Lex Digitales Digital economy regulation trends monitor

← back to the document

What changed

Fonden v. FDIC · редакция 1 → 2 · зафиксировано 2026-09-17 03:26 · +11 −11 lines

25-720 Sjunde AP-Fonden v. FDIC
14 Prudential standing is a “judicially self-imposed” limitation on courts’ exercise of their jurisdiction. Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11 (2004) (quoting Allen v. Wright, 468 U.S. 737, 751 (1984)); see Deutsche Bank, 757 F.3d at 84.
15FIRREA deprives federal courts of subject matter jurisdiction over unexhausted claims against a failed bank or the FDIC as its receiver. See Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905, 920–21 (2d Cir. 2010); Carlyle Towers Condo. Ass’n, Inc. v. FDIC, 170 F.3d prudential standing issue and the underlying question of the Succession Clause’s application, and dismissed the complaint for lack of prudential standing.
15 FIRREA deprives federal courts of subject matter jurisdiction over unexhausted claims against a failed bank or the FDIC as its receiver. See Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905, 920–21 (2d Cir. 2010); Carlyle Towers Condo. Ass’n, Inc. v. FDIC, 170 F.3d prudential standing issue and the underlying question of the Succession Clause’s application, and dismissed the complaint for lack of prudential standing.
While the district court was obligated to decide, as a threshold matter, whether FIRREA’s administrative exhaustion scheme deprived it of subject-matter jurisdiction,16 on the circumstances of this case, it could not do so without resolving prudential standing. Both the prudential standing and administrative exhaustion issues require an answer to the same initial question: who owns the claims?
301, 307 (2d Cir. 1999) (explaining that FIRREA’s administrative exhaustion requirement is jurisdictional).
16Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998).
16 Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998).
17 If the FDIC owns the claims, it would simply be left to manage their resolution independently of the administrative process applicable to claims against the failed bank and the FDIC as its receiver. See First Millennium, Inc., 607 F.3d at 920–21.
Succession Clause applies to AP7’s securities fraud claims.20
20 The district court analyzed prudential standing as a ground for dismissal under Rule 12(b)(1), reasoning that it “implicate[s] federal jurisdiction.” Spec. App’x at 6 (first citing Wight v. BankAmerica Corp., 219 F.3d 79, 90 (2d Cir. 2000); and then citing In re Sofer, 613 F. App’x 92, 92 (2d Cir. 2015) (summary order) (stating that “[p]rudential standing remains a jurisdictional requirement in our Circuit”)). Our cases are not perfectly clear on whether Rule 12(b)(1) or 12(b)(6) should govern a motion to dismiss for lack of prudential standing. Some of our cases suggest that a motion to dismiss for lack of prudential standing may be brought under either Rule 12(b)(1) or Rule 12(b)(6). E.g., Paris Baguette Am., Inc., 861 F.3d at 79. Moreover, several of our cases treat prudential standing as a “jurisdictional” issue in a more general sense, beyond the constitutional and statutory limitations on subject matter jurisdiction. See, e.g., Lerner v. Fleet Bank, N.A., 318 F.3d 113, 127–30 (2d Cir. 2003) (Sotomayor, J.) (explaining that “standing, whether in its constitutional or prudential form, [is] a jurisdictional limitation and as such [cannot] be waived,” and that “prudential considerations of standing are . . . generally treated as jurisdictional in nature” (citing Thompson v. County of Franklin, 15 F.3d 245, 248 (2d Cir. 1994)), abrogated on other grounds as recognized in Am. Psych. Ass'n v. Anthem Health Plans, Inc., 821 F.3d 352 (2d Cir. 2016); Hillside Metro Assocs., LLC, 747 F.3d at 50–51(remanding with instructions to dismiss the complaint for lack of subject matter jurisdiction where plaintiff lacked prudential standing under the third-party standing rule); see also In re Sofer, 613 F. App’x at 92.
