1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-19-1998

Hindes v. FDIC

Precedential or Non-Precedential:

Docket 97-1354

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Recommended Citation

"Hindes v. FDIC" (1998). 1998 Decisions. Paper 32.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/32
Filed February 19, 1998 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 97-1354 

Gary E. Hindes, Samuel Rappaport, Raymond Perelman,

Gary Erlbaum, Daniel Neduscin, individually and 

derivatively for Meritor Savings Bank, f/k/a The 

Philadelphia Savings Fund Society, 

 Appellants 

v. 

The Federal Deposit Insurance Corporation, in its 

corporate capacity and as receiver for Meritor Savings 

Bank, f/k/a The Philadelphia Savings Fund Society; 

John/Jane Does 1-10, Directors, Officers, Agents, and 

Employees of the Federal Deposit Insurance Corporation; 

and Richard C. Rishel, in his official capacity as the 

Secretary of Banking of the Commonwealth of 

Pennsylvania. 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Civ. No. 94-02355) 

Argued December 12, 1997 

BEFORE: GREENBERG, ROTH, and SEITZ, Circuit Judges 

(Filed: February 19, 1998) 
 Ken Carroll (Argued) 

 Kortney Kloppe-Orton 

 Carrington, Coleman, Sloman & 

 Blumenthal, L.L.P. 

 200 Crescent Court, Suite 1500 

 Dallas, TX 75201 

 Richard L. Bazelon 

 A. Richard Feldman 

 Bazelon & Less 

 1515 Market Street 

 7th Floor 

 Philadelphia, PA 19102 

 Attorneys for Appellants 

 Ann S. DuRoss 

 Assistant General Counsel 

 Maria Beatrice Valdez 

 Acting Senior Counsel 

 Thomas C. Bahlo (Argued) 

 Counsel 

 Federal Deposit Insurance 

 Corporation 

 550 17th Street, N.W. 

 Room H-11126 

 Washington, D.C. 20429 

 Attorneys for Appellee 

 Federal Deposit Insurance 

 Corporation in its Corporate 

 Capacity 

 2 
 David Smith 

 Rolin P. Bissell 

 Theresa E. Loscalzo 

 Schnader, Harrison, Segal & Lewis 

 1600 Market Street, Suite 3600 

 Philadelphia, PA 19103 

 John J. Graubard (Argued) 

 Colleen J. Boles 

 Charlotte M. Kaplow 

 David A. Birch 

 Federal Deposit Insurance 

 Corporation Legal Division 

 101 East River Drive 

 P.O. Box 280402 

 East Hartford, CT 06128-0402 

 Attorneys for Appellee 

 Federal Deposit Insurance 

 Corporation as Receiver for Meritor 

 Savings Bank 

 D. Michael Fisher 

 Daniel J. Doyle (argued) 

 Calvin R. Koons 

 John G. Knorr, III 

 Office of Attorney General 

 Litigation Section 

 15th Fl., Strawberry Square 

 Harrisburg, PA 17120 

 Attorneys for Appellee 

 Secretary of Banking of the 

 Commonwealth of Pennsylvania 

OPINION OF THE COURT 

GREENBERG, Circuit Judge. 

I. INTRODUCTION 

Gary E. Hindes, and other shareholders of Meritor 

Savings Bank ("Meritor"), appeal from various district court 

 3 
orders dismissing their claims against the Federal Deposit 

Insurance Corporation ("FDIC") and the Pennsylvania

Secretary of Banking ("Secretary"). Appellants contend that 

the appellees wrongfully seized Meritor, thereby depriving 

them of their substantive due process rights. More 

particularly, appellants allege that the FDIC reneged on an 

agreement with Meritor with respect to the computation of 

its capital base, ignored Meritor's actual financial condition 

when seizing Meritor, and engaged in a conspiracy with 

state officials to close the bank. Appellants also assert that 

the FDIC violated certain of its statutory duties as receiver. 

The district court had jurisdiction pursuant to 28 U.S.C. 

SS 1331 and 1367 and 12 U.S.C. SS 1819(b)(2)(A) and

1821(d)(6)(A). We have jurisdiction to review thefinal orders 

of the district court pursuant to 28 U.S.C. S 1291. We 

exercise plenary review over the issues on this appeal, as 

they all require review of the district court's interpretation 

and application of legal precepts. See Turner v. ScheringPlough, Corp., 901 F.2d 335, 340 (3d Cir. 1990). 

II. FACTS AND PROCEDURAL HISTORY 

The Secretary1 closed Meritor, the largest savings bank in 

Pennsylvania, on December 11, 1992, and appointed the 

FDIC as its receiver. The majority of appellants' allegations 

concern the events leading up to that closing, as they 

primarily object to the propriety of the seizure of Meritor. 

Because the district court disposed of all of appellants' 

claims on either motions to dismiss or for summary 

judgment, we accept as true their allegations, and therefore 

base our recitation of the facts on the allegations in the 

complaint. 

In 1982, at the FDIC's request, Meritor assumed the

deposit liabilities of Western Savings Fund Society of 

Philadelphia ("Western"). To induce Meritor to assume these 

liabilities, the FDIC granted Meritor the right to amortize, 

_________________________________________________________________ 

1. The Secretary of Banking at the time of the events we describe was 

Sarah W. Hargrove. Since that time, Richard C. Rishel has replaced her. 

Thus, in this memo we refer to the Secretary as "he." See Fed. R. App. 

P. 43(c). 

 4 
over a 15-year period, $796 million of "goodwill" resulting 

from the Western transaction ("grand-fathered goodwill"), 

thereby increasing Meritor's regulatory capital base. This 

transaction saved the FDIC and its Bank Insurance Fund 

$400 million. The FDIC and Meritor evidenced this 

regulatory goodwill inducement in a written agreement 

dated April 3, 1982. For over ten years, the FDIC and 

Meritor abided by that agreement. 

In an agreement dated April 5, 1991, the FDIC reaffirmed 

the 1982 agreement and further agreed to renegotiate 

Meritor's capital requirements if at any time Congress 

prohibited Meritor from considering this goodwill as a 

capital component. This 1991 agreement was prompted

when Meritor proposed that its 12% Subordinated Capital 

Noteholders ("Noteholders") exchange their notes for stock 

and cash in order to infuse Meritor with more that $100 

million of additional capital. Because the Noteholders would 

become shareholders, the continuation of the goodwill as a 

regulatory asset of Meritor was crucial to them. Therefore, 

before agreeing to the proposal, representatives of the 

Noteholders met with senior management of the FDIC, who 

assured them that the FDIC had no plans to disallow the 

grand-fathered goodwill. In fact, the FDIC encouraged the 

Noteholders to participate in the exchange. The exchange 

was completed in 1991, resulting in a $108 million increase 

in Meritor's capital. 

On December 19, 1991, Congress adopted the FDIC 

Improvements Act of 1991, requiring the FDIC to adopt new 

rules regulating bank capital. The FDIC published draft 

regulations in the summer of 1991 which clearly permitted 

Meritor's grand-fathered goodwill to continue to be included 

in its capital. When the FDIC adopted final regulations in 

September 1991, however, the regulations differed from the 

proposals so as to create doubt as to whether Meritor's 

grand-fathered goodwill would remain as capital. The FDIC 

refused Meritor's request to clarify the uncertainty. The 

confusion created by the regulations resulted in a 

withdrawal of over $300 million in deposits from Meritor. 

The appellants allege that, by mid-September, the FDIC 

and the Secretary had begun to devise a plan to seize 

Meritor in mid-December 1992, which was approximately 

 5 
the time the new regulations would take effect, and to sell 

its assets to one of Meritor's most aggressive competitors. 

On December 11, 1992, the FDIC hand-delivered a letter 

to Meritor reneging on its 1982 agreement and formally 

notifying Meritor that, under the new regulations, the 

grand-fathered goodwill no longer would be included in its 

capital base. On the same day, the FDIC also handdelivered Meritor a "Notification to Primary Regulator" 

("Notification") which stated that the FDIC Board of 

Directors had found that Meritor was in violation of its 

1991 agreement regarding capital maintenance, was in an 

unsound condition, and had inadequate capital. In the 

Notification, the FDIC asserted that it immediately would 

institute proceedings to cancel Meritor's insurance if 

Meritor did not promptly satisfy certain capitalization 

requirements. Because insurance was a prerequisite to 

Meritor's continued operation, the demand created a crisis. 

The Secretary, who the FDIC notified of these matters prior 

to notifying Meritor, used the crisis to justify the immediate 

closing of the bank on the same afternoon. At that time, he 

appointed the FDIC as receiver of Meritor. Neither Meritor 

nor the appellants challenged the appointment under the 

state procedure available for that purpose. See Pa. Stat. 

Ann., tit. 71, S 733-605 (West 1990). 

The appellants also allege that the FDIC and the 

Secretary disregarded circumstances which rendered the 

closing of Meritor inappropriate. In particular, eight days 

before the closing of the bank, Meritor sold a subsidiary 

bringing in capital which put it in compliance with the 

capital maintenance agreement. In addition, on December 

9, 1992, two days prior to the closing of the bank, the FDIC 

received a bid of $181.3 million for Meritor's remaining 

operations and deposits. 

In August 1994, appellants filed this action against the 

FDIC, both in its corporate capacity ("FDIC-Corporate") and 

as receiver of Meritor ("FDIC-Receiver"), various unidentified 

agents and employees of the FDIC ("the Doe defendants"), 

and the Secretary. In general, the complaint alleges that 

these appellees deprived the appellants of their substantive 

due process rights2 and asserts claims under 42 U.S.C. 

_________________________________________________________________ 

2. The complaint also alleges a deprivation of the privileges and 

immunities guaranteed under the Fifth and Fourteenth amendments, 

 6 
S 1983, Bivens v. Six Unknown Fed. Narcotics Agents, 403 

U.S. 388, 91 S.Ct. 1999 (1971), and the Administrative 

Procedure Act ("APA"). The complaint also alleges that the 

FDIC violated various statutory duties. 

By order entered March 1, 1995, the district court 

dismissed the due process claims, embodied in Count I, 

against the FDIC and the Secretary as well as appellants' 

APA claim in Count IV against FDIC-Corporate on the

grounds that 12 U.S.C. S 1821(j) deprived it of jurisdiction 

to adjudicate those claims. The district court also dismissed 

the section 1983 claim against the FDIC, finding that the 

FDIC was not a "person" under that statute. 

By order entered September 6, 1995, the district court 

dismissed the claims against the FDIC for the enforcement 

of its statutory duties. On November 8, 1996, the district 

court approved a Stipulation of Dismissal of the remaining 

claims against the Secretary in his individual capacity, 

which the court entered on November 27, 1996. Thus,

following the district court's order of November 27, 1996, 

appellants' only remaining claims were against the Doe 

defendants. 

