Petition for Writ of Certiorari — Meyerland Co. v. Federal Deposit Insurance
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IN THE
, AUG 11 1892
Supreme Court of the United States
OCTOBER TERM, 1992 GFFICE OF FHE @LERK
MEYERLAND COMPANY AND
WILLLIAM MICHAEL ADKINSON,
PETITIONERS,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS MANAGER OF THE FSLIC RESOLUTION FUND,
AS RECEIVER FOR CONTINENTAL SAVINGS
ASSOCIATION,
RESPONDENT.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FiFTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
MIKE O’BRIEN
MIKE O’BRIEN, P.C.
440 LOUISIANA
SUITE 2300
HOUSTON, TEXAS 77002
TEL: (713) 222-0088
FAX: (713) 222-6903
COUNSEL FOR PETITIONERS
IT.
ITT.
IN THE MATTER OF MEYERLAND CO.
QUESTIONS PRESENTED
Whether the general removal statutes or the removal
provisions of the Financial Institutions Reformation
Recovery and Enforcement Act empower a federal
district court to interfere with a final judgment, which
is being reviewed in the state appellate process, when
no other independent basis for removal exists under
federal law.
Whether the removal of a case pending in a state
appellate court, where no original jurisdiction can be
exercised by the federal district court, violates the
United States Constitution.
If removal of a case pending in any phase of a state
appellate process is permitted by the FDIC’s statutes
and the United States Constitution, what is the
appropriate procedural track for the case in federal
court?
ul IN THE MATTER OF MEYERLAND COMPANY
PARTIES
The plaintiffs below were Meyerland Company and
William Michael Adkinson. The defendant was the Federal
Deposit Insurance Corporation, as manager of the FSLIC
Resolution Fund, as Receiver of Continental Savings
Association.
Petitioner Meyerland Company is a wholly owned
subsidiary of The Development Group, Inc. Meyerland
Company has no subsidiaries.
IN THE MATTER OF MEYERLAND CO.
TA F CONTENT!
Fe eG. ee |:
py Ge tes yo |
Se ee kk
ee ike ko 5 kn kk 0s 8
CONSTITUTIONAL PROVISIONS INVOLVED
RULES AND STATUTES INVOLVED .........
BASIS FOR FEDERAL JURISDICTION IN THE
COURT OF FIRSTINSTANCE .........
Dareemeeeen Se Ge CAGE ..... 1... www ee
REASONS FOR GRANTING CERTIORARI ......
4 THE FIFTH CIRCUIT ERRONEOUSLY
HELD THAT THE FDIC’S REMOVAL
STATUTES EXPAND A_ FEDERAL
DISTRICT COURT’S POWER TO INCLUDE
REMOVAL JURISDICTION OVER A CASE
PENDING IN ANY PHASE OF A STATE
le RE NS G0 .. S
A. Congress Intended FIRREA to Rely
Upon General Removal Statutes Which
Provide No Basis for Federal Court
Jurisdiction Over Cases Pending in a
stats Appellate Court. ...........
ill
IV IN THE MATTER OF MEYERLAND COMPANY
i The federal district court does
not have original jurisdiction
over the dispute, which is
required by general removal
Ee ea oe ee ee 11
If Congress had intended to
depart from the ordinary
removal procedural
requirements, it would have
expucesy GONG 90. ......... 12
B. FIRREA Provides No Basis for Federal
Court Jurisdiction Over Cases Pending
in a State Appellate Court.......... 14
l. The language of 12 U.S.C. §
1819(b)(2) does not authorize
the removal of an action after
the state trial court loses plenary
power over the action. ....... 15
An action pending in a state
appellate court is not
"appealable" within the meaning
of 12 U.S.C. § 1821(d)(13). ... 18
ro
to
II. IN THE ALTERNATIVE, THE FIFTH
CIRCUIT ERRONEOUSLY HELD THAT
THE UNITED STATES CONSTITUTION
ALLOWED A FEDERAL DISTRICT COURT
TO EXERCISE REMOVAL JURISDICTION
OVER A CASE PENDING IN ANY PHASE
OF A STATE APPELLATE PROCESS. .... 20
A. Concepts of Comity and Federalism
Require that a Federal Court Refrain
from Exercising Appellate Jurisdiction
Over Final State Court Judgments. .... 22
a a Ee
IN THE MATTER OF MEYERLAND CO. V
B. The Tenth Amendment Obligates
Congress and Federal Courts to Respect
a Final State Court Judgment ....... 23
ee The Seventh Amendment Precludes
Federal Reexamination of a Final State
a ee lg Oran) ard oe 24
Ren ea i Neo LT eee 25
CT
V1 IN THE MATTER OF MEYERLAND COMPANY
This Page Intentionally Left Blank
IN THE MATTER OF MEYERLAND CO. Vil
TABLE OF AUTHORITIES
U.S. SUPREME COURT CASES
Atlantic Coast Line Ry. Co. y.
