Golden Pacific Bancorp v. U.S., 92-5141

Citation15 F.3d 1066
Decision Date08 February 1994
Docket NumberNo. 92-5141,92-5141
PartiesGOLDEN PACIFIC BANCORP and Miles P. Jennings, Jr., Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Jonathan Macey, of Ithaca, New York, argued for plaintiffs-appellants. With him on the brief was Leonard A. Leo.

Joan M. Bernott, Department of Justice, of Washington, D.C., argued for defendant-appellee. Stuart M. Gerson, Assistant Attorney General, David M. Cohen, Director and Allen D. Bruns, Assistant Director, Commercial Litigation Branch, Department of Justice, of Washington, D.C., were on the brief for defendant-appellee. Also on the brief was David C. Douglas, Senior Trial Attorney, Litigation Division, Office of the Chief Counsel, Comptroller of the Currency, of counsel.

Before LOURIE, CLEVENGER, and SCHALL, Circuit Judges.

SCHALL, Circuit Judge.

Appellants, Golden Pacific Bancorp (Golden Pacific) and Miles P. Jennings, Jr., appeal from an order of the United States Claims Court, No. 91-1242C (April 28, 1992), dismissing their complaint seeking compensation for a taking under the Fifth Amendment of the United States Constitution. Golden Pac. Bancorp v. United States, 25 Cl.Ct. 768 (1992). 1

Golden Pacific is a bank holding company and owns approximately 90 percent of the stock of Golden Pacific National Bank (Bank). Jennings owns 6,400 shares of the stock of Golden Pacific. Golden Pacific and Jennings filed an action in the Claims Court alleging that the actions of the Comptroller of the Currency (Comptroller) in declaring the Bank insolvent and appointing the Federal Deposit Insurance Corporation (FDIC) as receiver constituted a taking for which they were entitled to compensation under the Fifth Amendment. The Claims Court granted the government's motion for summary judgment after concluding that the actions of the Comptroller did not constitute a compensable taking. Id. at 771. 2 For the reasons set forth below, we affirm the judgment of the Claims Court.

BACKGROUND

The pertinent facts are not in dispute. The Bank was a national bank, with its principal place of business in New York City. Id. at 769. The Bank was chartered pursuant Acting on an informant's tip, the Comptroller undertook a surprise investigation of the Bank on June 17, 1985. Id. The Comptroller's actions were taken as a result of the Bank's practice of issuing "yellow" certificates of deposit (Yellow CDs). Id. The Bank purportedly regarded Yellow CDs as non-book "investments" made by it on behalf of the CD holders. Id. Based upon his investigation, however, the Comptroller determined that the Yellow CDs were, in fact, deposits. Id. As deposits, the Yellow CDs were liabilities of the Bank, and the Bank was required to maintain offsetting assets, or it would be technically insolvent. Id. 4 Since the Comptroller was not satisfied that the Bank possessed such assets, he began preparing a cease and desist order to halt the practice of issuing Yellow CDs. Id. Before the cease and desist order could be issued, however, rumors of the Comptroller's investigation precipitated a run on the Bank. Id. Faced with what he regarded as inadequate assets and a run on the Bank, the Comptroller declared the Bank insolvent pursuant to 12 U.S.C. Sec. 191 5 and placed it in FDIC receivership pursuant to 12 U.S.C. Sec. 1821(c) 6. Id.

to 12 U.S.C. Sec. 27 (1988) 3 and subject to the regulatory authority of the Comptroller pursuant to 12 U.S.C. Sec. 1 (1988). Id.

After the Bank was closed, Golden Pacific brought an action in the United States District Court for the District of Columbia. In its district court complaint, Golden Pacific sought (i) review of the Comptroller's actions under the Administrative Procedure Act (APA), 5 U.S.C. Sec. 706(2)(A) (1988), alleging that the Comptroller's actions were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;" (ii) damages from the government under the Federal Tort Claims Act (FTCA), 28 U.S.C. Secs. 1346(b), 2680(a) (1988), for the Comptroller's actions; and (iii) damages and injunctive relief under the Fifth Amendment. On December 1, 1986, the district court granted summary judgment for the government. Golden Pac. Bancorp v. Clarke, No. 85-2384, slip op. at 1 (D.D.C. Dec. 1, 1986). In so doing, the district court addressed Golden Pacific's APA and FTCA claims. After considering the administrative record, the district court concluded that, in declaring the Bank insolvent and placing it in receivership, the Comptroller had acted within the scope of his statutory authority and that his actions were not arbitrary, capricious, or undertaken in bad faith. Id. at 6. 7

