Lepelletier v. F.D.I.C.
| Decision Date | 05 January 1999 |
| Docket Number | No. 97-5287,97-5287 |
| Parties | Robert LEPELLETIER, Jr., Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, et al., Appellees. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from the United States District Court for the District of Columbia (No. 96cv01363).
Robert Lepelletier, Jr., appearing pro se, argued the cause and filed the briefs for appellant.
Allison M. Zieve, appointed by the court, argued the cause as amicus curiae on behalf of appellant. With her on the briefs was Alan B. Morrison, appointed by the court.
Jaclyn C. Taner, Counsel, Federal Deposit Insurance Corporation, argued the cause for appellees. With her on the brief were Ann S. DuRoss, Assistant General Counsel, and Lawrence H. Richmond, Acting Senior Counsel. Michelle Kosse and Robert D. McGillicuddy, Counsel, entered appearances.
Before: EDWARDS, Chief Judge, WILLIAMS and GINSBURG, Circuit Judges.
Opinion for the Court filed by Chief Judge HARRY T. EDWARDS.
Robert Lepelletier, Jr., an independent money finder, seeks the release of the names of depositors with unclaimed funds at three banks for which the Federal Deposit Insurance Corporation ("FDIC") is now the receiver. In the seven years since the FDIC began its receiverships, agency officials have sent only one notice to the last known addresses of the banks' depositors. Approximately $3.5 million is at stake; if the money in question remains unclaimed, it will be forfeited to the FDIC.
In December 1995, pursuant to a Freedom of Information Act ("FOIA") request filed by Lepelletier, the FDIC released a list of the amounts of all unclaimed deposits, as well as the governmental entities and deceased individuals associated with unclaimed deposits. The FDIC refused, however, to release the names of corporations and living individuals whose deposits remained unclaimed. Lepelletier then filed suit in District Court and advanced three principal causes of action: (1) he asserted that, under FOIA, the FDIC was required to release all of the names of parties with unclaimed deposits; (2) he contended that, under the due process clause of the Fifth Amendment, the FDIC was required to publish the names of all parties with unclaimed funds, along with the precise amounts due to each party, before forfeiting the funds; and, finally, (3) he claimed that the FDIC breached an agreement with him, pursuant to which he was to find former bank funds and advise the agency how it could recover those funds, and then "falsely" induced him to enter settlement negotiations.
The District Court dismissed Lepelletier's contract-related claims, and granted summary judgment in favor of the FDIC on his due process and FOIA claims. We affirm the District Court's dismissal of Lepelletier's contract-related claims, but reverse in part its grant of summary judgment in favor of the FDIC on the other two claims. We reject Lepelletier's claim that he is entitled to a list of the precise amounts due to each named depositor. However, we find that he has stated a viable claim that the FDIC may be legally obliged to disclose the names of certain depositors. The general issue to be resolved, under both FOIA and the due process clause, is whether public disclosure can be justified by reason of a depositor's pecuniary interest in recovering the funds, as against that person's countervailing interest in privacy.
We find that Lepelletier has standing to assert a due process claim on behalf of the depositors with unclaimed funds. In addition, because the District Court failed to develop evidence relevant to the adequacy of the depositors' notice and failed to weigh that evidence as required by established case law, we must remand the case for a determination of whether the FDIC's notice to the depositors was consistent with due process. We also remand Lepelletier's FOIA claim, because the depositors' interest in discovering the amounts that they are owed may outweigh their privacy interest, thus requiring the release of their names under FOIA.
On August 10, 1991, the Office of the Comptroller of the Currency closed the National Bank of Washington. On May 10, 1991, that office had also closed the Madison National Bank of Washington, D.C. and the Madison National Bank of Virginia. After closing, the three banks were placed under FDIC receivership. See 12 U.S.C. § 1821(c)(2)(A)(ii) (1994). As receiver, the FDIC assumed control of all bank records, see id. § 1821(d)(2)(A)(ii), and was also required to pay off all insured deposits from the three banks, either by paying cash to requesting depositors, or by depositing funds that would be available to each depositor at other local banks. See id. § 1821(f).
