On October 11, the U.S. District Court for the District of Columbia (DDC) denied an individual plaintiff’s motion for a temporary restraining order (TRO) and granted the FDIC’s motion to dismiss in a case seeking to enjoin an FDIC enforcement proceeding. In an administrative proceeding, the FDIC had alleged that the plaintiff engaged in misconduct while managing his investment firm and sought to prohibit him from further participation in the banking industry. The FDIC’s case was scheduled to be heard by an administrative law judge on October 15.
As previously covered by InfoBytes, the plaintiff filed suit the FDIC, its heads, board members and an administrative law judge for allegedly subjecting the plaintiff to an “endless and unlawful administrative process” during its proceedings. The individual plaintiff previously filed two separate actions to enjoin the FDIC’s enforcement proceeding, both of which were dismissed for lack of subject matter jurisdiction. The court ruled that issue preclusion barred the plaintiff from relitigating the jurisdictional issue, as it had already been decided in the previous cases.
The court also addressed the plaintiff’s argument that the US Supreme Court decision in Jarkesy v. SEC “repudiated” longstanding precedent allowing administrative agencies to try common law claims. However, the court found that Jarkesy did not affect the applicability of issue preclusion in this case. Furthermore, the court rejected the plaintiff’s argument that the statute authorizing the FDIC to enter prohibition orders and impose civil penalties is unconstitutional, holding that the individual plaintiff could still seek judicial review after the FDIC’s final order.
