-Elledge, and 

Conjugal Partnership Sandoval-Elledge. 

Andrés Rivero, Alan H. Rolnick, M. Paula Aguila, Bryan L. 

Paschal, and Rivero Mestre LLP, on brief for appellees Rolando 

Rodriguez, Andres I. Perez, Vicente Gregorio, Melba Acosta-Febo, 

and Victor J. Galan. 

March 27, 2019 
- 3 - 

LYNCH, Circuit Judge. In 2010, R&G Financial 

Corporation, a holding company, entered Chapter 11 bankruptcy 

after its primary subsidiary, R-G Premier Bank of Puerto Rico (the 

Bank), failed. Weeks prior, Puerto Rican regulators had closed 

the Bank and named the Federal Deposit Insurance Corporation (FDIC) 

as the Bank's receiver. The Bank's failure was one of the largest 

in Puerto Rico's history, costing the FDIC's Deposit Insurance 

Fund at least $1.2 billion.

Two years after the Bank's failure, Clifford Zucker, the 

plan administrator (the Administrator) for the Chapter 11 estate 

of R&G Financial (the Holding Company), filed this suit against 

six of the Holding Company's former directors and officers (the 

Directors) and their insurer, XL Specialty Insurance Company.1 

The Administrator's complaint alleged that negligence and breach 

of fiduciary duties owed to the Holding Company caused the Bank's 

failure and the Holding Company's resultant loss of its investment 

in the Bank. The FDIC intervened to defend its interests as the 

Bank's receiver, arguing that the claims asserted belonged to it 

and not to the Administrator. We affirm the district court's 

dismissal of the complaint, albeit on different reasoning. See 

 1 The other defendants are the Directors' spouses and the 

legal conjugal partnerships formed between the Directors and their 

spouses. 
- 4 - 

Zucker v. Rodriguez, No. 12-CV-1408, 2017 WL 2345683, at *1 (D.P.R. 

May 30, 2017).2

The FDIC and the Directors argue that the 

Administrator's complaint must be dismissed because the claims he 

has asserted for the Holding Company are the FDIC's under 12 U.S.C. 

§ 1821(d)(2)(A), a provision of the Financial Institutions Reform, 

Recovery, and Enforcement Act of 1989 (FIRREA). That provision 

provides that as receiver of a bank, the FDIC "shall . . . succeed 

to . . . all rights, titles, powers, and privileges of the insured 

depository institution, and of any stockholder . . . of such 

institution with respect to the institution and the assets of the 

institution." We agree that, under § 1821(d)(2)(A), the FDIC 

succeeded to the Administrator's claims, and affirm on that ground. 

I. 

The following facts are taken from the complaint, except 

where otherwise noted. Cooper v. Charter Commc'ns Entm'ts I, LLC, 

760 F.3d 103, 105 (1st Cir. 2014). 

A. The Bank and the Holding Company 

The Bank was established in 1983 as a federal savings 

bank and became a subsidiary of the Holding Company in 1994.3 Like 

 2 The district court's order captioned the case as Zuker 

v. Rodriguez, No. 12-CV-1408. 

3 See Executive Summary, Office of Inspector General, 

Material Loss Review of R-G Premier Bank of Puerto Rico, Hato Rey, 

Report No. MLR-11-009 (Dec. 2010), 

https://www.fdicoig.gov/sites/default/files/publications/11-
- 5 - 

other savings and loan, or thrift, institutions, the Bank's primary 

lending activity was home mortgages. See Executive Summary, OIG 

Report; see also United States v. Winstar Corp., 518 U.S. 839, 

844-45 (1996) (plurality opinion) (describing the thrift 

industry). In the 2000s, the Holding Company, with its 

subsidiaries, was Puerto Rico's second-largest residential 

mortgage loan originator and servicer. As the Holding Company's 

primary subsidiary, the Bank did most of this lending.4 Indeed, 

from 2009 until the Bank's failure, the Bank's assets made up over 

ninety percent of the Holding Company's assets. See OIG Report 

at 3 n.2. 

The Holding Company and the Bank had separate boards, 

but the same individuals served on both boards. See id. at 3. 

The entities also shared a CEO.5 Victor Galán, a defendant here, 

 

009.pdf (last visited Mar. 6, 2019) [hereinafter OIG Report]. 

This report, the authenticity of which is not disputed, is 

extensively quoted in the Administrator's complaint, has "merge[d] 

into th[at] pleading[]," and may be properly considered on a motion 

to dismiss. See Alt. Energy, Inc. v. St. Paul Fire & Marine Ins. 

Co., 267 F.3d 30, 33 (1st Cir. 2001) (quoting Beddall v. State St. 

Bank & Tr. Co., 137 F.3d 12, 17 (1st Cir. 1998)). 

4 In 2005, the Bank accounted for sixty-six percent of the 

Holding Company's assets. See OIG Report at 3 n.2. 

