# Opposition Brief — Monogram Credit Card Bank v. Heaton

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_1008%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2001
- **Citation:** 533 U.S. 915

## Text

f

} FILED
No. 00-1505 ‘ MAY 15 200i
CLERK
Supreme Court of the United States

¢

MONOGRAM CREDIT CARD BANK OF GEORGIA,

Petitioner,

PATRICIA HEATON,
Respondent.

¢

On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Fifth Circuit

¢

RESPONDENT'S BRIEF IN OPPOSITION

e
Louis L. PLoTKIN* Topp R. SLAck
M.H. GerTLER GALLOWAY, JOHNSON,
GERTLER, GERTLER, TOMPKINS, BuRR & SMITH
VINCENT & PLOTKIN Suite 4040

127-129 Carondelet Street 701 Poydras Street
New Orleans, LA 70130 New Orleans, LA 70139
(504) 581-6411 (504) 525-6802

*Counsel of Record
Attorneys for Respondent
May 18, 2001

COCKLE LAW BRIEF PRINTING CO., (500) 225-6964
OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page
suAbeems CR T9008 CAGE. ii cc icividen wed an as 2
I. THE EVENTS LEADING UP TO THE FIRST
eee ere ey eer rer ee he 2
Hl, THER CASE 15 REMANIIOD). 0.05 csccccescces 6
III. MONOGRAM APP™ALS THE REMAND RUL-
GE Se sare aa nie hake gh eade ea eus names 6
IV. THE FIFFH CIRCUIT DECISION ............ 8
V. MONOGRAM RELIES ON THE FIFTH CIR-
CUIT DECISION AND RE-REMOVES THE
NES aa ONG cans dd owe daa ke de ee 9
VI. AT THE REMAND HEARING, THE DISTRICT
COURT STRONGLY CRITICIZES THE FDIC’S
AND MONOGRAM’S BEHAVIOR IN THE
Greer Or re etre eee Te 11
Vil. THE CASE IS REMANDED A SECOND
TE 665 bo SUN x ROE AAT Sa Re eR ek ew 13
Vil. SUBSEQUENT PROCEEDINGS .............. 13
REASONS FOR DENYING THE WRIT............. 14
I. THE CASE DOES NOT PRESENT THE QUES-
TION POSED IN THE PETITION............ 14
Il. THE PETITION SHOULD BE DENIED
BECAUSE THE FIFTH CIRCUIT’S DECISION
Sy FETE SAE ck cee ne teach Skeees es 16
Ill. THE PETITION SHOULD BE DENIED
BECAUSE MONOGRAM HAS WAIVED ITS
RIGHT TO SEEK REVIEW OF THE FIFTH
See MERA. SOGUIEE 64 cia cad Css Kddauannneks 17

IV.

THE PETITION SHOULD BE DENIED AS
sug RELERERE RESET LE PRCT ET EEE ET Eee

ii
TABLE OF CONTENTS - Continued
Page

V. THE PETITION SHOULD BE DENIED
BECAUSE THE FIFTH CIRCUIT’S DECISION

FURTHERS PUBGI. PORE 66 dss cecscr cae 19
CONCLUSION. ss0csuccnekaeenennGsneban ¥edneaees 20
APPENDIX

Notice of Appeal, Heaton v. Monogram Credit
Card Bank of Georgia, USDC No. 98-1823
(December 3, TOO 0.05 cidnees cae eseuehiante- App. 1

Notice of Removal, Heaton v. Monogram Credit
Card Bank of Georgia, USDC No. 98-1823
(Noveenber 3, Sieh. icasa cues becke ers ieews App. 6

Excerpts from Oral Argument, Heaton v. Mono-
gram Credit Card Bank of Georgia, USDC No.
98-1823 (December 20, 2000)................. App. 11

Order and Reasons, Heaton v. Monogram Credit
Card Bank of Georgia, USDC No. 98-1823 (Janu-
ary 5, 2001) « .<.<sucicceeeneenesamaeeneea akon App. 17

FDIC Notice of Appeal, Heaton v. Monogram
Credit Card Bank of Georgia, USDC No. 98-1823
(January 11, QUE) «.csscewecstwadecaveveseess App. 26

Order and Reasons, Heaton v. Monogram Credit
Card Bank of Georgia, USDC No. 98-1823 (Febru-
ary 14, 2OGR) q. cccsinceceectawawencnes canes App. 27

Order, Heaton v. Monogram Credit Card Bank of
Georgia v. FDIC, U.S. 5th Cir. No. 01-30104
(March 22, 2008) .3.0cisasequlaceueaneeteriies App. 31

Order, Heaton v. Monogram Credit Card Bank of
Georgia v. FDIC, U.S. 5th Cir. No. 01-30104
(Miasch 22, ZOU) .<.4s0ccsnus els caecueseeeies App. 32

ili

TABLE OF CONTENTS - Continued
Page

Excerpt from Motion, Heaton v. Monogram Credit
Card Bank of Georgia, Civil District Court No.
PT CRE By SUPE a hi cectessvedsivancass App. 33

Excerpts from Oral Argument, Heaton v. Mono-
gram Credit Card Bank of Georgia, USDC No.
98-1823 (November 10, 1999) ................ App. 35

iv

TABLE OF AUTHORITIES

Page
Cases
Ahrens v. Perot Sys. Corp., 205 F.3d 831 (5th Cir.
SPORE EC OPER TL oe ee hy eT Ee ee paar re 18
In re Amoco Petroleum Additives Co., 964 F.2d 706
eo ps AG. rewere rT Myr ey rr err re Tr rrr Te eT 17
Bogle v. Phillips Petroleum Co., 24 F.3d 758 (5th Cir.
i Pree rere Sree ee ere ne rey eee ee
Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988)
PEP OTT ET EET Eee Pe NE COTTE S Pee Ct og PPE TET 7% ©
In re Coastal Plains, Inc., 179 F.3d 197 (5th Cir.
Oe er OR eae rT eee Seo eer( me re erry 18
Engelhardt v. Paul Revere Life Ins. Co., 139 F.3d 1346
ob Be Sere rye eT ee PORT PESTS OP Ee Te eC eee es 17
Hickey v. NCNB Texas National Bank, 763 F. Supp.
i Re Rk | ee re ee ey ay rote poeree 12
Irving Indep. School Dist. v. Packard Properties, 970
ee Fe ef! eRe rupee rer orn rere 10
Mangold v. Analytic Serv., Inc., 77 F.3d 1442 (4th
Ce PO a ct hs Re me ek oo a ee 17

Scott v. Kentucky Parole Board, 429 U.S. 60 (1976) ....19

Thermtron Products, Inc. v. Hermansdorfer, 423 U.S.
EE ik bo eb ee a te ee

Transit Casualty Co. v. Certain Underwriters at
Lloyd's, 119 F.3d 619 (8th Cis. 1997)............... 17

Zuniga v. Blue Cross & Blue Shield, 52 F.2d 1395 (6th
ee eee Tee ee CET RS TUT eT ELST ey PoP TTT eer rey 17

Vv

TABLE OF AUTHORITIES - Continued

Page
STATUTES AND REGULATIONS
42 USA. BERRA on hoa coe ee aes 3, 9
12 UGA. QEBOs k os ic ccc eika Seceeussnaeyccasivas 3
12 USK... SERTIO ea oa vin kascies raehae ieee 5, 10
yy: Bes ome yk | ee rere rrr i, 7,6, 348,
26 USK. BIG oS iesk Sa ccaewin sins teadesaeees passim
38 UBL. Ce ica niwiskecaviass 6 7,8, 3

OCS A BE... dosiiaskadetciee 3, 5

sa

1
RESPONDENT’S BRIEF IN OPPOSITION

Respondent, Patricia Heaton, submits this brief in
opposition to the petition for a writ of certiorari filed by
Monogram Credit Card Bank of Georgia (“Petitioner” or
“Monogram”).

The Petition should be denied. The Fifth Circuit's
ruling does not present the question raised by Petitioner.
Monogram claims the Fifth Circuit refused to review the
remand order simply because the trial court invoked 28
U.S.C. §1447(c). Petition at i. This is incorrect. Even a
cursory review of the Fifth Circuit’s decision reveals that
the panel carefully scrutinized the entire remand order.
After doing so, the Court of Appeals held that the
1 nand was based on §1447(c) and not on §1367(c)(3) as
Monogram had claimed. Thus, the Fifth Circuit did not
rely on “magic words” in dismissing the appeal, and the
ruling below is not worthy of a grant of certiorari.

The Petition should also be denied because Mono-
gram has waived its right to seek review of the Fifth
Circuit’s decision. The day after the Court of Appeals
issued the ruling Monogram removed the case to federal
court for a second time. To establish federal question
jurisdiction, Monogram relied on the federal claim the
Fifth Circuit had reinstated in the decision. Monogram
acquiesced in the judgment and did not suggest the rul-
ing was in error or subject to further review.

Only now, after the district court has remanded the
case a second time, does Monogram claim the Fifth Cir-
cuit erred and the Court should review the decision.
Monogram, however, waived its right to seek relief in this
Court by adopting the Fifth Circuit’s ruling as its own.

2

Petitioner's conflicting, self-serving arguments are barred
by the concept of judicial estoppel and must be rejected.

Monogram’s petition, moreover, should be denied as
moot. Monogram failed to advise the Court that the Fed-
eral Deposit Insurance Corporation (“FDIC”) appealed
the district court’s second remand ruling to the Fifth
Circuit. The appeal is pending. Thus, the issue now is
whether the district court’s second remand ruling was
correct. Monogram’s petition for a writ of certiorari,
which is based on the first remand ruling, is moot.

