FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, AS RECEIVER FOR
MANNING SAVINGS AND LOAN ASSOCIATION, PETITIONER V. HAROLD J. TICKTIN,
JOSEPH J. TICKTIN, WILLIAM HEATON, HAROLD BROWN, AND JUDITH TICKTIN

   No. 87-1865

   In the Supreme Court of the United States

   October Term, 1988

   On Writ of Certiorari to the United States Court of Appeals for the
Seventh Circuit

   Brief for the Petitioner

            TABLE OF CONTENTS
   Question Presented
   Opinions below
   Jurisdiction
   Statutes and regulations involved
   Statement:
      A. Statutory background
      B. Proceedings below
   Summary of argument
   Argument:
      The district court has jurisdiction in this case both under
      Clause (B) of Section 1730(k)(1) and under 28 U.S.C. 1345, and
      the proviso of Section 1730(k)(1) does not deprive the district
      court of such jurisdiction
      A. Introduction
      B. The proviso of Section 1730(k)(1) does not apply because this
         case involves the obligations of persons not listed in the
         proviso
      C. The proviso of Section 1730(k)(1) does not apply because this
         case involves the parties' obligations under federal as well
         as state law
      D. The proviso of Section 1730(k)(1) does not affect the federal
         agency jurisdiction established by 28 U.S.C. 1345 and
         confirmed by Clause (A) of Section 1730(k)(1)
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1a-18a) is reported
at 832 F.2d 1438.  The opinions of the district court (Pet. App.
19a-37a;  J.A. 39-46) are unreported.

                             JURISDICTION

   The judgment of the court of appeals (Pet. App. 38a-39a) was
entered on November 2, 1987.  An order denying the petition for
rehearing and suggestion for rehearing en banc was entered on December
14, 1987 (Pet. App. 40a-41a).  On March 7, 1988, Justice Stevens
extended the time in which to file a petition for a writ of certiorari
to and including May 12, 1988, and a petition was filed on that date.
This Court granted the petition on October 3, 1988.  The jurisdiction
of this Court is invoked under 28 U.S.C. 1254(l).

                   STATUTES AND REGULATIONS INVOLVED

   The principal statute at issue, 12 U.S.C. 1730(k)(1), is set out at
pages 5-6, infra.  That provision and other pertinent federal statutes
and regulations are set out in the appendix to the petition (Pet. App.
42a-71a).

                          QUESTION PRESENTED

   The Federal Savings and Loan Insurance Corporation (FSLIC), having
been appointed by the Federal Home Loan Bank Board as receiver of a
FSLIC-insured state-chartered institution, brought this suit in that
capacity against former directors and shareholders of the institution
to recover damages for the issuance and receipt of two dividends in
violation of state and federal law.  The question presented is whether
the federal district court had jurisdiction over this suit under 12
U.S.C. 1730(k)(1) and 28 U.S.C. 1345.

                               STATEMENT

   A. Statutory Background

   Savings and loan associations (thrifts) are financial institutions
that lend money and provide interest-bearing savings accounts.
Historically, thrifts tended to be smaller than commercial and savings
banks and had substantially more limited functions.  For most of their
history, thrifts have been the principal source of home mortgage
loans.  See F. Ornstein, Savings Banking:  An Industry in Change
(1985);  T. Marvell, The Federal Home Loan Bank Board 4 (1969).

   Prior to 1932, the regulation of thrifts was left entirely to the
States.  In that year, however, Congress responded to the devastating
impact of the Great Depression on thrifts, their borrowers, and their
depositors by enacting the Federal Home Loan Bank Act, ch. 522, 47
Stat. 725.  The Act's main purpose was to create a source of funds
that could be loaned to thrifts to increase their liquidity (see T.
Marvell, supra, at 18-20);  the Act created the Federal Home Loan Bank
Board (Bank Board) to oversee the process.  In 1933, Congress enacted
the Home Owners' Loan Act, ch. 64, 48 Stat. 128.  That law provided,
among other things, for the creation of federal thrifts to be
chartered and regulated by the Bank Board.  The same year, Congress
enacted the National Housing Act (NHA), ch. 847, 48 Stat. 1246.  The
NHA established a program of federal insurance for the deposit
accounts of both federal and state-chartered thrifts, and it created
the Federal Savings and Loan Insurance Corporation (FSLIC) to
administer the program.

   The NHA requires the FSLIC to insure the accounts of all federally
chartered thrifts.  12 U.S.C. 1726(a)(1) and (b).  The statute also
permits the FSLIC to make its insurance available to state-chartered
thrifts on the same conditions as it is made available to federal
thrifts.  12 U.S.C. 1726(a)(2) and (b).  Each such insured institution
must pay premiums into the FSLIC's insurance fund, which consists of a
primary and secondary reserve.  12 U.S.C. 1726(b).  Each such
institution also is subject to periodic examinations by the FSLIC "for
its protection and the protection of other insured institutions." 12
U.S.C. 1726(b).  Today, the FSLIC insures the accounts of most
state-chartered thrifts as well as all federal thrifts.

   If an insured thrift defaults -- which, as defined in 12 U.S.C.
1724(d), means that a conservator, receiver, or other legal custodian
has been appointed to liquidate the institution -- the FSLIC is
responsible for paying the thrift's depositors "as soon as possible,"
either by cash from its insurance fund or by a transfer account in a
new institution.  12 U.S.C. 1728(b).  Avoiding defaults and the
concomitant need to make payouts is a principal concern of the FSLIC
and of its operating hear, the Bank Board (see 12 U.S.C. 1725 (b)).
To that end, the FSLIC is empowered to render various types of
financial assistance to ailing thrifts.  12 U.S.C> 1279(f).  The FSLIC
is also empowered to terminate an insured thrift's insurance, to
initiate cease-and-desist proceedings, and to undertake to suspend or
to remove directors or officers in circumstances that involve unsafe
or unsound practices or violations of law or regulation and that thus
present a risk to the thrift's well-being.  12 U.S.C. 1730;  see 12
U.S.C. 1464(d)(1)-(5).  /1/

   A savings and loan association is not eligible to become a
bankrupt.  11 U.S.C. (& Supp. IV) 109.  For a federal thrift, the only
statutory path to a "corporate grave" -- that is, to a "default" -- is
under 12 U.S.C. (& Supp. IV) 1464(d)(6)(A), which gives the Bank Board
"exclusive power and jurisdiction to appoint a conservator or
receiver" for a federal savings and loan association in circumstances
involving insolvency, dissipation of assets or earnings due to legal
violations or unsafe or unsound practices, unsafe or unsound
conditions, violations of cease-and-desist orders, or concealment of
or refusal to disclose records or assets of the association.  If the
Bank Board declares a federal thrift in default, it must appoint the
FSLIC as receiver or conservator.  12 U.S.C. 1729(b)(1).

   For state-chartered FSLIC-insured thrifts, state authorities may
appoint a person other than the FSLIC as the receiver, but the FSLIC
is obliged to act as receiver if appointed by state authorities.  12
U.S.C. 1729(c)(1)(A).  Prior to 1968, only state authorities could
place a state-chartered FSLIC-insured thrift in default.  Since 1968,
the Bank Board has had broad powers, which Congress expanded in 1982,
itself to appoint the FSLIC receiver of a state-chartered
FSLIC-insured thrift.  12 U.S.C. 1729(c)(1)(B) and (2).  See Garn-St
Germain Depository Institutions Act of 1982, Pub. L. No. 97-320,
Sections 122(d) and (g), 96 Stat. 1482-1483;  Bank Protection Act of
1968, Pub. L. No. 90-389, Section 6, 82 Stat. 295-296.  Specifically,
under 12 U.S.C. 1729(c)(1)(B), the Bank Board has the power to place a
state-chartered FSLIC-insured institution in receivership in certain
circumstances involving insolvency, dissipation of assets, or unsafe
or unsound conditions.  And under 12 U.S.C. 1729(c)(2), the Bank Board
has the power to "federalize" the receivership of a thrift previously
placed in default by state authorities in certain circumstances.  In
any such case, as where a federal thrift is placed in default, it is
the FSLIC that must act as the receiver of the thrift (12 U.S.C. 1729
(c)), and the FSLIC has the duty, among others, "to liquidate such
institution in an orderly manner or to make such other disposition of
the matter as it deems to be in the best interests of the institution,
its savers, and the (FSLIC)" (12 U.S.C. 1729(c)(3)(B)).  In
liquidating an insured thrift, the FSLIC as receiver or conservator is
given broad power to take all necessary actions, including collecting
all obligations to the thrift, subject only to the regulation of the
Bank Board or, in cases where the FSLIC was appointed by a public
authority other than the Board, subject only to the regulation of that
authority.  12 U.S.C. 1729(d).