5 See Complaint at 5, FDIC v. Galán-Alvarez, No. 12-CV1029 (D.P.R. Jan. 18, 2012). The district court took judicial 

notice of this complaint filed by the FDIC against officers and 

directors of the Bank for grossly negligent conduct that led to 

the Bank's failure. Zucker, 2017 WL 2345683, at *4 n.4. We do 

the same. See E.I. Du Pont de Nemours & Co. v. Cullen, 791 F.2d 

5, 7 (1st Cir. 1986) (Breyer, J.) (taking judicial notice of the 
- 6 - 

was the Holding Company's President and Chief Executive Officer 

(CEO) until 2006. He remained Chairman of both boards until 

December 2008, and he controlled at least fifty-eight percent of 

the Holding Company's stock during the relevant period. Rolando 

Rodríguez, also a defendant, took over as President and CEO of the 

Holding Company in 2007. Galán and Rodríguez also served as CEOs 

of the Bank while leading the Holding Company. See Complaint at 

5, Galán-Alvarez, No. 12-CV-1029. 

Also among the director defendants are Joseph Sandoval, 

Vincente Gregorio, Andres Pérez, and Melba Acosta-Febo, each of 

whom served at some relevant time as Executive Vice President and 

Chief Financial Officer (CFO) of the Holding Company. The record 

does not say what roles, if any, these defendants held at the Bank. 

B. Mid-2000s Accounting Fraud Scheme 

While Galán and Sandoval were at the helm, the Holding 

Company and the Bank engaged in an accounting fraud scheme with 

two other major lending institutions in Puerto Rico -- First 

BanCorp and Doral Financial Corporation (Doral) -- and their 

subsidiary banks. The accounting scheme, which ran from 2002 

until 2005, involved a series of transactions in which the Holding 

Company or the Bank transferred interest in non-conforming 

mortgage loans to First BanCorp, Doral, or to their subsidiary 

 

complaint in a relevant case on a motion to dismiss). 
- 7 - 

banks. The participants then improperly recorded these 

transactions on their books as true sales; with proper accounting, 

the transactions would have been categorized as secured lending 

transactions. Categorizing the transactions as true sales allowed 

the participants to account for the sales as gains. Ultimately, 

because of the scheme, each bank holding company reported greater 

assets than it actually had and appeared healthier than it actually 

was on capital- and risk-related measures.

In 2005, investors questioned assumptions disclosed in 

Doral's 2004 Form 10-K used to calculate the "gains" from its 

transactions with the Holding Company and the Bank. In April of 

that year, the Holding Company publicly acknowledged that because 

of the accounting scheme, it would need to restate its consolidated 

financial statements for 2003 and 2004. The consolidated 

statements presented aggregated financial information for the 

Holding Company and its subsidiaries, including the Bank. The 

errors in the consolidated financial statements were sizable, in 

dollar terms: for example, for 2004, the Holding Company misstated 

its net income as $160.2 million when it had actually suffered a 

loss of $15.9 million. 

C. The Bank's Failure 

The Administrator's complaint alleged that negligence 

and breach of fiduciary duties by the Directors in the aftermath 

of this accounting scheme led to years-long delays in the 
- 8 - 

correction of the consolidated financial statements for 2002 

through 2004 and in the preparation and issuance of new 

consolidated financial statements for 2005 through 2008.6 These 

delays, the complaint said, led to the failure of the Bank and to 

resulting losses to the Holding Company. 

Between 2005 and 2010, the Holding Company and its 

subsidiaries, including the Bank, desperately needed to replenish 

the capital eroded during the accounting fraud and subsequent class 

action litigation.7 These capital shortages were exacerbated by 

the 2008 collapse of the housing market in Puerto Rico and 

elsewhere. In 2006 and 2007, in an apparent effort to raise 

capital, the Holding Company had sold off several other non-bank 

subsidiaries. However, it retained ownership of its wholly owned 

mortgage lending business, R&G Mortgage Corporation, and the Bank.8 

Further capital-raising efforts faltered because, without up-todate consolidated financial statements, it was impossible, the 

Administrator's complaint alleged, for the Holding Company and its 

 6 The restated 2002 through 2004 statements were not 

issued until the fall of 2007. The 2005 to 2007 statements were 

not issued until 2009. The 2008 statements were issued in 2010. 

7 Several class actions related to the accounting fraud 

were filed in federal court in New York and Puerto Rico. After 

the suits were consolidated, the class actions were resolved by a 

court-approved settlement.

8 It also kept a portion of R&G Investments Corporation.
- 9 - 

subsidiaries to access capital markets or private capital 

sufficient to remain solvent. 

