-
USCA1 Opinion
September 19, 1994
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
_________________________
No. 94-1509
SUNSHINE DEVELOPMENT, INC., ET AL.,
Plaintiffs, Appellees,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS LIQUIDATING AGENT FOR FIRST SERVICE BANK FOR SAVINGS,
Defendant, Appellant.
_________________________
ERRATA SHEET
ERRATA SHEET
The opinion of the court issued on August 22, 1994 is
corrected as follows:
On page 2, line 12 insert period after "reverse"
On page 22, line 5 delete ", 1821(d)(6)"
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
_________________________
No. 94-1509
SUNSHINE DEVELOPMENT, INC., ET AL.,
Plaintiffs, Appellees,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS LIQUIDATING AGENT FOR FIRST SERVICE BANK FOR SAVINGS,
Defendant, Appellant.
_________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Martin F. Loughlin, Senior U.S. District Judge]
__________________________
_________________________
Before
Selya, Circuit Judge,
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Campbell, Senior Circuit Judge,
____________________
and Lagueux,* District Judge.
______________
_________________________
Gregory E. Gore, Counsel, with whom Ann S. DuRoss, Ass't
________________ ______________
General Counsel, Robert D. McGillicuddy, Senior Counsel, Michelle
______________________ ________
Kosse, Counsel, Steven A. Solomon, and Backus, Meyer & Solomon
_____ _________________ ________________________
were on brief, for appellant.
Dennis G. Bezanson for appellees.
__________________
_________________________
August 22, 1994
_________________________
__________
*Of the District of Rhode Island, sitting by designation.
SELYA, Circuit Judge. This appeal requires us to
SELYA, Circuit Judge.
______________
determine the scope of the immunity from injunctions granted to
the Federal Deposit Insurance Corporation (FDIC) under the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (FIRREA), Pub. L. 101-73, 103 Stat. 842 (Aug. 9, 1989), in
the context of bankruptcy proceedings. After sketching how
Congress intended FIRREA to operate, and clarifying the source
and extent of bankruptcy courts' powers to manage the estates of
debtors whose fates are intertwined with the affairs of failed
financial institutions, we conclude that the court below lacked
the authority to restrain the FDIC in the exercise of its lawful
statutory powers. Accordingly, we reverse.
I.
I.
__
Background
Background
__________
The facts essential to an understanding of this appeal
are not disputed. Between 1985 and 1988, First Service Bank for
Savings made a total of seven separate loans to Sunshine
Development, Inc. in connection with various projects, including
Salisbury Pasture (Franklin, New Hampshire), Brightside Place
(Derry, New Hampshire), and 154 Webster Street (Hudson, New
Hampshire). The debt (much of which remains unpaid) is evidenced
by three promissory notes. The notes are cross-collateralized
and secured by mortgages encumbering all three pieces of
property.
A
A
Neither lender nor borrower survived the collapse of
3
the New England real estate market. A year after the last loan
had been made, First Service was declared insolvent. On March
31, 1989, the FDIC was appointed as liquidating agent (and
thereby became the owner and holder of the notes). On November
24, 1989, Sunshine petitioned for voluntary reorganization under
Chapter 11 of the Bankruptcy Code. The FDIC seasonably filed a
proof of claim in the bankruptcy court, asserting secured claims
amounting to $4,948,203.87. In April of 1991, the FDIC
petitioned the bankruptcy court for relief from the automatic
stay, see 11 U.S.C. 362(d)(1) & (2), so that it might initiate
___
foreclosure proceedings against the properties. Among other
things, the FDIC asserted that during the prior two years
Sunshine had failed to pay required real estate taxes and
insurance premiums. The bankruptcy court granted the FDIC's
petition on July 1, 1991. No appeal ensued.
On July 31, 1992, the FDIC filed an amended proof of
claim in the bankruptcy court. In March of 1993, the court
converted Sunshine's bankruptcy into a Chapter 7 case and
appointed a trustee.1 On July 20, 1993, the FDIC amended its
proof of claim once again. Throughout, the FDIC, for reasons not
illuminated in the record, abjured any attempt to foreclose on
the mortgages that it held.
B
B
Prior to any insolvency, the bank and the developer
____________________
1We henceforth refer to the debtor and its trustee in
bankruptcy collectively as "Sunshine" or "appellees."
