American Bankers Association v. United States

United States Court of Appeals

for the Federal Circuit

______________________

AMERICAN BANKERS ASSOCIATION,

WASHINGTON FEDERAL, N.A., INDIVIDUALLY

AND ON BEHALF OF ALL OTHERS SIMILARLY

SITUATED,

Plaintiffs-Appellants

v.

UNITED STATES,

Defendant-Appellee

______________________

2018-1341

______________________

Appeal from the United States Court of Federal Claims

in No. 1:17-cv-0194-SGB, Senior Judge Susan G. Braden.

______________________

Decided: August 8, 2019

______________________

STEPHEN JOSEPH OBERMEIER, Wiley Rein LLP, Wash-

ington, DC, argued for plaintiffs-appellants. Also repre-

sented by CLAIRE J. EVANS, MICHAEL E. TONER.

ERIC PETER BRUSKIN, Commercial Litigation Branch,

Civil Division, United States Department of Justice, Wash-

ington, DC, argued for defendant-appellee. Also repre-

sented by JOSEPH H. HUNT, ROBERT E. KIRSCHMAN, JR.,

KENNETH M. DINTZER, CLAUDIA BURKE; KATHERINE H.

2 AMERICAN BANKERS v. UNITED STATES

WHEATLEY, Board of Governors of the Federal Reserve Sys-

tem, Washington, DC.

______________________

Before WALLACH, CHEN, and HUGHES, Circuit Judges.

HUGHES, Circuit Judge.

This case arises out of legislation amending the statu-

tory rate for dividend payments on Federal Reserve Bank

stock. The Federal Reserve Act of 1913 set the dividend

rate at six percent per year, which remained in effect until

Congress amended the dividend provision in 2016. The

amendment effectively reduced the dividend rate for cer-

tain stockholder banks from the fixed six percent rate to a

lower variable rate. American Bankers Association and

Washington Federal, N.A. sued the United States in the

Court of Federal Claims, arguing that banks who sub-

scribed to Reserve Bank stock before the amendment are

entitled to dividends at the six percent rate. The complaint

alleged that, by paying dividends at the amended statutory

rate, the United States breached a contractual duty or, in

the alternative, effected a Fifth Amendment taking. The

trial court dismissed the complaint under Rules of the U.S.

Court of Federal Claims 12(b)(6) for failure to state a claim.

American Bankers and Washington Federal now appeal.

Because the complaint does not allege facts establishing

the existence of a contract or an unconstitutional taking,

we affirm.

I

A.

We begin with a brief overview of the Federal Reserve

System and its statutory origins. The Federal Reserve Act

AMERICAN BANKERS v. UNITED STATES 3

of 1913, Pub. L. No. 63−43, ch. 6, 38 Stat. 251 (1913), 1 es-

tablished a system to oversee banking operations and pro-

mote greater economic stability. The Federal Reserve

System includes the Federal Reserve Board of Governors,

see id., §§ 10−11, 38 Stat. 260–63, and twelve regional Re-

serve Banks, see id. § 2, 38 Stat. 251–52. The Board exer-

cises broad regulatory supervision over the Reserve Banks,

which serve as banks to the U.S. government and to com-

mercial banks who are members of the Federal Reserve

System.

The Act sets forth the conditions under which commer-

cial banks may join the Federal Reserve System. One of

the conditions of membership is that member banks must

“subscribe” to the stock of their regional Reserve Bank in

an amount “equal to six per centum of the paid-up capital

stock and surplus of [the] applicant bank . . . .” § 5, 38 Stat.

257. Every national bank 2 is required to join the system

and subscribe to Reserve Bank stock. § 2, 38 Stat 252.

Other financial institutions, such as state banks, are per-

mitted but not required to apply for membership and sub-

scribe to stock. § 9, 38 Stat. 259.

Reserve Bank stock is “divided into shares of $100,”

which “shall not be transferred or hypothecated.” § 5, 38

Stat. 257. From 1913 to 2015, the Act provided that “the

stockholders of the [Reserve] bank shall be entitled to

1 The Federal Reserve Act is codified as amended in

scattered sections of Chapter 3 of Title 12 of the United

States Code. See 12 U.S.C. §§ 221−522. This opinion cites

to the original 1913 Act, which is the same as the current

version except where otherwise noted.