Brotherhood of Locomotive Engineers,
eM 11, 20, 21
Bender v. Williamsport Area School
itt td de eg tS.) 21
Coyle v. Oklahoma, 221 U.S. 559 PGE wy Fee 23
Dist. of Columbia Ct. of Appeals vy.
Feldman, 460 U.S. 462 (1983) ................ 11
Evans v. U.S., -- U.S. --,
112 S. Ct. 1881, 1901 (1992).......... 9, 21, 23, 2a
Granny Goose Foods, Inc. v. Brotherhood
of Teamsters and Auto Truck Drivers
Local No. 70 of Alameda County, 415
ny rr ere ns hs Pe 19
Gregory v. Ashcroft, 111 S. Ct. 2395
Ge ey ose ee ee oe 9, 22
Griggs v. Provident Consumer Discount
Cm, Wop es Settee)... ws ee eee ee 11
Huffman v. Pursue, Lid., 420 U.S. 592,
603 (1975), reh’g denied, 421 U.S. 971
Ge Ne ree ee ae 23
Vill IN THE MATTER OF MEYERLAND COMPANY
Immigration and Naturalization Serv. v.
Chadha, 462 U.S. 942 (1983) .......
Isbrandtsen v. Johnson, 343 U.S. 779
EE Re nee A a ee a ae ae
Kremer v. Chemical Const. Corp., 456 U.S.
461 (1982), reh’g denied, 458 U.S. 1133
Sets a grace hank ee Se we Ses
Marbury v. Madison, 5 U.S. (1 Cranch)
2 SIRE os Seen a een
Midlantic Nat’! Bank v. New Jersey
Dept. of Env’t Protection, 474 U.S.
ia aoe rein ae ee
Mills v. Duryee, 11 U.S. (7 Cranch) 481
4S | ES a OE AD ten ory lee ne
Parsons Steel, Inc. v. First Alabama Bank,
474 U.S. 518 (1986), on remand to,
758 F.2d 929 (11th Cir. 1986), on remand
to, NO. Civ. A. 83V-181-N (M.S. Ala.,
1986), j. aff'd, 825 F.2d 1475 (11th Cir.
1987), cert. denied, 484 U.S. 1060 (1988)
Parsons v. Bedford, Breedlove & Robeson,
po ei ee A eee
Rooker v. Fidelity Trust Co., 263 U.S.
Cee SE, 6 es ee ee ee ak oe ees
to
i)
22
IN THE MATTER OF MEYERLAND CO. 1x
Thompson v. Immigration and
Naturalization Service, 375 U.S. 384
(1964), on remand to, 323 F.2d 167
ee he 18
U. S. COURT OF APPEALS CASES
Azzopardi v. Ocean Drilling
& Exploration Co., 742 F.2d 890
eg ergs coca chee 16
Beighley v. Federal Deposit Ins. Corp.,
we Foe tree Ge. 198). sk eee 16
Carrollton Farmers Branch Independent
School Dist. v. Johnson & Cravens, 889
F.2d 571 (Sth Cir. 1989), on remand
to, 776 F. Supp. 1180 (N.D. Tex. 1991) .......... 15
Corpus Christi Taxpayers Ass’n v. City
of Corpus Christi, Texas, 858 F.2d 973
(Sth Cir. 1988), reh’g denied, 860 F.2d
437, cert. dism’d, 490 U.S. 1032, cert.
ee a3
Federal Deposit Ins. Corp. v. Yancey Camp
Development, 889 F.2d 647 (Sth Cir. 1989) ........ 17
Federal Deposit Ins. Corp. v.
Loyd, 955 F.2d 316 (Sth Cir. 1992) ............. 12
Giannakos v. M/V Bravo Trader, 762 F.2d
I A oe st hal) ale 21
x IN THE MATTER OF MEYERLAND COMPANY
In re Franklin National Bank
Securities Litigation, 532 F.2d
ee ete ks A 5 on 6 6 ae he 12
In re Meyerland Co., 910 F.2d 1257
fs Se A ee eee ree ee eee
In re Meyerland Co., 960 F.2d $12 (Sth Cir.
RS ere eee ee ee 2, 7, 10, 14, 15, 17, 18
In re Savers Federal Sav. & Loan Ass’n,
pe & % Tih Yo A, 16
Jackson v. American Sav. Mortg. Corp.,
ee BF ee | re err 17
Lazuka v. Federal Deposit Ins. Corp.,
Rm Be Til be 2} ee 13
Marcal Paper Mills, Inc. v. Ewing,
ee ee Oe ee es I A we he wee es bea 23
Munsey v. Testworth Laboratories,
peage LF L r a e 16
Murray v. Ford Motor Co., 770 F.2d
ge Oe a a 16
Northshore Development, Inc. v. Lee,
Se ae ee Cn i SD hv SA ie eae et 16
Union Federal Bank of Indianapolis v.