   Section 1730(k)(1) of Title 12, United States Code, addresses the
jurisdiction of the federal courts to hear suits involving the FSLIC.
That section was enacted in 1966 as part of the Financial Institutions
Supervisory Act of 1966, Pub. L. No. 89-695, Section 102(a), 80 Stat.
1042.  It states in pertinent part (ibid. (emphasis in original)):

         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.  * * *

   B. Proceedings Below

   1. Prior to February 1983, Manning Savings and Loan Association
(Manning) was a savings and loan association chartered by the State of
Illinois and insured by the FSLIC.  In that month, the Bank Board,
acting pursuant to 12 U.S.C. 1729(c)(1)(B), appointed the FSLIC to be
the receiver of Manning.  Subsequently, the FSLIC brought this suit
against respondents, all of whom were directors of Manning, and three
other persons.  Two of the respondents (Harold and Joseph Ticktin)
were shareholders as well as directors;  the other three respondents
(William Heaton, Harold Brown, and Judith Ticktin) were directors but
not shareholders.  /2/

   According to the complaint, in 1980, Manning's directors declared a
dividend of more than $400,000 to all "permanent reserve" shareholders
(chiefly, certain directors themselves).  The dividend was illegal
because Manning did not have sufficient net worth or reserves to pay a
dividend of that magnitude under either state or federal law.  J.A. 6.
 The Illinois Commissioner of Savings and Loan Associations
subsequently determined that the dividend violated Illinois law for
those reasons and ordered the directors to recoup more than $300,000
of the dividend.  The directors did not recoup any portion of the
dividend.  Ibid.

   The FSLIC in late 1981 issued a Notice of Charges and Hearing
alleging that Manning had violated federal net worth requirements, 12
U.S.C. 1726(b);  12 C.F.R. 563.13.  The FSLIC simultaneously issued a
cease-and-desist order, pursuant to 12 U.S.C. 1730(f), temporarily
prohibiting the payment of dividends.  J.A. 6-7.  The United States
District Court for the Northern District of Illinois modified the
order, enjoining Manning not to pay dividends except in accordance
with state law.  Id. at 7.  In April 1982, the FSLIC amended the
Notice of Charges and Hearing to advise Manning and its directors that
Manning had a negative net worth of more than $500,000, was more than
$2 million below the net worth required to maintain FSLIC insurance,
and had monthly operating losses of approximately $300,000.  Pet. App.
21a;  J.A. 7.  Nevertheless, in May 1982, respondents, acting as the
Board of Directors, authorized the distribution of a dividend
consisting of stock in a company whose assets were valued at more than
$300,000.  Pet. App. 20a-21a;  J.A. 8.  That dividend, like the 1980
dividend, was illegal because Manning did not meet the net worth and
and reserve requirements of state and federal law.  J.A. 8.

   The first count of the complaint asserts director's liability,
alleging that all of the directors are liable for breaching their
state-law-based fiduciary duties to Manning in the following respects:
 declaring dividends, in violation of Ill. Ann. Stat. ch. 17, paras.
3093, 3110, 3111 (Smith-Hurd 1981), when required reserves were not
present;  causing Manning to violate the cease-and-desist order of the
FSLIC, as modified by the federal court;  dissipating assets by
granting dividends knowing that or recklessly disregarding whether net
worth and reserve requirements were not met;  disobeying the Illinois
Commissioner's order issued after the 1980 dividend.  J.A. 8-9.  Count
I also asserts directors' liability against Harold and Joseph Ticktin
based on their conflicts of interest with Manning, including a
conflict of interest in violation of federal regulation, 12 C.F.R.
571.7 (b). J.A. 9.  /3/ Based on the same allegations, the first count
alleges that Harold Ticktin is further liable to Manning for breaching
his fiduciary duties as an officer.  Id. at 10.  /4/

   The second count of the complaint asserts shareholders' liability
on the part of the shareholder-defendants, alleging that they were
unjustly enriched by the receipt of the illegal dividends.  J.A.
11-12.  The third count of the complaint alleges that respondents
breached their duties to Manning under federal law (a) by causing
Manning to violate the cease-and-desist order issued by the FSLIC, as
modified by the federal court (id. at 13), and (b) by placing
themselves in a position that created a conflict of interest with
Manning, in violation of federal regulations, 12 C.F.R. 571.7(b) (J.A.
13).  Those breaches of federal-law duties, the complaint asserts,
substantially contributed to the dissipation of assets effected by the
1982 dividend (ibid.).  See Pet. App. 20a-22a.  /5/

   2. In the district court, jurisdiction over the FSLIC's claims as
receiver for Manning was invoked not only under 12 U.S.C. 1730(k)(1),
which is set out above, but also under 28 U.S.C. 1345.  /6/ The latter
provision, which was enacted in 1948 (Act of June 25, 1948, Section 1,
ch. 646, 62 Stat. 933), states:

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

   The FSLIC pointed out in the district court that, if the proviso of
Section 1730(k)(1) does not apply, then Section 1730(k)(1) and 28
U.S.C. 1345 establish two independent bases for federal court
jurisdiction over this suit.  First, Clause (B) of Section 1730(k)(1)
grants jurisdiction because the FSLIC is a party to this case.
Second, 28 U.S.C. 1345 grants jurisdiction because the FSLIC is an
"agency * * * expressly authorized to sue by Act of Congress." Clause
(A) of Section 1730(k)(1) states that FSLIC is an agency for purposes
of 28 U.S.C. 451, and hence it is an agency for purposes of 28 U.S.C.
1345;  /7/ and under 12 U.S.C. 1725(c)(4), FSLIC has "power * * * (t)o
sue and be sued." See also 12 U.S.C. 1729(b) and (c)(1)(B)(i)(II)
(powers of FSLIC as receiver);  12 U.S.C. 1729(d) (power to collect
obligations to institution).

   Respondents argued to the district court, however, that this suit
falls within the jurisdiction-limiting proviso of Section 1730(k)(1)
and that jurisdiction is for that reason lacking.  The district court
denied respondents' motion to dismiss on that ground (Pet. App.
19a-37a).  At the outset, the court agreed with respondents (id. at
24a) that one precondition for the proviso to apply is met here:  the
case, according to the district court, does involve only the rights of
Manning and its investors, creditors, and stockholders.  The court
stated that the fact "(t)hat some defendants here are directors as
well as stockholders does not persuade the court the action should be
removed from the proviso's coverage" (ibid.).

   Nevertheless, the court held that the proviso is not applicable
because the case does not "involve()" only rights and obligations
"under State law." That requirement of the proviso, the court observed
(Pet. App. 24a-25a), is not satisfied merely because all claims "arise
under" state law;  rather, the court said, because the case "requires
the interpretation of federal law, it falls outside of the proviso's
scope" (id. at 25a).  Here, the court held, the state-law claims for
breach of duty are based on and would require resolution of
federal-law questions -- notably, whether the dividends violated the
FSLIC regulations establishing net worth and reserve requirements.
/8/ Concluding that the proviso of Section 1730(k)(1) therefore does
not apply to this case, the district court held that it had
jurisdiction.  /9/

   The district court subsequently denied respondents' motion to
reconsider, noting that, as an alternative ground for its ruling,
there was Seventh Circuit precedent for restricting the proviso to
removal cases (J.A. 38).  On respondents' motion to certify the
jurisdictional ruling for appeal, the court wrote a draft opinion
placing exclusive reliance on the removal precedent and abandoning its
earlier view that the present case "involves" federal law (J.A. 42).
After initially vacating that opinion, the court denied the FSLIC's
motion to reconsider its certification opinion and certified its
finding of federal jurisdiction for appeal (J.A. 45, 46).

   3. The United States Court of Appeals for the Seventh Circuit
reversed, holding that the proviso of Section 1730(k)(1) bars
federal-court jurisdiction in this case (Pet. App. 1a-18a).  /10/ The
FSLIC contended that the proviso does not limit the jurisdiction that
the district court has under 28 U.S.C. 1345, because the proviso
declares only that certain cases do not arise under federal law, and
Section 1345 confers jurisdiction over suits commenced by an "agency"
regardless of whether they arise under federal law.  The FSLIC also
contended that the district court has jurisdiction in any event under
Clause (B) of Section 1730(k)(1).  The court of appeals ruled that the
proviso bars jurisdiction under both statutes.

   With respect to 28 U.S.C. 1345, the court noted (Pet. App. 11a-12a)
that the purpose of Clause (A) of Section 1730(k)(1) was to confirm
that the FSLIC is an agency for purposes of Section 1345 -- a point
that had been in dispute just before Section 1730(k)(1) was enacted in
1966.  See Acron Investments, Inc. v. FSLIC, 363 F.2d 236 (9th Cir.),
cert. denied, 385 U.S. 970 (1966).  Clause (A) was not intended, the
court concluded (Pet. App. 11a-12a), to establish a basis of
jurisdiction that is not subject to the limits of the proviso.  The
court reasoned that Congress could not have intended to confer
jurisdiction under Clause (A) and Section 1345 in all cases in which
the FSLIC is a plaintiff, while conferring jurisdiction only within
the limits stated in the proviso when the FSLIC is a defendant,
because Clause (B) grants jurisdiction whenever the FSLIC is a
"party," defendant or plaintiff, and does not suggest an intention to
distinguish the two situations.  The proviso, the court therefore held
(Pet. App. 12a), states an absolute limit on federal-court
jurisdiction, whether founded on Clause (B) or on 28 U.S.C. 1345.
/11/

   Turning to the interpretation of the proviso, the court of appeals
held that the proviso applies to this case.  The court first rejected
the FSLIC's contention that, because the suit involves claims against
Manning's former directors (and one officer), it does not involve
"only the rights or obligations of investors, creditors, stockholders,
and (the failed) institution" (Section 1730(k)(1)).  The court
concluded that the proviso applies whenever the only "rights" in the
case are those of the failed institution, regardless of who the
defendants are.  Pet. App. 13a-15a.

