Justia Banking Opinion Summaries

Plaintiff appealed from the dismissal of its complaint for lack of subject matter jurisdiction and from the district court's order denying its motion for reconsideration. Plaintiff asserted, inter alia, claims against defendants under the First and Fourth Amendments and under the Right to Financial Privacy Act, 12 U.S.C. 3401-3422, as well as under state constitutions and various anti-wiretapping, consumer protection, and deceptive trade practices laws. On appeal, plaintiff argued that the district court erred by holding that it lacked standing, by denying jurisdictional discovery, and by denying it leave to amend its complaint. The court held that the district court correctly determined that plaintiff did not have Article III standing to assert its claims. Consequently, the district court did not abuse its discretion in denying plaintiff's request for jurisdictional discovery and for leave to amend its complaint. Accordingly, the court affirmed the judgment and order of the district court.

This case stemmed from the taking of property in downtown Los Angeles to comply with a federal court order to improve the quality of bus services and involved California's "quick-take" eminent domain procedure, Code of Civil Procedure 1255.010, 1244.410, where a public entity filing a condemnation action could seek immediate possession of the condemned property upon depositing with the court the probable compensation for the property. At issue was Section 1255.260's proper interpretation. The court of appeals in this case held that, under the statute, if a lender holding a lien on condemned property applied to withdraw a portion of the deposit, and the property owner did not object to the application, the lender's withdrawal of a portion of the deposit constituted a waiver of the property owner's claims and defenses, except a claim for greater compensation. The court found the court of appeal's conclusion was inconsistent with the relevant statutory language and framework. Therefore, the court reversed the judgment of the court of appeals.

The issue before the Supreme Court was whether the appearance of impartiality/conflict of interest in disciplinary proceedings before the Oklahoma Real Estate Appraiser Board (the Board) required invalidation of the proceedings. In December of 2005, Appellee real estate appraiser Beverly Bowen appraised a parcel of real property for her client BancFirst (Bank). By July of 2007, after having sat vacant for 19 months, the property sold at a sheriff's sale which resulted in a loss to the private mortgage insurer (insurer). The insurer filed a grievance against the appraiser with the Board alleging possible appraisal fraud. The insurer hired another local appraiser, JoElla Jones (Jones/review appraiser), to reappraise the property nineteen months after Bowen's initial appraisal. Apparently, the property remained unoccupied the entire time, and it may have been vandalized. Jones reviewed Bowen's work. She valued the property at $197,000.00 or $58,000 below Bowen's appraisal. While the dispute between the bank and the insurer regarding the property's value was ongoing, the bank discovered that Jones had a personal and direct history with Bowen: the appraisers had known one another for more than 26 years. Learning this information prompted the bank to write a letter to the insurer notifying them of the unmistakable conflict of interest and alleging that if a mistake in an appraisal occurred, it was made by the review appraiser. Soon thereafter, the Board brought disciplinary proceedings against Bowen. Notwithstanding the conflict of interest, a probable cause committee (committee) of the Board held a hearing. The Board adopted the committee's findings of fact and conclusions of law but modified the disciplinary recommendation. The trial court held another hearing reversing the Board's discipline, finding that the appearance of impropriety was so apparent on the face of the record that reversible legal error occurred. The Board appealed and the Court of Civil Appeals reversed the trial court. Upon review, the Supreme Court found that under the fact of this case, the disciplinary proceedings required invalidating proceedings because of the appearance of impartiality. The Court affirmed the trial court.

Defendant-Appellant Alan Tukes appealed his federal conviction for bank robbery, arguing that the government’s evidence was insufficient to prove that the bank was insured by the Federal Deposit Insurance Corporation (“FDIC”) at the time of the crime. At trial, a prosecutor asked the bank’s branch manager: “Now, the Compass Bank, is that a bank that is federally insured by the [FDIC]?” She responded: “Yes, it is.” When asked whether the bank “has” any documentation proving its insured status, she replied: “Yes. We have a certificate.” When asked whether the certificate “hangs” in the branch, the manager replied in the affirmative. The district court admitted the certificate, dated November 8, 1993, into evidence. The government offered no additional evidence of the bank’s insured status. At summation, Defendant argued that the government had not proven that the bank was FDIC insured at the time of the robbery. The jury returned a guilty verdict. Viewing the evidence in the light most favorable to the government, the Tenth Circuit concluded "it is clear that a rational juror could have concluded beyond a reasonable doubt that the bank was insured at the time of the robbery." The Court affirmed Defendant's conviction.

Appellant was the target of a grand jury investigation seeking to determine whether he used secret Swiss bank accounts to evade paying federal taxes. The district court granted a motion to compel appellant's compliance with a grand jury subpoena dueces tecum demanding that he produce certain records related to his foreign bank accounts. The court declined to condition its order compelling production upon a grant of limited immunity, and pursuant to the recalcitrant witness statute, 28 U.S.C. 1826, held appellant in contempt for refusing to comply. The court held that because the records sought through the subpoena fell under the Required Records Doctrine, the Fifth Amendment privilege against self-incrimination was inapplicable, and appellant could not invoke it to resist compliance with the subpoena's command. The court also held that because appellant's Fifth Amendment privilege was not implicated, it need not address appellant's request for immunity. Accordingly, the judgment of the district court was affirmed.

