FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GECCMC 2005-C1 PLUMMER 

STREET OFFICE LIMITED

PARTNERSHIP, a Delaware limited

partnership,

Plaintiff-Appellant, No. 10-56219

v. D.C. No.  2:10-cv-01615- JPMORGAN CHASE BANK, National

Association, JHN-SH

Defendant-Appellee, OPINION

FEDERAL DEPOSIT INSURANCE

CORPORATION, as receiver for

Washington Mutual Bank,

Defendant-Intervenor-Appellee. 

Appeal from the United States District Court

for the Central District of California

Jacqueline H. Nguyen, District Judge, Presiding

Argued and Submitted

November 15, 2011—Pasadena, California

Filed February 1, 2012

Before: Alfred T. Goodwin, William A. Fletcher, and

Johnnie B. Rawlinson, Circuit Judges.

Opinion by Judge Goodwin

957
COUNSEL

Peder K. Batalden, Horvitz & Levy, Encino, California, for

the plaintiff-appellant.

Allyson N. Ho, Morgan, Lewis & Bockius LLP, Houston,

Texas, Kathleen MacFarlane Waters, Morgan, Lewis & Bockius LLP, Los Angeles, California, for the defendant-appellee.

GECCMC 2005-C1 v. JPMORGAN CHASE BANK 959
Joseph Brooks, Federal Deposit Insurance Corporation,

Arlington, Virginia, for the defendant-intervenor-appellee.

OPINION

GOODWIN, Circuit Judge:

This case arises from a landlord-tenant dispute in the wake

of the Washington Mutual Bank (“WaMu” or the “Failed

Bank”) failure in September 2008. Appellant GECCMC

(“GE”) alleges that JP Morgan Chase Bank (“Chase”) failed

to pay rent on two properties under lease agreements that

Chase assumed after it purchased WaMu’s assets and liabilities from the Federal Deposit Insurance Corporation (“FDIC”)

pursuant to the terms of a written Purchase & Assumption

Agreement (the “P&A Agreement” or “Agreement”). GE

filed suit against Chase in the Central District of California

alleging breach of the lease agreements. The district court

granted Chase’s motion to dismiss GE’s complaint on the

grounds that GE lacked standing to enforce or interpret the

terms of the P&A Agreement. GE appealed. We granted the

FDIC’s motion to intervene as defendant-appellee. We have

jurisdiction under 28 U.S.C. § 1291, and we affirm.

I. BACKGROUND

On September 25, 2008, in the largest bank failure in

United States history, WaMu closed as a “failed bank” and

entered receivership under the direction of the FDIC. Exercising powers granted by the Financial Institutions Reform,

Recovery and Enforcement Act of 1989 (“FIRREA”),1 the

FDIC entered the P&A Agreement with Chase on the same

date that WaMu failed. The P&A Agreement memorialized

the terms and conditions of the transfer of WaMu’s assets and

1Pub. L. No. 101-73, 103 Stat. 183 (Aug. 9, 1989). 

960 GECCMC 2005-C1 v. JPMORGAN CHASE BANK
liabilities to Chase. As the successor-in-interest to the lessor

in two WaMu real estate leases, GE alleges that Chase

assumed the two leases under the terms of the P&A Agreement. GE brought suit to enforce the P&A Agreement arguing

that Chase is liable for unpaid rent on the leases.

The Leases

The current dispute centers on two leases for property in

Los Angeles, California. The first lease concerns property at

9401 Oakdale Avenue (the “Oakdale Lease”). The second

lease concerns property at 19850 and 19860 Plummer Street

(the “Plummer Lease”). The original tenant in the Oakdale

Lease was Great Western Savings bank. The original landlord

in the Oakdale Lease was Valley Associates I. These original

parties to the Oakdale Lease subsequently transferred their

interests in the property. WaMu became the tenant as the

successor-in-interest of Great Western Savings. After a series

of transfers of legal title, GE became landlord of the Oakdale

Lease as the successful bidder at a nonjudicial foreclosure

sale. 

The transfers of interest regarding the Plummer Lease

essentially mirror the above sequence with changes to dates

and the name of the original landlord. GE is now the landlord

of the Plummer Lease, and WaMu is the tenant as the

successor-in-interest to Great Western Savings. Neither Chase

nor the FDIC disputes GE’s status as the current landlord

under the leases. 

