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Slattery v. United States

United States Court of Appeals for the Federal Circuit

January 28, 2011, Decided

2007-5063, 2007-5064, 2007-5089

Opinion

 [*1299]  Newman, Circuit Judge.

This suit is brought on behalf of shareholders of the Meritor Savings Bank, formerly the Philadelphia Savings Fund Society. The cause originated in 1982, when the Western Savings Fund Society, a Pennsylvania bank, was failing, and the Federal Deposit Insurance Corporation (FDIC) sought a solvent bank to merge  [*1300]  with Western, to provide new capital and to assume Western's liabilities; the merger would thereby avoid failure of Western and the accompanying draw on the FDIC insurance fund. The Philadelphia Savings Fund Society and the FDIC agreed to the merger, upon mutual undertakings and specifically including certain accounting procedures necessary to enable the merged bank to comply with statutory and regulatory capital  [**3] requirements. The merger terms were embodied in several contracts, including a Merger Assistance Agreement and a Memorandum of Understanding. The events that culminated in the seizure and sale of Meritor in 1992 are set forth in the prior opinions of this court and the Court of Federal Claims.

The Court of Federal Claims found that the government had breached its contracts with the acquiring bank, and assessed damages. Slattery v. United States, 53 Fed. Cl. 258 (2002) (liability); Slattery v. United States, 69 Fed. Cl. 573 (2006) (damages); Slattery v. United States, 73 Fed. Cl. 527, modified, 2006 WL 3930812 (Dec. 18, 2006) (final order) (Slattery I). The appeal and cross-appeal were heard by a panel of the Federal Circuit, with decision reported at Slattery v. United States, 583 F.3d 800 (Fed. Cir. 2009) (Slattery II). The United States requested rehearing en banc, challenging the jurisdiction of the Court of Federal Claims and the Federal Circuit. We granted the petition in order to review the question of jurisdiction.

The government denies jurisdiction on several grounds. The principal ground for which rehearing was requested is that the Court of Federal Claims does not have jurisdiction  [**4] of breach of contract claims when the federal entity that incurred the breach does not receive appropriated funds. Thus the government argues that this claim is not within the court's Tucker Act jurisdiction because the Federal Deposit Insurance Corporation is currently supported by fees from member banks, not by congressional appropriations, and there is no specific appropriation with respect to payment of this judgment. The government states that this court's precedent, including the precedent of our predecessor the Court of Claims, 1 establishes this exception to Tucker Act jurisdiction.

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635 F.3d 1298 *; 2011 U.S. App. LEXIS 1759 **

FRANK P. SLATTERY, JR., (ON BEHALF OF HIMSELF AND ON BEHALF OF ALL OTHER SIMILARLY SITUATED SHAREHOLDERS OF MERITOR SAVINGS BANK), Plaintiff-Cross Appellant, AND STEVEN ROTH, AND INTERSTATE PROPERTIES, Plaintiffs-Cross Appellants, v. UNITED STATES, Defendant-Appellant.

Subsequent History: Motion denied by Slattery v. United States, 2011 U.S. Claims LEXIS 2198 (Fed. Cl., Nov. 18, 2011)

Prior History:  [**1] Appeal from the United States Court of Federal Claims in Case No. 93-CV-280, Senior Judge Loren A. Smith.

Slattery v. United States, 53 Fed. Cl. 258, 2002 U.S. Claims LEXIS 205 (2002)Slattery v. United States, 583 F.3d 800, 2009 U.S. App. LEXIS 21402 (Fed. Cir., 2009)

Disposition: JUDGMENT REINSTATED; CASE REMANDED.

CORE TERMS

Tucker Act, nonappropriated, funds, court of claims, appropriation, exchanges, Treasury, appropriate fund, entity, obligations, contracts, instrumentality, judgments, cases, borrow, military, district court, savings, courts, government entity, sovereign immunity, deposit insurance, banks, Army, legislative history, breach of contract, Housing, argues, enabling statute, immunity

Civil Procedure, Subject Matter Jurisdiction, Jurisdiction Over Actions, General Overview, Governments, Federal Government, Claims By & Against, Courts, Courts of Claims, Legislation, Interpretation, Banking Law, Regulators, US Federal Deposit Insurance Corporation, Enforcement Powers, Concurrent Jurisdiction, Supervisory Powers