The district court did not address Golden Pacific's claim under the Fifth Amendment for monetary and injunctive relief. Golden Pacific had acknowledged at an earlier stage of the proceedings that any monetary claim it was asserting against the government sounded in tort. Thus, when the district court granted the government's motion for summary judgment, Golden Pacific was no longer asserting any monetary claims under the Fifth Amendment. 8 As far as Golden Pacific's On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court judgment. Golden Pac. Bancorp v. Clarke, 837 F.2d 509, 513 (D.C.Cir.), cert. denied, 488 U.S. 890, 109 S.Ct. 223, 102 L.Ed.2d 213 (1988). The court of appeals determined that Golden Pacific's action was "nothing more than a claim for damages under the FTCA." Id. at 510. 9 The court concluded, however, that a FTCA cause of action was not available to Golden Pacific because the Comptroller's actions fell within the discretionary function exception to the FTCA. Id. at 511-512. 10 The court declined to reach Golden Pacific's claim under the Fifth Amendment because it was argued on appeal only in a reply brief. Id. at 513.

claim for injunctive relief under the Fifth Amendment was concerned, it appears that the district court either overlooked the claim or viewed its decision with respect to the APA and FTCA claims as being dispositive of any request for injunctive relief.

On June 21, 1991, appellants filed an action in the Claims Court, alleging that the Comptroller's actions constituted a compensable taking under the Fifth Amendment, a breach of an implied contract between the Comptroller and the Bank and its shareholders, and a mistake of fact. 11 In response, the government moved to dismiss for lack of subject matter jurisdiction, or in the alternative, for summary judgment, asserting that res judicata barred the taking claim under the Fifth Amendment and that the Comptroller's actions did not constitute a compensable taking under the Fifth Amendment.

The Claims Court held that the actions of the Comptroller in declaring the Bank insolvent and placing the Bank in FDIC receivership did not constitute a compensable taking under the Fifth Amendment. Golden Pac. Bancorp, 25 Cl.Ct. at 771. The Claims Court determined that appellants "lacked 'one of the most essential sticks in the bundle of rights that are commonly characterized as property--the right to exclude others.' " Id. at 770 (quoting Kaiser Aetna v. United States, 444 U.S. 164, 174, 179-80, 100 S.Ct. 383, 390, 392-93, 62 L.Ed.2d 332 (1979)). Without the right to exclude others, the court stated, appellants did "not have the 'historically rooted expectation of compensation' necessary to establish a fifth amendment taking." Id. at 770-771 (quoting California Hous. Sec., Inc. v. United States, 959 F.2d 955, 958 (Fed.Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 324, 121 L.Ed.2d 244 (1992)). The court also stated that appellants' "reasonable investment-backed expectations could not possibly have been interfered with given the highly regulated nature of the banking industry." Id. at 771. Since it found the Fifth Amendment issue to be dispositive, the Claims Court did not address the government's contention regarding res judicata. Id. at 771 n. 3. This appeal followed.

DISCUSSION
A. Standard of Review

"Summary judgment is properly granted only where there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed.Cir.1987) (citations omitted). In reviewing a grant of summary judgment by a trial court, we determine whether the standards for summary judgment have been met and are not bound by the trial court's ruling that there was no material factual dispute present in the case. Id. at 1390. In this case, there is no genuine issue of material fact, and the Claims Court did not err in concluding that the government was entitled to judgment as a matter of law.

B. Analysis

As a preliminary matter, the government argues that Golden Pacific's taking claim is barred by the doctrine of res judicata, in the sense of claim preclusion, based upon the district court judgment and the affirmance of that judgment on appeal. Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based upon the same claim or cause of action. 1B James W. Moore et al., Moore's Federal Practice p 0.401 (2d ed. 1993).

The doctrine of res judicata does not apply because Golden Pacific's taking claim before the Claims Court was not the same as Golden Pacific's APA and FTCA claims before the district court. The taking claim was never litigated in the district court action. As noted above, the district court regarded Golden Pacific's action as, for all intents and purposes, a tort action requesting tort relief, see supra note 8, as did the D.C. Circuit. 12 The district court also did not discuss Golden Pacific's claim for injunctive relief under the Fifth Amendment in its decision granting summary judgment for the...

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