Sierra Club, Lone Star Chapter v. F.D.I.C.

Decision Date08 June 1993
Docket NumberNo. 93-7062,93-7062
Citation992 F.2d 545
PartiesSIERRA CLUB, LONE STAR CHAPTER, et al., Plaintiffs-Appellees, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Defendant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Nick Turner, Houston, TX, Sharon Powers Siversten, Michael Krimminger, Richard Osterman, Jr., Ann DuRoss, Washington, DC, Chaves, Gonzales & Rodriguez, Carla Saenz, Harlingen, TX, Jerome Madden, FDIC, Washington, DC, for defendant-appellant.

Edward Stapleton, III, Brownsville, TX, David Frederick, Melinda Taylor, Henry Kelly & Lowerre, Austin, TX, for plaintiffs-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before JOLLY and DAVIS, Circuit Judges, and BRAMLETTE, * District Judge.

E. GRADY JOLLY, Circuit Judge:

The issue before us is whether the district court erred in enjoining the FDIC from approving the sale of an environmentally sensitive tract of land in South Texas. The FDIC acquired an interest in the land when it became the receiver of a failed bank. The FDIC sold the bank's assets to Heights Bank; still, the FDIC remained liable for losses Heights suffered on the sale of certain assets, provided the FDIC approved the sale in advance. Here, Heights found a buyer for the environmentally sensitive land and the FDIC approved the sale. At this point, the plaintiffs filed this action to enjoin the sale. The plaintiffs alleged that the FDIC violated the National Environmental Policy Act by approving the sale without considering the environmental impact of the sale.

Without receiving evidence or entering findings of fact, the district court granted the plaintiffs a mandatory preliminary injunction. We hold that the district court had jurisdiction to enjoin the FDIC because the FDIC was acting in its corporate capacity. Nevertheless, we vacate the district court's injunction and remand for further consideration because the Sierra Club has not yet shown that it is entitled to injunctive relief and because the district court has not entered findings of fact and conclusions of law as required by Rule 52 of the Federal Rules of Civil Procedure.

I

In the late 1980's, Champion Savings Association ("Champion") obtained an interest in a tract of land known as the Playa del Rio ("Playa") when it loaned money to the owner of the land. The Playa consists of almost 12,500 acres of wetlands in South Texas. Champion became the owner of the Playa when its debtor was unable to pay the loan secured by the property. 1

Shortly thereafter, Champion failed and the Federal Deposit Insurance Corporation ("FDIC") became its receiver. 2 The FDIC entered into an acquisition agreement with Heights of Texas, Federal Savings Bank ("Heights"). Under the acquisition agreement, the FDIC transferred substantially all of Champion's former assets, including its interest in the Playa, to Heights. In a parallel agreement, the FDIC entered into an assistance agreement with Heights in which the FDIC agreed to indemnify Heights for capital losses it incurs on the sale of certain "covered assets." The assistance agreement assured Heights that it would not suffer a loss on assets that Champion had carried on its books at an inflated value. In order to be indemnified, however, the assistance agreement required Heights to submit to the FDIC an asset sales request, which the FDIC could either approve or disapprove.

Heights has now informed the FDIC that it intends to sell the Playa to the Pacific Union Company for $5.8 million. The Playa's present book value is $7.4 million and, thus, the sale would result in a capital loss of $1.6 million. Pursuant to the assistance agreement, Heights asked the FDIC to bear this loss, and in September of 1992 the FDIC agreed.

II

The Sierra Club, Frontera Audubon Society, and Norman L. Richard ("Sierra Club") filed this suit to require the FDIC to withdraw its approval of the sale of the Playa. The Sierra Club also asked the court to enjoin the FDIC from approving the sale of the Playa until the FDIC, pursuant to the National Environmental Policy Act ("NEPA"), has determined the environmental impact of the sale of the Playa. It appears, however, that the Sierra Club's ultimate goal is to prevent the Heights from selling the Playa to the Pacific Union Company so that an environmentally conscious entity, like the Texas Nature Conservancy, can purchase the land. The Texas Nature Conservancy has offered to purchase the Playa, but its offer is lower than the Pacific Union Company's offer.

In any event, at a hearing on January 22, 1993, the district court issued a mandatory preliminary injunction ordering the FDIC to "withdraw its approval and withhold future approval for Heights' sale of the Playa del Rio property, pending consideration by the FDIC Board of Directors of the issues surrounding the FDIC's approval or rescission of the Playa del Rio sale request." The Sierra Club was prepared to present witnesses at that hearing, but the district court made its decision without hearing the Sierra Club's witnesses. The district court did not take any testimony because the district court believed that this case turns primarily on the reach of the "anti-injunction" provision of the Federal Deposit Insurance Act. The FDIC appeals the district court's preliminary injunction.

