Court Opinion

ID: 9010562
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:52:25.193593+00
Date Added: 2024-06-11T17:11:22.491060
License: Public Domain

LOGAN, Circuit Judge,
concurring in part and dissenting in part.
Although I agree with the majority’s resolution of the appealability and mootness issues, I do not agree with its construction of the statute to require concurrent administrative consideration and ongoing judicial action on claims asserted before the FDIC receivership. The majority’s reading is contrary to the one circuit court decision and to the overwhelming majority of district court decisions to have squarely considered the issue. Because an interpretation of § 1821(d) favoring a judicial stay of prereceivership claims pending administrative resolution best harmonizes its various paragraphs, I respectfully dissent from Part III of the court’s opinion.
The majority properly rejects the FDIC’s argument that a federal court loses jurisdiction over suits in which a financial institution is a party once that institution is placed into receivership. Subparagraph (D) of § 1821(d)(13) divests a court of jurisdiction over claims against depository institutions in receivership “[e]xcept as otherwise provided in this subsection.” This exception refers to § 1821(d) as a whole,1 not just to paragraph *1508(13), and § 1821(d)(5)(F)(ii) specifically provides that “the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the receiver.” Because there is little that “could be more prejudicial to a claimant’s right ‘to continue’ a pending action than the outright dismissal of the action,” Marquis v. FDIC, 965 F.2d 1148, 1153 (1st Cir.1992), a federal court retains jurisdiction over claims filed against a depository institution before appointment of a receiver.
The majority’s conclusion that such claims must proceed simultaneously through administrative and judicial channels, however, does not necessarily follow from this result. When considered in its entirety, § 1821(d) anticipates a judicial stay of prereceivership claims during a reasonable period of administrative consideration. As we explained in Resolution Trust Corp. v. Mustang Partners, 946 F.2d 103 (10th Cir.1991), prereceivership claims must be submitted to the FDIC’s administrative claims resolution process. After submission, the FDIC has 180 days in which to grant or deny the claim. 12 U.S.C. § 1821(d)(5)(A)(i). If the FDIC denies the claim (or if 180 days passes with no action), within 60 days “the claimant may request administrative review of the claim ... or file suit on such claim (or continue an action commenced before the appointment of the receiver).” Id. § 1821(d)(6)(A) (emphasis added). The parenthetical phrase clearly contemplates that the pre-existing suit has been held in abeyance awaiting the FDIC’s ruling. See also id. § 1821(d)(6)(B)(ii) (“If any claimant fails to file suit on such claim (or continue an action commenced before the appointment of the receiver), before the end of the 60-day period described in subpara-graph (A), the claim shall be deemed to be disallowed....”) (emphasis added).
If the statutory language is not deemed clear enough, the legislative history of FIR-REA supports this conclusion. See H.R.Rep. No. 54(1), 101st Cong., 1st Sess. 418 (1989), reprinted in 1989 U.S.C.C.A.N. 86, 214 (“Any suit (or motion to renew a suit filed prior to appointment of the receiver) must be brought by the claimant within 60 days after the denial of the claim.”) (emphasis added). The “shall not prejudice” language of § 1821(d)(5)(F)(ii) merely protects the claimant from dismissal while the administrative claim is pending.
Contrary to the majority’s conclusion, the grant of a stay pending administrative resolution of prereceivership claims would not render the automatic 90-day stay of § 1821 (d)(12)(A)(ii) superfluous. “The 90-day period is the agency’s space in which to learn about the case; but the 180-day period within which administrative decisions on claims are reached commences only after the time within which those claims are filed.” Guidry v. Resolution Trust Corp., 790 F.Supp. 651, 655 (E.D.La.1992). Further, the statutory stay is exclusively available “when the FDIC takes control of a depository institution who is a plaintiff in pending litigation [or] when the FDIC is appointed conservator of a bridge institution rather than a failed thrift.” Estate of Harding v. Bell, 817 F.Supp. 1186, 1195 (D.N.J.1993); see also Praxis Properties, Inc. v. Colonial Sav. Bank, S.L.A., 947 F.2d 49, 64 n. 14 (3d Cir.1991). I therefore agree with the First Circuit that “FIRREA cannot be read to foreclose district courts from granting stays above and beyond the 90-day automatic stay described in section 1821(d)(12),” and that under most circumstances a district court should “hold pending litigation in abeyance until the administrative review process has run its course, or 180 days has passed, whichever first occurs.” Marquis, 965 F.2d at 1155.
