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CURIALE v. REISSMAN

July 6, 1992

SALVATORE R. CURIALE, Superintent of Insurance of New York, as Rehabilitator for EXECUTIVE LIFE INSURANCE COMPANY OF NEW YORK, S.N. PHELPS & CO., NORTHEAST INVESTORS TRUST, WASHINGTON MUTUAL SAVINGS BANK, BARRY W. BLANK, ANDREW GREGOR, JAMES E. ERICKSON, ANCHOR NATIONAL LIFE INSURANCE COMPANY, AMERICAN INVESTORS LIFE INSURANCE COMPANY, INC., JACK FARBER, OTA LIMITED PARTNERSHIP, ROBERT M. GINTEL AND CECIL A. GODMAN, Plaintiffs,
v.
MAURICE L. REISSMAN, EDWARD S. REID, MARION P. AMES, ELWIN S. LARSON, THOMAS J. HENNESSY, ROBERT B. GOLDSTEIN, ARTHUR H. CHRISTY, FRANK A. DELLOMO, WILLIAM G. SHARWELL, JOHN SADLIK, and GEORGE R. WALKER, Defendants.



The opinion of the court was delivered by: MORRIS E. LASKER

 LASKER, D.J.

 The question presented is whether federal subject matter jurisdiction exists over plaintiffs' claims. Plaintiffs are several individual holders of notes issued by CrossLand Savings, FSB (CrossLand) who seek to collect two payments due in 1991 but defaulted on by the bank.

 Plaintiffs have held 11 1/4% Senior Subordinated Capital Notes since they were issued in September 1986 by CrossLand. The notes were due on September 15, 1998 with interest payments due twice per year. Manufacturers Hanover Trust Corp. (MHT) is the trustee on the indenture governing the notes. CrossLand, which was experiencing financial difficulty in 1991 and for which the Federal Deposit Insurance Corporation (FDIC) has since been named as receiver, failed to make payments due to plaintiffs on March 15, 1991 and September 15, 1991.

 Two suits have been brought on account of CrossLand's unsatisfied obligations on the notes. First, MHT instituted a separate action against CrossLand on behalf of all noteholders. That suit, originally filed in New York state Supreme Court, has been removed to this Court pursuant to 12 U.S.C. § 1819(b)(2) by the FDIC, which is now defending in its capacity as receiver of CrossLand.

 The present action is by individual noteholders against CrossLand's directors, whose failure to cause the bank to pay noteholders the amounts due in 1991 is alleged to have violated the directors' fiduciary duties, and to have been grossly negligent.

 The directors move to dismiss the action, either pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction, or, as to the gross negligence allegations, pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim. In the alternative, they move for a stay of this action until the suit by MHT is resolved.

 The motion to dismiss pursuant to Rule 12(b)(1) is granted. Because this court has no subject matter jurisdiction, it is unnecessary to rule on the other questions raised.

 I.

 There is no diversity among the parties, and plaintiffs' negligence claims arise under state law. Plaintiffs assert that this court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because their fiduciary duties claims arise under federal statutes and regulations governing federally chartered savings banks, or under federal common law. In addition, plaintiffs claim an implied private right of action under 12 U.S.C. § 1821(k), which authorizes federal suits by the FDIC against directors of insured institutions.

 Defendants argue that no statute or regulation creates a federal cause of action such as plaintiffs assert, that the mere fact that CrossLand is federally chartered is insufficient to merit the creation of a federal common law of directors' duties, and that plaintiffs have not identified any unique federal interests or statutory directives which warrant the creation of such a body of law.

 Plaintiffs' first response is that the mere allegation in the complaint that the claim is federal is sufficient to confer jurisdiction on the court. In support they cite 5A Wright & Miller, Federal Practice and Procedure § 1350, n. 8, at 197. That treatise in turn draws from Wheeldin v. Wheeler, 373 U.S. 647, 10 L. Ed. 2d 605, 83 S. Ct. 1441 (1963), which held that federal question jurisdiction does exist where "the right of petitioners to recover under their complaint will be sustained if the Constitution and laws of the United States are given one construction and will be defeated if they are given another." 373 U.S. at 649. The rule, however, does plaintiffs little good for two reasons: first, in Wheeldin petitioners alleged violation of an actual federal provision (the Fourth Amendment), whereas here plaintiffs assert a cause of action whose very existence in any circumstances is in doubt and is challenged by the present motion. A bald statement that a claim is federal is not sufficient in such circumstances. To survive a motion pursuant to Rule 12(b)(1), plaintiffs' complaint must state a cause of action actually "arising under the Constitution, laws or treaties of the United States." 28 U.S.C. § 1331. Moreover, to the extent the complaint does allege violations of existing federal law, the present motion can simply be treated as one to dismiss for failure to state a federal claim pursuant to Fed. R. Civ. P. 12(b)(6), as was done in Wheeldin.

 Plaintiffs offer three somewhat more substantial arguments as to why their fiduciary duty claims should be held to raise federal questions affording this court subject matter jurisdiction: (1) federal common law must govern their claim either because the fiduciary duties of directors of a federally chartered institution are so related to other organizational questions governed by existing federal regulations that the creation of a federal rule of decision is necessary, or (in the alternative) because despite the absence of federal regulations on point a federal rule of decision is needed to protect federal interests; (2) "federal law" governs their claims "because the Debt Securities were issued pursuant to the federal statutory and regulatory scheme governing savings and loans under the Home Owners Loan Act" (HOLA), 12 U.S.C. § 1464; and (3) an implied private right of action exists under 12 U.S.C. § 1821(k), which authorizes federal suits by the FDIC against directors of insured institutions.

 These or similar questions have been raised in other jurisdictions, with mixed results. Despite the existence of some case law supporting plaintiffs' contentions, however, see, e.g., Eureka Federal Sav. and Loan Ass'n v. Kidwell, 672 F. Supp. 436 (N.D. Cal. 1987); but see AmeriFirst Bank v. Bomar, 757 F. Supp. 1365 (S.D. ...


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