   The court similarly rejected the FSLIC's contention that the case
does not involve "only * * * rights or obligations * * * under State
law" (Section 1730(k)(1)).  The FSLIC pointed out that the complaint
alleges, in support of the state-law causes of action, that
respondents caused violations of federal law -- notably, the FSLIC's
net worth and reserve requirements.  /12/ But the court found that
fact insufficient to take the case out from under the proviso of
Section 1730(k)(1).  The court observed (Pet. App. 16a) that the
proviso uses the words "involves only * * * rights or obligations * *
* under State law," rather than the words "involves only State law."
The proviso would be rendered all but meaningless, the court stated,
if it were read as inapplicable to any case that involves any question
of federal law:  "(e)very suit with the FSLIC as a party necessarily
involves federal law" (ibid.).  The court concluded that, because all
the questions in this case are "subsidiary questions" to the state-law
question whether respondents breached their fiduciary duties, and the
case involves only rights to recover under state law, the case comes
within the proviso of Section 1730(k)(1) (Pet. App. 16a-17a).  /13/
The court therefore remanded the case with instructions that it be
dismissed for lack of jurisdiction (id. at 18a).

                          SUMMARY OF ARGUMENT

   The FSLIC brought this action as a federal agency carrying out
receivership functions assigned to it under federal statutes.  The
action plainly comes within the terms of the grants of federal
jurisdiction in 28 U.S.C. 1345 and in Clause (B) of Section
1730(k)(1).  It also comes within the policy underlying those bases of
jurisdiction, which Congress established to afford the protection of a
federal forum to the important federal interests at stake in suits
like this.  The proviso of Section 1730(k)(1), which is stated as an
exception to Section 1730(k)(1)'s broad grant of jurisdiction in cases
involving the FSLIC, should be construed strictly so as not to deprive
the FSLIC of a federal forum in any case in which the language of the
proviso does not so require.  Contrary to the court of appeals' view,
the proviso, properly construed, does not oust the federal courts of
jurisdiction in this case:  the proviso is limited to disputes
involving only state-law questions among a failed thrift and claimants
against its estate, and it impairs only federal-question jurisdiction
and not federal-agency jurisdiction under 28 U.S.C. 1345.

   The proviso applies only to cases that "involve() only the rights
or obligations of investors, creditors, stockholders, and (the failed)
institution" (Section 1730(k)(1)).  This case does not meet that
description, because the case involves, in addition to the rights of
the failed institution, the obligations of directors and officers --
persons not listed in the proviso.  Confining the proviso to cases
that involve only disputes among the proviso parties and that do not
involve anyone else is the only way to give effect to Congress's
decision to list "investors, creditors, (and) stockholders" in the
proviso:  those words are deprived of all effect if, as the court of
appeals ruled, the proviso is construed to apply to all cases in which
the only claims are those which involve the rights or obligations of
the failed thrift.  Moreover, the line distinguishing those listed) in
the proviso (claimants against the receivership estate) from those not
listed (directors, debtors, and other "outsiders" that receivers quite
commonly sue) was a natural one for the 1966 Congress that enacted
Section 1730(k)(1).  The proviso sensibly built on the practice of
centralizing claims seeking distribution from the estate in the state
court having jurisdiction over it, while affording the FSLIC access to
state or federal court to pursue actions to collect property of the
estate, which would not be centralized in any event.

   This case is outside the coverage of the proviso for an additional
reason.  The proviso does not apply unless a case involves only
"rights or obligations * * * under State law" (Section 1730(k)(1)),
but this case involves respondents' obligations, not just under state
law, but also under federal law.  In particular, respondents'
federal-law obligations under FSLIC financial and conflict-of-interest
regulations and a federal cease-and-desist order are centrally at
issue in the case.  Contrary to the court of appeals, the proviso is
not applicable simply because the claims "arise under" state rather
than federal law.  The proviso does not use that language to define
its coverage.  Instead, it leaves federal-court jurisdiction intact
whenever, as here, the case involves the adjudication of a federal
question.

   Finally, even if the proviso were applicable to this case, it would
not deprive the federal court of jurisdiction.  The proviso does not
sweepingly bar any federal jurisdiction in the cases it covers;  it
declares more narrowly that such cases do not arise under federal law.
 The federal-agency jurisdiction established by 28 U.S.C. 1345, which
does not depend on the presence of arising-under jurisdiction,
therefore is unaffected by the proviso.  The court of appeals'
contrary view -- that the proviso deprives the federal courts of
Section 1345 jurisdiction whenever it deprives the federal courts of
the jurisdiction they have under Clause (B) of Section 1730(k)(1) --
not only is contradicted by the proviso's language but would nullify
Clause (A) of Section 1730(k)(1).

                               ARGUMENT

   THE DISTRICT COURT HAS JURISDICTION IN THIS CASE BOTH UNDER CLAUSE
(B) OF SECTION 1730(k)(1) AND UNDER 28 U.S.C. 1345, AND THE PROVISO OF
SECTION 1730(k)(1) DOES NOT DEPRIVE THE DISTRICT COURT OF SUCH
JURISDICTION

   A. Introduction

   In 1948, Congress, building on statutes dating back to 1789,
enacted 28 U.S.C. 1345 to give federal district courts jurisdiction
over suits brought by any federal agency that is expressly authorized
by statute to sue.  See P. Bator, D. Meltzer, P. Mishkin, & D.
Shapiro, Hart & Wechsler's The Federal Courts and The Federal System
1080 (3d ed. 1988).  In 1966, focusing specifically on the FSLIC,
Congress enacted Section 1730(k)(1) not only to confirm that the FSLIC
is an "agency" but, more broadly, to declare as a general rule that
all civil cases to which the FSLIC is a party are to be deemed to
arise under federal law and, indeed, are within the federal courts'
jurisdiction whatever the amount in controversy.  /14/ Congress thus
determined that the FSLIC should generally be entitled to avoid any
potential prejudice favoring local interests in state courts and to
protect the important federal interests that the FSLIC represents in
federal court, whose independence is guaranteed by Article III of the
Constitution.

   The general rule recognized by Section 1730(k)(1) applies not only
when the FSLIC is litigating in its corporate capacity carrying out
its statutorily authorized functions as insurer, as regulator, or, for
example, as holder of notes acquired from failed thrifts.  The rule
also applies when the FSLIC is litigating in its capacity as receiver
for a failed thrift:  neither Clause (A) nor Clause (B) of Section
1730(k)(1) (nor Clause (C), concerning removal) makes any exception
for the FSLIC when acting as a receiver.  Moreover, that application
is fully justified by the policy of affording federal interests
represented by the federal government "the protection of a federal
forum" (Willingham v. Morgan, 395 U.S. 402, 407 (1969) (discussing
removal statute, 28 U.S.C. 1442(a)(1)):  important federal interests
are at stake when the FSLIC acts as receiver, which is why Congress
provided for the FSLIC to act as receiver of insured thrifts.

   The most concrete federal interest at stake in a FSLIC receivership
derives from the fact that the FSLIC in its corporate capacity, as
subgrogee of the insured depositors whose claims it pays in a
liquidation, is typically the party with the single largest claim in
any receivership of a failed FSLIC-insured thrift.  See Savings and
Loan Receiverships:  Hearing on S. 3436 Before the Senate Comm. on
Banking & Currency, 90th Cong., 2d Sess. 10-11 (1968) (statement of
Chairman of Bank Board).  Hence, the nationwide insurance fund has a
direct stake in each liquidating receivership.  More generally, as is
starkly apparent from the current crisis in the FSLIC-insured
industry, the sound conduct of each receivership affects the stability
of the FSLIC-insured system as a whole.  In particular, the premiums
that must be paid to the FSLIC fund by the insured institutions depend
in part on the drain placed on the fund by the institutions that fail
(see 12 U.S.C. 1727(c)), /15/ which in turn depends on the ability of
the FSLIC to carry out its various obligations as receiver -- notably,
the duty to marshal assets of the failed thrift (12 C.F.R. 549.3,
569a.6) so as "to proceed to liquidate its assets in an orderly
manner" (12 U.S.C. 1729(b)(1)(A)(v) and (c)(3)(B)).  Congress made a
general determination in Section 1730(k)(1) that the FSLIC can better
and more efficiently protect the important federal interests at stake
in its litigation if it has access to federal courts, with their
uniform rules of procedure and constitutionally guaranteed
independence from the local pressures that frequently accompany
litigation over a failed savings and loan.

