## Facts

- William C. Magellsen was the major shareholder, managing director, and creator of two banks.
- Magellsen applied to the Federal Deposit Insurance Corporation (FDIC) for federal deposit insurance for the banks on January 15, 1970.
- Under FDIC regulations, an application triggers an investigation and examination; the FDIC’s regional director makes a recommendation to the FDIC’s Board of Directors; and the Board exercises discretion whether to grant deposit insurance based on statutory and regulatory factors.
- The FDIC approved Magellsen’s applications on November 25, 1970—about ten months after submission.
- After approval, the FDIC later investigated Magellsen and suspended him from conducting banking operations.
- Magellsen sued the FDIC and Roger B. West, the FDIC regional director involved in processing the applications.
- Magellsen alleged, in substance: (1) the FDIC and West delayed arbitrarily and unreasonably; (2) they negligently failed and refused to act on the applications; (3) West intentionally aroused suspicion about Magellsen and discriminated against him; (4) the FDIC and West failed to administer FDIC rules fairly and without discrimination (citing 12 U.S.C. § 1820); and (5) their handling of the applications deprived him of a fair hearing and constituted arbitrary and unfair treatment.
- Magellsen also alleged that the FDIC’s handling of the matter made him vulnerable to “con artists,” including George Manuel, and that defendants knew of Manuel’s reputation but did not warn him; Magellsen attributed financial loss and later regulatory consequences to those dealings.

## Issues

1. Whether the FDIC may be sued directly for money damages on claims sounding in tort, or whether the Federal Tort Claims Act (FTCA) provides the exclusive route and requires suit against the United States.
2. Whether the action against the FDIC was barred because Magellsen did not first present an administrative claim as required by the FTCA and did not meet the FTCA’s timing requirements.
3. Whether West, as FDIC regional director, was immune from damages liability for conduct taken within the scope of his discretionary duties in processing and recommending action on deposit-insurance applications.

## Decision

- The court dismissed the claims against the FDIC, holding that the FDIC is a federal agency within the FTCA and cannot be sued directly for tort damages; the exclusive remedy is an FTCA action against the United States.
- The court also concluded that Magellsen had not satisfied the FTCA’s administrative-claim and limitations requirements (28 U.S.C. §§ 2675(a), 2401(b)), which independently required dismissal of the tort claims.
- The court dismissed the claims against West, relying on West’s uncontroverted affidavit and finding his challenged conduct fell within the discretionary authority of his office, warranting official immunity.
- The motions to dismiss filed by the FDIC and West were granted.

## Legal Principles

- The FDIC is a “federal agency” for purposes of the FTCA; tort suits seeking money damages based on FDIC conduct must proceed, if at all, under the FTCA against the United States rather than directly against the FDIC.
- An agency’s statutory “sue and be sued” clause does not supply jurisdiction for a tort-damages action where Congress has made the FTCA the exclusive remedy for tort claims against federal agencies.
- FTCA administrative presentment and timing requirements—particularly 28 U.S.C. §§ 2675(a) and 2401(b)—are prerequisites to maintaining an FTCA tort action.
- Officials performing discretionary functions within the scope of their delegated authority are protected from personal damages liability for those acts; where the challenged conduct involves discretionary decision-making in carrying out federal regulatory duties, official immunity applies.
- Cases allowing suit against the FDIC in other contexts do not control a tort-damages claim governed by the FTCA, especially where the earlier authority predates the FTCA or addresses a non-tort proceeding.

## Conclusion

The district court held that Magellsen’s damages claims against the FDIC were tort claims governed exclusively by the FTCA and therefore could not be maintained directly against the FDIC, particularly because Magellsen had not satisfied the FTCA’s administrative-claim and timing requirements; the court also held that FDIC regional director Roger West was immune from suit for actions within his discretionary authority in processing and recommending action on the deposit-insurance applications, and it granted the FDIC’s and West’s motions to dismiss.


Magellsen v. Federal Deposit Insurance Corporation, 341 F. Supp. 1031 (1972)