United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued April 12, 2013                  Decided May 21, 2013

                         No. 12-5170

 DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE
                 FOR THE TRUSTS,
                    APPELLEE
      ANCHORAGE CAPITAL GROUP, L.L.C., ET AL.,
                   APPELLANTS

                              v.

    FEDERAL DEPOSIT INSURANCE CORPORATION, IN ITS
 CAPACITY AS RECEIVER OF WASHINGTON MUTUAL BANK,
                        ET AL.,
                      APPELLEES


        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:09-cv-01656)


    William W. Taylor III argued the cause for appellants. With
him on the briefs were Shawn P. Naunton and Thomas P.
Vartanian.

    Jerome A. Madden, Counsel, Federal Deposit Insurance
Corporation, argued the cause for appellees FDIC-Receiver.
With him on the brief were Kathryn R. Norcross, Acting
Assistant General Counsel, and Lawrence H. Richmond, Senior
Counsel. Colleen J. Boles, Assistant General Counsel, Federal
                                2

Deposit Insurance Corporation, Scott H. Christensen, and Robert
L. Shapiro entered appearances.

   Brent J. McIntosh argued the cause for appellees JP Morgan
Chase Bank, et al. With him on the brief was Robert A. Sacks.

     Talcott J. Franklin and Dennis C. Taylor were on the brief
for appellee Deutsche Bank National Trust Company, as Trustee
for the Trusts. Tanya S. Chutkan entered an appearance.

   Before: TATEL, Circuit Judge, and SILBERMAN and
SENTELLE, Senior Circuit Judges.

    Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.

    Concurring opinion filed by Senior Circuit Judge
SILBERMAN.

     SILBERMAN, Senior Circuit Judge: Appellants, holders of
senior notes issued by Washington Mutual — a failed bank —
sought to intervene in litigation between Deutsche Bank, the
FDIC (Washington Mutual’s receiver), and J.P. Morgan Chase.
The district court denied intervention under Rule 24 of the
Federal Rules of Civil Procedure. We affirm, but conclude that
the appellants lack standing.

                                I

     Prior to its collapse, Washington Mutual was the sixth-
largest bank in the United States; its closure and receivership is
the largest bank failure in American financial history. In
September 2008, the U.S. Office of Thrift Supervision seized
Washington Mutual Bank and placed it into receivership with
                                   3

the FDIC.1 At the same time, the FDIC entered into a Purchase
and Assumption Agreement with J.P. Morgan, under which J.P.
Morgan agreed to purchase all of Washington Mutual’s assets,
including its subsidiaries, and certain of its liabilities. FDIC
also agreed to indemnify J.P. Morgan for losses related to any
liabilities that J.P. Morgan did not assume under the Agreement,
and the FDIC’s corporate entity guaranteed this indemnity
obligation.

     In August 2009, Deutsche Bank sued the FDIC in the
District Court for the District of Columbia, alleging breach-of-
contract claims in connection with a series of residential
mortgage securitization trusts created, sponsored, or serviced by
Washington Mutual and its subsidiaries, for which Deutsche
Bank served as trustee.          Deutsche Bank asserted that
Washington Mutual agreed to repurchase loans that violated
representations and warranties contained in the governing
documents for these trusts, and it sought several billion dollars
in damages from Washington Mutual’s successor.

     FDIC filed a motion to dismiss, arguing that it was not
liable for any of these alleged liabilities under the securitization
trusts because it transferred those liabilities and obligations to
J.P. Morgan. Deutsche Bank then filed an amended complaint
adding J.P. Morgan as a defendant and seeking a declaratory
judgment from the district court as to whether FDIC or J.P.
Morgan had assumed these liabilities, or whether both assumed
them in whole or in part. Those three parties — Deutsche Bank,


     1
        The FDIC’s function as a receiver for failed financial
institutions, defined in 12 U.S.C. § 1821, is separate from its function
as a corporate insurer of deposit accounts, defined in 12 U.S.C.
§ 1823. The parties refer to these entities as FDIC-Receiver and
FDIC-Corporate respectively, but we will use “FDIC” to refer to its
role as receiver, unless otherwise specified.
                                   4

FDIC, and J.P. Morgan — are engaged in ongoing, three-way
litigation about two principal issues: (1) which successor
assumed Washington Mutual’s liabilities for Deutsche Bank’s
claims; and (2) the merits and proper damages for those
underlying breach-of-contract claims.

