Court Opinion

ID: 9431603
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:32:42.453849+00
Date Added: 2024-06-11T17:23:28.332373
License: Public Domain

Justice Scalia,
concurring in part and concurring in the judgment.
I agree with the judgment of the Court, and join Parts I through III of its opinion. I do not join Part IV, however, because there is no precedent and in my view no sound policy justification for (1) using the doctrine of exhaustion of administrative remedies as a basis for pre-empting state law, and (2) imposing upon the Bank Board the obligation to set forth by rule a specific time period within which FSLIC must act upon claims.
I
This case is not about exhaustion; it is about pre-emption. To my knowledge, the doctrine of exhaustion of administrative remedies has never been used, as it is in today’s opinion, as a means of pre-empting state law. We normally apply the doctrine by refusing to entertain a federal claim unless and until the plaintiff has resorted to the federally created administrative remedies for the grievance underlying that claim. See, e. g., Renegotiation Board v. Bannercraft Clothing Co., 415 U. S. 1, 20-26 (1974); McGee v. United States, 402 U. S. 479, 483-486 (1971). That is a fair assessment of the congressional intent in creating the administrative remedies.
In the present case, by contrast, the Court applies what purports to be the exhaustion doctrine, not to determine when Congress wished federal claims to be first assertible, but to determine when Congress wished to prohibit the as*589sertion of state claims. The claims at issue in this case — and, I expect, in most litigation involving insolvent thrifts — arise under state law; and the suit was originally brought, before removal, in a Texas court. Part IV of the Court’s opinion says that the Bank Board can exclude these Texas-law claims from federal court until they have first been acted upon by FSLIC, or until a specific time limit for such action has passed. Moreover, unless that statement is devoid of practical effect (requiring no more than the remand of removed cases to the state courts), presumably the Court means that the Board can exclude these “unexhausted” claims from state courts as well.
What is enough to suggest a congressional intent to defer the maturing of a federal cause of action is not enough to suggest a congressional intent to override state law. We have repeatedly said that federal law pre-empts state law in traditional fields of state regulation only when “that was the clear and manifest purpose of Congress,” Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947); see also Puerto Rico Dept. of Consumer Affairs v. Isla Petroleum Corp., 485 U. S. 495, 500 (1988); Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S. 707, 715 (1985); Jones v. Rath Packing Co., 430 U. S. 519, 525 (1977). These assurances are meaningless if the directions to FSLIC to “pay all valid credit obligations,” 12 U. S. C. § 1729(b)(1)(B), to “liquidate . . . assets in an orderly manner,” 12 U. S. C. § 1729(b)(l)(A)(v), and to “settle, compromise, or release claims . . . and to do all other things that may be necessary in connection therewith,” 12 U. S. C. § 1729(d), can be interpreted as a congressional authorization for the suspension of rights arising under state usury and contract law, and for the exclusion of state-court jurisdiction.
II
It is, however, an understatement to say that what is involved is merely a “suspension” of state-created rights. The *590suspension becomes an extinguishment if, during the period while the plaintiff is pursuing his required “exhaustion” of federal remedies for his state claim, the state statute of limitations expires. To meet this difficulty, and thereby to make its pre-emption of state law seem less drastic, the Court imposes upon the Bank Board the requirement that its regulations “place a clear and reasonable time limit on FSLIC’s consideration of whether to pay, settle, or disallow claims.” Ante, at 586. Of course even this does not completely solve the problem. Even if the Bank Board establishes a flat 90-day limit, those state-created claims whose statute of limitations happens to expire during that 90-day period will be extinguished. The only complete solution would be to require tolling of the state statutes of limitations during this 90-day period — but that is so much more obviously a preemption of state law, and so difficult to conceal under the guise of “exhaustion,” that the Court avoids it, leaving state claimants without remedy if their causes of action expire before federal “exhaustion” has occurred.
But to achieve this limited benefit, the Court creates yet another novel doctrine that we may have cause to regret. I know of no precedent for the proposition that an agency’s regulations are “arbitrary, capricious” or “otherwise not in accordance with law,” 5 U. S. C. §706(2)(A), simply because they do not set forth a precise time by which the agency will have acted. To be sure, particular agency action becomes arbitrary and capricious when it is too long delayed, wherefore the Administrative Procedure Act instructs reviewing courts to “compel agency action unlawfully withheld or unreasonably delayed,” 5 U. S. C. §706(1) (emphasis added). But that determination is made on a case-by-case basis. See, e. g., Sierra Club v. Thomas, 264 U. S. App. D. C. 203, 212-215, 828 F. 2d 783, 794-797 (1987); Public Citizen Health Research Group v. Commissioner, Food and Drug Administration, 238 U. S. App. D. C. 271, 285, 740 F. 2d 21, 35 (1984). The equivalent, in the present context, would be *591to say that exhaustion has been completed when, in the particular case, FSLIC has taken too long to make up its mind. See, e. g., id., at 282, 740 F. 2d, at 32; Environmental Defense Fund, Inc. v. Hardin, 138 U. S. App. D. C. 391, 397, 428 F. 2d 1093, 1099-1100 (1970). But to say that the Bank Board must establish, for all cases, a specified cut-off date is to impose, contrary to our case law, a requirement that appears neither in the Administrative Procedure Act nor in FSLIC’s organic law. See Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U. S. 519, 524 (1978). The only thing to be said for the invention is that it somewhat reduces the harm caused by invention of the “exhaustion” requirement. One distortion has led to another.
* * *
It seems to me that, in Part IV of its opinion, the Court labors courageously — but in the last analysis unsuccessfully — to supply what is lacking in FSLIC’s organic law to cover the extraordinary situation with which the agency is now confronted. Ordinarily, the filing of a lawsuit against an insolvent thrift would pose no major problem. Service of summons in the suit would itself constitute notice of the claim, and if FSLIC was interested in granting or settling the claim it could request the state or federal court to defer further proceedings for a reasonable time pending settlement negotiations. It is hard to imagine that any court would deny such a request. It is only the current enormous volume of claims against insolvent thrifts, in a diversity of courts, that makes it impracticable for FSLIC to proceed in this fashion. I do not think it our role to supply the emergency provisions Congress has not enacted — and we are not much good at it anyway, since I doubt that (even at the expense of making some bad law) we have succeeded in giving FSLIC meaningful relief. The agency’s main problem, I suspect, is that the number of claims it must review is so high that it cannot give courts assurances that it will be able to address *592settlement within a “reasonable time.” Today’s opinion does nothing to solve that. Congress is currently considering legislation directed towards the so-called “Savings and Loan crisis,” Financial Institutions Reform, Recovery and Enforcement Act of 1989, S. 413, 101st Cong., 1st Sess. (1989), and instead of the dicta in Part IV of the opinion, we should have remanded FSLIC to that legislative process.
For these reasons, although I join in the reversal of the decision below, I do so on the more categorical ground that FSLIC’s claim procedures cannot pre-empt the filing of suits under state law.