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- NOTICE: This opinion is subject to formal revision before publication in the
- preliminary print of the United States Reports. Readers are requested to
- notify the Reporter of Decisions, Supreme Court of the United States, Wash-
- ington, D.C. 20543, of any typographical or other formal errors, in order that
- corrections may be made before the preliminary print goes to press.
- SUPREME COURT OF THE UNITED STATES
- --------
- No. 93-489
- --------
- O'MELVENY & MYERS, PETITIONER v. FEDERAL
- DEPOSIT INSURANCE CORPORATION as re-
- ceiver for AMERICAN DIVERSIFIED
- SAVINGS BANK et al.
- on writ of certiorari to the united states court
- of appeals for the ninth circuit
- [June 13, 1994]
-
- Justice Scalia delivered the opinion of the Court.
- The issue in this case is whether, in a suit by the
- Federal Deposit Insurance Corporation as receiver of a
- federally insured bank, it is a federal-law or rather a
- state-law rule of decision that governs the tort liability
- of attorneys who provided services to the bank.
-
- I
- American Diversified Savings Bank (ADSB or S&L) is
- a California-chartered and federally insured savings and
- loan. The following facts have been stipulated to, or are
- uncontroverted, by the parties to the case, and we
- assume them to be true for purposes of our decision.
- ADSB was acquired in 1983 by Ranbir Sahni and Lester
- Day, who respectively obtained 96% and 4% of its stock,
- and who respectively served as its chairman/CEO and
- president. Under their leadership, ADSB engaged in
- many risky real estate transactions, principally through
- limited partnerships sponsored by ADSB and its subsid-
- iaries. Together, Sahni and Day also fraudulently
- overvalued ADSB's assets, engaged in sham sales of
- assets to create inflated -profits,- and generally -cooked
- the books- to disguise the S&L's dwindling (and eventu-
- ally negative) net worth.
- In September 1985, petitioner O'Melveny & Myers, a
- Los Angeles-based law firm, represented ADSB in
- connection with two real estate syndications. At that
- time, ADSB was under investigation by state and federal
- regulators, but that fact had not been made public. In
- completing its work for the S&L, petitioner did not
- contact the accounting firms that had previously done
- work for ADSB, nor state and federal regulatory authori-
- ties, to inquire about ADSB's financial status. The two
- real estate offerings on which petitioner worked closed
- on December 31, 1985. On February 14, 1986, federal
- regulators concluded that ADSB was insolvent and that
- it had incurred substantial losses because of violations
- of law and unsound business practices. Respondent
- stepped in as receiver for ADSB, and on February 19,
- 1986, filed suit against Messrs. Sahni and Day in
- Federal District Court, alleging breach of fiduciary duty
- and, as to Sahni, RICO violations. Soon after taking
- over as receiver, respondent began receiving demands for
- refunds from investors who claimed that they had been
- deceived in connection with the two real estate syndica-
- tions. Respondent caused ADSB to rescind the syndica-
- tions and to return all of the investors' money plus
- interest.
- On May 12, 1989, respondent sued petitioner in the
- United States District Court for the Central District of
- California, alleging professional negligence and breach of
- fiduciary duty. The parties stipulated to certain facts
- and petitioner moved for summary judgment, arguing
- that (1) it owed no duty to ADSB or its affiliates to
- uncover the S&L's own fraud; (2) that knowledge of the
- conduct of ADSB's controlling officers must be imputed
- to the S&L, and hence to respondent, which, as receiver,
- stood in the shoes of the S&L; and (3) that respondent
- was estopped from pursuing its tort claims against
- petitioner because of the imputed knowledge. On May
- 15, 1990, the District Court granted summary judgment,
- explaining only that petitioner was -entitled to judgment
- in its favor . . . as a matter of law.- The Court of
- Appeals for the Ninth Circuit reversed, on grounds that
- we shall discuss below. 969 F. 2d 744 (1992). Petition-
- er filed a petition for writ of certiorari, which we
- granted. 510 U. S. ___ (1993).
-
- II
- It is common ground that the FDIC was asserting in
- this case causes of action created by California law.
- Respondent contends that in the adjudication of those
- causes of action (1) a federal common-law rule and not
- California law determines whether the knowledge of
- corporate officers acting against the corporation's interest
- will be imputed to the corporation; and (2) even if
- California law determines the former question, federal
- common law determines the more narrow question
- whether knowledge by officers so acting will be imputed
- to the FDIC when it sues as receiver of the corporation.
