No Magic Words: Fifth Circuit Holds § 1786(k)(1) Explicitly Bars District Court Pre‑Enforcement Review of NCUA Proceedings

Introduction

In Moats v. National Credit Union Administration Board, the United States Court of Appeals for the Fifth Circuit affirmed the dismissal of a pre‑enforcement constitutional challenge brought in federal district court against the National Credit Union Administration (NCUA). The panel (Judges Wiener, Douglas, and Ramirez; opinion by Judge Wiener) held that 12 U.S.C. § 1786(k)(1) explicitly strips district courts of jurisdiction to enjoin or otherwise affect NCUA enforcement proceedings, including when the target raises structural constitutional claims.

The case arises from an NCUA administrative enforcement action against Jeffrey Moats, the former CEO of Edinburg Teachers Credit Union. After Edinburg was placed in conservatorship and the NCUA terminated Moats, he sued for post‑termination benefits in state court. On the eve of the credit union’s answer, the NCUA served a Notice of Charges under § 1786. Moats then filed a federal district court action under 28 U.S.C. § 1331, seeking to halt the administrative case and asserting four constitutional challenges: (1) the NCUA Administrative Law Judge (ALJ) is unconstitutionally insulated from removal; (2) the administrative forum deprives him of the Seventh Amendment right to a jury; (3) the cumulative effect violates due process; and (4) the in‑house proceeding violates the nondelegation doctrine. The administrative matter was stayed by agreement pending the federal suit. The district court dismissed for lack of subject matter jurisdiction under § 1786(k)(1).

The sole issue on appeal was narrow: whether § 1786(k)(1) explicitly precludes district court jurisdiction over suits seeking to enjoin or otherwise affect NCUA enforcement notices and orders. The Fifth Circuit answered yes and affirmed.

Summary of the Judgment

The Fifth Circuit held that 12 U.S.C. § 1786(k)(1) expressly deprives district courts of jurisdiction to “affect by injunction or otherwise the issuance or enforcement of” NCUA notices or orders. The court emphasized the breadth of “any” in the preclusion clause.
Relying on its concurrently issued opinion in Burgess v. Whang (holding that identically worded § 1818(i)(1) likewise explicitly precludes district court jurisdiction) and on Supreme Court precedent in MCorp Financial, the court concluded § 1786’s text controls.
The court rejected the argument that, under Shalala v. Illinois Council, explicit preclusion requires a cross‑reference to § 1331. There is no “magic words” requirement. Channeling claims through the agency with eventual court of appeals review is sufficient.
Because review is available in the courts of appeals after a final agency order, constitutional claims are not rendered remediless; they can be addressed on petition for review, as illustrated by cases like SEC v. Jarkesy.
Result: The district court lacked subject matter jurisdiction; dismissal affirmed.

Detailed Analysis

I. Statutory Framework and the Text That Did the Work

Section 1786 governs NCUA enforcement. Its jurisdiction‑channeling provision states:

“[E]xcept as otherwise provided in this section or section 1790d of this title, no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under this section or section 1790d of this title or to review, modify, suspend, terminate, or set aside any such notice or order.” 12 U.S.C. § 1786(k)(1).

This language mirrors the FDIC/OCC analogue, 12 U.S.C. § 1818(i)(1). The Fifth Circuit treats the two regimes as materially identical for jurisdictional‑preclusion purposes. Where the text explicitly withdraws jurisdiction to “affect by injunction or otherwise” an agency “notice or order,” pre‑enforcement suits seeking to halt or alter an ongoing administrative process may not be heard in district court.

