FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, AS RECEIVER FOR
BOHEMIAN SAVINGS AND LOAN ASSOCIATION, PETITIONER V. JOHN V. CAPOZZI,
ET AL.

   No. 88-1300

   In the Supreme Court of the United States

   October Term, 1988

   The Acting Solicitor General, on behalf of the Federal Savings and
Loan Insurance Corporation (FSLIC), petitions the Court for a writ of
certiorari to review the judgment of the United States Court of
Appeals for the Eighth Circuit in this case.

   Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Eighth Circuit

                       PARTIES TO THE PROCEEDING

   The petitioner in this case is the Federal Savings and Loan
Insurance Corporation, as receiver for Bohemian Savings and Loan
Association.  The principal respondents in this Court -- the parties
directly affected by the jurisdictional issues -- are Vincent J.
Bommarito, Thomas F. Cline, Daniel L. Dierdorf, and Robert C. Fechner.
 The other, nominal respondents -- who were nominal appellees in the
court of appeals -- are John V. Capozzi, Margaret A. Capozzi, Dan L.
Wood, Floyd L. Shearin, Jacob Fishman, and Gregory Saban.

            TABLE OF CONTENTS
   Question Presented
   Parties to the Proceeding
   Opinions below
   Jurisdiction
   Statutory provisions involved
   Statement
   Discussion
   Conclusion
   Appendix A
   Appendix B
   Appendix C
   Appendix D

                            OPINIONS BELOW

   The opinion of the court of appeals (App., infra, 1a-16a) is
reported at 855 F.2d 1319.  The opinion of the district court (App.,
infra, 17a-39a) is reported at 653 F. Supp. 591.

                             JURISDICTION

   The judgment of the court of appeals was entered on August 24,
1988.  App., infra, 40a.  A petition for rehearing was denied on
November 4, 1988.  App., infra, 41a.  The jurisdiction of this Court
is invoked under 28 U.S.C. 1254(1).

                     STATUTORY PROVISIONS INVOLVED

   Section 102(a) of the Financial Institutions Supervisory Act of
1966, 12 U.S.C. 1730(k)(1), provides:

         Notwithstanding any other provision of law, (A) the
      Corporation (FSLIC) shall be deemed to be an agency of the
      United States within the meaning of section 451 of title 28;
      (B) any civil action, suit, or proceeding to which the
      Corporation shall be a party shall be deemed to arise under the
      laws of the United States, and the United States district courts
      shall have original jurisdiction thereof, without regard to the
      amount in controversy;  and (C) the Corporation may, without
      bond or security, remove any such action, suit, or proceeding
      from a State court to the United States district court for the
      district and division embracing the place where the same is
      pending by following any procedure for removal now or hereafter
      in effect:  Provided, That any action, suit, or proceeding to
      which the Corporation is a party in its capacity as conservator,
      receiver, or other legal custodian of an insured State-chartered
      institution and which involves only the rights or obligations of
      investors, creditors, stockholders, and such institution under
      State law shall not be deemed to arise under the laws of the
      United States.

   Section 1345 of Title 28, U.S. Code, provides:

         Except as otherwise provided by Act of Congress, the district
      court shall have original jurisdiction of all civil actions,
      suits or proceedings commenced by the United States, or by any
      agency or officer thereof expressly authorized to sue by Act of
      Congress.

                          QUESTION PRESENTED

   The Federal Savings and Loan Insurance Corporation (FSLIC), as
conservator of a FSLIC-insured state-chartered institution, brought
suit in federal court against former directors of the institution to
recover damages for their investments in real estate, extensions of
loans, execution of contracts, and management of the institution in
violation of state and federal law.  The question is whether the
district court had jurisdiction under 12 U.S.C. 1730(k)(1) or 28
U.S.C.  1345.

                               STATEMENT

   This case was brought in federal district court by the FSLIC, as
conservator for a FSLIC-insured, state-chartered savings and loan
association, to recover from former directors of the insolvent
institution damages caused by their violations of federal laws
applicable to federally insured thrifts and by their breaches of
fiduciary and contractual duties.  The FSLIC seeks review of the
Eighth Circuit's decision that neither 12 U.S.C. 1730(k)(1) nor 28
U.S.C. 1345 grants the federal courts jurisdiction over the case.

   1. Under 12 U.S.C. 1464(d)(6)(A) and 1729(c), the Federal Home Loan
Bank Board (Bank Board) is empowered in certain circumstances to
appoint the FSLIC to be the conservator or receiver for a
state-chartered savings and loan association (thrift) whose accounts
are insured by the FSLIC.  On January 30, 1986, the Bank Board, based
on a determination of insolvency, appointed the FSLIC to be the
conservator for Bohemian Savings and Loan Association (Bohemian) of
St.  Louis, Missouri.  Bohemian was chartered by the State of
Missouri, and its accounts were insured by the FSLIC under 12 U.S.C.
1726.

