Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Federal Deposit Insurance Corp. v. Bank of America, N.A.

United States District Court, District of Columbia

March 27, 2018

FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff,
v.
BANK OF AMERICA, N.A. Defendant.

          MEMORANDUM OPINION

          Emmet G. Sullivan United States District Judge

         I. Introduction .

         Every quarter, insured banking institutions make payments, known as "assessments, " into the Deposit Insurance Fund ("Fund"), which insures depositors' accounts up to $250, 000. Pursuant to the Federal Deposit Insurance Act ("FDIA" or "Act"), see 12 U.S.C. § 1817, the Federal Deposit Insurance Corporation ("FDIC") created a "risk-based" system to calculate each institution's assessment based on that institution's self-reported, quarterly data. The FDIC alleges that defendant Bank of America, N.A. ("BANA") improperly reported its quarterly data, thereby underpaying for deposit insurance. According to the FDIC, BANA owes $1.12 billion in deposit insurance assessments, which it refuses to pay.

         The FDIC's amended complaint alleges that (1) BANA failed to pay mandatory assessments in violation of the FDIA; and (2) BANA was unjustly enriched when it received deposit insurance without fully paying for it. BANA counterclaimed, challenging the FDIC's regulations, which purportedly set out the method by which regulated institutions must calculate and report their quarterly data. BANA argues that the regulations violate the Administrative Procedure Act, 5 U.S.C. § 500 et seq., and are contrary to the FDIA. Pending before the Court is BANA's motion to dismiss the FDIC's amended complaint in part or strike in part. See Def.'s Mot., ECF No. 13.[1] After careful consideration of the motion, the response, the reply thereto, and the applicable law, BANA's motion to dismiss or strike the FDIC's amended complaint in part is DENIED.

         II. Background

         The FDIC is a "government corporation and instrumentality of the United States." Am. Compl., ECF No. 10 ¶ 16. It examines and supervises almost 3, 800 commercial banks and savings institutions for operational safety and soundness. Id. It also administers the Fund, which provides deposit insurance to over 5, 000 banks and savings institutions, insuring accounts of up to $250, 000 per depositor. Id. ¶¶ 2, 16. If an institution fails, the FDIC ensures that the depositors are able to access their insured accounts at that institution; if the institution's assets are insufficient to return all insured deposits, the FDIC pays the balance from the Fund. Id. ¶ 21.

         As required by the FDIA, the FDIC finances the Fund with assessments collected from FDIC-insured institutions. Id.¶ 24. To determine the amount that each institution must pay, the FDIC utilizes a "risk-based" assessment system. Id. The system calculates each assessment rate based on that institution's "risk profile." Id. The risk profile captures the probability that the institution will fail and, in the event of failure, the potential amount of loss that the Fund will bear. Id. To determine each institution's risk profile, the FDIC implemented a "regulatory regime" that requires certain institutions to self-report specific data via quarterly "Call Report[s]." Id. ¶¶ 29, 32. This data, which includes the amount, that the institution has lent to other entities, is intended to capture the risk of failure.[2] Id. ¶¶ 30-39. Because BANA is one of the largest insured institutions, it is subject to the FDIC's assessment system and must report its quarterly data. Id. ¶ 25.

         The FDIC alleges that, from the second quarter of 2011[3]through the fourth quarter of 2014, BANA improperly reported its quarterly data, thereby understating its risk profile. Am. Compl., ECF No. 10 43. As a result, the FDIC underbilled BANA for deposit insurance. Had BANA properly reported its data, it allegedly would have owed the FDIC an additional $1.12 billion in assessment payments. Id. ¶¶ 48, 60. According to the FDIC, BANA knew how to properly report its data but "decided not to [do so]." Id. ¶¶ 57-59. Instead, it "certified as true and correct, " pursuant to the FDIA, every Call Report at issue. Id. ¶ 68 (referring to 12 U.S.C. § 1817(a)(3)). The FDIC purportedly did not "learn[] the full extent of [BANA's] reporting failure" until 2016. Id. ¶ 9. The FDIC thereafter invoiced BANA for the $1.12 billion it allegedly owes. Id. ¶¶ 11, 65. BANA purportedly refuses to pay. Id. ¶ 12.

         On January 9, 2017, the FDIC sued BANA for $542 million for failing to pay its mandatory assessments from the second quarter of 2013 through the fourth quarter of 2014. See Compl, ECF No. 1. On April 7, 2017, the FDIC amended its complaint, adding a claim for unjust enrichment. See Am. Compl., ECF No. 10 ¶¶ 72-94. The amended complaint alleges that BANA owes the FDIC an additional $583 million for underpayments predating the second quarter of 2013. Id. The FDIC requests that the Court order BANA to pay the full amount it owes, including interest, costs, and disorgement of profits unjustly earned. Id. ¶ 22. On May 5, 2017, BANA filed a motion to dismiss or strike the FDIC's amended complaint in part for failure to state a claim for relief pursuant to Federal Rule of Civil Procedure 12(b)(6). See Def.'s Mot., ECF No. 13.

         III. Standard of Review

         A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations and citations omitted).

         Despite this liberal pleading standard, to survive a motion to dismiss, a complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citations omitted). A claim is facially plausible when the facts pled in the complaint allow the court to "draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The standard does not amount to a "probability requirement, " but it does require more than a "sheer possibility that a defendant has acted unlawfully." Id.

         “[W]hen ruling on a defendant's motion to dismiss [pursuant to Rule 12(b)(6)], a judge must accept as true all of the factual allegations contained in the complaint." Atherton v. D.C. Office of the Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009) (internal quotations and citations omitted). In addition, the court must give the plaintiff the "benefit of all inferences that can be derived from the facts alleged." Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Even so, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements" are not sufficient to state a claim. Iqbal, 556 U.S. at 678.

         IV. Analysis

         BANA moves to dismiss or strike in part the FDIC's amended complaint for failure to state a claim. See Def.'s Mot., ECF No. 13. It makes three arguments: (1) the FDIC's unjust enrichment claim should be dismissed because the FDIA provides the FDIC with an adequate legal remedy; (2) the FDIC's unjust enrichment claim should be dismissed because the FDIC did not allege unjust enrichment as a matter of law; and (3) the FDIC's claims for unpaid ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.