Along with the First Circuit, district courts in the Second, Third, Fifth, Seventh, and Eleventh Circuits have approved stays in prereceivership cases pending administrative review. See Harding, 817 F.Supp. at 1195 (Third Circuit); Resolution Trust Corp. v. J.F. Assocs., 813 F.Supp. 951, 953 (N.D.N.Y.1993) (Second Circuit); Proctor-Smith v. Red Bird Bank, 806 F.Supp. 129, 131 (N.D.Tex.1992) (Fifth Circuit); Lanigan v. Resolution Trust Corp., No. 91-C-7216, 1992 WL 130075, at *2, 1992 U.S.Dist. LEXIS 8050, at *6-*7 (N.D.Ill. June 5, 1992) (Seventh Circuit); Solano v. Southeast Bank, N.A., 796 F.Supp. 506, 508 (S.D.Fla.1992) (Eleventh Circuit); Guidry, 790 F.Supp. at *1509654 (Fifth Circuit); Resolution Trust Corp. v. Cotten, 790 F.Supp. 649, 650 (E.D.La.1992) (Fifth Circuit); Simms v. Biondo, 785 F.Supp. 322, 325 (E.D.N.Y.1992) (Second Circuit); Coston v. Gold Coast Graphics, Inc., 782 F.Supp. 1532, 1536 (S.D.Fla.1992) (Eleventh Circuit); Homeyer v. Yorkville Fed. Sav. & Loan Ass’n, No. 90 Civ. 5830 (CSH), 1991 WL 274226, at *3, 1991 U.S.Dist. LEXIS 17939, at *15 (S.D.N.Y. Dec. 9, 1991) (Second Circuit); Connecticut Bank & Trust Co., N.A. v. CT Partners, Inc., 136 F.R.D. 347, 350 (D.Conn.1991) (Second Circuit). One district court in our own circuit is in accord, having refused to follow the Utah district court’s decision that we review in the instant case. See FDIC v. Updike Bros., Inc., 814 F.Supp. 1035, 1043 n. 4 (D.Wyo.1993).
Recent decisions have been critical of view of the district court the majority adopts in the instant case. In Proctor-Smith, the court stated that cases such as Marc Development “have been orphaned by the general trend in the case law to allow the administrative resolution process to run its course.” 806 F.Supp. at 131; see also Homeyer, 1991 WL 274226, at *5, 1991 U.S.Dist. LEXIS 17939, at *12. Of the two district courts that have adopted the Marc Development analysis, one has been overruled and the other is of dubious authority. FDIC v. Grillo, 788 F.Supp. 641 (D.N.H.1992), enthusiastically endorsed the Marc Development approach, but, because New Hampshire is in the First Circuit, has been overruled by Marquis. McNeily v. United States, 798 F.Supp. 395 (N.D.Tex.1992), also agreed that concurrent proceedings were appropriate, but Proctor-Smith, from the same district, decided nine months after McNeily, holds exactly to the contrary.
FIRREA is admittedly a highly complex statute; one court has quipped that it “makes the Internal Revenue Code look like a first grade primer.” Guidry, 790 F.Supp. at 653. In particular, § 1821(d) has “proven to be particularly troublesome for courts and litigants alike. As a result, a procedure originally intended to dispose of the bulk of claims against failed financial institutions expeditiously and fairly has instead become a source of delay and injustice in the disposition of such claims.” Espinosa v. DeVasto, 818 F.Supp. 438, 440 (D.Mass.1993) (quotation and citation omitted). An interpretation of § 1821(d) that encourages district courts to stay prereceivership claims pending administrative determination best comports with the language of the various paragraphs and subparagraphs of subsection (d) governing the review of administrative claims and with the overall intent of the statute. Parallel proceedings would require the FDIC to defend a claim in court that might ultimately be granted administratively, wasting judicial resources and taxpayer dollars. If the claim is denied, under § 1821(d)(5)(F)(ii) the claimant is in no worse a position than before. “To permit administrative and judicial remedies to run their course on parallel tracks would seem to invite chaos and thwart the administrative scheme Congress sought to create.” Guidry, 790 F.Supp. at 654. The majority contributes to that chaos by creating a circuit split and holding that judicial and administrative claims must proceed simultaneously. For the reasons stated, I dissent.

. 12 U.S.C. § 1821(d) uses the term "subsection” when referencing a part of § 1821 on a level with (d), see § 1821(d)(2)(F)(ii), (d)(2)(G)(ii), the term "paragraph” when referencing a part on a level with (,d)(13), the term "subparagraph” when referencing a part on a level with (d)(13)(D), and the term "clause” when referencing a part on the level of (d)(13)(D)(i).