Federal Savings & Loan Insurance v. Ticktin

Background

The federal savings-and-loan insurer (FSLIC), acting as the receiver for a state-chartered savings and loan, sued the association’s former directors in federal court for alleged breaches of their fiduciary duties under Illinois law. The District Court said it had federal jurisdiction because the FSLIC is an agency of the United States and certified that question for immediate appeal. The Court of Appeals reversed, relying on a 1966 statutory proviso that it read as removing federal-question jurisdiction when the FSLIC sues as receiver and the dispute involves only state-law rights.

Reasoning

The Supreme Court examined the federal statute that gives district courts jurisdiction over civil actions “commenced by” the United States or its agencies (28 U.S.C. § 1345) and the 1966 law (12 U.S.C. § 1730(k)(1)) that contains three clauses plus a proviso. The Court explained that clause (A) explicitly treats the FSLIC as a federal agency and that clauses (B) and (C) broaden access to federal courts. The proviso limits the federal-question basis in clause (B) for a narrow subclass of receiver cases, but it does not reach clause (A) or the agency-based jurisdiction in § 1345. Because the proviso does not cut off agency-based jurisdiction, the District Court properly had federal jurisdiction.

Real world impact

By reversing the Court of Appeals, the decision allows many lawsuits brought by the FSLIC as receiver to continue in federal court rather than be dismissed. The ruling preserves the FSLIC’s access to federal forums and prevents the automatic loss of a large number of cases tied to failed savings-and-loan institutions. The Court did not resolve the merits of the underlying claims and noted alternative statutory arguments need not be decided here.