Petition for Writ of Certiorari — Piekarski v. Home Owners Saving Bank, F. S. B.

Supreme Court brief1992

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Text

92-244

No,

In the

Supreme Court of the United States

October Term, 1991

PETER R. PIEKARSKI,

Petitioner.

HOME OWNERS SAVING BANK, F:S.B.,

and M. GENE DONLEY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

William P. Luther

Counsel of Record

4624 IDS Center

80 South Eighth Street

Minneapolis, Minnesota 55402

(612) 338-1931

Attorney for Petitioner

1992 — Bachman Legal Printing, 835 Second Ave. So., Mpls., MN 55402 — (612) 339-9518

@ FAX 612-337-8053

QUESTIONS PRESENTED

I. Whether the Resolution Trust

Corporation, under the removal

provisions of FIRREA, + has an absolute

right to remove a state court action a

second time, independent of the common

law and statutory limitations imposed

on other litigants.

II. Whether the exercise of

federal court jurisdiction under

FIRREA, as applied to Piekarski’s

solely state law claims, violates

principles of federalism and due

process, when the case is removed to

Minnesota federal district court after

lfhe Financial Institutions

Reform, Recovery, and Enforcement Act

of 1989 (*“FIRREA”), Pub.L.No. 101-73,

103 Stat. 183 et. seq.

liability has been determined by the

state trial court, is remanded to the

state court, is removed again to the

District Court for the District of

Columbia on grounds existing at the

time of the first removal, and is

finally transferred back to the

Minnesota federal district court (a

court which had declined to transfer

the case to the transferor court in

the first instance, a court where the

action could not “have been brought”

originally, and a court that

subsequently dismissed the distant

parent company under federal

receivership).

III. Whether collateral papers

filed at the same time as an actual

notice of appeal may serve as the

functional equivalent of the notice of

appeal.

iii

TABLE OF CONTENTS

Table of Authorities .

Opinions Below

Jurisdiction... .

Statute Involved ..

Statement of Case... .

Reasons for Granting Writ

Es Certiorari Should Be

Granted to Remedy an

Improvident Exercise of

Federal Court

Jurisdiction .....

ake Certiorari Should Be

Granted to Remedy an

Unconstitutional Exercise

of Federal Court

DUREGGSOCIOR 1 2 + st

III. Certiorari Should Be

Granted to Resolve a

Conflict Between

Caveat Gomres . « « 6 «

Pe a ee eee

TABLE OF AUTHORITIES

United States Constitution

U.S. Const. amend. V

U.S. Const. amend. X

Federal statutes

U.S.C. §1441

U.S.C. $1254

U.S.C. §1404

U.S.C. §1406

U.S.C. §1446

U.S.C. §1447

U.S.C. §1631

U.S.C. §1738

U.S.C. §2403

Federal Decisions

Allen Archery,

ine.

Vv.

Precision Shooting Equip.,

857

F.2d 1176,

(7th Cir. 1988)

S$7-63

Atlantic Coast Line Ry.

Co. v. Bhd. of Locomotive

Engrs

398 U.S. 281 (1970) a» « «= 28-52

Christianson v. Colt Indus.

Operating Corp.

U.S48800 (1988). ...... 35

Crane v. Hahlo

258 U.S. 142 (1922) eo © «© « 45,

Dura Systems, Inc. v.

Rothbury Inv., Ltd.,

886 F.2d 551 (3rd Cir. 1989)

cert. denied, 493 U.S.

1046 (1990) woe *

Federal Deposit Ins. Corp.

v. Santiago Plaza

598 F.2d 634, (1st Civ.

1979) . 2. sks ee ews s See

Federal Deposit Ins. Corp.

v. Sellards

731 F.Supp. 1300

(N.D.Tex. 1990) . « «© += ss « 49,

Federal Sav. & Loan Ins.

Corp. v. Griffin

935 F.2d 691 (5th Cir.

19933 . s+ *® s+ « © *% © 4 © se & @

Federal Sav. & Loan Ins.

Corp. v. Templeton

700 F.Supp. 456 (S.D.Ind.

19GG3 2s & tee hues © & & SS

Federal Savings and Loan

Ins. Corp. v. Westgate

Partners 726 F.Supp. 807

(D.Colo. 1989) ~- - + + + © + » 30

Fritzlen v. Boatsmen’s Bank,

212 U.S. 364 (1909) ..--+ + + 20

Good Samaritan Hosp.

v. Sullivan,

952 F.2d 1017,

(8th Cir. 1991) ae ae ae ae ee 56-59

Griffon v. United States

Dept. of Health and Human

Services, 802 F.2d 146

(5th Cir. 1986) ..+--+-+-+-+-+ 39

Hallowell v. Commons

239 U.S. 506 (1916) . - »- + «= « 39

Hartford Casualty Ins. Co.

v. Bora-Warner Corp.