The Bank failed on April 30, 2010 when Puerto Rican 

regulators closed it and named the FDIC as its receiver. By that 

time, the Holding Company had made R&G Mortgage a subsidiary of 

the Bank. The Holding Company had transferred all of its stock 

interests in R&G Mortgage to the Bank to satisfy debt owed by R&G 

Mortgage to the Bank. When the Bank closed, its liabilities 

exceeded its assets by at least $1.2 billion. See OIG Report at 

1. This $1.2 billion difference is the estimated loss to the 

FDIC's Deposit Insurance Fund because of the Bank's failure. Id. 

Having lost its only significant operating subsidiary, 

the Holding Company filed for Chapter 11 bankruptcy in May 2010. 

D. Procedural Histories of the Administrator's Action and the 

FDIC's Action 

The Administrator initiated this proceeding in the 

Holding Company's Chapter 11 case in May 2012. The complaint's 

Counts I through IV alleged that the Directors acted negligently 

and breached their fiduciary duties to the Holding Company by 

failing to implement and maintain effective internal controls over 

financial reporting. Counts V and VI alleged that the Directors 

breached a fiduciary duty of care owed to the Holding Company by 

failing to provide complete and accurate financial reports to the 

Holding Company's board. (Recall that the financial statements 
- 10 - 

of the Holding Company and the Bank were consolidated.) Count XI 

of the complaint was brought against XL Specialty Insurance Company 

and alleged that the claims asserted fell within the coverage 

provided to the Directors by XL. Finally, Counts VII through X 

of the complaint were ultimately withdrawn and are discussed below. 

The sole injury alleged in the complaint was the Holding 

Company's loss of its interest in the Bank when the Bank failed. 

"The loss of [the Bank] caused severe injury to [the Holding 

Company]," the complaint stated, "in an amount to be proven at 

trial but not less than $278 million." 

Once the reference to the bankruptcy court was withdrawn 

and the case was in federal district court, the FDIC moved to 

intervene to protect its interests as receiver of the Bank. Its 

motion informed the district court of an action filed by the FDIC 

alleging that gross negligence by officers and directors of the 

Bank in the supervision of the Bank's lending practices led to the 

Bank's failure. See Complaint at 2-4, Galán-Alvarez, No. 12-CV1029. 

The FDIC's complaint named as defendants three of the 

defendants in this case -- Galán and Rodríguez, in their capacities 

as CEO of the Bank, and XL Specialty Insurance Company. See id. 

at 1-2. As stated above, Galán and Rodríguez led the Bank, the 

Holding Company, and both entities' boards. Further, the same XL 

Specialty Insurance policy insured the officers and directors of 
- 11 - 

the Holding Company, defendants here, and the officers and 

directors of the Bank, defendants in the FDIC's action. Compare 

Complaint at 4, Galán-Alvarez, No. 12-CV-1029, with Complaint at 

36, Zucker v. Rodriguez, No. 12-00270-MCF (Bankr. P.R. May 11, 

2012). 

After the district court granted the FDIC leave to 

intervene, the FDIC and the Directors moved to dismiss.9 They 

argued that the Administrator lacked standing to assert his claims 

because the claims belong to the FDIC under 12 U.S.C. 

§ 1821(d)(2)(A), which we quoted earlier.10

The Administrator then filed a notice of withdrawal of 

various claims that he admitted the FDIC had succeeded to under 

§ 1821(d)(2)(A). These claims, in Counts VII through X of the 

complaint (and parts of Counts V and VI) alleged that the Directors 

had failed to implement adequate risk controls and good lending 

practices at the Bank. These claims overlapped with the claims 

brought by the FDIC in its action. 

 9 One of the Directors instead filed a motion for judgment 

on the pleadings. The district court addressed this motion with 

the motions to dismiss. Zucker, 2017 WL 2345683, at *2. 

10 The Directors' motion also argued other grounds for 

dismissal not reached by the district court. Zucker, 2017 WL 

2345683, at *2 & n.2. On appeal, Sandoval continues to press one 

of these grounds, but our disposition of the case makes it 

unnecessary to reach that argument. 
- 12 - 

In its order allowing the Administrator to withdraw 

these claims and dismissing the remainder of the complaint, the 

district court read § 1821(d)(2)(A) to allocate to the FDIC all 

claims that shareholders like the Holding Company might assert 

derivatively on behalf of the Bank under the relevant state law. 

Zucker, 2017 WL 2345683, at *3. Concluding that the 

Administrator's claims were derivative under Puerto Rican law and 

that the claims therefore belonged to the FDIC, the district court 

dismissed the Administrator's complaint for lack of standing. Id. 

at *12. 

II. 

