5.1 General Case Management
The FDIC's goal is to obtain the best resolution of legal matters at
the lowest reasonable cost. Consistent with that goal, we expect you
to manage time carefully.
The FDIC will not pay for costs associated with:
Unnecessary review of documents or files;
Unnecessary polishing of documents;
The "learning curve" for FDIC matters; and
Unfocused legal research; and
Excessive, unreasonable or unapproved expenses
You are required to discuss staffing with your Oversight Attorney
and assign no more attorneys or paraprofessionals than are necessary
to adequately represent the FDIC. You must refrain from rotating
assignments away from attorneys knowledgeable about FDIC matters or
using FDIC projects for the purpose of training firm personnel.
Cost-effective representation on every matter requires that you:
Consult with your Oversight Attorney on strategic, tactical, or cost-related
decisions on a matter, including pre-filing review of pleadings by
your Oversight Attorney.
Have a clear understanding of your role and the role of your Oversight
Insist that your Oversight Attorney define the goals and objectives to be
Send your Oversight Attorney copies of all correspondence, pleadings and
other filings promptly upon receipt unless instructed otherwise.
Make effective use of Legal Division resources, including its attorneys
and the FDIC Legal Research Bank described in Section 5.2, to the
greatest extent possible.
Develop a case plan and budget that will achieve the FDIC's goals and objectives
and obtain the written approval of the Legal Division for it, as
well as for any increase in the total budget amount.
Promptly advise your Oversight Attorney of all significant developments.
A number of legal issues are of special interest to the FDIC either
because they are peculiarly related to FDIC activities and rights,
or because of the need for a uniform, nationwide approach. These
“special issues” include such matters as interpretation of the
Federal Deposit Insurance Act, or other federal statutes, as well as
matters involving the status of the FDIC in its conservatorship,
receivership, or corporate capacities.
Outside Counsel representing the FDIC, FDIC asset servicers, or
other FDIC related interests are required to be alert to these
issues in matters referred for representation. You must contact the
FDIC Oversight Attorney before undertaking any research or drafting
with respect to these issues. Relevant research or statements of
agency policy concerning “special issues” will frequently be
provided to you and, in many cases, the Legal Division may wish to
handle those portions of a matter directly or in cooperation with
Special Issues List
The Special Issues List, which is provided for illustrative
purposes, includes without limitation:
Actions involving the
Federal Deposit Insurance Corporation and another state or federal
financial institution regulator or federal agency.
Agency status of FDIC, RTC, and FHLBB.
Comparative Fault/Contributory Negligence.
Conflicts between insolvent institutions including
conservatorships, receiverships, and bridge banks.
Constitutional challenges to actions and statutes
taken by FDIC officials affecting the FDIC.
Crime Control Act of 1990 ("CCA") Pub.L.No.
Department of Justice initiated subpoenas (Grand
Jury or Trial) and requests for information.
Deposit Insurance Funds Act of 1996.
Employee benefit and ERISA litigation. Employee
lawsuits involving any agency personnel whether as named parties,
deponents or witnesses.
Environmental issues including, but not limited
to: CERCLA, RCRA, USTs, asbestos, lead-based paints, wetlands,
endangered species, and NEPA.
Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA").
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 ("FlRREA").
Freedom of Information Act (FOIA).
Gramm-Leach-Bliley Act (GLBA).
Indemnification of employees, officers or
directors of failed institutions.
Interpretations of FDIC statutes, regulations, or
Involuntary Sale of FDIC Property, 12 USC 1825(b).
Judicial Restraints of Receivers Powers, 12 USC
National depositor preference and prudential mootness.
Privacy Act and Right to Financial Privacy Act
Pro-rata vs. pro tanto settlement bar rule.
Publicity: any case likely to generate publicity.
Qualified Financial Contracts; including
derivatives, repurchase agreements, and swaps.
Racketeer Influenced and Corrupt Organizations Act
Repudiation of contracts 12 USC 1823 (e).
Securities acts: Securities Act of 1933 and
Securities Exchange Act of 1934.
Standard of Liability of Directors and Officers
and 18 U. S. C. 1821(k).
Decisions that should be made only in consultation with your
Oversight Attorney (absent exigent circumstances) include, without
Hiring experts and other professional service providers;
Use of law clerks or summer interns;
Contacts with FDIC business staff;
Legal research; and
Staffing at conferences, court appearances, depositions, or meetings.