   It is against the background of that general policy that the
proviso of Section 1730(k)(1) should be read.  Indeed, the structure
of the section -- that it is a proviso we are construing -- itself
means that the language at issue should be read strictly so as not to
defeat or to diminish unnecessarily the policies recognized in the
general grants of jurisdiction stated in the opening clauses of
Section 1730(k)(1).  /16/ Moreover, the recent and continuing spate of
failures of FSLIC-insured thrifts has already generated and will
continue to generate a large volume of litigation, and disputes about
the FSLIC's jurisdictional provision have already consumed substantial
resources of litigants and courts.  Careful application of the terms
of Section 1730(k)(1)'s proviso is the surest way to minimize the
expenditure of further resources on jurisdictional disputes -- as well
as to ensure that the many suits, like the present one, that the FSLIC
has brought in federal court are not now dismissed for lack of
jurisdiction, after the time for filing in state court has lapsed in
many such cases.  /17/

   As we explain more fully below, a careful reading of the proviso's
language, together with consideration of its context and the
background of its enactment, strongly suggests that it was written to
preserve state court jurisdiction over run-of-the-mill
state-supervised receivership proceedings brought under state law to
distribute the limited assets of state-chartered thrifts among rival
claimants.  In traditional receivership and bankruptcy law, suits by
claimants seeking a distribution from the estate typically are
centralized in a single forum having jurisdiction over the
receivership property.  In 1966, when the proviso was enacted, state
authorities supervised the receivers of state-chartered thrifts and
had jurisdiction over the receivership property;  and it was therefore
necessary, in order to achieve centralization of the claims against
the estate property in a single court, to carve out an exception to
Section 1730(k)(1)'s general rule of federal jurisdiction.  By
contrast, suits in which the receiver seeks to collect estate assets
typically are not centralized (no single court would be expected to
have personal jurisdiction over the defendants in all such suits);
and so there was no need for an exception to federal jurisdiction for
claims brought by the FSLIC against outsiders, which would not be
centralized in any event.  Congress thus defined the proviso, first,
by borrowing the traditional notion of centralization of claims
against a state thrift's estate in state court;  it then narrowed the
proviso's scope further by restricting it to cases that involve only
questions under state law.  In that way, Congress wrote the proviso
generally to channel into state court suits brought by claimants under
state law against the estate of the state-chartered thrifts, and to
leave the FSLIC free to pursue its claims against other persons in any
court having jurisdiction over them, including federal court.

   The court of appeals misunderstood the design of the proviso and
incorrectly construed it to deny federal-court jurisdiction over the
present suit, which was brought by the FSLIC as receiver against
persons not listed in the proviso and which involves the obligations
of parties under federal law.  The court of appeals' decision is
incorrect for at least three reasons.  First, the proviso does not
apply to a suit that involves the rights or obligations of a
non-proviso party -- i.e., a person who is not the failed institution,
an investor, a creditor, or a stockholder.  /18/ Second, the proviso
does not apply to a suit that involves a claim that the defendants
violated "obligations" under federal law, even if the right to damages
for that violation arises under state law.  Third, the proviso does
not limit the federal-agency jurisdiction that, as Clause (A)
confirms, 28 U.S.C. 1345 grants to the federal courts over suits
initiated by the FSLIC acting in either its corporate capacity or its
capacity as receiver.  Accordingly, the proviso does not negate the
jurisdiction that the federal courts otherwise have in this case under
Section 1730(k)(1) and Section 1345.

   B. The Proviso of Section 1730(k)(1) Does Not Apply Because This
Case Involves The Obligation Of Persons Not Listed In The Proviso

   The court of appeals first erred in concluding that this case
satisfies the test of the proviso that it "involve() only the rights
or obligations of investors, creditors, stockholders, and (the failed)
institution" (Section 1730(k)(1)).  That language is most naturally
read to restrict the reach of the proviso to cases that involve the
listed parties and no one else -- that is, cases in which no person is
a party except the persons identified in the proviso (the proviso
parties).  On this straightforward reading, the proviso does not apply
here because this case involves the obligations of directors and
officers of Manning, who as such are not "investors, creditors,
stockholders, (or the) institution." /19/ This case therefore does not
"involve() only the rights or obligations" of the parties listed in
the proviso.

   In the court of appeals' view (Pet. App. 13a), the proviso applies
in every case in which the only claims are those asserted by the
receiver on behalf of the failed institution, regardless of whether
the claims are asserted against a proviso party or someone else.  That
view is contrary to the natural meaning of the proviso, for if such
claims are asserted against a non-proviso party, the case involves the
obligations of someone other than an investor, creditor, or
stockholder.  For example, the fact that each claim in this case
involves the rights of the failed institution does not mean that the
case involves "only" such rights:  this case also involves the
obligations of directors, who are not listed in the proviso.  Hence,
it does not involve "only the rights or obligations" of proviso
parties.

   Nothing in the legislative history of Section 1730(k)(1), which is
sparse, supports a contrary construction of the proviso.  As we have
noted, Section 1730(k)(1) was enacted in 1966.  The only commentary on
the provision in the pertinent congressional documents simply
describes it and observes that it is similar to the FDIC's proviso in
12 U.S.C. 1819 Fourth.  See S. Rep. 1482, 89th Cong., 2d Sess. 19
(1966);  Financial Institutions Supervisory Act of 1966:  Hearings on
S. 3158 Before a Subcomm. of the Senate Comm. on Banking and Currency,
89th Cong., 2d Sess. 319M (1966) (section-by-section analysis of the
bill submitted by the FSLIC, FDIC, Federal Reserve Board, and
Comptroller of the Currency).  /20/

   The legislative history of the FDIC's proviso sheds no additional
light on what the 1966 Congress understood when it borrowed from the
FDIC provision in writing Section 1730(k)(1).  The FDIC provision was
enacted in 1935.  Banking Act of 1935, ch. 614, Section 101, 49 Stat.
692 (codified originally at 12 U.S.C. (1940 ed.) 264(j) Fourth).  /21/
That proviso is limited to suits that involve only the rights or
obligations of "depositors, creditors, stockholders and (the failed)
bank" under state law.  Its legislative history, too, offers no
explanation for Congress's decision to list those particular persons
in the proviso:  the House and Senate Committee Reports merely give
simplified descriptions of the provision.  H.R. Rep. 742, 74th Cong.,
1st Sess. 4 (1935);  S. Rep. 1007, 74th Cong., 1st Sess. 5 (1935).
/22/

   Construing the proviso to render it applicable even where the FSLIC
as receiver makes claims against non-proviso parties would erase
Congress's decision to list particular parties in the proviso:  it
would make certain of the terms of the proviso superfluous.  The
receiver for a failed state-chartered financial institution quite
frequently has reason to bring suit against a variety of persons,
including borrowers, guarantors, and other debtors, as well as those
in a relationship of trust with the failed institution, such as
directors, officers, attorneys, accountants, and other professionals.
See, e.g., 12 U.S.C. 1729(b) and (d), 1821(d);  12 C.F. R. 548.2,
549.3 FSLIC v. Dixon, 835 F.2d 554, 562 (5th Cir. 1987).  Indeed, such
suits against persons who are not listed in the proviso are an
essential part of the receiver's function of "collect(ing) all
obligations to the insured institutions" (12 U.S.C. 1729(d)) and
marshaling the asstes of the institution (12 C.F.R. 549.3, 569a.6.  If
Congress had meant the proviso to cover the large class of common
receivership case involving non-proviso parties, it could easily have
said so:  It could have declared the proviso applicable to all cases
involving ghe rights or obligations of the failed institution (under
state law) and omitted any reference to other classes of litigants.
But Congress chose instead to list, in addition to the failed
institution itself, only "investors, creditors (and) stockholders" of
the receivership estate.  /23/ Those words would be nullified by the
court of appeals' reading of the proviso.

   Although the legislative history furnishes no explanation for the
drafting of the proviso, the identities of the parties listed in the
proviso of Section 1730(k)(1) suggest what idea governed the listing.
Aside from the failed institution itself, whose rights or obligations
are always in issue when the FSLIC is a party to the case in its
capacity as receiver for the institution, the proviso lists
"investors, creditors (and) stockholders";  and it does not list the
numerous other persons, such as debtors and directors of the thrift,
that a receiver commonly brings suit against.  The apparent design
suggested by Congress's choice about whom to list in the proviso was
to cover only cases involving the rights or obligations of the persons
that have claims against the assets of the failed institution, not
cases involving claims the receiver has against "outsiders."

