Federal Deposit Ins. Corp. v. Irwin
Decision Date | 30 June 1989 |
Docket Number | Civ. A. No. CA-2-87-188. |
Parties | FEDERAL DEPOSIT INSURANCE CORPORATION, in its Corporate Capacity, Plaintiff, v. William K. IRWIN, et al., Defendants, v. UNITED STATES of America, Third Party Defendant. |
Court | U.S. District Court — Northern District of Texas |
John M. Skrhak, Godwin, Carlton & Maxwell, Dallas, Tex., Thomas S. Rees, Tort
Branch, Civ. Div., U.S. Dept. of Justice, Washington, D.C., for plaintiff.
John Mozola, Underwood Law Firm, Dorothy Ann Kinney, Amarillo, Tex., for defendants.
The Federal Deposit Insurance Corporation (FDIC) brought suit against certain directors of the McLean Bank for alleged breaches of fiduciary and statutory duties to the bank. The Defendants then brought a third party action against the United States for alleged wrongdoing by the FDIC and the OCC in connection with the closing of the bank.
The action between the FDIC and the Defendants has been settled and dismissed. In addition, the Defendants have dropped their claims against the United States for the alleged wrongful conduct of the FDIC in the closing of the bank.
The only claims remaining in this case are those brought by Third Party Plaintiffs against the United States, the Third Party Defendant for the alleged wrongdoing by the Office of the Comptroller of Currency in the closing of the bank.
In its Motion to Dismiss the United States objects to the settlement of the FDIC and Defendants and questions the validity of that settlement; it maintains that that settlement should not affect its liability in any way. Because of the importance of the issue the Court will address it in this order. The other issues raised by the Motion to Dismiss will be discussed in the Court's Order ruling on the United States' Motion for Summary Judgment.
At the outset, the Court notes that the United States has failed to show that it has been prejudiced in any way by the settlement. Third Party Plaintiffs must still prove every element of their claims against the United States. The only thing that need not be proved after the settlement is that the Third-Party Plaintiffs are liable to the Original Plaintiff. Thus, the United States has not been injured in any way by the settlement except perhaps for the fact that it now cannot use the FDIC claim against the Defendants (Third-Party Plaintiffs) as a bargaining chip in settlement negotiations with the Third-Party Plaintiffs.
The United States claims that, under 28 U.S.C. § 516 and § 519, the Attorney General has sole authority to settle the litigation. Section 516 of title 28 provides:
Under these sections, the Attorney General is the chief legal officer of the United States and absent express congressional directive to the contrary he is vested with plenary power over all litigation to which the United States or one of its agencies is a party. Marshall v. Gibson's Products, Inc. of Plano, 584 F.2d 668 (5th Cir. 1978). This power, because it is so "broadly inclusive," must be narrowly construed. Hughes Aircraft Co. v. United States, 534 F.2d 889 (Ct.Cl.1976).
The FDIC argues that under 12 U.S.C. § 1819, Congress has "otherwise authorized" the FDIC to conduct its own litigation. Further it argues that the interpretation by the Department of Justice of analogous statutes, is consistent with its' own interpretation of the statute.
Section 1819 enumerated some of the powers of the FDIC, they are, in pertinent part:
The United States argues however that this power to sue and be sued does not provide the FDIC with authority to settle litigation. It cites one case in support of its argument, I.C.C. v. Southern Ry. Co., 543 F.2d 534 (5th Cir.1976), aff'd en banc, ...
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