- The first of these contentions need not detain us long,
- as it is so plainly wrong. -There is no federal general
- common law,- Erie R. Co. v. Tompkins, 304 U. S. 64, 78
- (1938), and (to anticipate somewhat a point we will
- elaborate more fully in connection with respondent's
- second contention) the remote possibility that corpora-
- tions 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. See Bank of America Nat. Trust & Savings
- Assn. v. Parnell, 352 U. S. 29, 33-34 (1956). The Ninth
- Circuit believed that its conclusion on this point was in
- harmony with Schacht v. Brown, 711 F. 2d 1343 (CA7
- 1983), Cenco Inc. v. Seidman & Seidman, 686 F. 2d 449
- (CA7 1982), and In re Investors Funding Corp. of N.Y.
- Securities Litigation, 523 F. Supp. 533 (SDNY 1980), 969
- F. 2d, at 750, but even a cursory examination of those
- cases shows the contrary. In Cenco, where the cause of
- action similarly arose under state common law, the
- Seventh Circuit's analysis of the -circumstances under
- which the knowledge of fraud on the part of the
- plaintiff's directors [would] be imputed to the plaintiff
- corporation [was] merely an attempt to divine how
- Illinois courts would decide that issue.- Schacht, 711 F.
- 2d, at 1347 (citing Cenco, 686 F. 2d, at 455). Likewise,
- in Investors Funding, the District Court analyzed the
- potential affirmative defenses to the state-law claims by
- applying -[t]he controlling legal principles [of] New York
- law.- 523 F. Supp., at 540. In Schacht, the Seventh
- Circuit expressly noted that -the cause of action [at
- issue] arises under RICO, a federal statute; we therefore
- write on a clean slate and may bring to bear federal
- policies in deciding the estoppel question.- 711 F. 2d, at
- 1347.
- In seeking to defend the Ninth Circuit's holding,
- respondent contends (to quote the caption of its argu-
- ment) that -The Wrongdoing Of ADSB's Insiders Would
- Not Be Imputed To ADSB Under Generally Accepted
- Common Law Principles,- Brief for Respondent 12-in
- support of which it attempts to show that nonattribution
- to the corporation of dishonest officers' knowledge is the
- rule applied in the vast bulk of decisions from 43
- jurisdictions, ranging from Rhode Island to Wyoming.
- See, e.g., id., at 21-22, n. 9 (distinguishing, inter alia,
- Cook v. American Tubing & Webbing Co., 28 R.I. 41, 65
- A. 641 (1905), and American Nat. Bank of Powell v.
- Foodbasket, 497 P. 2d 546 (Wyo. 1972)). The supposed
- relevance of this is set forth in a footnote: -It is our
- position that federal common law does govern this issue,
- but that the content of the federal common law rule
- corresponds to the rule that would independently be
- adopted by most jurisdictions.- Brief for Respondent 15,
- n. 3. If there were a federal common law on such a
- generalized issue (which there is not), we see no reason
- why it would necessarily conform to that -independently
- . . . adopted by most jurisdictions.- But the short of the
- matter is that California law, not federal law, governs
- the imputation of knowledge to corporate victims of
- alleged negligence, and that is so whether or not
- California chooses to follow -the majority rule.-
- We turn, then, to the more substantial basis for the
- decision below, which asserts federal pre-emption not
- over the law of imputation generally, but only over its
- application to the FDIC suing as receiver. Respondent
- begins its defense of this principle by quoting United
- States v. Kimbell Foods, Inc., 440 U. S. 715, 726 (1979),
- to the effect that -federal law governs questions involv-
- ing the rights of the United States arising under
- nationwide federal programs.- But the FDIC is not the
- United States, and even if it were we would be begging
- the question to assume that it was asserting its own
- rights rather than, as receiver, the rights of ADSB. In
- any event, knowing whether -federal law governs- in the
- Kimbell Foods sense-a sense which includes federal
- adoption of state-law rules, see id., at 727-729-does not
- much advance the ball. The issue in the present case
- is whether the California rule of decision is to be
- applied to the issue of imputation or displaced, and if it
- is applied it is of only theoretical interest whether the
- basis for that application is California's own sovereign
- power or federal adoption of California's disposition. See
- Boyle v. United Technologies Corp., 487 U. S. 500, 507,
- n. 3 (1988).
