Litigation Philosophy

The FDIC's philosophy with respect to litigation is to pursue an approach that is aggressive, forthright, and consistent with our overall objective of resolving litigation in an expeditious and cost-effective manner.

The Legal Division avoids extreme advocacy positions that are not likely to have a substantive impact on the outcome of litigation. Coercive, delaying, or obstructive tactics also are to be avoided. We discourage motion practice unless there is a clear strategic advantage to be gained. Where appropriate, however, motions to dismiss, for judgment on the pleadings, or for summary judgment should be employed to resolve or refine as many of the issues in dispute as possible. Lengthy interrogatories or requests for extensive document production for the purpose of burdening another party also are to be avoided.

The FDIC wishes to avoid costly delays that frequently result from abuses of the discovery process. The Legal Division specifically requests that outside counsel consider available remedies and sanctions when another party appears to be abusing the discovery process.

Outside counsel should familiarize themselves with the Legal Division's litigation procedures. Questions concerning litigation strategies should be addressed to the FDIC supervising attorney.

Role of Legal Division Attorneys in Litigation

Attorneys in the Division are responsible for managing all legal assignments and litigation, including matters referred to outside counsel. Outside counsel must consult with the FDIC supervising attorney on all major strategic or tactical decisions associated with a matter. Of course, on routine cases the Legal Division does not expect to be involved in every decision. If a case involves policy issues or large sums, however, important decisions always should be raised with the FDIC supervising attorney in sufficient time to allow for meaningful review and consideration of the issues.

The Legal Division believes it is important at the beginning of each assignment to identify clearly the objectives to be achieved and possible alternative courses of action. As a general matter (depending in part on the scope of the assignment), the FDIC supervising attorney will:

• Define the goals and objectives to be achieved.
  
  
• Outline the role and duties expected of outside counsel.
  
  
• Request outside counsel to prepare a Case Plan and a budget designed to achieve the FDIC's goals and objectives in a cost-effective manner.
  
  
• Monitor progress against the Case Plan and budget.
  
  
• Approve any significant changes in the Case Plan or budget.
  
  
• Keep FDIC business personnel informed of developments.
  
  
• Coordinate all contacts between outside counsel and FDIC business personnel, as discussed below.
  

The Division evaluates the performance of outside counsel on an ongoing basis. Among the items evaluated are the quality of the services provided, cost consciousness, responsiveness to Division and business personnel, effective management of matters referred, and compliance with FDIC policies and procedures. The Division reserves the right to discontinue its relationship with outside counsel for any reason, including, but not limited to, unsatisfactory performance.

Contact with the FDIC

Generally all contact by outside counsel with non-legal FDIC personnel should be made through the Legal Division. This policy permits the most efficient utilization of resources and serves to avoid duplication of effort and to minimize costs. Therefore, outside counsel is expected to direct all communications to the FDIC supervising attorney, except in the following circumstances: when the FDIC supervising attorney indicates otherwise; when immediate action is required and the FDIC supervising attorney and his/her supervisor cannot be reached; when outside counsel is responding to the FDIC's Office of Inspector General; or when outside counsel seeks limited factual information that can be obtained in a relatively brief amount of time (such as payoff figures for a loan or the address of a borrower).

Under special circumstances or in certain types of litigation, the FDIC supervisIng attorney may make arrangements for more extensive direct contact with FDIC business personnel. This might occur, for example, in a case involving an in-depth investigation of an institution's records. Charges for time and expenses related to contacts other than those authorized may not be paid.

Special Issues

A number of legal issues are of special interest to the FDIC either because they are peculiarly related to FDIC activities and rights, or because of the need for a uniform, nationwide approach. These "special issues" include such matters as interpretation of the Federal Deposit Insurance Act, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FlRREA"), or other federal statutes, as well as matters involving the status of the FDIC in its conservatorship, receivership, or corporate capacities (see Appendix C).

Outside counsel representing the FDIC, FDIC asset servicers, or other FDIC related interests are required to be alert to these issues in matters referred for representation. You must contact the FDIC supervising attorney before undertaking any research or drafting with respect to these issues. Relevant research or statements of agency policy concerning "special issues" will frequently be provided to you and, in many cases, the Legal Division may wish to handle those portions of a matter directly or in cooperation with the firm.

Case Management

General Case Management

The FDIC's goal is to obtain the best resolution of legal matters at the lowest practicable cost. Consistent with that goal, we expect outside counsel to manage time carefully. The FDIC is especially sensitive to costs associated with excessive conferencing, unnecessary review of documents or files, extensive polishing of documents, the "learning curve" for FDIC matters, and legal research. Moreover, outside counsel are required to discuss staffing with the FDIC supervising attorney, assign no more attorneys or paraprofessionals than are necessary to adequately represent the FDIC on any matter or for any given task; and refrain from rotating assignments away from attorneys knowledgeable about FDIC matters or using FDIC projects for the purpose of training firm personnel.

Cost-effective representation on every matter requires that outside counsel:

• Consult with the FDIC supervising attorney on strategic, tactical, or cost-related decisions on a matter.
  
  
• Have a clear understanding of your role and the role of the FDIC supervising attorney.
  
  
• Insist that the FDIC supervising attorney define the goals and objectives to be achieved.
  
  
• Make effective use of Legal Division resources, including its attorneys, and other FDIC resources, such as the FDIC Legal Research Bank (described below), to the greatest extent possible.
  
  
• Develop a Case Plan and budget that will achieve the FDIC's goals and objectives and obtain the written approval of the Legal Division for any increase in the total budget amount.
  
  
• Promptly advise the FDIC supervising attorney of all significant developments.
  

Decisions that should be made only in consultation with the FDIC supervising attorney (absent exigent circumstances) include without limitation: secretarial overtime; use of paraprofessionals; use of law clerks or summer interns; travel; contacts with FDIC business staff; legal research; and level of staffing at conferences, court appearances, depositions, or meetings.

The Legal Division expects timely, cost-effective solutions. Failure to conform to the required cost-saving measures noted above may result in disallowance of the billed amounts by the Legal Division.

FDIC Legal Research Bank

To avoid duplication of legal research and to obtain the benefits of previous legal research, the Legal Division established the FDIC Legal Research Bank ("Legal Research Bank"), designed to centralize substantive briefs, published and unpublished opinions, and other legal research materials utilized in FDIC cases. The Legal Research Bank is intended to assist outside counsel in representing the FDIC by making legal research materials readily available to them and to reduce the FDIC's legal research bills.

Documents in the Legal Research Bank are available full-text in a private FDIC database on Westlaw (the "Legal Research Bank database" or "database"). Each law firm with a current Legal Services Agreement is eligible to open an account for on-line research in the Legal Research Bank database.

Outside counsel are required to minimize legal research costs on FDIC matters. Thus, outside counsel must check the Legal Research Bank database at the beginning of every authorized legal research project. Failure to consult the database may result in disallowance of associated charges for unnecessary legal research.

All outside counsel are required to submit promptly their final, substantive FDIC legal work product (e.g., briefs, legal research memoranda, as well as significant court opinions in FDIC cases) directly to the Legal Research Bank staff for inclusion in the Legal Research Bank.

In representing FDIC, outside counsel authorize the FDIC to include those materials (and any other written materials prepared in the representation of the FDIC) in the Legal Research Bank. Outside counsel also consent to the reproduction, dissemination, distribution, or other use of such written materials (including the use of those materials in other documents prepared for the Legal Division) by any authorized user of the Legal Research Bank.

Inquiries about the Legal Research Bank database should be directed to the Legal Research Bank staff at the telephone number listed in the inside back cover of this Guide.