Federal Deposit Insurance v. McFarland

REVISED, MARCH 29, 2001
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 99-30756
FEDERAL DEPOSIT INSURANCE CORP.,
Plaintiff,
versus
RORY S. MCFARLAND, ET AL.,
Defendants.
TEXACO, INC.,
Defendant - Third Party Plaintiff,
versus
PREMIER VENTURE CAPITAL CORP.; DAVID L. JUMP,
Third Party Defendants - Appellees,
versus
DENNIS JOSLIN CO., L.L.C.,
Movant - Appellant.
Appeal from the United States District Court
For the Western District of Louisiana
February 28, 2001
Before JOLLY, HIGGINBOTHAM, and EMILIO M. GARZA, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
This appeal turns in part on whether the Federal Deposit
Insurance Corporation (FDIC) as receiver must abide by Louisiana
reinscription rules to preserve its liens. The district court
determined that the mortgage and assignment held by the assignee of
the FDIC, the Dennis Joslin Company ("Joslin"), lost priority
status because of the FDIC's failure to reinscribe the mortgage
within the statutory period. The court found that two creditors,
Bank One and David L. Jump, had valid liens that were senior to the
FDIC's interest.
In addition to its assertions based on Louisiana law, Joslin
argues that the FDIC is not bound by reinscription requirements.
The argument is that either the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, FIRREA, or federal common
law insulates the FDIC from state-law reinscription requirements.
We are not persuaded and affirm this holding of the district court.
We also conclude that Jump's lien was based on a judgment that was
not final when registered. We reverse the district court's contrary
holding and remand.
I
On November 30, 1984, Rory S. McFarland pledged a note in the
amount of $2.5 million to the Bank of Commerce of Shreveport,
Louisiana.1 McFarland secured this note with a mineral lease
mortgage and assignment, an "assignment of runs," of his interest
1
Although McFarland executed other mortgages in favor of the
Bank of Commerce, none of these instruments is relevant to the
instant appeal.
2
in the oil, gas, and minerals produced from the mortgaged leasehold
and mineral interests.2
A casualty of the misfortunes that befell banking in the
1980s, the Bank of Commerce failed in 1986. The FDIC was appointed
receiver and took over the bank's assets, including the pledged
1984 note and the assignment.3
In August 1990, Bank One Equity Investment, Inc., formerly
Premier Venture Capital Corporation, obtained judgment, "the Bank
One judgment," against McFarland in Louisiana state court. Bank One
recorded this judgment in various Louisiana parishes between March
and August of 1991.
On October 1, 1991, David L. Jump obtained a judgment against
McFarland, "the Jump judgment," in the United States District Court
for the Western District of Colorado. Jump registered the judgment
in the Western District of Louisiana on June 26, 1992. In June and
July of 1992, Jump recorded the judgment in various Louisiana
parishes.
2
The assignment, which was executed on the same day as the
note, encompassed McFarland's right, title, and interest "in and
to the oil, gas and other minerals, of whatever nature and kind
whatsoever, situated in and under and which may be produced from
the land affected by the leases described" in a schedule attached
to the mortgage.
3
We will refer to the 1984 mortgage note as the 1984 mortgage
and the 1984 mineral lease mortgage and assignment as the 1984
assignment. We will also refer to both instruments jointly as the
1984 mortgage and assignment.
3
On October 31, 1991, the FDIC filed suit to collect the debt
owed by McFarland to the Bank of Commerce, including the 1984
mortgage and assignment. Bank One and Jump intervened in the case4
seeking the proceeds from the mineral leases that had been paid
into the court registry.5 They claimed that the 1984 assignment did
not encompass a specific offshore lease, OCS-310.
In 1993, the district court ordered McFarland to pay the FDIC
from the proceeds in the court registry and recognized the 1984
mortgage as the first lien. The court also held that the 1984
assignment did not include OCS-310 and ordered McFarland to pay the
proceeds of that lease to Bank One and Jump.6 The FDIC recorded the
1993 judgment of the district court in various Louisiana parishes
4
Bank One and Jump agreed to combine their efforts in the
ensuing ranking dispute.
5
Texaco, Inc. had deposited proceeds from the mineral leases
into the court registry. The FDIC had joined Texaco as a party
given its status as the operator of most of the encumbered mineral
interests. The FDIC had also joined as parties Russell Long and
Palmer Long, who were trustees of certain expired trusts of which
McFarland had been beneficiary. Prior to the 1993 action, the Longs
periodically received funds from Texaco and distributed them to
McFarland.
6
On October 23, 1995, Bank One received $300,000 from the
funds deposited in the court registry that were traceable to the
OCS-310 lease. Bank One then released its judgment as to
McFarland's interest in the OCS-310 lease. Jump initiated
foreclosure proceedings and purchased that leasehold interest at a
sale held by the United States Marshal. Jump also received the
balance of the funds on deposit in the registry attributable to the
OCS-310 lease.
4
between November 2, 1993, and November 8, 1993. This Court
subsequently affirmed the judgment in relevant part.7
The FDIC reinscribed the 1984 mortgage and assignment in
various Louisiana parishes in July 1995. In 1997, the FDIC assigned
the mortgage and assignment to the Dennis Joslin Company.
In 1998, Joslin filed a motion for issuance of a writ of
execution and for foreclosure of the property subject to the 1984
mortgage and assignment. Joslin also sought distribution of the
funds that had accumulated in the court registry. The district
court issued the requested writ of execution and the United States
Marshal for the Western District of Louisiana seized the property.
The marshal advertised the sale of the property and set October 28,
1998 as the date of sale.
Through successive filings on October 23 and 26, 1998, Jump
objected to Joslin's actions. Jump contended that the FDIC's
failure to reinscribe the 1984 mortgage and assignment within ten
years of its execution resulted in a loss of ranking. Jump argued
that the 1991 Jump judgment consequently had priority as to both
the mineral interests and the proceeds deposited in the court
registry. The court postponed the marshal's sale.
In June 1999, the district court entered another judgment
holding that Louisiana law required the FDIC to reinscribe the 1984
7
See Federal Deposit Ins. Corp. v. McFarland, 33 F.3d 532(5th Cir. 1994).
