Opinion ID: 223275
Heading Depth: 1
Heading Rank: 4

Heading: The FDIC's Reversal of Position

Text: Plaintiffs alternately contend that, even if the FDIC was correct in its belief that § 330.5 applies to determinations of coverage under § 330.8, it acted in an arbitrary and capricious manner in reversing the determinations made by lower-level FDIC agents prior to the final decision. These intermediate determinations, which concluded the Challenged Accounts did constitute annuity contract accounts, were apparently communicated to Plaintiffs at various times before the FDIC ultimately reached its final, contrary, determination. Based on these communications, Plaintiffs infer the FDIC had, at one point, concluded the deposit accounts records were ambiguous or unclear on the manner in which the funds were owned, thereby allowing it to consider certain supplementary materials offered by Plaintiffs as proof of the Challenged Accounts' true nature. See 12 C.F.R. § 330.5 (If the deposit account records are ambiguous or unclear on the manner in which the funds are owned, then the FDIC may, in its sole discretion consider evidence other than the deposit account records....). Having previously made the decision to consider extrinsic evidence, and having concluded based on that evidence that the Challenged Accounts constituted annuity contract accounts, Plaintiffs assert it was arbitrary and capricious for the FDIC to reverse course without articulating a reason for its decision. [5] There is no provision within the Federal Deposit Insurance Act authorizing federal court review of intermediate FDIC determinations. Cf. 12 U.S.C. § 1821(f)(4) (authorizing judicial review of final agency actions). Plaintiffs acknowledge as much, but assert it is this court's duty to nevertheless ascertain whether the agency examined the relevant data and articulated a rational connection between the facts found and the decision made. Citizens' Comm. to Save Our Canyons, 513 F.3d at 1176. Presumably, they mean to say that the extrinsic evidence allegedly considered by the FDIC in forming its intermediate determinations constitutes relevant data and that it was incumbent upon the FDIC to explain how this data can be harmonized with the final insurance determination. There is no question, however, that the FDIC ultimately concluded the deposit account records clearly and unambiguously indicated the Challenged Accounts were owned in the manner of corporate accounts, per § 330.11. Having reached that conclusion, the FDIC's controlling regulations expressly prohibited it from considering any other records on the manner in which the funds [were] owned. 12 C.F.R. § 330.5. Plaintiffs' extrinsic evidence was not, therefore, relevant data for purposes of the FDIC's final insurance determination. The absence of any discussion pertaining to this evidence in the FDIC's final determination is therefore unsurprising, and in no way arbitrary or capricious. [6]