Ultimately, certiorari should be denied because the
Fifth Circuit’s decision to dismiss the appeal under 28
U.S.C. §1447(d) is plainly correct. The ruling is consistent
with Thermtron Products, Inc. v. Hermansdorfer, 423 U.S.
336 (1976) and its progeny. The Court of Appeals prop-
erly rejected Monogram’s transparent attempt to create
appellate jurisdiction where none existed.

+

STATEMENT OF THE CASE

I. THE EVENTS LEADING UP TO THE FIRST
REMAND RULING

A.

On May 11, 1998, Ms. Heaton filed this class action in
state court on behalf of all Louisiana citizens who (like
her) have been overcharged by Monogram in violation of
the Louisiana Consumer Credit Law (“LCCL”). Mono-
gram violated the LCCL by exceeding the limits placed
on interest and late fees.

3

Ms. Heaton had entered into a private-label credit
card contract with Monogram. Unlike a Visa or Master-
Card, Ms. Heaton was provided with a credit card that
only allowed her to shop at a local appliances store.

Monogram is not a bank in the ordinary sense of the
word. Instead, it is a unique creature of Georgia iaw. a
“credit card bank.”

Monogram removed the case to federal court, invok-
ing diversity and federal question jurisdiction. Because
Ms. Heaton had only alleged state-law claims, Monogram
argued a federal question existed under the complete
preemption doctrine. Specifically, Monogram alleged Ms.
Heaton’s claims were preempted by 12 U.S.C. §1831d(a).

Ms. Heaton moved to remand, arguing that federal
question jurisdiction did not exist. The federal preemp-
tion statute could only be invoked by a “State bank,”
which is a bank incorporated under state law and
engaged in the business of receiving deposits. See 12
U.S.C. §1813(a)(2).

Ms. Heaton argued Monogram was not a “State
bank” because it was not engaged in the business of
receiving deposits. As a Georgia credit card bank, Mono-
gram could “only” engage in the business of credit cards.
O.C.G.A. §7-5-3(6). The FDIC did not consider this issue
when the agency approved Monogram for deposit insur-
ance in 1988.

Ga

Two days before oral argument on Ms. Heaton’s
remand motion, Monogram submitted a supplemental

4

brief. Attached was a letter signed by an FDIC emplovee
and printed on FDIC letterhead (the “Letter”). In the
Letter, the FDIC employee declared that Monogram was a
“State bank.” This, of course, was the core issue in the
preemption analysis.

The district court denied the motion to remand, find-
ing that federal question jurisdiction did exist under the
complete preemption doctrine because Monogram was a
“State bank.” Pet. App. at 15a. The district court assumed
the Letter was legitimate and substantially deferred to it
in reaching this conclusion. Id. & n.1.

D.

Because the Letter was submitted at the last minute,
Ms. Heaton did not have the opportunity to check its
veracity. This was unfortunate because Ms. Heaton later
discovered the Letter was Monogram’s work product.
The Letter had actually been ghost-written by John Doug-
las, a lawyer hired by Monogram who was the former
general counsel of the FDIC.

Ms. Heaton sought to depose the FDIC employee
who had signed the Letter. The FDIC, however, refused to
make the employee available for deposition.

Ss.

Before discovering that the Letter was actually Mono-
gram’s work product, Ms. Heaton was granted leave to
add a federal claim under the federal Truth in Lending
Act (“the TILA claim”). At the time she had been duped
into believing the Letter was legitimate and that federal
question jurisdiction did exist.

Coeee ee ne tee rt re ne ey

Wer ot a ite ‘ te
nitieetniennien tO ee sila

i ae

anal
Pain'e’

3
F.

Because the Letter did not represent an impartial
agency determination, Ms. Heaton moved for recon-
sideration of her motion to remand.! Ms. Heaton reiter-
ated that Monogram could not be a “State bank” because
Monogram was prohibited from engaging in the business
of receiving deposits. O.C.G.A. §7-5-3(6). Moreover, the
only deposits received by Monogram were from its par-
ent company, GE, which were used to capitalize Mono-
gram.

To further illustrate Monogram was not a State bank,
Ms. Heaton noted that Monogram had less than one
percent (.39%) of its money insured by the FDIC. Tradi-
tional banks, however, had approximately 76% of their
deposits insured. Counsel for Monogram admitted at oral
argument that the only reason Monogram obtained the de
minimis amount of insurance was to attempt to qualify as
a State bank and invoke the preemption statute. Resp. :
App. at 37.

At oral argument, the district court expressed its
view that remand might be appropriate because Mono-
gram may not qualify as a “State bank.”

To prevent a remand, Monogram again turned to its
friends at the FDIC for help. Thus, shortly after oral
argument the FDIC filed a motion to intervene as a party
in the case. If granted, the FDIC would argue federal
question jurisdiction existed under 12 U.S.C.
§1819(b)(2)(A) thereby preventing a remand. Ironically,

1 In her briefs, Ms. Heaton indicated she would dismiss
the federal claim and later did so. Monogram incorrectly
suggests that Judge Barbier raised this issue sua sponte. Petition
at 6.

6

the FDIC was aware of the case for over a year before
seeking to intervene.

Il. THE CASE IS REMANDED.

The district court granted reconsideration and
remanded the case due to a lack of subject matter juris-
diction. Pet. App. at 20a. The trial court rejected Mono-
gram’s claim that Ms. Heaton had waived her
jurisdictional objections by adding a federal claim after
removal. Id. at 21a. Because no waiver had occurred, the
district court noted its dismissal of the federal claim in a
footnote. Id. at n.1.2 .

The trial judge then turned to the issue of federal
question jurisdiction. The court found it lacked such
jurisdiction because Monogram did not qualify as a
“State bank” and, therefore, could not invoke the federal
preemption statute. Id. at 21a-22a. Similarly, the judge
found he lacked diversity jurisdiction. Id. at 22a.

The district court, therefore, specifically cited 28
U.S.C. §1447(c) and remanded the case. Id. The court
recognized that if federal jurisdiction was in doubt,
remand was appropriate. Id.

II. MONOGRAM APPEALS THE REMAND RULING.
oe

Acutely aware of §1447(d) and its prohibition on
appealing remand orders, Monogram knew its appeal

2 Ms. Heaton had previously moved to dismiss the claim
with prejudice.

3 Because the court lacked subject matter jurisdiction, the
FDIC’s motion to intervene was subsequently denied as moot.

dicate see

ms 7

had to squeeze into the Thermtron exception. As a result,
Monogram argued in the Notice of Appeal the district
court “erroneously cited” §1447(c) and actually remanded
the case in its discretion under 28 U.S.C. §1367(c)(3).
Resp. App. at 1-2. Under Thermtron, a remand under
§1367(c)(3) would have been appealable.

To establish that a §1367(c)(3) remand had occurred,
Monogram invoked Bogle v. Phillips Petroleum Co., 24 F.3d
758 (5th Cir. 1994) and argued that the trial court's dis-
missal of the federal claim proved federal jurisdiction had
existed. Therefore, the remand of the remaining state-law

claims must have been in the district court’s discretion
under §1367(c)(3).

Notably, Monogram had not asked the district court
to reconsider its invocation of §1447(c) before raising the
issue on appeal. Similarly, Monogram did not request the
trial judge to clarify whether he remanded the case under
§1367(c)(3) or §1447(c).

Ms. Heaton moved to dismiss the appeal under
§1447(d) for lack of appellate jurisdiction. The district
court obviously had not remanded the case under
§1367(c)(3). The judge’s entire analysis was focused on
whether he enjoyed subject matter jurisdiction. See Pet.
App. at 20a-22a. The district court, moreover, did not cite
§1367(c)(3), nor did it rely on any of the factors articu-
lated by this Court in Carnegie-Mellon Univ. v. Cohill, 484
U.S. 343 (1988) in deciding a discretionary remand. Even
if the trial court erred in remanding under §1447(c), the
order was still unappealable. See Thermtron, 423 U.S. at
351.

8

Monogram responded that the Fifth Circuit should
review the remand ruling and determine the statutory -
basis on which the remand was based. Monogram argued
the Court of Appeals did “not need to look beyond the
face of the remand order here to determine that, in reality,
it is necessarily based on Section 1367(c)(3), and therefore
appealable.” Monogram’s Opposition to Motion to Dis-
miss at 8.

IV. THE FIFTH CIRCUIT DECISION
A.

On November 2, 2000, the Fifth Circuit dismissed
Monogram’s appeal unde: §1447(d). Pet. App. at la-12a.
The Fifth Circuit did exactly what Monogram requested.
The panel thoroughly scrutinized the remand order to

determine for itself whether the remand was based on a
§1447(c) ground.

The Fifth Circuit found that a “plain and common
sense reading of. . . Judge Barbier’s remand order reveals
that he stated a §1447(c) basis for remand.” Pet. App. at
5a. For example, the trial judge expressly held that he did
“not have federal question jurisdiction and that there is
no federal preemption.” Id. (quotations omitted) Sim-
ilarly, the district court had “invoked §1447(c) in ordering
the remand.” Id.

B.

The appellate court did not stop its analysis of the
remand ruling at this point. Instead, the Fifth Circuit
went on to reject Monogram’s invocation of Bogle and the
argument that the trial court must have exercised juris-
diction in dismissing the federal claim. Bogle was distin-
guishable because that case involved an ambiguous

ait abe

a a ae

oe

9

remand ruling in which the trial court remanded for lack
of jurisdiction, but also discussed the Carnegie-Mellon fac-
tors in deciding a discretionary remand. Pet. App. at 7a.