     But that’s only background for the case on appeal. A group
of direct holders in Washington Mutual senior notes moved to
intervene in this action as of right under Rule 24(a) of the
Federal Rules of Civil Procedure.2 FDIC has recognized these
senior notes as legitimate liabilities of the Washington Mutual
receivership, so the Proposed Intervenors will be entitled to
some pro rata share of the receivership’s assets when FDIC
administers payment to Washington Mutual’s creditors. These
note holders sought to intervene as defendants, alleging that any
judgment in Deutsche Bank’s favor against FDIC could reduce
or exhaust the funds in the receivership and therefore jeopardize
their recovery. The district court denied appellants’ motion
under Rule 24(a) on the ground that appellants’ alleged interests
“have yet to crystallize” because they turn on a prior question of
contract interpretation — if J.P. Morgan assumed the relevant
liabilities under the Agreement, the FDIC would be off the hook,
and therefore the appellants would have no further interest in
Deutsche Bank’s litigation. This appeal followed.

                                   II

    Appellants’ claim to intervene is challenged by all three of
the basic litigants. Their challenges are based on Rule 24, as
well as Article III and prudential standing. In their briefs, these


     2
      The Proposed Intervenors also included investment advisors of
these direct holders authorized to act on their behalf, but the district
court held that these advisers lacked standing because they faced no
injury, and the appellants do not appeal this ruling.
                                5

concepts are intertwined. Indeed, in one of appellee’s briefs,
one paragraph seems to weave through all three concepts
without an effort to separate them.

     We must start our analysis with a discussion of standing
because, of course, that implicates our jurisdiction, see Fund for
Animals, Inc. v. Norton, 322 F.3d 728, 732 (D.C. Cir. 2003)
(citing Sierra Club v. EPA, 292 F.3d 895, 898 (D.C. Cir. 2002)),
but we should first describe appellants’ Rule 24 arguments —
both because they make up the bulk of the parties’ briefing, but
also because the Rule 24 and standing requirements are similar.

    Rule 24(a) provides in relevant part that:

         “[o]n timely motion, the court must permit anyone to
         intervene who . . . claims an interest relating to the
         property or transaction that is the subject of the action,
         and is so situated that disposing of the action may as a
         practical matter impair or impede the movant’s ability
         to protect its interest, unless existing parties adequately
         represent that interest.”

FED. R. CIV. P. 24(a)(2). We have drawn from the language of
this rule four distinct requirements that intervenors must
demonstrate: “(1) the application to intervene must be timely;
(2) the applicant must demonstrate a legally protected interest in
the action; (3) the action must threaten to impair that interest;
and (4) no party to the action can be an adequate representative
of the applicant’s interests.” Karsner v. Lothian, 532 F.3d 876,
885 (D.C. Cir. 2008) (quoting SEC v. Prudential Sec. Inc., 136
F.3d 153, 156 (D.C. Cir. 1998)).

     Appellants argue that their motion is timely because the
underlying litigation is still at a nascent stage; that their legal
interest in the receivership funds is threatened by Deutsche
                                  6

Bank’s suit; and that the FDIC does not adequately represent
their interests because it has a conflict of interest arising from its
indemnity obligation to J.P. Morgan. Most importantly,
appellants argue that the district court’s holding that their claim
had not crystallized misunderstood the core of their concern.
They fear that the FDIC, perhaps in order to protect the assets of
the FDIC’s corporate entity from an adverse judgment, will
settle with J.P. Morgan at too low a figure. In other words the
FDIC, unlike a typical receiver, has skin in the game — a
downside risk — that could affect its calculation of the strength
of the claim vis-a-vis J.P. Morgan. As we deduce their
objective, appellants wish to intervene to be able to block such
a settlement — perhaps to have negotiating leverage.

