Justia U.S. D.C. Circuit Court of Appeals Opinion SummariesArticles Posted in Banking
Dodge v. Comptroller of the Currency
The Comptroller of the Currency found that petitioner, as the CEO and a director of the Bank, had engaged in a pattern of willfully misrepresenting the Bank's capital reserves to the OTS and the Bank's board of directors, and he issued orders prohibiting petitioner from participation in the affairs of any federally insured financial institution and assessing a civil penalty of one million dollars. Petitioner sought dismissal of the Comptroller's decision and orders, inter alia, on the grounds of legal error in relying on later-developed standards in the OTS New Directions Bulletin of 2009 when there were no clear standards at the relevant times, and in applying a "should have known" scienter standard in findings that required a more demanding level of scienter. The court concluded that petitioner failed to show that the stringent statutory requirements of 12 U.S.C. 1818 for an order of prohibition were not met. Accordingly, the court denied the petition for review. View "Dodge v. Comptroller of the Currency" on Justia Law
Westberg, et al. v. FDIC, et al.
Plaintiffs filed suit seeking a declaratory judgment that the FDIC's repudiation of a residential construction loan agreement relieved them of any obligation to continue making loan payments. The FDIC then assigned its interest in the loan to Multibank and plaintiffs amended their complaint to add Multibank as a defendant. The court affirmed the district court's dismissal of plaintiffs' claim against Multibank for lack of subject matter jurisdiction because the claim was subject to the administrative exhaustion requirements pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub. L. No. 101-73, 103 Stat. 183. View "Westberg, et al. v. FDIC, et al." on Justia Law
Heiser, et al. v. Islamic Republic of Iran, et al.
Plaintiffs, victims and victims' families and estates, filed suit against Iran and others alleging their liability for the attack on the Khobar Towers apartment complex in Dhahran, Saudi Arabia. Plaintiffs obtained a default judgment and attempted to collect. Plaintiffs had writs of attachment issued to Bank of America and Wells Fargo, seeking any asset held by the banks in which Iran had interest. The banks conceded that some accounts were potentially subject to attachment and these "uncontested accounts" were the subject of an interpleader action in the district court. The remaining "contested accounts" are the subject of this appeal. The court affirmed the order of the district court denying plaintiffs' motion for a turnover of the funds because plaintiffs could not attach the contested accounts under either section 201 of the Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, 116 Stat. 2322, 2337, or 28 U.S.C. 1610(g) without an Iranian ownership interest in the accounts and because Iran lacked an ownership interest in the accounts. View "Heiser, et al. v. Islamic Republic of Iran, et al." on Justia Law
Delta Air Lines, Inc. v. Export-Import Bank of the U.S., et al.
Delta filed suit against the Bank, under the Export-Import Bank Act, 12 U.S.C. 635(b)(1)(B), arguing that the Bank failed to consider the effects of loan guarantees given to Air India so that Air India could purchase Boeing airplanes. The district court entered judgment in favor of the Bank and Delta appealed. The court reversed, concluding that the Bank failed to reasonably explain its application of the Act in this case, as required by the Administrative Procedure Act, 5 U.S.C. 500 et seq. The court directed the district court to remand the case to the Bank for further proceedings, but the district court should not vacate any of the Bank's actions in this matter to date. View "Delta Air Lines, Inc. v. Export-Import Bank of the U.S., et al." on Justia Law
Deutsche Bank National Trust v. FDIC, et al
Appellants, holders of senior notes issued by Washington Mutual - a failed bank - sought to intervene in litigation between Deutsche Bank, the FDIC (Washington Mutual's receiver), and J.P. Morgan Chase. The district court denied intervention under Rule 24. The court concluded that appellants lacked Article III standing and affirmed the district court's denial of intervention. View "Deutsche Bank National Trust v. FDIC, et al" on Justia Law
MBIA Ins. Corp. v. FDIC