Minyard, 919 F.2d 335 (Sth Cir. 1990) ........... 16
IN THE MATTER OF MEYERLAND CO. XI
Ward v. Resolution Trust Corp.,
91-3015EA (8th Cir. July 30, 1992) ............. 17
Woburn Five Cents Sav. Bank y. Robert
M. Hicks, Inc. , 930 F.2d 965 (Ist. Cir. 1991) . 10, 12, 14
DISTRICT COURT AND STATE COURT CASES
Addison Airport of Texas, Inc. y.
Eagle Investment Co., 691 F .Supp.
1022 (N.D. Tex. 1988)..................... 17
Alpert v. Resolution Trust Corp.,
No. CIV. A. 91-B-1907 (D.Colo.
“spies denis Bienen, Meee OES a oe ae ter ll
Federal Deposit Ins. Corp. v. Norwood.
726 F. Supp. 1073 (S.D. Tex. Pe 6 ane ee cus 12
Federal Deposit Ins. Corp. v. Ritchie,
646 F. Supp. 1581 (D. Neb. 1986) ............. 16
Federal Deposit Ins. Corp. v. Sellards,
731 F. Supp. 1300 (N.D. Tex. 1990) ............ 19
Federal Deposit Ins. Corp. v. Taylor,
727 F. Supp. 326 (S.D. Tex. 1989) ............. 16
Federal Savings and Loan Ins. Corp. v.
Templeton, 700 F. Supp. 456 (S.D. Ind.,
Sg GOA PO i ee
Mitchell v. Carter, 545 §.W.2d 869
(Tex.Civ.App.--Waco 1977).................. 23
Xu IN THE MATTER OF MEYERLAND COMPANY
Transamerica Leasing Co. v. Three
Bears Inc., 567 S.W.2d 799 (Tex. 1978) .......... 11
Vernon Sav. and Loan Ass’n v. Commerce
Sav. and Loan Ass'n, 677 F. Supp. 495
ec Ye ae 16
CONSTITUTIONAL PROVISIONS, STATUTES, AND
RULES
Pes e oe P| 5, 8, 12-16
Fos Rea ea). | nee 5, 14, 18, 19
Oe ome Be er are 2
Bs NUET RUUE 6 oath Oe ke 5
ee er OME wor Gs ook eek Hck 608 bon a ee ee 11
y Bie Som Be. ee ear err eae 5
Be Wcilne © OOO CERO cee ee 5, 10, 11, 14
Re ee er ee 13
ee ee ee ee ee 12
FDIC Improvement Act, Pub. L. No.
102-242 §161, 105 Stat. 2285 (1991) ............ 13
. 8 Se er ee or a ar ere eee 4
IN THE MATTER OF MEYERLAND CO. X11
Pee wa a Ce he oe ee ee 4, 20, 21
a le | gh ey eee ee 4, 8, 17, 20, 21
Financial Institutions Reform, Recovery
and Enforcement Act of 1989 (FIRREA),
Pub. L. No. 101-73, 103 Stat. 183
og ee a 4, 6-8, 12-16, 18-20, 25
Pe a a hea eo 18
ee es Pe oe ke 7, 11
un WO I, cee ek 4, 24
Meme MM MO, ee ce 4, 23, 24
U.s. Const. amend. XIV,§81................. 4
WS. Coast. amend. XIV,85...........2¢.... 4
kN Sen ac fe |
Moree CE ek ood cn. 3, 22
CS 3
OTHER AUTHORITIES
H.R. Rep. No. 54(1), 101st Cong.,
Ist Sess., reprinted in 1989 U.S.Code
Cong. & Admin. News 86, 124-25 ............. 16
XIV IN THE MATTER OF MEYERLAND COMPANY
House Report 101-54(1), p. 330,
U.S.Code Congressional and Administrative
News, 101st Cong. 1989, Vol. 2, p. 330. ......... 19
Judicial Improvements and Access
to Justice Act. Pub. L. No.
ec CS 56 a & Wee ea Ne a ee ee 13
No.
IN THE
Supreme Court of the United States
OCTOBER TERM, 1992
MEYERLAND COMPANY AND
WILLLIAM MICHAEL ADKINSON,
PETITIONERS,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS MANAGER OF THE FSLIC RESOLUTION FUND,
AS RECEIVER FOR CONTINENTAL SAVINGS
ASSOCIATION,
RESPONDENT.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FiFTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
Petitioners respectfully request that a writ of
certiorari issue to review the judgment and en banc
opinion of the United States Court of Appeals for the Fifth
Circuit.
2 IN THE MATTER OF MEYERLAND COMPANY
OPINIONS BELOW
District Judge Kenneth Hoyt’s unpublished order of
remand is included in the Appendix at p. 39a. The panel
opinion of the Fifth Circuit Court of Appeals in the case of Jn
re Meyerland Co., 910 F.2d 1257 (Sth Cir. i990) is included
in the Appendix at pp. 46a-64a. The en banc opinion of the
Fifth Circuit Court of Appeals in the case of Jn re Meyerland
Co. , 960 F.2d 512 (Sth Cir. 1992) is included in the Appendix
at pp. la-27a.