Here, however, the Fifth Circuit found “no ambiguity
whatsoever in Judge Barbier’s remand order.” Id. The
trial judge “clearly intended to base his order on
§1447(c).” Id. at 11a. Moreover, the district court did not
cite §1367(c)(3) or the Carnegie-Mellon factors. Id. at 7a.

As a result, the district court erred in dismissing the
federal claim with prejudice because the court found it
lacked subject matter jurisdiction. Therefore, the Fifth
Circuit reinstated the federal claim, holding that the dis-
missal order was void and of no effect. Id. at 11la-12a.

V. MONOGRAM RELIES ON THE FIFTH CIRCUIT
DECISION AND RE-REMOVES THE CASE.

A.

“Monogram removed the case to federal court for the
second time the morning after the Fifth Circuit rendered
its decision. To invoke federal question jurisdiction,
Monogram relied on the federal claim that had been
revived by the Court of Appeals. Resp. App. at 7 & 9.4
Nowhere in the Notice of Removal did Monogram claim
the Fifth Circuit’s decision was in error or subject to
further review. Id.

Ms. Heaton moved to remand the case for lack of
subject matter jurisdiction. Ms. Heaton had dismissed the
federal claim in state court the day before Monogram re-
removed the case as authorized by Louisiana Code of
Civil Procedure article 1671.

4 Monogram also removed the case on the same grounds it
had alleged in the first removal: namely, complete preemption
by 12 U.S.C. 1831d(a) and diversity jurisdiction.

10

B.

Realizing the district court would remand the case a
second time, Monograr.. again turned to the FDIC for
help. The agency, consequently, filed another motion to
intervene as a party, hoping to invoke 12 U.S.C.
§1819(b)(2)(A) and create federal question jurisdiction.
Monogram and the FDIC had tried this tactic in 1999 in
onnection with the first remand proceedings. See supra at

ist 6

.

In addition to the FDIC’s repeated motions to inter-
vene and the misleading Letter, the agency has attempted
to assist Monogram in other ways. For example, the FDIC
attempted to assist Monogram in its Fifth Circuit appeal
by publishing General Counsel Opinion No. 12 only five
days before Monogram’s brief was due. Ironically, the
FDIC admits that this opinion marked the first time, in 65
years, that the agency opined on the meaning of the
phrase “engaged in the business of receiving deposits.”

Monogram extensively relied on the general counsel
opinion in its Fifth Circuit brief. This is not the first time
the FDIC has attempted to influence ongoing litigation by
publishing its opinions. See, e,g., Irving Indep. School Dist.
v. Packard Properties, 970 F.2d 58 (5th Cir. 1992) (FDIC
published legal memorandum and policy statement after
the trial court had ruled against it).

D.

The Attorney General for the State of Louisiana filed
an amicus brief in the Fifth Circuit on Ms. Heaton’s

11

behalf because he was troubled over Monogram’s and the
FDIC’s behavior.

Various special interest grcups filed amicus briefs on
Monogram’s behalf in the Fifth Circuit. Not surprisingly,
these same groups are apparently filing amicus briefs in
support of Monogram’s petition for a writ of certiorari.

VI. AT THE REMAND HEARING, THE DISTRICT
COURT STRONGLY CRITICIZES THE FDIC’S
AND MONOGRAM’‘S BEHAVIOR IN THE CASE.

At the hearing on the remand motion, the district
court severely criticized the agency and its persistent
efforts to assist Monogram in the case.

THE COURT: The FDIC has been helping
Monogram throughout. That’s

no secret.

{FDIC}: No, Your Honor, we don’t
make it a secret.

THE COURT: .. . You have been helping

them from the very beginning.
You have assisted them; when
you assisted them you
obstructed the plaintiffs’ dis-
covery. You did not want to be
involved in private litigation.

Resp. App. at 13.

The Court then admonished the agency that its inter-
vention request was merely designed to create federal
jurisdiction in an effort to help Monogram:

“To me I can only draw one logical conclusion
from all of this: This is simply a maneuver to
avoid remand of the case, pure and simple. And
nothing else makes any sense to me.”

Id.

12

Judge Barbier is not the only federal judge to criticize
the FDIC for attempting to manipulate federal jurisdic-
tion by improperly seeking to intervene in a case. In
Hickey v. NCNB Texas National Bank, 763 F. Supp. 896
(N.D. Tex. 1991), the court struck down the FDIC’s inter-
vention and explained: “The only possible explanation
for the intervention was to use on behalf of existing
defendants - and, in the court’s view, to abuse - the
power of removal granted to FDIC-Receiver.” Id. at 897.

Later in the hearing, the trial court reiterated its
grave concerns regarding the FDIC’s efforts to assist
Monogram in the case. The judge stated:

“I’m very disturbed I will say this about the
actions of the FDIC in this entire matter, and |
thought the FDIC was there to protect the public
frankly and consumers and not to protect Mono-
gram Bank and similar companies. I thought
they were to regulate these companies and not
to protect them and to the extent of even
defending them in private civil litigation.”

Resp. App. at 14.

The district court also emphasized he was not the
only one concerned about the FDIC’s antics:

I’m not the only one that is disturbed by the
FDIC’s actions in this. I’m sure you are aware
that among others the attorney general for the
State of Louisiana and apparently other attor-
neys general and consumer advocates around
the country are very disturbed and bothered
and critical of the FDIC’s actions in this type
of litigation. And I must say I agree with them.

Id. at 15 (emphasis added).

| ro

13
VII. THE CASE IS REMANDED A SECOND TIME.

On January 5, 2001, the federal court remanded the
case for lack of subject matter jurisdiction and denied the
FDIC’s intervention as moot. Resp. App. at 17-25. The
decision was comprehensive. The district court thor-
oughly explained why Monogram was not a State bank
and rejected General Counsel Opinion No. 12 as unper-
suasive. Id. at 21-22.

The first remand order and the second remand order
present essentially the same jurisdictional issues. In both
rulings, the trial court found it lacked federal question
jurisdiction because Monogram did not qualify as a
“State bank” and, therefore, could not invoke the federal
preemption statute. Compare Pet. App. at 2la-22a with
Resp. App. at 22-23. Similarly, in both orders the trial
court found it lacked diversity jurisdiction. Compare Pet.
App. E at 22a with Resp. App. 24-25.

VIII. SUBSEQUENT PROCEEDINGS

In its Petition, Monogram failed to advise the Court
of the proceedings that have occurred in the case follow-
ing the second remand. To ensure the Court has a com-
plete record in rendering its decision, Ms. Heaton
supplements as follows:

On January 11, 2001, the FDIC filed a notice of
appeal, seeking review of the second remand order and
the denial of its intervention request. Resp. App. at 26.
The appeal is pending.

The FDIC subsequently moved the district court for a
stay of the second remand ruling pending the appeal. On
February 14, 2001, the district court denied the FDIC’s
request for a stay. Resp. App. at 27-30.

14

Thereafter, the agency moved the Fifth Circuit for a
stay pending appeal, claiming such relief was necessary
in light of the alleged implications the case presented for
the banking industry. On March 22, 2001, in a unanimous
decision, the Fifth Circuit refused to issue a stay. Resp.
App. at 31. The panel, however, carried with the case Ms.
Heaton’s motion to dismiss the FDIC’s appeal. Resp.
App. at 32.

Adding to the procedural complexity is that the FDIC
is currently seeking to intervene as a party for the third
time, now in State court. Resp. App. at 33 (cover page of
motion). The FDIC admits that if the motion is granted,
the case will be removed to federal court for a third time.
Again, the present petition for a writ of certiorari would
be moot.

REASONS FOR DENYING THE WRIT

The case is not appropriate for Supreme Court review
for the reasons discussed below.

I. THE CASE DOES NOT PRESENT THE QUESTION
POSED IN THE PETITION.

The Petition should be denied because the Fifth Cir-
cuit decision does not present the question raised by
Petitioner. Monogram claims the Court of Appeals
refused to review the remand ruling simply because the
trial court invoked §1447(c). See Petition at i. As a result,
the Fifth Circuit “had to ignore” the face of the remand
order. Petition at 2.

Monogram’s arguments defy common sense and are
easily rebutted by a review of the Fifth Circuit's ruling.

15

The panel carefully scrutinized the remand order and
dismissed Monogram’s appeal oniy after concluding the
remand was clearly and unambiguously based on
§1447(c).

In its analysis, the Fifth Circuit painstakingly
reviewed the language of the remand order. The Court of
Appeals noted that the district court had specifically
found it lacked federal question jurisdiction and that
federal preemption did not exist. Pet. App. at 5a. The
district court, moreover, specifically invoked §1447(c) in
ordering the remand, and stated remand should be
granted if federal jurisdiction is in doubt. Id.

Further confirming its conclusion that the trial court
had remanded under §1447(c), the Court of Appeals rec-
ognized that “nowhere in the order did the judge discuss
the discretionary factors set forth in Carnegie-Mellon, nor
did he cite §1367(c)(3) or any other basis for remand.” Id. at
7a (emphasis added).

After completing its careful review of the district
court ruling, the Fifth Circuit saw “no ambiguity what-
soever in Judge Barbier’s remand order.” Id. at 7a. A
“plain and common sense reading of . . . Judge Barbier’s
remand order reveals that he stated a §1447(c) basis for
remand.” Id. at 5a. The district court’s “citation of
§1447(c) is clearly not a ‘mislabeling’ of the basis for
remand.” Id. The Court of Appeals concluded: “We think
judge Barbier clearly intended to base his order on
§1447(c).” Id. at lla.