20 The district court analyzed prudential standing as a ground for dismissal under Rule 12(b)(1), reasoning that it “implicate[s] federal jurisdiction.” Spec. App’x at 6 (first citing Wight v. BankAmerica Corp., 219 F.3d 79, 90 (2d Cir. 2000); and then citing In re Sofer, 613 F. App’x 92, 92 (2d Cir. 2015) (summary order) (stating that “[p]rudential standing remains a jurisdictional requirement in our Circuit”)). Our cases are not perfectly clear on whether Rule 12(b)(1) or 12(b)(6) should govern a motion to dismiss for lack of prudential standing. Some of our cases suggest that a motion to dismiss for lack of prudential standing may be brought under either Rule 12(b)(1) or Rule 12(b)(6). E.g., Paris Baguette Am., Inc., 861 F.3d at 79. Moreover, several of our cases treat prudential standing as a “jurisdictional” issue in a more general sense, beyond the constitutional and statutory limitations on subject matter jurisdiction. See, e.g., Lerner v. Fleet Bank, N.A., 318 F.3d 113, 127–30 (2d Cir. 2003) (Sotomayor, J.) (explaining that “standing, whether in its constitutional or prudential form, [is] a jurisdictional limitation and as such [cannot] be waived,” and that “prudential considerations of standing are . . . generally treated as jurisdictional in nature” (citing Thompson v. County of Franklin, 15 F.3d 245, 248 (2d Cir. 1994)), abrogated on other grounds as recognized in Am. Psych. Ass'n v. Anthem Health Plans, Inc., 821 F.3d 352 (2d Cir. 2016); Hillside Metro Assocs., LLC, 747 F.3d at 50–51 (remanding with instructions to dismiss the complaint for lack of subject matter jurisdiction where plaintiff lacked prudential standing under the third-party standing rule); see also In re Sofer, 613 F. App’x at 92.
In any event, we save further discussion of this question for another day. The district court’s decision did not turn on the application of Rule 12(b)(1), and our own
1.FIRREA’s Succession Clause
1. FIRREA’s Succession Clause
As we have noted, under FIRREA’s Succession Clause, the FDIC, upon its appointment as receiver for a failed bank, “succeed[s] to . . . all rights, titles, powers, and privileges of the insured depository institution, and of any stockholder, member, accountholder, depositor, officer, or director of such institution with respect to the institution and the assets of the institution.” 12
21 The district court alternatively reasoned that the claims against the Officers relate to the bank and its assets because damages recovered from the Officers would be paid, at least in part, from funds available under the directors and officers insurance
We begin and end our analysis with the Clause’s first requirement that the claims assert a right “of a[] stockholder.” 12 U.S.C. § 1821(d)(2)(A) (emphasis added).22 AP7 argues that this requirement means that the right at issue must be one that a stockholder possesses as astockholder—that is, “by virtue of . . . share ownership.” Appellant’s Br. at 22–23; Appellant’s Reply Br. at 13. We agree. A stockholder right, within the meaning of the Clause, is one that is distinctive to stockholders and therefore derives from the ownership of stock or the corresponding legal relationship between stockholders and the corporation. This interpretation follows from the Supreme Court’s decision in Collins v. Yellen, 594
We begin and end our analysis with the Clause’s first requirement that the claims assert a right “of a[] stockholder.” 12 U.S.C. § 1821(d)(2)(A) (emphasis added).22 AP7 argues that this requirement means that the right at issue must be one that a stockholder possesses as a stockholder—that is, “by virtue of . . . share ownership.” Appellant’s Br. at 22–23; Appellant’s Reply Br. at 13. We agree. A stockholder right, within the meaning of the Clause, is one that is distinctive to stockholders and therefore derives from the ownership of stock or the corresponding legal relationship between stockholders and the corporation. This interpretation follows from the Supreme Court’s decision in Collins v. Yellen, 594
U.S. 220 (2021), the Succession Clause’s neighboring provisions, and the wellestablished understanding of stockholder rights under state and federal law.