5
mortgage and assignment by November 30, 1994.8 The FDIC's
reinscription in 1995 was therefore untimely, depriving its
assignee, Joslin, of priority rank. The court consequently ranked
the Bank One judgment first, the Jump judgment second, and the
FDIC's 1984 mortgage and assignment third. Joslin appeals this
determination.
II
Joslin contends, first, that this case is moot.9 Joslin points
to the 1993 judgment, in which the district court declared the FDIC
to be "the owner and entitled to all funds paid into the Registry
8
See La. Civ. Code Ann. art. 3369 (West 1992) (requiring the
reinscription of a mortgage within ten years of its creation).
Although the statute was amended in 1993, see 1992 La. Acts No.
1132, these amendments only apply to mortgages created on or after
the effective date of January 1, 1993. See id. at § 7; Seal v.
Crain, 767 So. 2d 798, 801 (La. App. 1st Cir. 2000). We note that
a pledge of minerals, or assignment of runs, faces the same ten-
year reinscription requirement as the mortgage it secures. See La.
Rev. Stat. Ann. § 31:202 (West 1989). Contrary to Joslin's
assertions, the 1990 repeal of certain provisions of the Louisiana
Mineral Code does not affect this case. Revised Article 204 of the
Mineral Code, La. Rev. Stat. Ann. § 31:204 (West Supp. 2000), does
not apply to pledges entered into before the effective date of
Chapter 9 of the Louisiana's Commercial Laws. See 1989 La. Acts
137, § 20. The 1984 pledge at issue in this case was executed prior
to this effective date and is therefore governed by former Article
202 of the Mineral Code.
9
See Bayou Liberty Ass'n v. United States Army Corps of
Eng'rs, 217 F.3d 393, 396 (5th Cir. 2000) ("We must address the
issue of mootness first, because to qualify as a case for federal
court adjudication, a case or controversy must exist . . . .
Whether a case is moot is a question of law that we resolve de
novo.").
6
of this Court." Joslin argues that, except for the funds derived
from the OCS-310 lease, the FDIC was declared owner of all past and
future proceeds from the leases in question. Because the 1993
judgment vested the FDIC with priority lien status, Joslin contends
that the reinscription question was rendered moot.10
Joslin's position is meritless. There is a live case or
controversy regarding the meaning of the 1993 judgment—the extent
to which it encompasses future, as well as past, proceeds deposited
in the registry. Moreover, we note that Louisiana law mandates the
reinscription of mortgages and assignments within a ten-year
period.11 As the Louisiana Supreme Court has held, "[a] litigation
between the mortgage creditors does not dispense from
reinscription. . . . The inscription must continue until the
proceeds of the property mortgaged are reduced to possession."12 The
1993 judgment did not then implicitly end the FDIC's continuing
obligation to reinscribe the mortgage. Moreover, the FDIC's failure
to reinscribe the mortgage did not occur until 1994, and the issue
10
See Umanzor v. Lambert, 782 F.2d 1299, 1301 (5th Cir. 1986)
(discussing Article III case or controversy requirements and noting
that, "[i]f the subject of an appeal has become moot, the appellate
court may not decide it").
11
See La. Civ. Code Ann. art. 3369 (West 1992); La. Rev. Stat.
Ann. § 31:202 (West 1989).
12
Shepherd v. The Orleans Cotton Press Co., 2 La. Ann. 100,
111 (La. 1847).
7
was not properly before the district court.13 Even if we were to
interpret the 1993 judgment as declaring the FDIC to be owner of
all future proceeds deposited in the court registry, the judgment
would still not exclude the possibility that other
circumstances—e.g., failure to reinscribe—might deprive the FDIC of
its lien. The instant appeal therefore presents a live
controversy.14
III
The larger question posed by this case is whether Louisiana
reinscription law applies to mortgages held by the FDIC. The
parties urge three different means of resolving this question.
First, Jump15 contends that the 1993 judgment disposed of the
reinscription question and is the "law of the case." Second, Joslin
13
Because the facts litigated in the 1993 judgment differ from
those in the 1999 judgment, collateral estoppel is of no assistance
to Joslin. See Copeland v. Merrill Lynch & Co., 47 F.3d 1415, 1422
(5th Cir. 1995).
14
Joslin also frames its mootness argument in terms of the law
of the case doctrine. Joslin contends that the 1993 judgment
granted it (through the FDIC) ownership of the past and future
proceeds from the leases. It argues that this decision was binding
on the 1999 proceedings. This argument fails for the same reasons
as Joslin's mootness claim. The 1993 judgment did not preclude the
possibility that other circumstances could strip Joslin of its
ownership interest. Moreover, as discussed infra, we are skeptical
as to whether or not the 1993 and 1999 proceedings constitute
different phases of the same "case." Cf. United States v. Lawrence,
179 F.3d 343, 351 (5th Cir. 1999).
15
Jump is the only party besides Joslin participating in this
appeal. Pursuant to a prior compromise and settlement agreement,
Jump is participating on behalf of both himself and Bank One.
8
argues that the Financial Institutions Reform, Recovery, and
Enforcement Act of 198916 frees the FDIC from state-law
reinscription requirements. If FIRREA does not apply, Joslin
asserts that federal common law governs the FDIC, thereby
precluding the imposition of state reinscription obligations. We
address each contention in turn.
A
Jump argues that the district court in the 1999 case was bound
by the 1993 judgment, which provided the "law of the case." Under
the "law of the case" doctrine, "a decision on an issue of law made
at one stage of a case becomes a binding precedent to be followed
in successive stages of the same litigation."17 Where a final
judgment is entered, the case appealed, and the case remanded, a
trial judge must adhere on remand to the rulings it made in the
case before appeal, assuming that the appellate court has not
overturned the rulings.18 Moreover, an appellate court is generally
16
Pub. L. No. 101-73, 103 Stat. 183 (codified as amended in
scattered sections of 12 U.S.C.).
17
Roboserve, Inc. v. Kato Kagaku Co., 121 F.3d 1027, 1031 (7th
Cir. 1997) (citations and quotations omitted); see also United
States v. Webb, 98 F.3d 585, 587 (10th Cir. 1996); 18 Charles Alan
Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and
Procedure § 4478 (West Supp. 2000).
