Federal Deposit Ins. v. FIRST NAT. BANK OF WAUKESHA

• Decision Date: 11 March 1985
• Docket Number: No. 80-C-109.,80-C-109.
• Citation: 604 F. Supp. 616
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, a United States corporation, Plaintiff, v. FIRST NATIONAL BANK OF WAUKESHA, WISCONSIN, a National Banking Association, Edward Radi, an individual and Harold Erickson, an individual, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

604 F. Supp. 616

FEDERAL DEPOSIT INSURANCE CORPORATION, a United States corporation, Plaintiff, v. FIRST NATIONAL BANK OF WAUKESHA, WISCONSIN, a National Banking Association, Edward Radi, an individual and Harold Erickson, an individual, Defendant.

No. 80-C-109.

United States District Court, E.D. Wisconsin.

March 11, 1985.

William J. French, Gibbs, Roper, Loots & Williams, Milwaukee, Wis., for plaintiff.

John A. Busch, Michael, Best & Friedrich, Milwaukee, Wis., for First Nat. Bank.

William F. Reilly, Hippenmeyer, Reilly, Bode & Gross, Waukesha, Wis., for Edward Radi.

Harold Erickson, defendant, pro se.

DECISION AND ORDER

WARREN, District Judge.

Presently before the Court in this matter are the cross-motions of the principal parties for certification of portions of this Court's Decision and Order of December 20, 1984. Specifically, the plaintiff requests that the Court amend its opinion to include a statement, as provided for under 28 U.S.C. § 1292(b), certifying for interlocutory appeal the denial of its motion to amend the complaint to add a claim for punitive damages. Similarly, defendant First National Bank of Waukesha, Wisconsin, seeks certification under 28 U.S.C. § 1292(b) of the Court's ruling, as announced on December 20, 1984, denying its motion to dismiss the complaint for failure to state a claim upon relief can be granted.

The Court has carefully considered the respective positions of the parties both in support of and in opposition to the pending certification requests. Although it does not view the several arguments articulated as meritless, it does conclude, for the reasons stated below, that neither of the Court's recent rulings presents an issue appropriate for certification under the statute.

BACKGROUND

As the Court fully expected on the eve of issuance of its Decision and Order of December 20, 1984, neither of the present movants has been fully satisfied with the resolution of the two, principal pretrial motions filed in this case to date. Predictably, defendant First National Bank of Waukesha, Wisconsin, continues to feel strongly that the Court's analysis of the merits of its motion to dismiss for lack of jurisdiction was misguided, at best. In its opinion of December 20, 1984, the Court explained its ruling as follows:

While ... recognizing that proceedings under 12 U.S.C. § 192 are characteristically dissimilar from the many others routinely conducted, the Court is confident in concluding that it was a court of competent jurisdiction, constitutionally and lawfully authorized to hear and rule on the propriety of the proposed sale, on October 21, 1975. In reaching this conclusion, the Court finds persuasive the distinction between administrative and judicial review, as articulated by the United States Supreme Court in Federal Radio Commission v. Nelson Brothers Bond And Mortgage Company, 289 U.S. 266, 276-277 53 S.Ct. 627, 632-633, 77 L.Ed. 1166 (1933) excerpt omitted.

Examining the propriety of this Court's proceedings of October 21, 1975, under this general distinction, the Court concludes that its decision approving the proposed sale was judicial in character. As FDIC notes in its responsive brief, the Comptroller had previously determined that American City Bank was insolvent and unable to meet the considerable demands of its depositors—a determination not subject to judicial review unless challenged as arbitrary, capricious, or procured by fraud. Removed from this threshold determination were those issues squarely presented to the Court in its judicial capacity—namely, whether the Comptroller properly found that ACB was insolvent; whether the Comptroller duly appointed the FDIC as receiver; whether the FDIC thereafter determined that a contract for the purchase of certain assets and the assumption of certain liabilities of ACB would be appropriate; and, finally, whether the FDIC duly entered into that contract and, in that process, met the requisite statutory and administrative procedures. The Court's review of the transcript of proceedings of October 21, 1975, convinces it that attention was properly focused on these critical issues of compliance by the Comptroller and the FDIC, mandating judicial decisions on questions of law uniquely delegated to an Article III Court such as this.

