Court Opinion

ID: 9444109
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:41:48.557863+00
Date Added: 2024-06-11T17:29:43.275295
License: Public Domain

PICKETT, Circuit Judge
(dissenting) >
The principal controversy in this case revolves around the question as to whether the state law of Oklahoma or the federal law is applicable. The parties in their briefs and in their oral arguments conceded that the federal law should prevail unless the state law was made applicable by federal statute or the Federal Rules of Civil Procedure. The action was brought by the RFC to enforce an obligation created under federal statute. It is not a diversity action. Its purpose is the enforcement of an obligation which is exclusively federal, and in the absence of a statute, it is controlled by the federal law. Board of Commissioners of Jackson County v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313; Deitrick v. Greaney, 309 U.S. 190, 60 S. Ct. 480, 84 L.Ed. 694; D’Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956; Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838; United States v. Standard Oil Co., 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067; United States v. Independent School District No. 1, 10 Cir., 209 F.2d 578, 580; 59 Harv.L.Rev. 966. In the case of United States v. Independent School District No. 1, the United States brought an action to recover funds which had been disbursed to a school district under the terms of an agreement between the War Food Administration and the school district. The amounts paid the school district were in excess of those authorized. It was contended that under the Oklahoma Constitution and Statutes, the United States was not entitled to recover. In commenting on the law applicable to the case we said:
“In the Clearfield case the government sued to recover on a forged government check, and the question was whether its right to recover was controlled by state law where the check was issued and paid or by federal law. The court left no doubt of the controlling effect of federal law, holding that when the federal government disburses its funds or pays its debts, it does so in the exercise °5 a constitutional power or function, and that the rights and duties incident to the exercise of that power ^ave their roots in the federal *aw> and federal law controls. In the absence of applicable federal statutes, the federal courts fashion the remedies for the rights from the body of federal common law . And *n fashioning^ of those remedies, state law is applicable only insofar as is deemed appropriate as a bas*s ^or f°derai remedies,
United States v. Standard Oil Company, supra [332 U.S. 301, 67 S.Ct. 1608], in discussing this question, the Supreme Court said:
“The great object of the Erie case (Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188) was to secure in the federal courts, in diversity cases, the application of the same substantive law as would control if the suit were brought in the courts of the state where the federal court sits. It was the so-called ‘federal common law’ utilized as a substitute for state power, to create and enforce legal relationships in the area set apart in our scheme for state rather than for federal control, that the Erie decision threw out. Its object and effect were thus to bring federal judicial power under subjeetion to state authority in matters essentially of local interest and state control.
“Conversely there was no purpose or effect for broadening state power over matters essentially of federal *392..character or for determining whether issues are of that nature. The diversity jurisdiction had not created special problems of that sort. Accordingly the Erie decision, which related only to the law to be applied in exercise of that jurisdiction, had no effect, and was intended to have none, to bring within the governance of state law matters exclusively federal, because made so by constitutional or valid congressional command, or others so vitally affecting interests, powers ana relations of the Federal Government as to require uniform national disposition rather than diversified state rulings. Cf. Clearfield Trust Co. v. United States, 318 U.S. [363] at pages 366-368, 63 S.Ct. [573,] at pages 574—576, 87 L.Ed. 838. Hence, although federal judicial power to deal with , ,, , , common-law problems was cut down in the realm of liability or its absence governable by state law, that power remained unimpaired for dealing independently, wherever necessary or appropriate, with essentially federal matters, even though Congress has not acted affirmatively about the specific question.”
The RFC is a corporation created by federal statute to represent the United States in making loans of federal funds. By the provisions of the statute, sovereign immunity has been waived, and the corporation may sue and be sued in either state or federal courts, but the statute does not make the state law applicable. In the absence of such a statute the right to recover these funds should not depend upon the law of the state where the suit is brought,
Of course, if Rule 69 has the effect of bringing the Oklahoma statute into ef-feet as against the RFC, then the judgment should be affirmed. The Oklahoma statute is procedural to the extent that a valid deficiency judgment cannot be obtained without complying with its terms and no general execution can issue until the entry of the deficiency is fixed in the manner required by the statute. The requirements of the Oklahoma statute are, I think, substantive and do not constitute procedure on execution or in aid of execution as contemplated by Rule 69, which was designed only to make state law applicable in the enforcement of a valid judgment and not in the creation of it.
For the reasons stated, I would reverse the judgment,