JURISDICTION
(i) The judgment sought to be reviewed (the en banc
opinion of the Fifth Circuit Court of Appeals) was
entered on May 13, 1992.
(ii) No motion for rehearing from the en banc opinion of
the Fifth Circuit Court of Appeals was filed.
Additionally, no request for an extension of time to
file this petition for a writ of certiorari was requested.
(iii) | This Court’s jurisdiction is invoked pursuant to 28
U.S.C. § 1254(1) (1984). Additionally, the Fifth
Circuit, in departing from the accepted and usual
course of judicial proceedings, has decided an
important question of law which has not been, but
should be, decided by this Court.
CONSTITUTIONAL PROVISIONS
INVOLVED
United States Constitution, Article III
Section 1. The judicial Power of the United States, shall be
vested in one supreme Court, and in such inferior Courts as
the Congress may from time to time ordain and establish.
IN THE MATTER OF MEYERLAND CO. 3
The Judges, both of the supreme and inferior Courts, shall
hold their Offices during good Behavior, and shall, at stated
Times, receive for their Services, a Compensation, which
shall not be diminished during their Continuance in Office.
Section 2. (1) The judicial Power shall extend to all Cases,
in Law and Equity, arising under this Constitution, the Laws
of the United States, and Treaties made, or which shall be
made, under their Authority;--to all Cases affecting
Ambassadors, other public Ministers and Consuls;--to all
Cases of admiralty and maritime Jurisdiction:--to
Controversies to which the United States shall be a Party;--to
Controversies between two or more States;--to Controversies
between Citizens of different States;--between Citizens of the
same State claiming Lands under the Grants of different
States, [and between a State, or the Citizens thereof, and
foreign States, Citizens or Subjects. ]!
(2) In all Cases affecting Ambassadors, other public
Ministers and Consuls, and those in which a State shall be a
Party, the supreme Court shall have original Jurisdiction. In
all the other Cases before mentioned, the supreme Court shall
have appellate Jurisdiction, both as to Law and Fact, with
such Exceptions, and under such Regulations as the Congress
Shall make.
United States Constitution, Article IV
Section 1. Full Faith and Credit shall be given in each State
to the public Acts, Records, and judicial Proceedings of every
other State; And the Congress may by general Laws prescribe
the Manner in which such Acts, Records and Proceedings
shall be proved, and the Effect thereof.
Section 2. The Citizens of each State shall be entitled to all
Privileges and Immunities of Citizens in the several States.
' Changed by the Eleventh Amendment
4 IN THE MATTER OF MEYERLAND COMPANY
United States Constitution, Amendment 7, 1791
In Suits at common law, where the value in
controversy shall exceed twenty dollars, the right of trial by
jury shall be preserved, and no fact tried by jury, shall be
otherwise re-examined in any Court of the United States, than
according to the rules of the common law.
United States Constitution, Amendment 10, 1791
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.
United States Constitution, Amendment 14, 1868
Section 1. All persons born or naturalized in the United
States, and subject to the jurisdiction thereof, are citizens of
the United States and of the State wherein they reside. No
State shall make or enforce any law which shall abridge the
privileges or immunities of citizens of the United States; nor
shall any State deprive any person of life, liberty, or property,
without due process of law; nor deny to any person within its
junsdiction the equal protection of the laws.
Section 5. The Congress shall have power to enforce, by
appropniate legislation, the provisions of this article.
RULES AND STATUTES INVOLVED
1) Fed. R. Civ. P. 6, included in the Appendix at
p. 80a;
2) Fed. R. Civ. P. 59, included in the Appendix
at p. 81a;
3) Fed. R. Civ. P. 60, included in the Appendix
at p. 82a;
4) Financial Institutions Reform, Recovery and
IN THE MATTER OF MEYERLAND CO. 5
Enforcement Act of 1989 (FIRREA), Pub. L.
No. 101-73, 103 Stat. 183 (Aug. 9, 1989),
included in the Appendix at p. 93a;
5) 28 U.S.C. § 1257 (1984), included in the
Appendix at p. 92a;
6) 28 U.S.C. § 1345 (1984), included in the
Appendix at p. 84a;
7) 28 U.S.C. § 1441 (1984), included in the
Appendix at p. 85a;
8) 12 U.S.C. § 1819 (1984), included in the
Appendix at p. 93a.
9) 12 U.S.C. § 1821 (1984), included in the
Appendix at p. 97a.
BASIS FOR FEDERAL
JURISDICTION IN THE COURT OF
FIRST INSTANCE
The nature of this appeal contests the basis for
jurisdiction in the United States district court. Removal was
purportedly authorized pursuant to 12 U.S.C. § 1819(b)(2)
and 12 U.S.C. § 1821(d)(13).