We hold, based on our interpretation of the text of 

§ 1821(d)(2)(A), the persuasive value of the FDIC's interpretation 

of this provision (which it administers), and our rejection of the 

Administrator's interpretive arguments, that the Administrator's 

claims belong to the FDIC and were thus properly dismissed.11

We begin with a close look at the structure of federal 

savings and loan regulation and at FIRREA. The savings and loan 

industry has long been highly "regulated and . . . closely 

supervised" by the federal government. Winstar, 518 U.S. at 844 

 11 The district court dismissed the complaint for lack of 

standing. Zucker, 2017 WL 2345683, at *1. We affirm the 

dismissal on the ground that the Administrator cannot state a claim 

upon which relief can be granted because his claims belong to the 

FDIC. 
- 13 - 

(quoting Fahey v. Mallonee, 332 U.S. 245, 250 (1947)). Indeed, 

in enacting FIRREA, Congress described the thrift industry as a 

"federally-conceived and assisted system," one whose purpose is 

"to provide citizens with affordable housing funds." H.R. Rep. 

No. 101-54(I), at 292 (1989). "Every thrift," Congress explained, 

"is chartered by the government and consequently, voluntarily 

assumes an enormous public responsibility in return for deposit 

insurance and other government benefits." Id. at 294. 

That system was born in the Great Depression. After 

forty percent of the country's home mortgages were defaulted on 

and almost two thousand savings institutions failed, Congress 

created federal agencies authorized to charter and to regulate 

thrifts and established federal insurance for thrift deposits.12 

See Winstar, 518 U.S. at 844; see also Home Owners' Loan Act of 

1933, ch. 64, 48 Stat. 128 (1933) (codified as amended at 12 U.S.C. 

§§ 1461-1468); National Housing Act of 1934, ch. 847, 48 Stat. 

1246, 1255 (1934) (codified as amended at 12 U.S.C. §§ 1701-1749). 

 12 Deposit insurance stabilizes financial institutions, and 

the wider economy, by guaranteeing deposits in the event of bank 

failure. See, e.g., Kenneth E. Scott & Thomas Mayer, Risk and 

Regulation in Banking: Some Proposals for Federal Deposit 

Insurance Reform, 23 Stan. L. Rev. 857, 858 (1971); see also Levin 

v. Miller, 763 F.3d 667, 674 (7th Cir. 2014) (Hamilton, J., 

concurring) (describing FDIC's "vital roles in socializing losses 

to protect depositors and stabilize the economy"). Insurance not 

only replaces deposits that would be lost, but it also reassures 

the public about the security of their deposits, thereby preventing 

dangerous bank runs. Scott & Mayer, supra, at 858. 
- 14 - 

Federal deposit insurance has been funded primarily by 

premiums collected from banks. See Kenneth E. Scott & Thomas 

Mayer, Risk and Regulation in Banking: Some Proposals for Federal 

Deposit Insurance Reform, 23 Stan. L. Rev. 857, 864 (1971) ("The 

purpose of charging insurance premiums . . . is to require the 

banking and [savings and loan] industries to cover the costs they 

impose on the economy."). But it is ultimately "backed by the 

full faith and credit of the United States government," making the 

taxpayers the final guarantors of losses. Levin v. Miller, 763 

F.3d 667, 674 (7th Cir. 2014) (Hamilton, J., concurring); see also 

id. (describing deposit insurance as a form of "socializing 

losses") (citing Joseph E. Stiglitz, Freefall: America, Free 

Markets, and the Sinking of the World Economy (2010)). Indeed, 

Congress has on several occasions appropriated money to make up 

for shortfalls in the thrift deposit insurance fund. See, e.g., 

12 U.S.C. § 1441b(f)(2)(E) (authorizing use of Department of 

Treasury funds to address insolvencies at thrift institutions 

after the savings and loan crisis); see also Cheryl D. Block, 

Measuring the True Cost of Government Bailout, 88 Wash. U. L. Rev. 

149, 166-69 (2010) (discussing the role of federal funds in 

supporting deposit insurance). 

The savings and loan crisis of the 1980s was one such 

occasion. Block, supra, at 167. Then, thousands of thrift 

institutions failed, federal agencies lacked sufficient resources 
- 15 - 

to address the failures, and the existing deposit insurance fund 

teetered toward insolvency. See Winstar, 518 U.S. at 846-47. 

Congress responded with FIRREA. See Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989, Pub. L. 101-73, 103 

Stat. 183 (1989). FIRREA not only "put the Federal deposit 

insurance funds on a sound financial footing." Id. § 101 

(codified at 12 U.S.C. § 1811 note). It also restructured and 

expanded the government's regulatory and enforcement powers. See 

Winstar, 518 U.S. at 856 (noting the "enormous changes in the 

structure of federal thrift regulation" made in FIRREA); see also, 

e.g., LaSalle Talman Bank, F.S.B. v. United States, 317 F.3d 1363, 

1372–73 (Fed. Cir. 2003) (FIRREA made "a fundamental change in 

savings and loan regulatory policy and procedure, for the greater 

public benefit"). 

Relevant here, FIRREA transferred to the FDIC from a 

predecessor agency the power to act as conservator or receiver of 

a failed thrift institution. FIRREA, § 212 (codified at 12 U.S.C. 