2 A national bank refers to a commercial bank char-

tered by the federal government under the National Bank

Act. See 12 U.S.C. § 21 et seq.

4 AMERICAN BANKERS v. UNITED STATES

receive an annual dividend of six per centum on the paid-

in capital stock . . . .” § 7, 38 Stat 258.

On December 4, 2015, Congress passed the Fixing

America’s Surface Transportation Act (FAST Act), which

authorized substantial appropriations for surface trans-

portation infrastructure. See Pub. L. No. 114–94, 129 Stat.

1312. The FAST Act included an amendment to the statu-

tory dividend rate for Reserve Bank stock owned by mem-

ber banks with consolidated assets of more than $10

billion. Under the amended dividend provision, these

banks would receive a variable dividend rate equal to the

lesser of: (1) the rate of the 10-year Treasury note or (2) six

percent. See § 32203, 129 Stat. 1739 (codified as amended

at 12 U.S.C. § 289(a)(1)).

B.

Prior to 2013, Washington Federal operated as a feder-

ally chartered savings and loan association. On May 29,

2013, Washington Federal received approval from the Of-

fice of the Comptroller of the Currency to convert to a na-

tional bank, contingent on, inter alia, Washington Federal

applying for membership in the Federal Reserve System.

On July 8, 2013, Washington Federal submitted an ap-

plication for Reserve Bank stock to the Reserve Bank of

San Francisco (BSF). A letter from BSF, dated July 17,

2013, informed Washington Federal that its application

and payment for stock had been processed and enclosed an

Advice of Holdings for 479,610 shares of BSF stock. The

letter further noted that “[d]ividends are paid at the statu-

tory rate of 6 percent per annum, or $1.50 per share semi-

annually.” J.A. 65.

From 2013 to 2015, Washington Federal received divi-

dend payments on its stock at a rate of six percent per year.

After the FAST Act took effect on January 1, 2016, Wash-

ington Federal received dividends at the rate of the 10-year

Treasury note. In 2016, Washington Federal received

AMERICAN BANKERS v. UNITED STATES 5

dividends totaling $502,471.53, reflecting an annual rate of

approximately two percent.

C.

Washington Federal and American Bankers Associa-

tion 3 filed a complaint against the United States in the

Court of Federal Claims on February 9, 2017. 4 The com-

plaint alleged that, by paying dividends at a rate lower

than six percent in 2016, the government breached a con-

tractual duty to member banks that subscribed to Reserve

Bank stock before December 4, 2015. The complaint also

asserted, in the alternative, that the government’s conduct

effected a Fifth Amendment taking.

The government filed a motion to dismiss for lack of

standing under RCFC 12(b)(1) and failure to state a claim

under RCFC 12(b)(6). The Court of Federal Claims deter-

mined that American Bankers failed to meet the require-

ments for associational standing because the damages

requested would require individualized proof for each asso-

ciation member. The court found that Washington Federal

had standing but dismissed all counts of the complaint un-

der RCFC 12(b)(6) for failure to state a claim. Washington

Federal and American Bankers now appeal the court’s dis-

missal of the claims and its standing determination. We

have jurisdiction under 28 U.S.C. § 1295(a)(3).

3 American Bankers Association is a national trade

association for the banking industry. Its members include

Washington Federal, as well as other banks affected by the

amendment to the dividend rate, i.e., member banks with

more than $10 billion in consolidated assets.

4 The complaint was subsequently amended on April

14, 2017. This opinion refers to the amended complaint

unless otherwise stated.

6 AMERICAN BANKERS v. UNITED STATES

II

We review de novo whether the Court of Federal

Claims properly dismissed a complaint for failure to state

a claim upon which relief may be granted. Frankel v.

United States, 842 F.3d 1246, 1249 (Fed. Cir. 2016). To

avoid dismissal under RCFC 12(b)(6), a plaintiff “must al-

lege facts ‘plausibly suggesting (not merely consistent

with)’ a showing of entitlement to relief.” Acceptance Ins.

