The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FIRST NBC BANK CIVIL ACTION
VERSUS NO. 17-6652
LEVY GARDENS PARTNERS 2007, LP SECTION: “G”(2)
ORDER AND REASONS
Before the Court is Defendant Levy Gardens Partners 2007, LP’s (“Levy Gardens”)
“Motion to Dismiss.”1 In the motion, Levy Gardens argues that the Court should dismiss this
matter because Girod LoanCo, LLC (“Girod”) does not exist.2 Having considered the motion, the
memorandum in support, the memorandum in response, and the applicable law, the Court will
deny the motion.
I. Background
On March 14, 2017, First NBC Bank of New Orleans, LA (“First NBC”) brought a
foreclosure action by executory process against Levy Gardens in the Civil District Court for the
Parish of Orleans, State of Louisiana.3 In that action, Levy Gardens asserted a third-party demand
against Lewis Title Company, Inc. and Liskow & Lewis, PLC (collectively, the “Liskow
Defendants”).4
On April 28, 2017, First NBC was closed by the Louisiana Office of Financial Institutions,
1 Rec. Doc. 140.
2 Rec. Doc. 140-1 at 1.
3 See Rec. Doc. 1-2; see also Rec. Doc. 13-1 at 1.
4 Rec. Doc. 1-3.
and the FDIC-R was named receiver.5 On July 11, 2017, the FDIC-R filed a Motion for
Substitution of Parties in the state action, as the FDIC-R notified parties that it succeeded to all
rights, titles, powers, and privileges of First NBC.6 Moreover, on July 11, 2017, the FDIC-R filed
a Notice of Removal, removing the state action to this Court pursuant to 12 U.S.C.
§ 1819(b)(2)(B) and 28 U.S.C. § 1441.7
On October 5, 2017, this Court granted a motion to stay this matter pending exhaustion
of administrative remedies filed by FDIC-R.8 On December 5, 2017, this Court granted a “Motion
to Substitute Party Plaintiff,” substituting Girod for First NBC Bank pursuant to Federal Rule of
Civil Procedure 25(c).9 This Court found that Rule 25(c) provides that when there is a transfer of
interest, the Court may substitute the transferee as the party litigant.10 Further, this Court found
that Girod was the holder of the note described in and attached to the state-court Petition that
initiated this civil action, having acquired same from the FDIC-R as Receiver for First NBC.11
The Court found that Girod should be substituted as the party plaintiff due to the closure of First
NBC Bank, and the fact that Girod is the current holder of the note that forms the basis of this
litigation.12
On September 18, 2018, upon a motion by Levy Gardens, the Court reopened the case.13
5 Rec. Doc. 13-1 at 1.
6 See Rec. Doc. 1-4; see also Rec. Doc. 13-1 at 2.
7 Rec. Doc. 1; see also Rec. Doc. 13-1 at 2.
8 Rec. Doc. 57.
9 Rec. Doc. 61.
10 Id. at 2.
11 Id.
12 Id.
13 Rec. Doc. 66.
On April 12, 2019, the Court granted a “Rule 12(b)(6) Motion to Dismiss”14 filed by the Liskow
Defendants because this Court had previously issued a final judgment dismissing the same claims
against Levy Gardens and a party in privity with Liskow Defendants.15 On April 29, 2019, the
Court entered a final judgment pursuant to Federal Rule of Civil Procedure 54(b) against Levy
Gardens and in favor of the Liskow Defendants, dismissing all claims that Levy Gardens had
asserted against the Liskow Defendants in this action with prejudice.16 On May 7, 2019, Levy
Gardens filed a notice of appeal.17 On July 19, 2019, the United States Court of Appeals for the
Fifth Circuit dismissed the appeal for want of prosecution.18 On August 16, 2019, the Fifth Circuit
denied Levy Gardens’ motion to reinstate the appeal.19 On October 28, 2019, Levy Gardens filed
a “Motion to Direct the Clerk to File a Petition for a Writ of Certiorari Out of Time” before the
United States Supreme Court.20 On November 25, 2019, this motion was denied.21
On October 16, 2019, Levy Gardens filed the instant motion to dismiss.22 On October 29,
2019, Girod filed an opposition to the motion.23
14 Rec. Doc. 6.
15 Rec. Doc. 111.
16 Rec. Doc. 116.
17 Rec. Doc. 119.
18 Rec. Doc. 129.
19 Rec. Doc. 132.
20 Rec. Doc. 154-1.
21 Levy Gardens Partners 2007, L.P. v. Lewis Title Co., Inc., et al., __ S. Ct. __, 2019 WL 6257400 (Nov.
25, 2019).