II. Precedents Cited and Their Influence

Board of Governors v. MCorp Financial, Inc., 502 U.S. 32 (1991): The Supreme Court construed § 1818(i)(1)’s materially identical “no court shall have jurisdiction” clause as expressly barring district courts from enjoining a banking regulator’s ongoing enforcement action. MCorp is the foundational authority for explicit preclusion in bank‑supervision enforcement. The Fifth Circuit views § 1786 the same way.
Burgess v. Whang (5th Cir. 2025): In a companion decision, the Fifth Circuit held § 1818 explicitly precludes district court jurisdiction over pre‑enforcement challenges and rejected an argument that constitutional claims require a clear‑statement carve‑out. Burgess’s reasoning directly controls by analogy here, given the textual identity and regulatory context.
Bank of Louisiana v. FDIC, 919 F.3d 916 (5th Cir. 2019): Earlier circuit precedent dissected explicit vs. implicit preclusion and looked to whether a statute “expressly limits” jurisdiction conferred by § 1331. Moats harmonizes and conclusively aligns that line of cases with Burgess/MCorp for explicit preclusion in the banking/credit‑union context.
Cochran v. SEC, 20 F.4th 194 (5th Cir. 2021) (en banc), aff’d sub nom. Axon Enterprise, Inc. v. FTC, 598 U.S. 175 (2023): Cochran/Axon permitted district court jurisdiction over structural constitutional challenges to SEC/FTC proceedings because those statutes lacked an explicit preclusion clause like § 1818/§ 1786; the question there was implicit preclusion under Thunder Basin. Moats underscores that Axon’s pathway does not apply when Congress has expressly foreclosed district court jurisdiction.
Free Enterprise Fund v. PCAOB, 561 U.S. 477 (2010) and Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994): These cases provide the implicit preclusion framework. Moats clarifies that where explicit preclusion controls, courts need not reach Thunder Basin’s factors.
Elgin v. Department of Treasury, 567 U.S. 1 (2012) and Webster v. Doe, 486 U.S. 592 (1988): Burgess (incorporated here) explained that Webster’s clear‑statement rule for constitutional claims does not apply when meaningful judicial review exists—namely, in the courts of appeals after final agency action. Elgin confirms that channeling constitutional claims into a statutory review scheme is permissible.
Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (2000): Moats rebuffs the contention that Shalala demands a citation to § 1331 to achieve explicit preclusion. Shalala’s focus was on channeling within the Social Security/Medicare scheme and the distinction between delayed review (permitted) versus no review at all (disfavored). Moats reads Shalala as endorsing channeling where meaningful later review is available—not as imposing any “magic words” requirement for jurisdictional withdrawal.
McNary v. Haitian Refugee Center, Inc., 498 U.S. 479 (1991) and Califano v. Sanders, 430 U.S. 99 (1977): Cited in Shalala to emphasize that channeling does not equate to denial of judicial review; courts of appeals retain “adequate authority” to resolve constitutional and statutory questions on review of final agency action.
SEC v. Jarkesy, 603 U.S. 109 (2024): The court invokes Jarkesy to illustrate that courts of appeals can and do remedy constitutional defects in agency enforcement schemes upon judicial review. This undermines the notion that pre‑enforcement district court access is necessary to secure a remedy.

III. The Court’s Legal Reasoning

The Fifth Circuit’s reasoning is fundamentally textual, then confirmatory by precedent:

Text controls. Section 1786(k)(1) says “no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order.” The court emphasized the breadth of “any,” echoing the district court’s observation that “any means any.” Declaratory and injunctive relief that would halt or alter the ongoing administrative process are foreclosed.
Identical sibling statute, identical result. Because § 1786’s language mirrors § 1818’s, the Fifth Circuit’s fresh holding in Burgess (and the Supreme Court’s instruction in MCorp) dictates explicit preclusion.
No “magic words” requirement. The appellant argued Shalala requires Congress to reference § 1331 to foreclose federal question jurisdiction. The court rejected this, explaining Shalala’s context: it approved channeling so long as judicial review remains available. Moats reaffirms that Congress need not cite § 1331 by number to make an explicit jurisdictional withdrawal effective.
Remedy exists via appellate review. Because the statute furnishes direct review of final NCUA orders in the courts of appeals, constitutional arguments are not lost; they are simply postponed until judicial review, which remains fully empowered to resolve them.
No need to reach implicit preclusion. Given the express statutory bar, the Thunder Basin implicit‑preclusion analysis is unnecessary.

IV. What This Decision Does—and Does Not—Resolve

Does: Clarify that in the Fifth Circuit, district courts lack jurisdiction to entertain pre‑enforcement challenges—including structural constitutional claims—to NCUA actions governed by § 1786.
Does: Align the NCUA regime with the FDIC/OCC regime under § 1818 for explicit preclusion of district court jurisdiction.
Does Not: Decide the merits of Moats’s constitutional claims (ALJ removal, Seventh Amendment, due process, non‑delegation). Those issues remain to be raised and reviewed after final agency action.
Does Not: Foreclose judicial review altogether. It channels claims to the court of appeals on petition for review.

