FEDERAL DEPOSIT INSURANCE CORPORATION v. MEYER
Legal provision: Federal Tort Claims, or Alien Tort Statute
Argument of Paul Bender
Chief Justice Rehnquist: We'll hear argument first this morning in Number 92-741, the Federal Deposit Insurance Corporation v. John A. Meyer.
Mr. Bender: Mr. Chief Justice and may it please the Court:
This case arises out of the financial failure of a large California savings and loan institution in the early 1980's.
The bank had been suffering very serious financial losses.
It's net worth had gone down from about $100 million to about $15 million in the several months preceding the seizure of the bank.
In the week preceding the seizure, depositors removed about $70 million from the bank's deposits.
The bank was seized by the California Savings and Loan Commissioner because she thought the bank was operating in an unsafe manner.
She appointed the F-S-L-I-C... FSLIC, which has since been replaced by FDIC... as the receiver, and FSLIC was also appointed receiver under Federal law.
Under FSLIC's policy then, which is still FDIC's policy, when a thrift institution fails for financial reasons, they immediately terminate all the top management of the bank, for obvious reasons.
That's the management that got the bank into the financial condition that required the seizure, those are the highest paid people, but perhaps most importantly, the receiver's job is either to terminate the bank, or to merge it with another going institution, and for the purposes of doing that, it's very important not to have the top management there, because the institution into which it's merged will have its own management.
Pursuant to that policy, the four top officers of Fidelity were terminated... the president, the plaintiff in this case, Mr. Meyer, who is the president's brother, and two other people.
The bank was... what happens is, the bank is terminated... the receiver takes over at the end of one day, and at the beginning of the next day the bank reopens as a new institution which is chartered by the Federal Home Bank Board.
Six months later, that new institution merged the bank into Citibank, I think, in California, and it continues to exist in that form.
Unknown Speaker: What position did the respondent here occupy, Mr. Bender?
Mr. Bender: He was the head of the branch operations.
I think he was called a service manager, but his primary responsibility, I think, was to be in charge of branch operations.
He brought a lawsuit based on many different claimed rights.
The only ones which proceeded to trial were claims not of a breach of contract but claims under the due process clause.
The lawsuit was based on an alleged implied contract of continued employment which he said that California law gave him as a long-term employee of the bank, but he didn't... the suit that got to trial before the jury was not a suit based on the breach of contract, it was a suit based on the alleged deprivation of his contract rights without due process.
Unknown Speaker: May I interrupt you, sir?
If he had been fired by the bank, if there hadn't been the takeover, would he have had a contract claim under State law against the bank?
Mr. Bender: --If the bank had continued to operate and he had been fired, yes, so far as we can tell, he would have--
Unknown Speaker: He did have a right under his contract to pre... in effect, to pre-deprivation process, then?
Mr. Bender: --No, I don't think it was a right to process, it was a contract right.
If the bank had continued--
Unknown Speaker: No, but his due process claim was that he didn't get pre-deprivation process.
Would he have had a contract claim to the same effect against the bank?
Mr. Bender: --No.
I think the contract claim would have just been for breach of his contract of employment.
He makes no suggestion, and I know nothing in California contract law, that would suggest he had any procedural rights.
His remedy under California contract law would have been a suit for breach of contract against the bank for terminating him without just cause.
That's not the suit that he brought here.
The suit that he has recovered on, a jury... the two suits that went to the jury were a claim against FDIC for the deprivation of his property without due process, and a claim against the receiver for deprivation of his property, his contract right, without due process.
The jury found for the receiver on the ground that he had qualified immunity, but the jury found for the plaintiff against FDIC in the amount of $130,000.
Unknown Speaker: Mr. Bender, he didn't have a State law tort claim, did he?
Mr. Bender: He brought State law tort claims, but they didn't proceed to trial.
They were dismissed by the trial judge.
Unknown Speaker: But as we analyze the case, don't we assume he has no tort remedy as a matter of State law?
It goes to the question of whether it's cognizable, and so forth.
Mr. Bender: I don't think... I don't think it matters whether he has a tort remedy under State law.
The particular tort remedy--
Unknown Speaker: If he had a tort remedy, couldn't it arguably be said then the Federal Tort Claims Act would prevail?
Mr. Bender: --Well, if he had a tort remedy under State law, he could try to assert that State law remedy against the Federal Government under the Federal Tort Claims Act, but that's not the right he alleges in this case.
Here he's alleging a violation of his Federal constitutional rights.
Unknown Speaker: If you're right, Mr. Bender, about your argument that there is no due process right of the nature claimed, wouldn't that go to the receiver, Pattullo, as well as to the... FSLIC?
Mr. Bender: Yes.
Yes, it would.
Unknown Speaker: So your position, if you would prevail on that second argument that you make that there is no due process right to tenure as against this Federal agency, then Pattullo should never have gone to trial.
Mr. Bender: That's right.
Unknown Speaker: You would never get to the question of qualified immunity.
Mr. Bender: That's right.
This case should have been dismissed before trial, because there was no deprivation of property, nor... even if there was a deprivation of property, it wasn't without due process, and... well, let me turn to that first, because I think that's really the most fundamental question in this case.
There was no deprivation of property because the only property right he asserts, the right to continued employment, ended by virtue of the failure of the bank and its seizure by the receiver.
When the bank fails and it's seized by the receiver, it's just as if the bank had itself gone out of business, because--
Unknown Speaker: Mr. Bender, the first question you present in your petition for certiorari is whether FSLIC can be held liable for tort damages arising on a Bivens cause of action.
Now, you're choosing, I take it, to argue the second question you present first?
Mr. Bender: --Yes.
I think it's a little easier to understand the case if you understand first what the tort right is, what the constitutional tort right is that he's asserting.
Unknown Speaker: But I take it you're also going to argue, eventually, your--
Mr. Bender: Absolutely.
Both points are important, and both points are raised by the case.
Either one is sufficient to dispose of the case.
If he worked for the bank with a contract of... an implied contract of continued employment and the bank went out of business for financial reasons, I don't think anyone would think that he had a right of continued employment with a bank which had failed and was no longer in business, and that's exactly what happens when a bank goes into receivership.
You can tell that by the notion... the common law notion of receivership, which has been absorbed into the Federal statutes, cases going way back, including decisions of this Court, that--
Unknown Speaker: --Does this California law agree with that?
In other words, if there is a receivership of a business in California law, there's an absolute right to terminate all the employees and hire all the new ones?
Mr. Bender: --We think so, but that's irrelevant, because Federal law clearly supersedes California law, and the receiver here was appointed under Federal law.