4
parted company. Each sued the other. In one suit, the bank
sought to collect principal and interest due under the notes; in
the other, the borrower sought to recover damages from the bank
on various lender liability theories. These suits, though begun
in 1988, remained dormant for some time. In 1991, the district
court consolidated them and eventually referred the ongoing
litigation to the bankruptcy court.
The bankruptcy court repackaged the litigation and
brought it to a head. Following a two-week trial that ended in
May of 1992, a jury not only decided that Sunshine owed nothing
to the FDIC as the bank's successor in interest, but also decided
that Sunshine deserved $2,000,000 in damages. The bankruptcy
court disagreed. It set aside the jury verdict and entered
judgment in favor of the FDIC, against Sunshine, for
$2,717,856.12.2 Sunshine appealed to the district court on
February 12, 1993. See 28 U.S.C. 158(a). The appeal (which we
___
shall term "the Merits Appeal") is still pending in that court.
C
C
The pot came to a boil when the FDIC scheduled a
foreclosure sale of all three properties for May 11, 1994.
Alarmed at the prospect of foreclosure before the Merits Appeal
____________________
2At trial, the FDIC claimed that the borrower owed roughly
$3,951,000. Sunshine contested a fraction of the debt (on the
basis that First Service failed properly to credit certain
interim payments), admitted that the remainder was due, and
sought to set off damages allegedly owed on the lender liability
claims against the balance. The bankruptcy court's award
represents the portion of the underlying debt that Sunshine did
not controvert.
5
had been decided,3 appellees petitioned the bankruptcy court for
injunctive relief to pretermit the proposed foreclosure sale.
For whatever reason, the bankruptcy court referred the petition
to the district court. That court asked a magistrate-judge for a
report and recommendation. See Fed. R. Civ. P. 72(b).
___
Proceeding on the mistaken presumption that the automatic stay
remained in force, the magistrate recommended issuance of a
temporary restraining order aimed at halting the foreclosure.
The FDIC immediately objected to the recommendation.
See id. It noted the magistrate's mistake and again asserted,
___ ___
citing FIRREA's anti-injunction provision, that the district
court lacked the authority to grant the requested relief. The
district court held a hearing one day before the scheduled
foreclosure sale. In the course of the hearing, the parties
acknowledged the magistrate's bevue and agreed that the automatic
stay had been dissolved almost three years earlier. The district
judge nonetheless enjoined the FDIC from foreclosing on the
properties pending determination of the Merits Appeal.4 The
judge did not state the basis for his order.
____________________
3Sunshine apparently feared, inter alia, that if the
_____ ____
properties were sold in foreclosure and it subsequently prevailed
on its lender liability claims, it effectively would have lost
the right of setoff, and, instead, would be merely a general
unsecured creditor of the receivership. We take no view either
of the legitimacy of these fears or of the parties' rights,
should they materialize.
4The Merits Appeal is pending before a different district
judge. At oral argument, the parties informed us that it was
heard and taken under advisement on May 24, 1994.
6
II.
II.
___
Standard of Review
Standard of Review
__________________
Black letter law in this circuit instructs that
district courts ordinarily are to determine the appropriateness
of granting or denying a preliminary injunction on the basis of a
four-part test that takes into account (1) the movant's
likelihood of success on the merits, (2) the potential for
irreparable injury, (3) a balancing of the relevant equities, and
(4) the effect on the public interest. See Narragansett Indian
___ ___________________
Tribe v. Guilbert, 934 F.2d 4, 5 (1st Cir. 1991); Aoude v. Mobil
_____ ________ _____ _____
Oil Corp., 862 F.2d 890, 892 (1st Cir. 1988). This formulation
_________
can only be used in circumstances in which the district court is
empowered to issue an injunction. It is this antecedent question
the question of judicial power, sometimes called "jurisdiction"
that comprises the centerpiece of this appeal. Consequently,
while we ordinarily review a district court's decision to grant
or deny injunctive relief under a deferential abuse-of-discretion
standard, see, e.g., Narragansett Indian Tribe, 934 F.2d at 5,
___ ____ __________________________
this appeal which presents a pure question of law engenders
de novo review. See McCarthy v. Azure, 22 F.3d 351, 354 (1st
__ ____ ___ ________ _____
Cir. 1994); Liberty Mut. Ins. Co. v. Commercial Union Ins. Co.,
______________________ __________________________
978 F.2d 750, 757 (1st Cir. 1992); see also Narragansett Indian
________ ___________________
Tribe, 934 F.2d at 5 (explaining that an injunction may be
_____
overturned based on either "a mistake of law or an abuse of
discretion").