O’Melveny & Myers, 512 U.S. at 85, 87 (explaining that FIRREA’s Succession Clause “places the FDIC in the shoes of the insolvent [savings and loan], to work out its claims under state law, except where some provision in the extensive framework
25See also In re Starbuck, 251 N.Y. 439, 445 (1929) (“The right to the dividends is an incident of the ownership of the stock.”); Campbell v. Am. Zylonite Co., 122 N.Y. 455, 459 (1890) (discussing “[t]he rights and powers arising out of the ownership of corporate shares,” including the rights to sell shares, vote in corporate elections, approve or disapprove changes to the relative value of shares, and approve or disapprove mortgaging of corporate property); Cont’l Sec. Co. v. Belmont, 206 N.Y. 7, 17–18 (1912) (discussing “the authority of stockholders in the management of business corporations”); Gollust v. Mendell, 501 U.S. 115, 122–24 (1991) (discussing the stock ownership requirement for the stockholder right of action for disgorgement of short-swing profits from insider trading under § 16(b) of the ’34 Act); Zetlin v. Hanson Holdings, Inc., 48 N.Y.2d 684, 685 (1979) (noting “that those who invest the capital necessary to acquire a dominant position in the ownership of a corporation have the right of controlling that corporation”).
25 See also In re Starbuck, 251 N.Y. 439, 445 (1929) (“The right to the dividends is an incident of the ownership of the stock.”); Campbell v. Am. Zylonite Co., 122 N.Y. 455, 459 (1890) (discussing “[t]he rights and powers arising out of the ownership of corporate shares,” including the rights to sell shares, vote in corporate elections, approve or disapprove changes to the relative value of shares, and approve or disapprove mortgaging of corporate property); Cont’l Sec. Co. v. Belmont, 206 N.Y. 7, 17–18 (1912) (discussing “the authority of stockholders in the management of business corporations”); Gollust v. Mendell, 501 U.S. 115, 122–24 (1991) (discussing the stock ownership requirement for the stockholder right of action for disgorgement of short-swing profits from insider trading under § 16(b) of the ’34 Act); Zetlin v. Hanson Holdings, Inc., 48 N.Y.2d 684, 685 (1979) (noting “that those who invest the capital necessary to acquire a dominant position in the ownership of a corporation have the right of controlling that corporation”).
of FIRREA provides otherwise,” and that “matters left unaddressed” in FIRREA’s “comprehensive and detailed” “scheme are presumably left subject to . . . state law”); Atherton v. FDIC, 519 U.S. 213, 226 (1997) (holding that uniform federal common law does not supply a “general standard of care applicable to” federally insured institutions).26
Moreover, in Resolution Trust Corp. v. Diamond, we specifically explained that under FIRREA, the Resolution Trust Corporation, a predecessor receiver for federally insured savings institutions, “like the FDIC in O’Melveny, steps into the shoes of another entity having claims, rights, powers and causes of action defined and limited by state law.” 45 F.3d 665, 670 (2d Cir. 1995). In this sense, when it used the phrase “all rights . . . of any stockholder,” 12 U.S.C. § 1821(d)(2)(A)(i),
26Accord Langley v. FDIC, 484 U.S. 86, 90–91 (1987) (interpreting word “agreement” in a provision of the Federal Deposit Insurance Act that governed the enforcement of certain agreements against the FDIC in its capacity as receiver, based on its common meaning under commercial and contract law); Burks v. Lasker, 441 U.S. 471, 478 (1979) (explaining that “in [the] field [of corporate law] congressional legislation is generally enacted against the background of existing state law,” and that “Congress has never indicated that the entire corpus of state corporation law is to be replaced simply because a plaintiff’s cause of action is based upon a federal statute”); Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 98, 109 (1991) (stating that courts should rarely “endeavor to fill the interstices of federal remedial schemes with uniform federal rules,” and explaining that “[t]he presumption that state law should be incorporated into federal common law is particularly strong in areas,” like corporate law, “in which private parties have entered legal relationships with the expectation that their rights and obligations would be governed by state-law standards”).
