Justia U.S. D.C. Circuit Court of Appeals Opinion Summaries

Articles Posted in Banking
by
The Association challenged the NCUA's promulgation of a final rule that makes it easier for community credit unions to expand their geographical coverage and thus to reach more potential members. The DC Circuit considered the Federal Credit Union Act's text, purpose, and legislative history, and held that the agency's policy choices were entirely appropriate for the most part. With respect to the qualification of certain Combined Statistical Areas as local communities and the increased population cap for rural districts, the court directed the district court to issue summary judgment in favor of the NCUA. With respect to the elimination of the urban-core requirement for local communities based on Core Based Statistical Areas, the court directed the district court to issue summary judgment in favor of the Association and to remand, without vacating, the relevant portion of the 2016 rule for further explanation. View "American Bankers Assoc. v. National Credit Union Administration" on Justia Law

by
The United States government thought that three banks, headquartered in China, held records that might clarify how North Korea finances its nuclear weapons program. After the government subpoenaed those records, the Banks resisted and claimed that the district court lacked personal jurisdiction, that the Patriot Act subpoena exceeded the government's statutory authority, and that compelling production would run afoul of comity principles. The district court overruled the Banks' objections and subsequently held the Banks in civil contempt for failing to produce the requested records.The DC Circuit affirmed the contempt orders, holding that the Banks' jurisdictional challenges were meritless where Banks One and Two consented to jurisdiction when they opened branches in the United States and, although Bank Three has no U.S. branch and executed no such agreement, its choice to maintain correspondent accounts in the United States established an adequate connection to the forum and the enforcement action to sustain jurisdiction.The court also held that records "related to" a U.S. correspondent account, under 31 U.SC. 5318(k)(3)(A)(i), include records of transactions that do not themselves pass through a correspondent account when those transactions are in service of an enterprise entirely dedicated to obtaining access to U.S. currency and markets using a U.S. correspondent account. In this case, Bank Three's subpoena under the Patriot Act did not exceed the Attorney General's statutory authority, because all records pertaining to the Company's Bank Three account and its correspondent banking transactions, no matter where they occurred, are "related to" the Bank's U.S. correspondent accounts.In regard to the Banks' comity concerns, the court held that the district court did not abuse its discretion by enforcing the subpoenas despite the fact that the United States chose not to pursue the process designated in the Mutual Legal Assistance Agreement (MLAA) between the United States and China. Finally, the court held that the district court did not abuse its discretion by issuing the civil contempt orders in light of the circumstances. View "In re: Sealed Case" on Justia Law

by
Plaintiffs filed suit against SunTrust, alleging accounting and fraudulent-concealment claims arising from the loss of funds deposited into a Florida bank account more than two decades ago. The DC Circuit affirmed the district court's grant of summary judgment to the bank, holding that there was no genuine issue of material fact regarding plaintiffs' claim for an equitable accounting of the disputed funds, as well as plaintiffs' fraudulent-concealment claim.The court also held that the district court permissibly denied plaintiffs' motions to compel further discovery and to defer ruling on summary judgment in the meantime; the district court permissibly denied plaintiffs' motion to reconsider summary judgment on the concealment claim; and the district court permissibly declined to allow plaintiffs to file a third amended complaint to expand the concealment claim beyond the alleged litigation misconduct in 2015 and 2016. View "Trudel v. SunTrust Bank" on Justia Law

Posted in: Banking
by
After the Superior Court approved Chartered's reorganization plans, DC Healthcare Systems filed suit against the District and others, alleging that defendants' unlawful and unconstitutional actions manufactured Chartered's financial distress and forced it into the rehabilitation proceedings. The district court dismissed the action based on lack of subject matter jurisdiction under the Rooker-Feldman doctrine.The DC Circuit reversed and held that the Rooker-Feldman doctrine did not deprive the district court of jurisdiction to decide this case. The court held that Healthcare Systems' federal lawsuit did not invite district court review and rejection of the Superior Court's judgments. Rather, it presented claims that were independent of and distinct from those adjudicated by the Superior Court. Accordingly, the court remanded for further proceedings. View "D.C. Healthcare Systems, Inc. v. District of Columbia" on Justia Law

by
Petitioner, the former CEO of a Georgia bank, sought review of the Comptroller's decision to assess a $10,000 civil money penalty against him. The DC Circuit upheld the Comptroller's determination that petitioner engaged in unfair and unsound banking practices by allowing the bank to honor repeated overdrafts in the accounts of a frequent customer. However, the court set aside the Comptroller's determination that petitioner caused the bank to file materially inaccurate reports concerning the bank's financial condition. The court held that there were material factual disputes regarding whether petitioner reasonably believed in the accuracy of the call reports. View "Blanton v. Office of the Comptroller of the Currency" on Justia Law

by
The DC Circuit reversed the district court's dismissal of a complaint for lack of subject matter jurisdiction. This appeal stemmed from plaintiff's efforts to recover fraudulent transfers made as a part of a Ponzi scheme. The complaint alleged that because plaintiff's letter to the president of Washington Mutual had advised Washington Mutual and the FDIC of her claim, she was entitled to receive, and had not received, mailed notice of the bar date under the Financial Institution Reform, Recovery, and Enforcement Act (FIRREA), 12 U.S.C. 1821. The court held that, taken together, the allegations in the amended complaint showed that although plaintiff mailed a letter to the bank's subsidiary, she did not receive mailed notice of the bar date from the FDIC, and consequently she did not file her claim with the FDIC until months after the bar date had passed, despite being an experienced trustee actively pursuing related bankruptcy claims. View "Feldman v. FDIC" on Justia Law