The standard of review is particularly important
7
because this case has a curious twist. The magistrate's
recommendation was premised on a mistaken fact, the parties
explicitly informed the district court of the error, and the
court, though cognizant that the magistrate's reasoning was
flawed, issued its own order without any accompanying
explanation. Thus, we are very much in the dark as to the
district court's thinking. In the end, however, it is not
necessary that we remand. Since we review the legal issue de
__
novo, access to the district court's rationale is not a
____
prerequisite to appellate review.5 Withal, the absence of any
articulated reasoning below as to this controlling issue both
increased the risk of error an unexplained ruling being more
likely to be a poorly considered one and reduced this court's
(and the parties') opportunities to benefit from the lower
court's analysis.
III.
III.
____
Discussion
Discussion
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This case turns on the construction and interplay of
several provisions of the statutes that define the powers of the
FDIC and the bankruptcy courts, respectively. In each instance,
our starting point is the statutory text. See United States v.
___ _____________
____________________
5We wish to make it crystal clear that we prize the thinking
of the district courts and encourage district judges to state the
basis for their rulings whether or not they are legally required
to do so. While our review of legal questions is de novo, we
__ ____
remain an appellate tribunal with the function of reviewing what
another court has already done: the thinking and analysis of
that earlier tribunal even when, on consideration, we disagree
with it is integral to the judicial process within which both
courts are engaged.
8
Gibbens, ___ F.3d ___, ___ (1st Cir. 1994) [No. 93-2203, slip op.
_______
at 12].
A
A
FIRREA constitutes a vital part of the federal
government's response to the savings-and-loan crisis that rocked
the nation in the latter half of the last decade. The method of
the statute involves, among other things, "establish[ing]
organizations and procedures to obtain and administer the
necessary funding to resolve failed thrift cases and to dispose
of the assets of [those] institutions . . . ." H.R. Rep. No.
101-54(I), 101st Cong., 1st Sess. (1989), reprinted in 1989
_________ __
U.S.C.C.A.N. 86, 103. To this end, FIRREA gives the FDIC
unprecedented powers so that it may function efficaciously as a
receiver or conservator of insolvent financial institutions. See
___
Telematics Int'l, Inc. v. NEMLC Leasing Corp., 967 F.2d 703, 705
_______________________ ___________________
(1st Cir. 1992) (explaining that FIRREA is designed to "enable
the FDIC to move quickly and without undue interruption to
preserve and consolidate the assets of the failed institution");
see also 12 U.S.C. 1821(d)(2)(B) (giving the FDIC wide-ranging
___ ____
powers to take over the assets of, and operate, an insured
depository institution that fails); see generally H.R. Rep. No.
___ _________
101-54(I), supra, 1989 U.S.C.C.A.N. at 126-29.
_____
One major component of the statutory scheme is 12
U.S.C. 1821(j). It states that, with exceptions not relevant
here, "no court may take any action, except at the request of the
Board of Directors [of the FDIC] by regulation or order, to
9
restrain or affect the exercise of powers or functions of the
[FDIC] as a conservator or a receiver." Id. By its terms, then,
___
section 1821(j) is an anti-injunction measure, preventing courts
from issuing orders that unduly inhibit the FDIC in the exercise
of its statutory powers.6
Since the injunction issued below unabashedly restrains
and affects the FDIC, acting in its capacity as a receiver, our
inquiry reduces to whether the activity that the injunction kept
the FDIC from pursuing falls within the FDIC's powers under
FIRREA. This inquiry is actually composed of two subsidiary
questions: (1) As a general matter, does the FDIC have the power
to foreclose? (2) If so, does that power extend to the estate of
a bankrupt debtor?
B
B
The answer to the first query is patently in the
affirmative. Congress has given the FDIC broad authority "to
take over the assets . . . and conduct all business of the
institution," to "collect all obligations and money due the
institution," and to "preserve and conserve the assets and
property of such institution." 12 U.S.C. 1821(d)(2)(B)(i),
(ii), and (iv). As receiver, the FDIC may "place the insured
____________________
6Subject to enumerated exceptions, see 12 U.S.C.
