What is the question presented in Calcutt v. FDIC?

1. Whether, when a court of appeals identifies a legal error in an agency’s decision, the proper remedy is to remand to the agency for further proceedings, or whether the court may instead conduct its own de novo review of the record and reach its own factual findings to support the agency’s decision. 2. Whether the separation-of-powers concerns identified in Seila Law LLC v. CFPB, 140 S. Ct. 2183 (2020), and Collins v. Yellen, 141 S. Ct. 1761 (2021), require a court to vacate an agency action taken by an official who is unconstitutionally insulated from presidential removal, without a showing that the removal restriction caused the specific harm of which the party complains.

Docket 22-714

Calcutt v. FDIC

The Supreme Court ruled that when a federal agency makes a legal error, an appeals court must send the case back to the agency rather than reviewing the factual record itself. This decision reversed a lower court's attempt to uphold FDIC sanctions against a former bank CEO using its own legal rationale.

Status: Decided
Appeal from: United States Court of Appeals for the Sixth Circuit
Decision released: May 22, 2023

Decision briefing

The case in plain English

Start with the holding, why it matters, and the strongest takeaways from the opinions.

What Happened

The Supreme Court ruled that when a federal agency makes a legal mistake, an appeals court must send the case back to the agency for a new look. In this case, the Sixth Circuit Court of Appeals tried to fix an error by the FDIC by looking at the facts itself, but the Supreme Court said that was not allowed.

Why It Matters

This decision protects the rights of individuals and businesses facing government sanctions by ensuring agencies follow the correct legal rules. It prevents courts from making their own factual findings to support a government penalty that was originally based on a mistake.

The Big Picture

The ruling reinforces the boundary between the executive branch, which runs agencies like the FDIC, and the judicial branch. It ensures that agencies remain responsible for their own decisions rather than having courts do their work for them.

What the Justices Said

The Court issued a per curiam (an unsigned opinion by the whole court) decision reversing the lower court's ruling.

“When an agency commits legal errors, the reviewing court must remand the case to the agency.”
— Justice Per Curiam(majority)

The Bottom Line

Courts cannot fix an agency's legal errors by doing the agency's job; they must send the case back for a do-over.

What's Next

The case will return to the lower court and likely back to the FDIC for further proceedings. Lower courts across the country must now follow this rule when they find mistakes in agency decisions.

What was the core dispute in this case?

The case started when a bank CEO challenged sanctions from the FDIC. The appeals court found the FDIC made a mistake but tried to uphold the penalty anyway.

What are the real-world consequences for people facing agency penalties?

People and businesses have a better chance at a fair process. If an agency breaks the rules, a court cannot simply invent new reasons to punish them.

What is the specific legal rule the Court clarified?

The Court clarified the 'remand (sending a case back) rule.' Courts must remand cases to agencies rather than conducting their own de novo (starting from the beginning) reviews.

What is the next procedural step for this specific case?

The case goes back to the Sixth Circuit Court of Appeals. That court must now send the matter back to the FDIC to fix its original legal errors.

How does this fit into the broader trend of administrative law?

This ruling shows the Court is closely watching how much power federal agencies have. It ensures agencies stay within their legal limits when punishing citizens.

Where things stand