Source: http://www.chanrobles.com/usa/us_supremecourt/512/79/case.php
Timestamp: 2019-10-23 23:07:29
Document Index: 350578609

Matched Legal Cases: ['§ 1821', '§ 215', '§ 1821', '§ 1821', '§ 1821', '§ 1821', '§ 1821', '§ 1821']

O'MELVENY & MYERS v. FEDERAL DEPOSIT IN­ SURANCE CORPORATION, AS RECEIVER FOR AMERI­ CAN DIVERSIFIED SAVINGS BANK, ET AL. - US SUPREME COURT DECISIONS ON-LINE
US Supreme Court Decisions - On-Line> Volume 512 > O'MELVENY & MYERS v. FEDERAL DEPOSIT IN­ SURANCE CORPORATION, AS RECEIVER FOR AMERI­ CAN DIVERSIFIED SAVINGS BANK, ET AL.
O'MELVENY & MYERS v. FEDERAL DEPOSIT IN­ SURANCE CORPORATION, AS RECEIVER FOR AMERI­ CAN DIVERSIFIED SAVINGS BANK, ET AL.
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(b) California law also governs the narrower question whether corporate officers' knowledge can be imputed to the FDIC suing as receiver. This Court will not adopt a judge-made federal rule to supplement comprehensive and detailed federal statutory regulation; matters left unaddressed in such a scheme are presumably left to state law. Title 12 U. S. C. § 1821(d)(2)(A)(i)-which states that "the [FDIC] shall, ... by operation of law, succeed to-all rights, titles, powers, and privileges of the insured depository institution"-places the FDIC in the insolvent S&L's shoes to pursue its claims under state law, except where some provision in the extensive framework of the Financial Institutions Re-cralaw
Briefs of amici curiae were filed for the American Bar Association by R. William Ide III, John J. Curtin, Jr., and Arthur W Leibold, Jr.; and for Shrader & York et al. by Eugene B. Wilshire, Jr., and Patrick J. Dyer.cralaw
In September 1985, petitioner O'Melveny & Myers, a Los Angeles-based law firm, represented ADSB in connection with two real estate syndications. At that time, ADSB was under investigation by state and federal regulators, but that fact had not been made public. In completing its work for the S&L, petitioner did not contact the accounting firms that had previously done work for ADSB, nor state and federal regulatory authorities, to inquire about ADSB's financial status. The two real estate offerings on which petitioner worked closed on December 31,1985. On February 14,1986, federal regulators concluded that ADSB was insolvent and that it had incurred substantial losses because of violations of law and unsound business practices. Respondent steppedcralaw
1 For simplicity's sake, we refer to a "receiver" throughout, which we identify as the FDIC. The reality was more complicated. The first federal entity involved was the Federal Savings and Loan Insurance Corporation (FSLIC), which was appointed conservator of ADSB in 1986 and receiver in June 1988. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub. L. 101-73, 103 Stat. 183, abolished FSLIC, and caused FDIC, the manager of the FSLIC resolution fund, to be substituted as receiver and party to this case. See id., §§ 215, 401(a)(1), 401(f)(2).cralaw
2 The Court of Appeals appears to have agreed with the first of these contentions. Instead of the second, however, it embraced the proposition that federal common law prevents the attributed knowledge of corporate officers acting against the corporation's interest from being used as the basis for an estoppel defense against the FDIC as receiver. Since there is nothing but a formalistic distinction between this argument and the second one described in text, we do not treat it separately.cralaw
In seeking to defend the Ninth Circuit's holding, respondent contends (to quote the caption of its argument) that "The Wrongdoing Of ADSB's Insiders Would Not Be Imputed To ADSB Under Generally Accepted Common Law Principles," Brief for Respondent 12-in support of which it attempts to show that nonattribution to the corporation of dishonest officers' knowledge is the rule applied in the vast bulk of decisions from 43 jurisdictions, ranging from Rhode Island to Wyoming. See, e. g., id., at 21-22, n. 9 (distinguishing, inter alia, Gook v. American Tubing & Webbing Go., 28 R. I. 41, 65 A. 641 (1905), and American Nat. Bank of Powell v. Foodbasket, 497 P. 2d 546 (Wyo. 1972)). The supposed relevance of this is set forth in a footnote: "It is our position that federal common law does govern this issue, but that the content of the federal common law rule corresponds to the rule that would independently be adopted by most jurisdictions." Brief for Respondent 15, n. 3. If there were a federal common law on such a generalized issue (which there is not), we see no reason why it would necessarily conform to that "independently ... adopted by most jurisdictions." But the short of the matter is that California law, not federal law, governs the imputation of knowledge to corporate victims ofcralaw