In addition, the Fifth Circuit rejected Monogram’s
invocation of Bogle and the argument that the trial court
must have exercised jurisdiction in dismissing the federal
claim. Instead, it was error for the trial court to dismiss
the federal claim because the court had concluded it

16

lacked jurisdiction. The panel, consequently, reinstated
the federal claim. Pet. App. at 1la-12a. Monogram’s
attempt to convert the district court’s error into an argu-
ment for a §1367(c)(3) remand is unavailing. See Petition
at 19-20.

The Fifth Circuit used the phrase “magic words” only
once in the opinion when it quoted from the Bogle case..
Pet. App. at 8a. The Court of Appeals did not suggest it
was dismissing Monogram’s appeal simply because the
trial court had_ invoked §1447(c). The panel satisfied itself,
as Monogram had requested, that the remand was pur-
suant to §1447(c) and not §1367(c)(3).

Monogram’s attempt to portray the Fifth Circuit as a
rogue circuit that mechanically dismisses remand orders
based on “magic words” is inaccurate. The Petition
should be denied because the case does not present the
question posed by Monogram.

Il. THE PETITION SHOULD BE DENIED BECAUSE
THE FIFTH CIRCUIT’S DECISION IS PLAINLY
CORRECT.

There is iittle doubt the Fifth Circuit’s decision to
dismiss the appeal under §1447(d) is consistent with the
Court’s jurisprudence. The- Supreme Court has made
abundantly clear that §1447(d) “prohibits review of all
remand orders issued pursuant to §1447(c) whether erro-
neous or not.” Thermtron, 423 U.S. at 343.

Here, the Fifth Circuit found after reviewing the
order that the district court’s remand “was based solely
on §1447(c) grounds”. Pet. App. at 9a, n.3 (emphasis
added). Thus, following Thermtron, the Court of Appeals
held “even if Judge Barbier’s conclusion that he lacked
subject matter jurisdiction was clearly erroneous, he did

17

not state a non-§1447(c) ground for remand and we can-
not review his order.” Id. at 8a. The Fifth Circuit denied
rehearing en banc on this procedural ruling. Pet. App. at
24a-25a.

The cases cited by Monogram did not involve
remand orders like the one here. The cases dealt with
remand orders that either did not contain reasons for the
remand, or were facially ambiguous on why the remand
had been granted. See e.g., Mangold v. Analytic Serv., Inc.,
77 F.3d 1442 (4th Cir. 1996) (remand order cites §1447(c)
and discusses factors relating to discretionary remand);
Transit Casualty Co. v. Certain Underwriters at Lloyd's, 119
F.3d 619, 624 (8th Cir. 1997) (“district court’s citation to
§1447(c) was somewhat ambiguous”); Engelhardt v. Paul
Revere Life Ins. Co., 139 F.3d 1346, 1350 (11th Cir. 1998)
(district court did not state the statutory basis for its
remand order); In re Amoco Petroleum Additives Co., 964
F.2d 706, 708 (7th Cir. 1992) (court did not explain why
case was remanded); Zuniga v. Blue Cross & Blue Shield, 52
F.2d 1395, 1400 (6th Cir. 1995) (district court did not
specify, reasons for remanding counts).

Ill. THE PETITION SHOULD BE DENIED BECAUSE
MONOGRAM HAS WAIVED ITS RIGHT TO
SEEK REVIEW OF THE FIFTH CIRCUIT DECI-
SION.

Monogram has waived the right to seek review of the
Fifth Circuit ruling in this Court. Monogram embraced
the decision as correct when Monogram relied on it to
establish federal question jurisdiction and re-remove the
case. See Resp. App. at 7 & 9. Monogram attached the
Fifth Circuit’s decision as an exhibit to the Notice of
Removal and did not claim the ruling was in error or
subject to further review. Id.

18

Only now, after the district court remanded the case
for a second time, does Monogram reverse course and
argue the Fifth Circuit’s decision was in error. Having
adopted the ruling, Monogram cannot disown it. Mono-
gram has waived its right to seek review of the decision
and is judicially estopped from taking such inconsistent
positions. See Ahrens v. Perot Sys. Corp., 205 F.3d 831, 833
(5th Cir.), cert. denied, 121 S. Ct. 59 (2000) (Judicial estop-
pel “is a common law doctrine by which a party who has
assumed one position in his pleadings may be estopped
from assuming an inconsistent position.”); In re Coastal
Plains, Inc., 179 F.3d 197, 205 (5th Cir. 1999), cert. denied,
120 S. Ct. 936 (2000) (doctrine “is to protect the integrity
of the judicial process by preventing the parties from
playing fast and loose with the courts to suit the exigencies
of self interest”) (quotations and alterations omitted)
(emphasis added).

IV. THE PETITION SHOULD BE DENIED AS MOOT.

By removing the case a second time, Monogram
mooted the first remand ruling and this certiorari peti-
tion. The question now is whether the second remand
ruling was proper. This is the subject of a pending Fifth
Circuit appeal. If the Court of Appeals reverses the sec-
ond remand order, the case may be back in federal court.

Similarly, the FDIC has sought to intervene in state
court. Resp. App. at 33-34. If granted, the FDIC and
Monogram have indicated the case will be removed to
federal court for a third time. Such a removal would
spawn additional jurisdictional litigation, and again moot
the first remand ruling. Thus, any decision rendered by
the Court relating to the first remand ruling is simply
advisory in nature.

19

Alternatively, the Court may wish to remand the
matter to the Fifth Circuit to determine whether the now-
superceded first remand ruling remains a live contro-
versy. See Scott v. Kentucky Parole Board, 429 U.S. 60, 61
(1976) (“The Court postpones decision of the issue by
sending the case back to the Court of Appeals for its
advice on the question whether the litigation is now
moot.”) Such action may be appropriate in light of the
pending FDIC appeal on the second remand ruling.

V. THE PETITION SHOULD BE DENIED BECAUSE
THE FIFTH CIRCUIT’S DECISION FURTHERS
PUBLIC POLICY.

The Fifth Circuit’s decision in this case furthers pub-
lic policy and should not be disturbed. Permitting a party,
like Monogram, to re-write the clear and unambiguous
basis for a remand ruling would clearly lead to undesir-
able results. Future litigants who want to circumvent
§1447(d) will simply claim to have discovered the “real”
reason for the trial court’s remand. The appellate flood-
gates will open and consistency will be lost.

Congress enacted §1447(d) to avoid protracted juris-
dictional litigation. Thermtron, 423 U.S. at 351. Mono-
gram’s request that the lower court’s decision be re-
written to permit an appeal directly contravenes this
congressional goal.

Moreover, this particular case begs for the applica-
tion of §1447(d). The jurisdictional wrangling has gone on
for more than three years, and it is time to reach the
merits of the case. The State Court is certainly capable of
resolving the federal issues presented in the case, and the
remand rulings do not carry any preclusive effects. Pet.
App. at 1la.

20
CONCLUSION

For the foregoing reasons the petition for a writ of
certiorari should be denied.
Respectfully submitted,

Topp R. Stack Louis L. PLOTKIN*
GALLOWAY, JOHNSON, M.H. GERTLER

Tompkins, Burr & SMITH ~— GERTLER, GERTLER,
Suite 4040 VINCENT & PLOTKIN
701 Poydras Street 127-129 Carondelet Street ~
New Orleans, LA 70139 New Orleans, LA 70130
(504) 525-6802 (504) 581-6411

*Counsel of Record
Attorneys for Respondent
May 18, 2001

APPENDIX

App. 1

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

PATRICIA HEATON, on : CIVIL ACTION NO.
behalf of herself and all : 98-1823
others similarly situated,: c/w No. 99-2603

Plaintiff, SECTION “J”

Vv.

MONOGRAM CREDIT ‘ MAGISTRATE 1

CARD BANK OF
GEORGIA, : (Filed Dec. 3, 1999)

Defendant.

NOTICE OF APPEAL

NOTICE IS HEREBY GIVEN that defendant Mono-
gram Credit Card Bank of Georgia (“Monogram”) hereby
appeals to the United States Court of Appeals from the
November 22, 1999 order by the District Court, which
remanded plaintiff's breach of contract and Louisiana
Consumer Credit Law (“LCCL”) claims to state court.

The District Court dismissed with prejudice a federal
claim that had been brought by plaintiff under the Truth
in Lending Act (“TILA”), 15 U.S.C. §1601, et seq., as the
predicate to its order remanding the remaining claims to
state court. Federal subject matter jurisdiction indisputa-
bly existed by reason of plaintiff’s assertion of the TILA
claim, and federal jurisdiction was clearly exercised when
the District Court granted plaintiff’s motion for voluntary

App. 2

dismissal of the TILA claim with prejudice. Therefore, the
remand of the remaining claims immediately following
the Court’s dismissal with prejudice of the TILA claim
was necessarily made under 28 U.S.C. §1367(c)(3), not 28
U.S.C. §1447(c). As the Fifth Circuit stated in Bogle v.
Phillips Petroleum Co., 24 F.3d 758, 762 (5th Cir. 1994):

The critical distinction for determining appeal-
ability is the presence of federal subject matter
jurisdiction prior to the order of remand. In a
Section 1447(c) remand, federal jurisdiction
never existed, and in a non-Section 1447(c)
remand, federal jurisdiction did exist at some
point in the litigation, but the federal claims
were either settled or dismissed. (emphasis in
original).

