IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

WICHITA FALLS DIVISION

CORNELIUS CAMPBELL BURGESS,

Plaintiff,

 v.

FEDERAL DEPOSIT INSURANCE 

CORPORATION; MARTIN J. 

GRUENBERG, in his official capacity as 

Acting Chairman of the FDIC; MICHAEL J. 

HSU, in his official capacity as a Director 

of the FDIC; ROHIT CHOPRA, in his 

official capacity as a Director of the FDIC; 

and JENNIFER WHANG; in her official 

capacity as an Administrative Law Judge, 

 Defendants.

Civil Action No. 7:22-cv-00100-O

The Honorable Reed O’Connor,

United States District Judge, Presiding

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT 

OF PLAINTIFF’S MOTION FOR A PRELIMINARY INJUNCTION

AND A TEMPORARY ADMINISTRATIVE STAY

Manuel G. Berrelez (Texas Bar No. 24057760)

 mberrelez@velaw.com

Thomas P. Mitsch (Texas Bar No. No. 24102218)

 tmitsch@velaw.com

James F. Hopper (Texas Bar No. 24116535)

 jhopper@velaw.com

Madelyn B. Carter (Texas Bar No. 24121529)

 mcarter@velaw.com

VINSON & ELKINS LLP

Trammell Crow Center

2001 Ross Avenue, Suite 3900

Dallas, Texas 75201

Telephone: (214) 220-7700

Facsimile: (214) 220-7716

Counsel for Plaintiff Cornelius Campbell Burgess

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i

TABLE OF CONTENTS

Page

TABLE OF CONTENTS................................................................................................................. i

TABLE OF AUTHORITIES .......................................................................................................... ii

INTRODUCTION .......................................................................................................................... 1

FACTS ............................................................................................................................................ 3

A. The Structure of the FDIC and Its Administrative Adjudications. ................................ 3

B. The FDIC’s Enforcement Proceeding Against Burgess................................................. 6

STANDARD OF REVIEW............................................................................................................ 7

ARGUMENT.................................................................................................................................. 8

I. Burgess Is Entitled to a Preliminary Injunction.............................................................. 8

 A. Burgess Is Likely to Succeed on the Merits of His Constitutional Claims............ 8

 1. Burgess Is Likely to Succeed on His Claim that the FDIC’s Board Is 

 Unconstitutionally Structured (Count 1)........................................................ 8

2. Burgess Is Likely to Succeed on His Claim that the ALJs Used by 

 the FDIC Enjoy Unconstitutional Protection from Removal (Count 2). ...... 11

3. Burgess Is Likely to Succeed on His Claim that the FDIC Violated the 

 Seventh Amendment by Depriving Him of a Jury Trial (Count 3). ............ 14

B. Absent an Injunction, Burgess Will Suffer Irreparable Harm.............................. 18

 C. The Equities Favor the Issuance of an Injunction, and an Injunction Would 

 Not Disserve the Public Interest. ......................................................................... 21

 II. This Court Has Competent Subject-Matter Jurisdiction. .............................................. 23

 A. 12 U.S.C. § 1818(h) Does Not Divest This Court of Jurisdiction. ...................... 23

 B. 12 U.S.C. § 1818(i)(1) Does Not Divest This Court of Jurisdiction.................... 24

 1. Section 1818(i)(1) Does Not Explicitly Bar Jurisdiction Over Structural 

 Constitutional Claims of the Type Presented in Burgess’s Complaint........ 25

2. Section 1818(i)(1) Does Not Implicitly Bar This Court’s Jurisdiction........ 29

 III. This Court Should Enter a Temporary Administrative Stay Pending Disposition of 

 this Motion.................................................................................................................... 32

CONCLUSION............................................................................................................................. 35

CERTIFICATE OF SERVICE ..................................................................................................... 36

CERTIFICATE OF COMPLIANCE............................................................................................ 37

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TABLE OF AUTHORITIES

Cases: Page(s)

Atl. Sounding Co. v. Townsend, 

557 U.S. 404 (2009).................................................................................................................. 28

Atlas Roofing Co. v. Occupational Safety & Health Review Comm’n, 

430 U.S. 442 (1977).................................................................................................................. 14

Bank of Louisiana v. FDIC, 

No. No. 16-cv-13585, 2017 WL 3849340 (E.D. La. Jan. 13, 2017)......................................... 26

Bank of Louisiana v. FDIC,

919 F.3d 916 (5th Cir. 2019) .............................................................................................. 25, 26

Bowen v. Mich. Acad. of Family Physicians, 

476 U.S. 667 (1986).................................................................................................................. 28

Bowsher v. Synar, 

478 U.S. 714 (1986).................................................................................................................. 19

Burgess v. FDIC, 

871 F.3d 297 (5th Cir. 2017) .................................................................................... 6, 12, 20, 22

Carr v. Saul, 

141 S. Ct. 1352 (2021).............................................................................................................. 31

CBS Inc. v. PrimeTime 24 Joint Venture, 

245 F.3d 1217 (11th Cir. 2001) ................................................................................................ 27

Clark v. Martinez, 

543 U.S. 371 (2005).................................................................................................................. 29

Cochran v. SEC, 

20 F.4th 194 (5th Cir. 2021) (en banc) .............................................................................. passim

Cochran v. SEC, 

969 F.3d 507 (5th Cir. 2020) .................................................................................................... 26

Collins v. Yellen, 

141 S. Ct. 1761 (2021).............................................................................................................. 18

Consumers’ Res. v. Cons. Prod. Safety Comm’n, 

No. 6:21-cv-256, 2022 WL 1577222 (E.D. Tex. Mar. 18, 2022)....................................... 11, 18

Corrigan Dispatch Co. v. Casa Guzman, 

569 F.2d 300 (5th Cir. 1978) .................................................................................................... 23

Daniels Health Servs., L.L.C. v. Vascular Health Scis., L.L.C., 

710 F.3d 579 (5th Cir. 2013) ...................................................................................................... 7

Dimick v. Schiedt, 

293 U.S. 474 (1935).................................................................................................................. 14

Case 7:22-cv-00100-O Document 15-1 Filed 10/15/22 Page 3 of 44 PageID 124
iii

Cases—Continued: Page(s)

Doe #1 v. Trump,

944 F.3d 1222 (9th Cir. 2019) .................................................................................................. 33

Doe v. Texas Christian Univ., 

No. 4:22-cv-00297-O, 2022 WL 1573074 (N.D. Tex. Apr. 29, 2022)..................................... 19

Foley v. Biden, 

No. 4:21-cv-01098-O, 2021 WL 7708477 (N.D. Tex. Oct. 6, 2021) ......................................... 7

Franciscan All., Inc. v. Burwell, 

227 F. Supp. 3d 660 (N.D. Tex. 2016) ..................................................................................... 23

Free Enter. Fund v. Pub. Co. Account. Oversight Bd.,

561 U.S. 477 (2010)........................................................................................................... passim

Granfinanciera, S.A. v. Nordberg, 

492 U.S. 33 (1989).................................................................................................................... 14

I.A.M. Nat’l Pension Fund Benefit Plan C. v. Stockton TRI Indus., 

727 F.2d 1204 (D.C. Cir. 1984)................................................................................................ 27

In re Abbott, 

800 F. App’x 296 (5th Cir. 2020) ....................................................................................... 33, 34

In re Hooper, 

112 B.R. 1009 (B.A.P. 9th Cir. 1990)....................................................................................... 16

Jackson Women’s Health Org. v. Currier, 

760 F.3d 448 (5th Cir. 2014) .................................................................................................... 23

Jarkesy v. SEC, 

34 F.4th 446 (5th Cir. 2022) .............................................................................................. passim

Kaepa, Inc. v. Achilles Corp., 

76 F.3d 624 (5th Cir. 1996) ...................................................................................................... 23

Kelley v. Azar, 

No. 4:20-cv-00283-O, 2021 WL 4025804 (N.D. Tex. Feb. 25, 2021)..................................... 10

Landis v. N. Am. Co., 

299 U.S. 248 (1936).................................................................................................................. 33

Lucia v. SEC, 

138 S. Ct. 2044 (2018).......................................................................................................... 6, 12

Mata v. Lynch, 

576 U.S. 143 (2015).................................................................................................................. 31

McNary v. Haitian Refugee Ctr., Inc., 

498 U.S. 479 (1991).................................................................................................................. 27

Miss. Power & Light Co. v. United Gas Pipe Line, 

760 F.2d 618 (5th Cir. 1985) ...................................................................................................... 7

Case 7:22-cv-00100-O Document 15-1 Filed 10/15/22 Page 4 of 44 PageID 125
iv

Cases—Continued: Page(s)

Myers v. United States, 

272 U.S. 52 (1926)...................................................................................................................... 8

Nat’l Urb. League v. Ross,

977 F.3d 698 (9th Cir. 2020) .............................................................................................. 33, 34

Rover Pipeline, LLC v. Fed. Energy Reg. Comm’n,

(N.D. Tex. No. 3:22-cv-00232), ECF 34 (May 24, 2022)........................................................ 24

Richardson v. Texas Sec’y of State, 

978 F.3d 220 (5th Cir. 2020) .................................................................................................... 34

Scott v. S. Elec. Supply Co., 

No. 12-cv-119, 2013 WL 3280276 (N.D. Miss. June 27, 2013) .............................................. 21

Seila Law LLC v. CFPB, 

140 S. Ct. 2183 (2020)....................................................................................................... passim

Texas v. United States, 

201 F. Supp. 3d 810, 818 (N.D. Tex. 2016) ............................................................................. 23

Thunder Basin Coal Co. v. Reich,

510 U.S. 200 (1994)........................................................................................................... passim

Trivedi v. Gen. Elec. Co., 

No. 19-11862-PBS, 2021 WL 2229088 (D. Mass. May 27, 2021) .......................................... 34

Tull v. United States, 

481 U.S. 412 (1987)............................................................................................................ 14, 15

U.S. Navy SEALs 1-26 v. Biden, 

578 F. Supp. 3d 822 (N.D. Tex. 2022) ................................................................................. 7, 23

Valley v. Rapides Par. Sch. Bd., 

118 F.3d 1047 (5th Cir. 1997) .................................................................................................. 19

Webster v. Doe, 

486 U.S. 592 (1988).................................................................................................................. 27

Wiener v. United States, 

357 U.S. 349 (1958).................................................................................................................... 4

 

Constitutional Provisions:

U.S. Const. amend. VII................................................................................................................. 14

The Vesting Clause, U.S. Const. art. II, § 1, cl. 1........................................................................... 8

The Take Care Clause, U.S. Const. art. II, § 3................................................................................ 8

Statutes: 

5 U.S.C. § 1202(d).................................................................................................................... 5, 12

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Statutes—Continued: Page(s)

5 U.S.C. § 7521(a) .................................................................................................................... 5, 12

12 U.S.C. § 2................................................................................................................................... 4

12 U.S.C. § 1812(a) ........................................................................................................................ 3

12 U.S.C. § 1812(a)(1)............................................................................................................ 3, 4, 9

12 U.S.C. § 1812(c)(1).............................................................................................................. 3, 10

12 U.S.C. § 1818.................................................................................................................... passim

12 U.S.C. § 1818(c) ...................................................................................................................... 28

12 U.S.C. § 1818(e) ........................................................................................................................ 4

12 U.S.C. § 1818(e)(1)(A)............................................................................................................ 16

