The bank was a single-branch, state-chartered bank located in Weir, Kansas. The bank faced administrative proceedings for allegedly failing to comply with the Federal Deposit Insurance Corporation’s (FDIC) anti-money-laundering regulations. The FDIC alleged that the bank had generated the bulk of its earnings by providing banking services for many foreign financial institutions and failing to monitor their activities appropriately. The bank brought two claims: the first claim was that the FDIC’s administrative proceedings without a jury trial violated the Seventh Amendment, and the second claim was that the removal protections for the FDIC’s administrative law judges (ALJ) were unconstitutional under Article II. The bank sought an injunction from the district court. The court looked at 12 U.S.C. § 1818(i)(1) to determine whether it had subject matter jurisdiction over this case.
In CBW Bank v. FDIC, 769 F. Supp. 3d 1204 (D. Kan. 2025), the district court held that it lacked subject-matter jurisdiction. Under § 1818(i)(1), Congress explicitly stripped district courts of subject matter jurisdiction over administrative proceedings before the entry of a final order. In this case, however, the bank claimed that a structural constitutional claim “merit[ed] a different analysis.” The court first considered the factors from the Thunder Basin case, Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 114 S. Ct. 771 (1994), to evaluate “whether Congress intended to preclude district court jurisdiction for structural constitutional claims.” Axon Enterprise, Inc. v. FTC, 598 U.S. 175 (2023). In Axon, the court’s holding showed that Congress implicitly precluded district court jurisdiction. In contrast, under § 1818(i)(1), Congress explicitly precludes jurisdiction. Therefore, without applying the holding from Axon or the Thunder Basin factors, the court found that a structural constitutional claim did not alter Congress’s explicit denial of district courts’ jurisdiction. The district court also found that the holdings in Bonan v. FDIC, No. 4:23CV8 HEA, 2023 WL 156852 (E.D. Mo. Jan. 11, 2023) and Ponte v. FDIC, No. 123CV00165MSMLDA, 2023 WL 6441976 (D.R.I. Oct. 3, 2023), in which plaintiffs raised similar jurisdictional challenges under § 1818(i)(1), were unpersuasive. The bank placed its final hopes on Burgess v. FDIC, 639 F. Supp. 3d 732 (N.D. Tex. 2022), rev'd and remanded sub nom, Burgess v. Whang, 152 F.4th 579 (5th Cir. 2025). In Burgess, however, the court’s view was grounded on “Burgess’s reliance on implicit preclusion, rather than § 1818(i)(1)’s explicit bar.” Therefore, the court found Burgess unpersuasive to find that it had jurisdiction to issue the injunction or hear the claims of the bank. Ultimately, the court dismissed the bank’s motion for a preliminary injunction for both of its claims because 12 U.S.C.S. § 1818(i)(1) explicitly denied jurisdiction to district courts.
By Alexander Shim [email protected]
Edited By Jace Brown [email protected]
Edited By Callighan Ard [email protected]
Edited By Kristin Meurer [email protected]