18
See Roboserve, 121 F.3d at 1031.
9
precluded from reexamining issues decided in a prior appeal.19 This
doctrine applies regardless of whether the issue was decided
expressly or by necessary implication.20
Jump notes that the 1993 judgment found a mortgage and
assignment issued by McFarland in 1981 to be "preempted." He
contends that the district court found the 1981 mortgage to be
preempted because of the FDIC's failure to reinscribe the original
mortgage within a ten-year period. Jump concludes that the district
court thereby recognized that the FDIC must comply with Louisiana
reinscription requirements. Jump concedes that the 1993 judgment
did not and could not address the FDIC's subsequent failure to
reinscribe the pledged 1984 mortgage. However, he asserts that the
1993 judgment enunciated a legal principle that was binding on the
1999 judgment.21 As we understand it, he contends that the 1993 case
was merely a prior stage of the same litigation, and that the
district court's prior judgment bound it in future phases of the
same case.22
19
See Chevron U.S.A., Inc. v. Traillour Oil Co., 987 F.2d
1138, 1150 (5th Cir. 1993).
20
See id.21
Jump does not argue that this Court's prior decision
provides the law of the case. Nothing in our 1994 decision implied
an affirmation of the district court's ruling on the reinscription
issue. Indeed, this Court did not even discuss the 1981 mortgage.
Failure to address an issue decided below does not necessarily
imply its affirmation.
22
See Roboserve, 121 F.3d at 1031.
10
On the face of the matter it is doubtful whether the 1993 and
1999 proceedings constitute the same "case." It is true that the
same trial judge presided at both proceedings and that the two
judgments had the same case number and caption. It is equally true,
however, that the 1993 decision was a final judgment and the 1999
case was not decided on remand from our 1994 decision. By then,
several facts had changed: Joslin became the holder of the FDIC's
1984 mortgage and assignment, and the FDIC failed to reinscribe the
mortgage.23
Even if we assume that the two rulings were part of the same
"case," we do not read the 1993 judgment as advocated by Jump. The
1993 judgment does not explain its finding of preemption. In a pre-
trial order adopted by the district court in 1993, the court
recognized as a contested issue of law "[w]hether the 1981 FDIC
mortgage is unenforceable because it was not reinscribed" (emphasis
added). The court also noted two other objections to the 1981
mortgage: (1) whether the mortgage was "unenforceable" because it
failed to comply with La. Rev. Stat. § 30:138; and (2) whether
failure to fill in the effective date on the mortgage similarly
rendered it "unenforceable." The record does not reflect any
23
Cf. United States v. Lawrence, 179 F.3d 343, 351 (5th Cir.
1999) (finding that law of the case doctrine did not apply, as a
post-conviction motion is a separate "case" from the initial
proceeding resulting in conviction).
11
further discussion by the parties of the reinscription issue prior
to the 1993 judgment.
The 1993 judgment failed to unambiguously affirm the FDIC's
obligation to abide by Louisiana reinscription law. While Louisiana
cases occasionally employ the term "preemptive" to describe the
period in which a mortgage must be reinscribed,24 this language
differs from the court's 1993 pre-trial order, "unenforceable."
Given these uncertainties, we are not prepared to conclude that the
law of the case doctrine barred the district court from considering
the reinscription issue.25
B
Joslin argues that FIRREA, 12 U.S.C. § 1825(b)(2), protects
the FDIC from state-law reinscription requirements.26 The statute
provides:
When acting as a receiver, the following provisions shall
apply with respect to the Corporation: . . . No property
of the Corporation shall be subject to levy, attachment,
24
See State ex rel. Meriwether v. City of Shreveport, 91 So.
678, 679 (La. 1921); Vautrain v. Neel, 163 So. 555, 557 (La. Ct.
App. 1935).
25
See Roboserve, Inc. v. Kato Kagaku Co., 121 F.3d 1027, 1031-
32 (7th Cir. 1997) (finding that the law of the case doctrine did
not apply, as scant references in the record were insufficient to
establish that the district court or appellate court prior to
remand had decided the issue).
26
This Court applies de novo review to questions of law. See
St. Martin v. Mobil Exploration & Prod. U.S. Inc., 224 F.3d 402,
405 (5th Cir. 2000).
12
garnishment, foreclosure, or sale without the consent of
the Corporation, nor shall any involuntary lien attach to
the property of the Corporation.27
Joslin asserts that the plain meaning of the statute compels the
conclusion that Louisiana reinscription law would not apply to the
FDIC.
The Louisiana reinscription statute may effect a re-ranking of
liens. Failure to reinscribe a mortgage within the ten-year period
specified in Article 3369 of the Louisiana Civil Code does not
invalidate the mortgage as between the contracting parties.28
Untimely reinscription does, however, render the initial
inscription of the mortgage ineffective against third parties.
Third-party creditors then have priority over the mortgage that was
not timely reinscribed. Any attempt to reinscribe after the ten-
year period can not alter this change in seniority. Late
reinscription merely crystallizes the ranking in effect at the time
of the reinscription.29
Although failure to reinscribe a mortgage may result in the
application of an "involuntary lien" to FDIC property, FIRREA does
27
12 U.S.C. § 1825(b)(2) (2000).
28
See Security Nat'l Trust v. Alexander, 621 So. 2d 30, 31
(La. App. 2d Cir. 1993).
29
See Executors of Liddell v. Rucker, 13 La. Ann. 569, 571
(La. 1858); Alexander, 621 So. 2d at 31. The 1984 assignment faces
an equivalent reinscription law. See La. Rev. Stat. Ann. § 31:202
(West 1989) (articulating a ten-year reinscription period and
noting that the "effect of registry" of a pledge terminates after
that period).
13
not provide relief. We read the provisions of FIRREA in context,
cognizant of the statute's structure and purpose.30 Passed in the
wake of a national crisis in the banking and savings-and-loan
industries, FIRREA was intended to promote stability, economic
recovery, and increased public confidence.31 To this end, the FDIC
was empowered to serve as receiver for failed financial
institutions.32 Section 1825 was enacted to facilitate the FDIC's
efforts as receiver and was intended to "protect assets
involuntarily acquired by the FDIC from losing value because of its
lack of knowledge about local and state tax liens."33
Before the passage of FIRREA, section 1825 only included the
provision currently codified as 1825(a), which articulated the
FDIC's exemption from taxation while acting in its corporate
capacity.34 FIRREA added subsection (b) to extend this exemption to
the FDIC's role as receiver.35 We are persuaded that section
30
See Lady v. Neal Glaser Marine, Inc., 228 F.3d 598, 609 (5th
Cir. 2000).