12 U.S.C. § 1818(e)(4).................................................................................................................... 4

12 U.S.C. § 1818(h)................................................................................................................ 23, 24

12 U.S.C. § 1818(i)................................................................................................................... 4, 10

12 U.S.C. § 1818(i)(1) ........................................................................................................... passim

12 U.S.C. § 1821(k)...................................................................................................................... 17

12 U.S.C. § 1828........................................................................................................................... 10

15 U.S.C. § 78y............................................................................................................................. 23

18 U.S.C. § 1252(b)(9) ................................................................................................................. 27

28 U.S.C. § 1331..................................................................................................................... 23, 29

28 U.S.C. § 1651........................................................................................................................... 33

Regulations:

12 C.F.R. § 308.3............................................................................................................................ 5

12 C.F.R. § 308.5............................................................................................................................ 4

12 C.F.R. § 308.5(b)(8)................................................................................................................... 5

12 C.F.R. § 308.31(a)...................................................................................................................... 4

12 C.F.R. § 308.35.......................................................................................................................... 4

12 C.F.R. § 308.38.......................................................................................................................... 5

12 C.F.R. § 308.39.......................................................................................................................... 5

12 C.F.R. § 308.40(a)...................................................................................................................... 5

12 C.F.R. § 308.40(c)(2)........................................................................................................ 5, 7,11

Rules:

Federal Rule of Civil Procedure 65(c).......................................................................................... 23

Statutory History:

S. Rep. No. 1482 (1966) ............................................................................................................... 28

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vi

Other Authorities: Page(s)

Bayefsky, Rachel, Administrative Stays: Power and Procedure,

97 Notre Dame L. Rev. 1941 (2022) ........................................................................................ 33

Br. of Washington Legal Found. as Amicus Curiae, Calcutt v. FDIC, 

37 F.4th 293 (6th Cir. 2022), 2021 WL 1522018 (Apr. 9, 2021) ............................................. 10

Calabresi, Steven G. & Saikrishna B. Prakash, The President’s Power to Execute the Laws, 

104 Yale L.J. 541 (1994) ........................................................................................................ 8, 9

Gillette, Adam C., Form Over Function: How Collins v. Yellen Signals a 

Threat to the Independence of Multimember Financial Regulatory Agencies, 

26 N.C. Banking Inst. 109 (2022)............................................................................................. 10

Grove, Tara Leigh, A (Modest) Separation of Powers Success Story, 

87 Notre Dame L. Rev. 1647 (2012) ........................................................................................ 28

Katz, Martin J., Guantanamo, Boumediene, and Jurisdiction-Stripping:

The Imperial President Meets the Imperial Court, 25 Const. Comment. 377 (2009).............. 28

Nielson, Aaron L., Is the FTC on a Collision Course with the Unitary Executive?, 

Yale J. on Reg. Notice & Comment (July 21, 2021)................................................................ 10

Prakash, Saikrishna, New Light on the Decision of 1789, 

91 Cornell L. Rev. 1021 (2006).................................................................................................. 8

Redmond, Roland L., The Securities Exchange Act of 1934: An Experiment in

Administrative Law, 47 Yale L.J. 622 (1938)........................................................................... 29

Rubinstein, Samuel, Chairpointment: Rethinking the Appointment of Independent 

Agency Chairpersons, Harv. J. on Leg. Online (2020)............................................................. 10

Seipp, David J., Trust and Fiduciary Duty in the Early Common Law, 

91 B.U. L. Rev. 1011 (2011) .................................................................................................... 16

Sunstein, Cass R. & Adrian Vermeule, The Unitary Executive: Past, Present, Future, 

2020 Sup. Ct. Rev. 83 (2020) ................................................................................................... 10

 

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INTRODUCTION

For more than twelve years, unelected bureaucrats at the Federal Deposit Insurance 

Corporation (“FDIC”) have been pursuing a politically-motivated administrative enforcement 

proceeding against Plaintiff Cornelius Campbell Burgess (“Burgess”). The purported justification 

for the FDIC’s investigation is that Burgess engaged in self-dealing while serving as the President 

and CEO of Herring Bank, which is a community bank that Burgess’s great-grandfather founded 

in Vernon more than a century ago. But in truth the investigation is a stalking horse through which 

unaccountable civil servants seek to punish Burgess because they harbor political disagreements 

with him and dislike his management style. See Complaint (ECF No. 1) (“Compl.”) ¶¶ 4, 58. 

Although Burgess strongly disagrees with the allegations that the FDIC has levied against 

him, this case has nothing to with the merits of the FDIC’s claims. Instead, this case is entirely 

about how the FDIC is adjudicating the charges against Burgess. As explained in detail below, 

the FDIC’s proceeding (the “Enforcement Proceeding”) is unconstitutional in its entirety. Burgess 

therefore requests that this Court enter a preliminary injunction barring the FDIC from continuing 

the Enforcement Proceeding. That relief is necessary to ensure that this Court has an opportunity

to evaluate the merits of Burgess’s claims (and, if appropriate, to craft a meaningful remedy) before 

the FDIC inflicts yet more harm on Burgess by issuing its imminent Final Decision. 

Burgess easily satisfies the familiar multi-part test for issuing a preliminary injunction. 

First, Burgess has a substantial likelihood of success on the merits. In Count 1, Burgess 

alleges that the structure of the FDIC’s Board of Directors is unconstitutional. In Seila Law LLC 

v. CFPB, the Supreme Court held that the President must be able to remove, at will, the heads of 

agencies that are “vested with significant executive power.” 140 S. Ct. 2183, 2201 (2020). 

Burgess is likely to succeed on his challenge to the FDIC’s structure because that agency wields 

significant executive power, but yet a majority of its Board enjoys for-cause protection from 

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removal. See infra Section I.A.1. In Count 2, Burgess alleges that the tenure protections afforded

to the administrative law judges (“ALJs”) used by the FDIC are unconstitutional. Burgess is likely 

to succeed on this claim because recent Supreme Court precedent has confirmed that (1) inferior 

officers cannot have “double for-cause” removal protection and (2) ALJs are inferior officers. 

Thus, the ALJs used by the FDIC—who enjoy double for-cause protections against removal—are 

unconstitutional. See infra Section I.A.2. In Count 3, Burgess alleges that the FDIC unlawfully

deprived Burgess of his right to a jury trial. In Jarkesy v. SEC, the Fifth Circuit recently explained 

that the Seventh Amendment guarantees a jury in any administrative enforcement action “akin to 

traditional actions at law,” specifically including “actions seeking civil penalties.” 34 F.4th 446, 

451-52, 454 (5th Cir. 2022). Burgess is likely to succeed on his Seventh Amendment claim 

because the Enforcement Proceeding is exactly such an action. See infra Section I.A.3.

Second, Burgess faces a substantial threat of irreparable harm. Absent this Court’s swift 

intervention, the FDIC may issue a Final Decision ruling against Burgess at any time after October 

17. The very issuance of a Final Decision—regardless of what it says—will cause an irreparable 

injury to Burgess by mooting the possibility of any prospective remedy, which in turn will unfairly 

complicate his ability to secure meaningful judicial review. Moreover, an injunction is also 

necessary to prevent other impending and irreparable harms, including reputational and economic 

damages. And an injunction is necessary to block the FDIC from imposing serious sanctions in 

its impending Final Decision. One of those sanctions is likely to be a “prohibition order,” which 

is colloquially known as the “death penalty” in the banking industry because it will operate to 

forever bar Burgess, who has been a respected banker in Amarillo for some thirty years, from ever 

working anywhere in the banking industry again for the rest of his life. See infra Section I.B.

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Third, the weight of the equities and the public interest favor the issuance of an injunction. 

Allowing the FDIC to issue a Final Decision would not just injure Burgess, but would also have 

significant externalities; for example, the Final Decision will likely order Burgess removed from 

his position as a director of Herring Bank (the “Bank”), which in turn will harm the Bank and its 

depositors, who rely on Burgess for his practical know-how and vision. Conversely, the Bank will 

suffer no harm from an injunction. And an injunction is always in the public interest when it 

operates to halt ongoing or impending violations of the Constitution. See infra Section I.C.

Because it is so clear that the four-part test for a preliminary injunction can be satisfied on 

this record, Burgess anticipates that the FDIC will, in an effort at self-help, attempt to avoid a 

ruling on the merits by suggesting that this Court lacks subject-matter jurisdiction. Any such 

argument would be meritless. Article III courts have expansive federal-question jurisdiction under 

28 U.S.C. § 1331, and nothing in the FDIC’s enabling statutes prevent the issuance of an injunction 

when, as here, the plaintiff is pressing structural constitutional claims. See infra Section II.

Finally, Burgess respectfully requests that this Court enter a temporary administrative stay 

while his preliminary-injunction motion remains pending. Absent that relief, the FDIC could enter 

a Final Decision before this Motion is even fully briefed. See infra Section III.

FACTS

A. The Structure of the FDIC and Its Administrative Adjudications.

The FDIC is an “independent agency” that has expansive power to enforce a variety of 

banking laws against regulated parties. 12 U.S.C. §§ 1812(a), 1818; Compl. ¶¶ 18, 23-26, 31. 

The FDIC is headed by a five-member Board of Directors. 12 U.S.C. § 1812(a)(1). Three 

of those members are appointed by the President to fixed, six-year terms. Id. § 1812(c)(1). The 

three appointed members of the FDIC may only be removed by the President for cause. See Wiener 

v. United States, 357 U.S. 349, 352, 356 (1958) (equating fixed-length terms with for-cause 

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removal protection); Free Enter. Fund v. Pub. Co. Account. Oversight Bd., 561 U.S. 477, 487

(2010) (“PCAOB”) (same). The remaining two directors are “dual hat” and ex officio members 

of the Board. They are the Comptroller of the Currency (the “Comptroller”) and the Director of 

the Consumer Financial Protection Bureau (“CFPB”). See 12 U.S.C. § 1812(a)(1)(A)-(B). Both 

the Comptroller and the CFPB Director may be fired at will by the President. See id. § 2; Seila 

Law, 140 S. Ct. at 2209; Compl. ¶¶ 35-36. The current members of the Board (all of whom are 

Defendants here) are Martin J. Gruenberg, its Acting Chairman; Michael J. Hsu, who also serves 

as Comptroller; and Rohit Chopra, who also serves as the CFPB Director. Id. ¶¶ 19-21.

The FDIC is empowered by statute to issue a “notice of charges” against an enforcement 

target who is alleged to have violated banking laws, to conduct administrative adjudications of 

those charges, and, if those charges are sustained, to order a wide variety of sanctions. See 12 

U.S.C. § 1818; Compl. ¶ 23. The most severe sanctions that the FDIC can impose are a “removal” 

order (which will operate to remove its subject from the bank-related offices that he or she holds) 

and a “prohibition order” (which will operating to forever bar its subject from working anywhere 

in the American banking industry for the rest of their life). See 12 U.S.C. § 1818(e); Compl. ¶ 24. 

The FDIC can also impose significant civil monetary penalties. 12 U.S.C. § 1818(i).

