Nat'l Credit Union Admin. Bd. v. RBS Sec., Inc.

Decision Date15 August 2016
Docket NumberNo. 13–56620,13–56620
Citation833 F.3d 1125
Parties National Credit Union Administration Board, as Liquidating Agent of Western Corporate Federal Credit Union, Plaintiff–Appellant, v. RBS Securities, Inc., FKA RBS Greenwich Capital Markets, Inc., Defendant, and Nomura Home Equity Loan, Inc., Defendant–Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

David C. Frederick (argued), Wan J. Kim, and Gregory G. Rapawy, Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Washington, D.C.; George A. Zelcs, Korein Tillery LLC, Chicago, Illinois; Michael J. McKenna and John K. Ianno, National Credit Union Administration, Alexandria, Virginia; for PlaintiffAppellant.

Matthew S. Hellman (argued), Barbara S. Steiner and Barry Levenstam, Jenner & Block LLP, Chicago, Illinois, for DefendantAppellee Nomura Home Equity Loan, Inc.

Marc T.G. Dworsky and David H. Fry, Munger, Tolles & Olson LLP, San Francisco, California, for DefendantAppellee Wachovia Mortgage Loan Trust, LLC.

Before: Dorothy W. Nelson, Stephen Reinhardt, and Jacqueline H. Nguyen, Circuit Judges.

OPINION

D.W. NELSON

, Senior Circuit Judge:

This case concerns the National Credit Union Administration Board's (NCUA) liquidation of Western Corporate Federal Credit Union (Wescorp). The NCUA sued Wachovia Mortgage Loan Trust, LLC (Wachovia) and Nomura Home Equity Loan, Inc. (Nomura) for making false and misleading statements in their offerings of residential mortgage-backed securities (RMBS) purchased by Wescorp. The NCUA brought these claims under the Securities Act of 1933 (1933 Act). The district court dismissed the NCUA's claims, ruling that 12 U.S.C. § 1787(b)(14)

(the Extender Statute) did not supplant the statute of repose contained within 15 U.S.C. § 77m, and therefore that the NCUA's claims were time-barred. We VACATE the district court's judgment and REMAND the case for further proceedings consistent with this opinion.

BACKGROUND

The NCUA is an independent federal agency responsible for chartering and regulating federal credit unions, regulating federally insured state-chartered credit unions, and administering the Share Insurance Fund (the Fund). See 12 U.S.C. §§ 1752a(a)

, 1754, 1781, 17831784. The Fund insures the deposits of nearly 100 million account holders. It is financed through deposits by and assessments against insured credit unions and backed by the full faith and credit of the United States. See id. § 1782(c).

When an insured credit union is in danger of failing, the NCUA has the authority to step in as a conservator to preserve the credit union's assets and to protect the Fund. See id. §§ 1766, 1786(h). Upon finding that a credit union is bankrupt or insolvent, the NCUA closes the credit union for liquidation and appoints itself as liquidating agent. Id. § 1787.

Before its failure, Wescorp was the second largest corporate credit union in the United States. It offered a variety of financial services to other credit unions. Like many financial institutions before the collapse of the housing market, Wescorp invested in RMBS, which are securities backed by thousands of individual residential mortgages. And, like many such financial institutions, Wescorp failed after suffering heavy losses on its RMBS investments.

Pursuant to its statutory authority, the NCUA placed Wescorp into conservatorship, and later into liquidation. After assuming control of Wescorp, the NCUA determined that offering documents for RMBS issued by Wachovia and Nomura and purchased by Wescorp in 2006 and 2007 contained certain statements and omissions that the NCUA believed materially misrepresented the quality of the residential loans underlying the RMBS. The NCUA sued Wachovia and Nomura for violations of § 11 and § 12(a)(2) of the 1933 Act, ch. 38, 48 Stat. 74 (codified as amended at 15 U.S.C. § 77a et seq.

).1

Pursuant to § 13 of the 1933 Act, a private investor pursuing a claim under § 11 or § 12(a)(2) ordinarily must bring suit: (1) within one year after discovering a violation, and (2) within three years after the security was offered or sold. 15 U.S.C. § 77m

. The Supreme Court has explained that the second requirement is a statute of repose. See

Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson , 501 U.S. 350, 363, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991). Unlike a statute of limitations, which begins to run when a claim accrues and may be subject to equitable tolling, [a] statute of repose bars any suit that is brought after a specified time since the defended acted ..., even if this period ends before the plaintiff has suffered a resulting injury.” CTS Corp. v. Waldburger , ––– U.S. ––––, 134 S.Ct. 2175, 2182, 189 L.Ed.2d 62 (2014). A statute of repose is “therefore equivalent to a cutoff, in essence an absolute bar on a defendant's temporal liability.” Id . at 2183 (internal citations and quotation marks omitted).