Remember, this is a bank insured by the Federal Government.
Unknown Speaker: Well, but your theory is, is that the company has gone out of business, and I just have some trouble with that.
Most receiverships, including the FDIC, operate the business on a routine basis subject to the supervision of the FDIC.
Could they fire all the janitors because they didn't like the way they parted their hair?
Mr. Bender: In fact, FDIC now has a policy of firing all employees immediately upon the onset of a receivership and hiring back those that it wants to hire back to do whatever the bank wants to do.
I think it's a mistake to assume that the bank always continues operating in exactly the same form.
The receiver has the right to terminate, wind up the affairs of the bank, he has the right to consolidate or merge it with another bank, he has a right to draw it in, draw in its scope of operations to make it profitable, new management takes over, the receiver feels it needs new management in order to accomplish those things, and to have the old top management staying on in the bank as you're trying to merge it with another bank, which they may have resisted doing for a number of years, as you're trying to wind up its affairs, would be really disruptive.
Unknown Speaker: Perhaps so, but why is it so that you would be without liability for breaking those contracts any more than you would be without liability for breaking other contracts?
You certainly don't say that money that the bank owes to some people is no longer owed because the bank is now out of existence, right?
Mr. Bender: No.
No, I... that's a really good point.
Unknown Speaker: I mean, it's just a contract like that, I assume.
Mr. Bender: No, it's not.
There... I think you have to distinguish between two different kinds of contracts.
For example, this employee had accrued vacation pay coming to him, or perhaps even accrued severance pay.
That he would be entitled to, because that is pay for past services, and similarly, a company that had supplied desks, let's say, to the bank, which already had them, and they hadn't paid the bill yet, that company would be entitled to recover that out of the assets of the bank.
Unknown Speaker: Suppose it was a contract to provide desks, not just in the past, but in the future, wouldn't you be liable for the profit that is lost--
Mr. Bender: It's quite clear--
Unknown Speaker: --by terminating that contract?
Mr. Bender: --It's quite clear that the receiver has the power to terminate those kinds of executory contracts which haven't yet taken place.
At that time the regulations said that the receiver had the power to reject or repudiate any lease or contract which it considers burdensome.
Unknown Speaker: Without liability?
Mr. Bender: Without liability for future profits, without liability for services that had not been rendered.
It can repudiate contracts for past services where the money had already be earned, and then there would be liability.
It would be contract liability, and it would be contract liability that would come out of the remaining assets of that bank, not liability that would be paid by the assets of the Federal Government.
Unknown Speaker: Well, it doesn't make much sense to talk about repudiating past... or liability for past contractual breaches, does it?
I mean, you're going to be held liable on a contract measure of damages whether you technically repudiate the thing or just admit you didn't perform.
Mr. Bender: That's right, and so the main burden of the repudiation clause, it seems to me, has to be towards these future contracts.
If you were going to let him recover on that contract, how much could he recover?
Unknown Speaker: Well but, I mean, you can say repudiate... any businessman can repudiate a contract, but the issue is whether you're liable for the money under it.
To say you can repudiate it doesn't establish that you're not liable for the breach.
Mr. Bender: Right, but maybe the most fundamental point is, if you're liable, you're liable only on contract out of the assets of the bank.
That's not the claim that Mr. Meyer has brought here.
Even if he did have a contract right, it would be a right that was enforceable only by a suit for breach of contract, and that suit would be payable only out of the remaining net assets of the bank, so that if the bank in fact had no net assets, he wouldn't get any money.
What he has tried to do here is to turn that contract suit out of no... which would have to be paid out of no assets, into a suit where he wants to be paid from the taxpayer's money through the Federal appropriations to the FDIC, or FSLIC, by saying that I'm not suing under contract, I'm suing for the breach of the contract without due process, as if he had a constitutional right to a hearing before that.
Unknown Speaker: So it's not an essential part of your case, and you don't really argue here that when there is a repudiation there is necessarily no liability for the breach of future--
Mr. Bender: Not at all, although we do feel that there is no liability for the future work he was going to do, that the contract terminates.
If you want to... you could look at it this way.
When that contract--
Unknown Speaker: --I don't have to agree with that.
Mr. Bender: --No, you don't have to agree with that.
Unknown Speaker: And I suppose it's perhaps restating the same point that I take it you're not claiming that the Government is scot-free here of liability on the claim asserted simply because it was acting as a regulator and not as a mere successor to the originally contracting party?
Mr. Bender: No.
No, we're not arguing that at all.
We're arguing that the Government here did not deprive him of his property without due process, first because we don't think he had any property, but if, as Justice Scalia believes, you think he was deprived of property, that was still not without due process, because he has a completely adequate remedy, the normal remedy, the remedy he would have had if the bank had terminated him itself, namely, to sue the bank under California law of contract, which he is able to do.
Unknown Speaker: But isn't there an inconsistency in your position, though, Mr. Bender, because you say that the receiver's rights are not dependent on State law, and that... that it has rights coming from the Federal regulations and that sort of thing, and yet his remedy is purely State law?
Mr. Bender: Well, because the receivership doesn't... although the receivership has the power, Federal law has the power to totally supersede State law, it hasn't done that, and it's clear that the receivership permits suits to be brought against the remaining assets of the bank for contracts on which the money had already been earned, such as contracts for past services.
If Federal law tried to wipe out those contracts as well, I think there would be a problem with the takings clause.
In any event, the receiver has never... has never... as far as I know has never alleged that that happened.
Unknown Speaker: In addition is the process that is due, is the claim that can be asserted against the assets of the failed association--
Mr. Bender: Exactly.
Unknown Speaker: --And that is the full extent of the process that is constitutionally due.
Mr. Bender: Exactly, right.
That's all the process he would have had due if the bank had gone out of business itself, or if the bank had fired him, and there's absolutely no reason why he should suddenly get an entry into the Federal Treasury because the bank goes into receivership.
His rights... kind of ironic that management that would run a bank and run it into the ground so that the depositors lose all their money except for the Federal insurance should then be able to have a key into the Federal Treasury to recover on contracts that they couldn't recover on against the banks.
Unknown Speaker: But Mr. Bender, isn't it at least theoretically possible that even... if he had a State law right to recover assets from the bank which in turn would give him a right to pretermination hearing, maybe he would lose against the... on his State contract claim but nevertheless be able to argue that if you'd given me the hearing to which I was entitled, I could have persuaded you not to fire me, because I really wasn't involved in all this stuff?