22 Rec. Doc. 140.
23 Rec. Doc. 145.
II. Parties’ Arguments
A. Levy Gardens’ Arguments in Support of the Motion to Dismiss
In support of the motion, Levy Gardens first argues that the only reason this case is pending
before this Court is because it was removed by the FDIC pursuant to FIRREA, which is no longer
applicable.24 According to Levy Gardens, such an argument must be considered by the Court sua
sponte.25 Nevertheless, Levy Gardens asserts that “there is an easier, more compelling and public
policy reason why this case should be dismissed now.”26
Specifically, Levy Gardens argues that this case must be dismissed because Girod does not
exist.27 Levy Gardens disputes statements made by Girod in prior litigation indicating that it is a
limited liability company that is owned by three other limited liability companies.28 Levy Gardens
argues that Girod is a Delaware Tilting Trust, which is “created solely to defraud creditors,” and
which has “no redeeming social, monetary or regulatory value.”29 Levy Gardens contends that
Girod is not a ‘“person who can enjoy the privileges of using Louisiana Courts to cash their
bets.”30 Levy Gardens argues that Girod is a “Vulture Fund,” known for buying distressed debt,
bloating numbers and taking from debtors.31 Levy Gardens contends that Girod is not registered
in Louisiana or Texas and cannot be found in Delaware.32 Therefore, Levy Gardens argues that
24 Rec. Doc. 140-1 at 1.
25 Id.
26 Id.
27 Id.
28 Id.
29 Id. at 1-2.
30 Id. at 2.
31 Id.
32 Id.
the Girod claim against it should be dismissed.33
B. Girod’s Arguments in Opposition to the Motion to Dismiss
In opposition, Girod argues that the motion is contradictory to well-settled Fifth Circuit
precedent that “a post-removal substitution of parties does not divest a court of subject-matter
jurisdiction over the removed action.”34 Further, Girod contends that the notion that it does not
exist is contrary to the record of this case, the records from the Delaware Secretary of State, and
common sense; therefore, Girod argues, this motion has no merit and should be denied.35
First, Girod argues that this Court has original jurisdiction over this civil action.36 Girod
contends that Levy Gardens’ argument that this Court lost subject-matter jurisdiction over the
action after Girod was substituted for the FDIC, is contrary to Fifth Circuit precedent. 37 Girod
begins by reviewing the procedural history of this case––the FDIC removed this action to this
Court pursuant to 28 U.S.C. § 1441(a) and 12 U.S.C. § 1819(b)(2)(B), a subsection of the
Financial Institutions Reform, Recovery and Enforcement Act (“FIRREA”).38 Girod contends
that “FIRREA provides the FDIC with the authority to remove a proceeding to which it is a party
and provides that any action so removed ‘shall be deemed to arise under the laws of the United
States.’”39 Therefore, Girod argues that actions to which the FDIC is a party are within the original
33 Rec. Doc. 140-1 at 2-3.
34 Rec. Doc. 145 at 1.
35 Id.
36 Id. at 4.
37 Id.
38 Id.
39 Id. (citing 12 U.S.C. § 1819(b)(2)(A)).
subject-matter jurisdiction of a federal district court.40 Girod contends that after it purchased the
Note from the FDIC, Girod sought to replace the FDIC as the party-plaintiff in this action.41 Girod
argues that Levy Gardens consented to Girod’s “Motion to Substitute,” and that this Court granted
the motion, thereby substituting Girod for the FDIC as the party-plaintiff in this action.42
Girod contends that “Fifth Circuit precedent is clear that if the FDIC removes an action
under FIRREA, the district court retains original subject-matter jurisdiction under 12 U.S.C.
§ 1819 after the FDIC ceases to be a party.”43 Girod argues that this decision regarding FIRREA-
based removals specifically is consistent with the general rule that jurisdiction is determined at
the time of removal, and that post-removal events rarely divest a court of its jurisdiction.44 Girod
contends that when this case was removed, this Court had original jurisdiction pursuant to 28
U.S.C. § 1441(a) and 12 U.S.C. § 1819(b)(2)(B).45 Girod argues that the Court’s December 5,
2017 Order substituting Girod for the FDIC as party-plaintiff in this action did not divest the
Court of jurisdiction.46
Second, Girod argues that Levy Gardens’ claim that Girod “doesn’t exist” is false and
without merit.47 Girod contends that “[l]imited liability companies are ‘juridical persons’ under
40 Id.
41 Id. (citing Rec. Doc. 59).
42 Id. at 4-5 (citing Rec. Doc. 59).
43 Id. at 5 (citing FSLIC v. Griffin, 935 F. 2d 691, 697 (5th Cir. 1991); Adair v. Lease Partners, Inc., 587 F.
3d 238, 242-43 (5th Cir. 2009); BLS Joint Venture v. Bank Home Savings Assoc., 1993 WL 35859 (5th Cir. 1993);
Bank of Commerce v. Hoffman, 829 F. 3d 542 (7th Cir. 2016)).