On November 15, 1996, appellants moved the district

court to certify its March 1, 1995 order for an interlocutory 

appeal. They argued that the claims involving the Doe 

defendants were substantially the same as those against 

the FDIC and an immediate appeal would avoid the waste 

that would occur if this court eventually overturned the 

district court's order. FDIC-Receiver and FDIC-Corporate 

objected to the certification of the March 1, 1995 order, in 

part because the appellants' request did not include a 

request to certify the September 6, 1995 order as well, 

which they argued would result in "piecemeal" appellate 

review. Thereafter, appellants agreed to an expansion of the 

proposed certification to include the district court's order of 

September 6, 1995. 

On April 27, 1997, the district court denied the 

appellants' motion to certify its orders. The district court 

_________________________________________________________________ 

but we need not address this allegation in detail given our disposition of 

the claims. 

 7 
dismissed the claims against the Doe defendants because 

there were no named parties remaining in the action and 

because appellants failed to identify the fictitious parties by 

the close of discovery. Having dismissed the claims against 

the Doe defendants, the court concluded that its orders 

were final so that it therefore denied the appellants' motion 

to certify as moot. On May 6, 1997, they filed a notice of 

appeal. 

III. DISCUSSION 

A. TIMELINESS OF APPEAL 

An untimely appeal does not vest an appellate court with 

jurisdiction. See Browder v. Director, Dep't of Corrections, 

434 U.S. 257, 264, 98 S.Ct. 556, 561 (1978); Marcangelo v. 

Boardwalk Regency, 47 F.3d 88, 91 (3d Cir. 1995). To be 

timely, the notice of appeal must have been filed within 60 

days from the date of the district court's entry of a final 

judgment. See 28 U.S.C. S 1291; Fed. R. App. P. 4(a)(1) 

(establishing a 60-day period for appeal where a federal 

agency or officer is a party). In general, a judgment is not 

final for purposes of appeal until the district court has 

disposed of all claims against all parties. See Buzzard v. 

Roadrunner Trucking, Inc., 966 F.2d 777, 779 (3d Cir. 

1992); Jackson v. Hart, 435 F.2d 1293, 1294 (3d Cir. 1970) 

(per curiam). 

Appellees have filed a motion to dismiss this appeal as 

untimely. They argue that the district court's orders were 

final, thereby starting the running of the time to appeal, on 

November 27, 1996, upon the district court's dismissal of 

all claims except those against the Doe defendants. Thus, 

appellees aver that this appeal is untimely because the 

appellants did not file a notice of appeal until May 6, 1997, 

179 days after the district court's entry of a final judgment. 

We reject appellees' argument and hold that appellants 

timely filed this appeal so that we have jurisdiction to 

consider the appeal on its merits. 

Doe defendants "are routinely used as stand-ins for real 

parties until discovery permits the intended defendants to 

be installed." Scheetz v. Morning Call, Inc., 130 F.R.D. 34, 

 8 
36 (E.D. Pa. 1990) (citations omitted). The case law is clear 

that "[f]ictitious parties must eventually be dismissed, if 

discovery yields no identities," id. at 37, and that an action 

cannot be maintained solely against Doe defendants. See 

Scheetz v. Morning Call, Inc., 747 F. Supp. 1515, 1534-35 

(E.D. Pa. 1990) (noting that Federal Rules do not 

contemplate a plaintiff proceeding without a tangible 

defendant except in extraordinary circumstances), aff'd on 

other grounds, 946 F.2d 202 (3d Cir. 1991); Breslin v. City 

and County of Philadelphia, 92 F.R.D. 764 (E.D. Pa. 1981) 

(dismissing complaint against identified defendants

warrants dismissing unnamed defendants). 

Appellees conclude from these cases that Doe defendants 

are deemed dismissed, without a formal order by the

district court, if they remain unnamed at the close of 

discovery or upon the district court's dismissal of all named 

defendants. We, however, need not reach the issue of 

whether the district court's order became final on November 

27, 1996, by virtue of such a deemed dismissal of the Doe 

defendants.3 Even if a final order was entered on that date, 

this appeal was timely because the "Motion to Certify for 

Immediate Appeal" which appellants filed on November 15, 

1996, was the functional equivalent of a notice of appeal 

and therefore satisfies the requirements of Fed. R. App. P. 

3. 

Fed. R. App. P. 3(c) requires that a notice of appeal 

specify the parties taking the appeal and the orders from 

which the parties appeal. Despite these requirements, an 

"appeal will not be dismissed for informality of form or title 

of the notice of appeal, or for failure to name a party whose 

intent to appeal is otherwise clear from the notice." Id. 

_________________________________________________________________ 

3. We have case law indicating that "[a]n order that effectively ends the 

litigation on the merits is an appealable final judgment even if the 

district court does not formally include judgment on a claim that has 

been abandoned" by a party. Lusardi v. Xerox Corp., 975 F.2d 964, 970 

n.9 (3d Cir. 1992) (quoting Jones v. Celotex Corp., 867 F.2d 1503, 1503- 

04 (5th Cir. 1989) (per curiam)); see also Baltimore Orioles, Inc. v. 

Major 

League Baseball Players Ass'n, 805 F.2d 663, 667 (7th Cir. 1986). We 

again recognize this authority, but need not decide whether it would 

apply in this case because, as explained above, this appeal would be 

timely without reliance on it. 

 9 
Courts liberally construe the requirements for a notice of 

appeal. See Smith v. Barry, 502 U.S. 244, 248, 112 S.Ct. 

678, 681-82 (1992); Torres v. Oakland Scavenger Co., 487 

U.S. 312, 316-17, 108 S.Ct. 2405, 2408-09 (1988). Thus, 

courts can find that a litigant has satisfied the 

requirements of Rule 3(c) even if the litigant files a 

document that is "technically at variance with the letter of 

[Rule 3] . . . if the litigant's action is the functional 

equivalent of what the rule requires." Torres, 487 U.S. at 

316-17, 108 S.Ct. at 2408-09. Therefore, if a litigant files a 

document, regardless of its title, within the time for appeal 

under Fed. R. App. P. 4, it is effective as a notice of appeal 

provided that it gives sufficient notice of the party's intent 

to appeal. See Smith, 502 U.S. at 248-49, 112 S.Ct. at 682. 

We have held that a "Petition for Permission to Appeal" 

filed under the mistaken belief that the district court's 

order was interlocutory, but which notified the parties and 

the court of the intention to appeal, functioned as a notice 

of appeal. See Landano v. Rafferty, 970 F.2d 1230, 1237 

(3d Cir. 1992); see also San Diego Comm. Against 

Registration and the Draft v. Governing Bd. of Grossmont 

Union High Sch. Dist., 790 F.2d 1471, 1473-74 (9th Cir. 

1986) (construing a Fed. R. App. P. 5(a) motion as a notice 

of appeal). 

In this case, appellants filed documents which were the 

"functional equivalent" of a notice of appeal. On November 

15, 1996, appellants filed a "Motion to Certify for Immediate 

Appeal" in which they sought leave to file an interlocutory 

appeal of the district court's March 1, 1995 order. Thus, 

even if the March 1 order became final on November 27, 

1996, we will treat the motion, which specifically indicated 

an intention to appeal, and which was filed in the belief 

that the order remained interlocutory, as a notice of appeal. 

See Landano, 970 F.2d at 1237. Subsequently, appellants 

also filed a reply to appellees' objection to the certification, 

which requested to expand the proposed certified appeal to 

include the district court's September 6, 1995 order. Taken 

together, these documents notify the parties and the court 

as to appellants' specific intention to seek appellate review 

of both orders. Therefore, the documents were the 

functional equivalent of a de jure notice of appeal. 

 10 
Furthermore, appellants filed these documents within the 

period for a timely appeal under Rule 4. The "Motion to 

Certify for Immediate Appeal" was filed after the district 

court approved the stipulation of dismissal but before the 

order actually was entered. Rule 4(a)(2) specifically 

addresses this scenario as it provides that "[a] notice of 

appeal filed after the court announces a decision or order 

but before the entry of the judgment or order is treated as 

filed on the date of and after the entry" of that order. 

Pursuant to this rule, we treat the motion as filed on 

November 27, 1996, after the entry of the dismissal order. 

Accordingly, this appeal is timely.4 

B. DUE PROCESS AND APA CLAIMS 

On March 1, 1995, the district court held that 12 U.S.C. 

S 1821(j) deprived it of jurisdiction over appellants' due 

process and APA claims, Counts I and IV respectively, and 

therefore dismissed those counts against all appellees. By 

the same order, the district court also dismissed Count III, 

a 42 U.S.C. S 1983 claim, as against the FDIC for failure to 

state a claim because the FDIC is not a "person" within 

that statute.5 

We begin our merits analysis with a discussion of the 

appellants' First Amended Complaint. The district court 

analyzed the complaint as though Count I asserted an 

independent cause of action for a due process violation 

against all appellees. We do not adopt this construction of 

the complaint. 

Count I seeks the following remedies based upon an 

alleged due process violation: (1) a declaration that the 

_________________________________________________________________ 

4. In any event, Judge Roth and Judge Seitz conclude that this case is 

appealable because a timely notice of appeal was filed from the order 

dismissing the Doe defendants. 

5. Count III also asserts a section 1983 claim against the Secretary in 

his individual capacity. On November 27, 1996, the district court entered 

a Stipulation of Dismissal of the claims against the Secretary in his 

individual capacity. This appeal, therefore, does not concern Count III to 

the extent it asserts a claim against the Secretary in his individual 

capacity. 

 11 
FDIC, Doe defendants and the Secretary violated 

appellants' substantive due process rights; (2) a declaration 

that the FDIC's notification is void and a rescission thereof; 

(3) a declaration of the invalidity of the Secretary's orders 

closing Meritor and appointing FDIC as receiver and

rescissions thereof; and (4) the imposition of a constructive 

trust for Meritor's benefit nunc pro tunc. This count, 

however, does not identify the source of the substantive 

cause of action for the alleged constitutional violation as 

against each appellee. 

Accordingly, FDIC-Corporate urges us to dismiss Count I 

as improperly seeking declaratory relief without asserting a 

substantive cause of action. We decline to view the

complaint so narrowly. Rather, we are required to construe 

the pleadings "as to do substantial justice," Fed R. Civ. P. 

8(f), and in favor of the appellants. See Budinsky v. 

