Opinion ID: 5058
Heading Depth: 2
Heading Rank: 2

Heading: Analogizing Related Law

Text: Although we find that the language of § 1825 clearly expresses Congressional intent, we will address some of the FDIC's arguments and analogies in support of a contrary reading. We reject these analogies. First, the FDIC's heavy reliance on Lee v. Osceola & Little River Road Improvement Dist.13 is misplaced. Lee is inappo site because it involved liens the taxing authorities sought to attach to property while it was owned by the federal government. Both Irving and Carrollton, on the other hand, involve valid liens that attached to the property years before the FDIC became the owner of that property. A further distinction is that, in Lee, the liens related to improvements made by the government upon the property. In this case, the liens relate to pre-existing rights held by the Texas taxing authorities to ensure that the money they are due is eventually paid in full. It should then come as no surprise to the FDIC that these liens already attached to the property when the FDIC was appointed receiver for that property are sought to be enforced when the FDIC later sells the property. Valid pre-existing liens do not become the property of the FDIC when it is acting as a receiver, and consequently, any reconsolidation and resale plans must include these liens as part of their calculus. The FDIC enjoys sovereign immunity from state tax penalties to facilitate its reconsolidation 12 For example, see Sunbelt Savings, 923 F.2d at 356. 13 268 U.S. 643, 45 S.Ct. 620, 69 L.Ed. 1133 (1925). of failed banks; in addition to the Constitutional requirements, an admirable goal underlies that immunity. Whenever the FDIC can reduce the charges connected to property it has acquired, it can increase the value of the property, decrease its own losses, expedite resale, and save the nation's taxpayers and insured depositors a great deal of money. The ability to extinguish liens securing unpaid tax penalties incurred by earlier owners would certainly further those goals. But to endow the FDIC with such a valuable tool would come at a great cost to state and local taxing authorities. Using this case as an example, local governments and school districts have operated with reliance on the recovery of unpaid ad valorem taxes and penalties through liens on real property. To deny them their justified expectations of receiving those funds wo uld threaten their ability to operate their schools. The policy arguments in this case are strong on both sides. Perhaps in consideration of these countervailing interests, Congress limited its grant of power to the FDIC. The inability to extinguish such liens is one of the many indirect burdens the FDIC would rather not bear as it labors to cleanse the savings and loan Augean stables. As the district court noted in Irving, [The FDIC]'s inability to market the asset represents but one aspect of the grim reality that faces the FDIC upon the failure of a financial institution.14 In addition to Lee, which at least addresses governmental liability for tax liens, the FDIC also cites an entirely unrelated area of the law where a different outcome prevails. The FDIC argues that its role as receiver of failed thrifts is analogous to that of a trustee in a liquidation under Chapter 7 of the Bankruptcy Code because both the trustee and receiver are appointees rather than voluntary purchasers. The FDIC further notes that 11 U.S.C. §§ 724(a) and 726(a)(4) allow a trustee to avoid liens for tax penalties that were incurred by the debtor before bankruptcy. The FDIC then asks this Court to recognize that these bankruptcy provisions are evidence of a longstanding equitable policy that underlies the receivership context as well. The two bankruptcy provisions prove only that Congress was aware of its ability to word its 1989 amendments in accordance with § 1825 had it so 14 Irving II, 762 F.Supp. at 703. desired. If congressional silence is a legitimate element in legislative history, the absence of appropriate language is indicative of a conscious decision on the part of Congress not to expand the scope of the FDIC's immunity rather than indicative of an implicit policy supposedly underlying these two disparate sets of regulations. Finally, in the middle of its aggressive effort to avoid liability for local ad valorem taxes and to extinguish pre-existing liens securing those taxes and penalties for their nonpayment, the FDIC issued a favorable administrative interpretation of the law. On May 31, 1991—almost two months after the district court's opinion in Irving II—the FDIC issued a Legal Memorandum in Support of FDIC and RTC Statements of Policy Regarding Payment of State and Local Taxes. On June 4, 1991, the FDIC issued its Statement of Policy Regarding the Payment of State and Local Taxes. Although the district court requested both parties to offer their interpretations of 12 U.S.C. § 1825(b) before it decided Carrollton, the court discounted the value of the FDIC's interpretation. We review the district court's legal decisions, including the proper interpretation of a statute, de novo.15 We conclude that in both Irving, in which the FDIC interpretation was not an issue, and in Carrollton, in which it was, that the district court reached the correct result. A court may discount the FDIC's Legal Memorandum when reliance upon an agency interpretation is unnecessary because the statutory language the agency interprets is unambiguous. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.16 Discounting the FDIC interpretation is appropriate for another important reason. The FDIC's 15 Afco Steel, Inc. v. Tobi Engineering, Inc., 893 F.2d 92, 93 (5th Cir.1990). 16 Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–843, 104 S.Ct. 2778, 2781–2782, 81 L.Ed.2d 694 (1984); see also Rust v. Sullivan, ––– U.S. ––––, 111 S.Ct. 1759, 1767, 114 L.Ed.2d 233 (1991). Legal Memorandum was issued during pending litigation. It was only after Irving, in fact after the FDIC had filed its notice of appeal in Irving, that the agency published its interpretation of the statute. The District of Columbia Circuit has addressed the deference due a similarly delayed and conveniently favorable agency interpretation: Deference is due the authoritative interpretation an agency gives to its own regulations or to the statute it administers.... To carry much weight however, the interpretation must be publicly articulated some time prior to the agency's embroilment in litigation over the disputed provision.17 We conclude that the FDIC's Legal Memorandum should be given no deference, not only because of the clarity of the federal statute, but because the memorandum's strategically timed publication—especially when the statutory language is clear—imprints its contents with the stamp of biased opportunism.