NW Bnk MN Natl Assn, et al v. FDIC, No. 01-5435 (D.C. Cir. 2002)

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 15, 2002 Decided December 10, 2002

No. 01-5435

Norwest Bank Minnesota National Association, et al.,

Appellees

v.

Federal Deposit Insurance Corporation,

Appellant

Appeal from the United States District Court

for the District of Columbia

(00cv01250)

Barbara R. Sarshik, Counsel, Federal Deposit Insurance

Corporation, argued the cause for appellant. With her on the

briefs was Colleen J. Boles, Senior Counsel.

Gloria B. Solomon argued the cause and filed the brief for

appellees.

 Before: Edwards, Randolph, and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Randolph.

Randolph, Circuit Judge: On summary judgment, the dis-

trict court ruled in favor of Norwest Bank Minnesota Nation-

al Association,1 holding that Norwest had overpaid insurance

premiums to the Federal Deposit Insurance Corporation and

awarding Norwest a refund of $2.8 million, with interest.

The overpayments resulted from what the court viewed as the

FDIC's misinterpretation of the Federal Deposit Insurance

Corporation Improvement Act of 1991. We hold that Nor-

west's complaint was filed after the expiration of the statute

of limitations. We therefore vacate the order of the district

court and remand with instructions to dismiss.

I.

In 1989, in response to the savings-and-loan crisis, Con-

gress reformed the national system of deposit insurance,

creating two insurance funds under the control of the FDIC:

the Bank Insurance Fund ("BIF") to insure banks; and the

Savings Association Insurance Fund ("SAIF") to insure

savings-and-loan associations. The funds were to be sepa-

rately funded and administered. Congress anticipated that

the BIF would be in stronger financial condition for some

time and strictly limited the ability of an insured institution to

transfer deposits from one fund to the other fund. An

exception was the Oakar Amendment, named after its spon-

sor, which allowed a member of one fund to acquire a

member of the other fund. A SAIF member, after being

acquired by a BIF member, would continue to have its

acquired deposits insured by the SAIF, while the acquirer's

deposits would remain insured by the BIF. The financial

institution paid the SAIF rate on part of its deposits and the

BIF rate on the remainder of its deposits.

__________

1 Plaintiff is now known as Wells Fargo Bank Minnesota National

Association. For the sake of consistency with the district court's

orders in this case, we will continue to refer to it as Norwest.

 To determine the portion of the deposits to be insured by

the SAIF, Congress required Oakar institutions to calculate

their adjusted attributable deposit amount ("AADA") by add-

ing three components. The first component was (and still is)

the amount of deposits acquired from the SAIF bank. 12

U.S.C. s 1815(d)(3)(C)(i). The second component was (and

still is) cumulative adjustments made over time using the

third component. 12 U.S.C. s 1815(d)(3)(C)(ii). The third

component, prior to the 1991 amendments, was the amount

the first two components would have increased at a rate of

growth equal to the greater of a 7% annual increase or the

actual annual rate of growth of deposits of the bank (exclud-

ing any deposits acquired by further acquisitions). 12 U.S.C.

s 1815(d)(3)(C)(iii) (Supp. II 1990).

On December 19, 1991, Congress enacted the Federal

Deposit Insurance Corporation Improvement Act, modifying

the formula for calculating the AADA. Section 501(a) of the

Act eliminated the portion of the third component that pro-

vided for a minimum annual increase of 7% and instead

provided that the actual annual growth of deposits would be

used in all cases. Federal Deposit Insurance Corporation

Improvement Act of 1991, Pub. L. No. 102-242, 105 Stat.

2236, 2389 (codified at 12 U.S.C. s 1815(d)(3)(C)(iii)). Section

501(b) provided that the amendment "shall apply with respect

to semiannual periods beginning after the date of the enact-

ment of this Act." Id., 105 Stat. at 2391; see also 12 U.S.C.

s 1815 note. The dispute over the proper amount of the

insurance assessment stems from the parties' disagreement

about the meaning of the effective date provision. The FDIC

believes that the amendment did not take effect for purposes

of calculating Norwest's insurance premiums until 1993.

Norwest contends that its actual 1991 growth rate should

have been applied to the calculation of premiums beginning in

January 1992.

Norwest owed premiums to both the BIF and the SAIF as

a result of its acquisition of First Minnesota Savings Bank,

FSB, in December 1990. In January 1992, it filed the

appropriate FDIC form calculating its AADA based on the

greater of 7% and its actual growth rate, which was -7%.

Applying the pre-1991 calculation method, Norwest calculat-

ed its AADA on the appropriate form supplied by the FDIC

based on the 7% growth rate, which resulted in an inflated

AADA, if Norwest is correct. There was no immediate effect

on the total amount of insurance premiums Norwest owed the

FDIC because at that time the insurance rates for the BIF

and the SAIF were equal.

