O'Melveny & Myers v. FDIC - 512 U.S. 79 (1994)


OCTOBER TERM, 1993

Syllabus

O'MELVENY & MYERS v. FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR AMERICAN DIVERSIFIED SAVINGS BANK, ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

No. 93-489. Argued March 21, 1994-Decided June 13, 1994

Respondent Federal Deposit Insurance Corporation (FDIC), receiver for an insolvent California savings and loan (S&L), caused the S&L to make refunds to investors in certain fraudulent real estate syndications in which the S&L had been represented by petitioner law firm. The FDIC filed suit against petitioner in the Federal District Court and alleged state causes of action for professional negligence and breach of fiduciary duty. Petitioner moved for summary judgment, alleging, inter alia, that knowledge of the fraudulent conduct of the S&Us officers must be imputed to the S&L, and hence to the FDIC, which, as receiver, stood in the S&Us shoes; and thus the FDIC was estopped from pursuing its tort claims. The court granted the motion, but the Court of Appeals reversed, indicating that a federal common-law rule of decision controlled.

Held: The California rule of decision, rather than a federal rule, governs petitioner's tort liability. Pp. 83-89.

(a) State law governs the imputation of corporate officers' knowledge to a corporation that is asserting causes of action created by state law. There is no federal general common law, Erie R. Co. v. Tompkins, 304 U. S. 64, 78, and the remote possibility that corporations may go into federal receivership is no conceivable basis for adopting a special federal common-law rule divesting States of authority over the entire law of imputation. Pp. 83-85.

(b) California law also governs the narrower question whether corporate officers' knowledge can be imputed to the FDIC suing as receiver. This Court will not adopt a judge-made federal rule to supplement comprehensive and detailed federal statutory regulation; matters left unaddressed in such a scheme are presumably left to state law. Title 12 U. S. C. § 1821(d)(2)(A)(i)-which states that "the [FDIC] shall, ... by operation of law, succeed to-all rights, titles, powers, and privileges of the insured depository institution"-places the FDIC in the insolvent S&L's shoes to pursue its claims under state law, except where some provision in the extensive framework of the Financial Institutions Re-


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form, Recovery, and Enforcement Act of 1989 (FIRREA) specifically creates a special federal rule of decision. Pp. 85-87.

(c) Judicial creation of a special federal rule would not be justified even if FIR REA is inapplicable to the instant receivership, which began in 1986. Instances where a special federal rule is warranted are few and restricted, limited to situations where there is a significant conflict between some federal policy or interest and the use of state law. The FDIC has identified no significant conflict here, not even one implicating the most lightly invoked federal interest: uniformity. Pp. 87-89.

969 F.2d 744, reversed and remanded.

SCALIA, J., delivered the opinion for a unanimous Court. STEVENS, J., filed a concurring opinion, in which BLACKMUN, O'CONNOR, and SOUTER, JJ., joined, post, p. 90.

Rex E. Lee argued the cause for petitioner. With him on the briefs were Robert D. McLean, Carter G. Phillips, Joseph R. Guerra, Peter D. Keisler, Richard D. Bernstein, Gregory R. Smith, Joseph M. Lipner, and Elliot Brown.

Deputy Solicitor General Bender argued the cause for respondents. With him on the brief were Solicitor General Days, James A. Feldman, Ann S. DuRoss, Richard

JUSTICE SCALIA delivered the opinion of the Court.

The issue in this case is whether, in a suit by the Federal Deposit Insurance Corporation (FDIC) as receiver of a feder-

*Briefs of amici curiae urging reversal were filed for Arthur Andersen & Co. et al. by Carl D. Liggio, Kathryn A. Oberly, Jon N Ekdahl, Harris J. Amhowitz, Howard J. Krongard, Edwin D. Scott, and Eldon Olson; for Banking and Business Lawyers by Keith R. Fisher, John C. Deal, David S. Willenzik, Neal L. Petersen, Henry H. Fox, and Michael

C. Edward Simpson, Theodore H. Focht, and Michael E. Don filed a brief for the Securities Investor Protection Corporation et al. as amici curiae urging affirmance.

Briefs of amici curiae were filed for the American Bar Association by R. William Ide III, John J. Curtin, Jr., and Arthur W Leibold, Jr.; and for Shrader & York et al. by Eugene B. Wilshire, Jr., and Patrick J. Dyer.


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Full Text of Opinion

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