The P&A Agreement

On September 25, 2008, federal regulators declared WaMu

a failed bank and appointed the FDIC as receiver. Immediately upon WaMu’s closing, the FDIC and Chase entered into

the P&A Agreement. The FDIC entered the P&A Agreement

by the authority granted to it under FIRREA. Congress

enacted FIRREA in response to the savings and loan crisis of

GECCMC 2005-C1 v. JPMORGAN CHASE BANK 961
the late 1980s. FIRREA provides for the prompt and efficient

resolution of the assets and liabilities of failed banks. See

Financial Institutions Reform, Recovery, and Enforcement

Act of 1989, Pub. L. No. 101-73, § 101 (1989). Under FIRREA, all assets of the failed bank are transferred to the FDIC

as receiver. Id. § 212 (codified as amended at 12 U.S.C.

§ 1821(c)). The FDIC has extensive power and discretion to

manage the affairs of the failed bank, including the authority

to repudiate any contract or lease that it deems burdensome

and an impediment to the orderly administration of the failed

bank’s business. 12 U.S.C. § 1821(e)(1)(B), (C). 

Under the P&A Agreement, Chase “purchase[d] substantially all of the assets and assume[d] all deposits and substantially all other liabilities” of WaMu “on the terms and

conditions set forth in [the P&A Agreement].” However,

Chase’s assumption is subject to a caveat in the Agreement

expressly limiting the rights of third parties.

In relevant part, the Agreement provides:

13.5 Successors . . . Except as otherwise specifically provided in this Agreement, nothing expressed

or referred to in this Agreement is intended or shall

be construed to give any Person other than the

Receiver, the Corporation, and the Assuming Bank

[i.e., the FDIC and Chase] any legal or equitable

right, remedy or claim under or with respect to this

Agreement or any provisions contained herein, it

being the intention of the parties hereto that this

Agreement, the obligations and statements of

responsibilities hereunder, and all other conditions

and provisions hereof are for the sole and exclusive

benefit of the Receiver, the Corporation and the

Assuming Bank and for the benefit of no other person.

Chase and the FDIC argue that section 13.5’s express prohibition against granting third party rights precludes GE from

962 GECCMC 2005-C1 v. JPMORGAN CHASE BANK
seeking recovery through the P&A Agreement. GE counters

that the opening clause, “Except as otherwise specifically provided in this Agreement,” creates an exception to this prohibition. In support of its position, GE references section 2.1:

2.1 Liabilities Assumed by Assuming Bank. Subject to Sections 2.5 and 4.8, the Assuming Bank [i.e.,

Chase] expressly assumes at Book Value . . . and

agrees to pay, perform, and discharge, all of the liabilities of the Failed Bank which are reflected on the

Books and Records of the Failed Bank as of Bank

Closing, including the Assumed Deposits and all liabilities associated with any and all employee benefit

plans, except as listed on the attached Schedule 2.1.2

GE argues that the Oakdale and Plummer Leases are liabilities that existed on WaMu’s books and records at the time the

bank failed and therefore have been assumed by Chase under

section 2.1. GE cites section 4.6 in further support of its argument. Section 4.6(a) grants Chase a ninety-day option to

assume leases for “Bank Premises.” Specifically, section

4.6(a) states that “[Chase] shall give notice to the [FDIC]

within the option period of its election to accept or not to

accept an assignment of any or all leases.” GE argues that the

leases in question are not for “Bank Premises” as defined by

the P&A Agreement. Thus, according to GE, Chase had no

option to decline the tenancies.

Section 13.4 of the P&A Agreement also contains a choice

of law provision. 

13.4 Governing Law. This agreement and the

2Section 2.5 pertains to potential claims for borrowed money on WaMu

loans. Section 4.8 pertains to agreements for the rendering of services by

or to WaMu. These sections, as well as Schedule 2.1, are not relevant to

this controversy, and no party relies on them. Therefore, this opinion does

not address them. 

GECCMC 2005-C1 v. JPMORGAN CHASE BANK 963
rights and obligations hereunder shall be governed

by and construed in accordance with the federal law

of the United States of America and in the absence

of controlling federal law, in accordance with the

laws of the state in which the main office of the

failed bank is located.

