## Facts

- MCorp Financial, Inc., a bank holding company regulated by the Board of Governors of the Federal Reserve System, filed voluntary bankruptcy petitions in March 1989.
- After filing, MCorp brought an adversary proceeding in bankruptcy court seeking to stop two pending Board administrative enforcement proceedings.
- One proceeding charged MCorp with violating the Board’s “source of strength” regulation requiring a holding company to support subsidiary banks.
- The other alleged violations of § 23A of the Federal Reserve Act governing certain bank–affiliate transactions.
- The bankruptcy court transferred the adversary proceeding to the district court.
- The district court entered a preliminary injunction halting both administrative proceedings.
- The Fifth Circuit held § 1818(i)(1) barred injunctive relief as to the § 23A proceeding, but ordered an injunction against enforcement of the “source of strength” regulation on an ultra vires theory.

## Issues

1. Whether 12 U.S.C. § 1818(i)(1) withdraws federal-court jurisdiction to enjoin pending Board administrative enforcement proceedings.
2. Whether the Bankruptcy Code’s automatic stay, 11 U.S.C. § 362(a), permits a bankruptcy or district court to enjoin those proceedings notwithstanding § 1818(i)(1).
3. Whether a nonstatutory “ultra vires” exception associated with *Leedom v. Kyne* allows injunctive relief despite § 1818(i)(1)’s jurisdictional bar.

## Decision

- The Supreme Court unanimously reversed, holding the district court lacked jurisdiction to enjoin either administrative proceeding.
- Section 1818(i)(1)’s “plain, preclusive” jurisdiction-stripping language barred injunctive interference with the Board’s notices or orders.
- The Bankruptcy Code did not qualify or supersede § 1818(i)(1); in any event, the proceedings fit within § 362(b)(4)’s exception for governmental police or regulatory actions.
- *Leedom v. Kyne* did not authorize district-court intervention because Congress expressly limited jurisdiction and provided a statutory avenue for later review of final orders.

## Legal Principles

- When Congress expressly provides that “no court shall have jurisdiction” to affect agency enforcement by injunction or otherwise, federal district courts may not enjoin covered administrative proceedings.
- A comprehensive administrative enforcement and review scheme channels challenges to final agency action into the review path specified by statute (here, post-order review in a court of appeals).
- The bankruptcy automatic stay does not bar governmental actions to enforce police or regulatory power under 11 U.S.C. § 362(b)(4), even if the action has financial consequences for the debtor.
- *Leedom v. Kyne* is a narrow doctrine and does not permit courts to bypass an explicit jurisdictional bar where meaningful statutory review remains available.

## Conclusion

The Court held that § 1818(i)(1) stripped the district court of jurisdiction to enjoin the Board’s ongoing enforcement proceedings, and that bankruptcy did not supply a basis to halt those proceedings; MCorp’s challenges had to await the statutory review process after final agency action.


Bd. of Governors of the Fed. Rsrv. Sys. v. MCorp Fin., Inc., 502 U.S. 32 (1991)