Court Opinion

ID: 9582821
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:31:40.379355+00
Date Added: 2024-06-11T13:38:33.889464
License: Public Domain

MONTGOMERY, Justice (specially concurring). I concur in both the result and the reasoning of Chief Justice Ransom’s opinion. I write separately to set forth more clearly the extent of our ruling on the trial court’s jurisdiction over appellants’ counterclaims. As I understand the Chief Justice’s opinion, we are not ruling that the court below has jurisdiction over all claims asserted against the RTC by the defendants’ counterclaims. In particular, we are not ruling on whether the Federal Tort Claims Act (FTCA) precludes state court jurisdiction over any of the counterclaims. We are ruling only that the provisions of FIRREA do not divest a state court of jurisdiction to entertain a claim against the RTC, filed before the RTC is appointed receiver, after the RTC has denied the claim administratively. The Chief Justice’s opinion states that we do not reach “uncertified issues” raised by the parties in their briefs. The opinion also states that we are not deciding whether the counterclaims satisfy the elements of claims for recoupment. It is unclear to me whether the district court did or did not rule upon the preclusive effect of the FTCA on state-court jurisdiction when it ruled, as it did, “that the federal courts have exclusive jurisdiction over Defendants’ Counterclaim,” and that the counterclaim was dismissed for lack of subject-matter jurisdiction. At a hearing on the RTC’s motion to dismiss the counterclaims, the court commented: “The biggest problem is the chief federal jurisdiction of continuing the claims against the RTC. And I am persuaded that there is exclusive federal jurisdiction on this counterclaim.” This implies that the court became convinced that the provisions of FIRREA relied on by the RTC preempt state-court jurisdiction, and the court never ruled on the applicability or effect of the FTCA on any of the eight counterclaims asserted by the defendants. I believe that a elaim-by-claim analysis is necessary to determine whether the FTCA preempts state-court jurisdiction over any of the defendants’ counterclaims. As far as I can tell and as just indicated, the district court did not conduct such an analysis; consequently, it probably is accurate to say that the trial court has not “certified” for interlocutory appeal the issue of the FTCA’s applicability to any or all of the counterclaims. The court did begin such an analysis during the hearings on the RTC’s motion, but apparently abandoned it when the court became persuaded that FIRREA divests state courts of jurisdiction over claims against the RTC under the circumstances of this case. On appeal, the RTC maintains that the FTCA provides an alternate basis for the state court’s lack of jurisdiction over defendants’ fourth, sixth, seventh, and eighth counterclaims. Therefore, we may take it as conceded (putting aside the provisions of FIRREA) that the court has jurisdiction over at least defendants’ first and second counterclaims. In the district court, defendants apparently withdrew their third counterclaim; no one mentions this in the briefs on appeal, so the status of the third counterclaim is unclear. The fifth counterclaim sought cancellation of, and possibly money damages for, the RTC’s notice of lis pen-dens; that matter has been disposed of by our ruling that the notice was proper and not subject to cancellation. There thus remain four counterclaims over which the district court may or may not have jurisdiction, depending on how the FTCA is interpreted and applied. Whether the FTCA precludes state-court jurisdiction over the counterclaims requires resolution of several issues. The first issue is whether the exclusive federal jurisdiction provision of the FTCA (28 U.S.C. § 1346(b) (1988)) applies to all claims against the federal government, including counterclaims for recoupment. If it does apply to all claims, it bars state-court jurisdiction over all four of the remaining counterclaims, even if those counterclaims qualify as claims for recoupment.1  If § 1346(b) does not apply to counterclaims for recoupment, it is then necessary to analyze each counterclaim to determine whether it is a proper claim in recoupment. If it is, the trial court has jurisdiction over it; if it is not, the court lacks jurisdiction. The parties agree on the tests for determining whether a claim is one for recoupment: It must (1) arise from the same transaction or occurrence as the Government’s claim, (2) seek relief of the same kind or nature, and (3) seek an amount not in excess of the Government’s claim. The parties, however (and of course), diverge widely as to whether defendants’ counterclaims meet these tests, particularly the “same transaction or occurrence” test. Defendants claim that the relevant transaction or occurrence is “the bank’s movement towards insolvency,” citing FDIC v. Carter, 701 F.Supp. 730, 733-34 (C.D.Cal.1987) (quoting FSLIC v. Williams, 599 F.Supp. 1184, 1210 (D.Md.1984)). The RTC asserts that “a recoupment claim must seek to reduce the plaintiff’s recovery either because the plaintiff has not complied with some obligation of the contract on which he sues or because he has violated some duty which the law imposes upon him in making or performing that contract,” citing, inter alia, FSLIC v. Burdette, 696 F.Supp. 1183, 1187 (E.D.Tenn.1988). These issues were not ruled on by the district court in dismissing defendants’ counterclaims for lack of jurisdiction, so I agree that they are “uncertified” for purposes of this interlocutory appeal. On remand, the court should decide whether § 1346(b) applies to counterclaims for recoupment and, if not, whether any of the counterclaims is a proper claim for recoupment. Any that is proper should be adjudicated; any that is not should be dismissed for lack of jurisdiction. Another issue complicating the analysis, and highlighting the need for a district court ruling, which (if necessary) can then be reviewed on full briefing and argument, is whether 28 U.S.C. § 2680(a), (h) (1988) precludes jurisdiction over any of the counterclaims. That section, which is part of the FTCA, precludes, inter alia, any claims based on the exercise of a discretionary function or an abuse of process or interference with contract rights. The issue, as with § 1346(b), is whether that section applies to counterclaims for recoupment. The trial court has not ruled on the potential applicability of this provision to one or more of the counterclaims. Still another complicating factor arises from defendants’ declaration in their brief in chief that, if this Court rules that the district court has jurisdiction over (presumably one or more of) their counterclaims, they intend to amend their pleading to assert claims for breach of the covenant of good faith and fair dealing, fraud in the inducement, and negligent misrepresentation. If the court allows amendment, these claims also will have to be analyzed to determine their permissibility in light of the FTCA.  . Unfortunately, the parties have provided little guidance on this issue. Defendants cite several cases that support the proposition that the Government, by instituting suit, waives sovereign immunity for counterclaims in recoupment. None of those cases, however, addresses the issue of whether that proposition is an exception to § 1346(b), i.e., whether compulsory counterclaims for recoupment are subject to the exclusive federal jurisdiction provision of the FTCA. One of the cases cited by defendants, FDIC v. Carter, 701 F.Supp. 730 (C.D.Cal.1987), held that 28 U.S.C. § 2680(a) (preserving sovereign immunity for discretionary functions) applies to compulsory counterclaims for recoupment. Id. at 734-35. In so holding, the court stated that, while certain procedural requirements of the FTCA do not apply to compulsory counterclaims for recoupment, the substantive requirements of the Act do apply to such claims. Id. at 733-35. The court provided a few examples of "procedural” requirements of the Act, but did not discuss whether § 1346(b) would be considered a procedural or a substantive requirement.