Cos., Inc. v. United States, 583 F.3d 849, 853 (Fed. Cir.

2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,

557 (2007)). “A claim has facial plausibility when the plain-

tiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009). In reviewing a motion to dismiss, we accept as true

the complaint’s well-pled factual allegations; however, we

are not required to accept the asserted legal conclusions.

Id.

For the reasons set forth below, we conclude that the

trial court did not err in dismissing Washington Federal’s

breach of contract and takings claims under RCFC

12(b)(6). 5

A.

First, we address Washington Federal’s breach of con-

tract claim. The complaint asserts that the government

breached an implied-in-fact or express contract with Wash-

ington Federal by paying dividends at a rate lower than six

percent in 2016. Washington Federal alleges that an im-

plied-in-fact contract exists because the Federal Reserve

Act constitutes an offer by the government, which

5 We need not reach American Bankers’ standing ar-

gument because American Bankers’ allegations are the

same as Washington Federal’s and would thus share the

same flaws regardless of our outcome.

AMERICAN BANKERS v. UNITED STATES 7

Washington Federal accepted by submitting its application

and payment for Reserve Bank stock. Alternatively, Wash-

ington Federal contends that an express contract was

formed based on its application for stock, which was a con-

tractual offer that the government accepted by approving

the application and issuing stock.

There are four requirements to form a contract binding

upon the government: “(1) mutuality of intent to contract;

(2) lack of ambiguity in offer and acceptance; (3) consider-

ation; and (4) a government representative having actual

authority to bind the United States in contract.” Anderson

v. United States, 344 F.3d 1343, 1353 (Fed. Cir. 2003).

These requirements apply to both express and implied-in-

fact contracts. Id. at 1353 n.3. “To satisfy its burden to

prove such a mutuality of intent, a plaintiff must show, by

objective evidence, the existence of an offer and a reciprocal

acceptance.” Id.

For both its implied-in-fact and express contract theo-

ries, Washington Federal relies largely on the Federal Re-

serve Act as evidence of the government’s intent to

contract. Under its implied-in-fact contract theory, the Act

was an offer to contract; under its express contract theory,

the Act was an invitation to receive offers to contract. Un-

der either theory of contract formation, Washington Fed-

eral argues that the Act contemplates a contractual

agreement between member banks and the government.

Because Washington Federal failed to allege facts estab-

lishing the existence of a contract with the government, we

determine that the trial court did not err in dismissing this

claim.

1.

“[A]bsent some clear indication that the legislature in-

tends to bind itself contractually, the presumption is that

‘a law is not intended to create private contractual or

vested rights but merely declares a policy to be pursued

until the legislature shall ordain otherwise.’” Nat’l R.R.

8 AMERICAN BANKERS v. UNITED STATES

Passenger Corp. v. Atchison Topeka & Santa Fe Ry. Co.,

470 U.S. 451, 465–66 (1985) (quoting with alterations

Dodge v. Bd. of Educ., 302 U.S. 74, 79 (1937)). This “well-

established presumption” reflects a recognition that “the

principal function of a legislature is not to make contracts,

but to make laws that establish the policy of the state.” Id.

And “[p]olicies, unlike contracts, are inherently subject to

revision and repeal . . . .” Id.

To overcome the presumption, there must be a “clear

indication” that the legislature intended to create contrac-

tual rights enforceable against the government. Id. at

465−66. The Supreme Court has recognized evidence of an

intent to contract where a statute “provide[s] for the execu-

tion of a written contract on behalf of the United States” or

“speak[s] of a contract” with the United States. Id. at 467

(emphasis in original); see also Dodge, 302 U.S. at 78; Indi-

ana ex rel. Anderson v. Brand, 303 U.S. 95, 105 (1938). For

example, in Hall v. Wisconsin, 103 U.S. 5 (1880), the stat-

ute provided for a geological, mineralogical, and agricul-

tural survey to be carried out by commissioners appointed

by the governor. Id. at 5–6. The statutory text directed the

governor to “make a written contract with each of the com-

missioners . . . expressly stipulating and setting forth the

nature and extent of the services to be rendered by each,

and the compensation therefor . . . .” Id. at 8–9. Likewise,

in Indiana ex rel. Anderson, the Court found that Indiana’s

Teachers’ Tenure Law contemplated contracts binding on

the state, noting that “[t]he title of the act is couched in

terms of contract” and the text “speaks of the making and

canceling of indefinite contracts” between teachers and

school districts. 303 U.S. at 105.

