IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT



                             No. 94-40377



AMERICAN BANK & TRUST OF COUSHATTA, ET AL.,

                                            Plaintiffs-Appellants,

                                versus

FEDERAL DEPOSIT INSURANCE CORPORATION,

                                            Defendant-Appellee.




            Appeal from the United States District Court
               for the Western District of Louisiana


                           (March 29, 1995)

Before HIGGINBOTHAM, SMITH, and PARKER, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

     The issue in this case is the meaning of "good faith" under

the Civil Code of Louisiana.    Participants in a loan participation

argue that the FDIC breached the duty of a lead bank to act in good

faith.    They contend that the duty of good faith is breached by

gross fault, by negligence, or even by violations of the Golden

Rule.    The district court rejected these definitions, and found a

failure of proof of malice in the record and granted summary

judgment for the FDIC.

     We agree with the reasoning of the distinguished district

court, and affirm.
                                           I.

       In 1982, Bossier Bank & Trust loaned Retamco, Inc., $18

million secured by real estate called the Retama Property.                        BB&T

then   made     four    loans    secured        by   the   Retama    Property,    all

participated in by other banks.            The first tier of $8.5 million was

secured    by   a    first   lien   on     the   Retama      Property   and   fifteen

institutions, including BB&T, and the appellants were participants.

A second lien on the tract secured a second loan for about $8

million in which BB&T and three other institutions participated.

A third lien secured a third loan shared by five institutions for

$1 million.     A fourth loan, shared by three institutions for about

$470,000, was secured by a fourth lien.

       Retamco defaulted.        BB&T failed.         The FDIC was appointed as

receiver and liquidator. The FDIC assumed the role of lead lender,

with the responsibility of liquidating the Retama Property.                       The

FDIC sold the property in 1991 for $1.2 million at public auction.

It had, however, rejected several multi-million dollar offers for

the Retama Property and had spent more than $1.9 million to

maintain it.

       Angry that the FDIC had sold the Retama Property for so

little, four of the participant banks filed this suit.                    They claim

that the FDIC violated its contractual and statutory duties by

favoring    FDIC     interests      over    theirs     and    by    mismanaging   the

liquidation.        The FDIC held a large interest in the "subordinate"

loans, and the four banks' sole interest was in the first tier




                                           2
loan.1       The banks argue that the FDIC rejected offers that would

have paid much of the debt owed to the first tier lenders, but not

the subordinate loans in which the FDIC had a substantial interest.

     The district court granted summary judgment for the FDIC on

this claim.2      The court based its ruling on the key clause of the

participation agreements, providing that BB&T (and now the FDIC)

     will exercise the same care with respect to the loan, and
     the collateral, if any, as it gives to loans and
     collateral in which it alone is interested; but BB&T
     shall not be liable for any action taken or omitted so
     long as it has acted in good faith.

Emphasizing its second half, the court ruled that the FDIC owed the

banks only a duty to perform in "good faith," and the court looked

to the Louisiana Civil Code for the definition of that critical

term.    The Louisiana Civil Code does not define "good faith," but

it does define "bad faith" as "an intentional and malicious failure

to perform."       La. Civ. Code Ann. art. 1997 cmt. c (West 1987).3

Following Louisiana law, the district court then equated "good

faith" with the lack of "bad faith."       See, e.g., Great Southwest


     1
       The FDIC had held only a .06 percent interest in the first
tier loan. In the "subordinate" loans, i.e., the second, third,
and fourth tier loans, the FDIC had held much greater interests:
77.8 percent interest in the second loan, no interest in the third
loan, and a 22.5 percent interest in the fourth loan.
         2
          The court also denied summary judgment on the FDIC's
counterclaim, which sought the banks' share of the cost of
maintaining and liquidating the Retama Property. The FDIC does not
appeal that decision.
         3
          Unlike the Civil Code, Louisiana's Commercial Laws do
define "good faith." See La. Rev. Stat. Ann. § 10:1-201(19) (West
1993) (defining good faith as "honesty in fact in the conduct or
transaction concerned"). However, neither party contends that the
Commercial Laws' definition controls.

                                    3
Fire Ins. Co. v. CNA Ins. Cos., 

, 969 (La. 1990);

Bond v. Broadway, 

, 867 (La. Ct. App. 1992), cert.

denied, 

(La. 1993); see also Commercial Nat'l Bank v.

Audubon Meadow Partnership, 

, 1139 (La. Ct. App.