___
1441a(b)(5), the Resolution Trust Corporation (RTC), when
operating as a receiver, enjoys the same powers, and is subject
to the same FIRREA protections, as the FDIC. See 12 U.S.C.
___
1441a(b)(4). Of particular interest here, section 1821(j)
applies equally to both agencies. Consequently, we will refer
freely to cases involving the RTC to illuminate section 1821(j)'s
reach in respect to the FDIC.
10
depository institution in liquidation and proceed to realize upon
the assets of the institution," 12 U.S.C. 1821(d)(2)(E),
"transfer any asset or liability of the institution," id.
___
1821(d)(2)(G)(i)(II), and, in addition to the specific powers
granted under these statutes, it may "exercise such incidental
powers as shall be necessary" to carry out its stated powers, id.
___
1821(d)(2)(J)(i).
Taken in the ensemble, this broad array of powers
easily encompasses the grant of a general power to foreclose on
properties that the failed institution held as collateral. See
___
Lloyd v. FDIC, 22 F.3d 335, 336 (1st Cir. 1994) (interpreting
_____ ____
these statutes as affording the FDIC the "power as receiver to
foreclose on the property of a debtor"); see also 281-300 Joint
___ ____ _____________
Venture v. Onion, 938 F.2d 35, 39 (5th Cir. 1991) (holding that
_______ _____
"the ability of the conservator to foreclose on the property of a
debtor [is] a power that Congress gave to [agencies like the
FDIC] under FIRREA"), cert. denied, 112 S. Ct. 933 (1992); Abbott
_____ ______ ______
Bldg. Corp. v. United States, 951 F.2d 191, 194 (9th Cir. 1991)
___________ _____________
(similar). Therefore, in a run-of-the-mill case, a district
court lacks the authority to enjoin the FDIC, acting lawfully as
a receiver, from foreclosing on security that it holds. See
___
Lloyd, 22 F.3d at 336-37 (holding that district courts lack
_____
jurisdiction to enjoin the FDIC, acting as receiver, from
foreclosing on a debtor's property); Telematics, 967 F.2d at 706
__________
(refusing to enjoin the FDIC from foreclosing on a certificate of
deposit because section 1821(j) "must be accorded its ordinary
11
meaning"); see also Sweeney v. RTC, 16 F.3d 1, 6 (1st Cir. 1994)
___ ____ _______ ___
(per curiam) (explaining that section 1821(j) bars an injunction
designed to block an imminent nonjudicial foreclosure scheduled
by the RTC); 281-300 Joint Venture, 938 F.2d at 39 (holding that
_____________________
under section 1821(j) "the courts lack the ability to enjoin
nonjudicial foreclosures that are within the statutory powers" of
the RTC qua receiver).
___
C
C
The second query whether the FDIC's power to
foreclose extends to the context of bankruptcy proceedings
requires us to examine appellees' hydra-headed assertion that the
debtor's bankruptcy removes the FDIC's proposed foreclosure here
from the mine-run, and vests the federal courts with injunctive
powers that would be lacking in respect to other FDIC foreclosure
initiatives. Answering this second query is more complicated,
for the statutes defining the authority of the FDIC form only
part of the relevant legal universe; the statutes governing
bankruptcy matters also must be consulted. We devote the next
two sections of this opinion to the task of answering this second
query.
It is not disputed that the three properties on which
the FDIC seeks to foreclose constituted property of the debtor as
of the date of bankruptcy and are thus property of the estate.
See 11 U.S.C. 541(a)(1) (explaining that the bankruptcy "estate
___
is comprised of . . . all legal or equitable interests of the
debtor in property as of the commencement of the case"). As
12
Sunshine correctly points out, the district court obtained
jurisdiction over those properties by virtue of 28 U.S.C. 1334.
Pursuant to 28 U.S.C. 1334(d), "[t]he district court in which a
case under Title 11 is commenced or is pending shall have
exclusive jurisdiction of all the property, wherever located, of
the debtor as of the commencement of such case, and of property
of the estate." Id.; see also 28 U.S.C. 1334(a) (giving
___ ________
district court "original and exclusive jurisdiction of all cases
under title 11").