   The listing of the limited class of persons in the proviso is
consistent with what appears to be the primary purpose of the proviso:
 to preserve state-court jurisdiction over proceedings for
distributing a receivership's assets among rival claimants.  Suits by
claimants seeking a distribution from the estate, in traditional
receivership law and bankruptcy law, typically are centralized in a
single forum having jurisdiction over the receivership property.  See,
e.g., United States v. Bank of New York & Trust Co., 296 U.S. 463, 477
(1936);  Ill. Stat. Ann. ch. 17, para. 371 (Smith-Hurd 1981 & Supp.
1988);  2 D. Cowans, Bankruptcy Law and Practice Section 576, at 217
(2d ed. 1978) (summary jurisdiction of bankruptcy courts under
pre-1978 law);  75 C.J.S. 2d Receivers Section 271, at 906-907 (1952).
 By contrast, suits in which the receiver seeks to collect estate
assets typically are not centralized;  indeed, no single court would
be expected to have personal jurisdiction over the defendants in all
such suits.  See, e.g., Ill. Stat. Ann. ch. 17, para. 372 (Smith-Hurd
1981 & Supp. 1988);  2 D. Cowans, supra, at 218-219 (pre-1978
bankruptcy law generally did not centralize receiver's suits in
bankruptcy court);  75 C.J.S.2d Receivers Section 322, at 998 (1952).
/24/

   That distinction was a natural one for the 1966 Congress to take as
its model when it enacted the proviso.  /25/ Prior to 1968,
state-chartered thrifts were placed into receivership only by state
authorities, which supervised the receivers and had jurisdiction over
the receivership property.  In that situation, to achieve
centralization of the claims against the estate property in a single
court, it was necessary to carve out an exception to Section
1730(k)(1)'s general rule of federal jurisdiction, so that such claims
would, at least ordinarily, be heard in the state courts.  /26/ By
contrast, there was no need for an exception to the general rule of
federal jurisdiction for claims brought by the FSLIC against
outsiders, which would not be centralized in any event.  Accordingly,
Congress wrote the proviso generally to channel suits by claimants
against the estate into state court -- adding the further restriction
that the suits involve only questions under state law -- and to leave
the FSLIC free to pursue claims against others in any court having
jurisdiction over them, including federal court.  /27/ This case is
therefore not among those which the proviso was designed to except
from the general grant of federal jurisdiction.

   C. The Proviso of Section 1730(k)(1) Does Not Apply Because This
Case Involves The Parties' Obligations Under Federal As Well As State
Law

   The court of appeals also erred in holding that this case satisfies
the test of the proviso that it involve only "the rights or
obligations" of the parties "under State Law" (Section 1730(k)(1)).
As a matter of plain statutory language, the proviso does not apply to
a case that involves the obligations of defendants under federal law.
This is such a case, because it involves the obligations of the
respondent directors under federal law:  the FSLIC has asserted, in
support of the claim of breach of fiduciary duties, that respondents
failed to comply with various federal-law obligations, including those
under a federal cease-and-desist order and under FSLIC regulations
establishing net worth and reserve requirements and
conflict-of-interest proscriptions.

   Thus, the FSLIC alleged, as one of the respondents' breaches of
fiduciary duty, that respondents caused Manning to declare dividends
in violation of state statutes that require compliance with "the
reserve requirements of the insurer, which in the case of Manning was
the FSLIC" (Pet. App. 15a).  See Ill. Ann. Stat. ch. 17, Sections
3093, 3110, 3111 (Smith-Hurd 1981);  J.A. 6, 8 (1980 and 1982
dividends violated federal net worth and reserve requirements).  The
FSLIC also alleged, in the same cause of action, that respondents
caused Manning to violate the 1981 federal cease-and-desist order,
which was issued based on Manning's violation of federal statutory and
regulatory net worth requirements (12 U.S.C. 1726(b);  12 C.F.R.
563.13;  see J.A. 6-7).  In addition, all respondents were alleged to
have declared the dividends with knowledge that, or in reckless
disregard of whether, the required reserves and net worth were
deficient;  and respondents Harold and Joseph Ticktin particularly
were alleged to have breached their fiduciary duties by placing
themselves in a position that created a conflict of interest with
Manning in violation of federal regulation (12 C.F.R. 571.7(b)).  It
could not be plainer that those allegations place centrally in issue
in this lawsuit respondents' obligations under federal law.  /28/

   The court of appeals nevertheless found the proviso's language
applicable because the relevant provisions of federal law do not
themselves give rise to a cause of action.  The court noted (Pet. App.
16a) that the proviso speaks of "rights or obligations * * * under
State law," not of claims that "involve only State law." But the
proviso's use of the word "under" does not support the court's
conclusion.  This case does involve the "obligations" of respondents
"under" federal law, not just their obligations "under State law," as
the proviso requires.

   The court of appeals' analysis, which focuses on the source of the
cause of action, would read the proviso as if it covered all claims
that "arise under" state law, or all claims except those which "arise
under" federal law.  That, however, is not how the proviso is written.
 Indeed, Congress's failure to use the familiar "arising under"
terminology in defining what suits are within the proviso's coverage
is especially telling, because Section 1730(k)(1) elsewhere uses the
words "arise under" in two places, once in the proviso itself.  Had
Congress wished the proviso to apply in all cases where federal law is
not the source of the cause of action, it surely would have said so.
/29/

   The language that Congress chose instead -- restricting the proviso
to cases that involve only rights or obligations "under State law" --
serves an obvious policy that is ignored by the court of appeals' view
that the proviso applies whenever the source of the cause of action is
state law.  By restricting the proviso to cases that involve "only
rights to be determined according to State laws," as the Senate Report
described the FDIC's proviso upon its enactment in 1935 (S. Rep. 1007,
74th Cong., 1st Sess. 5 (1935)), Congress left to the state courts
only cases that are peculiarly within their expertise while providing
for federal jurisdiction over cases involving federal questions.  In
light of Section 1730(k)(1)'s otherwise plenary grant of jurisdiction
to the federal courts to hear cases involving the FSLIC, there is no
warrant for reading the proviso to exclude from federal-court
jurisdiction cases, like the present one, that may involve numerous
questions of the proper interpretation of federal law.

   Finally, contrary to the court of appeals' view, giving the proviso
its natural reading -- restricting it to cases that involve only
questions of state law -- would not bring into federal court "(e)very
suit with the FSLIC as a party" (Pet. App. 16a).  To be sure, suits
like this one against directors very often involve federal-law
questions, because of the extensive federal regulation of
FSLIC-insured institutions and the consequent federal-law obligations
of those in a position of trust with the institutions.  Claims by
proviso parties against the assets of the failed institution, by
contrast, often involve only questions of state law -- chiefly,
contract law and corporation law.  As explained above, those claims
are precisely what the proviso, in its most natural reading, is
designed to cover.  /30/

   D. The Proviso Of Section 1730(k)(1) Does Not Affect The Federal
Agency Jurisdiction Established By 28 U.S.C. 1345 And Confirmed By
Clause (A) Of Section 1730(k)(1)

   The court of appeals further erred in holding that the proviso
deprives the district court of the jurisdiction it has under 28 U.S.C.
1345.  That section states that, except as otherwise provided by law,
the federal courts have jurisdiction over suits commenced by an
"agency" of the United States that is expressly authorized to sue by
act of Congress.  This suit meets the requirements for jurisdiction
under that provision.

   This suit was commenced by the FSLIC.  Clause (A) of Section
1730(k)(1) expressly confirms that the FSLIC is an "agency" for
purposes of 28 U.S.C. 451, the section that defines "agency" for
purposes of 28 U.S.C. 1345.  Moreover, Clause (A) applies when the
FSLIC is acting in its capacity as receiver as well as when the FSLIC
is acting in its corporate capacity:  the absence of any distinction
along that line in Clause (A) -- or in Clauses (B) or (C) -- contrasts
sharply with the presence of that distinction in Section 1730(k)(1)'s
proviso;  and, of course, the functions of receiver are just as much
functions assigned by statute to the federal agency as are the FSLIC's
other functions.  Finally, the FSLIC is authorized "(t)o sue and be
sued" (12 U.S.C. 1725c)(4)) and has broad powers to take the actions
it deems appropriate as receiver of a failed institution (see 12
U.S.C. 1729(c) and (d)).  /31/ In fact, those provisions in all
material respects predate the enactment of Clause (A) and are
independently sufficient to permit the FSLIC to invoke the
jurisdiction of federal courts under 28 U.S.C. 1345.

   The plain terms of the proviso of Section 1730(k)(1) make clear
that it does not override the jurisdiction granted by 28 U.S.C. 1345.
The proviso states only that suits described therein "shall not be
deemed to arise under the laws of the United States." Jurisdiction
under 28 U.S.C. 1345, however, does not depend on whether the claim
arises under federal law:  Section 1345 grants jurisdiction whenever
the plaintiff is a federal agency, regardless of the nature of the
claim.  The effect of the proviso is simply to withdraw the
jurisdiction granted by Section 1730(k)(1)'s general declaration in
Clause (B) that all cases to which the FSLIC is a party are deemed to
arise under federal law.  The proviso has no effect on jurisdictional
grants, like Section 1345, that do not turn on whether a case arises
under federal law.  Indeed, if Congress had wished to override such
jurisdictional grants, it could easily have written the proviso to say
that the specified class of cases "shall not be within the
jurisdiction of the district courts." Congress instead declared only
that such cases do not arise under federal law, leaving jurisdictional
provisions like Section 1345 fully operative.