Commonwealth of Pa. Dep't of Envtl. Resources, 819 F.2d 

418, 421 (3d Cir. 1987); see also West v. Keve, 571 F.2d 

158, 163 (3d Cir. 1978) (liberally construing a complaint, 

which literally only sued defendants in their official 

capacities, so as also to state a claim against the

defendants in their individual capacities because the 

complaint stated facts sufficient to constitute such a claim). 

The due process violations alleged in Count I against the 

FDIC and the Doe defendants properly are viewed as 

constitutional claims asserted under section 1983 and 

Bivens, as alleged in Counts III and II respectively. 

Therefore, Count I does not assert a separate cause of 

action against these defendants, but seeks declaratory and 

injunctive relief in addition to the relief requested in Counts 

II and III. 

The due process claim alleged against the Secretary in 

his official capacity is a different matter, however, because 

the complaint does not elsewhere identify a substantive 

cause of action against the Secretary in his official capacity 

for a due process violation. While Count III asserts a claim 

against the Secretary, it does so only in his individual 

capacity. Accordingly, although the complaint does not 

explicitly identify this claim as such, we construe it as 

asserting a section 1983 claim against the Secretary in his 

official capacity. 

 12 
Thus, we proceed with our analysis as though the relief 

sought in Count I against the FDIC and the Doe defendants 

was sought in the counts alleging a right to relief pursuant 

to section 1983 and Bivens. Although our analysis of these 

counts takes a different course than that of the district 

court, we ultimately affirm its dismissal of these claims. 

We, like the district court, will not discuss the merits of the 

Bivens claim because the Doe defendants properly were 

dismissed on other grounds. 

1. Section 1983 Claim 

We begin our analysis with a discussion of the section 

1983 claim asserted against the FDIC. The district court 

dismissed this claim, holding that the FDIC was not a 

"person" within the meaning of section 1983 and therefore 

was not subject to section 1983 liability. The complaint 

alleges that the FDIC, under color of state law, acted in 

concert with the Secretary and deprived appellants of their 

substantive due process rights. The district court held that 

the FDIC could not be held liable under section 1983 

because it was not a "person" within the meaning of the 

statute. We agree. 

Section 1983 creates a cause of action against "[e]very 

person who, under color of any [state law] . .. subjects, or 

causes to be subjected, any citizen of the United States or 

other person within the jurisdiction thereof to the

deprivation of any rights, privileges, or immunities secured 

by the Constitution." 42 U.S.C. S 1983. Because section 

1983 provides a remedy for violations of federal law by 

persons acting pursuant to state law, federal agencies and 

officers are facially exempt from section 1983 liability 

inasmuch as in the normal course of events they act

pursuant to federal law. See District of Columbia v. Carter, 

409 U.S. 418, 425, 93 S.Ct. 602, 606 (1973); see also DalyMurphy v. Winston, 837 F.2d 348, 355 (9th Cir. 1988) (no 

section 1983 claim against federal officials acting pursuant 

to federal law); Zernial v. United States, 714 F.2d 431, 435 

(5th Cir. 1983) (action taken pursuant to federal law by 

federal agents and private parties); Kite v. Kelly, 546 F.2d 

334, 337 (10th Cir. 1976) (section 1983 is not applicable to 

federal officers acting under federal law); Scott v. United 

 13 
States Veteran's Admin., 749 F. Supp. 133, 134 (W.D. La. 

1990) (federal government and its agencies acting under 

federal law are not "persons" within section 1983), aff'd, 

929 F.2d 146 (5th Cir. 1991) (per curiam). 

It is a well-established principle, however, that federal 

officials are subject to section 1983 liability when sued in 

their official capacity where they have acted under color of 

state law, for example in conspiracy with state officials. See, 

e.g., Melo v. Hafer, 912 F.2d 628, 638 (3d Cir. 1990), aff'd 

on other grounds, 502 U.S. 21, 112 S.Ct. 358 (1991); Jorden 

v. National Guard Bureau, 799 F.2d 99, 111 n.17 (3d Cir. 

1986) (citing Knights of the Klu Klux Klan v. East Baton 

Rouge Parish, 735 F.2d 895, 900 (5th Cir. 1984)); see also 

Strickland v. Shalala, 123 F.3d 863, 866 (6th Cir. 1997); 

Cabrera v. Martin, 973 F.2d 735, 741 (9th Cir. 1992); Olson 

v. Norman, 830 F.2d 811, 821 (8th Cir. 1987). 

The allegations in the section 1983 claim, however, are 

against a federal agency, the FDIC, not federal officials. We 

find no authority to support the conclusion that a federal 

agency is a "person" subject to section 1983 liability, 

whether or not in an alleged conspiracy with state actors. 

We, therefore, hold that federal agencies are not "persons" 

subject to section 1983 liability.6 

In Accardi v. United States, 435 F.2d 1239, 1241 (3d Cir. 

1970), we held that "[t]he United States and other 

governmental entities are not `persons' within the meaning 

of Section 1983." We reject appellants' suggestion that 

subsequent decisions of the Supreme Court have 

undermined Accardi's authority, except to the extent that 

the Court now recognizes municipal liability under section 

1983.7 See Monell v. Department of Soc. Servs., 436 U.S. 

_________________________________________________________________ 

6. We note that two district courts in this circuit recently have come to 

the same conclusion. See Alexander v. Hargrove, 1997 WL 14436, No. 

Civ. 93-5510 (E.D. Pa. Mar. 31, 1995); Hurt v. Philadelphia Hous. Auth., 

806 F. Supp. 515, 524 (E.D. Pa. 1992). 

7. In particular, appellants contend that in Accardi we relied on the 

Supreme Court's narrow interpretation of "person" in Monroe v. Pape, 

365 U.S. 167, 81 S.Ct. 473 (1961), which the Court overruled in Monell 

v. Department of Soc. Servs., 436 U.S. 658, 98 S.Ct. 2018 (1977), to the 

 14 
658, 98 S.Ct. 2018 (1977). Accardi's holding that the 

United States was an improper party in a section 1983 

action, see Accardi, 935 F.2d at 1242, is not affected by the 

Supreme Court's subsequent recognition of municipal

liability. Because the United States is not a proper 

defendant in a section 1983 action, neither is a federal 

agency, an arm of the sovereign. See United States v. Vital 

Health Prods., Ltd., 786 F. Supp. 761, 778 (E.D. Wis. 1992), 

aff 'd without opinion sub nom., United States v. LeBeau, 

985 F.2d 563 (7th Cir. 1993); John's Insulation, Inc. v. 

Siska Const. Co., 774 F. Supp. 156, 161 (S.D.N.Y. 1991). 

We also note that, relying upon Accardi, the Court of 

Appeals for the Fifth Circuit has held that "a federal agency 

is . . . excluded from the scope of section 1983 liability." 

See Hoffman v. United States Dep't of Hous. & Urban Dev., 

519 F.2d 1160, 1165 (5th Cir. 1975); see also LaRouche v. 

City of New York, 369 F. Supp. 565, 567 (S.D.N.Y. 1974) 

(holding that the CIA, a federal agency, is not a person 

under section 1983). 

For the reasons set forth above, we affirm the district 

court's dismissal of the section 1983 claim against the 

FDIC. In light of our discussion regarding the proper 

_________________________________________________________________ 

extent that Monroe held that local governments were not subject to 

section 1983 liability. 

Although in Accardi we did not cite Monroe, we did rely on three cases 

which rejected liability for local government agencies based upon Monroe. 

See Egan v. City of Aurora, 365 U.S. 514, 81 S.Ct. 684 (1961); United 

States v. County of Phila., 413 F.2d 84 (3d Cir. 1969); Broome v. Simon, 

255 F. Supp. 434 (W.D. La. 1966). Appellants argue that because Monell 

reversed Monroe by holding that local governments are subject to suit 

under section 1983, the efficacy of Accardi has been undermined. 

Appellants essentially argue that under Monell and the Supreme 

Court's subsequent decision in Will v. Michigan Dep't of State Police, 491 

U.S. 58, 69, 109 S.Ct. 2304, 2311 (1989), federal entities are subject to 

suit under section 1983. In Monell, the Court interpreted "person" for 

purposes of section 1983 to include "bodies politic and corporate." See 

Monell, 436 U.S. at 688-89, 98 S.Ct. at 2034-35. Appellants argue that 

the FDIC is within the meaning of "bodies politic and corporate" because 

12 U.S.C. S 1819 expressly characterizes the FDIC as a "body corporate." 

We reject this rationale. 

 15 
construction of the complaint, our dismissal of the section 

1983 claim makes it unnecessary to discuss whether 12 

U.S.C. S 1821(j) would preclude the district court from 

granting the declaratory and injunctive relief requested in 

Count I to the extent it would operate against the FDIC. 

2. Bivens Claim 

Because we affirm the district court's dismissal of all of 

appellants' claims against the named appellees, we, like the 

district court, need not address the merits of appellants' 

Bivens claim against the Doe defendants. Rather, we affirm 

the dismissal of this claim because an action cannot 

proceed solely against unnamed parties. See Scheetz, 747 

F. Supp. at 1534. 

3. APA Claim 

a. 12 U.S.C. S 1821(j) 

We turn next to Count IV of appellants' complaint, which 

seeks APA review of the FDIC's issuance of the Notification 

finding that Meritor was operating in an unsafe and

unsound condition. Count IV alleges that the FDIC's

determinations, as embodied in the Notification, were 

arbitrary, capricious, an abuse of discretion and in violation 

of appellants' constitutional rights. Appellants thus seek 

the following remedies: (1) a declaration that thefindings 

are null and void; (2) a rescission of the declarations; and 

(3) the imposition of a constructive trust. The district court 

dismissed this claim as precluded by 12 U.S.C. S 1821(j). 

We agree. 

The Financial Institutions, Reform, Recovery, and 

Enforcement Act of 1989 ("FIRREA") establishes a 

comprehensive scheme for conservatorships and 

receiverships of insured financial institutions. See Richard 

B. Gallagher, Annotation, Construction and Application of 

Anti-Injunction Provision of Financial Institutions Reform, 

Recovery, and Enforcement Act (FIRREA) (12 U.S.C.A.

S 1821(j)), 126 A.L.R. Fed. 43, 53 (1995). The FDIC8 may be 

appointed as a conservator or receiver of an insured 

_________________________________________________________________ 

8. FIRREA grants the Resolution Trust Corporation ("RTC") the same 

powers and protections as the FDIC when the RTC operates as a 

receiver. See 12 U.S.C. S 1441a(b)(5),S 1441a(b)(4); see also Sunshine 

Dev., Inc. v. FDIC, 33 F.3d 106, 112 n.6 (1st Cir. 1994). 

 16 
financial institution if, inter alia, the institution becomes 

insolvent. See 12 U.S.C. S 1821(c); Gallagher, supra, at 53. 

