O’melveny & Myers v. Federal Deposit Insurance Corporation, as Receiver for American Diversified Savings Bank

Summary

The Court unanimously held that California law, rather than a special federal common-law rule, governs whether corporate officers’ knowledge is imputed to a failed savings and loan and to the FDIC suing as its receiver on state-law tort claims. FIRREA does not authorize additional judicially created exceptions to its statutory framework, and even assuming FIRREA does not apply, the FDIC identified no significant conflict between state law and an identifiable federal policy that would justify displacement. The Court reversed and remanded, leaving the content of California law to the Ninth Circuit. Justice Stevens, joined by Justices Blackmun, O’Connor, and Souter, concurred to emphasize that state courts may develop agency law to protect creditors and taxpayers, while federal courts must interpret and apply state law absent congressional direction.