Freeling v. Federal Deposit Insurance Corporation

• Decision Date: 20 November 1962
• Docket Number: Civ. No. 9373.
• Citation: 221 F. Supp. 955
• Parties: James R. FREELING, Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Defendant.
• Court: U.S. District Court — Western District of Oklahoma

221 F. Supp. 955

James R. FREELING, Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Defendant.

Civ. No. 9373.

United States District Court W. D. Oklahoma, Civil Division.

November 20, 1962.

Delmer L. Stagner, Stagner, Alpern & Powers, Sam W. Moore, Oklahoma City, Okl., for plaintiff.

John H. Cantrell, Cantrell, Douglass, Thompson & Wilson, Oklahoma City, Okl., John F. Lord, Gen. Counsel, Leslie H. Fisher, Asst. Gen. Counsel, Washington, D. C., for Fed. Deposit Insurance Corp.

RIZLEY, District Judge.

The plaintiff brings this action against the defendant corporation to recover damages for alleged slanderous statements made by Royal Coburn, General Counsel for Federal Deposit Insurance Corporation. The statements were made in open court during litigation before the District Court of Oklahoma County, Oklahoma.

The plaintiff asserts that jurisdiction of the matter exists by virtue of Title 12 U.S.C.A. § 1819, which provides the Federal Deposit Insurance Corporation with the authority to sue and be sued.

The defendant corporation has filed a motion to dismiss, challenging the jurisdiction of this Court under Section 1819. It is the position of the defendant that the passage of the Federal Tort Claims Act precludes bringing an action in tort for money damages directly against a "sue and be sued" federally created corporation.

The motion to dismiss presents two important questions. First, is the Federal Deposit Insurance Corporation a "federal agency" as defined by the Federal Tort Claims Act. Secondly, if the Federal Deposit Insurance Corporation is a federal agency, can a tort action for money damages be maintained directly against the corporation when recovery is excluded by Section 2680 of the Federal Tort Claims Act.

A federal agency is defined by Section 2671 of the Federal Tort Claims Act as follows:

"`Federal agency' includes the executive departments and independent establishments of the United States, and corporations primarily acting as, instrumentalities or agencies of the United States but does not include any contractor with the United States."

It seems beyond argument that the statute 12 U.S.C.A. § 1811 et seq. creating the Federal Deposit Insurance Corporation, plainly establishes the corporation as a federal agency. The statute provides in part: that the President will appoint two of the three members of the Board of Directors; certain investments of the corporation must first have the approval of the Secretary of the Treasury; and the corporation is required to report annually to Congress as to its financial condition.

In Pearl v. United States, C.C.A. 10, 230 F.2d 243, the Court considered the question of whether or not the Civil Air Patrol was a federal agency. The Court was of the opinion that the Civil Air Patrol was not a federal agency; however, when citing certain examples of federal agencies the Court stated:

"Nor is it a `mixed-ownership government corporation' whose financial transactions are required to be audited annually by the General Accounting Office, a typical example of which is the Federal Deposit Insurance Corporation."

In making the above reference, the Court was satisfied that a corporation such as the Federal Deposit Insurance Corporation should be classified as a federal agency.

In light of the ever increasing governmental interest in the financial transactions of this country, the purpose in creating the corporation has remained timely. The Congressional purpose in passing the statute creating the corporation was to promote the soundness of banking and to aid the government in the discharge of its fiscal transactions. See Doherty v. United States, 8 Cir., 94 F.2d 495.

The control of Congress and the President over the corporation, and the purpose of the corporation, lead me to the conclusion that the Federal Deposit Insurance Corporation is a federal agency as defined and referred to in the Federal Tort Claims Act.

Having decided that the corporation is a federal agency, it is necessary to dispose of the question of whether a tort action for money damages can be maintained directly against the corporation when recovery for the specific tort is excluded by Section 2680 of the Federal Tort Claims Act.

Prior to the passage of the Federal Tort Claims Act it had been decided that a "sue and be sued" federally created agency could be sued for their torts. See Keifer & Keifer v. Reconstruction Finance Corporation, 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784. Since federally created corporations were entering into commercial and business transactions with the public, it was the feeling of most courts that these agencies should be responsible for their acts to the same extent as a private corporation.

In 1946 the enactment of the Federal Tort Claims Act withdrew the right to proceed against federal agencies on tort claims cognizable under the Act. Sections 1346(b), 2671, 2679 and 2680 of the Act limited the actions which could be brought against federal agencies to those of a contractual nature. In Wickman v. Inland Waterways Corporation, D.C., 78 F.Supp. 284, the Inland Waterways Corporation, a federal agency, was being sued by a private individual for personal injury sustained due to the negligence of the defendant corporation. The plaintiff was asserting jurisdiction on the basis of the "sue and be sued" cla...