FIRREA also includes an anti-injunction provision intended 

to permit the FDIC to perform its duties as conservator or 

receiver promptly and effectively without judicial 

interference. See 12 U.S.C. S 1821(j); Gallagher, supra, at 

54. Section 1821(j) provides in relevant part that 

 [e]xcept as provided in this section, no court may take 

 any action, except at the request of the Board of 

 Directors by regulation or order, to restrain or affect 

 the exercise of powers or functions of the Corporation 

 as a conservator or a receiver. 

12 U.S.C. S 1821(j). 

In making the determinations and issuing the 

Notification, the FDIC clearly was acting in its corporate 

capacity. Appellants argue that the district court erred in 

dismissing the APA claim based upon section 1821(j)

because the section does not preclude judicial intervention 

where the FDIC acts in its corporate capacity. Thus, 

appellants would have us interpret section 1821(j) to 

preclude only those orders directly against the FDIC as 

receiver or as conservator. 

We find, however, that the plain language of the statute 

is not so limited. Rather, the statute, by its terms, can 

preclude relief even against a third party, including the 

FDIC in its corporate capacity, where the result is such 

that the relief "restrain[s] or affect[s] the exercise of powers 

or functions of the [FDIC] as a conservator or a receiver." 

12 U.S.C. S 1821(j) (emphasis added). After all, an action 

can "affect" the exercise of powers by an agency without 

being aimed directly at it. 

We note that our holding is not inconsistent with our 

decision in Rosa v. RTC, 938 F.2d 383, 397, 400 (3d Cir. 

1991).9 In Rosa, we did not decide the reach of section 

1821(j) because the RTC conceded that the anti-injunction 

_________________________________________________________________ 

9. This provision applies equally to the RTC. Thus, in considering the 

scope of section 1821(j)'s bar of equitable relief, courts refer to and 

rely 

upon cases involving the RTC and the FDIC interchangeably. See 

Sunshine Dev., Inc. v. FDIC, 33 F.3d 106, 112 n.6 (1st Cir. 1994). 

 17 
provision did not preclude the district court orders running 

against it in its corporate capacity. See Rosa, 938 F.2d at 

397, 400. Thus, Rosa did not hold that section 1821(j) 

allows an injunction against the FDIC in its corporate 

capacity. Further, because the court did not discuss the 

issue, the nature of the district court orders running 

against the RTC in its corporate capacity is not clear; thus, 

it is unclear whether the order running against the RTC in 

its corporate capacity would have had the type of effect we 

now describe. We, therefore, find that Rosa does not control 

the issue which we now confront. 

Likewise, we note that the opinions of other courts of 

appeals do not speak directly to the issue at hand. See 

Bursik v. One Fourth St. N., Ltd., 84 F.3d 1395, 1397 (11th 

Cir. 1996) (the section applies only if the RTC is acting in 

its capacity as receiver); Fischer v. RTC, 59 F.3d 1344, 1347 

(D.C. Cir. 1995) (noting in dicta that courts have 

interpreted the section not to apply where the FDIC is 

acting in its corporate, as opposed to its receiver or 

conservator, capacity); Sierra Club v. FDIC, 992 F.2d 545, 

548-51 (5th Cir. 1993) (holding that the court could enjoin 

the FDIC because it was acting in its corporate capacity). 

The Court of Appeals for the First Circuit has indicated 

quite clearly that a court order which operates against a 

third party is precluded by section 1821(j) if the order 

would have the same effect from the FDIC's perspective as 

a direct action against it precluded by section 1821(j). See 

Telematics Int'l, Inc. v. NEMCL Leasing Corp., 967 F.2d 703, 

707 (1st Cir. 1992). The Telematics court held that the 

district court could not enjoin the FDIC from foreclosing on 

a security interest. See id. at 705. But the court went 

further and also stated the following: 

 Telematics argues that even if the district court lacked 

 the power to enjoin the FDIC from attaching the 

 certificate of deposit held by Fleet Bank, the court 

 nevertheless maintained the authority to allow 

 Telematics to attach the certificate of deposit. The 

 district court concluded that it lacked such authority, 

 and we agree. Permitting Telematics to attach the 

 certificate of deposit, if that attachment were effective 

 against the FDIC, would have the same effect, from the 

 18 
 FDIC's perspective, as directly enjoining the FDIC from 

 attaching the asset. In either event, the district court 

 would restrain or affect the FDIC in the exercise of its 

 powers as receiver. Section 1821(j) prohibits such a 

 result. 

Id. at 707 (emphasis added). We agree with the Court of 

Appeals for the First Circuit's pragmatic suggestion that 

section 1821(j) precludes a court order against a third party 

which would affect the FDIC as receiver, particularly where 

the relief would have the same practical result as an order 

directed against the FDIC in that capacity. 

The relief appellants seek in this case clearly would 

"affect the exercise of powers or functions of the [FDIC] as 

conservator or receiver." Appellants' Count IV seeks a 

declaration that the Notification was void ab initio and a 

rescission thereof. Because the FDIC's findings directly and 

proximately caused the Secretary to close Meritor, the 

appellants also seek the imposition of a constructive trust 

as of the date Meritor was seized. Here, the requested relief 

against the FDIC-Corporate clearly would affect the FDIC's 

continued functioning as receiver and it effectively would 

throw into question every act of FDIC-Receiver. 

Our opinion, however, should not be overread. The 

affecting of the powers of the FDIC-Receiver in this case, 

which appellants' requested relief would cause, if granted, 

would be dramatic and fundamental. We do not suggest 

that we would reach the same result in a case in which the 

effect on the FDIC of an order against a third party would 

be of little consequence to its overall functioning as 

receiver. That type of situation is not before us. 

We reject appellants' contention that section 1818(j) 

cannot be interpeted to bar their constitutional claims 

because Congress did not express a clear intent for the 

section to preclude review of constitutional claims. See 

Webster v. Doe, 486 U.S. 592, 603, 108 S.Ct. 2047, 2053 

(1988). The Webster Court noted that this heightened 

standard is intended to avoid the "serious constitutional 

question" which would result if a court interpreted a federal 

statute so as to deny all judicial review of a constitutional 

claim. See id. at 603, 108 S.Ct. at 2053. Our interpretation 

 19 
of section 1821(j) only denies appellants the declaratory 

and injunctive relief they now seek, but does not deny them 

judicial review for their constitutional claims. Courts 

uniformly have held that the preclusion of section 1821(j) 

does not affect a damages claim. See, e.g., Sharpe v. FDIC, 

126 F.3d 1147, 1155 (9th Cir. 1997); Volges v. RTC, 32 

F.3d 50, 53 (2d Cir. 1994); RPM Investments, Inc. v. RTC, 

75 F.3d 618, 622 (11th Cir. 1996). Thus, our holding does 

not deny appellants a judicial remedy for an appropriate 

damages claim.10 

b. Availability of APA Review 

Even if we agreed that section 1821(j) did not preclude 

the relief appellants seek, we would affirm the district 

court's dismissal of their claim for review under the APA 

because such review is not available in this instance. The 

APA grants a right of judicial review of an agency action to 

"[a] person suffering legal wrong because of any agency 

action, or adversely affected or aggrieved by agency action 

within the meaning of a relevant statute." 5 U.S.C. S 702. 

This right of review, however, is limited. First, the APA only 

provides for review of those actions "made reviewable by 

statute and final agency action for which there is no other 

adequate remedy in a court." 5 U.S.C. S 704. Second, the 

APA withdraws the right of review "to the extent that 

statutes preclude judicial review." 5 U.S.C. S 701(a)(1). 

We find that the district court did not have jurisdiction to 

_________________________________________________________________ 

10. We recognize that the defendants in such an action might be able to 

assert various defenses but our concern here is only with the statute we 

are construing. This is also the circumstance in other places in the 

opinion in which we recognize the possibility of the bringing of a 

damages action. 

In fact, shareholders of Meritor have brought a damages action in the 

United States Court of Federal Claims against the United States 

predicated on the alleged wrongful issuance of the Notification. See 

Slattery v. United States, 35 Fed. Cl. 180 (1996). According to appellants 

this action is still pending and is predicated both on constitutional and 

breach of contract principles. Br. at 15-16. The Court of Federal Claims 

rather than this court will make the determination of what effect, if any, 

this opinion has in that litigation. 

 20 
review the FDIC-Corporate's issuance of the Notification 

because (1) it was not a final agency action, and (2) review 

expressly is barred by 12 U.S.C. S 1818(i)(1) and 

jurisdiction therefore is withdrawn pursuant to 5 U.S.C. 

S 701(a)(1). 

The APA provides for review of a "final agency action for 

which there is no other adequate remedy in a court," 5 

U.S.C. S 704, but the APA does not define what constitutes 

a "final" agency action. The Supreme Court has stated that 

the "core question is whether the agency has completed its 

decisionmaking process, and whether the result of that 

process is one that will directly affect the parties." Franklin 

v. Massachusetts, 505 U.S. 788, 797, 112 S.Ct. 2767, 2773 

(1992). The action must be a "definitive statement of [the 

agency's] position" with concrete legal consequences. FTC v. 

Standard Oil Co., 449 U.S. 232, 241, 101 S.Ct. 488, 493 

(1980); see also Darby v. Cisneros, 509 U.S. 137, 144, 113 

S.Ct. 2539, 2543 (1993). We have held that "thefinality of 

[an agency action] is determined by its consequences" or its 

practical effects. Shea v. Office of Thrift Supervision, 934 

F.2d 41, 44 (3d Cir. 1991); see also In re Seidman, 37 F.3d 

911, 923 (3d Cir. 1994). 

FDIC-Corporate issued Meritor a Notification which 

stated that, as a result of the grand-fathered goodwill no 

longer being considered in Meritor's capital base, Meritor 

was undercapitalized and in violation of the FDIC 

agreement. In the Notification, the FDIC also notified 

Meritor that procedures would be initiated to cancel 

Meritor's deposit insurance if Meritor did not come into 

immediate compliance with certain capital requirements. 

Based upon this information, the Secretary closed Meritor 

the same day that FDIC-Corporate issued the Notification.11 

We agree with FDIC-Corporate that the Notification at 

issue here was "the first step in a multi-step statutory 

_________________________________________________________________ 

11. The Secretary presumably acted pursuant to Pa. Stat. Ann., tit. 71, 

S 733-504(B) (West 1990), which states, in relevant part, that the 

Secretary need not conduct a hearing prior to taking possession of a 

financial institution "whenever immediate action shall be necessary in 

order to protect the interests of the depositors, other creditors, or 

shareholders of an institution." 

 21 
procedure which must be followed when FDIC-Corporate 

considers terminating an institution's deposit insurance." 

