Rothenberg et.al. v. Federal Deposit Insurance Corporation
- Jon Tigar
- 4:23-cv-01603
- U.S. District Court · Northern District of California
- 3
In Rothenberg v. Federal Deposit Insurance Corporation, Judge Tigar denied the FDIC’s requests to stay two proceedings because the statutory 90-day period had expired.
The Federal Deposit Insurance Corporation and the parties in the two identified proceedings, including Michael Brent Rothenberg and the other plaintiffs in Case No. 23-cv-01603-JST.
What happened
Rothenberg et al. v. Federal Deposit Insurance Corporation and a related action involved the Federal Deposit Insurance Corporation’s requests to pause both proceedings for 90 days. The FDIC said it was entitled to these stays under a federal banking law after being appointed receiver for Silicon Valley Bank.
The court explained that the law requires a court to grant a receiver’s requested stay, but the stay cannot extend beyond 90 days after the receiver’s appointment. The FDIC told the court it was appointed on March 10, 2023, so the permitted stay ended on June 8, 2023. The FDIC instead asked for the 90-day period to begin when the court ruled on its motions.
The court denied both motions for a stay. Judge Jon S. Tigar issued the order on July 11, 2023.
The detailed version
- Rothenberg et.al. v. Federal Deposit Insurance Corporation · No. 4:23-cv-01603
- Jon Tigar
- July 11, 2023
Background
The court considered motions by the Federal Deposit Insurance Corporation (FDIC) to stay, or temporarily pause, two proceedings: Case No. 23-cv-01603-JST, brought by Michael Brent Rothenberg and others, and Case No. 23-cv-01606-JST, brought by the FDIC against Michael Brent Rothenberg. The FDIC requested a 90-day stay under 12 U.S.C. § 1821(d)(12)(A), a federal statute governing stays after the appointment of a receiver for an insured depository institution.
The FDIC’s motions stated that it had been appointed receiver for Silicon Valley Bank on March 10, 2023. The FDIC asked that each 90-day stay begin on the date of the court’s order granting the motion.
Court’s Analysis
The court explained that Section 1821(d)(12) requires a court to grant a stay requested by a receiver, but courts have interpreted the statute to limit the stay to the 90-day period following the receiver’s appointment. The court therefore concluded that the FDIC’s statutory stay period ran through June 8, 2023.
Because the requested stays would have begun after that period had already ended, the court concluded that the FDIC was no longer entitled to a stay. The court rejected an interpretation that would allow the FDIC to request a new 90-day stay whenever it chose during the litigation.
Disposition
The court denied the FDIC’s motions for a stay in both proceedings. Judge Jon S. Tigar decided the motions without a hearing under the cited federal and local procedural rules. The order addressed the requested stays and did not decide the underlying claims.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.