So, this shitty ass bank, United Western Bancorp, Inc. (UWBI) had several subsidiaries, including United Western Bank. They apparently sucked at what they did, because they were losing money like they stored it in a toilet that just kept getting flushed.
Anyway, when you own several companies as a parent company, you can file one big ass tax form each year for the parent company instead of a bunch of little forms for each of your subsidiaries, so that’s what these assholes did.
Well, one of their branches United Western Bank (UWB) lost so much damn money, they qualified for a $4,000,000 tax refund. So the parent UWBI was like, “gimme that money, bitches.” Rodriguez, they’re Chapter 7 attorney, and the petitioner here, filed one big ass return for all of UWBI, claiming the losses of UWB, and getting that big ass refund as a result.
However, the FDIC had closed down UWB (the subsidiary), and took them into receivership because they were the shittiest bank that ever banked. Now UWBI (the parent) was told that the FDIC was taking UWBI’s refund, because they argued it went to UWB since they were the source of the loss, and therefore the FDIC would use that money to pay its debtors.
But UWBI was like, “Fuck you, you government pricks. We need that money.” So one court agreed, another court didn’t, as is usual. And eventually, these assholes found their way to SCOTUS.
In 1973, the courts had ruled on a previous case where they decided that a refund of this nature, absent any other agreement, belonged to the parent company. They call this the Bob Richards rule, because that’s the case it was named after in 1973.
But the FDIC is arguing that they did have an agreement between the subsidiary and the parent, and therefore the Bob Richards rule does not apply.
You can read about the case and hear oral arguments here.
So SCOTUS is now being asked whether state law or federal law determine who gets a tax refund. Because state law would mean Rodriguez wins. SCOTUS being keen on state’s rights determined that the state can and should handle this shit, and unanimously decided for Rodriguez, telling the FDIC to go eat a bag of dicks.