When the FDIC issues a notice of charges, it must also fix a time and place for an 

administrative hearing on those charges. See 12 U.S.C. § 1818(e)(4). Those hearings are in turn 

conducted by an ALJ. See 12 C.F.R. §§ 308.5, 308.35, 308.31(a). The ALJs used by the FDIC 

have a broad range of powers, including the abilities to issue subpoenas, rule on the admissibility 

of evidence, and decide critical substantive motions. See id. § 308.5; Compl. ¶ 48. After the 

hearing has concluded, the ALJ prepares a “recommended decision” for presentation to the FDIC’s 

Board. See 12 C.F.R. §§ 308.5(b)(8), 308.38. Parties may then file “exceptions” to the ALJ’s 

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recommended decision. See id. § 308.39. As soon as the exceptions are on file, the FDIC’s

“Administrative Officer”

1 may determine that the record is complete and notify the parties that the 

proceeding has been submitted to the FDIC’s Board for Final Decision. See id. § 308.40(a). At 

that point, the FDIC’s Board may render a Final Decision that imposes immediately-effective 

sanctions on the enforcement target. The FDIC’s Board must issue a Final Decision within 90 

days of the date on which the matter is submitted for its review. See id. § 308.40(c)(2).

Despite the significant executive authority wielded by the ALJs used by the FDIC, those 

ALJs enjoy an extraordinary level of protection from removal. The ALJs used by the FDIC can 

only be fired if a majority of the Merit Systems Protection Bureau (“MSPB”) determines that there 

is “good cause” for their termination. See 5 U.S.C. § 7521(a); Compl. ¶ 50. The five members of 

the MSPB in turn enjoy for-cause protection of their own. See 5 U.S.C. § 1202(d); Compl. ¶ 54.

To make matters worse, the FDIC cannot even unilaterally initiate a proceeding to remove 

the ALJs that it uses. That is so because the ALJs who work for the FDIC are part of an obscure 

entity called the Office of Financial Institution Adjudication (“OFIA”), which maintains a “pool” 

of ALJs who conduct adjudications on behalf of the FDIC and three other federal agencies with

related jurisdiction (together, the “Banking Agencies”). See Compl. ¶¶ 39-45 (discussing OFIA). 

By leveraging document requests pursuant to the Freedom of Information Act, regulated parties 

have recently been able to extract the Banking Agencies’ non-public internal memoranda of 

understanding concerning OFIA. Remarkably, those memoranda establish that OFIA’s ALJs—

including Defendant ALJ Whang, who is presiding over the Enforcement Proceeding against 

Burgess—cannot even be referred to the MSPB for removal proceedings unless all four Banking 

1 The FDIC’s Administrative Officer is an “inferior officer” appointed by the FDIC Board “to serve as the Board’s 

designee to hear certain motions or requests in an adjudicatory proceeding and to be the official custodian of the 

record” for the FDIC. See 12 C.F.R. § 308.3.

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Agencies unanimously agree, in writing, on that course of action. See id. ¶¶ 11, 42-43, 49. The 

ultimate result of this arrangement is that at least 11 different unelected bureaucrats would need to 

agree that it is appropriate to terminate an ALJ before that ALJ could be removed from office; of 

those 11 people, at least 9 enjoy for-cause protection from removal. See id. ¶¶ 11, 49-56.

B. The FDIC’s Enforcement Proceeding Against Burgess.

In November 2014, the FDIC formally opened an Enforcement Proceeding against Burgess 

and referred the matter for a hearing before one of OFIA’s ALJs. Compl. ¶¶ 60, 62. In September 

2016, a seven-day hearing was held before ALJ Christopher McNeil. Id. ¶ 65. In January 2017, 

ALJ McNeil issued a Recommended Decision in favor of the FDIC. Id. ¶ 66. And in August 

2017, the FDIC Board accepted that Recommended Decision and levied significant sanctions 

against Burgess. Id. ¶ 67. Burgess then filed a petition for review with the Fifth Circuit. The Fifth 

Circuit entered a published Order that stayed the Board’s Final Decision because it found that 

Burgess was likely to succeed on the merits of his argument that the ALJs used by the FDIC were 

unconstitutional under the Appointments Clause. See Burgess v. FDIC, 871 F.3d 297, 302-04 (5th 

Cir. 2017). Not long after, the Supreme Court decided in Lucia v. SEC that ALJs are inferior 

officers of the United States. 138 S. Ct. 2044, 2055 (2018). The Fifth Circuit then remanded the 

matter to the FDIC, at which point the agency reassigned the case to ALJ C. Richard Miserendino, 

and then ping-ponged the case yet again to a third ALJ (Defendant Whang). Compl. ¶¶ 72-75.

In January 2022, ALJ Whang held a three-day supplemental hearing. Compl. ¶ 76. And 

on September 16, 2022, ALJ Whang issued a Recommended Decision. ALJ Whang recommended 

that Burgess be removed from his bank-related offices, be prohibited from further participation in 

the banking industry, and be assessed a civil monetary penalty of $200,000. Id. ¶ 77. 

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Burgess intends to file timely exceptions to ALJ Whang’s Recommended Decision, which 

are due on or before October 17, 2022. Compl. ¶ 78. At any time after the exceptions are filed, 

the parties could receive notice that the proceeding has been submitted to the FDIC Board, which 

could then render a “Final Decision” and impose sanctions on Burgess (e.g., removal, prohibition, 

monetary penalties) that would be immediately effective. Id. Although the Board can take as long 

as 90 days after the case is submitted for its review to issue a Final Decision, 12 C.F.R §

308.40(c)(2), the Board can—and often does—render Final Decisions in fewer than 90 days. For 

example, the Board issued its 2017 Final Decision in Burgess’s case only 74 days after the FDIC’s 

Administrative Officer submitted that case for the Board’s review. See Compl. ¶¶ 78-79.

STANDARD OF REVIEW

“The decision to grant or deny a preliminary injunction is discretionary with the district 

court.” U.S. Navy SEALs 1-26 v. Biden, 578 F. Supp. 3d 822, 828 (N.D. Tex. 2022) (quoting Miss. 

Power & Light Co. v. United Gas Pipe Line, 760 F.2d 618, 621 (5th Cir. 1985)). To receive a 

preliminary injunction, the movant must show “(1) a substantial likelihood of success on the 

merits; (2) a substantial threat of irreparable harm; (3) that the balance of hardships weighs in the 

movant’s favor; and (4) that the issuance of the preliminary injunction will not disserve the public 

interest.” Foley v. Biden, No. 4:21-cv-01098-O, 2021 WL 7708477, at *1 (N.D. Tex. Oct. 6, 2021)

(citing Daniels Health Servs., L.L.C. v. Vascular Health Scis., L.L.C., 710 F.3d 579, 582 (5th Cir. 

2013)); see also Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). The final two 

elements of this four-part test are merged and considered together when the government is the 

party opposing the injunction. See SEALs 1-26, 578 F. Supp. 3d at 840.

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ARGUMENT

I. Burgess Is Entitled to a Preliminary Injunction.

A. Burgess Is Likely to Succeed on the Merits of His Constitutional Claims.

1. Burgess Is Likely to Succeed on His Claim that the FDIC’s Board Is 

Unconstitutionally Structured (Count 1).

The Vesting Clause provides that “[t]he executive power”—all of it—“shall be vested in a 

President of the United States.” U.S. Const. art. II, § 1, cl. 1. The Framers placed the entirety of 

the executive power in the President because they felt that a Unitary Executive would be 

“conducive to energy, dispatch, and responsibility” and would ensure that America’s leaders—

unlike King George III—would remain accountable to the people. Steven G. Calabresi & 

Saikrishna B. Prakash, The President’s Power to Execute the Laws, 104 Yale L.J. 541, 639 (1994).

Since the Founding, it has been understood that the executive power granted to the 

President in Article II “include[s] a power to oversee executive officers through removal.” 

PCAOB, 561 U.S. at 492; see Saikrishna Prakash, New Light on the Decision of 1789, 91 Cornell 

L. Rev. 1021, 1023 (2006) (discussing the “Decision of 1789,” in which “the first Congress 

concluded that the Constitution’s grant of executive power authorized the President to remove 

executive officers”); Compl. ¶ 91. The President’s removal power is derived not just from Article 

II’s Vesting Clause, but also from its Take Care Clause, which provides that the President must 

“take Care that the Laws be faithfully executed.” U.S. Const. art. II, § 3. Like the Vesting Clause, 

the Take Care Clause “guarantees the President a certain degree of control over executive officers,” 

and reflects the Founders’ belief that the “President must have adequate power over officers’ . . . 

removal” because “[o]nly then can the People, to whom the President is directly accountable, 

vicariously exercise authority over high-ranking executive officials.” Jarkesy, 34 F.4th at 463.

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The Supreme Court first recognized the President’s removal power in Myers v. United 

States, 272 U.S. 52 (1926). In the intervening century, the Supreme Court has decided a variety 

of cases that together delineate the outer limits on Congress’s ability to restrict the President’s 

removal power. The Supreme Court’s recent decision in Seila Law synthesized those prior cases 

into an easy-to-administer rule: Congress may not interfere with the President’s “unrestricted 

removal power,” subject only to “two exceptions.” 140 S. Ct. at 2198. The first exception is that 

Congress may constrain the President’s ability to remove “inferior officers with limited duties and 

no policymaking or administrative authority.” Id. at 2200 (emphasis added). The second 

exception applies to principal officers, who, by virtue of their significant ability to influence 

agency policy, must be more accountable to the President than inferior officers. Congress may 

constrain the President’s ability to remove principal officers only when they serve as the heads of

“multimember expert agencies that do not wield substantial executive power.” Id. at 2199-2200.

The FDIC’s Board is unconstitutional under Seila Law. See Compl. ¶¶ 90-105.

At the outset, there can be no debate that the members of the FDIC’s Board are “principal” 

officers who are the heads of a multimember expert agency. See 12 U.S.C. § 1812(a)(1) (“The 

management of the [FDIC] shall be vested in a Board of Directors consisting of 5 members.”).

Moreover, the FDIC plainly “wields substantial executive power.” Executive power, as 

distinct from legislative power or judicial power, refers to the ability to execute and enforce the 

law. See Seila Law, 140 S. Ct. at 2194, 2198; see also Calabresi & Prakash, supra, at 579-80. The 

FDIC wields exactly this type of “executive” authority; indeed, the FDIC’s frightening arsenal of 

executive powers closely resembles the list of “quintessentially executive powers” that the 

Supreme Court provided in Seila Law. 140 S. Ct. at 2200. For example, Seila Law found that the 

CFPB Director wielded executive power because he could, “though administrative adjudications,” 

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bring “the coercive power of the state to bear on millions of private citizens.” Id. at 2200-01. The 

same is true of the FDIC Board, which has authority to conduct administrative adjudications that 

have a profound effect on regulated parties and the nation at large. See 12 U.S.C. § 1818. Seila 

Law also found it probative that the CFPB Director “possesses the authority to promulgate binding 

rules” implementing a wide variety of statutes. Seila Law, 140 S. Ct. at 2200. Again, the same is 

true of the FDIC Board, which has authority to issue binding rules (and which in fact administers 

many more statutes than does the CFPB, an agency of more recent vintage). See 12 U.S.C. § 1828. 

And Seila Law concluded that the CFPB Director wielded executive power because he was 

empowered “to seek daunting monetary penalties against private parties.” Seila Law, 140 S. Ct. 

at 2200. Yet again, the FDIC Board has exactly the same authority. See 12 U.S.C. § 1818(i).