(all caps omitted). 

The Proceedings Below and Parallel Proceedings

On February 18, 2009, Chase notified GE’s predecessor-ininterest of its intent not to assume the Plummer lease.3

 The

record reflects no evidence that Chase sent formal notice of

its intent not to assume the Oakdale lease; however, Chase’s

counsel subsequently informed GE that Chase had a right

under the P&A Agreement to decline assignment of the Oakdale lease because it was not for Bank Premises as defined by

the Agreement. By mid-March 2009, Chase vacated both the

Plummer and Oakdale premises and ceased paying rent on the

leases. 

On April 19, 2009, the FDIC informed GE of its decision

to disaffirm the Plummer and Oakdale leases under its statutory powers.4

 GE filed an administrative claim with the FDIC

challenging the repudiation of the leases. The FDIC denied

GE’s administrative claim. 

3Chase sent a second letter repeating its position with regard to the

Plummer lease on February 23, 2009. 

4FIRREA gives the FDIC the authority to “disaffirm or repudiate any

contract or lease . . . . (B) the performance of which the conservator or

receiver, in the conservator’s or receiver’s discretion, determines to be

burdensome; and (C) the disaffirmance or repudiation of which the conservator or receiver determines, in the conservator’s or receiver’s discretion,

will promote the orderly administration of the institution’s affairs.” 12

U.S.C. § 1821(e)(1)(B), (C). 

964 GECCMC 2005-C1 v. JPMORGAN CHASE BANK
GE filed this action in the Central District of California

directly against Chase seeking enforcement of its alleged

rights under the P&A Agreement. Subsequently, GE filed suit

against the FDIC in the District of Columbia seeking review

of its administrative claim. The D.C. district court granted the

parties’ stipulated motion to stay that action pending resolution of this case. 

The district court here applied California law and dismissed

GE’s claims. The court noted that GE was not a party to the

P&A Agreement, and the Agreement’s only reference to

third-party beneficiary interests was a provision expressly

excluding them. The court held that GE, as a non-party to the

P&A Agreement, does not have the authority to interpret the

Agreement to create privity with Chase regarding the leases.

The district court reasoned that GE’s attempt to enforce the

Agreement impermissibly merged standing with the merits by

essentially asking the court to decide whether the leases constituted “Bank Premises” under the P&A Agreement.

GE timely appealed the district court’s ruling. We granted

the FDIC’s motion to intervene in the appeal.

II. DISCUSSION

The district court granted Chase’s motion to dismiss under

Rule 12(b)(6) of the Federal Rules of Civil Procedure. We

affirm on different grounds. See McSherry v. City of Long

Beach, 584 F.3d 1129, 1135 (9th Cir. 2009) (“We may affirm

on the basis of any ground supported by the record.”). Under

federal common law, GE cannot bring suit under the P&A

Agreement because GE is not an intended third-party beneficiary of the Agreement. 

A. Federal common law applies.

The district court applied California law in finding that GE

is not an intended third-party beneficiary to the P&A AgreeGECCMC 2005-C1 v. JPMORGAN CHASE BANK 965
ment. Whether GE can assert such status is central to the

determination of this appeal. The outcome is likely the same

under California or federal law, but in light of our precedent,

federal common law applies. 

[1] “Federal law governs the interpretation of contracts

entered pursuant to federal law where the federal government

is a party.” Chickaloon-Moose Creek Native Ass’n, Inc. v.

Norton, 360 F.3d 972, 980 (9th Cir. 2004). State law may

apply to the interpretation of a federal contract in limited circumstances, “such as when the United States is not a party,

or when the direct interests and obligations of the government

are not in question.” Smith v. Cent. Ariz. Water Conservation

Dist., 418 F.3d 1028, 1034 (9th Cir. 2005). Neither circumstance is present here. It is undisputed that the FDIC is a federal agency. It is undisputed that the FDIC is a party to the

P&A Agreement. FDIC and Chase entered the P&A Agreement pursuant to FIRREA, a federal statute. Moreover, FIRREA implicates uniquely federal concerns in that it governs

resolution of the affairs of failed banks. See 12 U.S.C.

