Sterling Savings v. United States

57 Fed. Cl. 234, 2003 U.S. Claims LEXIS 203, 2003 WL 21689594
CourtUnited States Court of Federal Claims
DecidedJuly 9, 2003
DocketNo. 95-829 C
StatusPublished
Cited by5 cases

This text of 57 Fed. Cl. 234 (Sterling Savings v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sterling Savings v. United States, 57 Fed. Cl. 234, 2003 U.S. Claims LEXIS 203, 2003 WL 21689594 (uscfc 2003).

Opinion

OPINION

DAMICH, Chief Judge.

The Court has found the Government liable for breach of contract, in this Winstarrelated case, in connection with Sterling Savings Association’s acquisition of three thrifts. Nevertheless, before the Court can determine the appropriate remedy for the breach, it must resolve whether Sterling has standing to assert a damages claim. Defendant argues that Sterling does not have standing due to the issuance of an injunction against the Government, which prevented it from taking any regulatory action inconsistent with the agreements it entered into with Sterling. Thus, Defendant asks the Court to grant partial summary judgment in its favor. For the reasons stated below, the Court finds Sterling has standing to assert a claim for damages, and thus Defendant’s Cross-Motion for Partial Summary Judgment with respect to this issue is DENIED.

I. Background

The Government argues that Sterling has no cause of action for damages during the period where an injunction, entered by a district court sitting in the Eastern District of Washington, prevented the Government fi-om enforcing any regulation against Sterling that was inconsistent with the agreements entered into in connection with the acquisition of three thrifts: (1) the Lewis [235]*235Federal Savings & Loan Association of Chehalis, Washington (“Lewis”), (2) Tri-Cities Savings & Loan Association of Kennewick, Washington (“Tri-Cities”), and (3) Central Evergreen Federal Savings & Loan Association of Chehalis, Washington (“Central Evergreen”).1

The Government was enjoined from the following actions:

a. imposing or enforcing any regulatory restriction or taking other regulatory action against Sterling that is inconsistent with the provisions of the November 1985, April 1988, and December 1988 supervisory acquisition agreements between Sterling and the FHLBB and the FSLIC;
b. enforcing or attempting to enforce the operating restrictions imposed by the January 26, 1990, March 9, 1990, and the May 11, 1990, letters from the Office of Thrift Supervision to Sterling that treat Sterling as a troubled thrift;
c. placing Sterling in a receivership or conservatorship; and
d. interfering with Sterling’s proposed public stock offering contemplated in the 1988 Central Evergreen acquisition agreement.

Sterling Savings Assoc. v. Ryan, 751 F.Supp. 871, 881-82 (E.D.Wash.1990).

By the time the injunction was lifted in 1992, Sterling had achieved regulatory compliance by raising in excess of $23 million through a 1991 public offering; therefore, the Government argues that Plaintiff lacks standing because the injunction prevented Sterling from suffering any injury by the Government’s breach. Def.’s Supp. Mem. at 38-39. Defendant argues that in order for Sterling to maintain a claim for breach of contract it must demonstrate it has standing to bring the claim. It argues Sterling must “‘show that [plaintiff] personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant ... and the injury fairly can be traced to the challenged action.’ ” Def.’s Supp. Mem. at 39 (quoting Valley Forge Christian Coll. v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982)). Defendant contends Sterling has not demonstrated direct injury or that it resulted from Defendant’s conduct.

Sterling argues that despite the Government’s contentions, it suffered real injury. For example, prior to the injunction, Sterling asserts that Defendant treated Sterling as an undercapitalized thrift and forced it to shrink its operations and abandon its growth strategy through the imposition of operating restrictions. These restrictions include: limiting Sterling’s asset growth, the amount of loan it could offer to one borrower, its ability to pay dividends, and the types of transactions it could enter into, such as lending to only existing customers. PL’s Reply to Def.’s Supp. Mem. at 29. Sterling contends that by the time of the injunction hearing, Defendant had already breached the agreements at issue and that the injunction did not prevent the damage that was already done to Sterling’s financial condition. Sterling claims that if Defendant had honored its agreements, Sterling would have had more capital to leverage and overall, a more profitable institution. Moreover, Sterling asserts that it never replaced all the capital it lost as a result of the Government’s breach, and the injunction neither “recaptured” the lost capital nor gave Sterling the benefit of its bargain. Significantly, Sterling asserts that despite the injunction, Sterling was still treated like a troubled thrift, and in reality could not operate as if the breach never occurred.

[236]*236II. The Standard for Granting a Motion for Summary Judgment

Summary judgment is appropriate when there are no genuine issues of material fact, and thus the moving party is entitled to judgment as a matter of law. RCFC 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Jay v. Secretary, DHHS, 998 F.2d 979, 982 (Fed.Cir.1993). “One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses ____” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party moving for summary judgment bears the initial burden of demonstrating the absence of any genuine issue of material fact. After adequate time for discovery and on motion, summary judgment is appropriate against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, where that party will bear the burden of proof at trial. Celotex Corp., 477 U.S. at 325, 106 S.Ct. 2548. The Court must resolve any doubts about factual issues in favor of the non-moving party, Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus., Inc., 145 F.3d 1303, 1307 (Fed.Cir.1998), and draw all reasonable inferences in its favor. See Gasser Chair Co. v. Infanti Chair Mfg. Corp., 60 F.3d 770, 773 (Fed.Cir.1995).

III. Discussion

Article III of the United States Constitution limits the function of the federal courts to resolving matters that involve only actual “cases” or “controversies.” McKinney v. United States Dept. of Treasury, 799 F.2d 1544, 1549 (Fed.Cir.1986). Standing further defines the “case” or “controversy” requirement of Article III. Arizonans for Official English v. Arizona, 520 U.S. 43, 65, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997); McKinney, 799 F.2d at 1549. Although the U.S. Court of Federal Claims is an Article I Court, 28 U.S.C.

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Bluebook (online)
57 Fed. Cl. 234, 2003 U.S. Claims LEXIS 203, 2003 WL 21689594, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sterling-savings-v-united-states-uscfc-2003.