As I read FIRREA, I lack judicial power to entertain any such prayer for equitable relief. The issue treated as one of power does not depend on the reasonableness of the legitimacy of what it is that RTC proposes to do or not do, which is the position taken by defendant counterclaimants. The moment I enter the tepid waters of determining reasonableness or legitimacy, I think I am undertaking exactly that superintendence of RTC's business judgment, which Congress has instructed me to refrain from doing.
The final issue is whether I should, as requested by RTC, exercise direct withdrawal of the lis pendens which has been filed by defendants with respect to Rebel Hill. It is clear from the argument today -- there was consensus -- that the filing of the lis pendens operates as a substantial drag on the marketability of Rebel Hill.
RTC proposes to dispose of Rebel Hill in the marketplace, and that, of course, is exactly what the counterclaimants don't want to have happen. They seek judicial direction that Rebel Hill be transferred to them. I've already addressed the reasons why exercising any such authority by me is inconsistent with the statutory scheme. I think only a logical extension of my conclusions with respect to my lack of authority to entertain an application for equitable relief of the sort requested, that I conclude that the lis pendens is not viable.
There are various pieces of the FIRREA statute which, without speaking to a lis pendens in so many words, certainly offers direction as to what the principles of the statute are.
12 USC Section 1821(d)(13)(C) states, "No attachment or execution may issue by any court upon assets in the possession of the receiver."
Section 1825(b)(2) tells us that "no property of the corporation shall be subject to levy, attachment, garnishment, foreclosure or sale without the consent of the corporation; nor shall any involuntary lien attach to the property of the corporation."
That is statutory language which, at least in its genesis, was clearly aimed at hostile -- at attachments and levies and so forth that were supportive of tax collection. But by amendment as of December of last year, the references to taxation have been eliminated, and it is at least a plausible argument that that was a legislative direction, that the statutory language should be viewed more comprehensive.
I appreciate that the argument could be made that the failure of FIRREA in the sections I've referred to, or other cognate sections that refer expressly to lis pendens as a device that was incompatible with the RTC's exercise of its responsibilities, would give footing for the proposition that Congress did not mean to disturb the lis pendens. I think that's a plausible, but ultimately unpersuasive, argument. It's hard to imagine that even if Congress could direct its full time to the drafting of a statute of this kind, it could or it even would be sensible for it to undertake an encyclopedic reference to every particular device to be found in the armament of every one of our American jurisdictions.
Certainly, this is cognate with a lien, and the spirit of the statute tells us that the lis pendens, as the marketplace would recognize, would be a significant impediment if it were to remain annexed to the Rebel Hill property.
Basically, I think where I come to rest is that whether or not one is prepared to say that 1821(d)(13)(C) or 1825(b)(2), both of them taken together are statutory directives and oust the lis pendens, the statutory framework, taken as a whole, is an instruction that this is an area of law in which federal law has ousted state forums, and state processes are incompatible in their operation.
The appropriate -- and I really regard it as controlling precedent here -- is the Third Circuit's instruction of last year in FDIC versus Shain, Schaffer and Rafanello, 944 F.2d 129. The very last point addressed by the Third Circuit in that case contained the following discussion:
Although SS and R -- that's of course the acronym for the law firm Shain, Schaffer and Rafanello, the appellant. "Although SS and R have a valid retaining lien under New Jersey law, it cannot assert it against the FDIC, because federal law has displaced state remedies in this area. SS and R must, therefore, submit its claim for fees to the FDIC according to the procedure established by FIRREA. The district court therefore was justified in requiring SS and R to return the files for which SS and R's retaining lien attached."
In cognate fashion, I conclude that the lis pendens filed by the defendants against the Rebel Hill property ought to be disallowed.
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