See Engelhardt v. Paul Revere Life Ins. Co., 139 F.3d 1346,
1350-1351 and n. 3 (11th Cir. 1998) (plaintiff amended
complaint after removal to add ERISA claim; court later
dismissed ERISA claim and remanded remaining claims;
remand order was therefore necessarily made under Sec-
tion 1367(c)(3), not Section 1447(c), and was appealable).

Where a federal claim is dismissed and thereafter the
remaining claims are remanded to state court, the remand
is made pursuant to the discretionary authority of 28
U.S.C. §1367(c)(3) and is appealable as a matter of right
under 28 U.S.C. §1291. See, e.g., Guzzino v. Felterman, 191
F.3d 588, 594 and n. 7 (5th Cir.1999); Hook v. Morrison
Milling Co., 38 F.3d 776, 780 (5th Cir. 1994). The mere fact
that the District Court erroneously cited 28 U.S.C.
§1447(c), rather than 28 U.S.C. §1367(c)(3), as the basis for
its remand following the dismissal with prejudice of the
TILA claim does not render the remand order non-

App. 3

reviewable. Flores v. Long, 110 F.3d 730, 732 (10th Cir.
1997); Mangold v. Analytic Services, Inc., 77 F.3d 1442,
1450-1451 (4th Cir. 1996).

PROCEDURAL BACKGROUND

The remand order by Judge Barbier was entered on a
“Motion for Reconsideration” filed by plaintiff more than
one year after the prior deniai of her remand motion by
Judge Porteous, the judge originally assigned to this case.
Judge Porteous denied remand on October 7, 1998, speci-
fically concluding that Monogram is a “state bank” under
Section 3(a)(2) of the Federal Deposit Insurance Act, 12
U.S.C. §1813(a)(2), and therefore plaintiff’s LCCL claim
was completely preempted by Section 27 of that Act, 12
U.S.C. § 1831d. Directly contrary to Judge Porteous’ rul-
ing, Judge Barbier concluded in his November 22, 1999
remand order that Monogram is not a “state bank.” Both
Judge Porteous and Judge Barbier stated that their rul-
ings were supported by the “plain language” of the Fed-
eral Deposit Insurance Act, but they reached
diametrically opposed positions on the meaning of that
“plain language.” Judge Barbier did not even mention the
prior contrary decision by Judge Porteous, nor did he
offer any explanation for reversing Judge Porteous’ rul-
ing, which was the law of the case. See Loumar v. Smith,
698 F.2d 759, 762 (Sth Cir. 1983) (“when a district judge
has rendered a decision in a case, and the case is later
transferred to another judge, the successor should not
ordinarily overrule the earlier decision”). Judge Barbier’s
remand order was not only contrary to the denial of
remand by Judge Porteous, it was also contrary to Judge
Barbier’s own decision a year earlier, on November 25,

App. 4

1998, wherein he denied plaintiff's motion for interlocu-
tory appeal of Judge Porteous’ denial of remand and
stated that “plaintiff has not shown a substantial ground
for difference of opinion as to whether defendant is a
state bank. Plaintiff cites no authority for the contention
that defendant is not a state bank.”

In addition, Judge Barbier issued his remand order
within one business day of being advised in writing of
the Federal Deposit Insurance Corporation’s (“FDIC”)
intent to intervene immediately in this case. As Mono-
gram advised the District Court prior to its remand order,
FDIC intervention would have created an independent
basis for federal jurisdiction. See 12 U.S.C. §1819(b). The
FDiC’s brief in support of intervention states: “For the
FDIC, the impact of a decision by the Court in this area
extends beyond the fate of Monogram and may affect
hundreds of similarly situated FDIC-insured institutions
processing billions of dollars in transactions. A decision
adverse to Monogram may literally open the floodgates
of litigation and deluge the institutions regulated by the
FDIC with a torrent of similarly frivolous suits.” The
FDIC’s motion to intervene was filed before the remand
order was entered, but was not acted on by Judge Barbier
prior to the remand.

App. 5

Respectfully submitted,

/s/ David S. Willenzik
ANTHONY ROLLO, T.A. (#01133)
DAVID S. WILLENZIK (#13487)
LAUREN Z. GARVEY (#23383)
McGLINCHEY STAFFORD
A Professional Limited Liability
Company
643 Magazine Street,
P.O. Box 60643
New Orleans; LA 70130-3488
(504) 586-1200

Attorneys for Defendant
Monogram Credit Card Bank
of Georgia

IR A TC et ets AOE

App. 6

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

PATRICIA HEATON, : CIVIL ACTION NO.
Individually and on : 00-3260
behalf of herself and all : SECTION “I”

others similarly situated, :
— MAGISTRATE 5
Plaintiff,
v.

MONOGRAM CREDIT
CARD BANK OF
GEORGIA,

Defendant.

NOTICE OF REMOVAL

Defendant Monogram Credit Card Bank of Georgia
(“Monogram”), while fully reserving its rights to object to
any matters, including without limitation, service, juris-
diction, and venue, and without waiving any other

defenses or objections to the plaintiff’s allegations, has
removed to this Court the case captioned, Patricia Heaton,
Individually and on Behalf of Herself and All Others Similarly
Situated, v. Monogram Credit Card Bank of Georgia, No.
98-8275, Div. D, originally filed in the Judicial District
Court for the Parish of Orleans, State of Louisiana, by
plaintiff Patricia Heaton.

App. 7

)

1.

This Court’s removal jurisdiction is based on federal
question jurisdiction as provided in 28 U.S.C. §§ 1331 and
28 U.S.C. §§ 1441(a) and (b).

2.

Plaintiff has alleged a violation of the Federal Truth
in Lending Act (“TILA”), 15 U.S.C. § 1601 et. seq., which
constitutes a claim arising under the laws of the United
States. The United States Fifth Circuit Court of Appeals
voided the district court’s order dismissing the TILA
claim and further noted that Monogram could again
remove the matter to federal court based on the reinstate-
ment of the TILA claim. See November 2, 2000 Opinion
attached as Exhibit 1.

3

In addition, plaintiff’s allegations that Monogram’s
charges violate Louisiana law are completely preempted
by Section 27(a) of the Federal Deposit Insurance Act, 12
U.S.C. § 1831(d)(a), which also constitutes a claim arising
under the laws of the United States.

4.

Diversity jurisdiction exists under 28 U.S.C. § 1332 as
the matter in controversy exceeds the sum of $75,000,
exclusive of interest and costs, and is between citizens of
different states.

App. 8

‘
;
3
4
i
;

a

At all relevant times hereto, plaintiff is and has been
a citizen of Louisiana and Monogram is and has been a
federally-insured state bank located in Georgia.

6.

Plaintiff brings this action net only on her own
behalf, but also as a class action pursuant to article 591 of
the Louisiana Code of Civil Procedure.

7.

Plaintiff has asked for an award of “reasonable attor-
ney’s fees.”

8.

The Fifth Circuit has held in In Re Abbot Laboratories,
51 F.3d 524 (5th Cir. 1995) that, pursuant to La. Code Civ.
Proc. art 595, the entire amount of attorney’s fees are
attributable to the class representatives.

9.

Clearly, given the size of the putative class and the
nature of the claims asserted, the potential counsel fee is
——_;__________in excess_of $75,000.

10.

This Court has supplemental jurisdiction over all
: other claims asserted by plaintiff in accordance with 28
U.S.C. §§ 1367(a) and 1441(c).

App. 9

11.

Removal is timely under 28 U.S.C. § 1446(b) as less
than thirty days have passed since the United States Fifth
Circuit Court of Appeals November 2, 2000 decision
voided the order entered in the federal court proceedings
which dismissed the federal TILA claims alleged by the
plaintiff. As a result, the TILA claims are reinstated in
these proceedings, thereby creating a basis for removal to
federal court.

12.
A Copy of this Notice of Removal has been sent to
counsel of record for the plaintiff and has been filed with

the Clerk of Court for the Parish of Orleans, State of
Louisiana.

13.

Attached to this Notice of Removal as Exhibit 2 are
copies of all process, pleadings and orders filed in the
state court record through this date.

App. 10

Respectfully submitted, this 3rd day of November,
2000.

Respectfully submitted,

/s/ Lauren Z. Garvey

COLVIN G. NORWOOD (#10083)

ANTHONY ROLLO (#01133)

DAVID S. WILLENZIK (#13487)

LAUREN Z. GARVEY (#23383) :

McGLINCHEY STAFFORD i

A Professional Limited Liability H
Company

643 Magazine Street

New Orleans, Louisiana 70130

Telephone (504) 586-1200

ATTORNEYS FOR MONOGRAM
CREDIT CARD BANK OF
GEORGIA

HPAES PMIMAT ecu aPs MARI + 910. Site SARE. TEA abe awe

9 eT eS

App. 11

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PATRICIA HEATON, CIVIL ACTION
Plaintiff NO. 98-1823 - “J”
Vv. New Orleans, Louisiana

MONOGRAM CREDIT Wednesday, December 20, 2000

CARD, ET AL.
10:00 a.m.

Defendants.

ORAL ARGUMENT ON SEVERAL MOTIONS
BEFORE THE HONORABLE CARL J. BARBIER,
UNITED STATES DISTRICT JUDGE

App. 12

APPEARANCES:

For the Plaintiff: Galloway, Johnson, Tompkins &
Burr
BY: TODD ROBERT SLACK
701 Poydras Street, Suite 4040
New Orleans, Louisiana 70139
504-525-6802

and

Gertler, Gertler, Vincent &
Plotkin
BY: LOUIS L. PLOTKIN and
LOUIS L. GERTLER
127-129 Carondelet Street
New Orleans, Louisiana 70130
504-581-6411

For Monogram Credit Ballard, Spahr, Andrews &
Card: Ingersoll
BY: ALAN S. KAPLINSKY
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania
19103
| 215-665-8500

and

App. 13

* * *

[31] THE COURT: You have been helping them from
the very beginning in this case.

