Court Opinion

ID: 9475999
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:45:15.033919+00
Date Added: 2024-06-11T17:45:04.809416
License: Public Domain

FLETCHER, Circuit Judge,
dissenting:
Because I think that the district court lacked subject matter jurisdiction in this case, I dissent.
Statutes conferring jurisdiction on federal courts are strictly construed, Boelens v. Redman Homes, Inc., 748 F.2d 1058, 1067 (5th Cir.1984), and doubts are resolved against federal jurisdiction. Id.; General Atomic Co. v. United Nuclear Corp., 655 F.2d 968, 968-69 (9th Cir.1981), cert, denied, 455 U.S. 948, 102 S.Ct. 1449, 71 L.Ed.2d 662 (1982). In determining whether a statute confers jurisdiction, we look to congressional intent. See, e.g., Boelens, 748 F.2d 1058 (scope of the Magnuson-Moss Warranty Act); General Atomic, 655 F.2d 968 (overall scheme of the Arbitration Act); Phillips v. Osborne, 403 F.2d 826 (9th Cir.1968) (purpose of Landrum-Griffin Act). Although neither party raised the issue of whether the district court lacked jurisdiction, we must consider the question sua sponte. Shamrock Development Co. v. City of Concord, 656 F.2d 1380, 1384 (9th Cir.1981).
Woodbridge Plaza brought suit against the FDIC in both its corporate capacity and its capacity as receiver. The same theory of law — breach of duty by the FDIC-receiver in improperly distributing assets— formed the foundation of both claims. The FDIC-corporation was added as a party simply to provide a source of assets upon recovery. That the FDIC acted in its corporate capacity in purchasing certain assets from the receiver was not material to the plaintiff’s claim.1 The.district court dismissed Woodbridge’s claim naming the FDIC-corporation as defendant on the merits2 and remanded its claim naming the FDIC-receiver as defendant to state court on the ground that the court lacked subject matter jurisdiction over the FDIC-receiver'.
Federal courts lack subject matter jurisdiction when the FDIC is sued in its capacity as receiver and the issues are determined pursuant to state law. See, e.g., In re F & T Contractors, Inc., 718 F.2d 171, 177 (6th Cir.1983); FDIC v. Sumner Financial Corp., 602 F.2d 670 (5th Cir.1979); see also FDIC v. Elefant, 790 F.2d 661 (7th Cir.1986); FDIC u de Jesus Velez, 678 F.2d 371 (1st Cir.1982). 12 U.S.C. § 1819 (Fourth), which confers federal jurisdiction over the FDIC, provides:
[T]he Corporation shall ... have power ... To sue and be sued, complain and defend, in any court of law or equity, State or Federal. All suits of a civil nature ... to which the Corporation shall be a party shall be deemed to arise under the laws of the United States and the United States district courts shall have original jurisdiction thereof, without regard to the amount in controversy; and *545the Corporation may, without bond or security, remove any such action ... from a State court to the United States district court..., except that any such suit to which the Corporation is a party in its capacity as receiver of a State bank and which involves only the rights or obligations of depositors, creditors, stockholders and such State bank under State law shall not be deemed to arise under the laws of the United States.
Thus, the jurisdictional section, like the Federal Deposit Insurance Act as a whole, distinguishes between the FDIC’s functions. Courts have enforced the statutory vision of the FDIC’s dual capacity by basing jurisdiction on the nature of the FDIC’s role as presented by the claim. See, e.g., FDIC v. de Jesus Velez, 678 F.2d 371, 374 (1st Cir.1982); FDIC v. Citizens Bank & Trust Co., 592 F.2d 364, 367 (7th Cir.), cert. denied, 444 U.S. 829, 100 S.Ct. 56, 62 L.Ed.2d 37 (1979); FDIC v. Ashley, 585 F.2d 157 (6th Cir.1978). A complaint alleging in part “that the F.D.I.C., as ... liquidating agent, had acted in an irresponsible manner and had conspired with and aided and abetted others ... in breaching the fiduciary duties owed the stockholders of the bank” raised a claim against the FDIC as receiver of a state bank, over which the federal court lacked jurisdiction. Freeling v. Sebring, 296 F.2d 244, 246 (10th Cir. 1961). By contrast, the FDIC acted as a corporation in asserting a claim against bank directors for corporate mismanagement when the FDIC purchased for value “unacceptable assets,” and bore the risk of loss as to recovery on the assets, so that the federal court had jurisdiction. Ashley, 585 F.2d 157. These courts considered the nature of the claim rather than, as here, the name in which the FDIC is a party or the potential source of assets upon judgment. In our case, because the claim involves the FDIC as receiver, federal jurisdiction is not conferred.
