United States v. Gaubert

Thomas Gaubert (plaintiff) was chairman and largest shareholder of Independent American Savings Association (IASA), a federally insured savings and loan. Federal regulators pressured Gaubert to sign an agreement removing him from IASA's management and personally guaranteeing its net worth, as a condition of approving a merger with a failing thrift. Regulators later forced out IASA's board and installed their own recommended replacements, then became heavily involved in IASA's daily operations. Although IASA had been financially sound under Gaubert, the new management soon reported a substantial negative net worth. Gaubert sued the federal government for $100 million under the Federal Tort Claims Act (FTCA), alleging the regulators were negligent. The court of appeals ruled for Gaubert, holding the regulators' conduct was not protected by the FTCA's discretionary-function exception.