STATEMENT OF THE CASE
This is an appeal from United States District Judge
Kenneth Hoyt’s order remanding this case back to an
intermediate appellate court, the Court of Appeals for the First
Supreme Judicial District of Texas. (Order of Remand, App.
at 40a.)
More than two years earlier, on May 26, 1987, a state
trial court entered a judgment for Continental Savings and
against Meyerland Company and its president, William M.
Adkinson. (R. 9 at 7-9.) Meyerland and Adkinson appealed
the final state judgment to the state appellate court. (R. 4 at
2.) Briefs were filed and arguments were scheduled on the
claims involving purely state law matters. Jd.
6 IN THE MATTER OF MEYERLAND COMPANY
While the case was pending in the state appellate court
and sixteen months after the state trial court had entered its
judgment, the Federal Home Loan Bank Board declared
Continental Savings insolvent and appointed the Federal
Savings and Loan Insurance Corporation (FSLIC) as receiver
for the failed savings institution. (Appellant’s Br., En Banc
Hr’g at 4.) FSLIC sought to have its derivative rights in the
state court action adjudged by a federal district court when it
filed a notice of removal. (R. 1 at 1.) On April 21, 1989,
Judge Hoyt ordered the case remanded back to the state
appellate court. (R. 11 at 1.)
Four months later, Congress enacted FIRREA, which
dissolved FSLIC and substituted the Federal Deposit Insurance
Corporation (FDIC) as receiver of the failed savings
institution. (Appellant’s Br., En Banc Hr’g at 6.) Once
again, the receiver attempted to have its derivative rights in
the state court action adjudged by a federal district court when
it filed another notice of removal. /d. On September 29,
1989, Judge Hoyt remanded the case back to the state
appellate court a second time because removal in this case
violated the purpose and spirit of the removal statutes. /d.
Additionally, Judge Hoyt imposed sanctions against the
receiver and its attorney. /d.
Judge Hoyt’s Order of Remand and Sanctions was
appealed to the United States Court of Appeals for the Fifth
Circuit. Respondent claimed that removal to federal court was
properly predicated upon the recent enactment of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989
(FIRREA), Pub. L. No. 101-73, 103 Stat. 183 (Aug. 9,
1989). Id. On September 7, 1990, a divided panel of the
Fifth Circuit reversed Judge Hoyt’s order in a published
opinion. Jn re Meyerland Co., 910 F.2d 1257 (Sth Cir.
1990). This panel opinion was subsequently vacated by the
Fifth Circuit’s decision to rehear the case en banc.
(Appellant’s Br., En Banc Hr’g at 7.) On May 13, 1992, a
IN THE MATTER OF MEYERLAND CO. 7
seven to five majority of the court’ reversed Judge Hoyt’s
order. Jn re Meyerland Co., 960 F.2d 512 (Sth Cir. 1992).
REASONS FOR GRANTING
CERTIORARI
I. THE FIFTH CIRCUIT ERRONEOUSLY HELD
THAT THE FDIC’S REMOVAL STATUTES
EXPAND A FEDERAL DISTRICT COURT’S
POWER TO INCLUDE REMOVAL
JURISDICTION OVER A CASE PENDING IN
ANY PHASE OF A STATE APPELLATE
PROCESS.
According to the Fifth Circuit Court of Appeals, the
Financial Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA"), Pub. L. No. 101-73, 103 Stat. 183
(Aug. 9, 1989) gives the FDIC absolute discretion to ignore
state rules of finality and any jurisdictional or waiver
problems facing its predecessor in interest in a state court suit
once the FDIC intervenes. The Fifth Circuit’s decision
endorses the FDIC’s belief that it has unfettered discretion to
relitigate a state court verdict in a United States district court
of its choosing almost two years after the verdict becomes
final.? This interpretation ignores the provision of FIRREA,
* Judges Edith H. Jones and Rhesa H. Barksdale were recused.
> Under Texas law, a trial court’s judgment is final thirty days
from the date a motion for new trail is overruled. Tex. R. Civ. P.
329b(d). In the present case, the trial court entered the judgment on
May 26, 1987. A motion for new trial was filed on June 25, 1987.
8 IN THE MATTER OF MEYERLAND COMPANY
and disregards the procedural track of general removal
Statutes.
Although FIRREA specifically provides that actions
involving the FDIC arise under the laws of the United States;
this grant of authority does not empower the FDIC to remove
a case from a State appellate court at any time in the appellate
process. See 12 U.S.C. §1819(b)(2)(A). The language of
FIRREA must be considered in conjunction with the
limitations of a federal court’s power. The congressional
intent of FIRREA was to create federal question jurisdiction
in any suit involving the FDIC, and to permit removal
provided that the federal district court could exercise original
jurisdiction consistent with established rules of federal
procedural law and substantive constitutional principles.
The En Banc majority opinion of the Fifth Circuit
Court of Appeals ignored settled rules of statutory
construction, as well as federal procedural and constitutional
law, in permitting the FDIC carte blanche authority to remove
an action in the state appellate process at any time without
regard to existing principles of law. Thus, the Honorable
Court must correct the clearly erroneous folding of the Fifth
Circuit Court of Appeals, and resolve th = important
questions of federal statutory and constitutions iaw.