- In answering the central question of displacement of
- California law, we of course would not contradict an
- explicit federal statutory provision. Nor would we adopt
- a court-made rule to supplement federal statutory
- regulation that is comprehensive and detailed; matters
- left unaddressed in such a scheme are presumably left
- subject to the disposition provided by state law. See
- Northwest Airlines, Inc. v. Transport Workers, 451 U. S.
- 77, 97 (1981); Milwaukee v. Illinois, 451 U. S. 304, 319
- (1981). Petitioner asserts that both these principles
- apply in the present case, by reason of 12 U. S. C.
- 1821(d)(2)(A)(i) (1988 ed., Supp. IV), and the compre-
- hensive legislation of which it is a part, the Financial
- Institutions Reform, Recovery, and Enforcement Act of
- 1989 (FIRREA), Pub. L. 101-73, 103 Stat. 183.
- Section 1821(d)(2)(A)(i), which is part of a Title cap-
- tioned -Powers and duties of [the FDIC] as . . . receiver,-
- states that -the [FDIC] shall . . . by operation of law,
- succeed to-all rights, titles, powers, and privileges of
- the insured depository institution . . . .- 12 U. S. C.
- 1821(d)(2)(A)(i) (1988 ed., Supp. IV). This language
- appears to indicate that the FDIC as receiver -steps into
- the shoes- of the failed S&L, cf. COIT Independence
- Joint Venture v. FSLIC, 489 U. S. 561, 585 (1989),
- obtaining the rights -of the insured depository institu-
- tion- that existed prior to receivership. Thereafter, in
- litigation by the FDIC asserting the claims of the
- S&L-in this case California tort claims potentially
- defeasible by a showing that the S&L's officers had
- knowledge--`any defense good against the original party
- is good against the receiver.'- 969 F. 2d, at 751
- (quoting Allen v. Ramsay, 179 Cal. App. 2d 843, 854, 4
- Cal. Rptr. 575, 583 (1960)).
- Respondent argues that 1821(d)(2)(A)(i) should be
- read as a nonexclusive grant of rights to the FDIC
- receiver, which can be supplemented or modified by
- federal common law; and that FIRREA as a whole, by
- demonstrating the high federal interest in this area,
- confirms the courts' authority to promulgate such
- common law. This argument is demolished by those
- provisions of FIRREA which specifically create special
- federal rules of decision regarding claims by, and
- defenses against, the FDIC as receiver. See 12 U. S. C.
- 1821(d)(14) (1988 ed., Supp. IV) (extending statute of
- limitations beyond period that might exist under state
- law); 1821(e)(1), (3), (precluding state-law claims
- against the FDIC under certain contracts it is autho-
- rized to repudiate); 1821(k) (permitting claims against
- directors and officers for gross negligence, regardless of
- whether state law would require greater culpability);
- 1821(d)(9) (excluding certain state-law claims against
- FDIC based on oral agreements by the S&L). Inclusio
- unius, exclusio alterius. It is hard to avoid the conclu-
- sion that 1821(d)(2)(A)(i) places the FDIC in the shoes
- of the insolvent S&L, to work out its claims under state
- law, except where some provision in the extensive
- framework of FIRREA provides otherwise. To create
- additional -federal common-law- exceptions is not to
- -supplement- this scheme, but to alter it.
- We have thought it necessary to resolve the effect of
- FIRREA because respondent argued that the statute not
- only did not prevent but positively authorized federal
- common law. We are reluctant to rest our judgment on
- FIRREA alone, however, since that statute was enacted
- into law in 1989, while respondent took over as receiver
- for ADSB in 1986. The FDIC is willing to -assume . . .
- that FIRREA would have taken effect in time to be
- relevant to this case,- Brief for Respondent 35, n. 21,
- but it is not self-evident that that assumption is correct.
- See Landgraf v. USI Film Products, 511 U. S. ___, ___-
- ___, ___ (1994) (slip op., at 24-25, 30); cf. id., at ___
- (slip op., at 6) (Scalia, J., concurring in judgment). It
- seems to us imprudent to resolve the retroactivity
- question without briefing, and inefficient to pretermit
- the retroactivity issue on the basis of the FDIC's
- concession, since that would make our decision of limited
- value in other cases. As we proceed to explain, even
- assuming the inapplicability of FIRREA this is not one
- of those cases in which judicial creation of a special
- federal rule would be justified.