31
See Trembling Prairie Land Co. v. Verspoor, 145 F.3d 686,
690 (5th Cir. 1998); H.R. Rep. No. 101-54(I), at 294, 307 (1989),
reprinted in 1989 U.S.C.C.A.N. 86, 90, 103; H.R. Conf. Rep. No.
101-222, at 393 (1989), reprinted in 1989 U.S.C.C.A.N. 432, 432.
32
See 12 U.S.C. §§ 1821(c)(6)(B)(ii) (2000).
33
Verspoor, 145 F.3d at 689-90.
34
See 12 U.S.C. § 1825 (1988).
35
See Irving Indep. Sch. Dist. v. Packard Props., 970 F.2d 58,
61 (5th Cir. 1992).
14
1825(b)(2) merely extends the general exemption of the FDIC from
taxation to the receivership context. As a House Report
accompanying FIRREA indicated:
[Section 1825(b)(2)] clarifies the existing provision
specifying that the only kind of non-Federal tax to which
the FDIC, in its corporate capacity or as receiver, is
subject is a tax on real property. The exemption from
taxation extends to the [FDIC's] property and operations
in whatever capacity it is functioning, and particularly
as receiver for a national bank, a branch of a foreign
bank, or a savings association (but not as a receiver for
a State bank under State law).36
The title to section 1825 confirms the arrangement established
by FIRREA.37 Section 1825 is labeled, "Exemption from taxation;
limitations on borrowing." FIRREA added the heading, "General
rule," to subsection (a).38 The heading which FIRREA designated for
subsection (b), "Other exemptions," confirms that section
1825(b)(2) was intended to address other exemptions from taxation
than those stipulated in the "general rule." The "other exemption"
at issue in this case is the rule precluding the attachment of an
involuntary tax lien to FDIC property. The structure, title, and
purpose of the statute compel this conclusion.
36
H.R. Rep. No. 101-54(I), at 337, reprinted in 1989
U.S.C.C.A.N. at 133 (emphasis added).
37
See United States v. Marek, 2001 WL 10561, at *8 (5th Cir.
2001) (affirming the value of examining the title of a disputed
provision where ambiguity is present).
38
See FIRREA § 219, 103 Stat. 183, 261 (codified as amended
at 12 U.S.C. § 1825(a)).
15
This Court has consistently interpreted section 1825(b)(2) in
this fashion. We have found that this section prohibits state and
local taxing authorities from foreclosing on property subject to an
FDIC lien without its consent.39 This Court has not applied the
exemption of section 1825(b)(2) to liens not attached by state and
local taxing authorities.40 Indeed, we have repeatedly found that
section 1825(b)(2) "represents the express will of Congress that
the FDIC must consent to any deprivation of property initiated by
a state."41
Joslin attempts to apply this exemption to the intervention
initiated by Jump and Bank One. As Jump and Bank One are private
entities possessing normal judgment liens, however, their claims
are not barred by section 1825(b)(2). We therefore find that FIRREA
does not preclude the application of Louisiana reinscription law to
the FDIC's property. Nothing in FIRREA prevents Louisiana law from
recognizing either the FDIC's obligation to reinscribe mortgages or
39
See Trembling Prairie Land Co. v. Verspoor, 145 F.3d 686,
689-91 (5th Cir. 1998); FDIC v. Lee, 130 F.3d 1139, 1143 (5th Cir.
1997); Donna Indep. Sch. Dist. v. Balli, 21 F.3d 100, 101 (5th Cir.
1994); Matagorda County v. Russell Law, 19 F.3d 215, 222 (5th Cir.
1994); see also Simon v. Cebrick, 53 F.3d 17, 22 (3d Cir. 1995).
40
Our Court is consequently in disagreement with the Tenth
Circuit. See GWN Petroleum Corp. v. OK-Tex Oil & Gas, Inc., 998
F.2d 853 (10th Cir. 1993). We note that the GWN court failed to
address whether the scope of section 1825(b)(2) was restricted to
liens held by state and local taxing authorities.
41
Lee, 130 F.3d at 1143 (emphasis added); First State Bank-
Keene v. Metroplex Petroleum Inc., 155 F.3d 732, 738-39 (5th Cir.
1998).
16
the loss of ranking suffered by the FDIC if it fails to meet this
obligation. FIRREA only prohibits state and local entities from
taking advantage of the FDIC's failure to reinscribe by attaching
liens and other instruments to satisfy tax judgments. As these
circumstances are not present here, Joslin's argument fails.42
42
Joslin also invokes 12 U.S.C. § 1821(d)(13)(C), which
provides: "No attachment or execution may issue by any court upon
assets in the possession of the receiver." Courts have construed
this provision as prohibiting the attachment of liens and judgments
against the property of the FDIC or Resolution Trust Corporation
(RTC) when they are acting as receivers. See Resolution Trust Corp.
v. Cheshire Mgmt. Co., 18 F.3d 330, 335 (6th Cir. 1994); GWN
Petroleum, 998 F.2d at 856-57; Cambridge Capital Corp. v. Halcon
Enters., Inc., 842 F. Supp. 499, 505 (S.D. Fla. 1993). However,
none of these decisions has applied this provision to the assignee
of the FDIC or RTC. Indeed, the plain language of section
1821(d)(13)(C) affirms that the provision applies only while the
assets are "in the possession" of the FDIC/RTC. While it is
generally true that "an assignee takes all of the rights of the
assignor, no greater and no less," In re New Haven Projects Ltd.
Liability Co. v. City of New Haven, 225 F.3d 283, 290 n.4 (2d Cir.