In finding that a statute or regulation constitutes an

offer to enter into a unilateral contract, courts have also

relied on explicit references to contractual undertakings.

For example, in Radium Mines, Inc. v. United States, 153

F. Supp. 403 (Ct. Cl. 1957), the regulation at issue included

a section entitled “Purchase Contract,” which stated that,

AMERICAN BANKERS v. UNITED STATES 9

if a sample of uranium delivered to the Commission

“meet[s] the conditions of this section, the Commission will

forward to the person making the offer a form of contract

containing applicable terms and conditions ready for his

acceptance.” Id. at 405. Similarly, the statutory provision

in Grav v. United States, 14 Cl. Ct. 390 (1988), aff’d, 886

F.2d 1305 (Fed. Cir. 1989), provided that “[t]he Secretary

shall offer to enter into a contract” with milk producers. Id.

at 392.

In contrast, the Supreme Court determined in Dodge

that the Miller Law did not clearly express the govern-

ment’s intent to contract. 302 U.S. at 80. As originally en-

acted, the Miller Law established a compulsory retirement

age for public school teachers and provided for the payment

of annuities to retired teachers. Id. at 76. The law stated

that teachers “who served in the public schools of such city

for twenty or more years prior to such retirement, shall be

paid the sum of fifteen hundred dollars ($1,500.00) annu-

ally and for life from the date of such retirement . . . .” Id.

Nearly ten years after it was passed, the Miller Law was

amended to reduce annuity payments to $500 for all retired

teachers, including those who had retired prior to the

amendment. Id. at 77. The teachers who filed suit against

the Board of Education argued that they were contractu-

ally entitled to annuity payments at $1,500 because the

Miller Law constituted an offer to contract, which they had

accepted by remaining in service for at least twenty years.

Id. at 77. The Supreme Court rejected this argument, con-

cluding that neither the statutory language nor the circum-

stances of enactment indicated a legislative intent to create

binding contractual obligations. Id. at 79−81.

2.

To determine whether a statute gives rise to a contrac-

tual obligation, we first look to the language of the statute.

See Dodge, 302 U.S. at 78; Nat’l R.R., 470 U.S. at 466. The

language of the Federal Reserve Act is devoid of the

10 AMERICAN BANKERS v. UNITED STATES

traditional indicia of a contractual undertaking. The Act

does not “speak of a contract” between Reserve Banks and

member banks; nor does it “provide for the execution of a

written contract on behalf of the United States.” See Nat’l

R.R., 470 U.S. at 467. Rather, the Act sets forth a regula-

tory system, in which member banks are granted certain

“powers and privileges” and are subject to specified “duties,

liabilities, and regulations.” § 8, 38 Stat. 259. Among the

duties, member banks are “required . . . to subscribe to the

capital stock” of their regional Reserve Bank. § 2, 38 Stat.

252. Among the privileges, banks “shall be entitled to re-

ceive an annual dividend of six per centum on the paid-in

capital stock. . . .” § 7, 38 Stat. 258.

Washington Federal urges us to discern contractual in-

tent from the terms “subscribe” and “subscription,” which

it contends are “contractual terms of art in the context of

stock offerings. . . .” Appellant’s Op. Br. 31; see also id. at

32−33. But we must interpret the language in the context

in which it is written. In the context of a regulatory stat-

ute, we will not infer a contractual undertaking “absent ‘an

adequate expression of an actual intent’ of the State to bind

itself. . . .” Nat’l R.R., 470 U.S. at 466–67 (quoting Wis. &

Mich. Ry. Co. v. Powers, 191 U.S. 379, 386–87 (1903)). And

the use of terminology that carries contractual connota-

tions when used in the private sector does not, on its own,

establish such intent. For example, in Dodge, the Supreme

Court rejected appellants’ argument that “annuity” is “ter-

minology based on contract” that reflected the legislature’s

intent to establish contractual rights. 302 U.S. at 81. Like-

wise, we find that the subscription language in the Federal

Reserve Act does not unequivocally express the govern-

ment’s intent to bind itself in contract.