- Such cases are, as we have said in the past, -few and
- restricted,- Wheeldin v. Wheeler, 373 U. S. 647, 651
- (1963), limited to situations where there is a -significant
- conflict between some federal policy or interest and the
- use of state law.- Wallis v. Pan American Petroleum
- Corp., 384 U. S. 63, 68 (1966). Our cases uniformly
- require the existence of such a conflict as a precondition
- for recognition of a federal rule of decision. See, e.g.,
- Kamen v. Kemper Financial Services, Inc., 500 U. S. 90,
- 98 (1991); Boyle, 487 U. S., at 508; Kimbell Foods, 440
- U. S., at 728. Not only the permissibility but also the
- scope of judicial displacement of state rules turns upon
- such a conflict. See, e.g., Kamen, 500 U. S., at 98;
- Boyle, 487 U. S., at 508. What is fatal to respondent's
- position in the present case is that it has identified no
- significant conflict with an identifiable federal policy or
- interest. There is not even at stake that most generic
- (and lightly invoked) of alleged federal interests, the
- interest in uniformity. The rules of decision at issue
- here do not govern the primary conduct of the United
- States or any of its agents or contractors, but affect only
- the FDIC's rights and liabilities, as receiver, with
- respect to primary conduct on the part of private actors
- that has already occurred. Uniformity of law might
- facilitate the FDIC's nationwide litigation of these suits,
- eliminating state-by-state research and reducing uncer-
- tainty-but if the avoidance of those ordinary conse-
- quences qualified as an identifiable federal interest, we
- would be awash in -federal common-law- rules. See
- United States v. Yazell, 382 U. S. 341, 347, n. 13 (1966).
- The closest respondent comes to identifying a specific,
- concrete federal policy or interest that is compromised
- by California law is its contention that state rules
- regarding the imputation of knowledge might -deplet[e]
- the deposit insurance fund,- Brief for Respondent 32.
- But neither FIRREA nor the prior law sets forth any
- anticipated level for the fund, so what respondent must
- mean by -depletion- is simply the forgoing of any money
- which, under any conceivable legal rules, might accrue
- to the fund. That is a broad principle indeed, which
- would support not just elimination of the defense at
- issue here, but judicial creation of new, -federal-common-
- law- causes of action to enrich the fund. Of course we
- have no authority to do that, because there is no federal
- policy that the fund should always win. Our cases have
- previously rejected -more money- arguments remarkably
- similar to the one made here. See Kimbell Foods, 440
- U. S., at 737-738; Yazell, 382 U. S., at 348; cf. Robert-
- son v. Wegmann, 436 U. S. 584, 593 (1978).
- Even less persuasive-indeed, positively probative of
- the dangers of respondent's facile approach to federal-
- common-law-making-is respondent's contention that it
- would -disserve the federal program- to permit Califor-
- nia to insulate -the attorney's or accountant's malprac-
- tice,- thereby imposing costs -on the nation's taxpayers,
- rather than on the negligent wrongdoer.- Brief for
- Respondent 32. By presuming to judge what constitutes
- malpractice, this argument demonstrates the runaway
- tendencies of -federal common law- untethered to a gen-
- uinely identifiable (as opposed to judicially constructed)
- federal policy. What sort of tort liability to impose on
- lawyers and accountants in general, and on lawyers and
- accountants who provide services to federally insured
- financial institutions in particular, -`involves a host of
- considerations that must be weighed and appraised,'-
- Northwest Airlines, Inc., 451 U. S., at 98, n. 41 (quoting
- United States v. Gilman, 347 U. S. 507, 512-513
- (1954))-including, for example, the creation of incentives
- for careful work, provision of fair treatment to third
- parties, assurance of adequate recovery by the federal
- deposit insurance fund, and enablement of reasonably
- priced services. Within the federal system, at least, we
- have decided that that function of weighing and apprais-
- ing -`is more appropriately for those who write the laws,
- rather than for those who interpret them.'- Northwest
- Airlines, 451 U. S., at 98, n. 41 (quoting Gilman, 347
- U. S., at 513).
- We conclude that this is not one of those extraordi-
- nary cases in which the judicial creation of a federal
- rule of decision is warranted. As noted earlier, the
- parties are in agreement that if state law governs it is
- the law of California; but they vigorously disagree as to
- what that law provides. We leave it to the Ninth
- Circuit to resolve that point. The judgment is reversed
- and the case remanded for proceedings consistent with
- this opinion.
- So ordered.
-