   Immediately after being appointed conservator, the FSLIC brought
this action in the United States District Court for the Eastern
District of Missouri.  The complaint, as amended, stated claims by the
FSLIC both in its capacity as conservator and in its separate
corporate capacity.  In its capacity as conservator, the FSLIC sought
more than $75 million in damages from respondents, who are former
directors and officers of and a former attorney for Bohemian.

   The FSLIC as conservator alleged, among other things, that the
director defendants violated numerous federal regulations that are
designed to ensure the sound management of FSLIC-insured thrifts.  In
particular, the complaint alleged that the director defendants
violated their duties under 12 C.F.R. 563.9-3(b) (lending limits),
563.9-8 (investments), 563.17(a) (safe and sound management policies),
563.17-1(c)(1) (loan requirements), 563.43(b) (loans to affiliated
persons), 523.12(a) and (b) (statutory reserves and net worth), 523.11
(liquidity), 563.17-1(c) (accounting and records), 563.37 (operation
of service corporation), 563.39 (unsafe and unsound employment
contracts), and 563.41(c)(iii) (purchasing property from affiliated
persons).  The FSLIC as conservator alleged that those violations gave
rise both to implied federal causes of action and to state-law causes
of action for breach of fiduciary and contractual duties.

   Jurisdiction over the claims brought by the FSLIC as conservator
was invoked under both 12 U.S.C. 1730(k)(1) and 28 U.S.C. 1345.  In
pertinent part, Section 1730(k)(1) states:

         Notwithstanding any other provision of law, (A) the
      Corporation (FSLIC) shall be deemed to be an agency of the
      United States within the meaning of section 451 of title 28;
      (B) any civil action, suit, or proceeding to which the
      Corporation shall be a party be deemed to arise under the laws
      of the United States, and the United States district courts
      shall have original jurisdiction thereof, without regard to the
      amount in controversy;  * * * Provided, That any action, suit,
      or proceeding to which the Corporation is a party in its
      capacity as conservator, receiver, or other legal custodian of
      an insured State-chartered institution and which involves only
      the rights or obligations of investors, creditors, stockholders,
      and such institution under State law shall not be deemed to
      arise under the laws of the United States.

   The FSLIC alleged that the proviso just set forth does not apply to
this case and, therefore, that the case comes within Clause (B)'s
grant of jurisdiction over all civil suits to which the FSLIC is a
party. The FSLIC also alleged -- relying on Clause (A)'s declaration
that the FSLIC is an agency for purposes of 28 U.S.C. 451 and on the
statutory provision that authorizes the FSLIC to sue and to be sued,
12 U.S.C.  1725(c) -- that the district court had jurisdiction under
28 U.S.C.  1345, which grants jurisdiction over any civil suit brought
by "any agency * * * expressly authorized to sue by Act of Congress."

   2. Respondents Cline, Fechner, and Bommarito, all of whom are
former directors of Bohemian, moved to dismiss the claims made by the
FSLIC as conservator, arguing that the court lacked jurisdiction over
those claims because they fall within the jurisdiction-limiting
proviso of Section 1730(k)(1).  The district court granted the motion.
 App., infra, 17a-39a.  The court dismissed the claims brought by the
FSLIC as conservator against the three moving parties and against
respondent Dierdorf, who was also a director of Bohemian.  Id. at 39a.
 /1/

   The district court first concluded that the FSLIC is an "agency"
within the meaning of Clause (A) only in its corporate capacity, not
in its capacity as conservator, receiver, or legal custodian.
Therefore, the court ruled, 28 U.S.C. 1345 does not confer
jurisdiction over the claims asserted by the FSLIC in its capacity as
conservator in this case.  App., infra, 20a-23a.  To determine whether
it had jurisdiction over those claims, the court accordingly turned to
Clause (B) of Section 1730(k)(1), which states that all civil cases to
which the FSLIC is a party are deemed to arise under federal law.
That clause confers federal jurisdiction here, the court observed,
unless Section 1730(k)(1)'s proviso applies.  App., infra, 23a.

   The district court ruled that the proviso applies to, and therefore
deprives the federal courts of jurisdiction over, the FSLIC's claims
as conservator (for a state-chartered thrift) against respondents
Cline, Fechner, Bommarito, and Dierdorf.  App., infra, 23a-34a.  The
court concluded that those claims "involve() only the rights or
obligations of investors, creditors, stockholders, and (the failed
thrift)" (Section 1730(k)(1)), notwithstanding that they involve the
obligations of directors, who are not listed in the proviso.  In the
court's view, it was sufficient that the claims at issue asserted
rights of the failed thrift and that any recovery would redound to the
benefit of investors, creditors, and stockholders.  App., infra,
24a-26a.  The court also concluded that the claims "involve() only * *
* rights or obligations * * * under State law" (Section 1730(k)(1)),
notwithstanding that the claims involve the defendants' obligations
under federal regulations.  In the court's view, it was sufficient
that the claims "arise under" state law, not federal law.  App.,
infra, 27a, 35a-36a.  /2/ In short, the district court concluded that
the claims against respondents Cline, Fechner, Bommarito, and Dierdorf
satisfy all of the conditions of the proviso and that those claims are
therefore outside its jurisdiction.