44 Id. (citing Asociacion Nacional de Pescadores v. Dow Quimica de Columbia, S.A., 988 F. 2d 559, 565
(5th Cir. 1993), cert. denied, 510 U.S. 1041, 114 S. Ct. 685, 126 L. Ed. 2d 653 (1994)).
45 Id.
46 Id.
47 Id.
Louisiana law.”48 Girod argues that this Court has already recognized Girod as the entity that
purchased the note and that Girod has been participating in this legal action for two years.49
Lastly, Girod contends that Levy Garden’ defamatory descriptions of Girod are irrelevant.50
III. Legal Standard
A. Legal Standard on a Rule 12(b)(1) Motion to Dismiss
“Federal courts are courts of limited jurisdiction,” and “possess only that power
authorized by the Constitution and statute.”51 Thus, under Rule 12(b)(1), “[a] case is properly
dismissed for lack of subject matter jurisdiction when the court lacks the statutory or
constitutional power to adjudicate the case.”52 In ruling on a Rule 12(b)(1) motion to dismiss, the
Court may rely on: (1) the complaint alone, presuming the allegations to be true; (2) the complaint
supplemented by undisputed facts; or (3) the complaint supplemented by undisputed facts and the
court’s resolution of disputed facts.53 The plaintiff, as the party asserting jurisdiction, has the
burden of proving subject matter jurisdiction by a preponderance of the evidence.54
IV. Analysis
In support of the motion to dismiss, Levy Gardens makes two arguments: (1) that the Court
no longer has subject-matter jurisdiction because the FDIC is no longer a party and (2) that Girod
48 Rec. Doc. 145 at 5-6 (citing Danos Tree Service, LLC v. Proride Trailers, LLC, 2017-1546 (La. App. 1
Cir. 7/10/18), 255 So. 3d 1078, 1084).
49 Rec. Doc. 145 at 6.
50 Rec. Doc. 145 at 6.
51 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (internal citations omitted).
52 Home Builders Ass’n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1000 (5th Cir. 1998) (internal
citation omitted).
53 Den Norske Stats Ojeselskap As v. HeereMac Vof, 241 F.3d 420, 424 (5th Cir. 2001). See also Williamson
v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981).
54 See Vantage Trailers, Inc. v. Beall Corp., 567 F.3d 745, 748 (5th Cir. 2009) (internal citations omitted).
does not exist.55 The Court will address both arguments in turn.
A. Whether the Court Retains Subject Matter Jurisdiction
Levy Gardens argues that the FIRREA, the basis by which the FDIC removed this action
to federal court, is no longer applicable because the FDIC is no longer a party.56 In response,
Girod contends that the Court has original jurisdiction over this civil action.57 Girod argues that
if the FDIC removes an action under FIRREA, the district court retains original subject-matter
jurisdiction even if the FDIC is replaced by another party. 58
The FDIC removed this action from state court to the United States District Court for the
Eastern District of Louisiana pursuant to 12 U.S.C. § 1819(b)(2)(B) and 28 U.S.C. § 1441.59 28
U.S.C. § 1441(a) provides that “any civil action brought in a State court of which the district
courts of the United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district and division embracing the
place where such action is pending.”60 12 U.S.C. § 1819(b)(2)(B) provides that the FDIC may
“remove any action, suit, or proceeding from a State court to the appropriate United States district
court before the end of the 90-day period beginning on the date the action, suit, or proceeding is
filed against the [FDIC] or the [FDIC] is substituted as a party.”61 The jurisdictional provision of
55 Rec. Doc. 140-1.
56 Id. at 1.
57 Rec. Doc. 145 at 4.
58 Id. at 5 (citing FSLIC v. Griffin, 935 F.2d 691, 697 (5th Cir. 1991); Adair v. Lease Partners, Inc., 587
F.3d 238, 242-43 (5th Cir. 2009); BLS Joint Venture v. Bank Home Savings Assoc., 1993 WL 35859 (5th Cir. 1993);
Bank of Commerce v. Hoffman, 829 F. 3d 542 (7th Cir. 2016)).
59 Rec. Doc. 1 at 1.
60 28 U.S.C. § 1441(a).
61 12 U.S.C. § 1819(b)(2)(B).
12 U.S.C. § 1819 provides, in its pertinent part, that “all suits of a civil nature at common law or
in equity to which the [FDIC], in any capacity, is a party shall be deemed to arise under the laws
of the United States.”62 The statute, however, does not address what happens to the district court’s
jurisdiction when the FDIC is no longer a party to the case.