Mr. Bender: He can argue that, and he does, but that is not a... that is not a convincing argument, because the Federal law made clear at the time, then in the regulations, now in the statute, that the receiver can repudiate any contract which it considers burdensome.
I think you can't read language like that to say that that's something you have a hearing over and an adjudication over.
It's any... it can repudiate a contract that the receiver considers burdensome.
It's in the sole discretion of the receiver, and it has to be.
If you seize a bank with 20 or 30 top management people and you have to give them all hearings before you can terminate their services and move on with the business of reorganizing the bank, that's going to make receiverships much less efficient.
The whole purpose of these receiverships is to go into a failing institution and save what's still there for the depositors and for the Federal taxpayers.
To have to go through a bunch of hearings and then, once you have the initial hearing there will probably be an asserted right to some kind of review of the question of whether this is a burdensome contract, those are not questions that the receiver is easily going to be able to answer in a short period of time before an independent hearing examiner.
Unknown Speaker: Do ordinarily Federal agencies have to do that?
I mean, let's assume a regular Federal agency wants to terminate a contract.
Does it have to give a due process hearing?
Mr. Bender: I don't think so, because the right to recover damages for the breach of contract is the process that is due in the commercial world.
You're dealing here with the FDIC and FSLIC... and let me move now to the second part of our argument.
Unknown Speaker: Before you do, let me just ask one question.
In the normal Government situation, supposing the head of the agency has a right to terminate the employment of anyone whom he thinks is not performing adequately in his sole discretion with no review, but he has to make a determination that he's not performing adequately.
Right to a hearing, or no?
Mr. Bender: You're talking about a Federal agency?
Unknown Speaker: Yes.
Mr. Bender: I think that if the statute makes it clear that it's in his sole discretion, then there wouldn't be a right to a hearing.
The cases in which this court has found there were rights to hearings are cases where the statute says, you can be fired, but only for cause.
I don't think we have cases in which the State law which creates these property rights made it clear that it was in the sole discretion of the person.
It's like a contract at will.
Once the bank goes into the receivership, the employment of the people that work for the bank is employment at will.
The receiver can terminate it at any time, just like a private employer could.
Unknown Speaker: Mr. Bender, you will get to your first point?
Mr. Bender: I'm about to, I hope.
The question here is whether, if there were a constitutional right in this case, a violation of procedural due process, there would be a suit against the FDIC, the successor of FSLIC.
The only ground for urging that there would be such a suit is the sue-and-be-sued clause of the agencies.
If an official in the Department of Justice were to commit a constitutional violation, there's no suit against the Department of Justice for that.
It has no sue-and-be-sued clause.
There's no suit, it's clearly established, against the United States for Bivens-type constitutional tort actions.
So the only way that the plaintiff can claim here that there's any ability to recover against FDIC for the constitutional tort is because of the sue-and-be-sued clause.
I think if you just... even if you just had the sue-and-be-sued clause, you would have to hold that that does not authorize constitutional torts, suits for constitutional torts.
The sue-and-be-sued clauses were to enable these entities to engage in commerce in the commercial marketplace, and they were meant to be able to sue and be sued on ordinary, commercial kinds of causes of action... contracts and torts growing out of the running of a private business.
Unknown Speaker: So you say we reach that result without even referring to the Federal Tort Claims Act, just the--
Mr. Bender: Right, just--
Unknown Speaker: --sue-and-be-sued clause alone.
Is that some implied exemption--
Mr. Bender: --Yes.
Unknown Speaker: --we read into the language?
Mr. Bender: Yes, that--
Unknown Speaker: Just intuitive, we know that intuitively it means sue-and-be-sued commercially?
Mr. Bender: --That's the... that was the reason for the creation of the sue-and-be-sued liability, but you don't have to reach that here, because Congress clarified that, made that absolutely clear.
Unknown Speaker: Well, we might not have to reach that, but we have to understand it, I think, to follow your argument.
Mr. Bender: Right... no, you don't.
You could... even if you thought that constitutional torts could come under the general sue-and-be-sued language, Congress has made it clear that they're... it doesn't intend that they do by specific language in the Federal Tort Claims Act, but I do think it's important to recognize that the sue-and-be-sued authority is not just an open-ended... I don't think it was intended to be an open-ended sue-and-be-sued authority.
It was intended to facilitate the operation of these agencies in the commercial marketplace, and I don't think you should infer a waiver of sovereign immunity for a wholly different kind of thing, a tort action growing, implied by the court out of the Constitution from that sue-and-be-sued authority, but Congress made it entirely clear that that's what it was thinking in the enactment of the Federal Tort Claims Act.
Unknown Speaker: What about a false imprisonment claim, would that be under the sue-and-be-sued clause, or is that outside of the commercial realm?
I mean, this is a very difficult jurisprudence you're asking us to adopt here.
Mr. Bender: I don't think so.
If the tort claim comes under State law, then I think it can be made against the agency under the sue-and-be-sued clause, but I don't think the sue-and-be-sued clauses were meant to create liability in those agencies arising out of the Federal Constitution.
So in your ordinary false imprisonment case there's probably a State law claim, which is the same kind of a claim which could be brought against a private company.
That's the test I'm asking you to use.
The kinds of claims that could be brought against a private company were the kinds of claims that were intended to be authorized by the sue-and-be-sued clause.
Unknown Speaker: Mr. Bender, is it part of your argument that the Bivens claim simply doesn't extend to agencies as distinguished from individuals, so that in no case... forgetting about the sue-and-be-sued clause... should one think of a Bivens claim as against an entity as distinguished from an individual?
Mr. Bender: That's right, and that's because there are only two kinds of agencies.
The ones without sue-and-be-sued clauses, it's clear that they cannot be sued.
You'd have to sue the United States, and it's plain you cannot sue the United States on a Bivens-type tort.
The other kinds of agencies are the sue-and-be-sued agencies, and there Congress made it clear in the Tort Claims Act that it wanted to make the tort liability of sue-and-be-sued agencies exactly the same as the tort liability of other agencies.
Unknown Speaker: I thought your argument went beyond that.
I thought you were also arguing that even without the Federal Tort Claims Act, and even without the sue-and-be-sued argument, there simply is no such thing as a Bivens action that is against the Government and not against a private individual.
Mr. Bender: That's right.
Unknown Speaker: Did you make that argument below as well, or is that being made for the first time here?
Mr. Bender: --I believe we made that argument below, yes.
I don't think it's being made for the first time here.
That argument was certainly made in the petition for certiorari, and there was no claim that it had not been made below.