MR. TAYLOR: That’s not something to apologize
for.

THE COURT: I’m not suggesting you ought to apol-
ogize. I’m just trying to get the facts out. You have been
helping them from the very beginning. You have assisted
them; when you assisted them, you obstructed the plain-
tiffs’ discovery. You did not want to be involved in pri-
vate litigation. Now all of a sudden this is this great
interest of the FDIC. To me I can only draw one logical
conclusion from all of this: This is simply a maneuver to
avoid remand of the case, pure and simple. And nothing
else makes any sense to me. If that is the only reason the
FDIC wants to intervene, I don’t think you have a basis
for intervening.

MR. TAYLOR: No, Your Honor.
THE COURT: I’m not going to allow it.

MR. TAYLOR: No, Your Honor, that is not our sole
basis for intervening.-As we stated in our papers, what
we seek to do is defend our decision in 1988 to insure
Monogram Bank and our determination that it was, in
fact, a state bank under the FDI Act.

Two, we are here to reserve territory on this issue
within the industry. Since 1991 we have -

THE COURT: Monogram has the same interests on
both of those points as you do, don’t they?

a

App. 14

MR. TAYLOR: They may be aligned at this point,
yes.

THE COURT: Okay. Why then isn’t your interest
[32] protected?

MR. TAYLOR: Well, Your Honor, there is a differ-
ence between participating in a case as a amicus versus as
a party. As a party we have a right to appeal. We have a
right to brief issues. We have a right to take discovery
and present evidence. As a matter of fact, those -

THE COURT: Exactly what you said you didn’t
have the resources to do a year ago. Now you want to do
all of that.

MR. TAYLOR: That was -

THE COURT: You aren’t going to depose that guy
who gave that affidavit for a deposition if I let you
intervene?

MR. TAYLOR: We just think that is frivolous and it
is a red herring. The entire thing is a red herring.

THE COURT: I’m not sure about that. If I kept this
case, I would be very interested in learning exactly what
went on and why. It is very curious to me that a federal
agency - I’m very disturbed I will say this about the
actions of the FDIC in this entire matter, and I thought
the FDIC was there to protect the public frankly and
consumers and not to protect Monogram Bank and simi-
lar companies. I thought they were to regulate these
companies and not to protect them and to the extent of
even defending them in private litigation. I just don’t
understand the FDIC’s whole position in this case. I mean
what difference does it make if you have to go back to a

App. 15

MD if ultimately these banks have to go to Congress to
get the law changed which they have a perfect right to
[33] do? What. difference does it make if you have to
regulate these state banks? Don’t you have another bank
to regulate?

MR. TAYLOR: You put you [sic] finger on the point
when you said that the FDIC should be regulating these
institutions. Our ability -

THE COURT: I said they regulate what they have to
regulate and protect consumers, and I don’t view your
mission as being to protect the industry. And that seems

to be what you, what the FDIC considers its mission to
be.

I’m not the only one that is disturbed by the FDIC’s
actions in this. I’m sure you are aware that among others
the attorney general of the State of Louisiana and appar-
ently other attorneys general and consumer advocates
around the country are very disturbed and bothered and
critical of the FDIC’s actions in this type of litigation. And
I must say I agree with them. I apologize for interrupting
you on this, but I wanted to do so at the very beginning.

Let met put on the record that I received several
letters in connection with this matter dated December 5,
2000, from the State of Louisiana, Office of Financial
Institutions, from a Mr. Gary L. Newport, Chief Attorney.
Is Mr. Newport in Court?

(No response.)

THE COURT: He is not here. I don’t know Mr.
Newport. He is an attorney so I assume he is licensed in

App. 16

Louisiana since he represents the Office of Financial Insti-
' tutions for the State of

* * *

App. 17

United States District Court, E.D. Louisiana.

Patricia HEATON, on Behalf of Herself
and All Others Similarly Situated

V.
MONOGRAM CREDIT CARD BANK OF GEORGIA
No. Civ.A. 98-1823.
Jan. 5, 2001.

ORDER AND REASONS
BARBIER, J.

Before the Court are Plaintiffs’ Motion to Remand
(Rec.Doc. 108), Defendant’s Motion to Add the Federal
Deposit Insurance Corporation (“FDIC”) as a Necessary
Party Defendant (Rec.Doc. 110), and FDIC’s Motion for
Leave to Intervene as a Party Defendant (Rec.Doc. 103).
The motions were set for hearing with oral argument on
December 20, 2000, at which time the Court took the
matter under advisement. After considering the mem-
oranda and argument presented by counsel, the Court
concludes that it is without subject matter jurisdiction to
hear this case. Accordingly, Plaintiffs’ motion to remand
this case to the Civil District Court for the Parish of
Orleans is GRANTED. The remaining two motions are
DISMISSED AS MOOT.

Background

In 1998, Patricia Heaton filed a class action suit
against defendant Monogram Credit Card Bank of Geor-
gia (“Monogram”) in state court alleging that Monogram
had violated the Louisiana Consumer Credit Law

App. 18

(“LCCL”) by charging excessive credit card late fees and
interest. Monogram removed the case to this Court and
Plaintiffs’ subsequent motion to remand was denied.
Resigned to pursuing their case in federal court, Plaintiffs
then, over Monogram’s objection, amended their com-
plaint to add a federal Truth in Lending Act (“TILA”)
claim. However, as the case progressed in this Court,
Plaintiffs discovered information which prompted them
to reurge their motion to remand. On November 22, 1999,
this Court determined that it was without subject matter
jurisdiction and remanded the case to state court. At the
same time, the Court permitted Plaintiffs to dismiss their
federal TILA claim.

Rather than proceed in state court, Monogram sought
to appeal the remand order to the Fifth Circuit Court of
Appeals. On November 2, 2000, the Fifth Circuit dis-
missed Monogram’s appeal concluding that 28 U.S.C.
§ 1447(d) precluded appellate review. Heaton v. Monogram
Credit Card Bank, 231 F.3d 994, 995 (5th Cir.2000). How-
ever, the Fifth Circuit reinstated the TILA claim noting
that Monogram would have immediate grounds to once
again remove the case to federal court — this time based
on federal question jurisdiction due to the pending TILA
claim. Id. at 1000 n. 6. Shortly after the Fifth Circuit
issued its ruling, however, Plaintiffs amended their state
court petition to delete the federal TILA claim. Mono-
gram then, for the second time, removed the case to this
Court. Soon thereafter, FDIC moved to intervene in the
suit, Monogram sought to add FDIC as a necessary party,
and Plaintiffs once again moved to remand the case to
state court. *

App. 19

Discussion

The Court begins its analysis with Plaintiffs’ motion
to remand. The arguments made by both sides are essen-
tially the same as those made over a year ago when
Plaintiffs last moved to remand this case. Monogram
argues that it qualifies as a “State bank” under the Fed-
eral Deposit Insurance Act (“FDIA”) (12 U.S.C. § 1811, et
seq.) and that section 1831d(a) of the FDIA preempts state
law causes of action against State banks. Moreover,
Monogram argues that the preemption created by section
1831d(a) is complete so as to allow removal of this case to
federal court. Monogram also asserts that the possibility
of attorney’s fees as part of Plaintiffs’ potential award
meets the jurisdictional amount for diversity jurisdiction.
Plaintiffs, on the other hand, argue that the Court is
without subject matter jurisdiction because Monogram is
not a State bank, and even if it is, section 1831d(a) does
not completely preempt state law claims so as to allow
removal to a federal court.

The Court considered the State bank issue over a
year ago when the case was remanded the first time. At
that time, the Court determined that Monogram, a “credit
card” bank chartered under Georgia law, was not a State
bank within the meaning of the FDIA. Heaton v. Mono-
gram, 1999 WL 1789422, at *1 (E.D.La. Nov. 22, 1999). In
reaching that conclusion, the Court relied on the plain
language of 12 U.S.C. § 1813(a)(2) which defines a State
bank as “any bank . . . engaged in the business of receiv-
ing deposits . . . and incorporated under the laws of any
State. ...” Although Monogram received deposits from
its parent company, it was not “engaged in the business”
of receiving deposits from its customers. Accordingly, the

App. 20

Court concluded that Monogram was not a State bank,
and therefore, federal preemption did not apply. Heaton,
1999 WL 1789422, at *1.

In opposition to the current motion to remand,
Monogram urges the Court to reconsider its prior conclu-
sion on the State bank issue. In support of its position,
Monogram directs the Court’s attention to several factors
that the Court did not have the benefit of considering last
time.! First, FDIC has since issued General Counsel’s
Opinion No. 12 (“GCO-12”), in which FDIC sets forth its
interpretation of “engaged in the business of receiving
deposits.” Monogram’s Exh. F. According to GCO-12, the
statutory requirement of being “engaged in the business
of receiving deposits” is satisfied by the continuous main-
tenance of one or more non-trust deposits in the aggre-
gate amount of $500,000. Id. at 1 (65 Fed.Reg. 14568).
Second, Monogram points out that it does in fact receive
“deposits” from its customers because Monogram accu-
mulates credit balances from customers who overpay
their credit card accounts. Finally, Monogram points out
that pursuant to recent changes in Georgia law, it now
accepts deposits from unaffiliated parties. Monogram’s
Exh. H, { 2-3.