§ 1821); see also H.R. Rep. 101-45(I), at 329-31 (noting that these 

powers were transferred). In doing so, Congress aimed "to give 

the FDIC power to take all actions necessary to resolve the 

problems posed by a financial institution in default." H.R. Rep. 

101-45(I), at 329-31. The FIRREA provision at issue defines the 

"General powers" of the FDIC as the "Successor to [the] 
- 16 - 

institution." 12 U.S.C. § 1821(d)(2). Again, the relevant 

subparagraph reads: 

The Corporation shall, as conservator or 

receiver, and by operation of law, succeed 

to-- 

(i) all rights, titles, powers, and 

privileges of the insured depository 

institution, and of any stockholder, 

member, accountholder, depositor, 

officer, or director of such institution 

with respect to the institution and the 

assets of the institution. 

12 U.S.C. § 1821(d)(2)(A). 

III. 

In holding that the FDIC succeeded to the 

Administrator's claims under § 1821(d)(2)(A), we first conclude 

that § 1821(d)(2)(A)(i)'s language about the "rights . . . of any 

stockholder . . . with respect to the institution and the assets 

of the institution" plainly encompasses the Administrator's 

claims. We reject the Administrator's favored reading of 

§ 1821(d)(2)(A), which limits the provision's key language to 

claims that shareholders may assert derivatively under state law 

on behalf of the institution in receivership. There is no support 

in the text of § 1821(d)(2)(A) for such a judicial gloss. Nor do 

the Administrator's non-textual interpretive arguments, which we 

evaluate in the next section, convince us to depart from our 

reading of the plain language. And while the FDIC does not have 

much of a track record of interpreting that text in this context, 
- 17 - 

it reads the provision it administers as we read it, not as the 

Administrator does; the FDIC's arguments in support of its reading 

are persuasive. 

Our ruling is a limited one: it applies only to claims 

like those before us. The claims are brought by a former bank 

holding company to recover its interest in a wholly owned 

subsidiary bank (a bank that made up over ninety percent of the 

holding company's assets). And the holding company seeks to 

recover from assets, like insurance, that the FDIC also seeks in 

its own action related to the Bank's failure. We do not establish 

any broader principles, and future claims by holding companies and 

other shareholders of banks in FDIC receivership will need to be 

evaluated on their own terms. With that overview in place, we 

turn back once again to § 1821(d)(2)(A)'s text. 

When the FDIC succeeded to "all rights, titles, powers, 

and privileges of the insured depository institution, and of any 

stockholder . . . of such institution with respect to the 

institution and the assets of the institution," it succeeded to 

the Administrator's claims. 12 U.S.C. § 1821(d)(2)(A)(i). We 

reach that conclusion by applying the provision's terms to the 

claims step-by-step. Cf. New Prime Inc. v. Oliveira, 139 S. Ct. 

532, 537-38 (2019) (emphasizing the importance of step-by-step 

reading). 
- 18 - 

First, the Holding Company was the Bank's sole 

shareholder, so the Holding Company's right to bring legal claims 

is a "right[] . . . of [a] stockholder" of the Bank. 12 U.S.C. 

§ 1821(d)(2)(A)(i). As the FDIC emphasizes, although the claims 

allege breach of duties owed to the Holding Company by the Holding 

Company's officers and directors, the claims are not brought by 

the Holding Company qua Holding Company. Instead, the suit 

depends entirely on the Holding Company's position as a Bank 

stockholder, as it seeks to recover for lost interest in the Bank. 

The claims, as pleaded by the Administrator, necessarily require 

the Administrator to prove that, but-for the malfeasance of the 

Holding Company Directors, the assets of the Bank would have been 

much greater, and that increase in Bank assets would have inured 

to the benefit of the Holding Company as the Bank's parent 

stockholder. 

Second, it follows from that reading of the complaint 

that the claims represent the assertion of a right of the 

stockholder "with respect to . . . the assets of the institution" 

in receivership. Id. That the claims depend on the Holding 

Company's proving that malfeasance by its directors depressed the 

Bank's assets means that the claims relate to or concern the assets 

of the Bank. See, e.g., Khan v. United States, 548 F.3d 549, 556 

(7th Cir. 2008) (defining "with respect to" as "pertaining to" or 

"concerning"); cf. Lamar, Archer & Cofrin, LLP v. Appling, 138 S. 
- 19 - 

Ct. 1752, 1760 (2018) (defining "respecting" and "relating to"). 

The claims in the Administrator's complaint therefore constitute 

the assertion of rights of a stockholder with respect to the assets 

of the Bank. 

We add that the Holding Company's right to bring the 

insurance coverage claim in Count XI is a "right[] . . . of [a] 

stockholder . . . with respect to . . . the assets of the 

institution" for another, independent reason: the coverage under 

the insurance policy is an asset shared by the Holding Company and 

the Bank, so the Holding Company's competing right to that coverage 

is a claim of a stockholder with respect to an asset of the Bank. 