Washington Federal further argues that the govern-

ment’s intent to contract is evident from the exchange of

obligations between member banks and Reserve Banks.

According to Washington Federal, the Act contemplates an

agreement that Reserve Banks will pay member banks an

AMERICAN BANKERS v. UNITED STATES 11

annual dividend of six percent in exchange for member

banks’ subscription to Reserve Bank stock. The language

and structure of the Act, however, do not reflect a bar-

gained-for quid pro quo between two parties. The dividend

rate is set forth in an entirely different section than the

provisions governing stock subscription. Compare § 7, 38

Stat. 258, with § 2, 38 Stat. 251−52, and § 5, 38 Stat. 257–

58. Moreover, the Act does not frame dividend payments

as a contractual obligation of the Reserve Banks. Rather,

the six percent dividend is described as a benefit that mem-

ber banks “shall be entitled to receive.” § 7, 38 Stat. 258.

And a statute does not create contractual obligations

merely by setting forth “benefits to those who comply with

its conditions.” Wis. & Mich, Ry. Co., 191 U.S. at 387. In-

deed, in Dodge, the statutory language provided that teach-

ers who retired after serving twenty or more years in the

public schools “shall be paid the sum of fifteen hundred dol-

lars ($1,500.00) annually and for life from the date of such

retirement . . . .” 302 U.S. at 76 (emphasis added). Yet the

Supreme Court declined to find that the teachers’ rights to

$1,500 annuity payments vested upon meeting the statu-

tory conditions. Id. at 77, 79−81. Similarly, we conclude

that the Federal Reserve Act does not demonstrate the gov-

ernment’s clear intent to confer vested contractual rights

on each member bank who complies with the stock sub-

scription requirement.

The circumstances surrounding the passage of the Fed-

eral Reserve Act and its legislative history offer further

support. See Nat’l R.R., 470 U.S. at 468. The Federal Re-

serve Act was passed in 1913 in response to ongoing insta-

bility within the financial sector, which had given rise to a

series of banking crises in the preceding decades. See H.R.

Rep. No. 63-69, at 3−5 (1913). One of the deficiencies of the

banking system at the time was that it “fail[ed] to afford

any safeguard against panics and commercial stringencies

or any means of alleviating them.” Id. at 6.

12 AMERICAN BANKERS v. UNITED STATES

Congress created the Federal Reserve System to pre-

vent and contain the financial disruption caused by bank

failures. The Reserve Banks were intended to serve as

lenders of last resort by maintaining a reserve of liquid cap-

ital “ready for use in protecting the banks of any section of

the country and for enabling them to go on meeting their

obligations instead of suspending payments, as so often in

the past.” Id. at 11; see also id. at 19−22. To provide the

funds for this reserve, Congress established the require-

ment that member banks subscribe to Reserve Bank stock.

Id. at 16−17, 20−21. Thus, the origins of the subscription

requirement reflect a regulatory effort to promote stability

in the banking system through collaboration, rather than

a collection of private contractual undertakings.

Statements in the legislative history bear this out. For

example, the House Report accompanying the bill later

passed as the Federal Reserve Act, expressed the view that

“banking institutions which desire to be known by the

name ‘national’ should be required, and can well afford, to

take upon themselves the responsibilities involved in joint

or federated organization.” Id. at 16. Likewise, the Senate

Report stated that the Reserve Banks were “not intended

to be merely money-making banks,” but “guardians of the

public welfare, primarily safeguarding the member banks,

protecting their reserves, safeguarding their credit, [and]

protecting them from panic or financial stringency. . . .” S.

