The U.S. Supreme Court case Atherton v. Federal Deposit Insurance Corporation (FDIC) in 1996 revolved around the question of whether federal common law or state law should govern the standard of conduct for directors and officers of federally insured banks that are not national banks. The FDIC, as receiver for City Savings, F.S.B., sued John W. Atherton Jr., a former director and officer, alleging negligence and breach of fiduciary duty under both federal common law and Kentucky state law after City Savings went into receivership due to insolvency. The court held that there was no significant need for a nationally uniform rule governing such cases; therefore, it ruled in favor of applying state laws instead unless Congress provides otherwise through legislation. This decision effectively limited the liability exposure faced by bank directors and officers by rejecting an attempt to impose stricter standards via federal common law.

In the dissenting opinion for Atherton v. Federal Deposit Insurance Corporation, Justice Thomas disagreed with the majority's decision to apply a uniform federal standard of care to directors and officers of federally insured banks. He argued that there was no clear evidence Congress intended such a standard when it enacted relevant banking legislation. Instead, he believed that state law should govern these cases unless there is explicit statutory language or persuasive evidence from legislative history indicating otherwise. In his view, applying a uniform federal rule in this context would disrupt traditional principles of corporate governance under state law without clear congressional authorization.