MEMORANDUM AND ORDER
JAMES McGIRR KELLY, District Judge.
Presently before the court is WH Venture's motion to dismiss the plaintiff, Federal Deposit Insurance Corporation (FDIC) as a party to this action. The defendant seeks to challenge the statutory validity of the FDIC's action to infuse $4.5 billion in permanent financial assistance to the ailing and financially troubled Continental Illinois National Bank and Trust Company of Chicago. Upon careful consideration of the parties' legal positions, I have concluded that WH Venture lacks standing to litigate the validity of the FDIC action and their motion will be denied.
This action was originally commenced in the Court of Common Pleas of Philadelphia County by Continental Bank to foreclose on a mortgage issued to WH Venture. In June, 1981, Continental Bank entered into a construction loan agreement with the defendant. The loan was used to develop high rise condominium units in a prime center city Philadelphia location. It appears from the pleadings and answers thereto that the defendant failed to meet the principal and interest payments when they came due in June, 1984. One month later, Continental instituted action in state court to foreclose on the property. W.H. Venture answered the complaint asserting, inter alia, that they had entered into various oral agreements that modified the express terms of the construction loan agreement. This non-performing loan to WH Venture was but one of many troubled loans that totaled almost $4.5 billion dollars contained in the bank's loan portfolio. Continental Bank was in severe financial difficulty and the prospect of its imminent demise sent shock waves through the world financial community. Foreign governments began to withdraw billions in deposits from the bank and a severe liquidity crisis developed.
In May 1984, in a joint effort, the FDIC, the Federal Reserve Board and the Comptroller of the Currency injected new capital into the bank thereby stabilizing it. Realizing their effort was but a stop-gap measure, these three parties began to work on a permanent assistance plan to aid the ailing bank. In July 1984, the FDIC adopted a resolution providing for $4.5 billion dollars in permanent financial assistance to Continental Bank. Pursuant to this agreement, the bank would transfer "non-performing loans" with a book-value of $4.5 billion in exchange for the bank's outstanding debt to the Federal Reserve Bank of Chicago. In addition the FDIC infused $1 billion in new capital into the bank. In accordance with this agreement, in September 1984, Continental Bank assigned the WH Venture loan to the FDIC. Shortly thereafter, the FDIC petitioned to join as a party in interest the mortgage foreclosure proceeding in state court. After the petition was granted, the FDIC removed the suit to federal court pursuant to 12 U.S.C. § 1819.
WH Venture contends that the assignment of its loan was not valid because the FDIC exceeded its statutory authority by the manner in which it transacted the permanent financial assistance program.
If the assignment was not valid, the FDIC should not be a party to the action and this court would be without jurisdiction over the subject matter of this suit. A more fundamental issue first needs to be resolved and that is whether WH Venture has standing to challenge the legality of the FDIC's permanent assistance plan.
In order for WH Venture to invoke the "judicial power" of this court, they must first prove they have standing to challenge the legality of the FDIC's assistance program. The doctrine of standing assures that the Article III "case or controversy" requirement is satisfied and thus the parties appear before the court having an actual or threatened injury capable of judicial redress. Frissell v. Rizzo, 597 F.2d 840, 843 (3d Cir. 1979); cert. denied, 444 U.S. 841, 62 L. Ed. 2d 54, 100 S. Ct. 82 (1979). Essentially, the standing doctrine works to prevent the federal judiciary from being converted into a "judicial version of college debating forum." Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 473, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982).
The Valley Forge College decision is the United States Supreme Court's most recent pronouncement on the standing issue. The Court held that in order for the party to assert standing, they must show that (1) they have suffered some actual injury or threatened harm; (2) which can be traced to the challenged action, and (3) which is capable of judicial redress. Valley Forge, 454 U.S. at 472.
Applying this criteria to the WH Venture claim, I find that they fail to meet the requirements and are without standing to challenge the validity of the financial assistance program.
WH Venture contends that it suffered an "injury" when its loan was assigned to the FDIC because of a federal law which works to divest WH Venture's right to assert certain affirmative defenses against the FDIC. 12 U.S.C. § 1823(e) reads in pertinent part:
(e) Agreements against Interests of Corporation