   That conclusion is reinforced by this Court's decision in Colorado
River Water Conservation Dist. v. United States, 424 U.S. 800 (1976),
which held that Section 1345 jurisdiction was not overridden by the
separate scheme established in the McCarran Amendment, 43 U.S.C. 666,
for the state-court adjudication of certain water-rights disputes
involving the United States.  The Court stated (424 U.S. at 808
(citations omitted)):  "When there are statutes clearly defining the
jurisdiction of the courts, the force and effect of such provisions
should not be disturbed by a mere implication flowing from subsequent
legislation.  * * * In the absence of some affirmative showing of an
intention to repeal, the only permissible justification for a repeal
by implication is when the earlier and later statutes are
irreconcilable." In the present context, there plainly is no
irreconcilable conflict between Section 1345 (enacted in 1948) and the
proviso (enacted in 1966);  in fact, as we have suggested, the proviso
would have to be rewritten for its language to bear the construction
that it affects other than federal-question jurisdiction.

   Nor is there any reason to believe that Congress actually intended
the proviso to override Section 1345 even though the proviso's
langauge does not say so.  The 1966 Congress that enacted Section
1730(k)(1) merely took note that the analogous FDIC jurisdictional
provision, 12 U.S.C. 1819 Fourth, did not contain an express
declaration that the FDIC was an agency.  The 1966 legislative history
does not refer to Section 1345 or otherwise explain the difference
between the treatment of the FSLIC and the FDIC (see sources cited
page 24, supra).  /32/ And for obvious reasons, nothing in the 1935
legislative history of 12 U.S.C. 1819 Fourth deals with Section 1345
jurisdiction, because it was not until 1948 that Congress provided for
general federal-agency plaintiff jurisdiction, as 28 U.S.C. 1345 now
does.  Act of June 25, 1948, ch. 646, 62 Stat. 933.  /33/ Moreover,
the considerations that led Congress to allow federal agencies to
bring actions in federal courts, whether or not they arise under
federal law, are fully applicable to FSLIC suits like the present one
brought against directors and officers of a failed institution.  The
FSLIC is a federal agency;  it serves as receiver of state-chartered
institutions like Manning at the behest of the Bank Board;  and it
does so not only to put the affairs of the institution in order but to
protect important interests of the federal regulatory and insurance
programs.

   The court of appeals, instead of being guided by the statutory
language, simply asserted (Pet. App. 11a-12a) that Congress did not
intend Section 1345 jurisdiction to apply to cases that fall within
the proviso.  The court of appeals did not point to any legislative
history that expresses an intent contrary to the statutory text.
Instead, it argued (a) that Congress added Clause (A) in 1966 merely
"to clarify that the FSLIC was an agency in light of the then-recent
litigation in Acron Investments, Inc. v. FSLIC, supra, and (b) that,
because Clause (B) of Section 1730(k)(1) applies both when the FSLIC
is a party defendant and when it is a party plaintiff, Congress must
have intended the proviso to apply equally to both situations and
hence to limit Clause (A) as well.  Those arguments, however, are
inadequate to support a ruling contrary to the language of the
proviso.

   First, if, as the court of appeals suggested, Congress added Clause
(A) to reaffirm the position that the FSLIC had recently prevailed on
in Acron, /34/ the point of Congress's action must have been to make
clear what the language says and Acron holds, namely that the FSLIC is
an agency such that any suit commenced by it may be brought in federal
court under 28 U.S.C. 1345.  On the other hand, if the court of
appeals' view that the proviso limits both Clause (B) and Clause (A)
is correct, it is not clear why Congress saw any need to reaffirm
Acron or to include Clause (A) at all, for the court's view makes
Clause (A) jurisdictionally redundant:  Clause (A) and the Acron
ruling would add nothing whatever to the jurisdiction conferred by
Clause (B), because the latter clause by itself confers jurisdiction
in all cases in which the FSLIC is a party and the proviso does not
apply.  But if, as the language suggests, the proviso limits only
Clause (B) jurisdiction, then Clause (A) serves to clarify that, where
the FSLIC is a plaintiff, the federal courts do have "agency"
jurisdiction under 28 U.S.C. 1345 even though the suit is not one
deemed to arise under federal law.  This reading of Section 1730(k)(1)
is the only one that gives any independent significance to Clause (A).
 /35/

   In addition, the court of appeals thought that the proviso must be
read to affect Section 1345 jurisdiction as well as Clause (B)
jurisdiction because the court could not understand why Congress would
have made the proviso applicable to one but not the other basis of
jurisdiction.  But such bewilderment is not a sound basis for holding
that the proviso has a meaning that is contrary to its language.  In
any event, the court's concern about allowing Section 1345 to diminish
the significance of the proviso rests on a misconception about the
proviso's operation.  As we have explained, the proviso lists
particular parties because it is concerned with claims against the
assets of the failed institution held in the receivership estate.
Suits involving such claims are rarely if ever commenced by the FSLIC.
 Section 1345 thus does not grant jurisdiction over any appreciable
number of cases that fall within the proviso, properly construed.

   In the end, the court of appeals' conclusion rests on the idea that
the FSLIC's proviso must be held applicable to Section 1345
jurisdiction so that Section 1730(k)(1) may be treated, as the Fifth
Circuit treated the FDIC's proviso in FDIC v. Sumner Financial Corp.,
602 F.2d at 678, as a "self-contained scheme for jurisdiction over
cases involving" the agency.  But such a notion, without concrete
support in statutory language or legislative history, is plainly
inadequate to support the distortion of the statutory language that
the court's view would require.  And this Court correctly held just
such a notion insufficient to override Section 1345 in Colorado River
Conservation Dist. v. United States, supra.

   Moreover, even if the "self-contained scheme" idea were adequate to
support the holding that Section 1345 jurisdiction is ousted by the
FDIC's proviso, 12 U.S.C. 1819 Fourth -- which, in light of the
statutory language, it is not -- there would be no basis for such a
holding with respect to the FSLIC's proviso.  Although the FDIC's
jurisdictional provision, when enacted in 1935, might have been
characterized as "self-contained," in that the federal-question
jurisdiction that the provision expressly modified was the principal
if not sole alternative basis of jurisdiction for the FDIC, /36/ the
same cannot be said of the FSLIC's provision, which was enacted in
1966.  By that time, as the Acron decision had recently confirmed, the
FSLIC could assert federal-agency jurisdiction under 28 U.S.C. 1345.
Against that background, it is wholly inappropriate to "construe" the
proviso, which is limited to federal-question jurisdiction, as having
been more broadly intended to cover other grounds of jurisdiction that
it does not mention.  Indeed, the notion that Section 1730(k)(1) was
intended as a "self-contained" jurisdictional scheme for the FSLIC is
contradicted by the fact that the 1966 enactment that contained
Section 1730(k)(1) itself included other provisions that expressly or
implicitly granted jurisdiction.  See, e.g., 12 U.S.C. (& Supp. IV)
1730(j) and (q).  Hence, the proviso should be read, as its language
unmistakably provides, to oust the federal courts only of
federal-question jurisdiction and to leave Section 1345 jurisdiction
intact.

                              CONCLUSION

   The judgment of the court of appeals should be reversed.

   Respectfully submitted.

   CHARLES FRIED

      Solicitor General

   THOMAS W. MERRILL

      Deputy Solicitor General

   RICHARD G. TARANTO

      Assistant to the Solicitor General

   JORDAN LUKE

      General Counsel

   DOROTHY L. NICHOLS

      Senior Associate General Counsel

   DAVID A. FELT

      Associate General Counsel

   JOHN B. BEATY

      Assistant General Counsel Federal Home Loan Bank Board

   NOVEMBER 1988

   /1/ The Bank Board is empowered to promulgate regulations governing
federal thrifts (12 U.S.C. 1464(a)).  The FSLIC is directed to provide
insurance under the direction of the Bank Board and to be "operated by
it under such bylaws, rules, and regulations as it may prescribe for
carrying out the purposes of (the FSLIC subchapter)" (12 U.S.C.
1725(a)).

   /2/ Harold Ticktin was the President and Managing Officer of
Manning;  he was also a director and shareholder.  Prior to October
1982, Joseph Ticktin, who is Harold's father, was a director and
shareholder and was Manning's attorney.  Judith Ticktin, who is
Harold's wife, was a director of Manning.  So, too, were Harold Brown,
who is Judith Ticktin's father, and William Heaton.  Of the defendants
that are not respondents in this Court, Raymond Powers was a director
of Manning prior to Judith Ticktin's election, and both Bruce Watters
and Grace Church Co. were shareholders.  See J.A. 4-5.

   /3/ The complaint also alleges that the directors violated a FSLIC
regulation, 12 C.F.R. 563.33, by allowing more than two members of the
same immediate family to be directors.  Pet. App. 20a, 31a;  J.A. 4.