Unknown Speaker: --Mr. Bender, the sue-and-be-sued clause came in when, as opposed to when the Bivens claim was created?
Mr. Bender: I think it's important to understand that.
The sue-and-be-sued clauses were first.
Many of them were first, and by the time of the tort claims act in 1946, there had been a number of tort suits brought against the sue-and-be-sued agencies, State law tort suits, because there were no Bivens claims at that time.
In enacting the Federal Tort Claims Act, Congress said that Government, the Federal Government is now going to be liable on the torts of all Federal agencies, sue-and-be-sued or not, with certain important limitations and at the same time it said... in the statute that is now 2679(a), it said that the sue-and-be-sued agencies should also not be sued, and all tort claims should be brought against the Federal Government, and the legislative history... let me read you a brief excerpt of the committee report that accompanied that statute.
It says, 404> ["]... that's the predecessor of the statute we now have...
"provides that Federal agencies suable in their own name prior to the enactment of this bill will no longer be suable for torts cognizable under that bill. "
"This will place torts of suable agencies of the United States on precisely the same footing as torts of nonsuable agencies. "
I don't see any way you can read that language except to say that you could no longer sue the sue-and-be-sued agencies for tort--
Unknown Speaker: That language in the legislative history is not in the statute itself.
Mr. Bender: --Well, I think the language in the statute itself is just as clear, because it refers to... it says the authority of any Federal agency to sue and be sued in its own name shall not be construed to authorize suits against such Federal agency on claims which are cognizable under the tort claims act, and it's clear from the legislative history that when they said, claims cognizable under the tort claims act, they meant all tort claims.
Unknown Speaker: Well--
--Except that was pre-Bivens.
Mr. Bender: That was pre-Bivens.
Unknown Speaker: And that statement was true pre-Bivens.
It was quite true pre-Bivens, right?
Mr. Bender: Well, it wasn't true before the tort claims act.
Before the tort claims act, you could sue the sue-and-be-sued agencies under tort, and so Congress was clearly doing something important here.
Unknown Speaker: I understand, but pre-Bivens, and given the new enactment of the tort claims act, that statement in the legislative history would be quite true, but it says nothing about what the effect of that act would be after you have Bivens.
Mr. Bender: All right, then the question for this Court is, when the Court creates the Bivens cause of action, finds the Bivens cause of action in the Constitution, is that now going to be the only tort claim that you can bring against the agencies, even though you can't bring it against the United States?
I think Bivens--
Unknown Speaker: Why not?
--is not cognizable under 1346(b).
Mr. Bender: --No, I think by cognizable under 1346(b), they meant tort claims, otherwise they could not possibly have said what they say in the next sentence of the committee report.
This will place torts of suable agencies on precisely the same footing as torts of nonsuable agencies.
Unknown Speaker: Again, you're referring to legislative history... legislative history prior to Bivens?
Mr. Bender: Yes, right.
Unknown Speaker: And you're simply reading out of the statute the description of the Government's liability as if it were a private party.
I mean, that qualification isn't in the legislative history you were reading, but it is in the statute, and that is what excludes its reference to Bivens, because there is no analogous private liability.
Mr. Bender: That's right, but it's still a tort claim cognizable under the tort claims act for purposes of--
Unknown Speaker: How do you define cognizable to reach this conclusion?
Mr. Bender: --I define it as a tort claim.
Unknown Speaker: The word "cognizable" doesn't mean tort claim.
Mr. Bender: Well, it says, cognizable under the tort claims act, which I think means recognizable under the tort claims act.
That's the most natural meaning of the word, which I think means a tort claim.
Unknown Speaker: Well, how could it be cognizable if the court doesn't even have jurisdiction under the statute?
Mr. Bender: Well, take, for example, a case of the post office's negligent delivery of mail.
You cannot recover under the tort claims act for that... there's a specific exception... and yet everyone agrees that that's cognizable under the tort claims act, even though it's specifically excluded because it's a tort claim, and Congress has--
Unknown Speaker: Well, because it has a State analog for private parties, which a constitutional tort doesn't.
Mr. Bender: --Right, but just... that's a different reason.
Here... there they exclude it because they don't want the post office burdened with that liability.
Here they exclude it because they don't want the Federal Government burdened with liability unless it's the kind of liability that an entity would be subject to under State law.
Just because it's a different reason for Congress excluding it, it's still an exclusion--
Unknown Speaker: Well--
Mr. Bender: --and it's clear that many things excluded--
Unknown Speaker: --Mr. Bender, I mean, if you just read the plain language of the statute, I think you have a hard time reaching your interpretation of what cognizable means.
Mr. Bender: --I think if all you had was the language of the statute there would be a difficulty in reading it that way, but when you start to think about it and realize that a suit against the post office for negligent delivery of mail cannot be successfully brought under the tort claims act, nevertheless it is held cognizable.
You can't sue... the post office is a sue-and-be-sued agency.
Unknown Speaker: That's this Court's determination?
Mr. Bender: What is--
Unknown Speaker: Have we said that it's cognizable, that that instance--
Mr. Bender: --No.
Unknown Speaker: --that you gave is cognizable?
Is it your position that this is the respondent's concession?
Mr. Bender: No.
I think it's clear in--
Unknown Speaker: You said everybody agrees that this is cognizable.
It seems to me that's the issue in the case, and I don't think respondent agrees with--
Mr. Bender: --I think everybody agrees that you cannot sue the United States Postal Service for negligent delivery of the mail.
Unknown Speaker: --But the question is, does everybody agree that that's what cognizable means?
Mr. Bender: No.
This is the first case to raise that, to raise the question.
Unknown Speaker: Mr. Bender, what you're... you're making the argument that Congress really mean to bracket sue-and-be-sued agencies with all other agencies for tort claims act purposes but they used incomplete language so the court should kind of fix up the language and--
Mr. Bender: It's not incomplete.
It's not as exact as we would like it to be.
It's somewhat uncertain what cognizable means, but I think when you start to think about the consequences of holding that it means that it's only those cases that you could succeed under the tort claims act under, you will realize it can't mean... cognizable can't mean claims you can win under the tort claims act.
Unknown Speaker: --No, but it could mean claims that have a counterpart in State law.
Mr. Bender: It could mean claims that have a counterpart in State law, that's true, but Bivens, then, I think makes clear that you shouldn't assume... you shouldn't imply a cause of action against the agency.
Bivens itself said that there are certain factors counseling hesitation in creating Bivens actions, and one of them, the first one Justice Brennan mentioned there, was an impact on the Federal fisc, and you couldn't get clearer case of an impact on the Federal fisc than the tort action in this case.