Br. of Appellee FDIC-Corporate at 12; see also 12 U.S.C. 

S 1818(a)(2). After such a notification is issued, to terminate 

an institution's deposit insurance, the FDIC also, inter alia, 

must give notice of a hearing and conduct a hearing

pursuant to statutory requirements. See 12 U.S.C. 

S 1818(a). In the context of this statutory procedure, the 

issuance of the Notification does not represent the FDIC's 

definitive statement regarding the termination of a financial 

institution's insurance status. 

In Standard Oil, the Supreme Court held that the Federal 

Trade Commission's ("FTC") issuance of a complaint was 

not a final agency action and therefore was not reviewable 

under the APA. See Standard Oil, 449 U.S. at 238, 101 

S.Ct. at 492. The Court reasoned that the complaint was, 

by its terms, not a definitive statement; rather, the 

complaint only was indicative of a "reason to believe" that 

the party was violating the law. See id. at 241, 101 S.Ct. at 

493-94. The Court found that the complaint was a 

determination that an administrative proceeding would be 

commenced but did not have the legal force or practical 

effect on the party's daily business activities indicative of a 

final agency determination. See id., 101 S.Ct. at 494. The 

Court noted that the finality requirement has been 

interpreted "in a pragmatic way." See id. at 239, 101 S.Ct. 

at 493. 

We find that the issuance of the Notification was not the 

FDIC's definitive statement. See id. at 241, 101 S.Ct. at 

493. Furthermore, the issuance of the Notification did not 

have the type of effect we described and required in Shea v. 

Office of Thrift Supervision to be a final, reviewable action, 

namely that the agency action must be one that "impose[s] 

an obligation, den[ies] a right, or fix[es] some legal 

relationship as a consummation of the administrative 

process." Shea, 934 F.2d at 44. Rather, the action that had 

legal effect was the Secretary's decision to close the bank, 

not the FDIC's issuance of the Notification. 

We also agree with the Court of Appeals for the Ninth 

Circuit, which has held that where a state actor relies upon 

a federal agency's notice, the state action does not convert 

 22 
the notice into a final agency act under the APA. See Air 

California v. United States Dep't of Transp., 654 F.2d 616, 

621 (9th Cir. 1981). In Air California, the Orange County 

Board of Supervisors ("Board") had adopted a policy

designed to freeze the level of operations at the Orange 

County Airport. See id. at 618. This policy resulted in the 

exclusion of new carriers, ultimately inuring to the benefit 

of Air California, an existing carrier at the airport. See id. 

Thereafter, the Board entered into agreements with the 

Federal Aviation Administration ("FAA") to gain federal 

airport funds, thereby subjecting the airport to federal 

regulations. See id. The FAA held a hearing to investigate 

allegations by carriers who unsuccessfully had applied for 

authorization to use the airport that the airport policy 

violated federal law. See id. Following an investigatory 

hearing, the FAA's Chief Counsel sent a letter to the Board 

warning that failure to comply with federal regulations 

would result in the FAA pursuing sanctions, but that no 

formal action would be taken for 30 days. See id. The FAA 

never took formal action, but as a result of the letter to the 

Board, the Board met and decided to reallocate theflights 

to include additional carriers, thereby reducing the number 

of flights for which Air California was authorized. See id. Air 

California then sought APA review of the FAA letter. See id. 

The court held that the letter was not a final agency order 

because the Board's action, not the FAA letter, immediately 

affected Air California's rights. See id. at 621. 

We reject appellants' attempt to distinguish Standard Oil 

and Air California; according to appellants, these cases are 

distinguishable because of the conspiracy the appellants 

allege existed here. While appellants acknowledge that the 

Notification could have been the beginning of an internal 

adjudicative process, as in Standard Oil, they argue that 

this possibility is immaterial in this factual context. Here, 

appellants contend that the Notification was not intended 

to commence an administrative investigation. They assert 

that by virtue of the alleged conspiracy, the FDIC knew and 

intended that the Secretary would close Meritor 

immediately when he received the Notification. Appellants 

also argue that the complicity involved distinguishes the 

FDIC's Notification from the FAA letter in Air California 

 23 
because the FDIC issued the Notification knowing and 

intending it directly to affect Meritor. In addition, appellants 

assert that because the FDIC specifically targeted Meritor 

whereas the FAA directed its attention to the Board, not to 

the plaintiffs therein, there is a more direct effect on 

Meritor associated with the FDIC's action than there was on 

the plaintiff in Air California by reason of the challenged 

action in that case. 

We acknowledge that the Secretary's closing of Meritor 

precluded the need for a final agency action terminating 

Meritor's insured status. However, appellants' failure to 

challenge the appointment of the receiver under the

available state procedure, see Pa. Stat. Ann., tit. 71, S 733- 

605 (West 1990), does not convert the Notification, an 

otherwise preliminary step in FDIC procedure, into afinal 

agency action reviewable under 5 U.S.C. S 704. 

APA review is unavailable in this case also because 12 

U.S.C. S 1818(i) precludes judicial review of the Notification, 

and the APA does not allow judicial review where another 

statute specifically prohibits it, see 5 U.S.C. S 701(a)(1). 

Section 1818(i) precludes review of orders and notices 

except as specifically provided elsewhere in section 1818. 

Section 1818(i)(1) provides in relevant part that 

 except as otherwise provided in this section . . . no 

 court shall have jurisdiction to affect by injunction or 

 otherwise the issuance or enforcement of any notice or 

 order under any such section, or to review, modify, 

 suspend, terminate, or set aside any such notice or 

 order. 

The Supreme Court has found that this language is clear. 

See Board of Governors of the Fed. Reserve Sys. v. MCorp. 

Fin., Inc., 502 U.S. 32, 39, 112 S.Ct. 459, 463 (1991). In 

MCorp, the Court held that section 1818(i)(1) "provides us 

with clear and convincing evidence that Congress intended 

to deny the District Court jurisdiction to review and enjoin 

the Board's ongoing administrative proceedings." MCorp, 

502 U.S. at 44, 112 S.Ct. at 466; see also Groos Nat'l Bank 

v. Comptroller of the Currency, 573 F.2d 889, 895 (5th Cir. 

1978) (noting that the section "in particular evinces a clear 

intention that this regulatory process is not to be disturbed 

 24 
by untimely judicial intervention, at least where there is no 

`clear departure from statutory authority' "). 

The question we now face is whether the section 1818(i) 

applies only where there is such an ongoing administrative 

proceeding. As discussed above, here there is no such 

proceeding because the Secretary's decision to close Meritor 

based upon the Notification eviscerated the need for further 

proceedings to terminate Meritor's insured status. 

Moreover, to our knowledge, the only case law involving 

section 1818(i) is in the context of an ongoing 

administrative proceeding. 

Yet the plain language of section 1818(i) broadly 

precludes the review of the issuance of any notice under 

any subsection. See 12 U.S.C. S 1818(i)(1); Henry v. Office 

of Thrift Supervision, 43 F.3d 507, 512 (10th Cir. 1994) 

(rejecting contention that the "orders" referred to in section 

1818(i) are limited to those issued after administrative 

hearings). Further, while section 1818 provides for review of 

certain notices and orders, such as those issued after a 

hearing, see 12 U.S.C. S 1818(a)(5) (providing for review of 

an order terminating an institution's insured status); 12 

U.S.C. S 1818(h) (providing for review of orders and notices 

issued after required hearings), it does not provide for 

review of the issuance of this Notification, which was issued 

pursuant to section 1818(a)(1). Thus, by its terms section 

1818(i) applies to this case and is not restricted to 

precluding judicial review which would interfere with an 

ongoing administrative proceeding. Based upon this plain 

meaning, we conclude that the district court did not have 

jurisdiction to review the issuance of the Notification. 

Courts, however, have recognized a limited exception to a 

statute's specific withdrawal of jurisdiction where the 

plaintiff claims that the agency acted in a blatantly lawless 

manner or contrary to a clear statutory prohibition. See, 

e.g., Abercrombie v. Office of the Comptroller of Currency, 

833 F.2d 672, 674-75 (7th Cir. 1987); First Nat'l Bank of 

Grayson v. Conover, 715 F.2d 234, 236 (6th Cir. 1983); 

Groos Nat'l Bank, 573 F.2d at 895. The roots of this socalled "statutory-authority" exception are in Leedom v. 

Kyne, 358 U.S. 184, 79 S.Ct. 180 (1958). 

 25 
The Supreme Court has considered the application of this 

exception to section 1818(i). See Board of Governors of the 

Fed. Reserve Sys. v. MCorp Fin., Inc., 502 U.S. 32, 112 

S.Ct. 459. In MCorp, the Court declined to apply the 

exception, distinguishing it in two respects from the 

situation in Kyne. First, the Court found that there were 

adequate means of review available upon a final 

determination by the agency. Second, the Court held that 

Kyne did not apply because there the preclusion was

implied from congressional silence, whereas the preclusion 

of section 1818(i) was express and clear. See id. at 43-44, 

112 S.Ct. at 465-66. 

We recently have addressed the "statutory-authority" 

exception and emphasized that an integral factor in

determining the applicability of the exception is the clarity 

of the statutory preclusion. See Clinton County Comm'rs v. 

EPA, 116 F.3d 1018, 1928-29 (3d Cir. 1997) (en banc) 

(citing Board of Governors of the Fed. Reserve Sys. v. MCorp 

Fin., Inc., 502 U.S. 32, 112 S.Ct. 459; Briscoe v. Bell, 432 

U.S. 404, 97 S.Ct. 2428 (1977)), cert. denied, 118 S.Ct. 687 

(1998). In rejecting the plaintiffs' contention that review was 

available under Kyne, in Clinton County we held that, as 

with section 1818(i), the section precluding review provided 

" `clear and convincing evidence' . . . that Congress intended 

to deny the district court jurisdiction to review EPA's 

ongoing remedial action." Clinton County, 116 F.3d at 1029. 

We find that this exception does not apply to this case 

primarily for two reasons. First, the exception does not 

apply in the face of such clear preclusive language. Second, 

the FDIC did not act in a blatantly lawless manner.

Although appellants may object to the FDIC's conclusions, 

the FDIC acted pursuant to the requirement that it notify 

a financial institution upon making a determination that 

the financial institution was operating in an unsafe 

financial condition. See 12 U.S.C. S 1818(a)(2). 