A. Congress Intended FIRREA to Rely Upon General
Removal Statutes Which Provide No Basis for
Federal Court Jurisdiction Over Cases Pending in
a State Appellate Court.
Congress certainly did not intend, by enacting
FIRREA, to grant the FDIC removal powers which could be
The trial court lost plenary power over the suit on September 9, 1987--
30 days after the motion for new trial was denied. Even under federal
guidelines, a federal district court lost the ability to alter the verdict on
May 26, 1988, one year after the state judgment was entered. Fed. R.
Civ. P. 60.
Dia enseciesniamianmnniinaianeane
IN THE MATTER OF MEYERLAND CO. 9
exercised in complete derogation of established rules
governing removal without expressly stating its legislative
intention to do so. Indeed this Court has held, that the normal
rule of statutory construction is that if Congress intends for
legislation to change the interpretation of a judicially created
concept, it must make that intent specific. Midlantic Nat’!
Bank v. New Jersey Dept. of Env’t Protection, 474 U.S. 494
(1986). This Court further held, "(s)tatutes which invade the
common law . . . are to be read with a presumption favoring
the retention of long-established and familiar principles, except
when a statutory purpose to the contrary is evident."
Isbrandtsen v. Johnson, 343 U.S. 779, 783 (1952). As this
court stated on May 26, 1992:
As we emphasized only last Term, however,
concerns of federalism require us to give a
narrow construction to federal legislation in
such sensitive areas unless Congress’ contrary
intent is "unmistakably clear in the language of
the statute." Gregory v. Ashcroft, 510 U.S. ---
-s----, 111 S. Ct. 2395, 2401 (1991) (internal
quotation marks omitted). This plain statement
rule is nothing more than an acknowledgement
that the States retain substantial sovereign
powers under our constitutional scheme,
powers with which Congress does not readily
interfere.
Id., as quoted in Evans v. U.S., -- U.S. --, 112 S. Ct. 1881.
1901 (1992),
The only sensible reading of the FIRREA removal
statute is that Congress clearly intended the general removal
principles to provide the requisite procedural guidance for
determining when removal is proper.
The FDIC’s argument that FIRREA grants FDIC
removal power wholly independent of the general removal
provision, has been rejected by the First Circuit Court of
Appeals based on these axiomatic principles of statutory
10 IN THE MATTER OF MEYERLAND COMPANY
construction. In Woburn Five Cents Sav. Bank, the Court of
Appeals in holding that the 30-day time limitation contained
in § 1446(b) applied in construing FIRREA’s § 1819(b)(2)(B),
cogently explained:
Finally, we think it inconceivable that
Congress, without any explicit statement,
intended such a drastic departure from existing
practice. The FDIC for years has been
required to adhere to the procedures set forth in
the general removal statute. If Congress had
intended to render that statute inapplicable and
to leave FDIC removal procedures up to the
discretion of individual judges, surely it would
have said so explicitly. (citation omitted)
In the absence of any other specified
procedure, logic dictates that FDIC removals
continue to be governed by the same general
removal principles that govern any other
removal.
Woburn Five Cents Sav. Bank v. Robert M. Hicks, Inc. , 930
F.2d 965, 968 (Ist. Cir. 1991).
It is important to remember that the underlying dispute
does not involve a federal question, but only issues of state
law. General removal principles would not allow the FDIC
to remove this case to federal court,* thus creating perforce
FDIC’s specious argument that the removal provision of
FIRREA authorizes a separate and independent procedural
* The en banc majority opinion declined to decide this case under
general removal provisions. See Jn re Meyerland Co., 960 F.2d 512,
515 n.5 (Sth Cir. 1992). The court did note, however, that the FDIC
could not remove the dispute under 28 U.S.C. § 1441. id.
Additionally, the majority questioned whether the FDIC could utilize
this provision in any case. /d.
IN THE MATTER OF MEYERLAND CO. 11
track. Only by reconciling FIRREA’s removal provision with
the general principles of law governing removal is the
congressional intent of FIRREA’s removal statute harmonized
with the requisite limitations imposed on the federal court’s
power.
1. The federal district court does not have original
jurisdiction over the dispute, which is required by
general removal statutes.
In order to be removable, a case must be one over
which the federal district court has original jurisdiction. 28
U.S.C. § 1441(a). A federal district court has original, not
appellate, jurisdiction over cases and controversies arising
under the laws of the United States. 28 U.S.C. § 1331;
Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); Dist. of
Columbia Ct. of Appeals v. Feldman, 460 U.S. 462 (1983).
