According to the Second Amended Complaint (filed December 30, 1992), plaintiff Resolution Trust Corporation (RTC) alleges that Anchor Savings and Loan Association was established as a New Jersey chartered mutual in 1943, and that Anchor was converted to a New Jersey chartered savings and loan association in 1987, changing its name to Action Savings Bank, SLA in 1989. In 1990, the Office of Thrift Supervision determined that Action Savings Bank, SLA ("Failed Action") was insolvent, and it appointed RTC as its Receiver and created Action Federal Savings Bank ("New Action") as a federally chartered savings and loan association. New Action was placed into conservatorship, with RTC acting as its conservator. On that same date, November 15, 1990, Failed Action transferred certain of its assets to New Action, including the causes of action RTC asserts herein. On October 25, 1991, New Action was placed into receivership, and RTC in its corporate capacity acquired certain New Action assets including these causes of action. RTC asserts that it brings this action in its corporate capacity as the purchaser and assignee from the RTC as Receiver for New Action of these causes of action, and as successor to the rights of Action and of Action's depositors, shareholders and creditors with respect to the assets of Action.
This court has jurisdiction pursuant to 12 U.S.C. § 1441a(1)(1) and 28 U.S.C. § 1331.
Mr. Vass was an outside director of Action, a New Jersey chartered stock savings and loan association, from February 1986 until the Resolution Trust Corporation ("RTC") was appointed as Action's receiver on November 15, 1990. (Pl. Second Am. Compl. PP 1-2, 15.) The RTC has sued Action's former directors and certain of its former officers for negligently conducting Action's business affairs. Two causes of action are asserted against Vass and the other directors, one for gross negligence (Count I) and one for simple negligence (Count II). Count II, at issue in the present motion, asserts that each of the directors and officers "was negligent in the fulfillment of his fiduciary duty of care" to Action. (Pl. Second Am. Compl. P 117.) Vass now moves, and numerous defendants join his motion, to dismiss the simple negligence count of the complaint for failure to state a claim on which relief can be granted, alleging that state law claims for simple negligence are preempted by 12 U.S.C. § 1821(k); or in the alternative, for partial summary judgment, because pursuant to New Jersey law and the terms of Action's certificate of incorporation, Action's directors are insulated from claims of breach of fiduciary duty.
I. Motion to Dismiss Standard
A Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted must be denied "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). A district court must accept as true the facts pleaded in the complaint and any and all reasonable inferences derived from those facts. Unger v. National Residents Matching Program, 928 F.2d 1392, 1400 (3d Cir. 1991); Glenside West Corp. v. Exxon Co., U.S.A., 761 F. Supp. 1100, 1107 (D.N.J. 1991); Gutman v. Howard Sav. Bank, 748 F. Supp. 254, 260 (D.N.J. 1990).
It is not necessary for the plaintiff to plead evidence, and it is not necessary to plead the facts that serve as the basis for the claim. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977); In re Midlantic Corp. Shareholder Lit., 758 F. Supp. 226, 230 (D.N.J. 1990). The question before the court is not whether the plaintiff will ultimately prevail; rather, it is whether he can prove any set of facts in support of his claims that would entitle him to relief. Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984). "Although the Federal Rules of Civil Procedure do not require a claimant to set forth an intricately detailed description of the asserted basis for relief, they do require that the pleadings give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Baldwin County Welcome Center v. Brown, 466 U.S. 147, 150, n.3, 80 L. Ed. 2d 196, 104 S. Ct. 1723 (quoting Conley v. Gibson, 355 U.S. 41, 47, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)).
II. Preemption of State Law Simple Negligence Claims by 12 U.S.C. § 1821(k)
Defendant Vass asserts that the language of 12 U.S.C. § 1821(k) of the Financial Institutions Reform, Recovery, and Enforcement Act ("FIRREA") creates a national, uniform gross negligence standard of liability against Savings and Loan Association officers and directors, thereby preempting all state law negligence claims with a lesser standard.