And so even if you think that it would be possible to imply some kinds of Bivens actions against Federal agencies, although we don't think you should, you certainly would not imply one in this kind of situation, where it is a direct attack on the Federal Treasury, and exactly the kind of action that Bivens says you should not--
Unknown Speaker: Does it also counsel hesitation that you'd have this anomaly of the difference between the sue-and-be-sued agencies and other agencies?
Mr. Bender: --I think it does.
I think Congress made clear that it wanted all the... that in tort cases it wanted all the agencies to be treated the same, and I think the Court should hesitate before creating a major exception to that kind of--
Unknown Speaker: It didn't make clear that it wanted, even if you read the legislative history.
They just made clear that they thought that was the effect of what they were doing.
I mean, had they said, the object of this legislation is... it didn't say that.
It just said, it will do this.
Mr. Bender: --May I answer Justice Scalia's question?
I think when you read the legislative history you'll see that one of the objectives... not just the result of what they were doing, but one of their objectives was to unify the procedure so all Federal agencies would be treated the same for the purposes of tort claims.
Thank you very much.
Unknown Speaker: Thank you, Mr. Bender.
Mr. Felice, we'll hear from you.
Argument of Gennaro A. Filice, III
Mr. Filice: Mr. Chief Justice and may it please the Court:
Counsel suggests that there's a rule somewhere that the FSLIC will terminate all top-level management when a savings and loan is seized.
It's interesting that counsel suggests that.
That rule is written in no regulation, no policy manual, no document anywhere.
That was the excuse that was given when we filed this lawsuit and when we went to the person who actually made the decision with respect to Mr. Meyer and told us that's why that decision was made, because he was a top-level manager.
It turns out that there were a number of top-level managers at Fidelity Savings that were not terminated.
Unknown Speaker: What about the regulation that allows the receiver to terminate a contract that he deems burdensome?
Mr. Filice: Yes, that regulation exists, and the thrust of our case, Mr. Chief Justice, is that Mr. Meyer was entitled to due process in the decision-making process that led to a determination that his contract was burdensome.
This Court has said on a number of occasion that where an administrative rule permits the deprivation of a liberty or property interest the impacted individual has a right to notice and an opportunity to be heard.
Unknown Speaker: And so that would be true of any employee that the receiver came in and decided to fire for the good of the institution.
Every one of them would have a right to notice and an opportunity for hearing, and presumably a right to pursue in court any claim that they have.
Mr. Filice: Not an opportunity for a hearing, Your Honor.
We believe that the due process required was not elaborate.
We believe he was entitled to notice and a reasonable opportunity to give reasons, in writing or in person, as to why he should not have been terminated.
Unknown Speaker: And I assume that's true for all Government contracts.
The Federal Government, unlike the private businessman, just can't come to the conclusion on its own that this contract is no longer worth it?
It has to give some rudimentary notice and opportunity for a hearing to all people that have contracts?
Mr. Filice: Not necessarily so, Justice Scalia.
In this particular case, Mr. Meyer had a property interest, and I will describe where his property interest came from, and the regulation in question said not that immediately upon the seizure that Mr. Meyer's contract interest ceased to exist, but rather his contract ceased to exist when and if it was found to be burdensome.
Counsel has suggested that the regulation now is that all employees are terminated at the time of seizure.
Under that regulation, perhaps Mr. Meyer wouldn't have a claim, but under the regulation in effect at the time of this seizure, there had to be a determination that his contract was burdensome.
Unknown Speaker: Well, you're... then you're not claiming a violation of the Constitution, but just of the regulation.
You're saying the Constitution doesn't require such a hearing, but you only have the right to the hearing by reason of the regulation, is that--
Mr. Filice: No.
We are saying that under Board of Regents v. Roth, we look not to the Constitution to define Mr. Meyer's property interest, instead, we look to independent sources such as State law.
State law in this circumstance, under California law, Mr. Meyer had an implied employment contract that he would not be terminated absent just cause for dismissal, and that implied employment contract was consistent with, in effect was ratified and permitted by Federal regulations at the time, which were also different at that time.
At that time, the Federal regulation provided that employees of savings and loans could have contracts and they would not be deemed to be an unsafe or unsound practice so long as they had an adequate, appropriate termination for cause provision, so the Federal regulation contemplated that there could be employment contracts with employees of savings and loans that had exactly what the California implied contract had--
Unknown Speaker: --Well, if the Federal law is more favorable to the employee and says you must show that it's unsafe or unsound, we must find it burdensome... the Federal law's more favorable, then there is a constitutional right, but if the Federal law is harsher and just says, everyone goes, there is no constitutional right, that's a strange--
Mr. Filice: --I don't believe that is strange, Your Honor, because if you look at Roth, which is the touchstone of the property interest we're talking about, it talks about reasonable expectations of the employee, and if you go to a savings and loan today and get a job, you know, under regulations as I understand them, that your job is forever subject to being terminated immediately upon a seizure, but at that time, Federal regulations provided that you could have an employment contract with your employer, and it was not prohibited so long as there was an adequate termination for cause provision.
Unknown Speaker: --So when you're hired by the State entity, or by the savings and loan, you're... to determine the nature of your property interest, you're looking to the day when that institution is going to go under and be taken over by a Federal receiver, and that's--
Mr. Filice: I believe that really is a legal fiction, but what you look to under Roth v. Board of Regents to define the property interest that Mr. Meyer is asserting is independent sources such as State law which define... which first of all create the property right, and at the same time define its scope, and California law defined the scope of this property interest as a right to continued employment absent just cause for dismissal, and that definition was completely consistent with Federal law on point.
So our argument is that Mr. Meyer had a property interest defined by California law, and also that that property interest did not cease to exist at the moment of regulatory seizure--
Unknown Speaker: --Do you... I'm sorry.
Finish your sentence.
Mr. Filice: --As apparently it would now, Justice Souter.
Unknown Speaker: Do you claim that the State law has anything to do by way of... by way of law or analogy with defining the degree of process that you are entitled to, and protection of the right?
Mr. Filice: No.
I believe that once you have defined the property interest, as you do by looking at State law, then you look at the U.S. Constitution and the rulings of this Court to see what you are entitled to.
Unknown Speaker: Now, in deciding that, should we... could we reasonably ask the question, what process he would have had against the bank as a private entity if the bank had simply terminated him prior to the assumption by FDIC, or whatever, of the receivership?
Mr. Filice: I'm not sure that that is a relevant question, because that's not... not--
Unknown Speaker: You should assume it's a relevant question, since it's asked by a member of the--
Mr. Filice: --I'm sorry, Chief Justice.