We have not overlooked the appellants' arguments 

regarding the effect of our interpretation of the 

jurisdictional bar. First, they argue that where, as here, the 

FDIC knowingly acts to eliminate section 1818 

administrative review, section 1818(i)(1) cannot preclude 

judicial review, because the effect would be to preclude all 

 26 
review of the issuance of the Notification. We reject this 

contention because the result of our holding with respect to 

the preclusion of section 1818(i) is to bar only APA review 

of the FDIC's issuance of the Notification. We are not moved 

by the lack of a remedy under the APA because section 

1818(i) only precludes court action which would "affect by 

injunction or otherwise the issuance or enforcement" of the 

Notification. We see no reason why, under proper 

circumstances, a plaintiff could not institute, and a district 

court could not entertain, an action for damages based 

upon the FDIC's allegedly wrongful conduct without 

offending section 1818(i). 

Second, appellants argue that that we should not 

construe section 1818(i)(1) to bar their constitutional claims 

because Congress clearly must express an intent to 

preclude review of constitutional claims. See Webster, 486 

U.S. at 603, 108 S.Ct. at 2053. We reject this argument for 

the same reasons that we rejected it above in the context of 

the jurisdiction bar of section 1821(j). Again, section 

1818(i)(1) precludes the declaratory and injunctive relief 

sought here, but on its face would not affect an appropriate 

constitutional claim for damages. 

4. Due Process Claim Against Secretary 

We now turn to the claim in Count I against the 

Secretary which seeks a declaration of the 

unconstitutionality of the Secretary's order closing Meritor 

and a rescission thereof. As noted above, we will treat this 

claim as one based upon section 1983 against the 

Secretary in his official capacity. On appeal, the Secretary 

raises an Eleventh Amendment objection to this claim. For 

the reasons we discuss below, we recognize but need not 

reach the Eleventh Amendment issue raised by this claim 

because we find that the district court correctly dismissed 

this claim as barred by 12 U.S.C. S 1821(j). 

In general, the Eleventh Amendment prevents suits in 

federal court against states, or state officials if the state is 

the real party in interest. See Ford Motor Co. v. Department 

of Treasury, 323 U.S. 459, 464, 65 S.Ct. 347, 350 (1945). 

The Amendment, however, does not bar such suits where 

 27 
the state has waived its immunity, see Atascadero State 

Hosp. v. Scanlon, 473 U.S. 234, 241, 105 S.Ct. 3142, 3145 

(1985), Congress validly has abrogated the state's immunity 

under the Fourteenth Amendment, see Seminole Tribe of 

Fla. v. Florida, 517 U.S. 44, 116 S.Ct. 1114 (1996), or the 

well-established exception of Ex Parte Young, 209 U.S. 123, 

28 S.Ct. 441 (1908), applies. 

Of these narrow exceptions, the only one that arguably 

applies in this case is that under Young. The principle 

which emerges from Young and its progeny is that a state 

official sued in his official capacity for prospective 

injunctive relief is a person within section 1983, and the 

Eleventh Amendment does not bar such a suit. See Hafer 

v. Melo, 502 U.S. 21, 27, 112 S.Ct. 358, 362-63 (1991); Will 

v. Department of State Police, 491 U.S. 58, 71 n.10, 109 

S.Ct. 2304, 2312 n.10 (1989); Kentucky v. Graham , 473 

U.S. 159, 167 n.14, 105 S.Ct. 3099, 3106 n.14 (1985) 

("[O]fficial-capacity actions for prospective relief are not 

treated as actions against the State.") (citing Young, 209 

U.S. 123, 28 S.Ct. 441). 

Thus, the Eleventh Amendment does not bar this claim 

against the Secretary, provided that the relief appellants 

seek properly is construed as "prospective injunctive relief" 

or is ancillary to such relief. See Quern v. Jordan, 440 U.S. 

332, 347-49, 99 S.Ct. 1139, 1148-49 (1979). The type of 

prospective relief permitted under Young is relief intended 

to prevent a continuing violation of federal law. See Puerto 

Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 

U.S. 139, 146, 113 S.Ct. 684, 688 (1993) (the Young

exception "does not permit judgments against state officers 

declaring that they violated federal law in the past"); 

Papasan v. Allain, 478 U.S. 265, 277-78, 106 S.Ct. 2932, 

2940 (1986) (the focus of the Young exception is on

addressing ongoing violations of federal law). 

Appellants seek threefold relief against the Secretary: (1) 

a declaration that the Secretary's order closing Meritor was 

unconstitutional; (2) a rescission of the Secretary's order 

closing Meritor; and (3) the imposition of a constructive 

trust nunc pro tunc. We, however, need not reach the issue 

of whether that relief would be prospective because we 

recognize that we need not decide difficult jurisdictional 

 28 
issues where we can decide the case on another dispositive 

issue in favor of the party who would benefit by a ruling 

that we do not have jurisdiction. See Georgine v. Amchem 

Prods., Inc., 83 F.3d 610, 623 (3d Cir. 1996) (citing Norton 

v. Mathews, 427 U.S. 528, 530-33, 96 S.Ct. 2771, 2774-76 

(1976); Elkin v. Fauver, 969 F.2d 48, 52 n.1 (3d Cir. 1992)), 

aff'd sub nom., Amchem Prods., Inc. v. Windsor, 117 S.Ct. 

2231 (1997). 

Although the issue here involves the application of the 

Eleventh Amendment rather than subject matter 

jurisdiction, we find that the issue "sufficiently partakes of 

the nature of a jurisdictional bar" to justify our application 

of the principle recognized in Georgine. See College Sav. 

Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 

131 F.3d 353, 365 (3d Cir. 1997) (quoting Edelman v. 

Jordan, 415 U.S. 651, 678, 94 S.Ct. 1347, 1363 (1974)). 

Moreover, like the jurisdictional issues avoided in Georgine, 

questions under the Eleventh Amendment issue are 

constitutional in scope. Courts, of course, will avoid such 

questions where possible. See, e.g., Spector Motor Servs., 

Inc. v. McLaughlin, 323 U.S. 101, 105, 65 S.Ct. 152, 154 

(1944). 

Largely for the reasons we stated above regarding the 

scope of section 1821(j), we agree with the district court 

that section 1821(j) would bar the declaratory and 

injunctive relief sought against the Secretary. As discussed 

above, section 1821(j) precludes injunctive and declaratory 

relief which would restrain or affect the powers of the FDIC 

as receiver, even where that relief is directed against a third 

party. See Telematics, 967 F.2d at 707. Rescinding the 

order closing Meritor clearly would have essentially the 

same effect on FDIC-Receiver as would an order directly 

enjoining the FDIC from continuing to act as receiver. 

Appellants urge that relief is warranted and not 

precluded by section 1821(j) where, as here, the gravamen 

of the complaint is that the appointment of the receiver was 

improper, not that the FDIC was exercising its duties as 

receiver improperly. We distinguish James Madison Ltd. v. 

Ludwig, 82 F.3d 1085 (D.C. Cir. 1996), cert. denied, 117 

S.Ct. 737 (1997),12 upon which appellants rely for this 

_________________________________________________________________ 

12. The district court did not consider the applicability of James Madison 

because the Court of Appeals for the District of Columbia Circuit decided 

 29 
proposition. In James Madison, the plaintiffs challenged the 

appointment of the FDIC as receiver of two national banks 

and requested "an injunction removing the FDIC as 

receiver; returning bank assets . . .; restoring the banks' 

charters to allow them to resume business; and returning 

the banks' files." Id. at 1091. The court rejected the FDIC's 

claim that the requested relief violated section 1821(j), 

reasoning that 

 [u]ntil now, this circuit has not considered whether 

 section 1821(j) precludes federal courts from granting 

 injunctive or declaratory relief if the [regulators] 

 improperly appointed the FDIC receiver of a national 

 bank. In our view, section 1821 does no such thing. 

 Section 1821(j) states only that courts cannot `restrain 

 or affect the exercise of powers or functions of the 

 [FDIC] as a conservator or receiver.' . . . It does not 

 address federal court power to set aside an illegal 

 appointment of a conservator or receiver. Congress 

 knows the difference between judicial power to restrain 

 an agency properly acting as a receiver and judicial 

 power to remove an improperly appointed agency. 

Id. at 1093. Thus, the court concluded that section 1821(j) 

bars a court from "interfering with the FDIC only when the 

agency acts within the scope of its authorized powers, not 

when the agency was improperly appointed in thefirst 

place." Id. 

We conclude that James Madison is inapplicable here. 

The James Madison court held that the anti-injunction 

provision of section 1821(j) did not bar an APA challenge to 

the appointment of a receiver for a national bank. The court 

first noted that there is no statutory provision which 

specifically provides for the review of the appointment of a 

receiver for a national bank while there is such a specific 

provision for others. See James Madison, 82 F.3d at 1092. 

Compare 12 U.S.C. S 191 (appointment of receiver to a 

national bank) with 12 U.S.C. S 203(b) (judicial review of 

_________________________________________________________________ 

that case after the district court dismissed appellants' claims, except 

for 

those against the Secretary in his individual capacity and the Doe 

defendants. 

 30 
the appointment of a conservator of a national bank); 12 

U.S.C. S 1464(d)(2)(E) (judicial review of an appointment by 

the Director of Office of Thrift Supervision of conservator or 

receiver); 12 U.S.C. S 1821(c)(7) (judicial review where the 

FDIC appoints itself as receiver or conservator of a state 

chartered institution); 12 U.S.C. S 1787(a)(1)(B) (review of 

appointment of National Credit Union Board as liquidating 

agent for insured credit union). The court held that section 

1821(j) did not clearly bar such review and review of the 

appointment under the APA was therefore proper. See

James Madison, 82 F.3d at 1094. Thus, the court in James 

Madison predicated its holding allowing review under the 

APA on the lack of an adequate remedy. 

We decline to apply the rationale of James Madison here 

for two reasons. First, APA review of the appointment of the 

FDIC as receiver is not proper here because the 

appointment was not made by a federal agency, but rather 

by the Secretary, a state official. Second, James Madison 

concerned receiverships of national banks, whereas Meritor 

was a state-chartered bank, and there is or was another 

available procedure for review of the appointment in this 

case. See Pa. Stat. Ann., tit. 71, S 733-605 (West 1990). 

Federal law explicitly provides for judicial review of the 

appointment of a receiver or conservator in certain specific 

instances where a receiver or conservator is appointed by a 

federal actor. See, e.g., 12 U.S.C. S 203(b) (providing for 

judicial review of the appointment of a conservator of a 

national bank within 20 days of the appointment); 12 

U.S.C. S 1464(d)(2)(B) (providing for judicial review of an 

appointment by the Director of Office of Thrift Supervision 

within 30 days of the appointment); 12 U.S.C. S 1821(c)(7) 

(providing for judicial review within 30 days of the 

appointment where the FDIC appoints itself as receiver or 

conservator of a state chartered institution); 12 U.S.C. 