     Appellees — which include Deutsche Bank, FDIC, and J.P.
Morgan, all of whom oppose intervention — argue that the
motion was filed more than two years after the initial complaint
was filed with no justification for the delay; that appellants have
no interest in the contract interpretation and breach-of-contract
claims actually at issue in the underlying litigation; and that the
FDIC adequately represents appellants’ interests because it is
statutorily required to maximize the value of creditors’ assets
and is advancing the same position and arguments as the
Proposed Intervenors.3

    It should be noted that, given the implications of appellants’
argument, they are swimming up river. If these bond holders are


     3
      The Proposed Intervenors have suggested that they are raising
an argument the FDIC has not — specifically, that the trust
agreements between Deutsche Bank and Washington Mutual are
“Qualified Financial Contracts” under 12 U.S.C. § 1821(e)(8)(D). But
appellants did not raise this argument below, and in any event,
Deutsche Bank has itself raised this issue in its amended complaint
naming J.P. Morgan as a defendant.
                                7

entitled to intervene, there is no apparent reason why any
creditor of Washington Mutual, no matter how small, could be
denied a similar opportunity. At oral argument, counsel for
appellants responded that any future intervenor could be rejected
on the ground that appellants themselves provided adequate
representation under Rule 24. But another creditor might assert
a different view of the underlying litigation as a reason why
appellants’ motivation was different than theirs. Morever, a
precedent allowing an ordinary creditor to intervene in litigation
involving a receiver would presumably have widespread effect.

                            * * *

     Turning to standing, appellants assert initially that as
defendant-intervenors, they are not obliged to demonstrate
Article III standing at all. That contention is drawn from our
dicta in Roeder v. Islamic Republic of Iran, 333 F.3d 228 (D.C.
Cir. 2003). We observed there in passing that “[r]equiring
standing of someone who seeks to intervene as a defendant runs
into the doctrine that the standing inquiry is directed at those
who invoke the court’s jurisdiction.” Id. at 233 (internal citation
omitted). But we went on to hold that, in that case, the United
States as defendant-intervenor did have standing. Id. at 233-34.
We relied on our prior decision in Rio Grande Pipeline Co. v.
FERC, 178 F.3d 533 (D.C. Cir. 1999), which acknowledged a
circuit split on whether intervenors must possess Article III
standing, but which unequivocally came down on the side of
requiring standing (not distinguishing between plaintiffs and
defendants). Id. at 538. It is therefore circuit law that
intervenors must demonstrate Article III standing, Fund for
Animals, 322 F.3d at 732-33, and we think appellants fail to do
so here.

     It is axiomatic that Article III requires a showing of injury-
in-fact, causation, and redressability. The leading Supreme
                                8

Court case, Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992),
describes the first element as including a showing of an invasion
of a legally protected interest which is (a) concrete and
particularized, and (b) actual or imminent, not conjectural or
hypothetical. Id. at 560. Appellants point to their economic
interest in the receivership funds as a legally protected interest.
That much is clearly correct. But appellants are not persuasive
in showing that their economic interest faces an imminent,
threatened invasion — i.e., one that is not conjectural or
speculative.

     First, at least two major contingencies must occur before
Deutsche Bank’s suit could result in economic harm to
appellants: (1) the district court must interpret the Agreement to
find that FDIC did not transfer the relevant liability to J.P.
Morgan; and (2) Deutsche Bank must prevail on the merits
against FDIC in its breach-of-contract claims. It is only if a
federal judgment concludes that the FDIC had not transferred
liability to J.P. Morgan that the receivership funds will even be
in jeopardy; if J.P. Morgan assumed the liabilities, then
appellants’ economic interest drops out entirely. Under such
circumstances, where a threshold legal interpretation must come
out a specific way before a party’s interests are even at risk, it
seems unlikely that the prospect of harm is actual or imminent.
Cf. Sea-Land Serv., Inc. v. Dep’t of Transp., 137 F.3d 640, 648
(D.C. Cir. 1998) (noting that the creation of adverse legal
precedent is insufficient to create Article III standing, even
where future litigation is foreseeable).