2000) (quotations omitted), no authority supports the proposition
that section 1821(d)(13)(C) creates assignable rights. See id.At oral argument, Joslin raised for the first time the
contention that 12 U.S.C. § 1821(d)(13)(D), in conjunction with
section 1821(d)(13)(C), deprived the district court of jurisdiction
to decide the matter. Section 1821(d)(13)(D), which is entitled,
"Limitation on judicial review," states:
Except as otherwise provided in this subsection, no court
shall have jurisdiction over - (i) any claim or action
for payment from, or any action seeking a determination
of rights with respect to, the assets of any depository
institution for which the Corporation has been appointed
receiver, including assets which the Corporation may
acquire from itself as such receiver; or (ii) any claim
relating to any act or omission of such institution or
the Corporation as receiver.
12 U.S.C. § 1821(d)(13)(D). This provision merely requires
claimants to assets in possession of the FDIC to exhaust
administrative remedies prior to filing in court. The circuits
17
C
Joslin argues, in the alternative, that federal common law—
and not Louisiana reinscription law—governs the status of FDIC
liens. In United States v. Kimbell Foods, Inc.,43 the Supreme Court
articulated the general framework for determining whether to apply
federal common law or state law. The Kimbell Foods case addressed
the question of whether liens arising from federal loan programs
take precedence over private liens. The Court noted that, in the
absence of a federal statutory provision setting priorities, it
must first decide whether federal or state law provides the "rule
of decision" for the controversy. 44 If a federal rule of decision
agree on this point. See, e.g., American First Federal, Inc. v.
Lake Forest Park, Inc., 198 F.3d 1259, 1263 (11th Cir. 1999); FDIC
v. Scott, 125 F.3d 254, 258 (5th Cir. 1997); Nat'l Union Fire Ins.
v. City Sav., 28 F.3d 376, 393 (3d Cir. 1994); RTC v. Midwest Fed.
Sav. Bank, 36 F.3d 785, 791 (9th Cir. 1993). The record does not
reveal that administrative claim remedies were pursued prior to
either the 1993 or 1999 action. This Court is precluded from
collaterally attacking the 1993 decision. See Chicot County
Drainage Dist. v. Baxter State Bank, 308 U.S. 371 (1940); Jack's
Fruit Co. v. Growers Mktg. Serv., Inc., 488 F.2d 493, 494 (5th Cir.
1973) (per curiam). Failure to pursue remedies in the 1999 case is
of no moment, however, as the FDIC was no longer a party. It would
be absurd for us to interpret section 1821(d)(13)(D) as assignable
to the current holder, Joslin. The claim procedures articulated in
12 U.S.C. § 1821(d)(5)-(11) are predicated on the FDIC's possession
of the property in question. When the FDIC relinquishes ownership,
the procedures governing its role as a receiver no longer apply to
the property. Thus, section 1821(d)(13)(D) did not deprive the 1999
court of jurisdiction. As noted above, section 1821(d)(13)(C) is
not a jurisdictional provision.
43
440 U.S. 715 (1979).
44
Id. at 718.
18
is appropriate, the court must determine whether to fashion a
uniform federal standard or to incorporate state commercial law.45
The Court's inquiry was guided by consideration of three factors:
(1) the federal interest in uniform federal rules; (2) whether
application of state law would frustrate the specific objectives of
the federal program at issue; and (3) to what extent application of
a federal rule would disrupt commercial relationships predicated on
state law.46 In subsequent cases, the Court has held that federal
law provides the "rule of decision" in lieu of state law only where
there is a "significant conflict between some federal policy or
interest and the use of state law."47 The Supreme Court has observed
that such a conflict is a "precondition for recognition of a
federal rule of decision," and has noted that such cases are "few
and restricted."48
We find that state law provides the rule of decision in this
case. FIRREA is a comprehensive and detailed statutory scheme.49 The
Supreme Court has stated that we are not to "adopt a court-made
rule to supplement federal statutory regulation that is
45
Id.46
Id.47
O'Melveny & Myers v. FDIC, 512 U.S. 79, 87 (1994)
(quotations omitted).
48
Id.49
See id. at 85 (describing FIRREA as "comprehensive
legislation"). Joslin concedes that FIRREA is "meticulous and
comprehensive."
19
comprehensive and detailed; matters left unaddressed in such a
scheme are presumably left subject to the disposition provided by
state law."50 Joslin does not articulate a valid basis for
overcoming this presumption.
Moreover, the FDIC in this case acts not in its corporate
capacity, but as receiver for a private bank. This Court has
followed the Supreme Court in recognizing that "the capacity in
which the FDIC acts may have a determinative impact on whether a
state or federal rule should control."51 As receiver for the Bank
of Commerce, the FDIC's rights and liabilities derive from a
private lien held by a private bank. Precedent confirms that the
FDIC's actions as receiver do not implicate the concerns
articulated in cases such as Kimbell Foods.52 As the FDIC's actions
as a receiver do not concern the "rights of the United States in a
nationwide federal program,"53 state law normally supplies the rule
of decision.54
50
Id.51
Davidson v. FDIC, 44 F.3d 246, 251 (5th Cir. 1995); see
O'Melveny & Myers, 512 U.S. at 88.
52
See Atherton v. FDIC, 519 U.S. 213, 225 (1997); O'Melveny
& Myers, 512 U.S. at 88; Ferguson v. FDIC, 164 F.3d 894, 897-98
(5th Cir. 1999); Davidson, 44 F.3d at 251.
53
Davidson, 44 F.3d at 251.
54
See id. at 250 ("Absent [a significant federal proprietary
interest] . . . or some express congressional policy to the
contrary, state law governs state-law rights held by the FDIC in
its limited capacity as the receiver of a nonfederal entity.").
20
We also do not find that application of state law would create
a "significant conflict" with the FDIC's putative interest in the
application of a uniform national standard.55 Joslin points to
provisions in FIRREA which protect the FDIC from the effects of
state law,56 yet offers no reason why these protections—none of
which is relevant to the reinscription issue at hand—imply the need
for a uniform national standard.57 While uniformity of law would
free the FDIC from the obligation of consulting state law to
determine reinscription and lien priority rules, this requirement
is one of the "ordinary consequences" of operating as receiver.58
Disposing of the assets and obligations of a failed financial
institution necessarily requires an individualized inquiry into the
effects of local law.59 FIRREA lightens this burden considerably by
55
See Kimbell Foods, 440 U.S. at 728-29.