In 1995, the FDIC reduced the BIF assessment rate. The

result was that if the FDIC had erroneously interpreted the

statute in 1992 to overstate Norwest's AADA, Norwest paid a

higher total premium than it should have in 1995 and later

years, because deposits that should have been assessed at the

preferential BIF rate were assessed at the higher SAIF rate.

The error, if any, was preserved by the second component of

the formula, s 1815(d)(3)(C)(ii), which carries forward an

increase in the AADA and does not allow an error in the

growth rate in a given year to be corrected by further

changes in a bank's deposit amounts in later years. In

addition, there were special assessments based on the amount

of deposits assessed at the SAIF rate. Norwest overpaid

these amounts as well if it incorrectly calculated its AADA.

Norwest disputed the alleged overcharge in a letter to the

FDIC dated May 7, 1998, requesting a refund of the overpay-

ment of assessments resulting from the artificially high

AADA. The FDIC's Division of Finance denied the request

on September 17, 1998, as did the Assessment Appeals Com-

mittee on June 2, 1999. Norwest then filed suit against the

FDIC in the district court on June 1, 2000, more than eight

years after the alleged miscalculation.

The district court found Norwest's action timely. Applying

the six-year limitations period in 28 U.S.C. s 2401(a),2 the

court measured from the date of the denial by the Assess-

ment Appeals Committee on June 2, 1999. Norwest Bank

Minnesota, N.A. v. FDIC, No. 00-1250, slip op. at 6 (D.D.C.

__________

2 "Except as provided by the Contract Disputes Act of 1978,

every civil action commenced against the United States shall be

barred unless the complaint is filed within six years after the right

of action accrues." 28 U.S.C. s 2401(a).

Nov. 7, 2000). In the alternative, the court applied the five-

year period of 12 U.S.C. s 1817(g),3 measured from the time

of the first alleged overpayment in June 1995. Id.

II.

Norwest and the FDIC agree that the proper statute of

limitations for refund claims is 12 U.S.C. s 1817(g), rather

than 28 U.S.C. s 2401(a). The six-year statute of limitations--

28 U.S.C. s 2401(a)--is a general, catchall provision for civil

actions against the United States. The five-year statute of

limitations--12 U.S.C. s 1817(g)--applies specifically to an

action for "the recovery of any amount paid to the [FDIC] in

excess of the amount due to it," which precisely describes

Norwest's complaint. When both specific and general provi-

sions cover the same subject, the specific provision will con-

trol, especially if applying the general provision would render

the specific provision superfluous, as it would here. See, e.g.,

Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445

(1987).

Statutes of limitations commonly begin the running of the

period from the date the cause of action accrued. 3M Co. v.

Browner, 17 F.3d 1453, 1460 (D.C. Cir. 1994); Note, Develop-

ments in the Law--Statutes of Limitations, 63 Harv. L. Rev.

1177, 1200 (1950). Section 1817(g) is no exception: the

triggering event is when "the right accrued for which the

claim is made." If, as the FDIC urges, the right of action

accrued in January 1992, the five-year period had already run

when Norwest sent its letter to the FDIC in May 1998 and

when it filed its suit in June 2000.

"A claim normally accrues when the factual and legal

prerequisites for filing suit are in place." 3M Co., 17 F.3d at

1460; see Bay Area Laundry & Dry Cleaning Pension Trust

Fund v. Ferbar Corp. of Cal., 522 U.S. 192, 195 (1997);

__________

3 "No action or proceeding shall be brought ... for the recovery

of any amount paid to the Corporation in excess of the amount due

to it, unless such action or proceeding shall have been brought

within five years after the right accrued for which the claim is

made...." 12 U.S.C. s 1817(g).

United States v. Lindsay, 346 U.S. 568, 569 (1954); Rawlings

v. Ray, 312 U.S. 96, 98 (1941); Oppenheim v. Campbell, 571 F.2d 660, 662 (D.C. Cir. 1978). Section 1817(g) governs not

only the time for an "action" in court, but also the time for a

"proceeding." We held in 3M with respect to another statute

of limitations that a "proceeding" included an administrative

proceeding. 3M Co., 17 F.3d at 1455-57. If we followed this

line, Norwest's claim accrued when the legal and factual

prerequisites for an administrative proceeding were in place.

In January 1992, when the alleged miscalculation of Nor-

west's AADA occurred, Norwest could have requested a

refund from the agency or it could have brought suit in court,

alleging that the miscalculation resulted in an overpayment to

the SAIF. In other words, the legal prerequisites for "an

action or proceeding" were then in place. Norwest maintains

that at that time a lawsuit or a complaint to the agency would

have booted it nothing. In January 1992 the assessment

rates for the SAIF and the BIF were the same. And so if

Norwest had prevailed in court or in the agency, the FDIC

likely would have responded by billing it for the identical

amount as an underpayment to the BIF.