The Legal Division expects timely, cost-effective solutions. Failure
to conform to the required cost-saving measures noted above may
result in disallowance of the billed amounts by the Legal Division.
FDIC management procedures require that you keep your FDIC Oversight
Attorney fully informed as to the status of each matter you are
handling. Reporting will vary by type and size of case, and by firm.
A status report for any matter you are handling shall be submitted
to your Oversight Attorney as often as directed.
Be brief but meaningful;
Emphasize developments since the last report;
Review whether the case is proceeding in line with the case plan and budget;
and if not
Explain why actual costs differ from projected or budgeted amounts.
5.2 FDIC Legal Research Bank
To avoid duplication of legal research and to obtain the benefits of
previous legal research, the Legal Division established the FDIC
Legal Research Bank ("Legal Research Bank"), designed to centralize
substantive briefs, unpublished opinions, and other legal research
materials utilized in FDIC cases.
The Legal Research Bank is intended to assist you in representing
the FDIC by making legal research materials readily available to you
and to reduce the FDIC's legal research bills.
Documents in the Legal Research Bank are available in full-text in a
private FDIC database on Westlaw (the "Legal Research Bank Database"
or "Database"). Each law firm with a current Legal Services
Agreement is eligible to open an account for on-line research in the
Legal Research Bank Database.
You are required to minimize legal research costs on FDIC matters.
Thus, you must check the Legal Research Bank Database at the
beginning of every authorized legal research project. Failure to
consult the Database may result in disallowance of associated
charges for unnecessary legal research. See,
Section 7.3 and 7.6 on billable expenses and invoicing.
You are required to submit promptly your final, substantive FDIC
legal work product (e.g., briefs, legal research memoranda, as well
as significant court opinions in FDIC cases) directly to the Legal
Research Bank staff at the address indicated below for inclusion in
the Legal Research Bank.
In representing the FDIC, you authorize the FDIC to include those
materials (and any other written materials prepared in the
representation of the FDIC) in the Legal Research Bank. You also
consent to the reproduction, dissemination, distribution, or other
use of such written materials (including the use of those materials
in other documents prepared for the Legal Division) by any
authorized user of the Legal Research Bank.
Inquiries about the Legal Research Bank Database should be directed
to the Legal Research Bank staff at (877) 275-3342 and work product
should be sent to:
or the Legal Research Bank, 3501 Fairfax Drive, Room VS-E-6052, Arlington, VA 22226
5.3 Alternative Dispute Resolution ("ADR")
The FDIC is committed to the use of alternative dispute resolution
(“ADR”) in appropriate cases. The FDIC views such techniques as
potentially less costly, less time consuming, and a more effective
means of facilitating negotiated settlements. Thus, throughout the
course of a lawsuit you are required to periodically review the case
to determine whether ADR is appropriate and to explore all
opportunities for utilizing non-judicial dispute resolution
When settlement negotiations reach an impasse, particularly if
technical or factual issues are central to a dispute, the use of ADR
and a third-party neutral should be considered.
When ADR is used, you are expected to comply with current
Your Oversight Attorney can provide information on use of binding
arbitration (Directive 5310.1) and the
selection and payment of neutrals.
Claims between FDIC-controlled institutions (including
receiverships, conservatorships, acquired or assisted institutions,
asset servicers, and bridge banks) must immediately be brought to
the attention of your Oversight Attorney. These claims must be
resolved through the use of the FDIC's internal ADR program unless
otherwise directed by your Oversight Attorney. Costs incurred in the
unauthorized litigation of such claims may be disallowed.
5.4 FDIC as a Litigant
The FDIC’s litigation philosophy is to pursue an aggressive,
forthright, and consistent approach with our overall objective of
resolving litigation in an expeditious and cost-effective manner.
The Legal Division avoids extreme advocacy positions that are not
likely to have a substantive impact on the outcome of litigation.
Coercive, delaying, or obstructive tactics also are to be avoided.
We discourage excessive motion practice unless there is a clear
strategic advantage to be gained. Where appropriate, however,
motions to dismiss, for judgment on the pleadings, or for summary
judgment should be employed to resolve or refine as many of the
issues in dispute as possible.
The FDIC wishes to avoid costly delays that frequently result from
abuses of the discovery process. Lengthy interrogatories or requests
for extensive document production for the purpose of burdening
another party are to be avoided. The Legal Division specifically
requests that you consider available remedies and sanctions when
another party appears to be abusing the discovery process.
Questions concerning litigation strategies should be addressed to
your Oversight Attorney.