Because the members of the FDIC’s Board are (1) principal officers who (2) serve as the 

head of an agency that “wield[s] substantial executive power,” the President must be able to fire 

those officers at will. Congress has nonetheless insulated a majority of the FDIC’s Board from 

removal. See 12 U.S.C. § 1812(c)(1). Burgess is likely to succeed on the merits of his claim that 

this arrangement is unconstitutional. Indeed, a litany of legal academics2and public-interest 

groups3have already ably explained the constitutional infirmities with the FDIC’s structure. And 

2 See Cass R. Sunstein & Adrian Vermeule, The Unitary Executive: Past, Present, Future, 2020 Sup. Ct. Rev. 83, 85 

(2020) (noting that Seila Law casts “grave doubt” over the legality of removal protections applicable to “independent 

agencies with multiple heads” such as the FDIC); Adam C. Gillette, Form Over Function: How Collins v. Yellen 

Signals a Threat to the Independence of Multimember Financial Regulatory Agencies, 26 N.C. Banking Inst. 109, 

115, 132 (2022) (suggesting that removal protections for the FDIC’s appointed directors are unconstitutional under 

Seila Law); Samuel Rubinstein, Chairpointment: Rethinking the Appointment of Independent Agency Chairpersons, 

Harv. J. on Leg. Online (2020) (same); see also Aaron L. Nielson, Is the FTC on a Collision Course with the Unitary 

Executive?, Yale J. on Reg. Notice & Comment (July 21, 2021), https://bit.ly/3EGdjAI (noting that, under 

“Collins and Seila Law,” the directors of “[m]ulti-headed independent agencies” such as the FDIC are on notice that 

“their removal protections . . . conflict[] with the Supreme Court’s current understanding of the separation of powers”).

3 See Br. of Washington Legal Found. as Amicus Curiae at 28, Calcutt v. FDIC, 37 F.4th 293 (6th Cir. 2022), 2021 

WL 1522018, at *28 (Apr. 9, 2021) (under Seila Law, the “President must be able to remove FDIC directors at-will”).

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multiple cases—from both this District4and others in Texas5—have confirmed that agencies with 

structures closely akin to that of the FDIC are unconstitutional under Seila Law.

Because Burgess is likely to succeed on his claim that the FDIC is an unconstitutionally 

structured agency, he is entitled to a preliminary injunction barring the FDIC and its Directors 

from proceeding in any way with the Enforcement Proceeding, including by issuing a Final 

Decision or taking any other action contemplated by 12 C.F.R. § 308.40(c)(2). A preliminary 

injunction is necessary to preserve the status quo pending further proceedings through which this 

court can issue a final judgment and order a remedy that it determines to be appropriate.

2. Burgess Is Likely to Succeed on His Claim that the ALJs Used by the 

FDIC Enjoy Unconstitutional Protection from Removal (Count 2).

Burgess is also likely to succeed on the merits of his claim that the entire Enforcement 

Proceeding is unconstitutional because ALJ Whang enjoys double for-cause removal protection.

In PCAOB, the Supreme Court considered the constitutionality of the removal protections 

afforded to members of the Public Company Accounting Oversight Board (“Accounting Board”). 

The Accounting Board was composed of five members who were officers of the United States. 

561 U.S. at 485-86. The members of the Accounting Board could only be removed for cause by 

the Securities and Exchange Commission (“SEC”), and the SEC’s Commissioners in turn could 

only by removed for cause by the President. Id. at 486-87. The Supreme Court held that “the dual 

for-cause limitations on the removal of [Accounting] Board members contravene the 

4 Kelley v. Azar, No. 4:20-cv-00283-O, 2021 WL 4025804, at *14 (N.D. Tex. Feb. 25, 2021) (O’Connor, J.) (“Pursuant 

to [the] fundamental principle of the separation of powers, Congress may not create independent agencies wielding 

substantial executive power that are insulated from all Presidential control.” (citing Seila Law, 140 S. Ct. at 2199)).

5

In Consumers’ Research v. Consumer Product Safety Commission, the plaintiffs raised removability concerns about 

the members of the Consumer Product Safety Commission (“CPSC”). That agency, like the FDIC, is headed by five 

directors who wield substantial executive power but cannot be removed by the President except for good cause shown. 

Judge Kernodle held that the structure of the CPSC was unconstitutional, issued a declaratory judgment to that effect, 

and granted partial summary judgment pursuant to Federal Rule of Civil Procedure 54(b). No. 6:21-cv-256, 2022 WL 

1577222, at *12-16 (E.D. Tex. Mar. 18, 2022), appeal docketed, No. 22-40328 (5th Cir. June 15, 2022). 

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Constitution’s separation of powers” and the Take Care Clause. Id. at 493, 502-03. The Court 

explained that the “second level of tenure protection” was unlawful because it meant that “[n]either 

the President, nor anyone directly responsible to him, nor even an officer whose conduct he may 

review only for good cause, has full control over the [Accounting] Board.” Id. at 496.

Footnote 10 of the PCAOB Opinion indicated that the Supreme Court was not “address[ing] 

that subset of independent agency employees who serve as administrative law judges,” for the 

stated reason that “[w]hether administrative law judges are necessarily ‘Officers of the United 

States’” was at that time “disputed.” 561 U.S. at 507 n.10. In 2018, the Supreme Court decided 

Lucia, which squarely addressed the question the Court had left unanswered in footnote 10 of 

PCAOB. Lucia held that SEC ALJs are inferior officers of the United States. 138 S. Ct. at 2055. 

Under Lucia, the ALJs used by the FDIC, including ALJ Whang, are clearly “inferior 

officers of the United States.” If further confirmation were needed, the Fifth Circuit indicated in 

a published Order at a prior stage of this very case that the duties of the ALJs used by the FDIC 

are “sufficiently important, and their discretion sufficiently significant, to render them Officers” 

of the United States. Burgess, 871 F.3d at 303 (emphasis added; internal quotation marks omitted).

Moreover, the ALJs used by the FDIC—like the members of the Accounting Board at issue 

in PCAOB—enjoy at least two layers of protection from removal. The first layer of protection is 

that the ALJs used by the FDIC cannot be removed unless the MSPB finds that there is good cause 

for their termination. See 5 U.S.C. § 7521(a). And the second layer of protection is that the 

members of the MSPB themselves enjoy for-cause protection from removal. See id. § 1202(d).

In its recent published decision in Jarkesy, the Fifth Circuit explained that the removal 

restrictions for the ALJs used by the SEC—which are identical in every respect to the removal 

protections for the ALJs used by the FDIC—were unconstitutional. 34 F.4th at 465. In so holding, 

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the panel accepted the Petitioner’s “straightforward” three-part argument: (1) the “SEC ALJs are 

‘inferior officers’” under Lucia; (2) the “SEC ALJs are insulated from the President by at least two 

layers of for-cause protection from removal” in violation of PCAOB; and ergo (3) the “statutory 

removal restrictions” for SEC ALJs “are unconstitutional.” Id. at 464-65. Jarkesy is on-point 

authority that controls this case.6 There is no material difference between an ALJ used by the SEC 

and an ALJ used by the FDIC, both of whom can only be removed for cause by the MSPB.

In fact, the constitutional defect tainting the ALJs used by the FDIC is vastly more

problematic than the defects at issue in Jarkesy and PCAOB. That is so because the FDIC’s 

Board—unlike the SEC—cannot even initiate a proceeding to remove an ALJ unilaterally; instead, 

all four of the so-called Banking Agencies must unanimously agree, in writing, to begin that 

process. See Compl. ¶¶ 11, 49-56. The Banking Agencies’ vetogates amount to what is essentially 

a third level of removal protection for the ALJs used by the FDIC. This arrangement—through 

which executive power is wielded not by the President as required by the Constitution but rather 

via a roll-call vote of a dozen unelected bureaucrats staffing five corners of the administrative 

state—is a far cry from the Unitary Executive envisioned by the Founders. Cf. PCAOB, 561 U.S. 

at 497 (bemoaning the “Matryoshka doll of tenure protections” for inferior officers).

Because the ALJs used by the FDIC are inferior officers who enjoy double for-cause 

removal protection, Burgess is likely to succeed on the merits of his claim that it is unconstitutional 

for them to act as adjudicators in administrative enforcement proceedings. See Compl. ¶¶ 106-

118 (Count 2). Burgess is therefore entitled to a preliminary injunction that (1) prevents any 

further exercise of executive authority by ALJ Whang and (2) prevents the FDIC from accepting 

6 ALJ Whang’s Recommended Decision acknowledged Jarkesy, but did not even attempt to distinguish that case; 

instead, she noted that the Fifth Circuit’s published decision in Jarkesy was, in her opinion, “in tension” with a separate 

Ninth Circuit precedent that she apparently viewed as being more persuasive. Compl. ¶ 113 n.9.

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or otherwise relying on ALJ Whang’s Recommended Decision in whole or in part, given that the 

Recommended Decision was the product of an inferior officer whose service was unconstitutional.

3. Burgess Is Likely to Succeed on His Claim that the FDIC Violated the 

Seventh Amendment by Depriving Him of a Jury Trial (Count 3).

Finally, Burgess is likely to succeed in showing that the Enforcement Proceeding is 

unconstitutional because the FDIC has deprived him of his Seventh Amendment right to a jury.

The Seventh Amendment provides that, “[i]n Suits at common law, where the value in 

controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact 

tried by a jury, shall be otherwise re-examined in any Court of the United States, than according 

to the rules of the common law.” U.S. Const. amend. VII. Because civil juries “have long served 

as a critical check on government power,” Jarkesy, 34 F.4th at 451-52, the Supreme Court has 

insisted that “any seeming curtailment of the right to a jury trial should be scrutinized with the 

utmost care,” Dimick v. Schiedt, 293 U.S. 474, 486 (1935). See Compl. ¶¶ 120-21.

In Tull v. United States, the Supreme Court construed the Seventh Amendment “to require 

a jury trial in those actions that are analogous to ‘Suits at common law’” because, “[p]rior to the 

Amendment’s adoption, a jury trial was customary in suits brought in the English law courts.” 481 

U.S. 412, 417-18 (1987) (emphasis altered). Tull confirmed that the fact that the cause of action 

giving rise to the dispute was “created by congressional enactment” does not mean that no jury 

trial is required; instead, the operative question is whether the “statutory action is . . . similar to

cases that were tried in courts of law.” Id. (emphasis added); see Jarkesy, 34 F.4th at 452.

All of that said, the Supreme Court held in Atlas Roofing Co. v. Occupational Safety & 

Health Review Commission that Congress may assign the adjudication of certain disputes to 

agencies instead of juries in a limited set of cases that implicate “public rights.” 430 U.S. 442, 450 

(1977). The Supreme Court later “refined” the concept of public rights in Granfinanciera, S.A. v. 

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Nordberg, 492 U.S. 33 (1989), where it clarified that “Congress cannot circumvent the Seventh 

Amendment jury-trial right simply by passing a statute that assigns ‘traditional legal claims’ to an 

administrative tribunal.” Jarkesy, 34 F. 4th at 452 (quoting Granfinanciera, 492 U.S. at 52).

The Fifth Circuit’s recent decision in Jarkesy is again instructive. That opinion clarified 

that, in this Circuit, the inquiry to determine whether an adjudication must be handled by a jury 

moves in two stages. “First, a court must determine whether an action’s claims arise ‘at common 

law’ under the Seventh Amendment.” Jarkesy, 34 F.4th at 453. And second, “if the action 

involves common-law claims, a court must determine whether the Supreme Court’s public-rights 

cases nonetheless permit Congress to assign it to agency adjudication without a jury trial. Id.