12 U.S.C. § 1821(d)(2)(A)(i). 

In sum, because the Administrator's claims assert 

"right[s] . . . of [a] stockholder . . . of [the Bank] . . . with 

respect to the [Bank] and the assets of the [Bank]," the FDIC as 

receiver succeeded to those claims "by operation of law" under 

§ 1821(d)(2)(A). 

The Administrator urges us to read this language about 

the rights of a stockholder as limited to claims that the Holding 

Company might assert derivatively under state law on behalf of the 

Bank. He argues that his claims are direct under Puerto Rico law 

so that, under his reading, the FDIC did not succeed to them. 

The most basic problem for the Administrator's 

interpretation is that the direct-derivative distinction appears 
- 20 - 

nowhere in the language of § 1821(d)(2)(A). Courts must avoid 

reading into statutes concepts or exceptions absent from the text, 

so we cannot assume, without a textual basis, that Congress 

intended to place such a limitation on the FDIC's power. See, 

e.g., Barnhart v. Sigmon Coal Co., 534 U.S. 438, 461–62 (2002) 

("[C]ourts must presume that [Congress] says in a statute what it 

means and means in a statute what it says there." (quoting Conn. 

Nat'l Bank v. Germain, 503 U.S. 249, 253-54 (1992))); EPA v. EME 

Homer City Generation, L.P., 572 U.S. 489, 508 (2014) (rejecting 

an interpretation that would add to the statute an "unwritten 

exception"); cf. United States v. Nunez, 146 F.3d 36, 40 (1st Cir. 

1998) (rejecting "an unwritten limitation plucked from thin air" 

in the sentencing guidelines). 

The Administrator points to the majority opinion in 

Levin v. Miller, 763 F.3d 667 (7th Cir. 2014), the only other 

circuit case to engage with this textual question to date. There, 

the majority read the phrase "rights . . . with respect to . . . 

the assets of the institution" to refer, just "in other words," to 

claims "that investors . . . would pursue derivatively." Id. at 

672. Yet those concepts are not self-evidently synonymous, and 

the Levin majority provided no further explanation. In 

concurrence, Judge Hamilton disagreed with the majority's reading, 

writing, "[i]f 'rights . . . of any stockholder' was meant to refer 

only to derivative claims, it's a broad and roundabout way of 
- 21 - 

expressing that narrower idea." Id. at 673 (Hamilton, J., 

concurring).13 We agree, and conclude that Levin's reasoning does 

not supply a textual basis for the Administrator's interpretation. 

The other circuit cases applying § 1821(d)(2)(A) that 

the Administrator relies on also do not help him. Barnes v. 

Harris, 783 F.3d 1185 (10th Cir. 2015) and Vieira v. Anderson (In 

re Beach First Nat'l Bancshares, Inc.), 702 F.3d 772 (4th Cir. 

2012) evaluated, using the direct-derivative distinction, whether 

the FDIC had succeeded to claims brought by former bank holding 

companies. But both did so without considering whether, under the 

language of § 1821(d)(2)(A), the FDIC's ownership is limited to 

derivative claims. 

In fact, those cases are consistent with our holding 

that § 1821(d)(2)(A) covers the Administrator's claims. The 

Administrator concedes that Barnes is inconsistent with his 

position. There, the court held that § 1821(d)(2)(A) allocated 

to the FDIC claims that are, in all legally relevant respects, 

indistinguishable from the Administrator's. Barnes, 783 F.3d at 

 13 The concurrence framed this point as one about avoiding 

statutory surplusage. Levin, 763 F.3d at 673. The parties here 

debate whether the Administrator's reading creates surplusage. We 

find the Administrator's reading unpersuasive without resort to an 

evaluation of those surplusage arguments. Cf. Rimini St., Inc. v. 

Oracle USA, Inc., No. 17-1625, 2019 WL 1005828, at *7 (U.S. Mar. 

4, 2019) (recognizing, even when there may be statutory redundancy, 

a party may still "overstate[] the significance of statutory 

surplusage" arguments). 
- 22 - 

1194. As for Vieira, that case decided that the FDIC succeeded 

to claims by a former holding company's trustee in bankruptcy 

against the holding company's directors, reasoning that the claims 

were based entirely on harms to the bank's assets. 702 F.3d at 

779. Here, the FDIC stresses the Administrator's concession that 

all of the Administrator's claims are based solely on the Bank's 

failure. And the FDIC emphasizes its authority, indeed its 

responsibility, to recover for the same Bank failure from a similar 

set of defendants. 