One might say--the FDIC does--that even if Norwest

succeeded in 1992 and wound up with no net recovery, it still

would have brought about a determination of the proper

construction of the 1991 statutory amendment and the FDIC

would have readjusted SAIF and BIF accounts accordingly,

not only for Norwest but also for all the other institutions in a

similar position. (The FDIC's Assessment Appeals Commit-

tee estimated that 75 of the 800 Oakar institutions would be

directly affected.) That would have had a future financial

impact for the regulated institutions if and when BIF assess-

ment rates were lowered, and it might also have affected

when the BIF became fully funded. On the other hand, it is

doubtless true that Norwest had no immediate financial in-

centive to raise the issue in 1992. But the action or proceed-

ing could have been brought then, and it has long been

settled that statutes of limitations begin running when the

wrong has been committed, even if at the time "no more than

nominal damages may be proved, and no more recovered; but

on the other hand, it is perfectly clear, that the proof of actual

damage may extend to facts that occur and grow out of the

injury, even up to the day of the verdict." Wilcox v. Plum-

mer, 29 U.S. (4 Pet.) 172, 182 (1830).4

Although the analogy is not perfect, Norwest's complaint is

like a claim "for restitution of money paid through mistake."

John P. Dawson, Mistake and Statutes of Limitation, 20

Minn. L. Rev. 481, 495 (1936). In such cases, courts generally

regard the statutory period to begin to run when the payment

is made. "Since the payment of money is ordinarily regarded

as final, the defendant-payee will probably change his position

in reliance upon a reasonable belief that the money is proper-

ly his...." Note, 63 Harv. L. Rev. at 1214. That, according

to the FDIC, is what happened here.

One of the policies underlying statutes of limitations is

repose. 3M Co., 17 F.3d at 1457. Yet if Norwest's cause of

action accrued when BIF and SAIF assessment rates di-

verged, and gave rise to a claim for each overpayment going

back five years from the date of filing the claim--which is

Norwest's position5--then the FDIC's books would never

close. In turn, the integrity and accuracy of the information

used to determine the aggregate assessment bases, and

__________

4 We have recognized, as have other courts, limited exceptions to

the general rule that the statute of limitations begins to run at the

time of the wrong. If the injuries are latent, as for example after

an exposure to toxic chemicals, the right to sue is deemed to accrue

when the wrong manifests itself in injury to the plaintiff. We

adopted this "discovery rule" in Connors v. Hallmark & Son Coal

Co., 935 F.2d 336, 342 (D.C. Cir. 1991). But here nothing prevented

Norwest from learning in 1992 that its AADA may have been

overstated, thus resulting in an overpayment to the SAIF. As we

stated in Connors, "if the injury is such that it should reasonably be

discovered at the time it occurs, then the plaintiff should be charged

with discovery of the injury, and the limitations period should

commence, at that time." Id.

5 Norwest argues that each overpayment creates a new cause of

action, and so long as a suit for a particular overpayment is

commenced within five years after overpayment, it is timely. Br. of

Appellee at 28-29.

therefore the financial health of the insurance systems, would

be placed in doubt.

Suppose the BIF and SAIF rates remained equal until

2030, then diverged. If Norwest's cause of action would not

accrue until then, a suit in 2034 would still be timely. The

FDIC would be forced to reallocate retroactively the assess-

ment base by increasing the amount for the BIF and decreas-

ing that of the SAIF for each year of the period, and for each

institution affected.

The statutory structure--which provides for independence

of the two funds6--does not treat transfers from one fund to

another as insignificant bookkeeping entries. An overpay-

ment to one fund, and the interest on the overpayment in the

fund, result in greater reserves for that fund, which inure to

the benefit of its member institutions. They pay less in

insurance assessments because less money is required to

maintain the designated reserve ratio (1.25% of the insured

deposits of that fund). 12 U.S.C. s 1817(b)(2)(A)(iv). On the

other hand, the members of the fund that is paid too little

because of an error might face a special assessment or an

increased insurance rate if the fund dips below the designated

reserve ratio.

A system that allowed a revision many years or decades

after an error would cast doubt on all of the data. The FDIC

could never be certain it was properly safeguarding the

financial health of the funds. Uncertainty might result in

overly cautious projections (keeping extra reserves on hand

just in case) or other problems for the FDIC, and therefore

its regulated financial institutions and their customers.