The Jarkesy Court then went on to apply that test to the facts of the case at bar. The 

Petitioner in Jarkesy had been the target of an SEC enforcement proceeding in which the agency 

alleged that the Petitioner had committed securities fraud and sought various remedies against him, 

including substantial civil penalties. Jarkesy, 34 F.4th at 449-50. On appeal, Mr. Jarkesy argued 

that the SEC enforcement proceeding deprived him of his constitutional right to a trial by jury. 

The Jarkesy panel began its analysis of that claim with the first question outlined above—

i.e., whether the cause of action arose at common law. The Jarkesy court held that the cause of 

action against Mr. Jarkesy did arise at common law because a “civil penalty was a type of remedy 

at common law that could only be enforced in courts of law.” Id. at 453-54 (quoting Tull, 481

U.S. at 422). As to the second question—i.e., whether the Supreme Court’s “public rights” cases 

permitted the SEC to proceed with an adjudication that did not include a jury—the Jarkesy panel 

held that they did not. The panel concluded that (1) “[s]ecurities fraud actions are not new actions 

unknown to the common law” and that (2) “[j]ury trial in securities fraud suits would not dismantle 

the statutory scheme” or “impede swift resolution of the SEC’s fraud prosecutions.” Id. at 455 

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(internal quotation marks omitted). And because Mr. Jarkesy was entitled to a trial by jury, the 

Fifth Circuit ordered the entirety of the SEC’s proceeding against him to be “vacated.” Id. at 459.

This case is on all fours with Jarkesy. Just as in Jarkesy, the FDIC’s claims against 

Burgess—while nominally statutory—do arise at common law. That is so because the FDIC is 

seeking a civil monetary penalty against Burgess. Jarkesy held that the “Seventh Amendment 

jury-trial right applies to suits brought under a statute seeking civil penalties.” 34 F.4th at 452; 

accord In re Hooper, 112 B.R. 1009, 1012 (B.A.P. 9th Cir. 1990) (“[A]n action to recover money 

damages for . . . breach of fiduciary duty . . . was the type of action that would have been brought 

in a court of law in the courts of England prior to the merger of law and equity.”).

The second question under Jarkesy is whether the public-rights doctrine permits Congress 

to route the proceeding to agency adjudication without a jury. See Jarkesy, 34 F.4th at 453. The 

relevant subsidiary “considerations include: (1) whether Congress created a new cause of action, 

and remedies therefor, unknown to the common law;” and “(2) whether jury trials would go far to 

dismantle the statutory scheme or impede swift resolution of the claims created by statute.” Id.

(internal quotation marks omitted).

One of the FDIC’s chief allegations in the Enforcement Proceeding is that Burgess 

breached his fiduciary duties to Herring Bank as a result of his purportedly improper expense 

practices. See 12 U.S.C. § 1818(e)(1)(A); Compl. ¶ 25. Actions seeking remedies for breaches of 

fiduciary duties have been known at common law for centuries. See David J. Seipp, Trust and

Fiduciary Duty in the Early Common Law, 91 B.U. L. Rev. 1011, 1013-16 (2011). Indeed, ALJ 

Whang noted in her Recommended Decision that Burgess’s alleged “self-dealing” was “a serious 

breach of [a] common law fiduciary duty.” Compl. ¶ 135 (emphasis added).

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Moreover, the use of jury trials to adjudicate claims of the type that the FDIC is pursuing 

against Burgess would not “dismantle the statutory scheme.” Jarkesy, 34 F.4th at 453. When 

applying this factor, one critical consideration for the court’s attention is whether the claims at 

issue are of “the sort . . . uniquely suited for agency adjudication.” Id. at 456. Claims alleging 

entitlement to money damages for breaches of common-law duties do not fit that bill because, just 

as with the securities-law claims at issue in Jarkesy, “federal courts have dealt with actions” of 

this type “for many decades.” Id. And the FDIC is certainly no stranger to jury-eligible 

proceedings, given that several of its enabling statutes allow it to bring cases in federal court 

against bank officials accused of various forms of misconduct—an authority it has often recently 

invoked. See, e.g., 12 U.S.C. § 1821(k). The FDIC can also pursue offensive claims against 

regulated parties under state common law. Indeed, outside the context of removal and prohibition 

proceedings, the FDIC has often brought claims in federal court that seek money damages based 

on alleged breaches of common law fiduciary duties by bank officers—i.e., exactly the sorts of 

claims at issue in Burgess’s Enforcement Proceeding. See Compl. ¶ 137 (collecting cases).

Finally, the use of jury trials to adjudicate claims of the type that the FDIC is pursuing 

against Burgess would not “impede swift resolution of the claims created by statute.” Jarkesy, 34

F.4th at 453 (internal quotation marks omitted). In Jarkesy, the Court found that there was “no 

evidence that jury trials would impede swift resolution” of SEC enforcement proceedings and 

noted that, in the particular case of Mr. Jarkesy, the “SEC took seven years to dispose of” the case. 

Id. at 456. Here, the situation is even worse than the seven-year slog at issue in Jarkesy. The 

FDIC initiated its investigation against Burgess more than 12 years ago and has been pursuing a 

formal Enforcement Proceeding against him for more than 8 years. And the Enforcement 

Proceeding still has not concluded.

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Burgess is likely to succeed on the merits of his claim that the FDIC deprived him of his 

right to a jury trial. See Compl. ¶¶ 119-140. Burgess is therefore entitled to a preliminary 

injunction that prevents the FDIC from continuing the Enforcement Proceeding.

B. Absent an Injunction, Burgess Will Suffer Irreparable Harm.

Unless this Court enters an injunction, the FDIC could soon issue its Final Decision in the 

Enforcement Action. And that decision will in turn cause Burgess several irreparable harms.

First, the very issuance of the Final Decision—regardless of what it says—will injure 

Burgess by depriving him of an opportunity for meaningful judicial review. Counts 1 and 2 of the 

Complaint currently request prospective rather than retrospective relief—i.e., they seek to block 

the Defendants from continuing the Enforcement Proceeding, rather than seeking to nullify 

anything that the Defendants have already done. See Compl. ¶¶ 102-104, 117. But as soon as the 

FDIC issues a Final Decision, the agency’s process will be at an end, and ergo any claim for 

prospective relief will become moot; the only remedy at that point would be to retrospectively 

unwind what the agency has done. And that presents a significant problem for Burgess. 

In Collins v. Yellen, the Supreme Court held that, in order to establish an entitlement to 

retrospective relief for a constitutional problem relating to removability, the plaintiff must show a

“compensable harm.” 141 S. Ct. 1761, 1789 (2021). For example, if the President had “attempted 

to remove [an agency] Director but was prevented from doing so,” that would be a “compensable 

harm.” Id. But when a plaintiff seeks prospective relief, he or she is not required to demonstrate 

this type of “compensable harm,” and instead can secure an injunction merely by showing that the 

agency’s structure is unconstitutional and that he or she has suffered an injury-in-fact for purposes 

of Article III standing. See Seila Law, 140 S. Ct. at 2196; Consumers’ Research, 2022 WL 

1577222, at *5-13. Burgess can plainly satisfy the lesser harm requirement attending a request for 

prospective relief (see Compl. ¶¶ 83-89), but he may experience more difficulty in attempting to 

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satisfy the greater harm requirement attending a request for retrospective relief. The FDIC should 

not be permitted to stack the decks in its favor by issuing a Final Decision before this Court 

has a chance to issue its judgment. The entire purpose of this lawsuit is to avoid the harm that 

would accrue if the FDIC did so. Indeed, Judge Oldham recently noted that, “[a]fter Collins,” a 

declaratory-judgment lawsuit of the type Burgess has filed today “may be the only way to provide 

a ‘meaningful avenue of relief’” when a plaintiff challenges an agency’s “unimpeded control over 

the way it investigates and proceeds against its targets.” Cochran v. SEC, 20 F.4th 194, 233 (5th 

Cir. 2021) (en banc) (Oldham, J., concurring), cert. granted, 142 S. Ct. 2707 (2022).

Second, Burgess will continue to suffer the harm of being subjected to an unconstitutional 

administrative process unless this Court issues an injunction. See Compl. ¶ 83. The Supreme 

Court has confirmed that a private citizen experiences a “here-and-now” injury as soon as he or 

she is exposed to an unconstitutional process of the type at issue here. Bowsher v. Synar, 478 U.S. 

714, 728 n.5 (1986); see Seila Law, 140 S. Ct. at 2196; PCAOB, 561 U.S. at 513 (parties are 

“entitled to declaratory relief sufficient to ensure that the [legal] standards to which they are subject 

will be enforced only by a constitutional agency accountable to the Executive”). 

Third, regardless of the content of the Final Decision, the ongoing pendency of the 

Enforcement Proceeding is causing Burgess a reputational harm that can only be arrested by an 

injunction. See Ex. A (Burgess Affidavit) ¶¶ 6-7; Compl. ¶ 84. Courts routinely find that 

reputational harm can constitute an irreparable injury. Doe v. Texas Christian Univ., No. 4:22-cv00297-O, 2022 WL 1573074, at *11 (N.D. Tex. Apr. 29, 2022) (citing Valley v. Rapides Par. Sch. 

Bd., 118 F.3d 1047, 1056 (5th Cir. 1997)). As a businessman and entrepreneur, Burgess’s 

reputation is his livelihood. He has already worked tirelessly to rebuild his reputation after the 

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FDIC Board’s Final Decision against him in 2017, but his reputation will never fully recover from 

what it once was while the Enforcement Proceeding continues. Ex. A (Burgess Affidavit) ¶¶ 6-7.

Fourth, and again irrespective of the content of the Final Decision, the ongoing pendency 

of the Enforcement Proceeding is causing economic harm to Burgess. See Ex. A (Burgess 

Affidavit) ¶ 12; Compl. ¶ 85. Absent an injunction, Burgess will be forced to continue incurring

a fortune in legal expenses to navigate the FDIC’s process (and the subsequent process for judicial 

review). Those expenses include fees for the preparation of his exceptions to ALJ Whang’s 

Recommended Decision (and his responses to the FDIC’s own exceptions, if any), as well as fees 

associated with seeking stays and judicial review of a Final Decision from the Fifth Circuit. All 

of those expenses will be a waste if Burgess is vindicated on any of the Counts in his Complaint.

Fifth, the FDIC’s imminent Final Decision will likely rule against Burgess. And that will 

trigger an onslaught of serious penalties, likely including removal, prohibition, and a six-figure 

civil monetary penalty. Those sanctions will be extraordinarily harmful to Burgess and clearly 

constitute irreparable harms. See Burgess, 871 F.3d at 304 (crediting Burgess’s arguments that 

the Enforcement Proceeding threatened to “destruct[]” his “career in his chosen profession of 

banking” and that the FDIC’s “constitutionally infirm hearing . . . injured [his] reputation and 

ability to procure comparable employment” (internal quotation marks and ellipsis omitted)). 

As a final matter, it also bears noting that, even in the unlikely event that the FDIC’s Final 

Decision is in Burgess’s favor, the Enforcement Proceeding still would have caused irreparable

injuries to Burgess, and that Burgess would have no remedy for those injuries, because he could 

not file a petition for review challenging an agency ruling in his favor.7 As Judge Oldham 

7 The possibility that Burgess could be deprived of meaningful relief absent quick action by this Court is much more 

than a mere hypothetical. In re Patrick Adams (No. OCC AA-EC-11-50) is instructive. In that case, an OFIA ALJ 

issued a Recommended Decision in a matter pertaining to a Notice of Charges brought against Mr. Adams by the 

Comptroller. The ALJ ruled in Mr. Adams’s favor and recommended that the Notice be dismissed in its entirety. The 

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21

explained, that reality only further underscores the need to allow Burgess to proceed with this 

case—and to timely issue an injunction. See Cochran, 20 F.4th at 230 (Oldham, J., concurring).