Sunshine argues that this statutory mosaic also infuses
the district court and/or the bankruptcy court with power to
enjoin the FDIC.7 This argument builds on the theory that, as a
general proposition, a bankruptcy court may issue injunctions to
protect its exclusive jurisdiction over estate property. See 11
___
U.S.C. 105(a) (empowering bankruptcy courts to "issue any
order, process, or judgment that is necessary or appropriate to
carry out the provisions of this title"); see also In re Olympia
___ ____ _____________
Holding Corp., 141 B.R. 443, 446 (Bankr. M.D. Fla. 1992) (relying
_____________
on the jurisdictional grant contained in 28 U.S.C. 1334(d) and
the grant of protective powers contained in 11 U.S.C. 105 to
issue an injunction to safeguard estate property). And this
proposition, Sunshine says, must mean that the bankruptcy court
possesses the power to enjoin the FDIC when it is necessary to do
____________________
7Despite the fact that the district court issued the
injunction in this instance, the litigants argue the case
primarily in terms of the bankruptcy court's power to enjoin the
FDIC. We agree that, for purposes of this appeal, the district
court and the bankruptcy court can be treated interchangeably.
13
so in order to preserve the assets of the bankruptcy estate.
We do not think that the appellees' argument proves
their point. Rather, it serves merely to highlight the tension
that exists between FIRREA's anti-injunction provision, on one
hand, and the bankruptcy laws, on the other hand. But this
tension does not mean that the statutes are in irreconcilable
conflict. As we explain below, they are not.
The preferred approach to statutory construction
dictates that a reviewing court first determine if the perceived
conflict between two laws is real. See Connecticut Nat'l Bank v.
___ ______________________
Germain, 112 S. Ct. 1146, 1149 (1992) (cautioning that courts
_______
confronted by arguably conflicting statutes must give effect to
both, where possible). Here, the perceived conflict is more
apparent than real, for the statutes can be reconciled. The key
to harmonizing them lies with 11 U.S.C. 362.
Section 362 of the Bankruptcy Code is an "automatic
stay" provision. It provides in substance that filing a
bankruptcy petition activates an automatic stay. That applies,
inter alia, to the commencement or continuation of most judicial
__________
actions or proceedings against the debtor to obtain possession of
property of the estate. 11 U.S.C. 362(a)(1),(3). Foreclosure
constitutes an action or proceeding against the debtor within the
purview of this law. Hence, attempts to foreclose come within
the statutory sweep and are banned unless and until the automatic
stay is lifted, see id. 362(d). Thus, no person or entity has
___ ___
a choate power to foreclose on property belonging to a bankrupt's
14
estate so long as the automatic stay is in place.
We see no basis for exempting the FDIC from the
strictures of this regime when it is acting as a receiver or
conservator.8 Because the automatic stay is exactly what the
name implies "automatic" it operates without the necessity
for judicial intervention. Consequently, the stay's curtailment
of the FDIC's power does not run afoul of FIRREA's anti-
injunction provision, which only prohibits "court . . . action .
_____
. . to restrain or affect the exercise of powers or function of
the [FDIC] as a . . . receiver." 12 U.S.C. 1821(j) (emphasis
supplied). On that basis, we are confident that the automatic
stay does not violate FIRREA's anti-injunction provision because
it arises directly from the operation of a legislative enactment,
not by court order. Accord In re Colonial Realty Co., 980 F.2d
______ _________________________
125, 137 (2d Cir. 1992); Gross v. Bell Sav. Bank, 974 F.2d 403,
_____ _______________
407 (3d Cir. 1992).
The automatic stay works in tandem with the statutes on
which Sunshine relies. The broad jurisdictional grant of 28
U.S.C. 1334 is designed to centralize proceedings in the
bankruptcy court, and 11 U.S.C. 105 is designed to permit the
court to protect that jurisdictional grant. The automatic stay
____________________
8To be sure, 11 U.S.C. 362(b)(4) provides that the
automatic stay does not reach proceedings undertaken to enforce a
"governmental unit's police or regulatory power." But when the
FDIC operates as a receiver or conservator, it does not exercise
"regulatory power" within the meaning of this statute. See
___
generally Howell v. FDIC, 986 F.2d 569, 574 (1st Cir. 1993)
_________ ______ ____
(distinguishing between FDIC acting in its corporate capacity as
a regulator and in its capacity as a receiver).
15
furthers this policy by preventing different creditors from
bringing different proceedings in different courts, thereby
setting in motion a free-for-all in which opposing interests
maneuver to capture the lion's share of the debtor's assets.