At the time of the receiverships in this case, the FDIC was only required to send one notice to depositors at their last known addresses, advising the depositors of their unclaimed funds. See 12 U.S.C. § 1822(e) (Supp. IV 1992) (amended 1993). After sending the notices, the FDIC had to allow at least three months for depositors to make claims; however, all claims had to be made within eighteen months of the appointment of the receiver. See id. Any deposits not claimed within eighteen months were to be "refunded" to the FDIC. See id.
In 1993, Congress revised the notification procedures of § 1822(e). See Unclaimed Deposits at Insured Banks and Savings Associations, Pub.L. No. 103-44, 107 Stat. 220 (1993) ("Act"). For receiverships established after the 1993 law went into effect, the FDIC is required to mail two notices to the "last known address of the depositor appearing on the records" of the bank: the first must be sent within thirty days of the FDIC's first payment to depositors in its role as receiver; the second must be mailed fifteen months later to all depositors who did not respond to the first notice. See id. §§ 1 (codified at 12 U.S.C. § 1822(e)(1) (1994)), 2(a). For those receiverships that began after January 1, 1989 and were still in progress at the time of the enactment of the new law, however, the notification procedures remained the same as they were prior to the passage of the Act.
Although the notification procedures did not change, the new law did change some aspects of existing receiverships. First, the time limit for depositors to claim their money was extended to the date when the FDIC terminates the receivership. See id. § 2(b). Second, states could, within 120 days after the passage of the Act, request the name and address of any depositor eligible to make a claim. See id. § 2(c). However, there is no requirement that the FDIC notify the depositors of these changes in the law, and it did not do so here. See Lepelletier v. FDIC, 977 F.Supp. 456, 464 (D.D.C.1997). Indeed, with respect to the depositors at issue in this case, the FDIC has sent only one notice to the depositors at their last known addresses as required by the previous version of § 1822(e). Thus, even though approximately $3.5 million remains unclaimed, no additional notices have been sent in the seven years since the FDIC began its receivership.
On December 22, 1996, the FDIC announced its intention to terminate the receivership of the Madison National Bank of Virginia. It also "expressed a desire to terminate the receivership of the [National Bank of Washington] and Madison National Bank of Washington, D.C." Lepelletier, 977 F.Supp. at 459. After Lepelletier sought an injunction to prevent the FDIC from terminating the receiverships, the FDIC agreed not to take any action until this lawsuit is resolved. See id.
In August 1994, Lepelletier entered into an agreement with the FDIC, in its role as receiver for the three failed banks. See Agreement, reprinted in Joint Appendix ("J.A.") 15. Under that agreement, Lepelletier was to find former bank funds and advise the FDIC as to how it could recover those funds. In return, the FDIC agreed to pay Lepelletier ten percent of any funds recovered. The FDIC terminated the agreement in February 1995. See Letter from James R. Foster, FDIC, to Robert Lepelletier, Jr. (Mar. 1, 1995), reprinted in J.A. 18.
In October 1995, Lepelletier filed FOIA requests for the names of those depositors with unclaimed deposits at the three banks. In December 1995, the FDIC released a list of the amounts of all unclaimed deposits, as well as the names of governmental entities and deceased individuals associated with unclaimed deposits. The lists given to Lepelletier indicate that approximately $3.5 million remains unclaimed. See Brief of the Appellant at 8. Although the FDIC released the amounts of the unclaimed deposits, it refused to release the names of corporations and living individuals associated with those deposits, citing Exemption 4, 5 U.S.C. § 552(b)(4), and Exemption 6, 5 U.S.C. § 552(b)(6), of FOIA.
When the FDIC refused to release the complete list of depositors' names, Lepelletier filed suit against the FDIC and three of its officials. He alleged that, under FOIA, the FDIC was required to release all of the names of parties with unclaimed deposits. He also argued that, because the District of Columbia had published some names with unclaimed deposits in the Washington Times in August 1994 at the FDIC's request, the information was no longer protected. In addition, he claimed that under the due process clause of the Fifth Amendment, the FDIC was required to publish the names of all parties with unclaimed deposits before forfeiting the funds, rather than simply send notices to the last known addresses pursuant to the pre-amendment version of § 1822(e). Finally, Lepelletier asserted that the FDIC had breached its 1994 agreement with him and then "falsely" induced him to enter into settlement negotiations.
The FDIC officials moved to dismiss the FOIA claim as to them, because individuals are not proper defendants to a FOIA...
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