§ 1821(d)(2)(G) (authorizing FDIC to transfer assets and liabilities as a receiver of a failed bank); Ins. Co. of North Am.

v. Fed. Express Corp., 189 F.3d 914, 926 (9th Cir. 1999)

(requiring that federal common law be “[t]ethered to a genuinely identifiable (as opposed to judicially constructed) federal policy.” (citation omitted)); Federal Deposit Insurance

Reform Act of 2005, Pub. L. No. 109-171, § 2102(a), 120

Stat. 9 (2006) (further consolidating responsibilities for oversight of failed banks in the FDIC). 

[2] Even more reason exists to apply federal common law

if the parties expressly select it as the law governing the contract. See Cnty. of Santa Clara v. Astra USA, Inc., 588 F.3d

1237, 1243 (9th Cir. 2009), rev’d on other grounds by Astra

USA, Inc. v. Santa Clara Cnty., 131 S. Ct. 1342 (2011). Section 13.4 of the P&A Agreement clearly provides that “it shall

be governed by and construed in accordance with the federal

law of the United States of America . . .” and in the absence

966 GECCMC 2005-C1 v. JPMORGAN CHASE BANK
of controlling federal law, the law of the state of WaMu’s

main office, which is Washington state. As discussed below,

federal common law squarely addresses the dispositive issue

here—whether GE is an intended third-party beneficiary of

the P&A Agreement. Therefore, federal common law governs.

B. GE is not an intended third-party beneficiary under the

P&A Agreement.

[3] GE is not a party to the P&A Agreement. Consequently, in order to prevail, GE must establish that it has

enforceable third-party rights under the P&A Agreement.

Under federal common law, this court looks to “general principles for interpreting contracts.” Klamath Water Users Prot.

Assoc. v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999). One

such general principle is that only a party to a contract or an

intended third-party beneficiary may sue to enforce the terms

of a contract or obtain an appropriate remedy for breach. See

Far West Fed. Bank, S.B. v. Office of Thrift Supervision-Dir.,

119 F.3d 1358, 1363 (9th Cir. 1997). The fact that a third

party may incidentally benefit under the contract does not

confer on him the right to sue; instead, the parties must have

intended to benefit the third party. See Klamath, 204 F.3d at

1211. This distinguishes intended beneficiaries to a contract

whose rights are judicially enforceable from incidental beneficiaries whose rights are not judicially enforceable. See id. at

1210.

To prove intended beneficiary status, “the third party must

show that the contract reflects the express or implied intention

of the parties to the contract to benefit the third party.” Id. at

1211. We examine the terms of the contract as a whole, giving them their ordinary meaning. Id. at 1210. The contract

need not name a beneficiary specifically or individually in the

contract; instead, it can specify a “class clearly intended by

the parties to benefit from the contract.” Id. at 1211. Nevertheless, “[d]emonstrating third-party beneficiary status in the

GECCMC 2005-C1 v. JPMORGAN CHASE BANK 967
context of a government contract is a comparatively difficult

task.” Cnty. of Santa Clara, 588 F.3d at 1244. “Parties that

benefit from a government contract are generally assumed to

be incidental beneficiaries,” rather than intended beneficiaries, and so “may not enforce the contract absent a clear intent

to the contrary.” Id. (citation omitted).

This “clear intent” hurdle is a high one. It is not satisfied

by a contract’s recitation of interested constituencies, Klamath, 204 F.3d at 1212, “[v]ague, hortatory pronouncements,”

id., “statement[s] of purpose,” Smith, 418 F.3d at 1037, “explicit reference to a third party,” Orff v. United States, 358

F.3d 1137, 1145 (9th Cir. 2004), or even a showing that the

contract “operates to the [third parties’] benefit and was

entered into with [them] ‘in mind,’ ” id. at 1147. Rather, we

examine the “precise language of the contract for a ‘clear

intent’ to rebut the presumption that the [third parties] are

merely incidental beneficiaries.” Id. at 1147 n.5; see also Kremen v. Cohen, 337 F.3d 1024, 1029 (9th Cir. 2003) (explaining that a “more stringent test applies” to government

contracts).

