John W. Atherton, JR. v. Federal Deposit Insurance Corporation, As Receiver for City Savings, F. S. B. (519 U.S. 213)
U.S. Supreme Court · decided January 14, 1997 · Supreme Court Database (Spaeth)
- Citation
- 519 U.S. 213 · 117 S. Ct. 666
- Decided
- January 14, 1997
- Term
- October Term 1996
- Vote
- 9–0
- Majority author
- Justice Breyer
- Issue area
- Economic Activity
- Disposition
- Vacated and remanded
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Justice Breyer delivered the opinion of the Court. The Resolution Trust Corporation (RTC) sued several officers and directors of City Federal Savings Bank, claiming that they had violated the legal standard of care they owed that federally chartered, federally insured institution. The case here focuses upon the legal standard for determining whether or not their behavior was improper. It asks where courts should look to find the standard of care to measure the legal propriety of the defendants’ conduct — to state law, to federal common law, or to a special federal (103 Stat. 243, 12 U. S. C. § 1821(k)) that speaks of “gross negligence”? of conduct as We conclude that long as the state standard (such as simple negligence) is stricter than that of the federal statute. The federal statute nonetheless sets a “gross negligence” floor, which applies as a substitute for state standards that are more relaxed. H-1 In 1989, City Federal Savings Bank (City Federal), a federal savings association, went into receivership. The RTC, as receiver, brought this action in the bank’s narrie against officers and directors. (Throughout this opinion, we use the more colloquial term “bank” to refer to a variety of institutions such as “federal savings associations.”) The complaint said that the defendants had acted (or failed to act) in ways that led City Federal to make various bad development,…
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