C. The Equities Favor the Issuance of an Injunction, and an Injunction Would 

Not Disserve the Public Interest. 

The equities in this case clearly favor the issuance of an injunction. Allowing the FDIC to 

proceed with the Enforcement Action and enter a Final Decision would not just harm Burgess

personally, but also the public at large. For example, allowing the Enforcement Proceeding to 

continue would cause significant harms to Herring Bank and its depositors. As Burgess explains 

in the attached Affidavit, the Enforcement Proceeding has harmed “the reputation of the Bank,” 

has “deterred business from the Bank,” and has caused “significant hesitation with counter-parties 

doing business with the bank,” and has caused the Bank “to suffer lost opportunities.” Ex. A 

(Burgess Affidavit) ¶¶ 8, 11; see id. ¶ 8 (“The Bank operates in many small towns, mostly in Texas, 

where reputation is everything.”). Moreover, the “Enforcement Proceeding has caused stress and 

strain on the Bank’s employees,” leading to “issues with retaining and hiring employees.” Id. ¶ 9. 

Time and energy that should be spent on the Bank’s customers and the Bank’s overall financial 

health will instead be spent navigating the FDIC’s convoluted regulatory scheme. See id. ¶¶ 9-10. 

The case law is clear that injuries of this type are highly probative to the question of whether an 

injunction is warranted. See Scott v. S. Elec. Supply Co., No. 12-cv-119, 2013 WL 3280276, at *3 

(N.D. Miss. June 27, 2013) (“A loss of a business’ customers and damage to its goodwill are widely 

Comptroller then issued a Final Decision that declined to adopt the Recommended Decision, reached conclusions that 

“reflected agreement with Enforcement Counsel,” found that the record “could” support findings of regulatory and 

banking law violations and a decision to impose civil monetary penalties, but then dismissed the charges against Mr. 

Adams, such that he was unable to appeal the Final Decision. The Adams matter illustrates that agency proceedings 

of the type at issue here can inflict significant harms on regulated parties while also depriving those regulated parties 

of meaningful review by Article III courts.

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22

recognized as injuries incapable of ascertainment in monetary terms and must thus be irreparable.”

(internal quotation marks omitted)).

Moreover, the FDIC’s impending Final Decision will likely order Burgess to be removed 

from his role as a director of Herring Bank. At a prior stage of this very case, the Fifth Circuit 

confirmed that the “balance of hardships favor[ed] issuing a stay” of the FDIC’s 2017 Final 

Decision because that Decision—much like the new Final Decision that will soon be issued—

would harm the Bank itself, “which values [Burgess’s] ongoing participation on the Board.” 

Burgess, 871 F.3d at 304; see id. (crediting Burgess’s arguments that “his continued participation 

on the board would benefit the Bank and its clients”). Burgess’s “know-how and experience” are 

critical in “execut[ing] the Bank’s strategic plan and help[ing] manage the Bank’s risk profile,” 

and therefore the Bank “will not be able to execute its strategic plan as effectively as it otherwise 

would” if “the Enforcement Proceeding is allowed to continue.” Ex. A (Burgess Affidavit) ¶¶ 10-

11; see id. ¶ 14.

Conversely, neither the public nor the FDIC would suffer any harm as a result of a 

preliminary injunction. See Ex. A (Burgess Affidavit) ¶ 13. The Bank has already “implemented 

significant controls to address the issues raised by the FDIC’s charges,” and many of the expenserelated practices that most concerned the FDIC (e.g., Burgess’s possession of a bank-owned credit 

card) have long been suspended. See id. ¶ 15. Burgess no longer serves as the Bank’s CEO and 

President, and the Bank’s balance sheet and ratings are currently sound. See id. ¶ 2, 15. Therefore, 

if the Enforcement Proceeding is enjoined, there is no risk that the prior, years-past conduct to 

which the FDIC has objected will recur. 

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Finally, it bears mention that an injunction is always in the public interest when, as here, it 

is necessary to prevent constitutional deprivations. SEALs, 578 F. Supp. 3d at 840 (citing Jackson 

Women’s Health Org. v. Currier, 760 F.3d 448, 458 n.9 (5th Cir. 2014)).

8

II. This Court Has Competent Subject-Matter Jurisdiction.

This Court has subject-matter jurisdiction because this is a “civil action[] arising under the 

Constitution.” 28 U.S.C. § 1331. But given that Burgess’s entitlement to a preliminary injunction 

is so clear under the test discussed above, Burgess anticipates that the Defendants may attempt to 

duck the constitutional claims presented here by arguing that two provisions in the Financial 

Institutions Supervisory Act of 1966 (“FISA”), now codified in 12 U.S.C. § 1818, deprive this 

Court of jurisdiction. See Ex. B at 3. As explained below, any such argument would be meritless.

A. 12 U.S.C. § 1818(h) Does Not Divest This Court of Jurisdiction. 

Defendants may suggest this Court lacks jurisdiction to hear this case because 12 U.S.C. § 

1818(h) provides an alternative path to judicial review through which the target of an FDIC 

enforcement proceeding can wait for the agency to issue a Final Decision and then seek judicial 

review through a petition for review filed in an appropriate court of appeals. That argument is 

squarely foreclosed by the Fifth Circuit’s recent en banc decision in Cochran. 

Cochran involved the judicial-review provision of the Securities and Exchange Act of 

1934, which allows the targets of an SEC enforcement action to challenge a final SEC order in the 

courts of appeals after it is issued. See 15 U.S.C. § 78y. The question presented was whether this 

8

 Under Federal Rule of Civil Procedure 65(c), “[a] movant who obtains a preliminary injunction must post a bond to 

secure the non-movant against wrongful damages it suffers as a result of the injunction.” Texas v. United States, 201 

F. Supp. 3d 810, 818 (N.D. Tex. 2016), order clarified, No. 7:16-CV-00054-O, 2016 WL 7852331 (N.D. Tex. Oct. 

18, 2016). But the Fifth Circuit has ruled that “the court ‘may elect to require no security at all.’” Kaepa, Inc. v. 

Achilles Corp., 76 F.3d 624, 628 (5th Cir. 1996) (citing Corrigan Dispatch Co. v. Casa Guzman, 569 F.2d 300, 303 

(5th Cir. 1978)). This Court has waived plaintiffs’ bond requirement when it found “no evidence that Defendants will 

suffer any financial loss requiring Plaintiffs to post security.” Franciscan All., Inc. v. Burwell, 227 F. Supp. 3d 660, 

696 (N.D. Tex. 2016). Burgess respectfully requests that the Court waive the bond requirement here.

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statute stripped the district courts of jurisdiction to hear a case in which the plaintiff sought to 

enjoin a pending SEC proceeding on the basis of a structural constitutional defect involving 

removal protections for the agency’s ALJs—i.e., the same claim presented in Count II of Burgess’s 

Complaint). The Fifth Circuit held that it did not. 20 F.4th at 207, 213. In so holding, the Court 

emphasized that there was no sense in shutting the doors to the district courts because (1) the 

plaintiff’s “structural” challenge was “wholly collateral” to the agency proceeding; (2) the 

“removal power claim is outside the [agency’s] expertise”; and (3) foreclosing district-court 

jurisdiction would “deprive [plaintiffs] of the opportunity for meaningful judicial review” because 

it would force them to endure the very agency processes they challenged. Id. at 207-12. The same 

reasoning applies here, and ergo 12 U.S.C. § 1818(h) does not divest this Court of jurisdiction.9

B. 12 U.S.C. § 1818(i)(1) Does Not Divest This Court of Jurisdiction. 

Burgess also anticipates that Defendants may argue that 12 U.S.C. § 1818(i)(1) strips this 

Court of jurisdiction. That statute provides that “no court shall have jurisdiction to affect by 

injunction or otherwise the issuance or enforcement of any notice or order under [12 U.S.C. § 

1818], or to review, modify, suspend, terminate, or set aside any such notice or order.” 

When a federal court is confronted with the question whether a statute strips it of its general 

federal-question jurisdiction, its analysis begins with the question of whether the statute explicitly

strips district-court jurisdiction. If it does, that is the end of the inquiry; if it does not, the court 

next considers whether the statute implicitly strips jurisdiction. See PCAOB, 561 U.S. at 489. The 

9 The United States Supreme Court granted certiorari in Cochran in May of 2022, and has scheduled that case for oral 

argument on November 7. Burgess would not be opposed to staying this action pending the Supreme Court’s 

disposition of Cochran, subject to the condition that the FDIC Enforcement Proceeding against Burgess is likewise 

stayed until such time as Cochran is decided. Other courts in this District have ordered that exact relief when recently 

presented with constitutional challenges to an agency’s structure akin to the types of challenges that Burgess is 

pursuing here. See Order, Rover Pipeline, LLC v. Federal Energy Regulatory Commission (N.D. Tex. No. 3:22-cv00232), ECF 34 (May 24, 2022) (Scholer, J.) (in case where plaintiffs presented constitutional challenge to the ALJs 

used by the Federal Energy Regulatory Commission (“FERC”) while a FERC case was pending against them, staying 

both the plaintiffs’ complaint and the underlying FERC action pending disposition of Cochran).

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analysis of implicit jurisdiction-stripping is guided by the so-called Thunder Basin factors, which 

are intended to determine whether “the claims at issue ‘are of the type Congress intended to be 

reviewed within th[e] statutory structure.’” Cochran, 20 F.4th at 206 (quoting Thunder Basin Coal

Co. v. Reich, 510 U.S. 200, 207, 212 (1994)). The three Thunder Basin factors are (1) whether “a 

finding of preclusion could foreclose all meaningful judicial review”; (2) whether the district-court 

action is “wholly collateral to a statute’s review provisions”; and (3) whether the claims at issue 

are “outside the agency's expertise.” Id. (internal quotation marks omitted).

As explained in detail below, Section 1818(i)(1) does not divest this Court of jurisdiction

either explicitly (see infra Section II.B.1) or implicitly (see infra Section II.B.2).

1. Section 1818(i)(1) Does Not Explicitly Bar Jurisdiction Over Structural 

Constitutional Claims of the Type Presented in Burgess’s Complaint.

Section 1818(i)(1) does not explicitly strip jurisdiction over structural constitutional 

claims of the type presented here. Burgess of course agrees that Section 1818(i)(1) would 

explicitly strip jurisdiction if a plaintiff sought to enjoin an FDIC proceeding on the basis of some 

irregularity that was internal to the proceeding itself. For that reason, the Fifth Circuit correctly 

held in Bank of Louisiana v. FDIC that a district court lacked jurisdiction to enjoin an FDIC

proceeding on the basis of purported constitutional violations that occurred as part of or within

the proceeding, such as age discrimination and due-process violations pertaining to “document

admissibility and witness sequestration.” 919 F.3d 916, 921 (5th Cir. 2019); accord Cochran, 20 

F.4th at 204 (en banc) (construing Section 1818(i)(1) as an “explicit jurisdictional bar” with respect 

to the types of non-collateral claims presented by the plaintiff in Bank of Louisiana).