Indeed, in the words of this Court, "(l)ower federal courts
possess no power whatever to sit in direct review of state
court decisions." Atlantic Coast Line Ry. Co. v. Brotherhood
of Locomotive Engineers, 398 U.S. 281, 296 (1970) (emphasis
added). Restrictions on removal jurisdiction serve to ensure
that a federal forum will operate as intended--as a court of
limited jurisdiction. Marbury v. Madison, 5 U.S. (1 Cranch)
137 (1803), Immigration and Naturalization Serv. v. Chadha,
462 U.S. 942 (1983).
The federal district court can not exercise original
jurisdiction over this dispute because the state trial court’s
plenary power jurisdiction over the matter ended 13 months
before the case was removed. Tex. R. Civ. P. 329b(d);
Transamerica Leasing Co. v. Three Bears Inc., 567 S.W.2d
799, 800 (Tex. 1978). The federal court’s power relies upon
and flows from the state court’s power. The filing of a notice
of appeal is an event of jurisdictional significance which
divests the district court of control over a case as well as
jurisdiction. Griggs v. Provident Consumer Discount Co..,
459 U.S. 56, 58 (1982); Alpert v. Resolution Trust Corp. , No.
Se
12 IN THE MATTER OF MEYERLAND COMPANY
CIV. A. 91-B-1907 (D.Colo. June 19, 1992). The original
jurisdiction requirement of the general removal statutes
likewise precludes a federal district court from relitigating the
facts of the present case.
2. If Congress had intended to depart from the
ordinary removal procedural requirements, it would
have explicitly done so.
The FDIC contends that in enacting FIRREA,
Congress created a totally new power authorizing the removal
of a case on the eve of a state appellate court decision.
However, both the FDIC and the Fifth Circuit fail to address
why Congress enumerated specific exceptions to general
removal provisions if it in fact intended to create a wholly
independent procedural track. It would be unnecessary for
Congress to make specific exclusions if Congress had not
intended for the general removal principles to apply in all
circumstances. Woburn, 930 F.2d at 968; Federal Deposit
Ins. Corp. v. Loyd, 955 F.2d 316 (Sth Cir. 1992); Federal
Deposit Ins. Corp. v. Norwood, 726 F. Supp. 1073 (S.D.
Tex. 1989). Congress gave the FDIC a number of procedural
advantages through specific exceptions to the general removal
Statutes. Through these exceptions, the FDIC:
i) may appeal remand orders. See 12
U.S.C. § 1819(b)(2)(C). Ordinarily,
remand orders are not appealable. 28
U.S.C. § 1447(d) (1984).
il) may appeal regardless of whether it is
the plainuff or the defendant in the suit.
See 12 U.S.C. § 1819(b)(1)(A). General
removal statutes only permit removal by
defendants. See In re Franklin National
Bank Securities Litigation, 532 F.2d
IN THE MATTER OF MEYERLAND CO. 13
842, 845-46 (2d Cir. 1976).
iii) may file a notice of removal within
ninety days of the date it inherits the
claim of the failed savings institution.
See 12 U.S.C. § 1819(b)(2)(B).
Typically, a substituted party only has
thirty days to file a notice of removal.°
See 28 U.S.C. § 1446(b) (1984).
iv) need not file a bond or security to
remove a case. See 12 U.S.C. §
1819(6)(2)(B). Until 1988, the FDIC
had been required to post bond or
security. Judicial Improvements and
Access to Justice Act. Pub. L. No. 100-
702, 1988.
These specific exceptions from the general procedural rules
conspicuously illustrate the congressional intent behind
FIRREA. Firmly established procedural rules control when
no exceptions are explicitly drawn by Congress. Midlantic
Nat'l Bank, 474 U.S. 494; Lazuka v. Federal Deposit Ins.
Corp., 931 F.2d 1530, 1536 (11th Cir. 1991).
Apart from the specific exceptions, congressional intent
can also be understood by looking to references made to
general removal principles. For example, the word
“appropriate” in 12 U.S.C. § 1819(b)(2)(B) necessarily refers
* This provision was amended on December 19, 1991. FDIC
Improvement Act, Pub. L. No. 102-242 §161, 105 Stat. 2285 (1991).
In the orginal enactment of FIRREA, the RTC was given the ability
to file a notice of appeal within a ninety day period. The FDIC was
not given this benefit and therefore was subject to the general removal
time limit of thirty days. However, Congress responded by enlarging
the period of time to ninety (90) days. Why would this amendment be
necessary if FIRREA did not intend to otherwise rely upon general
removal statutes?
14 IN THE MATTER OF MEYERLAND COMPANY
to the venue provision of the general removal statute, 28
U.S.C. § 1441(a), because "appropriate" is not defined in
FIRREA. Woburn, 930 F.2d at 968.
These specific departures from established procedural
requirements clearly demonstrate the congressional intent to
rely upon general removal provisions.
B. FIRREA Provides No Basis for Federal Court
Jurisdiction Over Cases Pending in a State
Appellate Court.