1990) (analyzing bad faith as the mirror image of good faith);

Heirs of Gremillion v. Rapides Parish Police Jury, 

,

587 (La. 1986) (implying that a party has acted in good faith

unless he has acted in bad faith).        The court held that the FDIC's

actions may have been negligent, imprudent, or bumbling, but

because they were not intentionally malicious, the banks could not

state a claim.

      On appeal, the banks challenge the court's definition of good

faith.   They argue that the duty to act in good faith is breached

not only by acting in bad faith but by any of three other standards

of   care.     They   are,   in   descending   order   of   stringency,   (1)

violations of the Golden Rule, (2) negligence, or (3) gross fault.

Alternatively, the banks argue that even under the district court's

bad faith standard -- a standard more lenient to the FDIC than any

of their three candidates -- the court should have denied the

FDIC's summary judgment motion in light of the banks' evidence of

the FDIC's self-dealing.

      We reject the banks' three definitions of breaches of good

faith:   the Golden Rule, negligence, and gross fault.              We also

agree with the district court that a trier of fact could not

reasonably conclude on the facts of this record that the FDIC acted

with malice.


                                      4
                                      II.

     Louisiana no longer measures good faith by the Golden Rule.

Apparently, it once did.      In 1979, the Supreme Court of Louisiana

observed    that   implied   into   every   Louisiana   contract   was   the

equitable "'christian principle not to do unto others that which we

would not wish others should do unto us.'"        National Safe Corp. v.

Benedict & Myrick, Inc., 

, 795 (La. 1979) (quoting

La. Civ. Code Ann. art. 1965 (1977)).4        Finding that National fell

short of its implied contractual duty "to do to Benedict & Myrick

that which it would wish Benedict & Myrick to do to it," the court

found National Safe liable.         

later, the legislature revised the Civil Code5 and

reenacted the statute that National Safe relied upon -- Article

1965 -- as Article 2055.        Although the legislature stated in a

comment that it intended new Article 2055 simply to reproduce the

"substance" of old Article 1965, the legislative revisions dropped

the Golden Rule.     Old Article 1965 provided that

     The equity intended by this rule is founded in the
     christian principle not to do unto others that which we
     would not wish others should do unto us; and on the moral
     maxim of the law that no one ought to enrich himself at
     the expense of another. When the law of the land, and
     that which the parties have made for themselves by their

        4
        Curiously, the word "christian" entered this statute by a
mistake in translation from the French text. According to the Note
to Article 1965, the word should have read "religious." See 16 La.
Stat. Ann. Civ. Code (Compiled Edition) (1973) at 1120 for the
original French text.
    5
       See Brill v. Catfish Shaks of Am., Inc., 

,
1039 n.7 (E.D. La. 1989).

                                       5
     contract, are silent, courts must apply these principles
     to determine what ought to be incidents to a contract,
     which are required by equity.

La. Stat. Ann. art 1965 (West 1977) (emphasis in original.)      The

Golden Rule is absent from revised Article 2055:

          Equity, as intended in the preceding articles, is
     based on the principles that no one is allowed to take
     unfair advantage of another and that no one is allowed to
     enrich himself unjustly at the expense of another.

          Usage, as intended in the preceding articles, is a
     practice regularly observed in affairs of a nature
     identical or similar to the object of a contract subject
     to interpretation.

La. Civ. Code Ann. art 2055 (West 1987). Nevertheless, old Article

1965 resists its death.     Years after Article 1965 was revised,

federal and state courts still cite the "christian principle" of

old Article 1965, or National Safe's reference to it, without

mentioning that Article 1965, as recodified as new Article 2055,

failed to retain it.   See, e.g., Devin Tool & Supply Co. v. Cameron

Iron Works, Inc., 

, 627 n.2 (5th Cir. 1986) (per

curiam); Owl Constr. Co. v. Ronald Adams Contractor, Inc., 642 F.

Supp. 475, 479 (E.D. La. 1986); Morphy, Makofsky & Masson v. Canal

Place 2000, 

, 574 & n.8 (La. 1989); Gibbs Constr. Co.

v. Thomas, 

, 767 (La. 1987); Hendricks v. Acadiana

Profile, Inc., 

, 245-46 (La. Ct. App. 1986).   We are

hesitant then to reject the Golden Rule definition of good faith

despite its loss of its statutory source.