I'm not sure that that question is critical to our analysis of the case.
Unknown Speaker: Well said.
Mr. Filice: Because the definition of Mr. Meyer's property right was that he was entitled to continued employment absent just cause for dismissal, and so when... when the savings and loan was taken over, at that point in time he had an interest in continued employment the same as if he had had a written contract that said that he wouldn't be discharged except for just cause.
Unknown Speaker: Let me ask you a different question.
Could I follow on this one before you let him off?
I really don't follow it.
It seems to me you've looked to the State to find the property right, and you claim to be looking to the Constitution for finding the procedural right, which is the basis of your suit, but when I ask you, where is that procedural right in the Constitution because if it's there, everybody who has a contract with the Government would have it, you fall back upon the regulation, and you say, well, the regulation entitles you to this procedure.
Where do you get the constitutional right just by virtue of having the State property right and without aversion to the regulation?
Mr. Filice: The constitutional right, Justice Scalia, comes from the Fifth Amendment, and when we are looking at property interests in employment, there's no question the Court has said this on numerous occasions, that you look to independent sources such as State law, so this is an employment case--
Unknown Speaker: For the property, not for what procedure is due.
Mr. Filice: --That's correct.
Unknown Speaker: Okay.
Mr. Filice: And then the procedure that is due, you look to the Fifth Amendment, and you look to this Court's rulings in a number of cases, the most recent one being Burns v. United States, that says where an administrative regulation permits the Government to take property, or to... I'm sorry, it shouldn't be a taking... to deprive somebody of a liberty or property interest, that person should be entitled to due process, and if the--
Unknown Speaker: But you've tacked onto the State-created property right the Federal regulation.
You said you have to judge it by this man's expectancy, and his expectancy at the time was that you would have this State law right to employment, and tacked onto that this Federal regulation that says, can't get rid of you unless it's unduly burdensome, or whatever, so you are... you're not relying just on the State law to create this right that attracts the due process guarantee.
You said, it's State law plus Federal regulation.
You need the Federal regulation in there to create that right.
Mr. Filice: --I believe that we need to have a Federal regulation which permits California to imply that contract right.
I believe that if the Federal regulation said, as it apparently does today, that employees of savings and loans can never have any contract except for at-will employment, then I don't believe that California, under the Supremacy Clause, could say no, we're going to allow these contracts to be other than at-will.
Unknown Speaker: You know, we've had so many discussions about what is this... the contours of this right, it occurred to me that the qualified immunity defense that was available to Pattullo, why wasn't that available to the FSLIC as well?
Mr. Filice: Well, first of all, the qualified immunity defense was not submitted, not pled, not raised as a defense by FSLIC.
Secondly, however, I would say that insofar as sue-and-be-sued agencies are concerned, the qualified immunity doctrine should not be applied because the rationale of the qualified immunity doctrine is to protect Federal employees from personal liability so that they will zealously complete their tasks.
Where you're talking about an agency, and where you are saying an agency should have appropriate constitutional safeguards and what it does, you don't have the same concerns that are raised by the qualified immunity doctrine, and indeed, you have the converse.
You, I think, would like to encourage Federal agencies to comply with constitutional--
Unknown Speaker: Except that Congress has made all other agencies totally immune.
Mr. Filice: --Well, Congress--
Unknown Speaker: That's my... what sense does it make to say that this agency, unlike the individual, is liable without a qualified immunity defense, and all other agencies are totally immune?
Mr. Filice: --Well, I would say that there is some sense in this sense: this agency was an independent corporation that had both Government and nongovernmental funds, that operated with its own board of directors, that had its own budget, that was authorized to commit corporate funds for various expenses, so this agency in fact is different than a standard agency that is not an independent, sue-and-be-sued corporate agency.
I think there is a difference between this agency and other governmental agencies.
Unknown Speaker: Have we ever held an agency liable on a Bivens cause of action as opposed to individuals?
Mr. Filice: You have not, Your Honor, and I don't think you have been asked to do that, so far as I can tell.
Unknown Speaker: I take it you're asking us to in this case?
Mr. Filice: Yes, we are, and the reason why we are, other... if I can move on to the sue-and-be-sued argument that we've gotten--
Unknown Speaker: Can I ask you one question before you do?
Mr. Filice: --Yes.
Unknown Speaker: It's not going to work into your argument later on.
You're not depending on State law as the source of the process that is due, and you're not depending on the Federal regs as the source for the process that is due.
You're saying the process that is due somehow should be appropriate to the State law contract right, property right, and that is a right to continued employment in the absence of cause to discharge.
Why, then, do you say that the process that is due includes merely a right on the part of the employee to say why he shouldn't be discharged, as opposed to an obligation on the Government to establish that cause for why he should be?
It seems to me the only reason to make that... to choose the former rather than the latter is that it's probably a little... may look a little easier to win the case.
It puts less of a burden on the Government, but I don't see in principle why you take that position.
Mr. Filice: Well, Your Honor, I said that that way... and let me just make clear what our position is.
We do not doubt the broad discretion of the FSLIC during a regulatory takeover to terminate those contracts... leases, employment contracts, whatever... that it considers burdensome.
We believe, however, that Mr. Meyer, having a constitutionally protected property interest as defined by State law, was entitled to notice and a reasonable opportunity to be heard in person or in writing why that action should not be taken.
I don't know that I have made a... that I have a position on who should bear the burden of proof in that regard.
Unknown Speaker: I mistook you, I'm sorry.
Mr. Filice: I would say, however, that we do not gainsay the Government's right, broad right to act boldly when there's an FSLIC takeover of a savings and loan that has financial problems.
Let me turn briefly to the--
Unknown Speaker: When you were talking about the scope of this, you didn't mean to imply that this would be a right that all employees would have.
You have to have somebody who has kind of tenure expectancy, is that--
Mr. Filice: --That's correct, and apparently, the way the Government now operates, probably nobody could make this claim, because the way the Government now operates, apparently you can only have an at-will employment contract with a savings and loan.
To move on to the sue-and-be-sued language, we believe that the Government's argument is a circular argument with respect to the sue-and-be-sued language.
The Government identifies the appropriate statutes, and the issue boils down to whether this action is cognizable not under the Federal Tort Claims Act, as Mr. Bender said... 2679(a) says the issue is whether it is cognizable under 1346(b), and 1346(b) does not say torts, as the Government would wish it says.
1346(b) says that actions cognizable under the Federal tort claims actions are those actions for which a private individual would be liable under local law.