     But second, and more decisively, the real alleged threat to
appellants’ legally protected interest is not the ostensible
concern with Deutsche Bank’s possible subsequent claim
against the FDIC, but the prospect that the FDIC would enter
into what appellants regard as an unfavorable settlement. And
the difficulty with that claim — besides ignoring the FDIC’s
                                  9

statutory obligation to represent creditors fairly — is that it is
hopelessly conjectural. The district court seemed to suggest that
it was only after the contract interpretation was settled that
appellants’ interests would crystallize, but paradoxically, at that
point in the litigation, appellants would no longer be concerned
with intervention. Indeed, their brief acknowledged that
resolution of the contract interpretation is “the principal dispute
in which the Intervenors seek to participate.” After this question
is settled, there is no apparent reason why appellants would be
unwilling to rely on the FDIC to defend against Deutsche
Bank’s claims. Appellants might well have standing under
Article III at that point (though it would be virtually impossible
to show under Rule 24 that existing parties do not adequately
protect their interests), but they do not have it now.

     Even if appellants enjoyed Article III standing — which
they do not — they would still run afoul of prudential standing
requirements, which could be thought similar to the concept
embodied in Rule 24 that a proposed intervenor must have an
interest “relating to” the property or transaction at issue in the
litigation.4 Appellants lack prudential standing to enforce the
terms of the Agreement because they were neither parties nor
intended third-party beneficiaries to this contract. See Interface

     4
       Prudential standing, like Article III standing, is a threshold,
jurisdictional concept. Steffan v. Perry, 41 F.3d 677, 697 (D.C. Cir.
1994) (en banc). Federal courts may consider third-party prudential
standing even before Article III standing, see Kowalski v. Tesmer, 543
U.S. 125, 129 (2004), so there is no problem deciding prudential
standing as an alternative holding — as we have previously found it
appropriate to do. See Haitian Refugee Ctr. v. Gracey, 809 F.2d 794,
807 (D.C. Cir. 1987). On the other hand, it would be improper to
decide the Rule 24 issue (the “merits” question on this appeal), but we
think it appropriate to discuss the “relating to” language of the rule
because we see it as closely bound up with the prudential standing
inquiry.
                                  10

Kanner, LLC v. JPMorgan Chase Bank, N.A., 704 F.3d 927,
932-33 (11th Cir. 2013); GECCMC, 2005-C1 Plummer St.
Office L.P. v. JPMorgan Chase Bank, N.A., 671 F.3d 1027, 1033
(9th Cir. 2012); see also SEC v. Prudential Sec. Inc., 136 F.3d
153, 160 (D.C. Cir. 1998) (“Because the parties to the consent
decree clearly indicated that third parties such as appellants are
not intended third party beneficiaries, appellants have no legally
protected interest in enforcing the terms of the consent
decree.”).5

    Of course, appellants are seeking to intervene, not to bring
a cause of action under the Agreement itself. But appellants
concede that they are not intended beneficiaries, so the basic
point remains that the contract does not protect their rights.
Insofar as the Proposed Intervenors wish to be heard on the
specific question of contract interpretation, they are effectively
seeking to enforce the rights of third parties (here, the FDIC),
which the doctrine of prudential standing prohibits. Steffan v.
Perry, 41 F.3d 677, 697 (D.C. Cir. 1994) (en banc).