56
See, e.g., 12 U.S.C. § 1825; see also Campbell Leasing, Inc.
v. FDIC, 901 F.2d 1244, 1249 (5th Cir. 1990) (finding that the FDIC
enjoys holder in due course status as a matter of federal common
law, regardless of whether it acts in a corporate or receivership
capacity).
57
See Atherton v. Federal Deposit Ins. Corp., 519 U.S. at 218("Nor does the existence of related federal statutes automatically
show that Congress intended courts to create federal common-law
rules, for 'Congress acts . . . against the background of the total
corpus juris of the states.'") (quoting Wallis v. Pan Am.
Petroleum Corp., 384 U.S. 63, 68 (1966)); see also O'Melveny &
Myers, 512 U.S. at 86-87.
58
See O'Melveny & Myers, 512 U.S. at 88.
59
See Kimbell Foods, 440 U.S. at 729-33 (noting that adherence
to state-law lien priority rules would not unduly impede the
operations of the Small Business Administration (SBA), given that
21
protecting the FDIC from the effect of state law in various
respects. Joslin provides no compelling reason for this Court to
extend these protections. Nor does it offer any limiting principles
were we to proceed down that road, demonstrating the "runaway
tendencies of 'federal common law.'"60
Joslin articulates no significant federal policy or interest
that would be jeopardized by exposure to reinscription
requirements. There is a candidate. FIRREA was "designed in part to
facilitate the efficient and speedy recovery of the assets of . .
. failed [financial institutions]."61 Given the need to market
occasionally large quantities of assets, the FDIC prefers to sell
assets without the risk of losing its priority position. While we
are not unsympathetic to the bureaucratic limitations of the FDIC,
we fail to see how the state-law requirements at issue pose a
"significant conflict" with the federal interest in effectively
disposing of the assets at the FDIC's disposal.
Precedent also leaves little doubt that a federal agency's
interest in preserving priority lien status is insufficient to
render state law inapplicable. Although Kimbell Foods applied a
federal rule of decision, it incorporated state law for purposes of
determining the relative priority of competing federal and private
it already engaged in individualized inquiry regarding local law
and prospective debtors).
60
O'Melveny & Myers, 512 U.S. at 89.
61
N.S.Q. Assocs. v. Beychok, 659 So. 2d 729, 731 (La. 1995).
22
liens.62 In Magnolia Federal Bank v. United States,63 our Court
similarly found that, "[i]nsofar as Magnolia's claim would
subordinate rather than bar enforcement of SBA's liens for
untimeliness, state law is properly invoked against the federal
agency."64 Failure to reinscribe a lien in Louisiana does not
extinguish the mortgage. The mortgage merely loses priority status
vis-a-vis other creditors.65 The prohibition against applying state
statutes of limitations to the activities of federal agencies
consequently does not govern this case.66 The Louisiana law at issue
presents no significant conflict with the FDIC's interests.
We further note that the application of federal law would
disrupt commercial relationships predicated on state law.67 As
Joslin concedes, Louisiana has a strong public records doctrine.68
62
See Kimbell Foods, 440 U.S. at 718.
63
42 F.3d 968 (5th Cir. 1995).
64
Magnolia, 42 F.3d at 969. This Court fails to discern a
relevant difference between the interests of agencies such as the
SBA and the Farmers Home Administration (FmHA) in preserving
priority lien status and that of the FDIC.
65
See Executors of Liddell v. Rucker, 13 La. Ann. 569, 571
(La. 1858); Security Nat'l Trust v. Alexander, 621 So. 2d 30, 31
(La. App. 2d Cir. 1993).
66
See Magnolia, 42 F.3d at 972; cf. United States v.
Summerlin, 310 U.S. 414, 416 (1940); cf. Farmers Home Admin. v.
Muirhead, 42 F.3d 964, 965 (5th Cir. 1995).
67
See Kimbell Foods, 440 U.S. at 728-29, 739-40.
68
See McDuffie v. Walker, 51 So. 100, 105 (La. 1909); see also
Max Nathan, Jr. & Anthony P. Dunbar, The Collateral Mortgage: Logic
23
The public records doctrine serves important reliance interests, as
third parties are "entitled to rely on the absence from the public
records of any unrecorded interest in the property."69 The purposes
of the Louisiana reinscription requirement are "to provide public
notice of the essentials of the mortgage and to limit 'searching,
for the evidence of mortgages, more than ten years back.'"70 The
significance of this doctrine is evident in the Louisiana rule
stating that actual knowledge by third parties of an unrecorded
interest is immaterial; recordation and reinscription are alone
dispositive of priority status.71
and Experience, 49 La. L. Rev. 39, 44 n.22 (1988) (discussing
Louisiana's "strong public records doctrine"); Lee Hargrave,
Presumptions and Burdens of Proof in Louisiana Property Law, 46 La.
L. Rev. 225, 234 (1985) (same).
69
Dallas v. Farrington, 490 So. 2d 265, 269 (La. 1986)
(emphasis omitted).
70
Exxon Process & Mech. Fed. Credit Union v. Moncrieffe, 498
So. 2d 158, 159 (La. App. 1st Cir. 1986) (quoting Poutz v. Reggio,
25 La. Ann. 637 (1873)).
71
See Dallas, 490 So. 2d at 269. The fact that Jump and Bank
One had actual notice of the 1984 mortgage and assignment is
therefore irrelevant. We note that they are "third persons" as
defined in La. Civ. Code Ann. art. 3309 (West 2000) ("Third persons
to a mortgage are those who are neither parties to the contract of
mortgage or the judgment that the mortgage secures."). Jump and
Bank One were not parties to the 1984 mortgage and assignment,
which was created by contract. However, Joslin contends that the
language, "judgment that the mortgage secures," indicates that Jump
and Bank One, who are parties to the 1993 judgment, are not third
persons. As previously discussed, a mortgage only binds "third
persons" to the extent that it is validly recorded and reinscribed.
See La. Civ. Code Ann. art. 3308 (West 2000). Following Joslin's
reasoning, the FDIC's failure to reinscribe does not render the
1984 mortgage and assignment ineffective as to Jump and Bank One.