I don't believe we need to go beyond the wording of the statute to look at the legislative history to interpret that plain language.
The sue-and-be-sued clause and the Federal Tort Claims Act draw the same distinction that we wish to draw.
That is, common law torts are covered by the Federal Tort Claims Act, but those actions that are other than common law torts are not cognizable, and if there is an appropriate sue-and-be-sued clause, that gives jurisdiction against a sue-and-be-sued agency.
Unknown Speaker: --If you have to rely on--
--May I just make one... ask one point.
If we agree with the Government that this claim must be brought under 1346(b) or not at all, and if we say there's no Bivens action against a Federal agency, is that the end of your case?
Mr. Filice: In other words, if you say that the sue-and-be-sued clause does not waive sovereign immunity?
Unknown Speaker: Yes, except to the extent that it's waived under 1346(b).
Mr. Filice: I believe that probably would be the end of our case.
However, I would like to point out that in the footnote in our brief we make the point that a number of judicial riders have commented that sovereign immunity as a doctrine should not really be applied in cases of constitutional torts.
Sovereign immunity does not retain its medieval connotation that the sovereign cannot be sued merely because the king can do no wrong.
Unknown Speaker: Then you wipe out the entire... the Federal Tort Claims Act is beside the point, because the immunity... we should go back and rethink the entire immunity doctrine, but even if you... even if we did that, you have a problem of extending Bivens to an agency something you conceded has never been done before.
Why aren't there the factors that counsel hesitation here against extending Bivens to an agency when that's never been done before, when the payment will have to come out of the Federal fisc as distinguished from an individual's pocket?
Mr. Filice: I don't believe, Your Honor, that in fact this case is very different than the majority of Bivens cases, in that what we are talking about is an indirect impact on the Federal fisc.
Bivens defendants are routinely provided indemnity by their Federal employers.
That is an indirect impact on the Federal fisc.
This would also be an indirect impact in that FSLI... this would not be a judgment against the United States.
This would be a judgment against the FSLIC, an independent corporation, having its own budget, having sources of funds that are both private and public, so I believe that both the standard Bivens action against an individual and a Bivens action against a sue-and-be-sued agency would in fact only have an indirect impact on the Federal Treasury.
Unknown Speaker: Well, except there is one difference, and that is the Federal Government chooses, for whatever reason, voluntarily to pay in the one case and it doesn't choose in the other.
Mr. Filice: Well--
Unknown Speaker: The question... the issue of what is appropriate for the Court is what is it... in recognizing the Bivens action is a question of what is appropriate for the Court to do in imposing liability involuntarily, and you're suggesting an analogy with liability voluntarily assumed.
I don't see the point.
Mr. Filice: --Well, it is voluntarily assumed only with a gun at its head, so to speak.
In other words--
Unknown Speaker: Where does the gun come from?
You don't have to reimburse these people.
Mr. Filice: --Well, the gun comes from the practical consideration that if the Federal Government, after the creation of Bivens, then had a policy that it was not going to indemnify or provide a defense, which is another expense to any of its employees that were charged with Bivens actions, that would cause a tremendous morale problem among Federal employees and would be, in a practical sense, an impossible situation, so in fact--
Unknown Speaker: Well, it might cause timidity, and that may be why the Government wants to pay the bill.
I can understand that, but it still is a voluntary assumption of a responsibility.
Mr. Filice: --Well, it's voluntary in a sense, but it would cause timidity, or lack of zealousness in Government employees, or lack of morale, and so in a sense, when the court came down with the Bivens decision, it wasn't directly impacting the Federal fisc, but in a practical sense it was indirectly impacting the Federal fisc, because it would be hard for me to believe that the Government would ever take the position that it is never going to provide a defense, let alone indemnity, on every Bivens claim no matter how specious the claim is.
Unknown Speaker: Of course, you--
--Mr. Filice, the Government says, I think with some reason, that your argument about cognizability based on 1346 runs contrary to our decision in Smith.
What is your answer to that?
Mr. Filice: Your decision in Smith dealt with the 1988 legislation, the 1988 Federal Employees Reform Act, which was in turn a response to your Westfall decision.
Your Westfall decision dealt with Federal employee liability, and it dealt with liability for common law torts.
That was the problem that Congress was looking at when it passed that 1988 legislation.
It was looking at a situation involving Federal employees and common law torts.
Congress made no attempt in the 1988 legislation, which you then construed in Smith, to look one way at the other at sue-and-be-sued clauses, let alone Federal agencies, and indeed, if we look at what Congress did, I believe it is more consistent with our position, namely what Congress did in the 1988 legislation was, they drew a distinction between common law torts and constitutional torts and said common law torts are cognizable under the Federal Torts Claims Act and constitutional torts are not.
Unknown Speaker: Well, but that's your theory, and it may be factually distinguishable from Smith, but certainly the entire analysis of Smith suggests that your definition of cognizable is too narrow.
Mr. Filice: Well, as the court of appeals noted, it is difficult to interpret the sounds of legislative silence.
In the 1988 legislation, and what the Government is talking about and seeking to draw conclusions from, the Government... the Congress did not in fact pass a completely symmetrical statute.
In other words, they dealt with employees, but they didn't deal with agencies.
Unknown Speaker: I'm not talking about the legislative history of what happened in... I'm talking about our opinion in Smith, which assumes a much broader definition of cognizable, I think, than you're willing to concede.
Mr. Filice: Except that your definition, Your Honor, respectfully, in the Smith case again dealt with common law torts and with employees, and what you said in Smith was, excluded common law torts, implicitly or explicitly, excluded common law torts, would arguably still be cognizable under the act.
But that is a different question than whether constitutional torts are cognizable, and I think we have to go back to 1346(b) to determine the answer to that question, and the last sentence, or last phrase of 1346(b) makes very clear what Congress' intent was.
Congress' intent was to recognize, to take cognizance of those wrongs for which a private individual would be liable under local law.
Unknown Speaker: But at the time Congress legislated 1346(b), which was 1946, there were no such thing as constitutional torts recognized.
Mr. Filice: That's true, but--
Unknown Speaker: You can argue one way or the other from that, but just like you say that you can't really draw much analysis from the 1946 action since Bivens came much later, the whole idea of constitutional torts came much later.