[4] Section 13.5 of the Agreement expressly disclaims any

intent to create third-party beneficiaries while stating that this

disclaimer is limited “as otherwise specifically provided in

this Agreement.” GE argues that the limitation of the disclaimer together with language from section 2.1, which provides that “[Chase] . . . agrees to pay, perform, and discharge,

all of the liabilities of [WaMu] which are reflected on the

Books and Records of [WaMu] as of Bank Closing,” vests GE

with enforceable rights under the Agreement. We disagree.

The P&A Agreement does not reflect a “clear intent” to confer a benefit on GE. The phrase “[e]xcept as otherwise specifically provided” relied on by GE does not specifically refer to

section 2.1, and certainly does not refer to section 2.1 in a

clear enough matter to overcome the presumption against

third-party beneficiaries. See Wichita Falls Office Assocs. v.

Banc One Corp., No. 3:90-CV-1301, Mem. Op. at 19 (N.D.

968 GECCMC 2005-C1 v. JPMORGAN CHASE BANK
Tex. Nov. 22, 1993), aff’d without opinion, 40 F.3d 384 (5th

Cir. 1994). Nor does section 2.1 “specifically provide[ ]” for

third-party rights of third-party lessors. A survey of our recent

cases addressing third-party beneficiaries in the government

contract context confirms this conclusion. 

In Klamath, Orff, and Smith, three water rights cases, this

court found insufficient evidence to overcome the “clear

intent” hurdle. Klamath involved disputed claims to water in

the Klamath Basin. 204 F.3d at 1209. Local irrigators sought

to enforce terms of a contract between the United States and

a power company engaged to build and operate a dam within

the Basin. Id. at 1209-10. Applying federal law, we held that

although the contract “operates to the Irrigators benefit” and

“was undoubtedly entered into with the Irrigators in mind,”

the irrigators could not be third-party beneficiaries because

such a finding would be inconsistent with the objectives of the

contract and “would open the door to all users receiving a

benefit from the Project achieving similar status, a result not

intended by the Contract.” Id. at 1212.

Orff provides an even starker example of the heightened

standard required of third-party beneficiaries to government

contracts. In Orff, we declined to extend enforceable rights to

a group of California farmers, who were not parties to the

contract but were nevertheless end users of water brought to

their land under a federal allocation project. 358 F.3d at 1141,

1145. We reached this decision despite the fact that the farmers were explicitly referred to in and benefitted by the contract

and were clearly “in [the] mind” of the contracting parties. Id.

at 1145-47. Similarly, in Smith, despite at least six provisions

in the underlying master and subcontracts that purportedly

extended enforceable rights to end users, we declined to find

that Arizona landowners were intended third-party beneficiaries to contracts involving a water reclamation project. 418

F.3d at 1036-37. Again, our decision turned on the landowners’ failure to show a “clear intent” to benefit them and the

difficulty of reconciling third-party beneficiary status with the

GECCMC 2005-C1 v. JPMORGAN CHASE BANK 969
express objectives of the contracts. Id. at 1037; cf. Cnty of

Santa Clara, 588 F.3d at 1245-46 (conferring intended thirdparty beneficiary status where a “specific responsibility” was

undertaken by the contracting parties to benefit the third parties in an “unambiguous,” “concrete” way). 

[5] Here, section 13.5’s “no third-party beneficiary” clause

stacks the deck against GE’s claims at the outset. The express

objective of the P&A Agreement is to create a contractual

framework whereby “substantially all,” but not all, of

WaMu’s assets and liabilities can be transferred by the FDIC

to Chase “on the terms and conditions set forth in this Agreement.” (Emphasis added). As in Klamath, Orff, and Smith, the

Agreement thus memorializes the relationship between contracting parties while keeping “in mind” that other third parties may retain some interest in the subject matter of the

transaction. The plain language of section 13.5 establishes

enforceable rights as between the contracting parties to the

P&A Agreement, the FDIC and Chase—not GE. See, e.g.,

Smith, 418 F.3d at 1036 (a provision indicating that one party

to the contract will “abide by the terms of the project subcontracts . . . does nothing to create vested . . . rights in the [parties affected by those subcontracts]).” 

