Resolution Trust Corp. v. Walde, s. 92-5495

• Decision Date: 22 March 1994
• Docket Number: 93-5010 and 93-5011,Nos. 92-5495,s. 92-5495
• Citation: 18 F.3d 943
• Parties: , 62 USLW 2598 RESOLUTION TRUST CORPORATION, Appellee, v. William L. WALDE, Appellant. RESOLUTION TRUST CORPORATION, Appellee, v. Solomon F. SCHICK, John C. Adams, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 943

18 F.3d 943

305 U.S.App.D.C. 183, 62 USLW 2598

RESOLUTION TRUST CORPORATION, Appellee, v. William L. WALDE, Appellant.

RESOLUTION TRUST CORPORATION, Appellee, v. Solomon F. SCHICK, John C. Adams, et al., Appellants.

Nos. 92-5495, 93-5010 and 93-5011.

United States Court of Appeals District of Columbia Circuit.

Argued Sept. 14, 1993.

Decided March 22, 1994.

Thomas M. Buchanan, argued the cause and filed the briefs for appellant Walde in No. 92-5495.

Gregory A. Presnell, argued the cause for appellants John C. Adams, et al., in No. 93-5011. John M. Robertson, argued the cause for appellant Solomon F. Schick in No. 93-5010. With them on the joint briefs were, Gregory J. Kelly, Keith R. Mitnik, and David R. Kuney.

David M. Fitzgerald, argued both causes for appellee Resolution Trust Corp. With him on the briefs were John H. Korns, Paul M. Laurenza, and James E. Topinka.

Before BUCKLEY, GINSBURG, and HENDERSON, Circuit Judges.

Opinion for the court filed by Circuit Judge BUCKLEY.

BUCKLEY, Circuit Judge:

Former directors and officers of failed savings and loan institutions challenge district court decisions enforcing subpoenas duces tecum issued by the Resolution Trust Corporation ("RTC"). They object to those parts of the subpoenas that seek personal financial information. Appellant Solomon F. Schick also contends that his subpoena is now moot because the RTC has instigated civil proceedings against him. We affirm the district court rulings ordering enforcement of the subpoenas in all respects but one: We hold that the RTC does not have the authority to subpoena information for the sole purpose of determining the subpoenaed person's net worth. We also hold that the intervening filing of civil charges does not render the subpoena moot with respect to Mr. Schick.

I. BACKGROUND

In the 1980s, the savings and loan industry was threatened by a deluge of insolvencies. As a consequence, the federal government was confronted with tens of billions of dollars in claims from depositors whose savings had been insured by the Federal Deposit Insurance Corporation ("FDIC"). To instill some semblance of order and limit the calls on the federal treasury, Congress created the RTC as part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub.L. No. 101-73, 103 Stat. 183 (codified as amended at 12 U.S.C. Secs. 1441a, 1811 et seq. (West Supp.1993)) ("FIRREA").

Under this statute, the Director of the Office of Thrift Supervision ("OTS") may appoint the RTC as conservator of failed savings and loan institutions ("S & Ls"). 12 U.S.C. Sec. 1821(c)(6)(A) (Supp. III 1991). The RTC is granted the same powers that Congress granted the FDIC under 12 U.S.C.A. Secs. 1821-23. 12 U.S.C. Sec. 1441a(b)(4)(A) (West Supp.1993). As conservator of a failed S & L, the RTC succeeds to all of its "rights, titles, powers, and privileges." 12 U.S.C. Sec. 1821(d)(2)(A) (Supp. III 1991).

In discharging its stewardship, the RTC is to "preserve and conserve the assets and property of such institution[s]." Id. Sec. 1821(d)(2)(B)(iv). To these ends, it is empowered to avoid fraudulent asset transfers, 12 U.S.C.A. Sec. 1821(d)(17) (West Supp.1993), assert claims against an S & L's directors and officers, 12 U.S.C. Sec. 1821(k) (Supp. III 1991), seek a court order attaching assets, 12 U.S.C.A. Sec. 1821(d)(18) (West Supp.1993), and issue administrative subpoenas duces tecum, 12 U.S.C. Sec. 1821(d)(2)(I) (Supp. III 1991) (authorizing RTC to employ powers listed in 12 U.S.C. Sec. 1818(n)).

In 1974, William Walde founded Trustbank Savings, F.S.B., and subsequently served it as President, Chief Executive Officer, Chairman of the Board, and director. Mr. Walde's career with the company ended on January 25, 1991, when the OTS declared Trustbank insolvent and appointed the RTC as its conservator. The RTC launched an investigation, still ongoing, into whether Mr. Walde and other former Trustbank officials might be liable to the RTC as a result of their operation of the company. The agency's "Amended Order of Investigation" states that its purpose is to determine whether

(1) former officers, directors and others who provided services to, or otherwise dealt with, Trustbank ... may be liable as a result of any actions, or failures to act, in connection with or which may have affected Trustbank ...; (2) the RTC should seek to avoid a transfer of any interests or an incurrence of any obligations; (3) the RTC should seek an attachment of assets; and (4) pursuit of such litigation would be cost-effective, considering the extent of the potential defendant's ability to pay a judgment in any such litigation.