913 F.2d 419 (7th Cir. 1990) .. 58

Hellon & Assocs. Inc. V.

Phoenix Resort Corp.

755 F.Supp. 280 (D.Ariz. 1990).. 37

Hoffman v. Blaski,

363 U.S. 335 (1960) .~. - - «© + = io

Kirkbride v. Continental

Cas. Co., 933 F.2d 729

(9th Cir. 1991) ...-+ + + +21 ,23

vii

Kulbeth v. Woolnought,

324 F.Supp. 908

(Ree OOTEY lk se ee ss os 2

Mariani-Giron v. Acevedo

Ruiz, 877 F.2d 1114,

[eee Gare Beeeh es se ee ehlhw hmv hl t™lhCUHD

Minority Employees v.

Tenn. Dept. of Emp. Sec.,

901 F.2d 1327

(6th Cir. 1990) oe a a | |

Mountain Ridge State Bank

v. Investor Funding

763 F.Supp. 1282

eo ee et”) re

Northshore Development,

Inc. v. Lee, 835 F.2d 580,

583 (5th Cir. 1988) a a a ae 52

O’Bryan v. Chandler,

496 F.2d 402 (10th Cir.

1974) o . e = . . . * . . . ° 32

Pension Benefit Guar.

Corp. v. R.A. Gray & Co.

467 U.S. 717 (1984) ~~“ * 40, 44

Pope v. Cheney,

22 F. 177 (S.D. Iowa 1884). .20, 28

Powers v. Chesapeake

& Oh}: Oh @ Ry.

169 U.S. 92 (1898) ae a ee ee

viii

Pride v. Verango River

Corp., 916 F.2d 1250

(7th Cir. 1990), cert.

denied, 111 S.Ct. 1696

2 re ee ae ee

Resolution Trust Corporation

v. Lightfoot, 938 F.2d 65

(7th Cir. 1991) . +--+ ++ + 29,

Resolution Trust Corporation

v. Westgate Partners, Ltd.

937 F.2d 526, 531

(10th Cir. 1991) ..---. 41,

St. Paul and Chicago

R.Co. v. McLean,

108 U.S. 212 (1883) : «es

Sunbelt Sav. v. Bent Trail

Phase IV Joint Venture

907 F.2d 1569

(Sth Cir. 1990) ..- -

Sweeney v. Resolution Trust

Corp., 765 F.Supp. 33

(D.Comm. 1991) - ++ +-+se-s

The Texas Plumbing Company

v. Zurn Indus. Inc.,

168 F.Supp. 144

(N.D.Tex. 1958) .

Thermtron Products Vv.

Hermansdorfer, 423 U.S.

336, (1976) - +--+ ++ ees 38,

o2l

Torres v. Oakland

Scavenger Co., 487 U.S.

342 (21968) . «© «© © © © © « «© §§=-60

Triland Holdings & Co. v.

Sunbelt Service Corp.

884 F.2d 205 (5th Cir. 1989) . . 46

Woburn Five Cents Sav.

Bank v. Robert M. Hicks

930 F.2d 965 (1st Cir. 1991). . .29

Younger v. Harris

401 U.S. 37 (1971) . ee © -« 38

Other Authority

Bank/Thrift Litigation and

Enforcement News,

VOL. 2, MO. 22. « «© « «© «© 25, 30, 34

FemeMsP JF see ssn sine scses

Tomemee BE «+ «6 2 «+ &@ © & 6 6 ee 51

59 Fordham L. Rev. S339 (1991). . . 33

Grafman, A New S & L Venue

Game, Nat’1] L.J.,

Jan. 14, 1991 . © 6 *& © & * 36, 42

H.R. Reg. No. 54(TI)

101lst Cong., ist Sess,

seu €S0Ge) & « «8 6 « « 6 6 se, 22, 62

IN THE SUPREME COURT OF

THE UNITED STATES

October Term, 1992

No.

Peter R. Piekarski,

Petitioner

vs.

Home Owners Savings Bank, F.S.B.

and M. Gene Donley,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME COURT OF THE UNITED STATES

To the Honorable, the Chief Justice

and Associate Justices of the

Supreme Court of the United States:

Peter R. Piekarski, the petitioner

herein, prays that the writ of

certiorari issue to review the

judgment of the United States Court of

Appeals for the Eighth Circuit, and/or

the judgment of the United States

District Court for the District of

Columbia.