Posted in: Banking
by
Relator filed a quit tam action under the False Claims Act against Chase, alleging that Chase falsely claimed compliance with a Settlement. Relator also alleged that Chase falsely claimed compliance with the Home Affordable Modification Program (HAMP). The DC Circuit disagreed with the district court's conclusion that plaintiff was required to exhaust his contentions pursuant to the procedures of the Settlement. However, the court affirmed the dismissal of the claims regarding the Settlement on a related basis. In this case, the Monitor was aware of the practices and concluded that Chase was in compliance. To the extent that relator vaguely alleged that Chase sought credit for loans that otherwise did not qualify for relief under the Settlement, the complaint nowhere identified any ineligible loan Chase submitted for credit, alleged that the Monitor was unaware of any such loan's disqualifying characteristics, or claimed that the cumulative value of any such loans exceeded the $250 million buffer. Finally, the court agreed with the district court that relator failed to state a claim that Chase falsely certified HAMP compliance because he did not allege, with factual allegations in support, that the certifications were materially false. View "United States ex rel. Schneider v. JPMorgan Chase Bank, N.A." on Justia Law

by
The D.C. Circuit held that the district court properly entered summary judgment for judicial foreclosure to the property at issue, because D.C. law allows the holder of a note to enforce the deed of trust by judicial foreclosure. In this case, there was no genuine dispute of material fact that the Bank holds the Note. The court rejected defendant's counterclaim for declaratory and injunctive relief, as well as defendant's counterclaim under the Fair Debt Collection Practices Act (FDCPA). Furthermore, the Bank has carried its burden of showing there was no genuine dispute of material fact with respect to the quiet title counterclaim; defendant forfeited his claim under the Fair Credit Reporting Act (FCRA); and, in regard to the civil conspiracy claim, defendant failed to meet the heightened pleading requirements for fraud. View "Bank of New York Mellon v. Henderson" on Justia Law

by
Appellants, the majority shareholder of Banca Privada d'Andorra S.A., filed suit claiming that FinCEN violated the Administrative Procedure Act (APA) by issuing a Notice of Finding and a Notice of Proposed Rulemaking proposing to cut off the Bank's ties to the United States' financial system. While the case was pending, FinCEN withdrew both Notices and the district court subsequently granted FinCEN's motion to dismiss on mootness grounds. The DC Circuit held that the case should be dismissed, but for different reasons than the district court. The DC Circuit explained that when FinCEN withdrew the Notices, appellants received full relief on their first claim. Therefore, the first claim of relief was moot. As for appellants' second claim, they no longer have standing to press this claim, because appellants have not met their burden of demonstrating that they still had standing to seek a declaratory order that the Notices were unlawful. Furthermore, even assuming that appellants do have the requisite injury and causation to support standing, they failed to show that a judicial order would effectively redress their alleged injuries. View "Cierco v. Mnuchin" on Justia Law

Posted in: Banking, Criminal Law
by
Under the Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654, the Federal Housing Finance Agency (FHFA) became the conservator of Fannie Mae and Freddie Mac. In 2012, FHFA and Treasury adopted the Third Amendment to their stock purchase agreement, which replaced the fixed 10% dividend with a formula by which Fannie and Freddie just paid to Treasury an amount (roughly) equal to their quarterly net worth. Plaintiffs, Fannie Mae and Freddie Mac stockholders, filed suit alleging that FHFA's and Treasury's alteration of the dividend formula through the Third Amendment exceeded their statutory authority under the Recovery Act, and constituted arbitrary and capricious agency action in violation of the Administrative Procedure Act (APA), 5 U.S.C. 706(2)(A). The court held that plaintiffs' statutory claims are barred by the Recovery Act's strict limitation on judicial review; the court rejected most of plaintiffs' common law claims; insofar as the court has subject matter jurisdiction over plaintiffs' common-law claims against Treasury, and Congress has waived the agency's immunity from suit, those claims are also barred by the Recovery Act's limitation on judicial review; in regard to claims against FHFA and the Companies, some are barred because FHFA succeeded to all rights, powers, and privileges of the stockholders under the Recovery Act, and others failed to state a claim upon which relief could be granted; and, as to the remaining claims, which are contract-based claims regarding liquidation preferences and dividend rights, the court remanded for further proceedings. View "Perry Capital LLC v. Mnuchin" on Justia Law