Finally, the Administrator argues that the FDIC's 

position should be rejected because the FDIC had not, before this 

litigation, advanced the reading of § 1821(d)(2)(A) that it 

embraces now and that we adopt. But the FDIC has never changed 

its fundamental position. In Levin, Vieira, and Barnes, as here, 

the FDIC said that § 1821(d)(2)(A) allocated claims like the 

Administrator's to the FDIC. That those past suits were framed 

in state law terms does not preclude the FDIC from relying on the 

plain language of § 1821(d)(2)(A) here. 

In this litigation, the FDIC takes the position that 

nothing in the language of § 1821(d)(2)(A) limits the claims to 

which the FDIC succeeds to claims that state law classifies as 

derivative. This litigation position, the FDIC says, largely 

encompasses the reasoning of Judge Hamilton's concurring opinion 

in Levin. See 763 F.3d at 673-74. 
- 23 - 

The FDIC adds that Congress confirmed, in a related 

provision, that the FDIC should own actions like the Holding 

Company's. The provision lays out FIRREA's priority scheme for 

the payment of certain claims not allocated to the FDIC. This 

scheme provides that claims of shareholders, "including any 

depository institution holding company," cannot be satisfied until 

after all other claims, by depositors and others. 12 U.S.C. 

§ 1821(d)(11)(A)(v). The Administrator's interpretation, were it 

applied here, would allow former bank holding companies to turn 

this priority scheme on its head.

Finally, the FDIC says that, should we determine that 

§ 1821(d)(2)(A) is ambiguous, then its litigation position is 

entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134, 

140 (1944).

In the end, there is no ambiguity in Congress's choice 

not to limit the claims to which the FDIC succeeds to derivative 

claims. Our conclusion that § 1821(d)(2)(A) covers the 

Administrator's claims is consistent with the plain meanings of 

the words Congress chose. Further, compared to the 

Administrator's narrowing construction, our reading better 

reflects § 1821(d)(2)(A)'s breadth. See Pareto v. FDIC, 139 F.3d 

696, 700 (9th Cir. 1998) (stating that "Congress has transferred 

everything it could to the FDIC"); see also Levin, 763 F.3d at 673 

(Hamilton, J., concurring). 
- 24 - 

IV. 

Ordinarily, our interpretive efforts stop when, as here, 

the meaning of a provision's text is plain. See, e.g., NLRB v. 

SW Gen., Inc., 137 S. Ct. 929, 942 (2017) ("The text is clear, so 

we need not consider this extra-textual evidence."); Robb Evans & 

Assocs., LLC v. United States, 850 F.3d 24, 34 (1st Cir. 2017) 

("If the plain language of a statute elucidates its meaning, that 

meaning governs."). But the Administrator makes two additional 

interpretive arguments. Neither convinces us to depart from our 

reading. 

A. Absurdity and Avoidance 

The Administrator first argues that our reading must be 

avoided because it leads to an absurd result. State law, the 

Administrator says, does not grant the subsidiary Bank standing to 

bring his claims alleging breach of duties to the parent Holding 

Company. As a result, the Administrator contends, if 

§ 1821(d)(2)(A) is read to allocate his claims to the FDIC as that 

Bank's receiver, his claims would disappear. 

This resort to state law and the holding company form is 

unconvincing. What the Administrator's argument misses is that 

§ 1821(d)(2)(A) itself conveys, "by operation of law," the 

relevant rights in the causes of action to the FDIC. For that 
- 25 - 

simple reason, those rights are not lost, they are transferred, 

and they now belong to the FDIC.14

Next, the Administrator objects that transferring his 

right in the causes of action to the FDIC would violate the 

Constitution's Takings Clause and should therefore be avoided. 

But "[t]he canon [of constitutional avoidance] 'has no 

application' absent 'ambiguity.'" Nielsen v. Preap, No. 16-1363, 

2019 WL 1245517, at *13 (U.S. Mar. 19, 2019) (quoting Warger v. 

Shauers, 574 U.S. 40, 50 (2014)). Given that the text of 

§ 1821(d)(2)(A) "cuts clearly against" the Administrator's 

reading, adopting that interpretation for reasons of 

constitutional avoidance is not an option. Id. 

There is no constitutional problem in any event. The 

Takings Clause requires the government to provide "just 

compensation" before taking private property for "public use," 

U.S. Const. amend. V, but only for deprivations of vested property 

rights, see, e.g., Landgraf v. USI Film Prod., 511 U.S. 244, 266 

 14 As a policy matter, vesting the holding company's claims 

in the FDIC is not absurd, it is sensible. That is especially 

true where a former holding company and the FDIC seek to recover 

for the same bank failure from the same pot of money (here, the 

same insurance policy). Vesting the claims in FDIC prevents 

holding companies that may have contributed to or failed to prevent 

the collapse of their wholly owned subsidiary banks from recovering 

"ahead of or on par with the FDIC" for the bank's failure. Levin, 

763 F.3d at 673; see Barnes, 783 F.3d at 1195 (finding such a 

result "consistent with the requirement that shareholders not 

circumvent the interests of creditors and the FDIC"). 
- 26 - 

(1994). And, for purposes of the Takings Clause, "[i]t is well 

established that a party's property right in a cause of action 

does not vest 'until a final, unreviewable judgment has been 

obtained.'" Cooperativa de Ahorro y Credito Aguada v. Kidder, 

Peabody & Co., 993 F.2d 269, 273 n.11 (1st Cir. 1993) (quoting 

Hammond v. United States, 786 F.2d 8, 12 (1st Cir. 1986)); see 

also Hoffman v. City of Warwick, 909 F.2d 608, 621 (1st Cir. 