1 In its memorandum and at oral argument, Monogram also
argued of the potential chaos that would ensue if courts began
to “second-guess” FDIC’s determination of State bank status.
Implicit in FDIC’s 1988 decision to insure Monogram was a
finding by FDIC that Monogram was a State bank. While
Monogram and FDIC made persuasive arguments on this point,
those policy arguments are best left for Congress to resolve
rather than the judiciary.

App. 21

It is important to note that the issue is not whether
Monogram “receives deposits” — it likely does. But sec-
tion 1813(a)(2) does not define a State bank as one that
“receives deposits.” Rather, a State bank is one engaged in
the business of receiving deposits. 12 U.S.C. § 1813(a)(2).
While the statute does not define “engaged in the busi-
ness,” the Court must assume that Congress added the
phrase for some purpose, and therefore, must interpret
section 1813(a)(2) so as to give meaning to the phrase.
Thus, even assuming that overpayments by credit card
customers would qualify as “deposits” under 12 U.S.C.
§ 1813(1), a premise that in and of itself is not completely
clear, it does not necessarily follow that Monogram is
engaged in the business of receiving deposits as that term
is used in the statute.

Similarly, the fact that the Georgia statutes under
which Monogram is chartered now allow Monogram to
accept deposits from non-affiliates does not necessarily
lead to the conclusion that Monogram is engaged in the
business of receiving deposits. Even with the changes in
Georgia’s banking law, Monogram’s ability to accept
deposits is still extremely limited. See Ga. Stat. § 7-5-3(7).
And the law under which Monogram is chartered still
dictates that Monogram may only engage in the business
of soliciting, processing, and making loans pursuant to
credit card accounts. ...” Ga. Stat. § 7-5-3(6).2 Thus, the
per se restrictions imposed by the state law governing

2 Furthermore, the statutory changes at issue were made
well after Plaintiffs’ cause of action arose and this suit was filed.
Accordingly, the changes in Georgia law would likely be
inapplicable to this lawsuit.

App. 22

Monogram’s operations militate against finding that
Monogram engages in the business of receiving deposits.

Finally, GCO-12 does not convince the Court that
Monogram engages in the business of receiving deposits.
Undoubtedly, Monogram’s activities qualify as “engaged
in the business of receiving deposits” as FDIC interprets
the phrase in GCO-12, and if the Court were bound by
GCO-12 it would be compelled to find that Monogram is
a State bank. But given that GCO-12 is an opinion letter, it
is not entitled to Chevron deference. Christensen v. Harris
County, 529 U.S. 576, 120 S.Ct. 1655, 1662-63, 146 L.Ed.2d
621 (2000). Rather, it is “entitled to respect” but only to
the extent that the opinions and interpretations expressed
therein have the power to persuade. Id. Reviewing
GCO-12 in light of section 1813(a)(2) it would seem that
FDIC’s interpretation of “engaged in the business of
receiving deposits” ignores at least one aspect of the
statute. Section 1813(a)(2) refers to deposits in the plural
which would seem to indicate that Congress envisioned a
State bank to have at minimum more than one deposit.
FDIC, on the other hand, seems to completely ignore this
and under its interpretation, a single deposit of $500,000
suffices. At oral argument, counsel was unable to explain
the significance of the $500,000 figure chosen by FDIC.
Simply said, the Court is unable to discern how FDIC’s
interpretation of “engaged in the business of receiving
deposits,” as explained in GCO-12, gives effect to the
language of the statute as Congress wrote it. Accordingly,
the Court does not find GCO-12 persuasive.

fhus, having considered Monogram’s new argu-
ments, the Court once again concludes that Monogram is

App. 23

not “engaged in the business of receiving deposits.” Con-
sequently, it does not meet the definition of a State bank
under the FDIA. Given that Monogram is not a State
bank, preemption, whether ordinary or complete, does
not apply.?

However, assuming arguendo that Monogram is a
State bank, the Court would nevertheless find removal
improper because the Court is convinced that section
1831d does not completely preempt state law causes of
action. While neither the Fifth Circuit nor the United
States Supreme Court has addressed whether 12 U.S.C.
§ 1831d(a), the preemption provision of the FDIA, com-
pletely preempts state law causes of action, the Fifth
Circuit has recognized that the doctrine of complete pre-
emption is to be narrowly applied, that few federal stat-
utes meet the standards necessary to show complete
preemption, and that the doctrine should be applied with
“circumscription.” Heimann v. National Elevator Industry
Pension Fund, 187 F.3d 493, 500 (5th Cir.1999). Further, the
Fifth Circuit requires evidence of clear Congressional
intent to show that claims preempted by state iaw are
removable. Id.; Aaron v. National Union Fire Ins., 876 F.2d
1157, 1165 (5th Cir.1989). Monogram points to nothing in
the FDIA or its legislative history that evidences such
intent. And while other courts have reached a contrary

3 The Court’s determination on this issue will have no
preclusive effect in state court because a remand order is
jurisdictional in nature. Heaton, 231 F.3d at 1000 (citing Smith v.
Texas Children’s Hosp., 172 F.3d 923, 926 (5th Cir.1999)). Thus, all
of the same defenses and arguments made to this Court,
including ordinary preemption, are available to Monogram in
state court.

App. 24

conclusion, see, e.g., M. Nahas & Co. v. First Nat’l Bank, 930
F.2d 608 (8th Cir.1991) (holding that the National Bank
Act completely preempts state law claims for usurious
interest), the Court finds the reasoning employed in cases
such as Jones v. Bankboston, N.A., 115 FSupp.2d 1350
(S.D.Ala. Oct. 2, 2000) (holding that there is no complete
preemption under the NBA), more persuasive. The dis-
trict judge in Jones conducted a detailed and comprehen-
sive analysis of complete preemption under sections 85
and 86 of the National Bank Act, the sister statutes to
section 1831d, and found absent the requisite congres-
sional intent to allow removal under the complete pre-
emption doctrine. The Court is persuaded that the
reasoning employed in Jones is consistent with the stan-
dards enunciated by the Fifth Circuit in Heimann and
Aaron.

Finally, the Court concludes that there is no diversity
jurisdiction because Monogram has failed to demonstrate
that Plaintiffs’ claims meet the jurisdictional amount.
Monogram argues that if Plaintiffs avail themselves of the
attorney fee provisions of the LCCL then Heaton, as the
sole named plaintiff, will have a claim exceeding $75,000.
In re Abbott Laboratories, 51 F.3d 524 (5th Cir.1995). How-
ever, Plaintiffs amended their state court petition prior to
removal to clarify that they are not seeking attorney’s
fees under the LCCL. Plaintiffs’ Exh. 25, at 4, ¥ 10.
Plaintiffs’ counsel also stipulated on the record at oral
argument that Plaintiffs are not claiming and will not
attempt to claim attorney’s fees under the LCCL. This
Court has previously held that attorney’s fees are attrib-
uted to the class representative only when awarded pur-
suant to a specific statute. Jones v. Valvoline Co., 1999 WL

App. 25

319215 (E.D.La. May 20, 1999). Given then that Plaintiffs
do not seek attorney’s fees pursuant to a statute, an
attorney’s fee award is not relevant to a claim of diversity
jurisdiction in this case. Monogram has not otherwise
shown that Heaton’s claims meet the jurisdictional
amount. Accordingly, the Court finds that it does not
have diversity jurisdiction over this suit.

In conclusion, the Court finds that Monogram is not a
State bank, and even if it is, Plaintiffs’ claims are not
completely preempted by federal law. The Court does not
have diversity jurisdiction. Consequently, this Court is
without subject matter jurisdiction to hear this case. The
suit is remanded to state court pursuant to 28 U |S.C.
§ 1447(c). Given the Court’s decision to remand the case,
FDIC’s motion to intervene and Monogram’s motion to
add FDIC are moot. Accordingly,

IT IS ORDERED that Plaintiffs’ Motion to Remand
should be and is hereby GRANTED. The case is
remanded to the Civil District Court for the Parish of
Orleans. The request for attorney’s fees and costs is
DENIED;

IT IS FURTHER ORDERED that Defendant’s Motion
to Add the Federal Deposit Insurance Corporation as a

Necessary Party Defendant is DISMISSED AS MOOT; .

IT IS FURTHER ORDERED that FDIC’s Motion for
Leave to Intervene as a Party Defendant is DISMISSED
AS MOOT.

App. 26

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA

Patricia Heaton,
Plaintiff,

v. Case No. 98-1823

Monogram Credit Card Bank

of Georgia, et al., Section J

Magistrate 1

i i

Defendants.

NOTICE OF APPEAL

Notice is hereby given that the Federal Deposit Insur-
ance Corporation (“FDIC”) hereby appeals to the United
States Court of Appeals for the Fifth Circuit from the
District Court’s Order of January 5, 2001 insofar as it
dismisses as moot the FDIC’s Motion for Leave to Inter-
vene as a Party Defendant and grants the Plaintiffs’
Motion to Remand.

Respectfully submitted,

Charles L. Cope
Senior Counsel

/s/ Gregory F. Taylor
Gregory F. Taylor
Counsel
Federal Deposit Insurance
Corporation
550 17th Street, NW
Room H-2112
Washington, DC 20429
PHONE: (202) 736-0582
FAX: (202) 736-0584

App. 27

United States District Court, E.D. Louisiana.

Patricia HEATON, on Behalf of Herself and
All Others Similarly Situated

v.
MONOGRAM CREDIT CARD BANK OF GEORGIA
No. Civ.A. 98-1823.
Feb. 14, 2001.
BARBIER, J.

Before the Court is a motion for stay filed by the
Federal Deposit Insurance Corporation (“FDIC”)
(Rec.Doc. 136). Plaintiffs oppose the motion. The motion,
set. for hearing on February 14, 2001, is before the Court
-on briefs, without oral argument.