     We are persuaded finally to do so because we have been unable

to find a single case since National Safe was decided in 1979 that

actually applies it.   Most courts that have cited old Article 1965


                                 6
since 1979 have relied not upon the statute's "christian principle"

but upon its rule that "no one ought to enrich himself at the

expense of another."    See, e.g., Owl 

; 

.       Indeed, one Louisiana court has

suggested that the "christian principle" is nothing more than a ban

on unjust enrichment.    See 

.    Even

those courts that have used old Article 1965 to inform the meaning

of the term "good faith" have not held that the duty of good faith

demands refraining from doing unto others that which we would not

wish them to do to us.     See, e.g., Devin 

;

Gibbs 

.       In short, the Louisiana

Supreme Court's application of the Golden Rule in National Safe

appears to have been an anomaly.        We predict that the Louisiana

Supreme Court would not choose to apply it again, and, in our best

effort to replicate the Louisiana Supreme Court, we refuse to do so

here.


                                 III.

     The banks' attempt to define negligent acts as a breach of

good faith is similarly ill-founded.      Under Louisiana law a party

can act in good faith and be negligent.        In fact, the Louisiana

Supreme Court recently rejected the negligence standard:
     Although it is clear that "bad faith" or "lack of good
     faith" in this context means something more reprehensible
     than ordinary negligence, imprudence or want of skill, it
     is apparent that our courts have perceived the terms to
     include some forms of gross fault as well as intentional
     and malicious failures to perform.

Great 

(emphasis added); see also 

("The term bad faith means more than mere bad

                                  7
judgment or negligence, it implies the conscious doing of a wrong

for    dishonest         or   morally       questionable         motives.").       At   oral

argument, counsel for the banks properly conceded that he knew of

no case in Louisiana or anywhere else that stated that negligence

is a breach of good faith.

       The banks' second line of argument is that the participation

agreements         adopt      a   negligence          standard,   both   implicitly      and

explicitly. By forcing the participant banks to depend on the FDIC

to    get    the       best   price    for       the    property,      the    participation

agreements implicitly created what the banks call an "agency

coupled with an interest," which imposed upon the FDIC the duty to

act "in a manner that a reasonably prudent banker would have acted

for    his       own     interest      in     a       nonparticipated        loan."6      The

participation agreements explicitly imposed a negligence standard,

the banks argue, by demanding that the FDIC "exercise the same care

with respect to the loan, and the collateral, if any, as it gives

to loans and collateral in which it alone is interested."

       We are not persuaded that the standard the banks find in the

text       and   subtext      of   the      participation         agreements     imposes   a

negligence         standard.          As    we    read     it,    it   imposes    an    anti-

discrimination standard, which requires the FDIC to treat the


       6
        In support of their argument, the banks cite Mansura State
Bank v. Southwest Nat'l Bank, 

, 1280 (La. Ct. App.),
cert. denied, 

(La. 1989), which found that a
participation agreement can create an agency relationship, and
Franklin v. Commissioner, 

, 128 n.9 (5th Cir. 1982),
which found that the terms of the participation agreement at issue
made the lead bank the agent for the purposes of servicing of the
loan.

                                                  8
participant banks' loans the same as it treated its own loans, a

matter we will come to.


                               IV.

     Further, we agree with the district court that gross fault

cannot be a breach of good faith under Louisiana law.              The

strongest support for the banks' gross fault standard is the

Louisiana Supreme Court's statement that "our courts have perceived

[the term 'lack of good faith'] to include some forms of gross

fault."   Great 

.      Following the civil

law tradition of Louisiana, the district court elevated statutory

law over decisional law and gave Great Southwest little weight.

Because Comment c to Article 1997 of the Civil Code defined bad

faith as an intentionally malicious failure to perform, and because

the Louisiana Supreme Court had made no "definitive statement"

about the meaning of bad faith, the district court stated that it

was "not free to abrogate the Louisiana legislature's unambiguous

declarations."   (Memorandum Ruling of March 22, 1994, at 4.)

     We agree with the district court's careful adherence to

Louisiana's civil law tradition.       As an Erie court, our task is to

anticipate the Louisiana Supreme Court's interpretation of the

meaning of bad faith, see Transcontinental Gas Pipe Line Corp. v.