   /4/ Count I adds that the directors' distributions of dividends
constituted actual and constructive fraud, were reckless, and were
grossly negligent.  J.A. 10.

   /5/ The three counts of the complaint among them seek compensatory
damages, restitution, and exemplary damages.

   /6/ The complaint includes a claim brought by the FSLIC in its
separate corporate capacity, but that claim was dismissed by the
district court (Pet. App. 24a), was not pursued on appeal, and is not
at issue in this Court.

   In addition, the complaint relies on 28 U.S.C. 1331 and 1337 as
grounds of jurisdiction, but those provisions, as relevant here, add
nothing to the bases of jurisdiction contained in Section 1730(k)(1).

   /7/ 28 U.S.C. 451 gives definitions of the term "agency" and of
other terms "(a)s used in this title."

   /8/ The district court also observed that whether dividends could
lawfully have been paid is "to be determined under accounting
principles in part recognized by the (Bank Board) for a federal
association" (Pet. App. 26a).  The FSLIC pointed out to the court, in
addition, that the case involves the federal question whether
respondents violated the cease-and-desist order (id. at 25a).

   /9/ The district court focused only on the state-law claims for
relief in resolving the jurisdictional issue, because it concluded
(Pet. App. 31a-37a) that the federal laws and orders allegedly
violated do not themselves give the FSLIC as receiver a cause of
action for damages.  The court also ruled that, although the Illinois
statutes relied on by the FSLIC do not provide a cause of action to
the FSLIC as receiver (id. at 28a-29a), Illinois common law does
furnish a cause of action against both the directors and the
shareholders (id. at 29a-31a).  The FSLIC does not contest any of
those rulings.

   /10/ The court first rejected prior Seventh Circuit statements (see
Katin v. Apollo Savings, 460 F.2d 422 (1971), cert. denied, 406 U.S.
918 (1972);  FSLIC v. Krueger, 435 F.2d 633, 636 (1970)) that Clause
(B) and the proviso of Section 1730(k)(1) apply only to removals from
state court proceedings and not to actions commenced initially in
federal court.  The court held that Clause (B) is a grant of original
jurisdiction limited by the proviso.  Pet. App. 5a-9a.  That ruling is
not challenged here.

   /11/ In so concluding, the court of appeals also relied (Pet. App.
10a-11a) on FDIC v. Sumner Financial Corp., 602 F.2d 670 (5th Cir.
1979), which held that the Federal Deposit Insurance Corporation
(FDIC), as receiver of a state bank, could not assert Section 1345
jurisdiction in a case that came within the proviso of 12 U.S.C. 1819
Fourth, the counterpart for the FDIC of the FSLIC's Section
1730(k)(1).  Section 1819 Fourth states, in pertinent part:

         All suits of a civil nature at common law or in equity 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 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 or division embracing the
      place where the same is pending by following any procedure for
      removal now or hereafter in effect, except that any such suit to
      which the Corporation is a party in its capacity as receiver of
      a State bank and which involves only the rights or obligations
      of depositors, creditors, stockholders, and such State bank
      under State law shall not be deemed to arise under the laws of
      the United States.  * * *

   The provision is essentially identical to Section 1730(k)(1) except
that it has no counterpart to the latter provision's Clause (A)
declaring the FSLIC an agency.  The Sumner court observed that Section
1730(k)(1) might be construed differently from Section 1819 Fourth,
pointing out that when Congress enacted Section 1730(k)(1) in 1966, it
took note of the fact that Clause (A) has no counterpart in Section
1819 Fourth.  602 F.2d at 680, citing S. Rep. 1482, 89th Cong., 2d
Sess. 19 (1966), and Financial Institutions Supervisory Act of 1966:
Hearings on S. 3158 Before a Subcomm. of the Senate Comm. on Banking
and Currency, 89th Cong., 2d Sess. 319M (1966) (section-by-section
analysis of the bill submitted by the FSLIC, FDIC, Federal Reserve
Board, and Comptroller of the Currency).  Apparently unpersuaded by
this basis of distinction, the court of appeals in the present case
extended to Section 1730(k)(1) the Sumner holding regarding Section
1819 Fourth.

   /12/ The FSLIC also argued that respondents violated federal
criminal statutes, 18 U.S.C. 657, 1006, and regulations establishing
bookkeeping and reporting requirements, and that those violations
support the claim of breach of state-law fiduciary duties.  See Pet.
App. 16a.

   /13/ The court also rejected the argument that the proviso was not
applicable because the FSLIC had been appointed receiver by the Bank
Board rather than by state authorities (Pet. App. 17a-18a).

   /14/ The amount-in-controversy requirement for jurisdiction under
28 U.S.C. 1331 was not eliminated until 1980.  See Federal Question
Jurisdictional Amendments Act of 1980, Pub. L. No. 96-486, Section
2(a), 94 Stat. 2369.

   /15/ The FSLIC fund is currently billions of dollars short of the
money that will be required to meet all of its obligations to the
record number of failed FSLIC-insured thrifts.  As a consequence, the
FSLIC has placed a "special assessment" on the insured institutions to
recoup some of its losses.  See 53 Fed. Reg. 40271 (1988).

   /16/ It has long been "consecrated almost as a maxim in the
interpretation of statutes, that where the enacting clause is general
in its language and objects, and a proviso is afterwards introduced,
that proviso is construed strictly, and takes no case out of the
enacting clause which does not fall fairly within its terms." United
States v. Dickson, 40 U.S. (15 Pet.) 141, 165 (1841).  See 2A C.
Sands, Sutherland's Statutes & Statutory Construction Section 47.08,
at 135 (4th ed. 1973);  W. Eskridge & P. Frickey, Cases and Materials
on Legislation:  Statutes and the Creation of Public Policy 646
(1988).

   /17/ Cf. Cheng Fan Kwok v. INS, 392 U.S. 206, 212 (1968) ("As a
jurisdictional statute, it must be construed both with precision and
with fidelity to the terms by which Congress has expressed its
wishes.");  Heckler v. Edwards, 465 U.S. 870, 877 (1984) (discussing
28 U.S.C. 1252:  "the consequence of an erroneous choice of forum can
be to preclude any court's review" and, therefore, "litigants ought to
be able to apply a clear test to determine" whether they have brought
their cases to the right court).

   /18/ The courts of appeals have adopted different views on this
point.  The Eighth Circuit has joined the Seventh Circuit in rejecting
the view that the presence of a non-proviso party renders the proviso
inapplicable.  FSLIC v. Capozzi, 855 F.2d 1319 (1988).  By contrast,
three circuits have found the Section 1730(k)(1) proviso inapplicable
because a non-proviso party was present in the case.  Andrew D. Taylor
Trust v. Security Trust Federal Savings & Loan Ass'n, Inc., 844 F.2d
337, 341-342 (6th Cir. 1988);  Fidelity Financial Corp. v. FSLIC, 834
F.2d 741, 744-745 (9th Cir. 1987);  North Mississippi Savings & Loan
Ass'n v. Hudspeth, 756 F.2d 1096, 1100-1101 (5th Cir. 1985), cert.
denied, 474 U.S. 1054 (1986);  see also FSLIC v. Frumenti Development
Corp., 857 F.2d 665 (9th Cir. 1988).  In American National Bank v.
FDIC, 710 F.2d 1528, 1533 n.5 (11th Cir. 1983), the Eleventh Circuit
drew the same conclusion applying the FDIC's comparable proviso, 12
U.S.C. 1819 Fourth.  As noted above, the Fifth Circuit in FDIC v.
Sumner Financial Corp., supra, adopted a reading of the FDIC's proviso
contrary to Hudspeth's reading of Section 1730(k)(1).

   /19/ Respondents are all former directors of Manning, and the
complaint asserts claim against them in their capacity as directors.
Respondent Harold Ticktin was also an officer of Manning, and the
complaint asserts a claim against him in that capacity.  It is
irrelevant to those claims whether respondents were also shareholders.
 In any event, three respondents were not shareholders.  See note 2,
supra.

   /20/ The House Report, H.R. Rep. 2077, 89th Cong., 2d Sess. (1966),
does not discuss the provision.

   /21/ 12 U.S.C. 1819 Fourth was amended in the same 1966 legislation
that contained Section 1730(k)(1):  Congress added an express
provision for removal of actions to federal court and eliminated the
jurisdictional amount requirement for federal-question jurisdiction.
Financial Institutions Supervisory Act of 1966, Pub. L. No. 89-695,
Section 205, 80 Stat. 1055.  The proviso in 12 U.S.C. 1819 Fourth,
however, was not altered.

   /22/ The House Report (H.R. Rep. 742, supra, at 4) states:  "Under
the provisions of title I (of the Act), Federal courts have
jurisdiction over suits to which the Corporation is a party where the
amount involved exceeds $3,000, but an exception is made where the
Corporation is a party in its capacity as receiver of a State bank."
The Senate Report (S. Rep. 1007, supra, at 5) states:  "new matter is
added giving jurisdiction, in the case of suits of a civil nature to
which the Corporation is a party, to courts having jurisdiction of
suits arising under the laws of the United States.  It is provided
that any suit to which the Corporation is a party in its capacity as
receiver of a State bank and which involves only rights to be
determined according to State laws shall not be deemed to arise under
the laws of the United States."