But this case does not fall within the ambit of Section 1818(i)(1) because here Burgess is 

pursuing structural constitutional claims that are exogenous to the Enforcement Proceeding. 

Cognizant of the limitations imposed by Section 1818(i)(1), Burgess elected not to include in his 

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Complaint certain claims that he believes are meritorious, but which relate to conduct within the 

four corners of the Enforcement Proceeding (e.g., claims that the agency has behaved in a biased 

manner and has misinterpreted various statutes). This Court would lack jurisdiction to consider 

those claims. But the situation is materially different with respect to the claims that Burgess has 

presented here, because those claims—unlike those in Bank of Louisiana—each relate to structural 

defects such as separation-of-powers concerns and a violation of the Seventh Amendment.

Judge Haynes, who wrote the majority opinion for the en banc Court in Cochran, expressly 

acknowledged this crucial and dispositive distinction. As a dissenter at the panel stage of that case, 

Judge Haynes correctly noted that Bank of Louisiana “did not address a structural claim” and did 

not preclude the possibility that “a claim concerning the President’s removal power should be 

analyzed differently than other types of constitutional claims” when considering the jurisdictional 

implications of Section 1818(i)(1). Cochran v. SEC, 969 F.3d 507, 518 (5th Cir. 2020) (Haynes, 

J., dissenting in part); accord Bank of Louisiana v. FDIC, No. 16-cv-13585, 2017 WL 3849340, 

at *6 (E.D. La. Jan. 13, 2017) (clarifying that the Bank of Louisiana “plaintiffs d[id] not question 

the constitutionality or inherent authority of the FDIC” and then suggesting that the answer to the 

jurisdictional question in Bank of Louisiana may well have been different if the plaintiffs had done 

something more than just “attack the motives underlying the FDIC’s” enforcement proceeding 

(emphasis added)).

The key insight from the Fifth Circuit’s most recent case law is that, for purposes of Section 

1818(i)(1), there is a material difference between (1) structural constitutional claims that are 

wholly collateral to the agency proceeding and (2) constitutional “claims alleging ‘irregularities’ 

during an enforcement proceeding,” which “are not wholly collateral, either procedurally or 

substantively.” Cochran, 969 F.3d at 518 n.1 (Haynes, J., dissenting in part) (quoting Bank of 

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Louisiana, 919 F.3d at 928-29). With respect to the claims in the second camp, Section 1818(i)(1)

strips jurisdiction, because a collateral attack pertaining to “irregularities” in the agency process is 

an effort to “review” or “modify” the agency’s actions within the proceeding. But with respect to 

structural constitutional claims that fall into the first camp, Section 1818(i)(1) is simply silent.

This Court’s decision about whether to interpret Section 1818(i)(1) as an explicit bar over 

the district courts’ power to hear structural constitutional claims should be guided by the Supreme 

Court’s instruction “that where Congress intends to preclude judicial review of constitutional 

claims,” its “intent to do so must be clear.” Webster v. Doe, 486 U.S. 592, 603 (1988); accord

McNary v. Haitian Refugee Ctr., Inc., 498 U.S. 479, 492 (1991) (interpreting jurisdiction-stripping 

provision of the INA to apply only to collateral attacks on denials of a certain type of immigration

status, and not to “general collateral challenges to unconstitutional practices and policies used by 

the agency in processing applications”). Section 1818(i)(1) does not clearly foreclose jurisdiction 

over structural constitutional claims, and nor would that result comport with the statute’s purposes 

or legislative history. See infra note 11. 

It also bears mention that Congress knows how to explicitly strip district-court jurisdiction 

over structural constitutional claims when it wants to do so, and has done so in other statutes.10 

The fact that Congress elected to expressly strip jurisdiction over constitutional claims in other 

laws but not in Section 1818(i)(1) lends further support to the notion that this Court retains subjectmatter jurisdiction. “[W]here Congress knows how to say something but chooses not to, its silence 

is controlling.” CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1226 (11th Cir. 2001)

(internal quotation marks omitted); accord I.A.M. Nat’l Pension Fund Benedit Plan C. v. Stockton

10 See, e.g., 18 U.S.C. § 1252(b)(9) (judicial-review provision within the Immigration and Nationality Act) (“Judicial 

review of all questions of law and fact, including interpretation and application of constitutional and statutory 

provisions, arising from any action taken or proceeding brought to remove an alien . . . shall be available only in 

judicial review of a final order under this section.” (emphasis added)). 

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TRI Indus., 727 F.2d 1204, 1209 (D.C. Cir. 1984) (“Congress knows how to withdraw jurisdiction 

expressly when that is its purpose” (internal quotation marks omitted)); see also Atl. Sounding Co.

v. Townsend, 557 U.S. 404 (2009).

11

As a final matter, Burgess notes that interpreting Section 1818(i)(1) to explicitly strip 

district-court jurisdiction over structural constitutional claims would itself present serious 

constitutional concerns by creating a situation in which plaintiffs like Burgess have no opportunity 

to secure a meaningful remedy for violations of the separation-of-powers doctrine. The theoretical 

justification for the well-established rule that Congress cannot strip all federal courts of power to 

hear constitutional claims is that at least some Article III court must be available to serve as a 

“meaningful check on the political branches.”12 See Bowen v. Mich. Acad. of Family Physicians, 

476 U.S. 667, 681 n.12 (1986) (noting that a scheme which operates to deny meaningful judicial 

review for a constitutional question would itself raise “serious constitutional question[s]”). 

Interpreting Section 1818(i)(1) to explicitly foreclose district-court jurisdiction over structural 

constitutional claims would run afoul of that principle, because that interpretation of Section 

1818(i)(1)—in combination with the difficult-to-satisfy requirements for retrospective relief 

11 To the extent this Court might find legislative history probative, it is notable that nothing in the legislative history 

of FISA suggests any intent to strip district-court jurisdiction over structural constitutional claims. The Senate Report 

for FISA suggests that the overarching purpose of the statute’s judicial-review provision was to allow “such review 

[to] be expedited.” S. Rep. No. 1482, at 15 (1966). Allowing structural constitutional claims to be brought in federal 

district court would certainly lead to a much more expeditious resolution of those claims than could be provided by a 

court of appeals. Moreover, FISA’s Senate Report acknowledges that other provisions of the statute now codified at 

12 U.S.C. § 1818 do allow review in the district courts when the claims are wholly collateral to the proceeding. For 

example, the provision at 12 U.S.C. § 1818(c) allows district courts to hear claims challenging temporary cease-anddesist order issued by the FDIC. Congress’s explanation for that provision was that judicial review of cease-anddesist orders was permissible because “[s]uch an application would, of course, be ancillary to the administrative 

proceedings” and “would not extend to full consideration of the merits of the Board’s charges.” S. Rep. No. 1482, at 

22. The exact same reasoning applies to structural constitutional claims of the type at issue here.

12 Martin J. Katz, Guantanamo, Boumediene, and Jurisdiction-Stripping: The Imperial President Meets the Imperial

Court, 25 Const. Comment. 377, 406 (2009). For this reason, the “Reagan Administration opposed the efforts of 

social conservatives to strip federal jurisdiction over constitutional claims like school prayer and abortion,” even 

“though President Reagan described the Supreme Court’s jurisprudence in those areas as ‘not in keeping with the 

Constitution at all.’” Tara Leigh Grove, A (Modest) Separation of Powers Success Story, 87 Notre Dame L. Rev. 

1647, 1662 (2012).

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prescribed in Collins—would functionally leave Burgess and like litigants without any meaningful 

remedy for the structural constitutional harms they have suffered. This Court could avoid that 

outcome by invoking the canon of constitutional avoidance, and interpreting Section 1818(i)(1) to 

allow district courts to hear structural constitutional claims. See Clark v. Martinez, 543 U.S. 371, 

381 (2005) (discussing the important role of the constitutional avoidance canon as “a tool for 

choosing between competing plausible interpretations of a statutory text”).

The FDIC’s jurisdictional argument is a serious affront to individual liberty. If the FDIC’s 

reading of Section 1818(i)(1) were correct, structural constitutional challenges could only be 

presented to the agency itself. That is like insisting that the only person qualified to guard the 

henhouse is the fox. The FDIC’s position ignores the fact that bureaucrats have no expertise over 

constitutional questions, but do have a “tendency . . . to perpetuate and to increase their 

administrative powers.” Roland L. Redmond, The Securities Exchange Act of 1934: An

Experiment in Administrative Law, 47 Yale L.J. 622, 635 (1938). The FDIC’s position would 

leave litigants stuck between a rock and a hard place, unable to seek review in federal court and 

likewise unable to avoid enduring the very process they wish to challenge—at great loss of time 

and money—before ever having an opportunity to challenge that process (and even then being 

unable to secure any retrospective relief in almost all cases). That is not—and cannot be—the law.

2. Section 1818(i)(1) Does Not Implicitly Bar This Court’s Jurisdiction.

Because Section 1818(i)(1) does not explicitly strip district-court jurisdiction over 

structural constitutional claims, the general federal-question statute at 28 U.S.C. § 1331 would

confer jurisdiction over structural constitutional claims of the type at issue here unless the text of 

Section 1818(i)(1) evinces an intent by Congress to implicitly strip jurisdiction over such claims. 

And clearly it does not. That result is compelled by a straight-forward application of Thunder 

Basin.

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The first Thunder Basin factor is whether “a finding of preclusion could foreclose all 

meaningful judicial review.” Thunder Basin, 510 U.S. at 212-13. The Fifth Circuit’s en banc 

decision in Cochran confirmed that there would be no “opportunity for meaningful judicial 

review” if a plaintiff who is “challenging the constitutional authority of” the agency was forced to 

litigate his or her claims before the agency instead of in district court. 20 F.4th at 208-09. That 

was so for several independent reasons, all of which apply with equal force here and in Cochran.

First, Cochran explained that a scheme allowing a regulated party to seek judicial review 

only by waiting for a final agency action and then appealing to the court of appeals “does not 

guarantee [the plaintiff] meaningful judicial review of her claim because the enforcement 

proceedings will not necessarily result in a final adverse order,” meaning that the plaintiff could 

be “left unable to seek redress for the injury of having to appear before the [agency].” Id. at 209. 

Second, the Court found that judicial review would not be “meaningful” if the plaintiff was forced 

to endure the very unconstitutional agency process that she sought to enjoin through her federal 

action. See id. at 208, 210. And finally, Judge Oldham’s concurring opinion—which was joined 

by five other Judges—presciently explained that leaving the door open to federal-court actions 

challenging agency proceedings was particularly important given that it is “very challenging to 

obtain meaningful retrospective relief after Collins.” See id. at 232-34 (Oldham, J., concurring). 

That means that prospective challenges styled as declaratory-judgment actions may now “be the 

only way to provide a ‘meaningful avenue of relief’ for structural constitutional challenges.” Id.

All of the considerations discussed in Cochran apply with equal force here. First, Burgess 

could be deprived of any judicial review of his constitutional claims if the FDIC issues a Final 

Decision that is favorable to him, or if he settles. See supra at 20 & note 7. Second, it would be 

profoundly unfair to force Burgess to continue enduring the very unconstitutional process he seeks 

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to enjoin in order to secure ultimate judicial relief. And third, Burgess’s chance to secure 

meaningful relief will be diminished if he is forced to wait for a Final Decision, because then the 

only available remedy would be retrospective—and much harder to obtain. See supra at 17-18.