OPINIONS BELOW

The opinion of the United States

Court of Appeals for the Eighth

Circuit is reported at 956 F.2d 1484

(8th Cir. 1992) and is printed in

Appendix A hereto, infra, page A-1.

The judgments of the United States

District Court for the District of

Minnesota are reported at 759 F.Supp

542 (D.Minn. 1991), 755 F.Supp 859

(D.Minn. 1991), and 752 F.Supp. 1451

(D.Minn 1990) and are printed in

Appendix A hereto, infra, pages A-72,

A-105 and A-146 respectively. The

judgment of the United States District

Court for the District of Columbia

is reported at 743 F. Supp- 38 (D.D.C.

1990) and is printed in Appendix A

hereto, infra, page A-262.

JURISDICTION

The judgment of the United States

Court of Appeals for the Eighth

Circuit was entered on February 28,

1992. A timely petition for rehearing

was denied on April 8, 1992.

(Appendix A, infra, page A-315). The

jurisdiction of the Supreme Court is

invoked pursuant to 28 U.S.C.

§1254(1). In addition, this Court has

jurisdiction to determine whether

federal jurisdiction has been

improvidently exercised below.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Petitioner states that 28 U.S.C.

§2403(a) may be appiicable.

This case involves the Fifth

Amendment to the Constitution of the

United States, which provides as

follows:

No person shall be held to answer

for a capital, or otherwise

infamous crime, unless on a

presentment or indictment of a

Grand Jury, except in cases

arising in the land or naval

forces, or in the Militia, when

in actual service in time of War

or public danger; nor shall any

person be subject for the same

offence to be twice put in

jeopardy of life or limb; nor

shall be compelled in any

criminal case to be a witness

against himself, nor be deprived

of life, liberty, or property,

without due process of law; nor

shall private property be taken

for public use, without just

compensation.

This case involves the Tenth Amendment

to the Constitution of the United

States, which provides as follows:

The powers not delegated to the

United States by the

Constitution, nor prohibited by

it to the States, are reserved to

the States respectively, or to

the people.

This case involves 12 U.S.C.

§1441a(1), which provides as

follows:

» (1) Power to remove; jurisdiction

(1) In general

Notwithstanding any other

provision of law, any civil

action, suit, or proceeding to

which the Corporation is a party

shall be deemed to arise under

the laws of the United States,

and the United States district

courts shall have original

jurisdiction over such action,

suit, or proceeding.

—<_

(2) Corporation as party

The Corporation shall be

substituted as a party in any

civil action, suit, or proceeding

to which its predecessor in

interest was a party with respect

to institutions which are subject

to the management agreement dated

February 7, 1989, among the

Federal Savings and Loan

. Insurance Corporation, the

Federal Home Loan Bank Board and

the Federal Deposit Insurance

Corporation.

(3) Removal and remand

The Corporation may, without

bond or security, remove any such

action, suit, or proceeding from

a State court to the United

States District Court for the

District of Columbia, or if the

action, suit, or proceeding

arises out of the actions of the

Corporation with respect to an

institution for which a

conservator or a receiver ha:

been appointed, the United States

district court for the district

where the institution’s principal

business is located. The removal

of any action, suit, or

proceeding shall be instituted --

Ke °°

(A) not later than 90 days

after the date the Corporation is

substituted as a party, or

(B) not later than 30 days

after the date suit is filed

against the Corporation, if such

suit is filed after August 9,

1989.

The Corporation may appeal any

order of remand entered by a

United States district court.

STATEMENT OF THE CASE

The Procedural Facts

This case was commenced in Hennepin

County District Court, State of

Minnesota. The defendants then

transferred the case to Otter Tail

County District Court, State of

Minnesota. The state trial judge

found liability on four separate

grounds following a unanimous verdict

from an advisory jury. The jury found

all sixteen issues in favor of

Piekarski including two grounds for

punitive damages against individual

defendant Donley. See State Trial

Findings, reprinted in Appendix A, 752

F.Supp. 1451, 1458-70 (D.Minn. 1990).

After the liability determination,

but before the damages portion of the

bifurcated trial, the defendants

removed the action to the United

States District Court for the District

of Minnesota based on the federal

receivership of a distant parent

company, Home Owners of Boston.* That

court, J. Devitt, remanded the case

back to the state court, on

plaintiff’s motion, interpreting 12

U.S.C. §1441a(1) as requiring removal

exclusively to the United States

District Court for the District of

Columbia. See Memorandum and Order,

6/12/90, pp. 2-5, reprinted in

Appendix A, infra p. A-330. Judge

2 Home Owners-Boston is the parent

company of Knutson Mortgage Company

(headquartered in Minneapolis), and

Knutson Mortgage Company is in turn

the parent company for Home Owners-

Fergus Falls.

