Coit Independence Joint Venture v. Federal Savings and Loan Insurance Corporation

PETITIONER: Coit Independence Joint Venture
RESPONDENT: Federal Savings and Loan Insurance Corporation
LOCATION: Sable Communications of California

DOCKET NO.: 87-996
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 489 US 561 (1989)
ARGUED: Nov 01, 1988
DECIDED: Mar 21, 1989

ADVOCATES:
Jeffrey P. Minear - on behalf of the Respondent
Robert E. Goodfriend - on behalf of the Petitioner

Facts of the case

Question

Media for Coit Independence Joint Venture v. Federal Savings and Loan Insurance Corporation

Audio Transcription for Oral Argument - November 01, 1988 in Coit Independence Joint Venture v. Federal Savings and Loan Insurance Corporation

Audio Transcription for Opinion Announcement - March 21, 1989 in Coit Independence Joint Venture v. Federal Savings and Loan Insurance Corporation

William H. Rehnquist:

The opinion of the Court in No. 87-996, Coit Independence Joint Venture versus FSLIC will be announced by Justice O’Connor.

Sandra Day O'Connor:

This case comes on writ of certiorari to the United States Court of Appeals for the Ninth Circuit.

In the mid 1980s, the petitioner, Coit Independence Joint Venture a real estate firm, borrowed money form FirstSouth, a Federal Savings and Loan Association.

They had subsequent disagreements, and the petitioner filed suit against FirstSouth in State Court alleging state law claims for usury and breach of fiduciary duty.

Two months later, the Federal Home Loan Bank Board determined that FirstSouth was insolvent, and appointed the Federal Savings and Loan Insurance Corporation, the acronym for which is FSLIC, as receiver.

FSLIC then substituted itself for FirstSouth in the petitioner’s state lawsuit and had the case removed to Federal District Court.

That court dismissed the suit for lack of subject-matter jurisdiction holding that Congress had given FSLIC exclusive jurisdiction to adjudicate claims against the assets of an insolvent savings and loans association under receivership.

The Fifth Circuit affirmed.

We granted certiorari to resolve a conflict in the lower courts over whether FSLIC does have exclusive authority to adjudicate the validity of creditor state law claims filed against insolvent savings and loan associations under FSLIC receivership.

We now reverse the judgment of the Fifth Circuit and remand for further proceedings.

For reasons explained in the opinion, we hold that the statutes governing FSLIC and the Bank Board do not grant FSLIC adjudicatory power over creditor's claims against insolvent savings and loan associations under FSLIC receivership, nor do they divest the courts of jurisdiction to consider those claims de novo.

We also hold that creditors are not required to exhaust the Bank Board’s current administrative claims procedure before bringing suit in court because that procedure does not place a reasonable time limit on FSLIC’s consideration of creditor’s claims because an inadequate administrative remedy need not be exhausted.

The petitioner may proceed directly to court for a de novo determination on the merits of its state law claims.

Justice Blackmun and Justice Scalia have each filed an opinion concurring in part and concurring in the judgment.