The second Thunder Basin factor is whether the claims at issue are “wholly collateral” to 

the agency’s proceeding and to the alternative process for judicial review. Thunder Basin, 510 

U.S. at 212. Cochran held that a claim is “wholly collateral” when the “nature of [the] challenge 

is structural”—i.e., when “it does not depend on the validity of any substantive aspect” of the 

agency’s enabling statutes or orders. 20 F.4th at 207-09. Burgess’s claim is clearly collateral 

given that he is pursuing structural challenges to the FDIC that do not depend at all on any 

substantive aspect of the Enforcement Proceeding. See Compl. ¶ 6.

The third Thunder Basin factor is whether the claims at issue are “outside the agency’s 

expertise.” Thunder Basin, 510 U.S. at 212. Burgess’s claims fall outside the agency’s expertise 

because, like the claims in Cochran, they present questions of constitutional law as to which the 

FDIC has no special expertise. See Cochran, 20 F.4th at 208; Carr v. Saul, 141 S. Ct. 1352, 1360 

(2021) (“[A]gency adjudications are generally ill suited to address structural constitutional 

challenges, which usually fall outside the adjudicators’ areas of technical expertise.”).

In sum, Section 1818(i)(1) does not explicitly divest this Court of jurisdiction, and an

application of the Thunder Basin factors confirms that this statute does not implicitly divest this 

Court of jurisdiction either. Thus, this Court has federal-question jurisdiction under 28 U.S.C. § 

1331. See Mata v. Lynch, 576 U.S. 143, 150 (2015) (noting that federal courts have a “virtually 

unflagging obligation” to exercise their jurisdiction under Section 1331); Cochran 20 F.4th at 200.

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III. This Court Should Enter a Temporary Administrative Stay Pending Disposition of 

this Motion.

On October 12, counsel for Burgess conferenced with Defendants’ counsel and requested 

that Defendants agree to delay a Final Decision until this Court has ruled on this Motion. The 

following day, counsel for Defendants stated by email that they would not agree to that request, 

and confirmed that a Final Decision could be issued as soon as “the deadline for submitting 

exceptions has passed, which is October 17th.,” and the parties have been notified that the 

proceeding has been submitted for final decision. Ex. B at 4. On October 14, Burgess’s counsel 

advised Defendants’ counsel that, in light of the FDIC’s unwillingness to delay a Final Decision, 

this Motion would include a request for a temporary administrative stay in order to preserve this 

Court’s ability to order relief. Id. at 3-4. Defendants advised that they opposed a stay. Id. at 1-3.

The Defendants characterized the “exigency here” as being “of [P]laintiff’s own making” 

based on the fact that the Enforcement Proceeding has been ongoing for years. Ex. B at 5. 

However, Burgess began diligently preparing his Complaint and this filing as soon as the 

Recommended Decision was issued mere weeks ago. Prior to the issuance of the Recommended 

Decision, Burgess had hoped that ALJ Whang would find that liability is unwarranted for the 

reasons provided in Burgess’s extensive post-hearing briefing. In any event, Defendants’ counsel 

is incorrect to suggest that Burgess could have filed this case “years” ago, because Burgess’s 

claims depend in large part on the Fifth Circuit’s very recent decisions in Cochran and Jarkesy.

Moreover, Burgess only recently learned that the FDIC Board might act more quickly in 

issuing its Final Decision than it did in 2017. The FDIC’s Board requested an official copy of the 

administrative record in the Enforcement Proceeding on October 4, prior to the deadline for the 

parties to file their exceptions to the Recommended Decision. See Compl. ¶ 79. Burgess is not 

aware of a similar request being made by the FDIC Board in 2017 and, during that prior 

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proceeding, he was not made aware that the record had been submitted to the FDIC Board for final 

decision until after the parties had filed reply briefs in support of their exceptions.

The exigency here—at least as it relates to the necessity of a temporary administrative 

stay—is better described as being of the Defendants’ own making. Given the FDIC’s 

intransigency and its refusal to guarantee that it will not issue a Final Decision while this Motion 

is pending, Burgess must respectfully request that this Court issue a temporary administrative stay.

According to the Fifth Circuit, “[e]ntering temporary administrative stays so that a panel 

may consider expedited briefing in emergency cases is a routine practice.” In re Abbott, 800 F. 

App’x 296, 298 (5th Cir. 2020). The authority to issue such stays is not limited to courts of appeals; 

the Fifth Circuit made clear that the authority to issue such stays is found within the “power 

inherent in every court to control the disposition of the causes on its docket with economy of time 

and effort for itself, for counsel, and for litigants.” Id. (emphasis added) (quoting Landis v. N. Am. 

Co., 299 U.S. 248, 254 (1936)); see Rachel Bayefsky, Administrative Stays: Power and Procedure,

97 Notre Dame L. Rev. 1941, 1960-64 (2022) (discussing the increasing use of administrative 

stays by federal courts based on their authority under the All Writs Act, 28 U.S.C. § 1651, and 

under federal judges’ inherent equitable authority to manage their own docket). An administrative 

stay is a device that is “only intended to preserve the status quo until” some other “substantive” 

motion “can be considered on the merits,” and it “does not constitute in any way a decision as to 

the merits” of the plaintiff’s contentions. Nat’l Urb. League v. Ross, 977 F.3d 698, 700-01 (9th

Cir. 2020) (quoting Doe #1 v. Trump, 944 F.3d 1222, 1223 (9th Cir. 2019)). 

Temporary administrative stays are appropriate when “warranted in [the court’s] reasoned 

judgment.” In re Abbot, 800 F. App’x at 298 (Dennis, J. dissenting). Here, the Court should find 

it within its “reasoned judgment” to issue a temporary stay that will prevent the FDIC Board from 

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issuing its Final Decision before this Court has had the opportunity to rule on Burgess’s Motion. 

That is so for two reasons. 

First, Burgess will suffer irreparable harm if the FDIC Board issues a Final Decision prior 

to this Court having the opportunity to rule on his request for a preliminary injunction. As 

discussed above, Burgess has reason to believe the FDIC Board might not take its full allotted 90 

days, and, upon issuance of an adverse Final Decision, Burgess’s requests for relief in Counts 1 

and 2 of his Complaint will transform from prospective to retrospective requests for relief, which 

in turn will materially reduce his chances of securing a meaningful remedy. Moreover, the other 

harms detailed above will begin the minute the Final Decision is issued. See supra Section I.B. 

Second, as a result of this expedited briefing schedule, a temporary administrative stay will 

cause no harm for Defendants. On October 17, the parties will file their exceptions, and the FDIC’s 

Administrative Officer will then notify the parties that proceeding has been submitted to the Board; 

after that happens, the FDIC’s Board could issue a Final Decision at any time. 12 C.F.R. § 

308.40(c)(2). However, the FDIC Board has up to 90 days from when the case is submitted for its 

review to issue a decision. Id. Therefore, an exceptionally brief administrative stay that 

temporarily prevents the FDIC Board from issuing its Final Decision would allow this Court to 

rule on Burgess’s Motion without prejudicing the FDIC’s ability to issue its order. See Richardson 

v. Texas Sec’y of State, 978 F.3d 220, 227-28 (5th Cir. 2020) (granting a temporary administrative 

stay that lasted approximately one month until the court was able to rule on the defendant’s 

motion).13 Furthermore, since granting a temporary administrative stay says nothing as to whether 

this Court will ultimately grant or deny Burgess’s Motion, the temporary administrative stay itself 

13 A temporary administrative stay is particularly appropriate here given that this Court has already issued an expedited 

briefing schedule for Burgess’s preliminary-injunction motion. This case is therefore closely akin to In re Abbot, 

where the Fifth Circuit ruled that a temporary administrative stay was warranted because the panel had “ordered 

expedited briefing on the underlying stay motion and mandamus petitions.” 800 F. App’x at 298. 

Case 7:22-cv-00100-O Document 15-1 Filed 10/15/22 Page 41 of 44 PageID 162
35

will not harm the Defendants’ ability to issue their Final Decision. See Nat’l Urb. League, 977

F.3d at 701; Trivedi v. Gen. Elec. Co., No. 19-11862-PBS, 2021 WL 2229088, at *1 (D. Mass. 

May 27, 2021), aff’d, No. 21-1434, 2022 WL 1769136 (1st Cir. May 3, 2022) (lifting a previouslyissued administrative stay while denying a preliminary injunction).

CONCLUSION

This Court should enter a preliminary injunction barring the Defendants from continuing 

the Enforcement Proceeding and, in the interim, enter a temporary administrative stay.

 Dated: October 15, 2022 Respectfully submitted,

/s/ Manuel G. Berrelez 

Manuel G. Berrelez (Texas Bar No. 24057760)

 mberrelez@velaw.com

Thomas P. Mitsch (Texas Bar No. No. 24102218)

 tmitsch@velaw.com

James F. Hopper (Texas Bar No. 24116535)

 jhopper@velaw.com

Madelyn B. Carter (Texas Bar No. 24121529)

 mcarter@velaw.com

VINSON & ELKINS LLP

Trammell Crow Center

2001 Ross Avenue, Suite 3900

Dallas, Texas 75201

Telephone: (214) 220-7700

Facsimile: (214) 220-7716

Counsel for Plaintiff Cornelius Campbell Burgess

Case 7:22-cv-00100-O Document 15-1 Filed 10/15/22 Page 42 of 44 PageID 163
36

CERTIFICATE OF SERVICE

I hereby certify that on this 15th day of October, 2022, I caused the foregoing document to 

be filed with the Clerk of the U.S. District Court for the Northern District of Texas via the Court’s 

CM/ECF system. I further certify that service was accomplished today by sending hard copies of

the same to the Defendants at the mailing address for Defendants’ counsel below: 

Andrew Dober

Counsel

Federal Deposit Insurance Corporation

3501 Fairfax Dr. 

Arlington, VA 22205

The undersigned counsel also emailed courtesy copies of the same to Defendants’ counsel 

Andrew Dober (at adober@fdic.gov) and Andrew Nicely (at anicely@fdic.gov).

 Dated: October 15, 2022 Respectfully submitted,

/s/ Manuel G. Berrelez 

Manuel G. Berrelez (Texas Bar No. 24057760)

 mberrelez@velaw.com

VINSON & ELKINS LLP

Trammell Crow Center

2001 Ross Avenue, Suite 3900

Dallas, Texas 75201

Telephone: (214) 220-7700

Facsimile: (214) 220-7716

Counsel for Plaintiff Cornelius Campbell Burgess

Case 7:22-cv-00100-O Document 15-1 Filed 10/15/22 Page 43 of 44 PageID 164
37

CERTIFICATE OF COMPLIANCE

I hereby certify that this document complies with the applicable type-volume limitation 

because it contains no more than 35 pages, which was the length limit set in this Court’s Order of 

October 14, 2022 (ECF No. 14).

 Dated: October 15, 2022 Respectfully submitted,

/s/ Manuel G. Berrelez 

Manuel G. Berrelez (Texas Bar No. 24057760)

 mberrelez@velaw.com

VINSON & ELKINS LLP

Trammell Crow Center

2001 Ross Avenue, Suite 3900

Dallas, Texas 75201

Telephone: (214) 220-7700

Facsimile: (214) 220-7716

Counsel for Plaintiff Cornelius Campbell Burgess

Case 7:22-cv-00100-O Document 15-1 Filed 10/15/22 Page 44 of 44 PageID 165