A bank executive sought to halt a Federal Deposit Insurance Corporation (FDIC) enforcement action by filing suit in federal district court before the FDIC Board of Directors (the “board”) issued its final order. The FDIC had reopened its administrative case against him after a Supreme Court decision required a rehearing before a properly appointed Administrative Law Judge (ALJ). Lucia v. SEC, 585 U.S. 237 (2018). In response, the executive advanced several claims, including challenges to removal protections for ALJs. He also claimed he had the right to a jury trial under the Seventh Amendment. He invoked 28 U.S.C. § 1331 as a basis for federal-question jurisdiction, arguing that such constitutional claims create an independent jurisdictional foundation allowing review before enforcement happens. The district court rejected the removal arguments but issued an injunction halting the enforcement action on Seventh Amendment grounds. The board appealed, contending that the district court lacked subject-matter jurisdiction to enjoin the proceeding and issue such an injunction, and sought dismissal of the suit in federal court.
In Burgess v. Whang, 152 F.4th 579 (5th Cir. 2025), the Fifth Circuit agreed with the board and vacated the injunction. The court reasoned that 12 U.S.C. § 1818 establishes an exclusive enforcement structure. Section 1818(i)(1) expressly stripped district courts of jurisdiction, including federal question subject matter jurisdiction conferred by § 1331, to enjoin FDIC enforcement proceedings before the issuance of a final order, except in narrow statutory circumstances. Section 1818(h)(2) provides the sole path for judicial review, channeling all claims, including constitutional and structural challenges, directly to the courts of appeals after a final agency decision. Congress’s deliberate sequencing of enforcement and review, in the eyes of the court, reflected a clear choice to preclude collateral suits before enforcement, even those framed in constitutional terms. Because the executive’s suit sought to enjoin an ongoing enforcement action rather than follow the prescribed review process, the district court lacked subject matter jurisdiction and the action had to be dismissed.
By Landon Womack [email protected]
Edited By Hayden Mariott [email protected]
Edited By Kristin Meurer [email protected]