26 Accord Langley v. FDIC, 484 U.S. 86, 90–91 (1987) (interpreting word “agreement” in a provision of the Federal Deposit Insurance Act that governed the enforcement of certain agreements against the FDIC in its capacity as receiver, based on its common meaning under commercial and contract law); Burks v. Lasker, 441 U.S. 471, 478 (1979) (explaining that “in [the] field [of corporate law] congressional legislation is generally enacted against the background of existing state law,” and that “Congress has never indicated that the entire corpus of state corporation law is to be replaced simply because a plaintiff’s cause of action is based upon a federal statute”); Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 98, 109 (1991) (stating that courts should rarely “endeavor to fill the interstices of federal remedial schemes with uniform federal rules,” and explaining that “[t]he presumption that state law should be incorporated into federal common law is particularly strong in areas,” like corporate law, “in which private parties have entered legal relationships with the expectation that their rights and obligations would be governed by state-law standards”).
Congress “borrow[ed] [a] term[] of art in which are accumulated the legal tradition and meaning of centuries of practice.” United States v. Hansen, 599 U.S. 762, 774 (2023) (quoting Morissette v. United States, 342 U.S. 246, 263 (1952)). We therefore presume Congress “kn[ew] and adopt[ed] the cluster of ideas that were attached to” the term stockholder rights when it enacted FIRREA’s Succession Clause. Id.
The next question, then, is whether AP7’s securities fraud claims assert rights that are stockholder rights within the meaning of the Clause.
## 2.AP7’s 10b-5 Claims
## 2. AP7’s 10b-5 Claims
AP7’s securities fraud claims do not assert the right of a stockholder but the right of a stock purchaser under Rule 10b-5. The Birnbaum rule27 limits the availability of the § 10(b) and Rule 10b-5 private right of action to purchasers and sellers of securities who suffered economic loss due to misrepresentations in connection with their purchase or sale. Blue Chip Stamps v. Manor Drug Stores, 421
27Birnbaum v. Newport Steel Corp., 193 F.2d 461, 464 (2d Cir. 1952).
27 Birnbaum v. Newport Steel Corp., 193 F.2d 461, 464 (2d Cir. 1952).
U.S. 723, 731–35, 737–38 (1975). In doing so, it precludes claims by “actual shareholders in the issuer who allege that they decided not to sell their shares because of an unduly rosy representation or a failure to disclose unfavorable material.” Id. at 737–38. The rule also precludes claims by “shareholders [ and]
Because AP7’s Rule 10b-5 right of action is not a stockholder right within the meaning of the Succession Clause, the district court erred in concluding that the Clause transfers AP7’s securities fraud claims to the FDIC. And for that reason, the district court erred in dismissing AP7’s complaint for lack of prudential standing.
29See 15 U.S.C. § 78c(a)(10) (defining the term “security” under the ’34 Act to include, among other things, “any note, stock, treasury stock, security future, securitybased swap, bond, debenture, [or] certificate of interest or participation in any profitsharing agreement”); Reves v. Ernst & Young, 494 U.S. 56, 60–61 (1990) (discussing the definition of “security” under § 3(a)(10) of the ’34 Act).
29 See 15 U.S.C. § 78c(a)(10) (defining the term “security” under the ’34 Act to include, among other things, “any note, stock, treasury stock, security future, securitybased swap, bond, debenture, [or] certificate of interest or participation in any profitsharing agreement”); Reves v. Ernst & Young, 494 U.S. 56, 60–61 (1990) (discussing the definition of “security” under § 3(a)(10) of the ’34 Act).
## Administrative Exhaustion
## § 1821(d)(13)(D)(i) (stripping jurisdiction over any unexhausted “claim or action for
payment from . . . the assets of” Signature of the FDIC) (emphasis added)), withid.
payment from . . . the assets of” Signature of the FDIC) (emphasis added)), with id.
## § 1821(d)(13)(D)(ii) (stripping jurisdiction over any unexhausted “claim relating to
REMAND for further proceedings consistent with this opinion.