John L. Lewis was injured by a vehicle owned and operated by a federal reserve bank, and brought
action alleging jurisdiction under the Federal Tort Claims Act. The District Court dismissed the case by
ruling that the federal reserve bank was not a federal agency within meaning of the Federal Tort Claims
Act and the court therefore lacked subject-matter jurisdiction. The Appeals court affirmed the decision.
The court stated “Examining the organization and function of the Federal Reserve Banks, and
applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for
purpose of the FTCA, but are independent, privately owned and locally controlled corporations.”
However, this does not imply, as so many wrongly interpret, that private individuals own the banks
for the court also stated “Each Federal Reserve Bank is a separate corporation owned by commercial
banks in its region. The stockholding commercial banks elect two thirds of each Bank’s nine member
board of directors. The remaining three directors are appointed by the Federal Reserve Board. The
Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is
exercised by its board of directors. 12
U.S.C. Sect. 301. The directors enact by-laws regulating the manner of conducting general Bank
business, 12 U.S.C. Sect. 341,
and appoint officers to implement and supervise daily Bank activities. These activities include
collecting and clearing checks, making advances to private and commercial entities, holding reserves for
member banks, discounting the notes of member banks, and buying and selling securities on the open
market. See 12 U.S.C. Sub-Sect.
Serving a federal purpose does not necessarily imply being a federal agency.