Although the legislative history of the Banking Act of 19353 is unenlightening because it does not address the jurisdictional section, see S.Rep. No. 1007, 74th Cong., 1st Sess. (1935); H.Rep. No. 742, 74th Cong., 1st Sess. (1935), the general scheme of the Federal Deposit Insurance Act indicates that Congress considered the two functions of the FDIC to be distinct. Different sections of the statute authorize the FDIC to act as receiver4 or corporation.5 See FDIC v. de Jesus Velez, 678 F.2d 371, 374 (1st Cir.1982).6 In the Banking Act of 1935, Congress addressed the proper functioning of the FDIC as insurer; it was in this context that Congress conferred federal jurisdiction and excepted cases involving the FDIC as receiver. It therefore seems unlikely that Congress intended jurisdiction to be conferred in suits nominally against the FDIC in its corporate capacity but alleging a breach of duty by the receiver.
Woodbridge relies on First Empire Bank v. FDIC, 572 F.2d 1361 (9th Cir.), cert. denied, 439 U.S. 919, 99 S.Ct. 3032, 69 L.Ed.2d 406 (1978), in asserting that a claim against the FDIC-corporation for acts of the FDIC-receiver is appropriate. Because First Empire involved a claim against a national bank, however, the court never considered this jurisdictional issue. The court held the FDIC-corporation liable without determining that the claim, by its nature, was asserted against the FDIC in its corporate capacity.7
Nor do I think that Woodbridge may rely on an analysis based on the FDIC’s status as defendant. Under 12 U.S.C. § 1819 (Fourth), federal jurisdiction is excepted if the rights of creditors are determined by state law. Suits in which the FDIC acts in *546its capacity as receiver typically are said to invoke state law. 12 U.S.C. § 821(e). Suits in which the FDIC-receiver is a defendant, however, do involve questions of federal law. Notably, whether sovereign immunity bars suit against the FDIC is determined by reference to federal law. See, e.g., Franchise Tax Board v. United States Postal Service, 467 U.S. 512, 104 S.Ct. 2549, 81 L.Ed.2d 446 (1984) (examining scope of “sue-and-be-sued” provision). I think, however, that Congress did not intend federal jurisdiction in all suits against the FDIC-receiver. As stated above, Congress construed an FDIC with two capacities and intended federal jurisdiction only when the FDIC acted in its corporate capacity. If it had intended otherwise, Congress could have drafted the statute to provide federal jurisdiction for all suits against the FDIC. Further, other circuits have barred suit against the FDIC-receiver in federal court. FDIC v. La Rambla Shopping Center, Inc., 791 F.2d 215, 220-21 (1st Cir.1986) (dismissing counterclaim against FDIC-receiver); In re F & T Contractors, Inc., 718 F.2d 171, 176-78 (6th Cir.1983) (same). I therefore conclude that 12 U.S.C. § 1819 (Fourth) did not confer jurisdiction on the district court to hear a claim against the FDIC-corporation that although nominally directed at the FDIC’s corporate capacity is at its heart a claim against the FDIC-receiver.
In moving for removal to federal court, the FDIC claimed jurisdiction exclusively under 12 U.S.C. § 1819. The case law makes clear that there is no other basis for federal jurisdiction in cases involving the FDIC-receiver and raising issues of state law. 12 U.S.C. § 1819 precludes not only federal question jurisdiction, but diversity jurisdiction as well. FDIC v. La Rambla Shopping Center, Inc., 791 F.2d 215, 220-21 (1st Cir.1986) and cases cited therein; FDIC v. Elefant, 790 F.2d 661, 665-66 (7th Cir.1986).
I therefore would remand to the district court with direction that it vacate that portion of its ruling that dealt with the merits and remand the balance of the case to state court.

. Woodbridge did not allege, for example, that the FDIC corporation was liable under a transferee liability theory.

. The court thereby treated the claim as one against the FDIC-corporation.

. The Banking Act of 1935, ch. 614, 49 Stat. 684, 692 added the distinction between the FDIC’s corporate capacity and its capacity as receiver.

. See 12 U.S.C. § 1821(e).

. See, e.g., 12 U.S.C. § 1823(d), (e).

. The caselaw recognizes that Congress intended that the FDIC may act in a dual capacity, even in the same transaction. See, e.g., In re F & T Contractors, Inc., 718 F.2d 171, 176-77 (6th Cir. 1983).

. I need not determine whether the FDIC-corporation can be held liable for a breach of duty by the FDIC-receiver. It should be noted, however, that First Empire failed to analyze this issue in awarding judgment.