"The stay insures that the debtor's affairs will be centralized,
initially, in a single forum in order to prevent conflicting
_________
judgments from different courts and in order to harmonize all of
the creditors' interests with one another." In re Colonial
________________
Realty, 980 F.2d at 133 (citation omitted) (emphasis supplied).
______
Nonetheless, the automatic stay does not always operate
in perpetuity. While the stay ensures that most matters related
to the debtor's estate will come under the wing of a single
bankruptcy court in the first instance,9 further provisions of
__ ___ _____ ________
the same statute permit the bankruptcy court to relax the
automatic stay under enumerated conditions. See 11 U.S.C.
___
362(d)-(g). Once relief from the stay is granted, an "action or
proceeding against the debtor that was or could have been
commenced before the commencement of the [bankruptcy] case" may
go forward. Id. 362(a). In other words, by granting relief
___
from the automatic stay the bankruptcy court effectively yields
the exclusive control over the debtor's estate initially accorded
to it by section 1334(d).
With all pieces in place, the assembled doctrinal
____________________
9In the interests of accuracy, we note that certain property
is excepted from the operation of the automatic stay. See 11
___
U.S.C. 362(b). This exception has no relevance for present
purposes.
16
puzzle looks like this: the jurisdictional grant and the
automatic stay work together to centralize nearly all claims
relating to the bankrupt estate in the bankruptcy court. While
the legislatively mandated stay is in place, the FDIC, like any
other creditor, is fully subject to it. If at this point the
FDIC were to ignore the stay and initiate a foreclosure
proceeding, the bankruptcy court would be acting within its
authority to issue an injunction. After all, FIRREA's anti-
injunction provision, 12 U.S.C. 1821(j), only prohibits court
actions restraining FDIC's exercise of its lawful powers or
______
functions. See 281-300 Joint Venture, 938 F.2d at 39.
___ _____________________
Once the bankruptcy court grants the FDIC relief from
the automatic stay, however, the court surrenders the preferred
position that Congress carved out for it. At that juncture,
FIRREA's anti-injunction provision comes into play. Thereafter,
without the automatic stay in place, the bankruptcy court, like
any other court, is prevented from taking "any action . . . to
restrain or affect the exercise of powers or functions of the
[FDIC] as a conservator or receiver." 12 U.S.C. 1812(j). So
viewed, the statutes under consideration do not conflict.
We thus answer the second of our two questions
affirmatively and hold that FIRREA's anti-injunction provision,
12 U.S.C. 1821(j), applies in the bankruptcy milieu. That ends
this phase of our inquiry. In this case, relief from the
automatic stay had been obtained long before the FDIC instituted
foreclosure proceedings, and Sunshine had not appealed.
17
Consequently, the bankruptcy court had surrendered its exclusive
control over the properties and, in the face of FIRREA's anti-
injunction provision, could not then reverse direction and
restrain the FDIC from going forward.10
D
D
In a related vein, the appellees also suggest that
section 1334(b) gives the bankruptcy court power to grant an
injunction against the FDIC, FIRREA notwithstanding.11
Appellees' reliance on this provision is misplaced.
We need not wax longiloquent. The Supreme Court
rebuffed a strikingly similar interpretation of section 1334(b)
in Board of Governors v. MCorp Financial, Inc., 112 S. Ct. 459
__________________ ______________________
(1991). There, the debtor contended that section 1334(b) gave a
bankruptcy court concurrent jurisdiction that empowered it to
____________________
10We are not aware of any instance involving either the FDIC
or the RTC in which a court reinstated the automatic stay after
having granted a party relief from it. We leave for another day
the dichotomous question whether reinstatement of a section
362(a) stay vis-a-vis the FDIC would be possible, and if so,
whether such reinstatement would constitute "court action"
violative of 12 U.S.C. 1821(j). We likewise express no opinion
as to whether judicial implementation of a stay pursuant to
Bankruptcy Rule 8005 might run afoul of section 1821(j).
11The statute provides:
Notwithstanding any Act of Congress that
confers exclusive jurisdiction on a court or
courts other than the district courts, the
district courts shall have original but not
exclusive jurisdiction of all civil
proceedings arising under title 11, or
arising in or related to cases under title
11.
