Farella Braun + Martel LLP v. Federal Deposit Insurance Corporation as Receiver…
Farella Braun + Martel LLP v. Federal Deposit Insurance Corporation as Receiver for First Republic Bank
- Susan Illston
- 3:24-cv-01746
- U.S. District Court · Northern District of California
- 7
In Farella Braun v. FDIC, Judge Illston granted summary judgment to the FDIC but ordered payment of $2,679.14 mistakenly withheld.
Farella Braun + Martel LLP and the Federal Deposit Insurance Corporation as receiver for First Republic Bank; the ruling concerns the firm’s claim for payment of legal invoices from the failed bank’s receivership.
What happened
Farella Braun + Martel LLP sued the Federal Deposit Insurance Corporation, acting as receiver for First Republic Bank, over legal-fee claims arising from work performed before the bank failed. The FDIC allowed part of the firm’s $50,704.34 claim but disallowed three invoices.
The court had jurisdiction to decide the validity of the claim itself, rather than review whether the FDIC originally handled the claim correctly. It limited its review to evidence the firm submitted during the FDIC’s claim-review period and found that the invoices lacked necessary billing details, such as hours, rates, or proof of a flat-fee agreement.
Judge Susan Illston granted the FDIC’s motion for summary judgment. However, because the parties agreed that $2,679.14 had been mistakenly withheld, the court ordered the FDIC to pay that amount to the firm within 30 days of the order.
The detailed version
- Farella Braun + Martel LLP v. Federal Deposit Insurance Corporation as Receiver… · No. 3:24-cv-01746
- Susan Illston
- Sept. 5, 2025
Background
Farella Braun + Martel LLP performed legal work for First Republic Bank before the bank failed on May 1, 2023. The Federal Deposit Insurance Corporation (FDIC) was appointed receiver. The FDIC published a deadline for claims against the failed bank and processed almost 6,000 claims.
On August 24, 2023, the firm submitted a $50,704.34 proof of claim covering 11 invoices for work performed in 2022 and early 2023. After the FDIC requested line-item information, the firm submitted 11 invoices. The FDIC later issued a notice partially allowing $30,966.65 and disallowing $19,737.69. The parties agreed that the disallowed amount should have been $17,058.55. The FDIC stated that one invoice was duplicative and that two others were not proven to the receiver’s satisfaction. The firm filed this action under 12 U.S.C. § 1821(d)(6).
Jurisdiction and scope of review
The FDIC argued that the court lacked jurisdiction because the firm was seeking review of the FDIC’s partial disallowance. The court rejected that argument. It interpreted the complaint as seeking a new, independent determination of whether the claim was valid, rather than review of the propriety of the FDIC’s initial decision. The court therefore retained jurisdiction.
The FDIC also argued that the court’s review should be limited to material submitted during the FDIC’s 180-day claim-determination period. The court agreed. It reasoned that allowing a claimant to withhold evidence from the FDIC and present it for the first time in court would undermine the Financial Institutions Reform, Recovery and Enforcement Act’s goal of resolving claims against failed banks quickly. The court noted that the firm had not intentionally hidden evidence, but concluded that it was not legally required to repeatedly contact claimants whose documentation was incomplete.
Merits and ruling
The three disputed invoices contained descriptions of legal work, but did not state the number of hours worked, billing rates, or the identities of the attorneys who performed the work. The firm also had not provided the FDIC, during the claim-determination period, evidence of any flat-fee agreement.
Applying the summary-judgment standard, the court found the invoice information insufficient to support payment. It stated that billing details, including hours and rates or a flat-fee agreement, were necessary to protect the FDIC and other creditors of the failed bank. The court therefore granted the FDIC’s motion for summary judgment.
The court also ordered the FDIC to pay the firm $2,679.14 because the parties agreed that amount had been mistakenly disallowed. Payment was due within 30 days of the order.
Disposition
The FDIC’s motion for summary judgment was granted. Separately, the FDIC was ordered to pay Farella Braun + Martel LLP $2,679.14 within 30 days.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.