S 1787(a)(1)(B) (providing for judicial review within ten days 

of the appointment of National Credit Union Board as 

liquidating agent for insured credit union). Courts have 

held that where a plaintiff has not pursued these remedies 

to challenge the appointment of a receiver or conservator, a 

subsequent action outside the applicable limitation period 

is barred for failure to exhaust administrative remedies. See 

 31 
Lafayette Fed. Credit Union v. National Credit Union Admin., 

960 F. Supp. 999, 1005 (E.D. Va. 1997), aff'd, ___ F.3d ___ 

(4th Cir. 1998) (table). 

The same principle applies here where there is an 

adequate state procedure available to challenge the

appointment of a receiver by the Secretary.13 In closing 

Meritor, the Secretary acted pursuant to Pa. Stat. Ann., tit. 

71, S 733-504B (West 1990), so that his action was subject 

to review under Pa. Stat. Ann., tit. 71, S 733-605 (West 

1990), which provides that "[a]ny institution whose

business or property the secretary has taken possession as 

receiver, may, at any time within ten days after the 

secretary has become receiver, apply to the court for an 

order requiring the secretary to show cause why he should 

not be enjoined from continuing as receiver." This state 

procedure is consistent with the federal policy of requiring 

a swift challenge to the appointment of a receiver. See, e.g., 

12 U.S.C. S 203(b) (providing 20 days to seek judicial 

review); 12 U.S.C. S 1464(d)(2)(B) (providing 30 days to seek 

judicial review); 12 U.S.C. S 1821(c)(7) (providing 30 days to 

seek judicial review); 12 U.S.C. S 1787(a)(1)(B) (providing 

ten days to seek judicial review). 

The district court refused to require the appellants to 

have availed themselves of the state procedure because it 

concluded that such a requirement effectively would permit 

a state statute to foreclose appellants' constitutional claims. 

In so holding, the district court apparently conceived of 

such a requirement as imposing a 10-day statute of 

limitations on any claim relating to the seizure of the bank.14 

_________________________________________________________________ 

13. Appellants suggested at oral argument that the statute does not 

apply here because it only provides for review where the Secretary is 

appointed as receiver. Tr. of oral arg. at 10-11. We recognize that there 

is scarce case law interpreting Pa. Stat. Ann., tit. 71, S 733-605, but we 

see no reason why the Pennsylvania statute would not apply where the 

Secretary has designated another to act as receiver. 

14. Citing Pa. Stat. Ann., tit. 71, S 733-605, the district court stated 

that 

"[t]he defendants have asserted a number of arguments in support of 

their individual motions, foremost among them the claim that the 

plaintiffs are barred from pursuing their constitutional claims here 

because of the ten day limitation on applying for court orders placed by 

Pennsylvania law." The district court found "that the plaintiffs are not 

prejudiced in their ability to bring their constitutional claims here by 

the 

law in Pennsylvania" but left open the possibility that "the defenses of 

waiver, estoppel, or laches may be raised at a later date." 
 32 
Once again, we emphasize the limits of our holding. We 

hold that section 1821(j) precludes the relief sought here, 

namely a rescission of the Secretary's appointment of a 

receiver, because it would wholly prevent the FDIC from 

continuing as receiver, where there is an adequate 

procedure available to challenge the appointment of a 

receiver. As we state elsewhere in this opinion, this holding 

is based upon section 1821(j)'s preclusion of remedies and 

does not foreclose the possibility of proper constitutional 

claims seeking other remedies.15 

We also find inapplicable the case law cited by appellants 

in which courts have declined to apply certain state 

procedural requirements to plaintiffs asserting federal civil 

rights actions in federal court. See Felder v. Casey, 487 

_________________________________________________________________ 

15. Appellants' also argue that an action pursuant to Pa. Stat. Ann., tit. 

71, S 733-605 could not be brought in federal court because the statute 

provides for exclusive jurisdiction in state court. This argument does not 

alter our conclusion. 

First, appellants are incorrect in their blanket assertion that the 

statute vests exclusive jurisdiction in state court. Although the statute 

provides that a party must make application to "the court," which is 

defined as "[t]he court of common pleas in the county in which the 

corporation or person has its principal or only place of business in the 

Commonwealth; or, where an institution of which this Secretary is 

receiver is concerned, the particular court in which the certificate of 

possession . . . is filed," see Pa. Stat. Ann., tit. 71, S 733-2 (West 

1990), 

a state statute cannot be applied so as to limit a federal court's 

supplemental jurisdiction. See, e.g., Scott v. School Dist. No. 6, 815 F. 

Supp. 424, 429 (D. Wyo. 1993) (holding that state statute which 

purported to establish exclusive jurisdiction in state court is 

unconstitutional to extent it preclude federal courts from exercising 

supplemental jurisdiction over the state claims). Thus, for example, if a 

plaintiff instituted a proper damages suit in federal court within ten 

days 

of the appointment of a receiver by the Secretary, the state statute could 

not be interpreted to preclude the federal court from exercising 

supplemental jurisdiction over an action under Pa. Stat. Ann., tit. 71, 

S 733-605. 

Second, we acknowledge that our example is not realistic in many 

cases given the brevity of the time period in the state statute. We see no 

reason, however, why our conclusion should be altered by the fact that 

an action to challenge the appointment of the receiver pursuant to the 

state procedure ordinarily would not be in federal court. 

 33 
U.S. 131, 108 S.Ct. 2302 (1988) (notice of claim statute); 

Burnett v. Grattan, 468 U.S. 42, 50-55, 104 S.Ct. 2924, 

2929-32 (1984) (state statute of limitations); Patsy v. Board 

of Regents, 457 U.S. 496, 516, 102 S.Ct. 2557, 2568 (1982) 

(holding that a civil rights plaintiff need not exhaust state 

administrative remedies). These cases are inapposite 

because the Court based the holdings on the notion that 

state laws or requirements which are inconsistent with 

federal law or its objectives are subordinated to the federal 

law by virtue of the Supremacy Clause. As the Felder Court 

noted, applying a state statute of limitations which provides 

only a truncated period in which to file an action in civil 

rights cases "inadequately accommodate[s] the complexities 

of federal civil rights litigation." Felder, 487 U.S. at 140, 

108 S.Ct. at 2307. 

Here, requiring appellants to have availed themselves of 

the Pennsylvania procedure to challenge the Secretary's 

taking of possession of the bank would not undermine 

federal policy. To the contrary, as we noted above, the state 

requirement is consistent with the federal policy of 

requiring swift objection to the appointment of a receiver. 

C. ENFORCEMENT OF FDIC's STATUTORY 

OBLIGATIONS 

The district court also dismissed Counts V and VI, in 

which appellants sought to enforce certain statutory duties 

of the FDIC. We affirm the dismissal of these counts 

because there is no implied private right of action to enforce 

the FDIC's duty to maximize gain and minimize loss in its 

disposition of assets and the shareholders have no 

enforceable right to an accurate accounting. 

1. FDIC's Duty to Maximize Gain and Minimize Loss in 

 its Disposition of Assets 

In its September 6, 1995 order,16 the district court 

_________________________________________________________________ 

16. The district court initially dismissed this claim, embodied in Count V 

of appellants' First Amended Complaint, for lack of jurisdiction by order 

dated February 28, 1995. The district court held that the appellants had 

failed to exhaust their administrative remedies. Shortly thereafter, the 

court reinstated the claim after appellants completed their pursuit of 

those procedures. Therefore, the September 6, 1995 disposition of this 

claim is the subject of this appeal. 

 34 
dismissed appellants' claim for money damages for the 

FDIC-Receiver's alleged failure to comply with its statutory 

duty to maximize the gain and minimize the loss in the 

disposition of Meritor's assets. See 12 U.S.C. 

S 1821(d)(13)(E).17 The district court held that this provision 

neither expressly nor impliedly grants a private right of 

action to individual shareholders.18 See exhibit B to 

appellant's brief. 

The standard announced in Cort v. Ash, 422 U.S. 66, 95 

S.Ct. 2080 (1975), guides our inquiry into whether section 

1821(d)(13)(E) impliedly grants shareholders of a failed 

financial institution a private right of action to enforce the 

FDIC-Receiver's statutory obligations. In Cort, the Court 

announced that courts should consider the following four 

factors to determine whether a statute impliedly grants a 

private right of action: (1) whether the plaintiff is a member 

_________________________________________________________________ 

17. Section 1821(d)(13)(E) provides: 

 In exercising any right, power, privilege, or authority as 

conservator 

 or receiver in connection with any sale or disposition of assets of 

 any insured depository institution for which the Corporation has 

 been appointed conservator or receiver, including any sale or 

 disposition of assets acquired by the Corporation under section 

 1823(d)(1) of this title, the Corporation shall conduct its 

operations 

 in a manner which-- 

 (i) maximizes the net present value return from the sale or 

 disposition of such assets; 

 (ii) minimizes the amount of any loss realized in the resolution of 

 cases; 

 (iii) ensures adequate competition and fair and consistent 

treatment 

 of offerors; 

 (iv) prohibits discrimination on the basis of race, sex, or ethnic 

 groups in the solicitation and consideration of offers; and 

 (v) maximizes the preservation of the availability and 

affordability of 

 residential real property for low- and moderate-income individuals. 

18. Appropriately, appellants do not appeal the district court's decision 

to the extent that the court held that the statute does not expressly 

grant appellants a private right of action. See Touche Ross & Co. v. 

Redington, 442 U.S. 560, 568, 99 S.Ct. 2479, 2485 (1979) (holding that 
a right of action must be clear from the text of the statute). 

 35 
of the class for whose special benefit the statute was 

created; (2) whether there is either an explicit or implicit 

legislative intent to create or deny a private remedy; (3) 

whether an implied remedy is consistent with underlying 

policies of the statute; and (4) whether the cause of action 

is one that traditionally is relegated to state law and the 

area is a state concern so that it would be inappropriate to 

imply a federal cause of action. See id. at 78, 95 S.Ct. at 

2088. 

In deciding whether to recognize an implied private right 

of action, we ascertain the intent of Congress;"[u]nless 

such `congressional intent can be inferred from the

language of the statute, the statutory structure, or some 

other source, the essential predicate for implication of a 

private remedy simply does not exist.' " Karahalios v. 

National Fed'n of Fed. Employees, Local 1263, 489 U.S. 

527, 532-33, 109 S.Ct. 1282, 1286 (1989) (quoting 

Thompson v. Thompson, 484 U.S. 174, 179, 108 S.Ct. 513, 

516 (1988)). Thus, we recently have noted that we should 

focus our inquiry on the first two Cort factors. See 

Mallenbaum v. Adelphia Communications Corp., 74 F.3d 

465, 469 (3d Cir. 1996). 