Many courts have wrestled with the preemptive reach of FIRREA generally, and of § 1821(k) in particular, and no clear consensus has been forthcoming. Several courts have found that § 1821(k) has no preemptive effect on either federal or state law. F.D.I.C. v. Nihiser, 799 F. Supp. 904 (C.D. Ill. 1992); F.D.I.C. v. Black, 777 F. Supp. 919 (W.D. Okla. 1991); F.D.I.C. v. McSweeney, 772 F. Supp. 1154 (S.D. Cal. 1991), aff'd, 976 F.2d 532 (9th Cir. 1992). Other courts have held that § 1821(k) preempts both federal and state law on the standard of liability. F.D.I.C. v. Swager, 773 F. Supp. 1244 (D.C. Minn. 1991). Finally, several courts have ruled that the § 1821(k) preempts federal common law but not state common or statutory law. RTC v. Farmer, 823 F. Supp. 302 (E.D. Pa. 1993); F.D.I.C. v. Mintz, 816 F. Supp. 1541 (S.D. Fla. 1993); F.D.I.C. v. Miller, 781 F. Supp. 1271 (N.D. Ill. 1991); F.D.I.C. v. Isham, 777 F. Supp. 828 (D. Colo. 1991); see also F.D.I.C. v. Canfield, 967 F.2d 443 (10th Cir.) (en banc), cert. dismissed, U.S. , 121 L. Ed. 2d 527 (1992). This court finds the third construction of § 1821(k) to be most persuasive, and holds that the most reasonable interpretation is that state common or statutory law simple negligence claims are not preempted by § 1821(k).
This holding is consistent with the proper analysis for determining whether Congress intended the preemption of state law by federal statute.
It is well established that there exists an assumption that state law is only superseded by federal law when such is "the clear and manifest purpose of Congress." Cipollone v. Liggett Group, Inc., U.S. , 112 S. Ct. 2608, 2617 (1992) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 91 L. Ed. 1447, 67 S. Ct. 1146 (1947); City of Milwaukee v. Illinois, 451 U.S. 304, 316, 68 L. Ed. 2d 114, 101 S. Ct. 1784 (1980). Congress can clearly indicate the application of state law standards when it wishes, and in fact did so in establishing the applicable standards for gross negligence under § 1821(k).
However, an indication of a "clear and manifest purpose of Congress" to preempt all state law simple negligence claims is not evident from the language of the statute, particularly in light of the "saving clause" language that: "Nothing in this paragraph shall impair or affect any right of the Corporation under other applicable law." 12 U.S.C. § 1821(k).
Preempting all lesser state law standards of negligence would leave the saving clause virtually empty. Statutory construction must strive to give meaning to each element of the statute in a sensible manner which does not render it superfluous. See United States v. Smith, 499 U.S. 160, 183, 113 L. Ed. 2d 134, 111 S. Ct. 1180 (1991) (citing United States v. Morton, 467 U.S. 822, 828, 81 L. Ed. 2d 680, 104 S. Ct. 2769 (1984)); see also 2A N. Singer, Sutherland Statutory Construction § 46.06 (5th ed. 1992). This construction, under which § 1821(k) does not preempt state common law or state statutory negligence claims against officers and directors, is also most consistent with preserving such tort liability as states have imposed upon bank directors and officers while assuring that, whether or not a state has chosen to do so, such conduct will also be governed by the § 1821(k) gross negligence standard. States thus remain free to impose stricter liability -- in terms of a simple negligence standard, for example -- if they choose to do so.
Therefore, given the absence of a clear indication by Congress to preempt state law liability standards, the court finds that the RTC's state claims for negligent breach of fiduciary duty are not preempted by § 1821(k).
III. Motion for Partial Summary Judgment
In the alternative, Vass requests that this court rule as a matter of law that the claim for negligent breach of fiduciary duty in Count II of the Second Amended Complaint against Action directors is not cognizable under New Jersey law, because the certificate of incorporation insulates Action directors from breach of duty claims which do not fall under a statutorily enumerated exception. Because we hold that § 1821(k) does not preempt state law claims by the RTC for negligent breach of fiduciary duty against directors of a failed thrift, we must now decide if the claim is viable under New Jersey law and the terms of the certificate of incorporation.
A. Summary Judgment Standard
The standard for granting summary judgment is a stringent one. A court may grant summary judgment only when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see Hersh v. Allen Prods. Co., 789 F.2d 230, 232 (3d Cir. 1986); Lang v. New York Life Ins. Co., 721 F.2d 118, 119 (3d Cir. 1983). In deciding whether there is a disputed issue of material fact the court must view all doubt in favor of the non-moving party. Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 n.2 (3d Cir. 1983), cert. denied, 465 U.S. 1091, 79 L. Ed. 2d 910, 104 S. Ct. 2144 (1984); Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870, 874 (3d Cir. 1972). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
B. N.J.S.A. 14A:2-7(3) and N.J.S.A. 17:12B-38.1
1. Rights Asserted by RTC on Behalf of Association and Shareholders