24
Case law affirms the importance of respecting this state
policy. The Supreme Court has recognized that state laws of this
kind provide private commercial entities with "the stability
essential for reliable evaluation of the risks involved."72 The
Supreme Court also has noted that if federal law were to displace
state law regulating lien priority, "[c]reditors who justifiably
rely on state law to obtain superior liens would have their
expectations thwarted whenever a federal contractual security
It is unclear whether the current version of Article 3309
applies to a mortgage that was created before the effective date of
the Act creating that provision. See 1992 La. Acts 1132, §§ 2, 7
(amending prior definition of "third persons" and indicating in
general terms the effective date of the Act as January 1, 1993).
Louisiana law prior to 1993 defined "third persons" as "persons who
are not parties to the act or to the judgment on which the mortgage
is founded." La. Civ. Code Ann. art. 3343 (West compiled ed. 1973)
(emphasis added). This language makes clear that the previous
formulation of the category, "third persons," simply excluded
parties to the proceedings creating the original judicial mortgage.
The 1992 Act revising this article indicates that the current
Article 3309 merely codifies principles of the existing public
records doctrine and that it is based on former Civil Code articles
3343 and 3344. 1992 La. Acts 1132, § 2 (cmts. following Article
3309). The commentary following the revised article does not
indicate that the new language changed prior law. Indeed, the
current version of article 3299 of the Civil Code defines "judicial
mortgage" as a mortgage which "secures a judgment for the payment
of money." La. Civ. Code Ann. art. 3299 (West 2000) (emphasis
added). This language mirrors that which appears in Article 3309.
Although Bank One and Jump might be parties to a judicial mortgage
created by the 1993 judgment, this fact is irrelevant. The parties
do not contend that the FDIC failed to reinscribe a judicial
mortgage created in 1993. The 1993 judgment only binds Bank One and
Jump to the extent that the underlying 1984 mortgage and assignment
remains valid.
72
Kimbell Foods, 440 U.S. at 739.
25
interest suddenly appeared and took precedence."73 Moreover, this
Court's jurisprudence affirms that we are to defer to state
property regimes when considering whether to apply a federal common
law rule.74 We have found that the "strong local interest in state
regulation of land titles. . . . should 'be overridden by the
federal courts only where clear and substantial interests of the
National Government, which cannot be served consistently with
respect for such state interests, will suffer major damage if the
state law is applied.'"75 As we do not find that state law will
significantly impede the work of the FDIC as receiver in this
context, "we decline to override [this] intricate state law[ ] of
general applicability on which private creditors base their daily
transactions."76 We are ill-equipped to take such a step and leave
this matter in Congress's capable hands.77
73
Id.74
See Farmers Home Admin. v. Muirhead, 42 F.3d 964, 966 (5th
Cir. 1995); Davidson v. Federal Deposit Ins. Corp., 44 F.3d 246,
251 n.4 (5th Cir. 1995); see also United States v. Yazell, 382 U.S.
341, 352-54 (1966); Mason v. United States, 260 U.S. 545, 555-57
(1923).
75
Davidson, 44 F.3d at 251 n.4 (quoting Yazell, 382 U.S. at
352).
76
Kimbell Foods, 440 U.S. at 729.
77
See O'Melveny & Myers, 512 U.S. at 89. Our holding today
renders it unnecessary to decide the question of whether the
putative exemption of the FDIC from Louisiana reinscription law is
assignable to Joslin. See Federal Deposit Ins. Corp. v. Bledsoe,
989 F.2d 805, 811 (5th Cir. 1993) (holding that assignees of the
FDIC and FSLIC are entitled to federal six-year statute of
26
IV
Assuming that Louisiana reinscription law applies to the FDIC,
Joslin contends that the 1993 judgment satisfied these
requirements. We disagree. Article 3333 of the Louisiana Civil Code
requires that the holder of the mortgage file a signed, written
notice of reinscription which, inter alia, "shall declare that the
document is reinscribed."78 Article 3336 of the Civil Code affirms
that this method is exclusive of all others.79 The Act creating the
reinscription method currently in effect states that "[t]he
procedure for reinscription of mortgages and privileges as set
forth in Civil Code Articles 3328 through 3331 shall be effective
as to all requests for reinscription filed on or after [January 1,
1993]."80 Assuming that the 1993 judgment constitutes a "request for
reinscription," the method outlined in Article 3333 applies. Not
limitations); Federal Sav. & Loan Ins. Corp. v. Cribbs, 918 F.2d
557, 560 (5th Cir. 1990) (finding that assignees of the FDIC enjoy
holder in due course status whether or not they satisfy the
requirements of state law); Porras v. Petroplex Sav. Ass'n, 903
F.2d 379, 381 (5th Cir. 1990) (holding that the protections
accorded the FDIC under the D'Oench, Duhme doctrine apply to
private assignee).
78
La. Civ. Code Ann. art. 3333 (West 2000). The name of the
mortgagor, as well as the "recordation number or other appropriate
recordation information," are also required. Id.79
La. Civ. Code Ann. art. 3336.
80
1992 La. Acts 1132, § 7.
27
only was the 1993 judgment not signed by an FDIC representative,
but it also does not declare that the document is to be
reinscribed. Consequently, the 1993 judgment did not reinscribe the
1984 mortgage and assignment.
Even under prior law, the 1993 judgment would not constitute
an effective reinscription of the mortgage and assignment. Although
a recorded judgment could effectively reinscribe a mortgage, it had
to include each of the "substantial particulars" of the mortgage.81
A reinscription had to contain "notice to the world that the
mortgagor continue[s] to admit his indebtedness, and that the
mortgagee continue[s] to maintain its mortgage on the property
described."82 The 1993 judgment does not include a copy of the 1984
mortgage and assignment. It only refers to "the oil and gas leases,
royalty interests, overriding royalty interests and other property
described" in the mortgage. This description fails to provide
third-parties with the notice required under Louisiana
reinscription law.83 The judgment also was deficient in other
81
See Exxon Process, 498 So. 2d at 160 (quoting Life Ins. Co.
of Virginia v. Nolan, 159 So. 583, 585 (La. 1935)). Former Article
3369 of the Louisiana Civil Code governs reinscription in this
case. Recent statutory amendments do not apply to the 1984 mortgage
and assignment. See 1992 La. Act No. 1132, § 7 (stating that
amendments do not apply to mortgages entered into before January 1,
1993).