Rep. No. 63-133, at 10 (1913). Although the proposed leg-

islation was to provide member banks with a return on the

use of their funds, the Senate Report noted that “the sta-

bility of the business of the bank, and the peace of mind it

will give to the bankers in having freedom from constant

anxiety, would more than compensate them, even if the fi-

nancial advantages did not do so.” Id. at 12.

Accordingly, we discern no “clear indication” of the gov-

ernment’s intent to contract in either the language of the

Federal Reserve Act or the circumstances under which it

was passed.

AMERICAN BANKERS v. UNITED STATES 13

The additional evidence on which Washington Federal

relies, primarily for its express contract theory, does noth-

ing to remedy this deficiency. For example, the July 17,

2013 letter from the BSF merely states that Washington

Federal’s application and payment have been processed

and informs Washington Federal of some of the obligations

and benefits associated with membership in the Federal

Reserve System. Washington Federal points to the letter’s

statement that “[d]ividends are paid at the statutory rate

of 6 percent per annum, or $1.50 per share semi-annually.”

J.A. 65. But this is simply a statement of policy based on

the statutory dividend rate in effect at the time, not the

language of a promise or contractual undertaking. See

Chattler v. United States, 632 F.3d 1324, 1330 (Fed. Cir.

2011) (“[T]he obligation of the government, if it is to be held

liable, must be stated in the form of an undertaking, not as

a mere prediction or statement of opinion or intention.

Likewise statements of information or definition are not

statements of obligation.” (internal citations and quotation

marks omitted)).

Because Washington Federal did not plead facts suffi-

cient to establish the government’s intent to contract, the

complaint fails to state a plausible claim for breach of con-

tract. Accordingly, this claim was properly dismissed. 6

6 Washington Federal’s claim for breach of implied

duty of good faith and fair dealing likewise depends on the

existence of a valid contract. See Centex Corp. v. United

States, 395 F.3d 1283, 1304 (Fed. Cir. 2005) (“The covenant

of good faith and fair dealing is an implied duty that each

party to a contract owes to its contracting partner.”).

Therefore, this claim was also properly dismissed.

14 AMERICAN BANKERS v. UNITED STATES

B.

We now turn to Washington Federal’s Fifth Amend-

ment takings claim. The complaint sets forth two takings

theories: (1) by enacting the FAST Act, the government de-

prived Washington Federal of its “property interest[] in the

promised six percent dividend,” J.A. 57 ¶ 92; and (2) by

paying dividends at a rate lower than six percent, the gov-

ernment effected “a taking of [Washington Federal’s] capi-

tal investment[] in Federal Reserve Bank stock without

just compensation in the form of a market return on the

invested capital,” J.A. 57 ¶ 93. Under either theory, Wash-

ington Federal failed to state a plausible takings claim.

To state a claim for a taking under the Fifth Amend-

ment, a plaintiff must identify a legally cognizable property

interest. Tex. State Bank v. United States, 423 F.3d 1370,

1378 (Fed. Cir. 2005). “The Constitution neither creates

nor defines the scope of property interests compensable un-

der the Fifth Amendment.” Conti v. United States, 291

F.3d 1334, 1340 (Fed. Cir. 2002) (citing Bd. of Regents of

State Colls. v. Roth, 408 U.S. 564, 577 (1972)). Property

interests arise from “existing rules and understandings

and background principles derived from an independent

source, such as state, federal, or common law. . . .” Air Peg-

asus of D.C., Inc. v. United States, 424 F.3d 1206, 1213

(Fed. Cir. 2005) (internal quotation marks omitted). To

support a takings claim, a property interest must be more

than a “mere unilateral expectation or an abstract need.”

Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S.

155, 161 (1980).

Under its first takings theory, Washington Federal as-

serts a property interest in its “contractual and statutory

rights to receive a six percent dividend on Federal Reserve

Bank stock . . . .” J.A. 57 ¶ 90. While contract rights are a

form of property that may be compensable under the Fifth

Amendment, see Cienega Gardens v. United States, 331

F.3d 1319, 1329–30 (Fed. Cir. 2003), the complaint does not

AMERICAN BANKERS v. UNITED STATES 15

establish that Washington Federal had a contractual right

to a six percent dividend, see supra Section II.A.2. Thus,

the trial court properly dismissed the contract-based tak-

ings claim.