In answering the central question of displacement of California law, we of course would not contradict an explicit federal statutory provision. Nor would we adopt a court-made rule to supplement federal statutory regulation that is comprehensive and detailed; matters left unaddressed in such a scheme are presumably left subject to the disposition provided by state law. See Northwest Airlines, Inc. v. Transport Workers, 451 U. S. 77, 97 (1981); Milwaukee v. Illinois, 451 U. S. 304, 319 (1981). Petitioner asserts that both these principles apply in the present case, by reason of 12 U. S. C. § 1821(d)(2)(A)(i) (1988 ed., Supp. IV), and the comprehensive legislation of which it is a part, the Financial Institutionscralaw
Respondent argues that § 1821(d)(2)(A)(i) should be read as a nonexclusive grant of rights to the FDIC receiver, which can be supplemented or modified by federal common law; and that FIRREA as a whole, by demonstrating the high federal interest in this area, confirms the courts' authority to promulgate such common law. This argument is demolished by those provisions of FIRREA which specifically create special federal rules of decision regarding claims by, and defenses against, the FDIC as receiver. See 12 U. S. C. § 1821(d)(14) (1988 ed., Supp. IV) (extending statute of limitations beyond period that might exist under state law); §§ 1821(e)(1), (3) (precluding state-law claims against the FDIC under certain contracts it is authorized to repudiate); § 1821(k) (permitting claims against directors and officers for gross negligence, regardless of whether state law would require greater culpability); § 1821(d)(9) (excluding certain state-law claims against FDIC based on oral agreements by the S&L). Inclusio unius, exclusio alterius. It is hard tocralaw
Such cases are, as we have said in the past, "few and restricted," Wheeldin v. Wheeler, 373 U. S. 647, 651 (1963), limited to situations where there is a "significant conflict between some federal policy or interest and the use of state law." Wallis v. Pan American Petroleum Corp., 384 U. S. 63, 68 (1966). Our cases uniformly require the existence of such a conflict as a precondition for recognition of a federal rule of decision. See, e. g., Kamen v. Kemper Financial Services, Inc., 500 U. S. 90, 98 (1991); Boyle, supra, at 508; Kimbell Foods, 440 U. S., at 728. Not only the permissibility but also the scope of judicial displacement of state rulescralaw
The closest respondent comes to identifying a specific, concrete federal policy or interest that is compromised by California law is its contention that state rules regarding the imputation of knowledge might "deplet[e] the deposit insurance fund," Brief for Respondent 32. But neither FIRREA nor the prior law sets forth any anticipated level for the fund, so what respondent must mean by "depletion" is simply the forgoing of any money which, under any conceivable legal rules, might accrue to the fund. That is a broad principle indeed, which would support not just elimination of the defense at issue here, but judicial creation of new, "federalcommon-law" causes of action to enrich the fund. Of course we have no authority to do that, because there is no federal policy that the fund should always win. Our cases have previously rejected "more money" arguments remarkably similar to the one made here. See Kimbell Foods, supra, at 737-738; Yazell, supra, at 348; cf. Robertson v. Wegmann, 436 U. S. 584, 593 (1978).cralaw
They raise issues, such as the imputation question here, that may not have been definitively settled in the state jurisdiction in which the case is brought, but that nevertheless must be resolved by federal courts. The task of the federal judges who confront such issues would surely be simplified if Congress had provided them with a uniform federal rule to apply. As matters stand, however, federal judges must do their best to estimate how the relevant state courts would perform their lawmaking task, and then emulate that sometimes purely hypothetical model. The Court correctly avoids any suggestion about how the merits of the imputation issue should be resolved on remand or in similar cases that may arise elsewhere. "The federal judges who dealcralaw