Amended Order of Investigation, September 11, 1992, Joint Appendix ("J.A.") at 17-A.

On November 30, 1992, the RTC served a subpoena duces tecum on Mr. Walde calling for the production of "[a]ny and all documents in your possession, custody or control for the years 1975 through the present that reflect, refer or relate to the operations or management of Trustbank...." J.A. at 64A-65A. The subpoena also sought extensive personal financial information, namely:

3. Any and all documents in your possession, custody or control that reflect, refer or relate to any real and/or personal property interests having a value of $5,000, or more, per person or organization per year, in which you, or anyone acting on your behalf, or under your control or influence, have had any interest at anytime during the past five years, including, but not limited to, documents reflecting, referring or relating to the following:

a. personal financial statements;

b. state and federal tax returns;

c. bank records, including joint accounts held by or with your spouse or children (both foreign and domestic, including bank statements, cash verification statements and cancelled checks);

d. partnership interests;

e. interests in any insurance policy;

f. trust accounts or other trust assets (including cash deposits, stocks and mutual funds and real property);

g. broker/dealer, financial advisor, or financial planner statements (including those related to stocks, bonds, mutual funds, pension plans or any other fund or security);

h. stocks, bonds options, or any other negotiable or non-negotiable instrument or security;

i. businesses, corporations, joint ventures, partnerships, Walde Enterprises, Walde Management, or any other entity in which you or anyone acting on your behalf owns or controls an interest (including bank records and cancelled checks of such entities);

j. inheritances, whether vested or contingent;

k. notes or other commercial paper;

l. IRA's, Keogh's, pension or profit sharing plans, annuities;

m. accounts receivable;

n. alimony, maintenance, support or property settlements;

o. real property in which you, or anyone acting on your behalf or under your control or influence, own an interest;

p. options or rights to purchase any interest in real property;

q. personal property in which you, or anyone acting on your behalf or under your control or influence, own any interest;

r. income from any other sources;

s. contingent interests in real or personal property;

t. employee, contractor or independent contractor relationships or involvement in any business enterprise;

u. any financial accounts and instruments held in your name or in your benefit, sold, closed or otherwise transferred in the past five years, both foreign and domestic (including: checking, savings, CD's or other instruments);

v. shares and share accounts held in banks, credit unions, pension funds, corporations, associations, brokerage houses and other financial institutions, including both domestic and foreign;

4. Any and all documents in your possession, custody or control that reflect, refer or relate to any financial, real or personal property transactions or transfers in which you, or anyone acting on your behalf, or under your control or influence, have been involved during the past five years, except as the attorney, employee or agent of another party on transactions in which you had no personal interest, having a value of $5,000 or more, per person or organization per year, including, but not limited to, documents reflecting, referring or relating to the following:

a. all real and personal property purchases, sales or transfers;

b. all trust participations;

c. mortgages, trusts or other liens on security interests obtained or supplied to any third party;

d. lawsuits; and

e. deposits and withdrawals in financial institutions, both foreign and domestic.

5. With respect to any trusts having assets with a value of $5,000 or more, for which you, your spouse, your children or other relatives are beneficiaries or otherwise may receive distributions, any and all documents in your possession, custody or control that reflect, refer, or relate to:

a. any contributions to that trust within the past five years of assets having a value of $5,000 or more;

b. the beneficiaries and trustees of the trust;

c. the right to direct the distributions of that trust;

d. the assets of the trust; and

e. the identity or location of any assets of the trust having a value of $5,000 or more.

J.A. at 66A-70A. On the same day, the RTC filed a petition in district court to enforce this subpoena; and on December 9, 1992, the court ordered Mr. Walde to comply with it within sixty days. RTC v. Walde, Misc. No. 92-419, 1992 WL 448858 (D.D.C. Dec. 9, 1992). On February 5, 1993, we granted Mr. Walde's motion to stay the district court's order pending appeal.

The consolidated companion cases, RTC v. Schick & Adams, raise essentially the same issues. On May 25, 1990, the RTC was appointed conservator of American Pioneer Savings Bank, a Florida Chartered Stock Savings and Loan Association on whose board of directors the seven Adams appellants and Mr. Schick (collectively, "American Pioneer appellants") had served. The RTC issued an Order of Investigation on October 2, 1991, "to determine whether the former directors...