Likewise, Washington Federal has not alleged a legally

cognizable property interest arising from its “statutory

rights” under the Federal Reserve Act. Absent independ-

ent evidence of a contractual undertaking, a statutory en-

titlement “creates no vested right.” Dodge, 302 U.S. at 79.

Because “Congress at all times retains the ability to amend

statutes, a power which inheres in its authority to legislate,

Congress at all times retains the right to revoke legisla-

tively created entitlements.” Members of Peanut Quota

Holders Ass’n, Inc. v. United States, 421 F.3d 1323, 1335

(Fed. Cir. 2005). Indeed, in this case, Congress “expressly

reserved” its “right to amend, alter, or repeal” any provi-

sion of the Federal Reserve Act. See § 30, 38 Stat. 275

(1913), renumbered § 31, Pub. L. No. 95−630, title I, § 101,

92 Stat. 3641 (1978). Washington Federal emphasizes

that, prior to the FAST Act, the six percent dividend rate

had remained unchanged for over 100 years. But Wash-

ington Federal’s “unilateral expectation” that Congress

would not exercise its right to amend the dividend provi-

sion going forward does not give rise to a compensable

property interest under the Fifth Amendment. See Webb’s,

449 U.S. 161; Peanut Quota Holders, 421 F.3d at 1334

(“[Appellants] have no legally protected right against the

government’s making changes in the underlying [regula-

tory] program and no right to compensation for the loss in

value resulting from the changes.”).

Washington Federal’s alternative takings theory con-

templates a taking of its underlying capital investment in

Reserve Bank stock without just compensation. 7 This

7 The trial court did not directly address this alter-

native takings theory. Washington Federal contends that

16 AMERICAN BANKERS v. UNITED STATES

claim also fails. Washington Federal’s initial subscription

of stock was part of its voluntary participation in a regula-

tory scheme, and we have held that “enforceable rights suf-

ficient to support a taking claim against the United States

cannot arise in an area voluntarily entered into and one

which, from the start, is subject to pervasive Government

control.” Mitchell Arms, Inc. v. United States, 7 F.3d 212,

216 (Fed. Cir. 1993) (internal quotation marks omitted); see

also Commonwealth Edison Co. v. United States, 271 F.3d

1327, 1339 (Fed. Cir. 2001) (“[R]egulatory actions requiring

the payment of money are not takings.”). Furthermore, un-

der the Federal Reserve Act, Washington Federal can sur-

render its stock and obtain a refund of its paid-in capital.

See 12 U.S.C. §§ 287, 321. Thus, the requirement that

member banks subscribe to reserve bank stock under the

Federal Reserve Act does not constitute a regulatory tak-

ing.

remand is necessary for the trial court to rule on this issue

in the first instance. We conclude, however, that principles

of judicial economy counsel against remand, and whether

Washington Federal has adequately stated a claim under

its alternative takings theory is an issue amenable to reso-

lution for the first time on appeal. See Glaxo Grp. Ltd. v.

TorPharm, Inc., 153 F.3d 1366, 1371 (Fed. Cir. 1998) (not-

ing that “an appellate court may choose to decide [an] issue

even if not passed on by the trial court” where the issue “is

one of law” and “has been fully vetted by the parties on ap-

peal”); Singleton v. Wulff, 428 U.S. 106, 121 (1976) (“The

matter of what questions may be taken up and resolved for

the first time on appeal is one left primarily to the discre-

tion of the courts of appeals, to be exercised on the facts of

individual cases.”).

AMERICAN BANKERS v. UNITED STATES 17

Because the complaint fails to allege facts sufficient to

support a taking under the Fifth Amendment, the trial

court properly dismissed this claim under RCFC 12(b)(6).

III

For the foregoing reasons, we conclude that the com-

plaint fails to state a claim upon which relief may be

granted. Thus, we affirm the trial court’s grant of the gov-

ernment’s motion to dismiss Washington Federal’s claims

under RCFC 12(b)(6).

AFFIRMED