Devitt also denied defendants’ motion

to transfer venue to the United States

District Court for the District of

Columbia because, despite the fact

that the “court [had] the power to

transfer under the act”, 2

“"{cjonsiderations of equity and

judicial economy weigh[ed] against

transfer.” Id. at 5.

Defendants next removed the case to

the United States District Court for

the District of Columbia. Piekarski

moved for remand, and the defendants

filed a motion to transfer the case

back to the United States District

Court for the District of Minnesota.

That court, J. Hogan, could “see no

3 pursuant to either 28 U.S.C. §1631

or 28 U.S.C. §1406(a).

reason to interrupt [the] on-going

state proceeding to grant the RTC the

‘benefit’ of a federal forum;” nor

could it see any “potential for abuse

by allowing the RTC to defend such an

action in state court.” 743 F.Supp.

38, 43, n.6 (D.D.C. (1990)). However,

it denied Piekarski’s motion to

remand, holding that FIRREA afforded

the "RTC the absolute right, to remove

to federal court, subject to the time

limitations imposed in the statute.”

Id. at 42. Judge Hogan concluded that

"Congress would be wise to revisit the

FIRREA removal provisions to consider

whether a federal forum is necessary

in every case involving the RTC

(particularly those involving only

issues of state law).” Id. at 44.

The court then transferred the case

to the United States District Court

for the District of Minnesota, in an

acknowledged “exercise in legal

gymnastics,” pursuant to 28 U.S.C.

§1404(a). Id. Fearing that an

improvidently exercised transfer

would, in combination with the

arguments against the propriety of the

second removal, deny the transferee

court jurisdiction to render a

judgement in his favor, Piekarski

"oppos[(ed] the transfer.” Id. at 42.

Judge Hogan phrased the “crucial

question [as] whether or not

the federal court in Minnesota [was] a

district where this action "might have

been brought.” Id. He observed that

“{(hjad the RTC been named as a

defendant at the commencement of the

suit, the suit ‘might have been

brought’ in Minnesota.” Id. at 43.

The RTC could not have been named at

the commencement of the suit, however,

since the parent company in Boston was

not under federal receivership until

well after the trial had begun.

Nonetheless, Judge Hogan held that the

dictates of Hoffman v. Blaski, 363

U.S. 335 (1960),* are limited to its

particular facts and that a

4 tn Hoffman, this Court held that the

phrase “where it might have been

brought” carnot be interpreted to mean

"where it may now be rebrought, with

defendants’ consent.” 363 U.S. at

342, 343. Judge Hogan held that

Hoffman is properly limited by the

phrase “with defendants’ consent”

because clearly he interpreted the

phrase to include where it may now be

rebrought.

retrospective impossibility satisfied

the meaning of 28 U.S.C. §1404(a). Id.

at 42-43.

Piekarski again contested the

second removal, transfer, and exercise

of jurisdiction over his purely state

law claims in another motion to remand

when the case was returned to the

United States District Court for the

District of Minnesota. That motion was

denied, without a published opinion,

but Piekarski prevailed in the damages

portion of the trial. See 752 F.Supp.

1451 (D.Minn. 1990). Piekarski also

prevailed in post-trial motions to

have the state court liability

determinations overturned. See 759

F.Supp. 542 (D.Minn. 1991). The court

did however amend the judgment to

dismiss the only defendant under

federal receivership, Home Owners~

Boston. Id. at 546. At every

opportunity prior to that judgment

Piekarski contested the federal

jurisdiction over his claims. As

FIRREA only grants the RTC appellate

review of motions to remand that are

granted, this is Piekarski’s first

opportunity to appeal the exercise of

jurisdiction over his claims. See 12

U.S.C. §1441(1) (3).

Home Owners-Fergus Falls appealed

the district court decision by filing

a Notice of Appeal on April 5, 1991.

The Notice of Appeal did not name

individual defendant Donley as an

appellant. Although the Eighth

Circuit Court of Appeals contacted

Donley’s counsel well within the 30-

day appeal period, and advised him of

the possible insufficiency of the “et.

al” designation on the Notice of

Appeal, Donley nevertheless failed to

appeal within that period.

Thereafter, Donley filed an Amended

Notice of Appeal on May 2, 1991 and

requested Judge Devitt to accept the

appeal claiming excusable neglect on

the part of his counsel. Judge

Devitt, finding no basis for the

request, denied it. See Order, 4-90-

661, pp. 3-5, Appendix A, infra page

A-368. However, upon entertaining the

issue on the merits, the Eighth

Circuit Court of Appeals held that

Appellant’s Information Form A, an

accompanying paper which listed Donley

as a party appealing the judgment,

satisfied a “functional equivalent”

exception to the particularity

requirement of Federal Rule of

Appellate Procedure 3(c). See 956

F.2d 1484, 1486, n. 1 (8th Cir. 1992).

