Auction Co. of America v. F.D.I.C.

• Decision Date: 28 April 1998
• Docket Number: No. 96-5343,96-5343
• Citation: 132 F.3d 746
• Parties: AUCTION COMPANY OF AMERICA, Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Manager of the FSLIC Resolution Trust Fund, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 746

132 F.3d 746

328 U.S.App.D.C. 45

AUCTION COMPANY OF AMERICA, Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Manager of the FSLIC Resolution Trust Fund, Appellee.

No. 96-5343.

United States Court of Appeals District of Columbia Circuit.

Argued Oct. 21, 1997.

Decided Dec. 19, 1997.

Rehearing Denied April 28, 1998.

Appeal from the United States District Court for the District of Columbia (No. 94cv02006).

Alan M. Grayson, McLean, VA, argued the cause and filed the briefs for appellant.

J. Scott Watson, Counsel, Federal Deposit Insurance Corporation, argued the cause for appellee. With him on the brief were Ann S. DuRoss, Assistant General Counsel, Federal Deposit Insurance Corporation, Robert D. McGillicuddy, Senior Counsel, Roberta H. Clark, Counsel, Federal Deposit Insurance Corporation, and Robert P. Fletcher, Washington, DC.

Before: WALD, WILLIAMS and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Circuit Judge:

Auction Company of America ("Auction Company") seeks damages for breach of contract from the Federal Deposit Insurance Company ("FDIC") as statutory successor to the Resolution Trust Corporation ("RTC"). It filed the first of three suits (and the one both parties regard as controlling for limitations purposes) four years and one day after the cause of action accrued. The filing was too late under the District of Columbia's three-year limitations period for contract actions, 12 D.C.Code § 301(7), but timely under either the general six-year limitations period for civil actions against the United States, 28 U.S.C. § 2401(a), or the Missouri five-year contract limitations period, Mo. Ann. Stat. § 516.120(1). The district court ruled that the federal statute did not govern and performed a choice-of-law analysis to arrive at the D.C. limitations period. It thus dismissed the complaint. Because we find that the federal statute does apply, we reverse and remand without reaching the state choice-of-law issue.

* * *

Auction Company's claim is that it entered into a contract with the RTC, as receiver for certain failed thrifts, to auction off key thrift assets. On September 18, 1990, after a number of actions that according to Auction Company impeded its efforts to organize the auction, the RTC terminated the contract and thereby breached it. Four years and one day later, on September 19, 1994, Auction Company filed its first complaint.

That complaint's caption named the RTC as defendant, but also said that the suit was against the RTC in its corporate capacity ("RTC-Corporate"). The RTC responded with a motion to dismiss, arguing that it was a legal entity distinct from the RTC as Receiver and could not be sued for contractual liabilities of the RTC as Receiver. In briefing the motion it also asserted that the statutory provisions for administrative determination of claims against depository institutions, see 12 U.S.C. § 1821(d)(3)-(13), imposed an exhaustion requirement on Auction Company's contract claim. On June 15, 1995, Auction Company submitted its claim for administrative determination by the RTC as Receiver, but at the same time protested that its contract action ran against the RTC, not against a depository institution, and was therefore not subject to the administrative claim allowance procedures.

12 U.S.C. § 1821(d)(5) requires the RTC as Receiver to allow or disallow claims within 180 days. Without waiting for the end of this period, Auction Company filed a second suit on October 4, 1995. This complaint named the RTC as Receiver as defendant but was in other respects identical to the first. The RTC as Receiver moved to dismiss on the grounds that Auction Company had not exhausted its administrative remedies. On February 9, 1996, following the disallowance of its claim by RTC as Receiver, Auction Company filed its third suit. By this time the RTC no longer existed; its authorizing statute provided for termination on December 31, 1995. See 12 U.S.C. § 1441a(m)(1). The FDIC, its statutory successor, was named as defendant in the third suit and was substituted into the first two. We do not believe this substitution affects our analysis, and we will limit our focus to the FDIC.

All three actions were consolidated before the district court. The FDIC moved for judgment on the pleadings under Rule 12(c), seeking dismissal on the grounds that the District of Columbia three-year statute of limitations for contracts applied. Auction Company suggested instead the six-year limitations period for civil actions against the United States. See 28 U.S.C. § 2401(a). Alternatively, it noted that the contract at issue contained a choice-of-law clause selecting Missouri law, and argued that the Missouri statute of limitations should govern. The district court, treating the 12(c) motion as "essentially" one to dismiss under 12(b)(6), ruled that the FDIC was not "the United States" for the purposes of 28 U.S.C. § 2401(a). It thus proceeded to pick between the D.C. and the Missouri statutes of limitation. Reviewing de novo, we find error in the first determination and stop at that juncture: Section 2401(a) does apply, and Auction Company's suits were timely.