Mr. Filice: --That's true, and as a matter of fact, the sue-and-be-sued clause was... that we're talking about for the FSLIC was drafted in the 1930's, but the point we are making is, is this Court has held that sue-and-be-sued clauses are to be liberally construed as general waivers of sovereign immunity unless one of three things occur, unless the suit in question is inconsistent with the statutory scheme, unless an implied restriction on the general waiver is necessary to avoid a grave interference with a governmental... performance of a governmental function, or unless it was clearly the purpose of Congress to use a sue-and-be-sued clause in a narrow sense.
None of those three conditions exist here, so in the 1930's when Congress created the FSLIC and decided how broadly it would waive immunity for the FSLIC, at that point in time, what Congress decided to do was, rather than delineate all of the ways--
Unknown Speaker: With no thought at all, Mr. Filice, of anything like a Bivens claim.
Mr. Filice: --That's true.
What Congress intended to do, Your Honor, was to waive immunity generally for that agency, subject to those exceptions that may later occur.
Now, the Government has identified that later came the Federal Tort Claims Act, and possibly the Federal Tort Claims Act could have been written to exclude this kind of an action.
It was not.
Congress could today... Congress could today take a look at the issue, and could say, we're also going to include constitutional torts under the Federal Tort Claims Act with these rules, but when Congress decided to launch this agency, Congress used a broad waiver of sovereign immunity which waives all immunity for the universe, subject to such exceptions as may be made later on.
Unknown Speaker: Mr. Filice, 1346(b) provides liability if a private person would be liable to the claimant in accordance with the law of the place where the act or omission occurred.
Suppose you have a State that allows no recovery for psychological torts.
It must be physical injury.
Does that mean that psychological torts are not cognizable under 1346(b), and therefore the Government is liable for all cognizable torts?
Mr. Filice: Well, there is jurisprudence by this Court that would say no, that that is cognizable.
Unknown Speaker: Right, and it seems to me you're repudiating that jurisprudence.
Mr. Filice: No.
No, the way I just--
Unknown Speaker: Tell me why you're not.
Mr. Filice: --The way I justify our position, Your Honor, is that those actions are at least common law torts.
I think the Court could look at those actions and could say it was clearly the purpose of Congress to include within the Federal Tort Claims Act those actions that are common law torts.
That's the meaning of that last phrase, so that if there is a common law tort that is not... that is accepted either implicitly or plicitly by the Federal Tort Claims Act, then that still would be cognizable, but here we're talking about constitutional torts.
Unknown Speaker: So the difference between you and the Government is that the Government says cognizable means all torts, and you say that cognizable means just common law torts.
Is that what we're arguing about, essentially?
Mr. Filice: I believe that is one way to put it, Your Honor, yes.
Unknown Speaker: There's little choice in rotten eggs, it seems to me.
Why shouldn't we take the Government's unrealistic interpretation rather than your unrealistic--
It seems to me it means neither one of those things.
Mr. Filice: Well, we believe that our... well, I would say this about your hypothetical, your hypothetical, while certainly I am duty bound to answer it, is not the case that we have today.
Unknown Speaker: But you are asking us to extend the Bivens doctrine to so far new territory.
Whatever the tort claims act... whatever our role with respect to that is, the Bivens doctrine is a Court-created doctrine--
Mr. Filice: Yes--
Unknown Speaker: --and you're asking us to extend that to one class of agency uniquely.
Mr. Filice: --Yes, I am, and it's my position that the logic of the Bivens action, namely, that this Court has the primary duty to enforce constitutionally protected rights, and that it should not be surprising that Article III courts, in protecting constitutionally protected rights would turn to traditional judicial remedies like damages to do that, applies with equal logic to a sue-and-be-sued agency, and that sue-and-be-sued agency has a waiver of sovereign immunity by Congress, so I believe that... I believe that your logic in Bivens makes perfect sense for a sue-and-be-sued agency, and there has been a waiver of sovereign immunity.
But to get back to what I was saying to Justice Scalia, what I was trying to say was, perhaps my answer to the hypothetical was nonsensical, but my answer to the Government's position in this case makes sense.
No matter how you read the language of that statute, 1346(b), you can't squeeze in a constitutional claim.
That language says that it is concerned with wrongs for which a private individual would be liable under local law, and that cannot include a constitutional tort.
Chief Justice Rehnquist: Thank you, Mr. Filice.
The case is submitted.
Argument of Speaker
Mr. Speaker: The opinions of the Court in two cases will be announced by Justice Thomas.
Argument of Justice Thomas
Mr. Thomas: The first opinion which I have in announcement is the Federal Deposit Insurance Corporation versus Meyer, No. 92-741.
This case comes to us on a writ of certiorari to the United States Court of Appeals for the Ninth Circuit.
Acting as a receiver for a failed thrift institution, the Federal Savings and Loan Insurance Corporation, FSLIC, discharge the respondent, Meyer, who was a senior officer of the thrift.
In a suit against FSLIC, respondent claim that his discharge deprived him of due process.
After the jury returned the verdict in respondent's favor, FSLIC's statutory successor, petitioner Federal Deposit Insurance Corporation, FDIC, appealed and the Court of Appeals affirmed.
First, the court found that although the remedy under the Federal Tort Claims Act is exclusive for all claims cognizable under 1346(b) of the Act, respondent's constitutional claim was not so cognizable.
Second, it determined that FSLIC's sue-and-be-sued clause constituted a waiver of sovereign immunity for the claim.
And third, it concluded on the merits that respondent had been deprived of due process.
In an opinion filed with the Clerk today, we reverse.
Like the Court of Appeals, we find that respondent's claim is not cognizable under Section 1346(b) of the Federal Tort Claims Act.
A claim that is cognizable under Section 1346(b) if it is actionable under that Section, and it is actionable if it alleges, among other things, that the United States would be liable in accordance with the law of the place where the act occurred.
The reference to the law of the place means that the law of the state, and by definition, federal law is not state law.
Federal law, not state law, provides the source of substantive liability for a claim alleging the depravation of federal constitutional right.
We also agree with the Court of Appeals that FSLIC's sue-and-be-sued clause waives sovereign immunity for respondent's claim.
Petitioner fails to make the clear showing of congressional purpose necessary to overcome the presumption that immunity has been waived by the clause.
Contrary to the Court of Appeals, however, we hold that respondent has no cause of action for damages against an agency of the Federal Government, in this case, FSLIC's.
In Bivens versus Six Unknown Federal Narcotics Agents, we implied a damages remedy against federal agents.
Respondent argues that the logic of Bivens supports extending the damages remedy from the agents to the agencies.
We implied a cause of action in Bivens against the agents in part because a direct action against the agency was not available.
In essence, respondent asked us to imply a damages action based on a decision that itself presumed the absence of that very action.
The opinion is unanimous.