FDIC and Twelfth-Century England — UPDATED

After WaMu failed, the FDIC conveyed its assets and liabilities to Chase.  Several landowners sought to enforce lease terms against Chase by virtue of that conveyance. The Fifth Circuit affirmed summary judgment for them in Excel Willowbrook LLC v. JP Morgan Chase Bank, NA, 758 F.3d 592 (5th Cir. 2014).  First, the Fifth Circuit “reluctantly” followed two other Circuits which found that a “no-beneficiaries” clause in the FDIC’s assignment extinguished the landlords’ rights, noting its own belief that the lease requirements were more in the nature of primary obligations.  But the Court then agreed with the district court that the landlords were in privity of estate with Chase and could enforce the leases for that reason, characterizing the FDIC’s argument to the contrary as “ignor[ing] eight centuries of legal history,” and expressly disagreeing with an Eleventh Circuit case to the contrary.  As for concerns about expansive liability for FDIC assignees, the Court observed: “The FDIC can avoid its present plight in future cases by drafting contractual provisions for the right it seeks to claim.”  The Court re-examined this “obscure but heavily litigated consequence of the largest bank failure in U.S. history” in Central Southwest Texas Development, LLC v. JPMorgan Chase, No. 12-51083 (March 2, 2015), resolved largely on procedural grounds.