The convoluted procedural background of this case is
fully explained in the Court’s January 5, 2001 Order and
Reasons (Rec.Doc. 133). In that order, the Court explained
why it was without subject matter jurisdiction to hear
Plaintiffs’ suit against Monogram Credit Card Bank of
Georgia (“Monogram”). The Court remanded the case to
state court pursuant to 28 U.S.C. § 1447(c). At the same
time, the Court dismissed as moot FDIC’s motion to
intervene in the suit, as well as defendant Monogram’s
motion to add FDIC as a necessary party. FDIC is appeal-
ing those rulings and now asks the Court to stay the
remand order pending the outcome of its appeal.

In support of its motion for a stay, FDIC argues that
this case satisfies the Fifth Circuit’s criteria for a stay
pending appeal because, among other things, FDIC has a
substantial likelihood of success on the merits. As the
Court sees it, however, the crucial threshold question is

App. 28

whether the Court would have jurisdiction to grant
FDIC’s request should it find FDIC’s arguments mer-
itorious. After reviewing the applicable law and the
authorities cited by FDIC, the Court concludes that it
lacks jurisdiction to issue a stay.

Where an appellate court has jurisdiction to review a
remand order, the district court retains jurisdiction to
modify or vacate the order. In re Shell Oil Co., 932 F.2d
1523 (5th Cir.1991) (quoting Browning v. Navarro, 743 F.2d
1069 (5th Cir.1984)). Appellate courts have no jurisdiction
to review an order remanding a case to state court when
the federal district court determines that it lacks subject
matter jurisdiction. 28 U.S.C. § 1447(d); Heaton v. Mono-
gram Credit Card Bank, 231 F.3d 994, 997 (5th Cir.2000).
Accordingly, it is well-settled that federal courts are com-
pletely divested of jurisdiction following a remand to
state court based upon a finding that the court lacks
subject matter jurisdiction. New Orleans Pub. Serv. v.
Majoue, 802 F.2d 166, 167 (5th Cir.1986).

FDIC cites 12 U.S.C. § 1819(b)(2)(c) and a host of
cases for the proposition that FDIC can appeal any order
of remand issued by a district court. And given that FDIC
can appeal any order of remand, it follows that this Court
retains jurisdiction to issue a stay.

1 FDIC did not brief the issue of jurisdiction. Defendant
Monogram, without leave of court, filed a memorandum in
support of FDIC’s motion for a stay. Monogram addressed
jurisdiction in its memorandum. To simplify matters, the Court
will refer to Monogram’s arguments on the jurisdictional issue
as if they had in fact been presented by FDIC.

App. 29

While FDIC’s cited authorities unarguably establish
that FDIC can appeal an otherwise unreviewable remand
order, those authorities do nothing to bolster FDIC’s con-
tention that it can appeal the remand order issued in this
case — a case where FDIC was never a party to the suit.
For the same reason, FDIC’s reliance on section
1819(b)(2)(c) rings hollow. The Court is persuaded that
the remand order in this case is not reviewable at FDIC’s
request.?

Nor is the Court persuaded that the Court’s dismissal
of FDIC’s motion to intervene as moot is appealable.
Afram Carriers, Inc. V. Moeykens, 145 F.3d 298, 300 (5th
Cir.1998), cited by FDIC, recognizes that the denial of an
intervention as of right is an appealable final order under
28 U.S.C. § 1291. In this case, the Court did not deny
FDIC’s motion to intervene but rather dismissed it as
moot after finding that the Court lacked subject matter
jurisdiction. Accordingly, FDIC remains free to seek inter-
vention in the state court, and therefore, suffers no preju-
dice in not having its motion to intervene heard by this
Court.

In sum, the Court concludes that its January 5, 2000
order is non-reviewable on appeal. It follows then that
this Court is completely divested of jurisdiction, and
therefore, without power to issue a stay. Accordingly;

2 The Court notes that the procedural posture of the case at
this time is virtually identical to the procedural posture of the
case when Monogram sought to appeal the last remand order.
Under that virtually identical procedural posture, the Fifth
Circuit held that the remand order was not appealable. Heaton,
231 F.3d at 1000.

App. 30

IT IS ORDERED that FDIC’s motion for a stay should
be and is hereby DENIED.

App. 31

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 01-30104

PATRICIA HEATON
Plaintiff-Appellee
v.
MONOGRAM CREDIT CARD BANK OF GEORGIA
Defendant
v.
FEDERAL DEPOSIT INSURANCE CORPORATION
Movant-Appellant

Appeal from the United States District Court
for the Eastern District of Louisiana, New Orleans

(Filed Mar. 22, 2001)

Before EMILIO M. GARZA, STEWART and PARKER, Cir-
cuit Judges.

BY THE COURT:

IT IS ORDERED that movant-appellant’s motion for
stay pending appeal is DENIED.

App. 32

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 01-30104

PATRICIA HEATON
Plaintiff-Appellee
v.
MONOGRAM CREDIT CARD BANK OF GEORGIA
Defendant
v.
FEDERAL DEPOSIT INSURANCE CORPORATION
Movant-Appellant

Appeal from the United States District Court
for the Eastern District of Louisiana, New Orleans

Before EMILIO M. GARZA, STEWART, and PARKER,
Circuit Judges.

BY THE COURT:

IT IS ORDERED that Appellee’s motion to dismiss
appeal for lack of jurisdiction is carried with the case.

Judge Stewart dissents and would GRANT the motion to
dismiss the FDIC’s appeal for lack of jurisdiction.

/s/ CES

App. 33

CIVIL DISTRICT COURT FOR THE
PARISH OF ORLEANS

STATE OF LOUISIANA
NO. 98-8275 SECTION “16”
DIVISION “D”

PATRICIA HEATON, Individually and on
behalf of herself and all others
similarly situated,

VERSUS
MONOGRAM CREDIT CARD BANK OF GEORGIA
FILED:

DEPUTY CLERK

MOTION FOR LEAVE TO FILE PETITION
IN INTERVENTION

NOW INTO COURT, through undersigned counsel,
comes the Federal Deposit Insurance Corporation
(“FDIC” or “Petitioner in Intervention”), who pursuant to
Articles 1031 and 1033 of the Louisiana Code of Civil
Proced ure, moves this Court for leave to file the attached
Petition in Intervention. For the reasons set forth in the
FDIC’s accompanying Memorandum in Support of its
motion for leave to file Petition in Intervention, Petitioner
in Intervention avers that the intervention is proper and

App. 34

that the filing of this petition will not retard the progress
of the principal action.

Respectfully submitted,

/s/ James A. Brown

James A. Brown, T.A.

(Bar #14101)
K. Todd Wallace (Bar #25920)
LISKOW & LEWIS
701 Poydras Street, Suite 5000
New Orleans, LA 70139-5099
(504) 581-7979

Attorneys for Federal Deposit
Insurance Corporation,
Intervenor

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that copies of the foregoing
have been served upon counsel of record by hand deliv-
ery this 3d day of April, 2001.

/s/ James A. Brown
James A. Brown

App. 35

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NEW ORLEANS DIVISION

PATRICIA HEATON,
Individually and on
behalf of herself and all
others similarly situated

Plaintiff
VERSUS

MONOGRAM CREDIT
CARD BANK OF
GEORGIA

Defendant

DOCKET NO. 98-1823-J
c/w 99-2603-J

New Orleans, Louisiana
November 10, 1999
9:30 A.M.

+ + + & $F HF He HEH HH Hh HH F

THE FOLLOWING IS A TRANSCRIPT OF
MOTIONS HEARD BEFORE THE HONORABLE
CARL BARBIER, PRESIDING JUDGE ON THE
10th DAY OF NOVEMBER, 1999.

App. 36

APPEARANCES:

FOR THE PLAINTIFF:

FOR THE DEFENDANT

GERTLER, GERTLER,
VINCENT & PLOTKIN
(BY: LOUIS L. PLOTKIN)
127-129 Carondelet St.
New Orleans, LA 70130

McGLINCHEY, STAFFORD

A Professional Limited

Liability Company

(BY: ANTHONY ROLLO)

643 Magazine Street

P. O. Box 60643

New Orleans, LA
70130-3477

BALLARD, SPAHR,
ANDREWS

& INGERSOLL, LLP

(BY: BURT M. RUBLIN)

1735 Market Street

51st Floor

Philadelphia, PA 19103-7599

App. 37

[33] illegal or wrong, but it seems to me the sole reason
for them insuring this minute fraction of their deposits is
to get qualified as a state bank under the statute. I want
you to tell me if I am wrong.

MR. RUBLIN: Your Honor, that’s the most
insurance they can get. They can get a hundred thousand
dollars per deposit. ;

THE COURT: You haven’t answered my ques-
tion. Is there any other reason for them to carry this
insurance?

MR. RUBLIN: It is part of being a state bank.
They want to be a state bank.

THE COURT: That’s the sole reason for it,
really.

MR. RUBLIN: Yes. There is nothing improper
about that.

THE COURT: I never said there was. Why
didn’t you say that when I asked you five minutes ago
instead of beating around the bush with it?

MR. RUBLIN: Well, Your Honor, it is integral to
their function as a state bank, as a Credit card bank, that
they be insured as a depository institution by the FDIC.
That comes with regulation by the FDIC. That comes with
periodic examinations by the FDIC. There are hundreds
of credit card banks, Your Honor, around the country.
Monogram is one of many hundreds of credit card banks.
This

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_1008%3A2. Public record. Not legal advice.