In addition, the Court does not feel that the mere fact that its approval of the FDIC's contract for the purchase of assets and assumption of liabilities was made in the wake of an ex parte proceeding invalidates or renders unconstitutional the decision rendered....

Finally, the Court observes that the mere absence of adverse parties to any action need not divest the Court of jurisdiction in a case properly before it....

Court's Decision and Order at 5-8 (December 20, 1984).

Likewise, the plaintiff in this action complains that the Court's decision to deny it leave to amend its complaint significantly compromises its position in the prosecution of all claims that might arguably spring from the factual circumstances on which this action is premised. The resolution of this party's motion was explained in the Decision and Order of December 20, 1984, this way:

... The Court has looked in vain at the language, statutory schemes, and legislative histories of the principal federal statutes the FDIC now seeks to invoke....

FDIC properly directs the Court's attention to those four well-established factors, first articulated by the United States Supreme Court in Cort v. Ash, 422 U.S. 66, 78 95 S.Ct. 2080, 2087, 45 L.Ed.2d 26 (1965), to be used in determining whether private rights of action may be implied from the provisions of federal statutes. Unfortunately, the Court, having addressed itself to each of these touchstones with respect to the federal statutes described above, does not reach the conclusion recommended by the movant.

First, while the FDIC undeniably has an interest in the enforcement of these federal banking laws, the Court is not convinced that any of them was passed for the "especial benefit" of this federal insurer: instead, the Court is inclined to believe that the predominant purpose behind these laws regulating the activities of national banks is to insure that the numerous investors, commercial customers, and other holders of interest in the administrative and financial welfare of these institutions are adequately protected. Although the FDIC might well be in a unique position to protect the rights of members of this class, the Court notes, as a second point, that there is little, if anything, in the legislative history of any of these statutes to suggest that the Congress intended to create a private remedy in favor of a party like the movant. Moreover, even to the extent that the United States Supreme Court has recognized the importance of protecting the FDIC through this package of federal banking legislation, see D'Oench, Duhme & Company v. Federal Deposit Insurance Corporation, 315 U.S. 447, 457, 460 62 S.Ct. 676, 679, 680, 86 L.Ed. 956 (1942), this Court does not interpret these statutes so as to afford the FDIC special status as a "private attorney general" in prosecuting the sorts of claims it now seeks to amend to its complaint.

Finally, while an implied right of action in FDIC's favor is certainly not inconsistent with the underlying purposes of the legislative scheme behind these statutes, and the causes of action the FDIC articulates are not traditionally relegated to state law, the Court opines that these two peripheral considerations pale in comparison with the more compelling conclusions articulated above and the more recent trend against the implication of private causes of action under federal statutes in the context of legislative silence....

Court's Decision and Order at 13-15 (December 20, 1984). Significantly, the Court's decision to deny the plaintiff's petition was also based, in part, on the threat of undue prejudice to the defendants and of unreasonable delay in the further litigation of this matter, as follows:

In further support of this conclusion, the Court finds itself somewhat sympathetic to FNB's related contentions regarding delay and prejudice—namely, that the request for leave to amend was interposed at the conclusion of some three years of pretrial activity; that the claim as amended is sufficiently novel to warrant another round of discovery; that important witnesses may no longer be available; and that the trial, when finally conducted, might well prove significantly more complex than the proceedings to date might indicate. To be sure, the FDIC charges that the delay in its interposition of the present motion to amend was occasioned principally by the FNB's "repeated attempts to avoid legitimate discovery during this action, and its acts of fraud and concealment prior thereto." Plaintiff's Reply Brief in Support of Motion to Amend at 43 (August 4, 1983). While declining to resolve any of the motivational cross-charges giving rise to the vitriolic arguments on both sides of this motion, the Court would note simply that the amendment, as proposed, would, in all likelihood, alter significantly the landscape of this already complicated litigation. Today, some 58 months after this action was initiated, the Court feels strongly, for the several reasons explained above, that final disposition of the parties' claims should proceed apace....

Court's Decision and Order at 16-17 (December 20, 1984).

On the same day that it announced its decision disposing of these significant pretrial matters, the Court conducted a brief hearing on the status of the action. It was at that hearing that counsel for the present movants first signaled their intentions to seek certification for interlocutory appeals of the two, hotly-disputed issues described above. By the time of the subsequent hearing on February 14, 1985, both parties had submitted formal motions, further articulating their interests in immediate appellate review. The merits and demerits of the...