Farella Braun + Martel LLP v. Federal Deposit Insurance Corporation as Receiver…

Purpose of the order

The court stated that the case was set for an August 16, 2024 hearing on the defendant’s motion to dismiss and strike portions of the complaint. Rather than ruling on that motion, the court identified questions for the parties to address at the hearing.

Questions concerning interest

The Federal Deposit Insurance Corporation argued that sovereign immunity prevents an award of either pre-judgment interest, which covers interest before judgment, or post-judgment interest, which covers interest after judgment. The court noted that Far West Federal Bank specifically discusses pre-judgment interest and asked whether that decision also prevents an award of post-judgment interest and what legal authority supports the parties’ positions.

Questions concerning declaratory relief

The court asked what legal authority supports the defendant’s argument that the plaintiff must allege a contract between itself and Silicon Valley Bank to state a claim for declaratory relief.

The court also cited Sharpe v. F.D.I.C., 126 F.3d 1147 (9th Cir. 1997), which held that claims for rescission and declaratory relief must fall under an exception to 12 U.S.C. § 1821(j) to survive. The court asked how Sharpe applies, what exception the case falls under, and whether the defendant could reconcile a position that Sharpe bars declaratory relief with language in the Federal Deposit Insurance Corporation’s notice of partial allowance. That notice stated that, under 12 U.S.C. § 1821(d)(6), a claimant who disagrees with disallowance may file a lawsuit on the claim. The court asked whether § 1821(d)(6) is an exception to § 1821(j) and what legal authority supports that conclusion.

Disposition

The court ordered that the parties be prepared to address the listed questions at the August 16, 2024 hearing. This order did not grant, deny, or otherwise decide the motion to dismiss and strike.