Further, an Oakar bank could hold onto the knowledge that

its AADA had been improperly enhanced, and choose to sue

__________

6 For example, 12 U.S.C. s 1821(a)(4)(A)(ii) provides that the

funds shall be "maintained separately and not commingled." The

FDIC is required to set the insurance rates such that the reserve

ratio of 1.25% (or a higher percentage as may be determined) is

maintained for each fund to cover future failures of financial institu-

tions insured by that fund. See 12 U.S.C. s 1817(b)(2)(A)(i), (iv).

years later if the rates went in the direction that disadvan-

taged it (in this case, SAIF assessment rates higher than

those of the BIF). If the rates diverged in the other di-

rection (BIF higher than SAIF), it would be able to choose

not to sue and benefit from the previous error. The Oakar

bank would be in a no-lose situation, to the detriment of the

BIF members whose assessments would be too high each

semiannual period.

As against this, Norwest will suffer "damage" indefinitely

into the future, so long as the SAIF assessment rates remain

higher than BIF rates, and so long as it does not divest itself

of the former savings-and-loan institution it acquired. Each

payment, by its lights, will be an overpayment because the

error in 1992 will remain embedded in its adjusted attribut-

able deposit amount. One response, although perhaps not

entirely satisfactory, is that Norwest is in the same position

as a person permanently disabled from an automobile acci-

dent who fails to sue within the period of limitations. That

person too will suffer continuing injury that cannot be recom-

pensed because the limitations period has run. Still, we

recognize that the result we reach may be seen as strict. But

we must also recognize the time-honored standard that "limi-

tations and conditions upon which the Government consents

to be sued must be strictly observed." Soriano v. United

States, 352 U.S. 270, 276 (1957).

As we have mentioned, Norwest argues that since each

assessment is a separate payment, it may recover all pay-

ments made within the preceding five-year period, a position

that would effectively suspend the running of the limitations

period. In support, Norwest invokes Keefe Co. v. Americable

Int'l, Inc., 219 F.3d 669 (D.C. Cir. 2000) (per curiam). Keefe

decided a certified question of District of Columbia law in the

context of a private dispute. It did not interpret a federal

statute of limitations. At issue were a series of installment

payments (equaling a percentage of subscriber revenues) due

as compensation for prior assistance obtaining cable television

contracts for U.S. military bases. There was no single event

that resulted in all future damages. See Keefe Co. v. Ameri-

cable Int'l, Inc., 755 A.2d 469, 476 (D.C. 2000). The District

of Columbia Court of Appeals held that the local statute of

limitations did not bar an action to recover installment pay-

ments that accrued within the limitations period. See id. at

478 (answering the certified question); see also Bay Area

Laundry & Dry Cleaning Pension Trust Fund, 522 U.S. at

195 ("[E]ach missed payment creates a separate cause of

action with its own six-year limitations period."). In contrast,

here the alleged miscalculation in 1992 of Norwest's AADA

was the cause of all of the future overpayments. The D.C.

Court of Appeals, in deciding the certified question in Keefe,

recognized that the outcome might have been different if

there had been a dispute over the interpretation of the

contract that would "govern throughout the life of the con-

tract." Id. at 477 (quoting Air Transp. Ass'n of Am. v.

Lenkin, 711 F. Supp. 25, 27 (D.D.C. 1989), aff'd per curiam

on other grounds, 899 F.2d 1265 (D.C. Cir. 1990)). In Len-

kin, the district court, interpreting District of Columbia law,

held that the limitations period for a tenant's claim of over-

payment of rent based on the landlord's alleged misinterpre-

tation of a lease provision commenced when the tenant first

received notice of the landlord's interpretation. Lenkin, 771 F. Supp. at 27. The statute of limitations barred the com-

plaint even though further payments would be incorrectly

inflated, if the tenant's interpretation was correct. Id.

Norwest also seeks to extend the period of limitations on

the ground that the six-year period of limitations in the

general statute (28 U.S.C. s 2401(a)) only started running in

1999, after the FDIC finally rejected its refund claim, so that

if it sued for a refund within six years of that date it was

entitled to recover all overpayments within six years of its

suit. This cannot possibly be right. Norwest initiated no

administrative action until May 1998, when it requested a

refund in a letter to the FDIC. By then the limitations

period had already expired. If Norwest's claim was untimely,

as we have determined it was, the FDIC's rejection of the

claim could not make it timely. Norwest relies upon Sendra

Corp. v. Magaw, 111 F.3d 162 (D.C. Cir. 1997), for the

proposition that when an agency reopens a matter it creates a

right of judicial review. But we cannot see how the FDIC

Assessment Appeals Committee's decision to treat the claim

for a refund on the merits, while noting in a footnote that it

appeared to be untimely under s 1817(g), somehow waived

the statute of limitations defense in judicial proceedings.

The district court's judgment in favor of Norwest cannot

stand because the complaint was filed after the expiration of

the five-year statute of limitations provided by 18 U.S.C.

s 1817(g). The judgment of the district court is vacated and

the case is remanded with instructions to dismiss because the

action was untimely.

So ordered.