Transportation Ins. Co., 

, 988 (5th Cir. 1992), even

when we construe Louisiana's civil law.        See 

Supreme Court's statement in Great Southwest was dicta, sharply

contradicted by the plain text of the comment to Article 1997.      We

believe that if the Louisiana Supreme Court were hearing this case,

                                   9
it would brush aside the stray statement in Great Southwest and

follow the clear dictates of the Louisiana Code.            The only holding

of Great Southwest was that negligence was not enough.             The choice

between gross negligence and malice was not before the court.               Of

course,   these   are   common   law,    not   civil    law,    observations.

Nonetheless, they inform our prediction of the Louisiana Supreme

Court's future course.



                                    V.

     Finally,     the   banks   argue   that   the     FDIC's   actions   were

intentionally malicious.

     We review the district court's determination that even after

adequate discovery, the banks have not made a sufficient showing of

bad faith.   See FDIC v. Ernst & Young, 

, 169 (5th Cir.

1992) ("A summary judgment is proper if after adequate time for

discovery and upon motion [the nonmovant] fails to make a showing

sufficient to establish the existence of an element essential to

that party's case, and on which that party will bear the burden of

proof at trial." (internal quotation marks omitted)).              The banks

argue that the award of summary judgment was improper in light of

evidence that the FDIC engaged in self-dealing and deliberately

concealed vital information.

     The banks' first contention is that the FDIC intentionally

sacrificed the banks' interests in the first tier loan to protect

the FDIC's large interest in the subordinate loans.             They cite two

instances.      First, they argue that the FDIC elevated its own


                                    10
financial interests over the banks' by rejecting an offer that

would    have    paid   the   debt    due    most     first   tier   participants,

including       appellants,     but    none      of     the    subordinate      tier

participants, including the FDIC.             The FDIC insists that there is

no evidence that its rejection of this offer, the so-called Bearden

contract, was in bad faith.            The banks respond with deposition

testimony of a former FDIC account officer, who stated that in

liquidating the Retama Property he was "trying to do everything I

could to recover a hundred percent of the first tier participants'

monies, and attempting to extend down into the second tier, because

the FDIC's largest dollar amount was in the second tier."                        The

district court found, and we agree, that this deposition testimony

establishes only that the FDIC properly put its own interest in the

loans on a par with the other participants' interests.                    There is no

evidence that the FDIC maliciously or spitefully rejected the

Bearden contract to prevent the appellant banks from collecting.

Consequently, we agree with the district court that a reasonable

trier of fact could not conclude that the FDIC's rejection of the

Bearden contract was intentionally malicious.

     Second, the banks argue that the FDIC intentionally encouraged

a group of investors, the Straus Group, to withdraw its lucrative

offer to buy the Retama Property.                   The FDIC's self-interested

motive    was,    allegedly,    to     protect      itself    from    a    potential

countersuit.      The banks' evidence shows that the FDIC promised the

Straus Group that it would not sue the group, but this is no

evidence of bad faith.         The banks' evidence establishes that the


                                        11
FDIC determined that the deal with the Straus Group was an option

contract, not a contract of sale, which gave the FDIC no rights

enforceable by suit.    Even if the FDIC's assessment of the Straus

Group's deal were wrong, it was not unreasonable, and there is no

evidence that the decision not to sue was made in bad faith.   It is

true that the Straus Group later purchased the Retama Property for

only $1,200,000, after having offered $8,750,000 originally.   This

embarrassment, however, does not create a jury question of whether

the FDIC's failures were intentionally malicious.

     Finally, the banks argue that the FDIC intentionally and

maliciously concealed from them the existence of several offers for

the Retama Property.      They allege, for example, that the FDIC

failed to tell them about a $7 million offer from the Straus Group

in November 1988.      However, by that time the FDIC had already

committed Retama Property to auction, and the Straus Group's

earnest money would not adequately compensate it for removing the

property from the auction.    In any event, the FDIC felt it could

resume negotiations with the Straus Group if the auction did not

produce an acceptable bid.   Second, the banks allege that the FDIC

deliberately concealed from them a lucrative auction bid from one

Mr. Louis Cooper.   Yet the district court found no evidence that

the FDIC or the auction house knew Mr. Cooper had submitted a bid.

     In short, the evidence that the banks have produced -- that

the FDIC rejected the lucrative Bearden contract, that it failed to

sue the Straus Group to enforce an offer, and that it failed to

inform the banks of several offers -- at least would allow a trier


                                 12
of fact to infer that the FDIC was negligent, not intentionally

malicious.   We must agree that this is a sorry tale of bureaucratic

bungling, but the step up to intentionally malicious is too great

on this record.

     AFFIRMED.




                                 13