Death of the Bob Richards Rule?Supreme Court Limits Federal Common Law ( Rodrigues v. Fed. Deposit Ins. Corp.)
February 25, 2020
Authored by: Craig Schuenemann
When can a Federal Court employ a federal common law rule to make its decision in the case? Justice Gorsuch answer this in Rodriguez v. Fed. Deposit Ins. Corp., U.S., No. 18-1269, 2/25/20. The answer . . . less often than you might think.
Leave it to a bankruptcy case to stir up Supreme Court worthy controversy over who exactly reaps the benefit of a whopping $35,351,690 operating loss. In this instance, that controversy resolved a circuit split and gives us clear guidance on when federal common law can be employed and when a court should stick to state law.
The controversy arose between Simon Rodriguez (Trustee), the court appointed Chapter 7 Trustee for United Western Bancorp, Inc. (UWBI), which was a bank holding company, and the Federal Deposit Insurance Corporation (FDIC), the receiver for United Western Bank (the subsidiary Bank) over a $4,846,625 tax refund.