82
Nolan, 159 So. at 585.
83
See Shepherd v. The Orleans Cotton Press Co., 2 La. Ann.
100, 113 (La. 1847) (noting that the description of the property
mortgaged is one of the "essential requisites" of Louisiana
28
respects, as it failed to include, inter alia, "the name of the
officer who passed the act [of mortgage and assignment]."84 We
therefore agree with the district court that the 1993 judgment was
not a valid reinscription of the 1984 mortgage and assignment.85
V
Joslin contends that the Jump judgment was not a "final"
judgment and therefore improperly registered. 28 U.S.C. § 1963allows for registration where a judgment "has become final by
appeal or expiration of the time for appeal or when ordered by the
court that entered the judgment for good cause shown." By the plain
reinscription law and that "reference to previous mortgages does
not cure that defect").
84
A. Miltenberger & Co. v. Dubroca, 34 La. Ann. 313, 314 (La.
1882).
85
Joslin also points out that Jump and Bank One made no
additional seizure of McFarland's assets following the 1993
judgment. It argues that the 1993 judgment "merged" Jump and Bank
One's previous seizure of the proceeds from the mineral leases.
Assuming that the FDIC's failure to reinscribe resulted in Joslin's
lien losing priority, Joslin contends that Jump and Bank One no
longer have a claim to the assets.
Joslin fails to explain what "merger" in this context entails.
It is far from clear that the 1993 judgment ended the seizure of
the registry funds obtained by Jump and Bank One in 1992. Even if
the seizure terminated in the wake of the 1993 judgment, Jump and
Bank One's failure to renew this seizure does not necessarily
deprive them of a claim. Assuming that they have valid judgment
liens against McFarland that have yet to be fully satisfied by the
OCS-310 proceeds, they presumably have a claim to the other
proceeds generated by the mineral pledge entered into by McFarland.
Moreover, Joslin fails to cite any authority in support of its
argument. See Fed. R. App. P. 28(a)(9)(A); Jason D.W. v. Houston
Indep. Sch. Dist., 158 F.3d 205, 210 n.4, 212 (5th Cir. 1998).
29
language of the statute, registration may only occur where a
judgment or order is final for purposes of appeal.86 The only
exception contemplated by section 1963 is where the district court
makes a good cause determination.
Rule 54 of the Federal Rules of Civil Procedure affirms that
a judgment is not final for purposes of appeal where it disposes of
fewer than all of the claims or parties involved in a case. Rule
54(b) allows a court to "direct the entry of final judgment as to
one or more but fewer than all of the claims or parties only upon
an express determination that there is no just reason for delay and
upon an express direction for the entry of judgment."
The Jump judgment only disposed of Jump's claims. Litigation
involving other parties to the Colorado litigation did not conclude
until August 25, 1997—long after the FDIC's reinscription of the
mortgage and assignment. As Jump concedes that no Rule 54(b)
certification was obtained, the judgment upon which he bases his
claim was not final.87 Because the registration of the Jump judgment
was premature,88 it could not prime the FDIC's lien following the
86
The time for appeal articulated in Fed. R. App. P.
4(a)(1)(A) is only triggered by the entry of a final judgment or
order. See Nelson v. Foti, 707 F.2d 170, 171 (5th Cir. 1983)
("F.R.A.P. 4(a) provides that an appeal from a final judgment must
be filed within 30 days of entry of judgment.") (emphasis added).
87
See Huckeby v. Frozen Food Express, 555 F.2d 542, 545-46
(5th Cir. 1977); Redding & Co. v. Russwine Constr. Corp., 417 F.2d
721, 723-24 (D.C. Cir. 1969).
88
Our holding today does not constitute a collateral attack
30
FDIC's reinscription of the mortgage and assignment in 1995.
Although registration of the 1997 judgment would assure Jump of a
claim to McFarland's assets, a resulting lien would remain
subordinate to those held by Bank One and Joslin, respectively.89
The district court focused on the unique status of consent
judgments, which are unappealable.90 The court held that the time
for appeal from a consent judgment expires immediately upon the
entry of judgment.91 Even if we accept the court's position, it does
not alter the fact that Jump failed to obtain the requisite Rule
54(b) certification. We are unprepared to carve out an exception to
Rule 54(b) for consent judgments. Such a decision is more
appropriately taken by Congress.92
on the 1993 judgment—a step that we are not permitted to take. See
Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371,
375 (1940); Jack's Fruit Co. v. Growers Mktg. Serv., Inc., 488 F.2d
493, 494 (5th Cir. 1973) (per curiam).
89
On remand, Jump will have the opportunity to re-register his
judgment. We are unprepared to view the conclusion of the Colorado
litigation in 1997 as automatically rendering Jump's registered
judgment final.
90
See Stanford v. Utley, 341 F.2d 265, 271 (8th Cir. 1965)
(Blackmun, J.).
91
See id.; Kelly v. Greer, 354 F.2d 209, 211 (5th Cir. 1965)
(dictum); Dichter v. Disco Corp., 606 F. Supp. 721, 724 (S.D. Ohio
1984).
92
See Coopers & Lybrand v. Livesay, 437 U.S. 463, 476 n.28
(1978) ("The Congress is in a position to weigh the competing
interests of the dockets of the trial and appellate courts, to
consider the practicability of savings in time and expense, and to
give proper weight to the effect on litigants. . . . This Court .
. . is not authorized to approve or declare judicial modification.
31
In light of the preceding, we hereby AFFIRM the judgment of
the district court finding that Louisiana reinscription law
operates to strip the FDIC of priority lien status. We further
REVERSE the district court's holding that the Jump judgment was an
executable, final judgment and its finding that the Jump judgment
was senior to Joslin's lien. We REMAND for proceedings not
inconsistent with this opinion.
AFFIRMED in part, REVERSED and REMANDED in part.
. . . [These] choices fall in the legislative domain.") (quoting
Baltimore Contractors v. Bodinger, 348 U.S. 176, 181-82 (1955)).
32