28 U.S.C. 1334(b).
18
enjoin ongoing administrative proceedings of the Federal Reserve
Board, despite a specific statutory provision precluding
injunctions in such circumstances. The Court rejected the
debtor's argument, holding that section 1334(b) "concerns the
allocation of jurisdiction between bankruptcy courts and other
`courts'" and that "an administrative agency such as the Board is
not a `court'." MCorp, 112 S. Ct. at 465. Section 1334(b) is
_____
similarly inapplicable to a nonjudicial foreclosure proceeding
undertaken by the FDIC (which, like the Federal Reserve Board, is
not a "court").12
E
E
The appellees have one more shot in their sling. They
strive to persuade us that, regardless of FIRREA's anti-
injunction provision, authority to enjoin the FDIC can be found
in the bankruptcy court's general equitable jurisdiction, to
which the FDIC subjected itself by filing proofs of claim and
litigating in the bankruptcy court. For this thesis, appellees
rely almost exclusively on the bankruptcy court's reasoning in In
__
re Tamposi Family Inv. Properties, 159 B.R. 631 (Bankr. D.N.H.
__________________________________
1993). But the reasoning of the Tamposi court cannot withstand
_______
scrutiny.13
____________________
12This case presents a relatively easy question involving an
ill-starred effort to apply section 1334(b) to nonjudicial
proceedings instituted by an administrative agency. We intimate
no opinion regarding that section's applicability vel non to the
_______
FDIC in other settings.
13It is important to note that, although Tamposi's reasoning
_______
is flawed, the result in the case may be defensible. See, e.g.,
___ ____
In re Parker North Amer. Corp., ___ F.3d ___, ___ (9th Cir. 1994)
______________________________
19
There, the debtors brought adversary complaints against
the FDIC under 11 U.S.C. 547(b), seeking to avoid transfers
that had been made to the failed bank less than ninety days
before the debtors declared bankruptcy. See Tamposi, 159 B.R. at
___ _______
632-33. The FDIC contended that the bankruptcy court lacked
subject matter jurisdiction under 12 U.S.C. 1821(d)(13)(D), a
FIRREA provision stating that "no court shall have jurisdiction
over . . . [a]ny claim or action for payment from . . . the
assets of any depository institution for which the [FDIC] has
been appointed receiver . . . ." The Tamposi court rejected the
_______
FDIC's contention because "by filing a proof of claim in a
bankruptcy proceeding, the creditor/claimant submits itself to
the process of allowance and disallowance of claims which is at
the heart of a bankruptcy court's subject matter jurisdiction."
Tamposi, 159 B.R. at 634.
_______
The Tamposi court's reasoning leaves much to be
_______
desired. In the first place, the bankruptcy court, 159 B.R. at
636, misread our opinion in Marquis v. FDIC, 965 F.2d 1148 (1st
_______ ____
Cir. 1992). In Marquis, we held that federal courts retain a
_______
modicum of subject matter jurisdiction over actions pending
against failed financial institutions even after the FDIC has
been appointed as receiver, notwithstanding the jurisdictional
bar of 12 U.S.C. 1821(d)(13)(D) (a FIRREA accouterment
providing that "no court shall have jurisdiction over . . . any
____________________
[1994 WL 192456, at *9] (holding that section 1821(d)(13)(D) does
not bar a bankruptcy court from hearing a preference action
against the RTC).
20
claim or action for payment from, or any action seeking a
determination of rights with respect to, the assets of any
depository institution for which the [FDIC] has been appointed
receiver"). See id. at 1155. We arrived at this holding as a
___ ___
matter of statutory interpretation, stressing other language in
FIRREA that addresses claimants' rights "to continue any action
which was filed before appointment of a receiver," 12 U.S.C.
1821(d)(5)(F)(ii). Moreover, we specifically limited the reach
of the Marquis holding to actions pending in a federal court
_______
prior to the FDIC's appointment as receiver or conservator. See
___
id. at 1154.
___
The Tamposi court ignored this limitation. Instead, it
_______
erroneously asserted that whether proceedings were pending at the
time of the FDIC's appointment "is irrelevant under the logic of
Marquis." Tamposi, 159 B.R. at 636. This assertion is incorrect:
_______ _______
the holding in Marquis cannot be transplanted root and branch to
_______
a wider class of cases. Specifically, the holding is inapposite
in the Tamposi context and it is similarly inapposite here.