[6] In sum, GE’s reliance on section 2.1, in which Chase

“expressly assumes . . . all of the liabilities of [WaMu],” does

not evince the specificity required to carve out enforceable

rights as contemplated by section 13.5. Nor does section 2.1

show the “clear intent” needed to rebut the presumption that

GE is merely an incidental beneficiary. See Orff, 358 F.3d at

1147 n.5. As an incidental beneficiary, GE cannot seek recovery under the P&A Agreement. 

C. GE’s no third-party beneficiary status adheres to 

FIRREA’s statutory purpose.

[7] FIRREA’s statutory framework further supports our

conclusion that GE is not an intended third-party beneficiary.

970 GECCMC 2005-C1 v. JPMORGAN CHASE BANK
“In determining th[e] central question of the parties’ intent [to

create enforceable rights in a third party] . . . [w]e also weigh

the ‘circumstances of the transaction,’ which, when a contract

is mandated by a federal statute, includes the ‘governing statute and its purpose.’ ” Cnty. of Santa Clara, 588 F.3d at 1245

(internal citations omitted). 

[8] The FDIC entered the P&A Agreement under the

authority granted to it by Congress through FIRREA. See 12

U.S.C. § 1821(d). One of FIRREA’s core purposes is “[t]o

provide funds from public and private sources to deal expeditiously with failed depository institutions.” See Financial

Institutions Reform, Recovery, and Enforcement Act of 1989,

Pub. L. No. 101-73, § 101(8) (1989). The FDIC’s receivership

powers under FIRREA include the ability to transfer or retain

any liability of the failed bank as well as to disaffirm or repudiate any lease that the FDIC determines is burdensome. See

12 U.S.C. § 1821(d)(2)(G), (e). FIRREA’s statutory scheme

thus contemplates the FDIC’s sweeping authority to manage

the affairs of a failed bank to further the purpose of expeditious resolution of the failed bank’s affairs. See McCarthy v.

FDIC, 348 F.3d 1075, 1079 (9th Cir. 2003).

[9] Allowing GE to enforce rights under the P&A Agreement would impede FIRREA’s mandate to “preserve and conserve the assets and property of [the Failed Bank],” 12 U.S.C.

§ 1821(d)(2)(B)(iv), by opening the door to suits from any

number of third parties who might claim a benefit from the

Agreement’s terms. See National Union Fire Ins. Co. of Pittsburgh, Pa. v. City Sav., F.S.B., 28 F.3d 376, 388 (3d Cir.

1994) (“One of the important goals of FIRREA is to enable

the receiver to efficiently determine creditors’ claims and preserve assets of the failed institution without being burdened

by complex and costly litigation.”); see also Astra USA, Inc.,

131 S. Ct. at 1349 (“Recognizing the [alleged third-party beneficiary’s] right to proceed in court could spawn a multitude

of dispersed and uncoordinated lawsuits”). 

GECCMC 2005-C1 v. JPMORGAN CHASE BANK 971
GE’s argument that denial of its alleged right to enforce the

P&A Agreement would frustrate FIRREA by prejudicing the

rights of other important constituencies, such as depositors, is

unavailing. It is true that an important purpose of FIRREA is

to protect the assets of depositors. However, depositors need

not rely on the P&A Agreement for a remedy. FIRREA provides a statutory mechanism for such relief. See 12 U.S.C.

§ 1821(f).5

[10] Our precedent balanced against the Congressional

imperatives of FIRREA dictate that GE does not have

enforceable rights under the P&A Agreement. Therefore,

GE’s recourse is not a suit against Chase under the P&A

Agreement. To the extent GE seeks recovery for its losses,

that remedy is best sought in its claim against the FDIC in the

D.C. district court. See id. § 1821(d) (enumerating appropriate

remedies against the FDIC for liabilities claimed against a

failed bank).

III. CONCLUSION

Because GE is not an intended third-party beneficiary of

the P&A Agreement, GE has no enforceable rights under that

contract. 

AFFIRMED.

5

In any event, a depositor attempting to rely on the P&A Agreement for

recovery would have a more persuasive argument for intended third-party

beneficiary status based on the specific language of the Agreement. See

P&A Agreement § 2.1 (“including the Assumed Deposits”). 

972 GECCMC 2005-C1 v. JPMORGAN CHASE BANK