Discovery Requests - FDIC, Other Federal or State Agencies
To obtain all requisite authorizations and instructions for
coordination of a response, you must immediately contact your
Oversight Attorney when you receive a:
Notice of deposition or subpoena of an employee of the FDIC, or other federal or state agency; or
Subpoena or request for production of documents generated by the FDIC, or another federal entity.
Similarly, you should consult with your Oversight Attorney prior to
contacting employees of the FDIC or other federal entities, or
obtaining documents generated by another federal entity.
In the United States District Courts and Courts of Appeals, the FDIC
is not required to pay filing fees or post any bond to pursue an
appeal 12 U.S.C. 1819(b)(4).
Experts and Other Professional Service Providers
The decision to hire experts and other professional service
providers should only be made in consultation and with the approval
of your Oversight Attorney (absent exigent circumstances). It is
very important that experts and other professional service providers
are screened for conflicts of interest and are eligible to provide
services. Such conflicts screening and approval should be
documented. Refer to
and conflicts of interest.
The proposed rates, compensation, and expenses should be reasonable
in light of the matter for which they are hired and the customary
levels for their professions.Under no circumstances
can compensation be based upon a contingent fee arrangement. You
should try to obtain discounts when possible.
Absent express Legal Division permission, experts and other
professional service providers may only be compensated for fees and
expenses in accordance with the requirements of this Deskbook.
Chapter 7 for format requirements. The Legal Division
considers your oversight of experts and other professional service
providers an important duty under your legal referral.
The settlement possibilities of each matter should be identified and
considered early in the proceedings and at each stage thereafter.
Cases should be settled as early as practicable under the
circumstances. You will be asked to review the likelihood of success
with your Oversight Attorney on an on-going basis so that FDIC will
have current information on which to base its decisions.
Generally, Oversight Attorneys are involved in settlement
discussions. You must communicate all settlement offers, including
any deadlines imposed, to your Oversight Attorney as soon as
practicable. Such communications may be oral unless your Oversight
Attorney instructs otherwise.
You should advise the opposing party’s counsel, and the court, as
appropriate, that your Oversight Attorney will review all settlement
offers or bankruptcy plans with the appropriate FDIC representatives
and obtain necessary decisions.
The time needed to obtain authority to accept or reject a settlement
offer may vary. You should provide sufficient notice to the Legal
Division to secure FDIC pre-approved settlement authority for
The Legal Division generally assesses proposed settlements on the
likelihood of success and the likely net economic recovery,
considering, among other factors, the cost of litigation and the
amount and collectability of a judgment, using net present-value
most cases, the Legal Division will not consider an offer to settle
a matter for less than the full amount claimed without verified
financial information, on the approved form which will be furnished
by your Oversight Attorney. The debtor's disclosure statement and
any other available financial information should be supplied in
connection with the submission of a bankruptcy plan.
Attach to any settlement offer a description of any material changes
that relate to acceptance of the offer (e.g., a change in your
estimate of success or timing). When there are no such changes since
your last status report, so state.
Do not prepare a detailed analysis of the settlement offer unless
specifically requested to do so. Your recommendation(s) will be an
important part of the decision-making process, but the FDIC retains
the authority to accept or reject a settlement offer.
You must promptly notify your Oversight Attorney of any adverse
ruling so that a decision can be made regarding appeal. Although you
are expected to take all steps necessary to protect the interests
and preserve appeal rights of the FDIC, pending a decision whether
to appeal, no appeal shall be taken without the prior approval of
the Legal Division.
5.5 Criminal Referrals
The Legal Division has a responsibility to notify and, where
appropriate, assist law enforcement officials including the Office
of Inspector General in investigating conduct that may constitute a
violation of criminal statutes. You must immediately forward any
information that indicates possible criminal behavior to your
Oversight Attorney. Your Oversight Attorney may either file a
Suspicious Activity Report form with your assistance, or instruct
you to do so under Legal Division guidelines.
The FDIC does not have authority or responsibility for instituting,
conducting, or disposing of criminal proceedings. As a matter of
policy, the settlement of civil litigation on behalf of the FDIC may
not, expressly or by implication, extend to the disposition of any
criminal charges or recommendations with respect to such charges, or
to the disposition of any potential criminal or civil liability for
fraud against the FDIC or the United States. Furthermore, in
conducting civil litigation, including settlement negotiations,
under no circumstances may you agree to withhold from law
enforcement authorities any information relating to a possible
criminal violation or investigation.