   3. The court of appeals affirmed.  App., infra, 1a-16a.  The court
first ruled, contrary to the ruling of the district court, that the
FSLIC is an "agency" under Clause (A) of Section 1730(k)(1) regardless
of the capacity in which it has filed its claims -- i.e., whether it
is acting in its capacity as insurer, regulator, conservator, or
receiver.  App., infra, 3a-4a.  Nevertheless, following the Seventh
Circuit's decision in FSLIC v. Ticktin, 832 F.2d 1438, 1443-1444
(1987), cert.  granted, No. 87-1865 (Oct. 3, 1988), the court held
that 28 U.S.C. 1345 does not furnish an independent basis of
jurisdiction over claims that come within Section 1730(k)(1)'s
proviso, because Section 1730(k)(1) sets forth a comprehensive scheme
for jurisdiction in cases involving the FSLIC.  App., infra, 4a-8a.

   The court of appeals then ruled that the proviso applies to the
FSLIC's claims as conservator against respondents Cline, Fechner,
Bommarito, and Dierdorf -- the only claims that were before the court.
 Following the Ticktin decision (832 F.2d at 1444), the court of
appeals agreed with the district court that those claims "involve()
only the rights or obligations of investors, creditors, stockholders
and (the failed thrift)" because -- regardless of who the defendants
are -- the claims were brought to enforce the rights of the thrift.
App., infra, 9a-10a.  The court also agreed with the district court
and with the Ticktin decision (832 F.2d at 1445-1446) that,
notwithstanding the defendants' alleged violations of federal
regulatory obligations, the claims at issue involve only "rights or
obligations * * * under State law" because the claims "arise under"
state law, not federal law. App., infra, 10a-12a.  /3/ The court of
appeals accordingly held that the proviso bars federal jurisdiction
over the claims before it.

                              DISCUSSION

   The FSLIC submits that its claims as receiver against respondents
Cline, Fechner, Bommarito, and Dierdorf are within the jurisdiction of
the district court under both 12 U.S.C. 1730(k)(1) and 28 U.S.C. 1345.
 /4/ The court of appeals rejected that submission.  The court ruled,
contrary to the FSLIC's arguments, (a) that Section 1730(k)(1)'s
proviso limits the federal agency jurisdiction conferred by 28 U.S.C.
1345, (b) that the proviso applies even to claims that involve the
obligations of persons, such as directors, who are not listed in
Section 1730(k)(1)'s proviso, and (c) that the proviso applies even to
claims that involve obligations under federal law, as long as the
claims arise under state law.

   The three issues that the court of appeals ruled on in this case
are currently before the Court in FSLIC v. Ticktin, No. 87-1865, which
is scheduled for argument on February 27, 1989.  As we explained in
our brief in Ticktin, the courts of appeals are divided over whether
there is federal jurisdiction over claims like those brought in this
case against respondents Cline, Fechner, Bommarito, and Dierdorf.  The
petition in this case should be held for disposition in light of the
Court's decision in Ticktin.

                              CONCLUSION

   The petition for a writ of certiorari should be held and disposed
of as appropriate in light of the Court's decision in FSLIC v.
Ticktin, No. 87-1865.

   Respectfully submitted.

   WILLIAM C. BRYSON

      Acting Solicitor General

   JORDAN LUKE

      General Counsel Federal Home Loan Bank Board

   FEBRUARY 1989

   /1/ The court held that there was pendent jurisdiction (pendent to
certain federal-law claims and certain claims by the FSLIC in its
corporate capacity) over certain state-law claims brought by the FSLIC
as conservator against respondents John and Margaret Capozzi,
respondent Wood, and respondent Fishman.  See App., infra, 36a-39a.
Jurisdiction over those claims was not at issue in the court of
appeals and is not at issue in this petition.  The two other
respondents, Shearin and Saban, both of whom were outside directors,
were dismissed without prejudice at the instance of the FSLIC.  Only
the claims against respondents Cline, Fechner, Bommarito, and Dierdorf
were at issue in the court of appeals and are at issue here.

   /2/ The court concluded that the FSLIC as conservator has no
implied right of action under any of the federal regulations that the
defendants allegedly violated.  App., infra., 27a-34a.

   /3/ The court of appeals concluded that the FSLIC has no implied
right of action as conservator under the federal regulations that are
at issue and that there is no basis for recognizing a federal common
law cause of action in the present setting.  App., infra, 12a-15a.

   /4/ On December 13, 1987, after the case was submitted to the court
of appeals but prior to the court's decision, the Bank Board replaced
the conservator and appointed the FSLIC as receiver for Bohemian.

   Appendix