     To be sure, once before we indicated that if a proposed
intervenor satisfied Article III, then that “is alone sufficient to
establish that [an intervenor] has ‘an interest relating to the
property or transaction that is the subject of the action.’” Fund
for Animals, 322 F.3d at 735 (quoting FED. R. CIV. P. 24(a)(2)).
That statement could be thought to suggest that the third-party
aspect of prudential standing is inapplicable here — and
similarly, that Rule 24’s phrase “relating to the property or



     5
      Other courts do not seem to have specifically identified this rule
as going to third-party prudential standing, but that seems to us the
most natural understanding. When a litigant is neither party to nor an
intended beneficiary of a contract, then any claim brought under that
contract must belong to a third party.
                                11

transaction that is the subject of the action” (emphasis added)
has no meaning beyond Article III’s requirements.

     In Fund for Animals, we relied on previous cases that had
equated the legally protected interest requirement of Article III
with the “interest” of Rule 24. Id. at 735. That equation is
undeniable with respect to the kind of interest that Rule 24
protects. As we have indicated, however, the “relating to”
language suggests a sort of nexus requirement more akin to
third-party prudential standing. But in Fund for Animals, we
recognized that the statute in question had been interpreted by
the Supreme Court to eliminate prudential standing
considerations and to extend standing to the full limits of Article
III. Id. at 734 n.6. The standing dispute there was only whether
the intervenor, a Mongolian agency, had adduced sufficient
evidence for the proposition that listing argali sheep as an
endangered species would adversely affect Mongolian tourism.
Id. at 733-34. Because prudential standing was irrelevant in that
case, the broad language quoted above must be understood in
context as not precluding considerations of prudential standing
under different statutes.

     We note also that other circuits have generally concluded
that a party may not intervene in support of a defendant solely
to protect judgment funds that the party wishes to recover itself.
See, e.g., Med. Liab. Mut. Ins. Co. v. Alan Curtis LLC, 485 F.3d
1006, 1008-09 (8th Cir. 2007); Mt. Hawley Ins. Co. v. Sandy
Lake Props., Inc., 425 F.3d 1308, 1311 (11th Cir. 2005); United
States v. Alisal Water Corp., 370 F.3d 915, 920 (9th Cir. 2004)
(“[A]n allegedly impaired ability to collect judgments arising
from past claims does not, on its own, support a right to
intervention. To hold otherwise would create an open invitation
for virtually any creditor of a defendant to intervene in a lawsuit
where damages might be awarded.”). We would therefore be
quite hesitant to suggest that a creditor’s general economic
                               12

interest in receivership funds, even if sufficient to support
Article III standing, would necessarily be an interest relating to
any action that threatens those funds. Be that as it may, our
holding is only that appellants lack prudential standing, not that
they fail Rule 24’s requirements.

                            * * *

     Accordingly, we conclude that appellants lack standing, and
the judgment of the district court is affirmed.

                                                     So ordered.
     SILBERMAN, Senior Circuit Judge, concurring: As our
opinion explains, Op. at 7, straightforward reliance on our prior
case law suffices to reject appellants’ argument that they need
not demonstrate standing as a defendant-intervenor. But I think
it worth noting the concerns that weigh against any alteration of
our precedent on this point.

     If we were authorized to dispense with the standing
requirement for a defendant-intervenor, then any organization or
individual with only a philosophic identification with a
defendant — or a concern with a possible unfavorable precedent
— could attempt to intervene and influence the course of
litigation. To be sure, parties seeking intervention as of right
would still need to meet the specific standards articulated in
Rule 24(a), but district courts have discretion to grant permissive
intervention under Rule 24(b), which requires only that a party
have “a claim or defense that shares with the main action a
common question of law or fact.” FED. R. CIV. P. 24(b)(1)(B).
Opening participation to parties without standing would be quite
troublesome in direct review in the court of appeals, see Rio
Grande Pipeline Co. v. FERC, 178 F.3d 533, 539 (D.C. Cir.
1999), but intolerable at the district court level, where individual
parties have substantial power to direct the flow of litigation and
affect settlement negotiation. Our rule requiring all intervenors
to demonstrate Article III standing prudently guards against this
possibility.