III

While we review the district court's preliminary injunction for an abuse of discretion, we review de novo the district court's legal conclusions. See Dallas Cowboys Cheerleaders, Inc. v. Scoreboard Posters, Inc., 600 F.2d 1184, 1187 (5th Cir.1979); Pullman-Standard, Div. of Pullman, Inc. v. Swint, 456 U.S. 273, 287, 102 S.Ct. 1781, 1789, 72 L.Ed.2d 66 (1982).

A

We begin with the FDIC's contention that 12 U.S.C. § 1821(j), in combination with other statutes, bars the district court from enjoining it. Simply put, the FDIC argues that Congress has divested the courts of equity jurisdiction in these matters. The Supreme Court has long held, however, that "[a]bsent the clearest command to the contrary from Congress, federal courts retain their equitable power to issue injunctions in suits over which they have jurisdiction." Califano v. Yamasaki, 442 U.S. 682, 705, 99 S.Ct. 2545, 2559, 61 L.Ed.2d 176 (1979). See also Amoco Production Co. v. Gambell, 480 U.S. 531, 542, 107 S.Ct. 1396, 1402, 94 L.Ed.2d 542 (1987) ("Unless a statute in so many words, or by a necessary and inescapable inference, restricts the court's jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied.") (Internal cites omitted.) Thus, we must reject the FDIC's argument unless Congress has clearly and unambiguously limited the court's equity jurisdiction in these statutes.

The predicate statute upon which the FDIC relies provides:

Except as provided in this section, no court may take any action, except at the request of the Board of Directors by regulation or order, to restrain or affect the exercise of powers or functions of the Corporation as conservator or receiver.

12 U.S.C. § 1821(j) (1989) (emphasis added). 3 This statute directly addresses and expressly limits the court's power to enjoin the FDIC when the FDIC is acting as a conservator or receiver. See Telematics Int'l, Inc. v. NEMLC Leasing Corp., 967 F.2d 703 (1st Cir.1992); 281-300 Joint Venture v. Onion, 938 F.2d 35, 39 (5th Cir.1991). However, as the FDIC candidly admits, it was not acting as a conservator or a receiver when it approved the sale of the Playa; instead it was acting in what it refers to as its corporate capacity. 4 The FDIC, however, argues that Congress extended the 1821(j) bar on the court's equity jurisdiction in 12 U.S.C. §§ 1821a(a)(4), 1823(d)(3)(A). Specifically, the FDIC argues that these statutes serve to limit the court's equity jurisdiction when the FDIC, acting in its corporate capacity, administers assets in the FSLIC Resolution Fund.

In this respect, the FDIC originally relied on section 1821a(a)(4), but now the FDIC argues that section 1821a(a)(4) (quoted infra ) merely clarifies section 1823(d)(3)(A). Thus, we first examine section 1823(d)(3)(A) to see whether it, in conjunction with section 1821(j), bars the court's equity jurisdiction. Section 1823(d)(3)(A) provides:

With respect to any asset acquired or liability assumed pursuant to this section, the Corporation shall have all of the rights, powers, privileges, and authorities of the Corporation as receiver under sections 1821 and 1825(b) of this title. (Emphasis added.)

To be clear, the question before us is whether this language casts an interpretive light on section 1821(j) that clearly and unambiguously requires the courts to refrain from exercising their equitable power over the FDIC, when the FDIC, in its corporate capacity, administers the FSLIC Resolution Fund. Although the FDIC makes a plausible argument, this statute simply does not reflect the clarity that the Supreme Court requires to strip away our traditional equitable powers. 5

There are several obvious ambiguities in this statute. For example, the statute specifies that it applies only to assets and liabilities "assumed pursuant to this section," i.e., section 1823. 6 Yet, it appears that Congress gave the FDIC its interest in FSLIC Resolution Fund assets like the Playa through section 1821a, not section 1823. Section 1821a(a)(1) establishes the FSLIC Resolution Fund, names the FDIC as its manager, and orders the FDIC not to commingle its own assets with FSLIC Resolution Fund assets. See also 12 U.S.C. § 1821a(a)(3) (providing that "[a]ssets and liabilities transferred to the FSLIC Resolution Fund shall be assets and liabilities of the Fund and not of the Corporation"). Although the FDIC may be able to argue that it assumed the liability at issue, i.e., the obligation to indemnify Heights against the loss it may suffer on the sale of the Playa, under one of section 1823's several provisions, the point to be made is that the FDIC did not "clearly and...

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