Plaintiffs Aviva Life & Annuity Company and American Investors Life Insurance Company (collectively, "Aviva") contended the Federal Deposit Insurance Corporation (FDIC) acted in an arbitrary and capricious manner in rendering insurance determinations concerning certain of Plaintiffs’ bank deposit accounts. They appealed a district court’s order upholding the FDIC’s determinations. In 2008, the Kansas Bank Commissioner closed Columbian Bank & Trust Company and appointed the FDIC as receiver. At that time, Plaintiffs maintained twelve deposit accounts at Columbian. The bulk of those funds were held in two accounts (the “Challenged Accounts”). The remaining accounts bore a variety of titles. Shortly after its appointment as receiver, the FDIC determined that each Plaintiffs’ respective accounts identified as “operating” accounts, which included the Challenged Accounts, would be aggregated as corporate accounts. The FDIC further determined that the accounts designated as “benefits” accounts would be separately insured as annuity contract accounts. Upon review of the FDIC's determination and the applicable legal authority, the Tenth Circuit found that the FDIC ultimately concluded the deposit account records clearly and unambiguously indicated the Challenged Accounts were owned in the manner of “corporate accounts.” Plaintiffs’ extrinsic evidence was not, therefore, “relevant data” for purposes of the FDIC’s final insurance determination: "[t]he absence of any discussion pertaining to this evidence in the FDIC’s final determination is therefore unsurprising, and in no way arbitrary or capricious." The Court affirmed the FDIC's determination.

In connection with an assessment of a taxpayer for unpaid taxes, the IRS began searching for the taxpayer's assets and issued a summons to a bank for a related third party's account information. The taxpayer and third party argued that 26 U.S.C 7609 required the IRS to notify them, which would have enabled them to seek a court order quashing the summons. Applying Ip v. United States, the court held that under the circumstances of the case, no notice was necessary. Therefore, the court affirmed the judgment of the district court.

Plaintiffs Debbie and Max Walters appealed from a district court judgment that dismissed their petition for the issuance of a turnover order. In 1990, the Walters' thirteen-year-old son was killed on a hunting trip with his father when a Chinese-manufactured rifle the boy carried allegedly misfired. The Walters sued China and several entities allegedly controlled by China in the U.S. District Court on theories of products liability, negligence, and breach of warranty in connection with the manufacture of the rifle. The Walters eventually won a $10 million default judgment, and sought to enforce it by collecting China's assets in the possession of the respondent banks, Industrial and Commercial Bank of China, Ltd., Bank of China, Ltd. and China Construction Bank Corporation. Citing the Foreign Sovereign Immunities Act of 1976 (FSIA), the district court dismissed the petition with prejudice. Without filing a new petition, the Walters argued on appeal that the Banks lacked standing to assert foreign sovereign immunity on behalf of China, and that China waived any immunity by its conduct underlying the default judgment and by its failure to appear. Upon review of the submitted briefs and the applicable legal authority, the Second Circuit found Plaintiffs' arguments were without merit, and affirmed the district court's decision to dismiss their case.

Petitioner appealed a final decision and order of the Office of the Comptroller of the Currency (Comptroller) requiring him to bear the costs of his own defense in an underlying administrative proceeding in which he prevailed. In the underlying lawsuit, petitioner and his law firm were retained by Hamilton Bank (Bank) to conduct an independent investigation of fraud at the Bank and the Comptroller's Enforcement and Compliance Division subsequently alleged that petitioner had breached his fiduciary duties to the Bank. The court held that the Comptroller was not "substantially justified" in bringing the underlying administrative proceeding against petitioner and therefore, petitioner was entitled to attorney's fees under the Equal Access to Justice Act, 5 U.S.C. 504. Accordingly, the court remanded for the Comptroller to calculate the amount of those fees.

First Union National Bank of Florida (First Union) appealed a judgment in favor of the Lee County Commission (Commission) and Philip Summers. Mr. Summers executed a mortgage on property he owned within the County on which he built a summer home. The home was ultimately subject to a tax sale by the County. The trustee for Mid-State Trust IV sued the Commission and Mr. Summers in 2009 seeking the excess redemption proceeds from the tax sale of the Summers property. The trustee later filed a motion to substitute First Union as the real party in interest. The trial court eventually entered a judgment finding that Mr. Summers was entitled to the excess funds from the tax sale because he was the last "owner" as defined by state law against whom the taxes were assessed. Upon careful consideration of the trial court’s record and the applicable legal authority, the Supreme Court affirmed the lower court’s decision.