MBIA sued as the third party beneficiary of the Pooling and Servicing Agreements (PSAs) of a failed bank. It alleged that the FDIC as conservator of the successor bank had "approved," the PSAs and then breached its "Put Back" obligations under those agreements, resulting in investor claims of MBIA-issued insurance policies. At issue was whether payments made by MBIA to investors in mortgage securitizations of a failed bank constituted "administrative expenses" entitled to priority under the Financial Institutions, Reform, Recovery, and Enforcement Act (FIRREA), 12 U.S.C. 1821(d)(11)(A). The court held that the district court properly rejected MBIA's broad interpretation of "approved" in section 1821(d)(20) and dismissed MBIA's damage claims in counts I-V and VIII as prudentially moot in light of the FDIC's No Value Determination; the district court did not err in dismissing counts VI-VII for failure to state a claim; and the court rejected MBIA's alternative theory of recovery, claiming that FDIC Corporate was obligated under 12 U.S.C. 1821(m)(13) to fund the failed bank's losses. Accordingly, the court affirmed the judgment. View "MBIA Ins. Corp. v. FDIC" on Justia Law
DeNaples v. Office of the Comptroller of Currency
Petitioner challenged the OCC and the Board's authority to issue cease-and-desist orders pursuant to Section 19 of the Federal Deposit Insurance Act (FDIA), 12 U.S.C. 1829, as well as their respective conclusions that petitioner's agreement with the prosecutor triggered Section 19. Section 19 restricted who could participate in the affairs of insured depository institutions and bank and savings and loan holding companies. Because the agencies applied an improper definition of "pretrial diversion or similar program" and failed to adequately justify their positions on petitioner's expunction, the court granted petitioner's petitions for review in part, vacated the agencies' orders, and remanded for the agencies to determine whether the Agreement at issue fell within the parameters the court identified. The court denied the petition in all other respects. View "DeNaples v. Office of the Comptroller of Currency" on Justia Law
Farouki v. Petra Int’l. Banking Corp., et al
In 1986, appellee personally guaranteed a loan made by Petra to AEGIS. Appellee subsequently sued Petra in district court in late 2008, seeking a declaratory judgment that he did not have any obligations under a Guaranty Agreement. Petra counter-sued in early 2009, seeking to enforce the Guaranty Agreement. The court concluded that Petra's claim was time-barred where the limitations period began in 1987 when AEGIS declared bankruptcy and appellee was obligated to pay Petra under the Guaranty Agreement, and the limitations period expired in 1999. The court also concluded that Petra should have the opportunity to produce evidence sufficient to create a substantial question of material fact to the governing issues of the case. Accordingly, the court vacated the district court's grant of summary judgment and remanded for further proceedings. View "Farouki v. Petra Int'l. Banking Corp., et al" on Justia Law
NBC-USA Housing, Inc, et al. v. Donovan, et al.
This was an appeal from the denial of declaratory and injunctive relief against the foreclosure sale of an apartment complex for elderly and disabled low-income residents by HUD. The complex was funded by Section 811 of the Cranston-Gonzalez National Affordable Housing Act (Section 811), 42 U.S.C. 8013. Following the district court's grant of summary judgment and denial of injunctive relief against the foreclosure sale, HUD resumed foreclosure proceedings. HUD subsequently sold the property to a third party not before the court. Consequently, the court could not grant NBC effective relief and dismissed the appeal as moot. View "NBC-USA Housing, Inc, et al. v. Donovan, et al." on Justia Law
Batiste v. SLM Corp.
Relator, on behalf of the United States, appealed the district court's dismissal of his qui tam complaint for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). The district court held that an earlier-filed complaint barred its consideration of relator's complaint under the first-to-file rule of the federal False Claims Act (FCA), 31 U.S.C. 3730(b)(5). At issue was whether Section 3730(b)(5) required the first-filed complaint to meet the heightened pleading standards of Federal Rule of Civil Procedure 9(b) for alleging fraud in order to bar a later-filed complaint. The court held that the earlier-filed complaint alleged the same material elements of a fraudulent scheme as relator's complaint, and that the earlier-filed complaint need not meet the heightened pleading standards of Rule 9(b) to allege facts sufficient to prompt a government investigation, and thus, to bar later-filed complaints under Section 3730(b)(5). The court also held that relator waived his argument that the case should not have been dismissed with prejudice. View "Batiste v. SLM Corp." on Justia Law