The Court went on to reverse all

findings of liability against the

defendants.

REASONS FOR GRANTING THE WRIT

Certiorari Should Be Granted to

Remedy an Improvident Exercise of

Federal Court Jurisdiction.

This case, based exclusively on

state law claims, was commenced on

November 18, 1988. The trial was

bifurcated between liability and

damages with an advisory jury sitting

during the liability phase. On

February 20, 1990, the state trial

court issued its findings of fact,

conclusions of law and order for

judgment against the defendants.

Reprinted in Appendix A, p.___, 752

F.Supp. 1451, 1458-70 (D.Minn 1990).

On April 27, 1990, the Office of

Thrift Supervision was appointed

conservator for Home Owners-Boston,

the parent company of Home Owners-

Fergus Falls’ parent company Knutson

Mortgage Company.

The action was originally removed

to the United States District Court

for the District of Minnesota by

notice of removal on May 7, 1990.

Judge Devitt remanded the case to

state court on June 12, 1990, because

the "defendants could only have

removed to the United States District

Court for the District of Columbia”,

and he refused to transfer it there

because “equity and judicial economy

weighed against transfer.” Memorandum

and Order, Civ. 3-90-248, Reprinted in

Appendix A, P- A-330, pp. 4-5-

However, on June 15, 1990, the

defendants removed the action a second

time to the United States District

Court for the District of Columbia.

Traditionally, courts have

prohibited second removals that are

based either on the same grounds

rejected previously, St- Paul and

Chicago R. Co. v. Mclean, 108 U.S.

212, 217 (1883), OF based on grounds

that existed at the time of the first

removal. Pope v. Cheney, 22 F. 177,

178-179 (S.D. Iowa 1884). Implicit in

those prohibitions are the strict

conditions under which a defendant may

seek a second removal under 28 U.S.C.

§1446(b) and the common law doctrine

codified therein. See Fritzlen v.

Boatsmen’s Bank, 212 U.S. 364, 372

(1909); Powers v. Chesapeake & Ohio

Ry., 169 U.S. 92 (1898). "These cases

[and Section 1446(b)] stand for the

proposition that a defendant who fails

in an attempt to remove on the initial

pleadings can file a removal petition

when subsequent pleadings or events

reveal a new and different ground for

removal.” ed e ,

v. Santiago Plaza, 598 F.2d 634, 636

(lst Cir. 1979) (emphasis in original)

Case law uniformly holds that where

the grounds relied upon for a second

removal existed at the time of the

first removal, the defendants are

foreclosed from asserting such a basis

for removal. See The Texas Plumbing

Company _v. Zurn Industries, Inc., 168

F.Supp. 144, 145 (N.D.Tex. 1958); see

also Kulbeth v. Woolnought, 324

F.Supp. 908, 911 (S.D.Tex. 1971).

Prior to FIRREA, courts also gave

effect to those requirements when

interpreting removals by federal

banking agencies. See Santiago Plaza,

598 F.2d 634, 636 (1st Cir. 1979).

The only circuit court to discuss the

issue after the passage of FIRREA was

cautious of the prohibitions against

second removals. Kirkbride v.

Niet

Continental Cas. Co., 933 F.2d 729,

732 (9th Cir. 1991) (Santiago

satisfied because “subsequent

pleadings or events revealed a new and

different ground for removal.”).

In the present case, the United

States District Court for the District

of Columbia erroneously rejected the

second removal limitation. It noted

that ”“FIRREA does not prohibit a party

from correcting the defective removal

attempted to a court,” and thereby

reasoned that it affords the "RTC the

absolute right to remove to federal

court, subject to the time limitations

imposed in the statute.” 743 F.Supp.

38, 41-42 (D.D.C. 1990). By allowing

the second removal of this action

under the “absolute right” rationale,

| ian iaieaeaiiiatiaaiaaiaicaaaiaaiias

the court (1) ignored the common law

prohibition against second removals;

(2) abrogated the purpose of the time

period allowed for removal; and (3)

failed to recognize that the general

statutory procedure provisions

supplement FIRREA, especially on

issues where FIRREA is silent.

Although FIRREA does not prohibit

second removals, the common law

prohibits a second attempt at removal

that is not “new and different.” See

Santiago, 598 F.2d 634, 636 (1st Cir.

1979) (citing the common law origins) ;