Appellants contend that the district court erred by failing 

to give proper consideration of two circumstances which 

distinguish this case from others involving receiverships: (1) 

the existence of a surplus in the Meritor receivership; and 

(2) the appellants, as shareholders, have an express 

statutory right to distribution of this surplus. According to 

appellants, in the context of a receivership operating with a 

surplus, the Cort factors are met and thus we should imply 

the existence of a private right of action in their favor. 

We disagree. Our analysis of the Cort factors, with an 

emphasis on the first two, see Mallenbaum, 74 F.3d at 469, 

leads us to the conclusion that there is no evidence of a 

congressional intent to provide for a private remedy. 

Because such intent is our ultimate guidepost, wefind that 

the shareholders of a failed financial institution do not have 

a private right of enforcement of the FDIC's duty to 

maximize gain and minimize loss in its disposition of the 

institution's assets. 

 36 
First, appellants, as shareholders, are not members of a 

class for whose special benefit Congress created section 

1821(d)(13)(E). The duty to maximize gain in the disposition 

of assets has implications broader than to benefit 

shareholders. The FDIC's duty to maximize gain and 

minimize loss primarily is intended to benefit the insurance 

fund by minimizing the claims against it, thereby reducing 

the cost to the taxpayers. Thus, the benefits gained by the 

shareholders and other claimants are incidental to the 

primary intended beneficiaries, the insurance fund and the 

taxpayers. See FDIC v. Niblo, 821 F. Supp. 441, 455 n.59 

& 456 (N.D. Tex. 1993); FDIC v. Updike Bros., Inc., 814 F. 

Supp. 1035, 1041-42 (D. Wyo. 1993). 

In a similar context, we have noted that the FDIC does 

not have a duty to shareholders. See First State Bank of 

Hudson County v. United States, 599 F.2d 558, 563 (3d Cir. 

1979). In Hudson County, we held that the FDIC's duty to 

examine banks, see 12 U.S.C. S 1820, is intended to

prevent losses which ultimately would result in claims 

against the insurance fund. See id. at 562-63. We also 

noted that while the examination incidentally might benefit 

the bank, its depositors, and its creditors, the primary 

purpose of the examination is to safeguard the insurance 

fund. See id. at 563. Further, our conclusion is supported 

by evidence in the legislative history that Congress was 

concerned with reducing the costs to taxpayers. See H.R. 

Rep. No. 101-54(I), 101st Cong., 1st Sess., 1, 514-15, 

reprinted in 1989 U.S.C.C.A.N. 86, 308-09. 

In addition, the duty to maximize gain and minimize loss 

does not operate for the special benefit of shareholders 

where the receivership is operating with a surplus. Section 

1821(d)(11)(B) establishes a shareholder right to 

distribution of funds in a case where there is a surplus 

after the payment of all claimants and administrative 

expenses.19 Given this right to distribution, appellants 

_________________________________________________________________ 

19. The text of the section provides: 

 In any case in which funds remain after the depositors, creditors, 

 other claimants, and administrative expenses are paid, the receiver 

 shall distribute such funds to the depository institution's 

 37 
argue that the FDIC fulfills its statutory duty to maximize 

gain in order to preserve the surplus, thus for the sole 

benefit of the shareholders. We disagree. 

We recognize that the express right to distribution of 

surplus granted under section 1821(d)(11)(B) creates a 

direct interest in shareholders. See California Hous. Sec., 

Inc. v. United States, 959 F.2d 955, 957 n.2 (Fed. Cir. 1992) 

(rejecting the argument that the shareholders did not have 

standing to claim an unconstitutional taking); Branch v. 

FDIC, 825 F. Supp. 384, 402-06 (D. Mass. 1993) (holding 

that shareholders of a failed financial institution have 

standing to assert derivative claims because they retain the 

right to distribution of surplus). This right, however, does 

not transform the FDIC's duty to maximize gain and 

minimize loss into one inuring solely to the benefit of the 

shareholders. The FDIC performs its section 1821(d)(13)(E) 

duty to maximize gain intending to reduce the claims 

against the insurance fund, not to ensure that shareholders 

receive distribution. 

Because the section clearly inures to the benefit of other 

classes, the first Cort factor militates strongly against 

granting a private remedy. Turning to the second Cort 

factor, the parties agree that there is no statement in the 

legislative history which suggests that Congress intended 

either to create or deny a private right of action to enforce 

the FDIC's duty to maximize gain and minimize loss. While 

congressional silence does not preclude a court from 

implying a private right of action where the other factors 

are satisfied, see Zeffiro v. First Pa. Bank & Trust Co., 623 

F.2d 290, 297 (3d Cir. 1980), here we find that the other 

factors do not support finding a private right of action. 

_________________________________________________________________ 

 shareholders or members together with the accounting report 

 required under paragraph (15)(B). 

12 U.S.C. S 1821(d)(11)(B). 

Although Congress recently amended this section, the amended 

provision only applies to institutions for which receivers were appointed 

after the enactment of the amendment. See Pub. L. No. 103-66, 

S 3001(a), 107 Stat. 312, 337 (1993). Thus, our discussion is governed 

by this version of this section prior to the 1993 amendment. 

 38 
While we acknowledge that an action against a federal 

entity to enforce rights expressly granted under federal law 

traditionally is not relegated to state law, our inquiry ends 

upon our conclusion that the first two Cort factors are not 

met. See California v. Sierra Club, 451 U.S. 287, 298, 101 

S.Ct. 1775, 1781 (1981) (noting that the second two factors 

"are only of relevance if the first two factors give indication 

of congressional intent to create the remedy"). 

2. FDIC's Duty to Provide Annual Accounting 

The district court dismissed appellants' claim for a full 

and fair accounting from the FDIC-Receiver, to which 

appellants alleged they were entitled under 12 U.S.C. 

S 1821(d)(15)(A)-(C). The court found that the FDIC-Receiver 

had complied with the literal requirements of the provision 

by providing a copy of the annual accounting report to 

appellants upon their request, and refused to engraft an 

enforceable duty to provide a correct accounting to

shareholders. 

We again part with the district court's approach, but not 

its result. While the district court focused on whether an 

accuracy requirement is implicit in the statute, wefind the 

more appropriate inquiry to be whether the statute grants 

shareholders an implied private right of enforcement. We 

hold that it does not. 

The relevant portion of 12 U.S.C. S 1821(d)(15) provides: 

 (A) The Corporation as conservator or receiver shall, 

 consistent with the accounting and reporting practices 

 and procedures established by the Corporation, 

 maintain a full accounting of each conservatorship and 

 receivership or other disposition of institutions in 

 default. 

 (B) With respect to each conservatorship or 

 receivership to which the Corporation was appointed, 

 the Corporation shall make an annual accounting or 

 report, as appropriate, available to the Secretary of the 

 Treasury, the Comptroller General of the United States, 

 and the authority which appointed the Corporation as 

 conservator or receiver. 

 39 
 (C) Any report prepared pursuant to subparagraph (B) 

 shall be made available by the Corporation upon 

 request to any shareholder of the depository institution 

 for which the Corporation was appointed conservator 

 or receiver or any other member of the public. 

Although appellants urge us to imply a requirement of 

accuracy, they cite no authority which directly supports 

this view. Rather, they cite analogous authority, which we 

find unpersuasive in this context. See First Nat'l Bank of 

Gordon v. Department of Treasury, 911 F.2d 57, 62-63 (8th 

Cir. 1990).20 Despite this lack of authority, we recognize 

that, in a practical sense, at some point the right to an 

accounting may be rendered meaningless if the accounting 

is not accurate. Nevertheless, even if we were to imply an 

accuracy requirement, we must affirm the district court's 

dismissal of this claim because our analysis of the Cort 

factors establishes that the shareholders do not have a 

private right of action to enforce the FDIC duty. 

The shareholders are not members of a special class for 

whose benefit the statute was created. Rather, the plain 

language of the statute puts shareholders on par with 

members of the general public. The statute gives 

shareholders and members of the public identical rights -- 

the FDIC must make the annual report available to either 

upon request -- and the statute establishes these rights in 

the same subsection. We see no reason, therefore, to 

distinguish between shareholders and members of the

general public for purposes of this statute. 

Further, the legislative history is silent as to whether 

Congress intended to create a private remedy. Because the 

first two Cort factors are not satisfied, our inquiry ends 

here. See Sierra Club, 451 U.S. at 298, 101 S.Ct. at 1781. 

_________________________________________________________________ 

20. In First National, the court addressed the interpretation of a statute 

which requires financial associations to make reports of condition in 

accordance with 12 U.S.C. S 1811 et seq. See 12 U.S.C. S 161(a). The 

court found that a bank violated section 161(a) where the report of its 

condition was not accurate. Section 161(a) includes a requirement that 

the report be accurate to the best knowledge and belief of the officers 

who sign it, but does not expressly make the bank responsible for an 

inaccurate report. In contrast, section 1821(d) does not include language 

concerning accuracy. Thus, First National is distinguishable. 

 40 
Because there is no indication of a congressional intent 

to grant shareholders a private right to enforce the FDIC's 

duty to provide an accounting, we will affirm the dismissal 

of this claim. We emphasize, however, that we render no 

opinion on whether the FDIC has a duty to provide an 

accurate accounting to those officials enumerated in 

subsection (B). 

IV. CONCLUSION 

For the foregoing reasons, we will affirm the district 

court's dismissal of appellants' claims. 

 41 
ROTH, Circuit Judge, concurring and dissenting: 

I concur for the most part with the majority's thorough 

and thoughtful opinion. I cannot, however, agree with their 

conclusion in Part III.C.2. that the appellants do not have 

a right to demand an annual accounting beyond what the 

FDIC might choose to provide to them. The statute states 

that the FDIC shall "consistent with the accounting and 

reporting practices and procedures established by the 

[FDIC], maintain a full accounting of each. . . receivership" 

and that it shall provide to any shareholder or to any other 

member of the public a copy of its annual report with 

respect to each such receivership. 12 U.S.C. 

S 1821(d)(15)(A)-(C) (emphasis added). 

I conclude from the above statutory language that the 

shareholders, as well as the general public, have the right 

to an annual report which has been prepared in a manner 

which is consistent with the accounting and reporting 

practices established by the FDIC. It has not been 

documented on the record here that the annual reports 

supplied to appellants by the FDIC do conform to such 

practices. I would therefore remand this issue to the district 

court for a determination whether the reports in question 

meet the required statutory standard. Cf. First Nat'l Bank of 

Gordon v. Department of Treasury, 911 F.2d 57, 62-63 (8th 

Cir. 1990) (holding that bank violated 12 U.S.C.S 161(a), 

requiring an accurate report, when it submitted an 

inaccurate one to the Comptroller of the Currency).

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 42