1990).15

B. Legislative History and Legislative Intent 

The Administrator next argues that § 1821(d)(2)(A) 

cannot be read to cover his claims based on his view of the 

legislative history of a rejected amendment to FIRREA. We will 

not "allow[] ambiguous legislative history to muddy clear 

statutory language." Milner v. Dep't of Navy, 562 U.S. 562, 572 

(2011); see also Barnhart, 534 U.S. at 457 (similar). The text 

here is clear, and so this rejected amendment cannot change our 

result.

We find the rejected amendment irrelevant in any event. 

The Senate version of FIRREA initially included § 214(o), which 

read: 

 15 Other circuits have observed the same. See, e.g., 

Bowers v. Whitman, 671 F.3d 905, 914 (9th Cir. 2012); Sowell v. 

Am. Cyanamid Co., 888 F.2d 802, 805 (11th Cir. 1989). The Court 

of Federal Claims cases relied on by the Administrator are neither 

binding nor, in the face of this settled law, persuasive.
- 27 - 

In any proceeding related to any claim 

acquired under [§ 1821] against an insured 

financial institution's director, officer, 

employee, agent, attorney, accountant, 

appraiser, or any other party employed by or 

providing services to an insured financial 

institution, any suit, claim, or cause of 

action brought by the Corporation shall have 

priority over any such suit, claim, or cause 

of action asserted by depositors, creditors, 

or shareholders of the insured financial 

institution . . . . 

S. 774, 101st Cong. § 214(o) (1989). This, as the Administrator 

reads it, would have given priority to the FDIC in proceedings 

"related" to claims the FDIC had acquired as receiver. The 

conference committee tasked with reconciling the House and Senate 

versions of the bill cut § 214(o) from the final version of FIRREA. 

The Administrator asks us to infer that the conference 

committee's rejection of § 214(o)'s priority language means that 

Congress could not have intended to give the FDIC ownership of 

claims like his. Inferences of this sort are notoriously 

unreliable and are to be avoided by courts. The fact that Congress 

rejected a provision about one thing tells us little about what 

Congress intended in enacting a provision about something else. 

See generally William N. Eskridge, Jr., Interpreting Legislative 

Inaction, 87 Mich. L. Rev. 67, 94 (1988) ("[L]egislative inaction 

rarely tells us much about relevant legislative intent."); see 

NLRB v. C & C Plywood Corp., 385 U.S. 421, 426-27 (1967) (rejecting 
- 28 - 

an inference from a rejected amendment). Congress might have 

excluded § 214(o) for any number of reasons.

The Administrator urges that a floor statement by a 

member of the conference committee demonstrates that the amendment 

was rejected for relevant reasons. Courts do not attribute to 

Congress as a whole the views expressed in individual legislators' 

floor statements. See SW Gen., 137 S. Ct. at 943 ("[F]loor 

statements by individual legislators rank among the least 

illuminating forms of legislative history."). In any event, the 

primary fear expressed in the floor statement was that § 214(o) 

would reduce private parties' incentives to bring securities fraud 

suits, undermining the federal government's ability to rely on 

those parties to aid in anti-fraud efforts and "lead[ing] to more 

fraud." 135 Cong. Rec. H4985, H4989 (daily ed. Aug. 3, 1989) 

(statement of Rep. Staggers). But this action is not one alleging 

fraud or one to enforce the securities laws. Moreover, we think 

that allocating the Administrator's claims to the FDIC increases 

incentives for bank holding companies not to engage in conduct 

that leads to a bank's failure. 

V. 

The long history of extensive federal involvement in the 

savings and loan industry reveals that the protection of depositors 

and the stability of thrift institutions are paramount among 

congressional concerns. A strong and solvent deposit insurance 
- 29 - 

fund and an FDIC well-equipped to recover funds to address the 

needs of failed banks are essential to achieving those goals. We 

doubt that a Congress with these concerns would have intended to 

allow a holding company that played a role in the failure of its 

subsidiary bank to recover for that bank's failure at the expense 

of the FDIC, the deposit insurance fund, and ultimately, ordinary 

depositors and taxpayers. See Levin, 763 F.3d at 674 (Hamilton, 

J., concurring); Barnes, 783 F.3d at 1195. 

The judgment of the district court is affirmed.