However, in response to the Savings and Loan Crisis, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Pub. L. 101–73, 103 Stat. 183.

FIRREA contains special provisions concerning the failure of financial institutions. Among other things, it provides that the NCUA may be appointed as a conservator or liquidating agent for failing and failed credit unions, and that upon such appointment, the NCUA gains the right to pursue any claims the credit unions had. See generally 12 U.S.C. § 1787.

Additionally, FIRREA contains the Extender Statute, which establishes “the applicable statute of limitations with regard to any action brought by [the NCUA] as conservator or liquidating agent.” 12 U.S.C. § 1787(b)(14)

. The Extender Statute requires that contract claims be brought within the longer of: (1) the 6–year period beginning on the date the claim accrues; or (2) the period applicable under State law. Id. § 1787(b)(14)(A). It requires that tort claims be brought within the longer of: (1) the 3–year period beginning on the date the claim accrues; or (2) the period applicable under State law. Id. For purposes of these provisions, a claim accrues the later of: (1) the date of appointment of the NCUA as conservator or liquidating agent; or (2) the date on which a cause of action accrues. Id. § 1787(b)(14)(B).

The NCUA placed Wescorp into conservatorship on March 20, 2009. It filed its original complaint less than three years later, on July 18, 2011. Nevertheless, the district court held the NCUA's claims were not timely filed. Instead, the district court interpreted the Extender Statute narrowly, finding that it supplanted only the one-year statute of limitations” and not the three-year statute of repose” contained in § 13 of the 1933 Act. Because the NCUA did not file suit within three years after the securities at issue were offered or sold (as the statute of repose ordinarily requires), the district court dismissed the NCUA's claims against Wachovia and Nomura as time-barred.

We disagree with the district court's interpretation of the Extender Statute. We hold that the Extender Statute replaces all preexisting time limitations—whether styled as a statute of limitations or a statute of repose—in any action by the NCUA as conservator or liquidating agent. We also hold that the Extender Statute's scope—“any action brought by the [NCUA]—includes actions such as this one, in which the NCUA asserts statutory claims rather than common law tort or contract claims. In sum, we conclude that the NCUA's claims were timely filed.

STANDARD OF REVIEW

We review a dismissal on statute of limitations grounds de novo. Papenthien v. Papenthien , 120 F.3d 1025, 1027 (9th Cir. 1997)

.

ANALYSIS

I. The District Court Erred in Holding that the Extender Statute Does Not Supplant the 1933 Act's Statute of Repose.

a. FIRREA applies to statutes of repose.

We join all appellate courts to have considered the question of whether an extender statute like the one in FIRREA applies to both statutes of limitations and to statutes of repose and find that it does.2 Indeed, the Extender Statute establishes a universal time limit for all actions by the NCUA as conservator or liquidating agent. Both textual and contextual analyses of the statute confirm this conclusion, and the Supreme Court's decision in CTS Corp. v. Waldburger , ––– U.S. ––––, 134 S.Ct. 2175, 189 L.Ed.2d 62 (2014)

does not support Appellees' arguments to the contrary.

1. By its plain meaning, the Extender Statute displaces all other time limitations.

The “first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.” Robinson v. Shell Oil Co. , 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997)

. In this case, it does. And that plain and unambiguous meaning demonstrates that the Extender Statute applies not only to the 1933 Act's statute of limitations, but also to its statute of repose.

The Extender Statute provides:

(A) In general
Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the [NCUA] as conservator or liquidating agent shall be—
(i) in the case of any contract claim, the longer of—
(I) the 6-year period beginning on the date the claim accrues; or
(II) the period applicable under State law; and
(ii) in the case of any tort claim, the longer of—
(I) the 3-year period beginning on the date the claim accrues; or
(II) the period applicable under State law.
(B) Determination of the date on which a claim accrues
For purposes of subparagraph (A), the date on which the statute of limitations begins to run on any claim described in such subparagraph shall be the later of—
(i) the date of the appointment of the [NCUA] as conservator or liquidating agent; or
(ii) the date on which the cause of action accrues.

12 U.S.C. § 1787(b)(14)

. The Extender Statute begins by setting forth the applicable statute of limitations with regard to any action brought by the [NCUA]...

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