V. Practical Impact and Forward‑Looking Implications

The decision has immediate and substantial consequences for parties regulated by the NCUA and for litigation strategy in administrative enforcement matters within the Fifth Circuit.

1. Channeling is mandatory for NCUA enforcement targets

Parties cannot file pre‑enforcement district court suits to halt NCUA proceedings on constitutional or structural grounds. Any suit seeking to “affect by injunction or otherwise” a notice or order is barred.
The proper path is to proceed through the administrative process, ensure constitutional objections are preserved, and seek court of appeals review of any final adverse order.

2. Axon’s reach is cabined by express preclusion clauses

After Axon, many litigants attempted to bring structural constitutional challenges in district courts. Moats, following Burgess and MCorp, confirms that approach is unavailable where Congress has explicitly withdrawn district court jurisdiction (as in § 1786 and § 1818).

3. Constitutional claims remain viable—but at a different time and place

Courts of appeals retain full authority to resolve constitutional challenges to the NCUA’s enforcement scheme on petitions for review of final orders. Jarkesy illustrates that structural defects can be corrected at that stage.
Practitioners should build a careful record, state constitutional objections, and seek appropriate stays from the agency or the court of appeals when warranted.

4. Harmonization across banking regulators

By confirming that § 1786 operates like § 1818, the Fifth Circuit aligns NCUA enforcement with FDIC/OCC practice. Targets across these regimes should expect the same jurisdictional rule: no pre‑enforcement district court suits to interfere with notices or orders.

5. Residual pathways are narrow

Although the Supreme Court recognizes a strong presumption in favor of judicial review, Moats underscores that channeling is not a denial of review. Only where channeling would amount to no meaningful review at all might different considerations arise; Moats presents the ordinary case of delayed—not denied—review.

Complex Concepts Simplified

Subject matter jurisdiction: A court’s power to hear a case. If Congress withdraws jurisdiction by statute, a federal court cannot adjudicate the case, no matter how compelling the claim.
Explicit vs. implicit preclusion: - Explicit preclusion occurs when a statute plainly says courts have no jurisdiction over certain matters (e.g., § 1786(k)(1)). - Implicit preclusion arises when a statute creates a review scheme suggesting Congress intended to channel claims away from district courts even without an express bar; courts apply the Thunder Basin factors to decide.
Channeling: Requiring parties to proceed through an agency’s internal process first, with judicial review later (usually in a court of appeals). Channeling delays review but does not deny it.
“Affect by injunction or otherwise”: Broad statutory phrasing that bars district courts from granting relief—injunctions, declaratory judgments, or other orders—that would halt or alter an ongoing agency enforcement action.
Pre‑enforcement vs. post‑enforcement review: - Pre‑enforcement: Suits filed before the agency concludes its process, typically seeking to stop the proceeding. - Post‑enforcement: Judicial review after the agency issues a final order.
Structural constitutional claims: Challenges to the framework of agency adjudication (e.g., ALJ removal protections, nondelegation, Seventh Amendment jury rights), as opposed to fact‑specific defenses.

Conclusion

Moats cements a clear, administrable rule in the Fifth Circuit: 12 U.S.C. § 1786(k)(1) explicitly withdraws district court jurisdiction over pre‑enforcement challenges to NCUA notices and orders, even when those challenges allege structural constitutional defects. In aligning § 1786 with § 1818 and expressly rejecting the notion that Congress must cite § 1331 to make such a withdrawal effective, the court reaffirms that “channeling” is constitutionally permissible where meaningful judicial review remains. The ultimate forum for constitutional adjudication in NCUA enforcement is the court of appeals on petition for review of a final order—not the district court midstream.

Key takeaways:

“Any means any”: § 1786(k)(1)’s text forecloses district court jurisdiction to affect NCUA enforcement actions.
No “magic words” are required; explicit preclusion does not hinge on an express reference to § 1331.
Structural constitutional claims are preserved for—and can be remedied on—appellate review after final agency action.
In the banking and credit‑union enforcement sphere, Axon’s district‑court route is generally unavailable where statutes mirror § 1786/§ 1818.