Opinion ID: 6602
Heading Depth: 2
Heading Rank: 1

Heading: The Dallas Action

Text: On October 9, 1992, DLG and De La Garza filed suit in the Dallas Court against the Board, the FRBD, and the FDIC. In this action, DLG and De La Garza sought declaratory and injunctive relief to (1) establish their rights with respect to the promissory notes, (2) prevent interference with those rights, and (3) preclude the Board from asserting jurisdiction over DLG as a bank holding company under the BHCA. DLG and De La Garza also sought monetary 1 12 U.S.C. §§ 1841-1850 (1988 & Supp. III 1991). 2 Section 1842(a)(1) of the BHCA prohibits an entity from becoming a bank holding company without obtaining prior approval of the Board. In general, a bank holding company is any company that has control over a bank. Id. § 1841(a)(1). One way that a company can control a bank is to own, control, or have the power to vote 25% or more of any class of voting security of a bank, whether directly, indirectly, or acting through one or more other persons. Id. § 1841(a)(2)(A). 3 DLG and the FRBD later agreed that within 60 days DLG would sell the notes, obtain Board approval, or file a new divestiture plan. 4 damages and attorney's fees for breach of contract, tortious interference with contract, tortious interference with prospective contractual and business relations, fraud, conspiracy to commit fraud, and violations of the Due Process Clause of the Fifth Amendment. On March 30, 1993, the Dallas Court dismissed DLG's and De La Garza's claims for declaratory and injunctive relief, reasoning that such relief was explicitly precluded by 12 U.S.C. § 1818(i)(1). As for the monetary claims, the court dismissed (1) DLG's and De La Garza's state-law tort claims against the Board and the FDIC, holding that such claims must be brought against the United States pursuant to the Federal Tort Claims Act (FTCA)4; (2) a constitutional takings claim against the Board, finding that the Tucker Act granted the Court of Federal Claims exclusive jurisdiction over such an action5; (3) a motion to dismiss a takings claim against the FDIC6; and (4) a breach of contract claim against the FDIC, but granted an opportunity to replead. DLG and De La Garza amended their complaint, but, late in 1993, voluntarily dismissed all remaining claims and filed this appeal. In May 1993, IBI redeemed the promissory notes for $2,000,000. 4 28 U.S.C. §§ 2671-2680 (1988 & Supp. III 1991). 5 28 U.S.C.A. § 1491(a)(1) (West 1994). The district court denied a motion to dismiss without prejudice Appellants' statelaw tort and constitutional claims against the FRBD, declining to decide whether the FTCA or the Tucker Act applied to that entity. Subsequently, appellants voluntarily dismissed these claims. 6 Appellants voluntarily dismissed takings claims against the other defendants. 5 De La Garza instructed IBI to wire the payment to a recently formed entity headed by his wife, Southwest Underwood Company, which had no previous connection with the promissory note transaction. On September 22, 1993, a state grand jury sitting in Travis County, Texas returned an indictment charging De La Garza and others with misapplication of approximately $9,000,000 in insurance company assets.7 This indictment and De La Garza's decision to have the proceeds of the sale of the notes wired to Southwest Underwood Company precipitated, in part, the Board's decision to commence litigation in the Houston Court.