The Fifth Circuit addressed this question in Adair v. Lease Partners, Inc. 63 There, the Fifth
Circuit reviewed a district court’s decision to remand a case that was removed to federal court by
the FDIC pursuant to 12 U.S.C. § 1819(b)(2).64 After the FDIC was dismissed as a party, the
district court held that no original jurisdiction remained over the plaintiff’s claims.65 The Fifth
Circuit reversed the district court’s determination, holding that district courts retain original
jurisdiction even after the FDIC is dismissed.66 The Fifth Circuit relied on the general rule that
the jurisdiction of the Court is determined at the time of removal.67 “The power to remove is
evaluated at the time of removal. The dismissal of one of the parties by the time of appeal does
not affect the propriety of removal.”68 Therefore, the Fifth Circuit held that despite the FDIC’s
dismissal, the district court retained original jurisdiction, and the exercise of that jurisdiction was
mandatory for the district court.69
Here, as in Adair, the FDIC removed the case under § 1819(b)(2)(B).70 On December 5,
62 12 U.S.C. § 1819(b)(2)(A).
63 587 F.3d 238 (5th Cir. 2009).
64 Id. at 239.
65 Id. at 240.
66 Id. at 242-43.
67 Id. at 244.
68 Federal Sav. & Loan Ins. Corp. v. Griffin, 935 F.2d 691, 696 (5th Cir. 1991).
69 Adair, 587 F.3d at 245.
70 Rec. Doc. 1.
2017, this Court granted a “Motion to Substitute Party Plaintiff,” substituting Girod for First NBC
Bank pursuant to Federal Rule of Civil Procedure 25(c).71 As noted in the prior Order of this
Court, Rule 25(c) provides that when there is a transfer of interest, the Court may substitute the
transferee as the party litigant.72 Further, this Court found that Girod was the holder of the note
described in and attached to the state-court Petition that initiated this civil action, having acquired
same from the FDIC-R as Receiver for First NBC.73 The Court found that Girod should be
substituted as the party plaintiff due to the closure of First NBC Bank, and the fact that Girod is
the current holder of the note that forms the basis of this litigation.74
Despite the dismissal of the FDIC, all the claims in a case removed by the FDIC under
§ 1819(b)(2)(B) continue to arise under federal law and support continuing original federal
jurisdiction. Therefore, this Court retains original jurisdiction over this matter.
B. Whether Girod is a Legal Entity Capable of Suing and Being Sued
Levy Gardens contends that Girod is not a “person” who should enjoy the privileges of the
Louisiana courts, because it is not a person who can sue or be sued.75 Girod argues that Levy
Gardens’ claims regarding Girod’s existence are false and without merit.76 Lastly, Girod contends
that Levy Garden’ defamatory descriptions of Girod are irrelevant.77
Under Louisiana law, an entity must qualify as a juridical person before it may instigate
71 Rec. Doc. 61.
72 Id. at 2.
73 Id.
74 Id.
75 Rec. Doc. 140-1 at 2.
76 Rec. Doc. 145.
77 Id. at 6.
litigation or be sued.’* In Louisiana, “[a] juridical person is an entity to which the law attributes
personality, such as a corporation or a partnership.”’? Furthermore, under Louisiana law,
“TcJorporations and limited liability companies are recognized juridical persons.”*° Girod is a
limited liability company organized under the laws of the state of Delaware.*! Therefore, Girod
is a juridical person under Louisiana law. In Louisiana, juridical persons are granted “the power
to participate in legal life by the attribution of legal personality.”*” Therefore, the Court finds that
Levy Gardens’ argument regarding Girod’s existence is without merit; Girod is a juridical person
under Louisiana law capable of instigating litigation.
Accordingly,
IT IS HEREBY ORDERED Levy Gardens Partners 2007, LP’s “Motion to Dismiss”*?
is DENIED.
NEW ORLEANS, LOUISIANA, this !2th gay of December, 2019.
NANNETTE J Neh BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT
78 See, e.g., Dugas v. City of Breaux Bridge Police Dep't, 757 So.2d 741, 743 (La. App. 3 Cir. 2000).
™ La. Civ. Code Ann. art. 24.
8° Danos Tree Service, LLC v. Proride Trailers, LLC, 255 So. 3d 1078, 1084 (La. Ct. App. 1st Cir. 2018).
81 Rec. Doc. 145-1.
82 Brown vy. State Farm Fire & Cas. Co., 804 So.2d 41, 45 (La. App. Ist Cir. 2001) (citing Prof. A.N.
Yiannopoulos, Louisiana Civil Law System § 48 (1977)).
83 Rec. Doc. 140.
11