* * *

28 U.S.C § 2401(a) provides that "every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues." The question for this appeal, broadly stated, is whether the FDIC counts as the United States for the purposes of this provision. The district court was impressed by O'Melveny & Myers v. FDIC, 512 U.S. 79, 114 S.Ct. 2048, 129 L.Ed.2d 67 (1994), which contains the striking phrase "the FDIC is not the United States," id. at 85, 114 S.Ct. at 2053-54. But as the O'Melveny Court was not interpreting 28 U.S.C. § 2401(a), or indeed any other federal statute, this language cannot be controlling. Whether the FDIC should be treated as the United States depends on the context. See FDIC v. Hartford Ins. Co. of Ill., 877 F.2d 590, 592-93 (7th Cir.1989).

In O'Melveny the FDIC as Receiver sued the counsel of a failed savings and loan for malpractice and breach of fiduciary duty in failing to expose frauds in the management of the S&L. The lawyers defended on the grounds that the management was fully aware of its own frauds, and that knowledge of those frauds must therefore be imputed to the S&L, and thence to the FDIC as Receiver. The argument was a possible winner for the lawyers under California's imputation law, but the FDIC argued that state law should be displaced by federal common law. Immediately after the Court's declaration that the FDIC was not the United States, it twice discounted the significance of the remark, noting that: (1) even if the FDIC were the United States it would be begging the question to assume that it was asserting its own rights rather than those of the S&L and (2) even if federal law governed in the sense explained in United States v. Kimbell Foods, Inc., 440 U.S. 715, 726, 99 S.Ct. 1448, 1457, 59 L.Ed.2d 711 (1979), i.e., a sense that includes federal adoption of state law rules, that would "not much advance the ball." The Court decided that state law should apply: "[T]his is not one of those extraordinary cases in which the judicial creation of a federal rule of decision is warranted." O'Melveny, 512 U.S. at 89, 114 S.Ct. at 2056.

Creating federal common law is one thing, applying a federal statute quite another. State law will generally fill the gaps in a comprehensive federal statutory scheme such as the FDIC's enabling legislation, but it will not do so to the exclusion of another applicable federal statute. See id. at 85, 114 S.Ct. at 2053-54. If § 2401(a) applies, it does so by its own terms, so long as not contradicted by some other federal statute, not by virtue of any lawmaking power of federal courts. On the question of the scope of "United States" in § 2401(a), O'Melveny provides no guidance.

So we turn to the statute itself. Section 2401(a) originated as the internal limitations period for the Little Tucker Act. See Christensen v. United States, 755 F.2d 705, 707 (9th Cir.1985); Saffron v. Dep't of the Navy, 561 F.2d 938, 944-45 (D.C.Cir.1977). That act and its big brother the Tucker Act collectively establish jurisdiction and a waiver of sovereign immunity for certain cases that are "against the United States" and founded upon various bases including "any express or implied contract with the United States." For contract cases, the Little Tucker Act gives the district courts jurisdiction, concurrent with the Court of Federal Claims, if the amount sought is less than $10,000. If more than $10,000 is at issue, the suits lie only in the Court of Federal Claims under the Tucker Act proper. See 28 U.S.C. § 1346(a)(2); 28 U.S.C. § 1491; see also Saffron, 561 F.2d at 944. In the 1946 U.S.Code, the Little Tucker Act was located at 28 U.S.C. § 41(20), which provided in part, "No suit against the Government of the United States shall be allowed under this paragraph unless the same shall have been brought within six years after the right accrued for which the claim is made." The Act of June 25, 1948 made minor changes in the wording and relocated this language to 28 U.S.C. § 2401(a), where it was to function as a catch-all limit for non-tort actions against the United States.

While this shuffle expanded the function of § 2401(a), see, e.g., Daingerfield Island Protective Society v. Babbitt, 40 F.3d 442, 445 (D.C.Cir.1994) (applying § 2401(a) to APA suit); Impro Products v. Block, 722 F.2d 845, 850 n. 8 (D.C.Cir.1983) (same), the section remained applicable as ever to Little Tucker Act suits. See, e.g., Loudner v. United States, 108 F.3d 896, 900 (8th Cir.1997). Thus, barring some exceptional statutory twist, the term "United States" must have the same meaning in § 2401(a) as in the Little Tucker Act. And hence if the FDIC as Receiver is the United...