   The FDIC's jurisdictional provision was recodified without change
as part of 12 U.S.C. (1952 ed.) 1819 Fourth by the Federal Deposit
Insurance Act of 1950, ch. 967, Section 2, 64 Stat. 881.  The
committee reports that accompany the 1950 Act do not comment on the
provision.  See S. Rep. 1269, 81st Cong., 2d Sess. (1950);  H.R. Rep.
2564, 81st Cong., 2d Sess. (1950);  H.R. Conf. Rep. 3049, 81st Cong.,
2d Sess. (1950).

   /23/ We read the term "creditors" in this context as encompassing
all persons with claims against the receivership estate, whether based
on contract or tort.  See 11 U.S.C. (& Supp. IV) 101(9) (bankruptcy
code definition of "creditors");  12 C.F.R. 569a.1-569a.8 (treating
all claims against the estate of a state-chartered institution in
FSLIC receivership as "creditors" claims).

   /24/ See also Tex. Rev. Civ. Stat. Ann. art. 852a, Section 8.09
(Vernon Supp. 1988) (directing liquidating agent of failed thrift to
enforce collection of property of the thrift, while channeling all
claims against the thrift through the liquidating agent and, if
necessary, a single state court).  In addition, under current
bankruptcy law, the district court where the bankruptcy petition is
filed has exclusive jurisdiction over the property of the estate (28
U.S.C. (Supp. IV) 1334(d)), and claims against the estate must be
filed in that court (see 11 U.S.C. 501);  by contrast, the district
court does not have exclusive jurisdiction over so-called "related
proceedings," including suits brought by a bankruptcy trustee,
pursuant to the duty to collect property of the estate (11 U.S.C. (&
Supp. IV) 704), to collect on an obligation to the bankrupt that arose
prior the bankruptcy (28 U.S.C. 1334(c)(2);  1 L. King, Collier
Bankruptcy Manual Paragraph 3.01(1)(c)(iv), at 3.24 to 3-27 (3d ed.
1988)).  Similarly, 12 U.S.C. 94 specifies a single venue for all
actions against a national banking association for which the FDIC has
been made receiver or against the FDIC in such capacity, whereas it
does not specify a single venue for suits by the FDIC as receiver.

   /25/ The traditional receivership/bankruptcy model was only the
starting point for Congress's drafting of the proviso.  The proviso is
not limited to cases requiring jurisdiction over the receivership
property but applies as well to cases in which a proviso party seeks
only to establish its claim.  Compare Riehle v. Margolies, 279 U.S.
218, 223-224 (1929) (discussing suits merely seeking to establish the
validity of a claim but not seeking distribution of assets);  FDIC v.
Citizens State Bank, 130 F.2d 102 (8th Cir. 1942) (comity as reason
for federal court refraining from adjudicating claim that would be
adjudicated in state proceeding).  And the proviso does not apply,
even if a claim is made against the receivership property, if the case
does not involve only rights or obligations under state law.

   /26/ The proviso's effect would be generally to leave no
alternative basis of federal jurisdiction available for such claims.
Notably, the proviso abrogates all federal-question jurisdiction,
including the implied federal-question jurisdiction for some federally
chartered corporations (see 28 U.S.C. 1349 (limiting such
jurisdiction);  In re Dunn, 212 U.S. 374 (1909)).  Moreover, diversity
jurisdiction under 28 U.S.C. 1332 would not generally be available to
the FSLIC based on its own citizenship.  A federal corporation that is
not specifically granted citizenship in a particular State is not
deemed to be a citizen of any State and hence cannot meet the
diversity requirement (see, e.g., Federal Intermediate Credit Bank v.
Mitchell, 277 U.S. 213, 214 (1928);  Bankers Trust Co. v. Texas &
Pacific R.R., 241 U.S. 295, 309-310 (1916);  Harris v. American
Legion, 162 F. Supp. 700 (S.D. Indl), aff'd, 261 F.2d 594 (7th Cir.
1958);  First Carolinas Joint Stock Land Bank v. New York Title &
Mortgage Co., 59 F.2d 350, 351 (E.D.S.C. 1932));  and there is no such
special grant for the FSLIC, which is a federal corporation.

   /27/ The 1968 legislation that empowered the Bank Board to appoint
the FSLIC receiver of even state-chartered thrifts (see pages 4-5,
supra) substantially altered the circumstances in which the proviso
operates.  But Congress has not reconsidered the proviso, and the
changes in the legal landscape have not changed its meaning.  The idea
of centralizing claims against the receivership estate (but not claims
by the estate) provides the most plausible account of why the proviso
was written as it was by the 1966 Congress -- and, indeed, of why the
1935 Congress drafted and enacted the FDIC's proviso, on which Section
1730(k)(1) is modeled.

   /28/ Although the net worth and reserve regulations directly apply
only to the institution, they indirectly impose obligations on the
institution's directors.  The FSLIC has the authority under 12 U.S.C.
1730(e) to initiate cease-and-desist proceedings against directors who
take action to place the institution in violation of the regulations.
The FSLIC also has authority to suspend or to remove directors for
sufficiently harmful breaches of fiduciary duty.  12 U.S.C. 1730(g).

   /29/ Although some claims "arise under" federal law even if federal
law does not supply the cause of action (see Franchise Tax Bd. v.
Construction Laborers Vacation Trust, 463 U.S. 1, 19 (1983)), we have
not contended in this case that the state-law claims arise under
federal law.  See Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478
U.S. 804 (1986).

   /30/ When, pursuant to the powers granted to the Bank Board after
the 1966 enactment of Section 1730(k)(1) (see 12 U.S.C. 1729(c)(1)(B)
and (2)), the Bank Board appoints the FSLIC as receiver of any thrift,
including a state-chartered thrift, the FSLIC conducts the
receivership "subject to the regulation of the (Bank Board)" (12
U.S.C. 1729(d)), and no court may "restrain or affect the exercise of
powers or functions of (the FSLIC)" (12 U.S.C. 1464(d)(6)(C);  see 12
U.S.C. 1729(c)(3)(A)).  There may be cases in which the fact that the
FSLIC was appointed receiver by the Board, rather than by state
authorities, means that rights or obligations under federal law are
presented that would not otherwise be in the case and that the case is
for that reason not within the proviso.  See Carrollton-Farmers Branch
Ind. School Dist. v. Johnson & Cravens, 13911, Inc., No. 87-1835 (5th
Cir. Oct. 27, 1988).  We do not contend that that is so in this case.

   /31/ Indeed, at least where, as here, the FSLIC is appointed
receiver by the Bank Board, rather than by state authorities, its
authority to bring suits where necessary is solely dependent on
federal and not state law.  See 12 U.S.C. 1729(d) (FSLIC conducts
receivership "subject only to the regulation of" the Bank Board);  12
U.S.C. 1464(d)(6)(C) (court may not restrain or affect the FSLIC's
receivership powers);  S. Rep. 1263, 90th Cong., 2d Sess. 10 (1968)
(the FSLIC, once appointed by the Board, is not subject to the
regulation "of any State authority, administrative or judicial");  114
Cong. Rec. 18298-18299 (1968) (remarks of Rep. Patman);  Savings and
Loan Receiverships:  Hearing on S. 3436 Before the Senate Comm. on
Banking and Currency, 90th Cong., 2d Sess. 7 (1968) (statement of the
Chairman of the Bank Board).

   /32/ The Fifth Circuit in FDIC v. Sumner Financial Corp., supra,
thought that the difference between Section 1730(k)(1) and Section
1819 Fourth might be significant.  See note 11, supra.

   /33/ The absence of such jurisdiction, together with the fact that
there may be cases where the FDIC as receiver does sue a proviso
party, explains why its proviso is written to apply when the FDIC is a
"party" rather than a "defendant." And the 1966 Congress, when
enacting the FSLIC's Section 1730(k)(1), merely borrowed the language
of the proviso from 12 U.S.C. 1819 Fourth without focusing on its
relation to Clause (A) of Section 1730(k)(1).

   /34/ In fact, there appears to be no mention of Acron in the
legislative history of the 1966 enactment.

   /35/ The court of appeals noted that 28 U.S.C. 1345 begins
"(e)xcept as otherwise provided" and stated that Section 1730(k)(1)
provides the necessary overriding "polic(y)" (Pet. App. 12a).  But a
"policy" standing alone could not override the language of Section
1345.  In any event, the court of appeals failed to identify any
policy that fully accounts for all of Section 1730(k)(1) and that
overrides Section 1345.

   /36/ There was, at the time, no general federal-agency
jurisdiction.  Moreover, diversity jurisdiction was not available to
corporations in 1935 (see FDIC v. Elefant, 790 F.2d 661 (7th Cir.
1986)), and would not seem to have been generally available in any
event to the FDIC, which is a federally chartered corporation (see
note 26, supra).