_______
The second problem with the reasoning of Tamposi is
_______
that the opinion places too great a premium on a trio of Supreme
Court cases not involving the FDIC. Each of these cases stands
for the somewhat mundane proposition that "by filing a claim
against a bankruptcy estate the creditor triggers the process of
allowance and disallowance of claims, thereby subjecting himself
to the bankruptcy court's equitable powers." Langenkamp v. Culp,
__________ ____
498 U.S. 42, 44 (1990) (citation and internal quotation marks
21
omitted); accord Granfinanciera, S.A. v. Nordberg, 492 U.S. 33,
______ ____________________ ________
59 n.14 (1989) (noting that "by submitting a claim against the
bankruptcy estate, creditors subject themselves to the court's
equitable power to disallow those claims"); Katchen v. Landy, 382
_______ _____
U.S. 323, 329-30 (1966) (similar). We do not doubt that this
proposition pertains to the FDIC but staking the farm on it for
present purposes begs the question of what equitable powers the
bankruptcy court possesses vis-a-vis particular litigants.
Once the question is properly framed, the FDIC's
involvement makes a dispositive difference. The bankruptcy court
is a creature of statute, and Sunshine has not suggested that it
is beyond Congress's lawful powers to limit the remedies
available to that court or to remove selected matters from its
jurisdiction. Here, Congress exercised that very power, limiting
the authority of all courts the bankruptcy court included to
enjoin the FDIC. The general proposition that filing a proof of
claim subjects a party to the bankruptcy court's equitable
jurisdiction cannot be read in isolation, but, rather, must be
read in conjunction with the specific statutory language,
contained in section 1821(j), that Congress subsequently saw fit
to write. Cf. Vimar Seguros y Reaseguros, S.A. v. M/V Sky
___ ___________________________________ ________
Reefer, ___ F.3d ___, ___ (1st Cir. 1994) [No. 93-2179, slip op.
______
at 12] (explaining that a specific, later-enacted statute
"ordinarily controls the general") (collecting cases); Watson v.
______
Fraternal Order of Eagles, 915 F.2d 235, 240 (6th Cir. 1990)
___________________________
(same).
22
Finally, and relatedly, to accept the Tamposi court's
_______
reasoning would be to stand FIRREA on its ear. After all, once a
party declares bankruptcy, a creditor's principal recourse to
money owed is by filing proofs of claim in the bankruptcy court.
Under the Tamposi regime, when the FDIC as receiver or
_______
conservator is also a creditor of a bankrupt, the FDIC must
either elect to forgo its claim or to waive its statutory
protections. In the most auspicious of circumstances, we would
be reluctant to read section 1821(j) as constructing so perverse
a paradigm.
Here, the circumstances are anything but auspicious,
for the statute is prefaced by the phrase "Except as otherwise
provided in this section . . . ." This language serves to
identify those occasions on which the anti-injunction provision
lacks force. See, e.g., 1821(c)(7), 1821(c)(8)(C). When, as
___ ____
now, a law itself contains an enumeration of applicable
exemptions, the maxim "expressio unius est exclusio alaterius"
ordinarily applies. Under that maxim, a legislature's
affirmative description of certain powers or exemptions implies
denial of nondescribed powers or exemptions. See Continental
___ ___________
Cas. Co. v. United States, 314 U.S. 527, 533 (1942); Park Motor
________ _____________ ___________
Mart, Inc. v. Ford Motor Co., 616 F.2d 603, 605 (1st Cir. 1980);
__________ ______________
see generally 2A Norman J. Singer, Sutherland Stat. Const.
___ _________ _________________________
47.23, at 216-17 (5th ed. 1992). So it is here.
IV.
IV.
___
Conclusion
Conclusion
__________
23
We need go no further. There is no conflict between
the statutory provisions defining the bankruptcy courts'
jurisdiction and the FDIC's powers while the automatic stay is in
place. When and if a bankruptcy court grants relief from the
stay for a particular purpose, however, the FDIC's powers, which
in this regard are spelled out by FIRREA's recent, clear, and
specific language, come to the fore and trump the residual powers
of the courts. Had the court below correctly understood the
interface between the relevant statutory schemes, it would have
realized that, because the automatic stay had been dissolved, the
appellees were requesting relief of a kind that, 18 U.S.C.
1821(j) considered, exceeded the district court's authority.
Consequently, the injunction issued by the lower court may not
stand.
Reversed.
Reversed.
________
24
Document Info
Docket Number： 94-1509
Filed Date： 9/19/1994
Precedential Status： Precedential
Modified Date： 9/21/2015