The FDIC convinced the Fifth Circuit majority to
speculate and create an independent track which would
mandate a federal district court to “rubber stamp" the decision
of the state trial court or even more incredibly, to allow the
federal district court to vacate the final state court judgmenf
altogether. Jn re Meyerland Co., 960 F.2d 512, 525, n. 8
(Sth Cir. 1992). Neither of these approaches is based upon
the language or legislative history of FIRREA.
The FDIC cites two provisions of FIRREA which
purportedly allow federal court removal regardless of the
procedural status of the case within the state judicial process.
They are:
i) 12 U.S.C. § 1819(b)(2), which provides
that “the Corporation may .. .
remove any action, suit, or
proceeding from a State court to the
appropriate United States district court
(emphasis added)"; and
ii) 12 U.S.C. § 1821(d)(13)(i), which
provides that "(ijn the event of any
appealable judgment, the Corporation as
conservator or receiver shall have all
the rights and remedies available to the
insured depository institution (before the
appointment of such conservator or
IN THE MATTER OF MEYERLAND CO. 15
receiver) and the Corporation in its
corporate capacity, including removal to
federal court and all appellate rights
Contrary to the Fifth Circuit’s holding, neither provision
creates “out of whole cloth" a new category of federal district
court possessing original appellate jurisdiction. Under the
circumstances of this case, the federal district court was
powerless to exercise any meaningful original jurisdiction over
the case, and Judge Hoyt was correct in remanding the case
back to the state appellate court.
i. The language of 12 U.S.C. § 1819(b)(2) does not
authorize the removal of an action after the state
trial court loses plenary power over the action.
The gravamen of the Fifth Circuit’s majority en banc
opinion relies principally on the word “any” to support its
conclusion that a case can be removed at any stage of the state
appellate process. This language does not refer to the
procedural status of the litigation. Instead, as the dissent
correctly elucidates, it refers to the types of cases which the
FDIC may remove to federal court. In re Matter of
Meyerland Co., 960 F.2d at 523. This language does nothing
more than expand the federal court’s subject matter
jurisdiction to permit the FDIC to bring actions which,
because of their subject matter, would ordinarily have been
matters for the state courts. See Carrollton Farmers Branch
Independent School Dist. v. Johnson & Cravens, 889 F.2d
$71, 572 (Sth Cir. 1989), on remand to, 776 F. Supp. 1180
(N.D. Tex. 1991).
The FDIC’s contention that "any" means cases of any
procedural posture as well as any subject matter, also conflicts
with the legislative intent behind FIRREA. When FIRREA’s
removal provision was first submitted as an amendment in the
House of Representatives, it was described as vesting in the
16 IN THE MATTER OF MEYERLAND COMPANY
FDIC only "the authority to remove certain state court
proceedings to federal court." H.R. Rep. No. 54(1), 101st
Cong., Ist Sess., reprinted in 1989 U.S.Code Cong. &
Admin. News 86, 124-25 (discussing H.R. 1278, 101st
Cong., Ist Sess. (version 2 of May 18, 1989)) (emphasis
added). "Certain" state court proceedings does not mean any
state court proceedings. Congress intended to limit the
FDIC’s ability to remove only those cases over which a
federal district court had some meaningful original
jurisdiction. This approach harmonizes the language of 12
U.S.C. § 1819(b)(2)(B) with the intent of Congress in passing
FIRREA.
The cases relied on by the majority opinion of the Fifth
Circuit Court of Appeals as supporting post-judgment removal
are easily distinguished from this case. Each and every case
cited by the Fifth Circuit in the en banc opinion are ones over
which the state trial court still could exercise some meaningful
original jurisdiction.® While some of the cases cited involved
° Beighley v. Federal Deposit Ins. Corp., 868 F.2d 776 (Sth Cir.
1989) (motions to vacate the judgment and for a new trial were still
pending in state trial court when the suit was removed, so district court
still had power to grant Rule 60 relief); Jn re Savers Federal Sav. &
Loan Ass'n, 872 F.2d 963 (11th Cir. 1989) (no appeal filed as of yet
and Rule 60 relief was still available); Federal Deposit Ins. Corp. v.
Taylor, 727 F. Supp. 326, 328 (S.D. Tex. 1989) (judgment entered
Jan. 27, 1989 and case removed an April 26, 1989); Union Federal
Bank of Indianapolis v. Minyard, 919 F.2d 335 (Sth Cir. 1990) (motion
for new trial was pending when removed); Murray v. Ford Motor Co.,
770 F.2d 461 (Sth Cir. 1985) (Rule 60(b)(1) relief was still available);
Northshore Development, Inc. v. Lee, 835 F.2d 580 (Sth Cir. 1988)
(FSLIC was seeking 60(b) relief); Azzopardi v. Ocean Drilling &
Exploration Co. , 742 F.2d 890 (Sth Cir. 1984) (district court set aside
default judgment); Federal Deposit Ins. Corp. v. Ritchie, 646 F. Supp.
1581 (D. Neb. 1986) (district court found relief to set aside judgment
was still available); Munsey v. Testworth Laboratories, 227 F.2d 902
(6th Cir. 1955) (district court set aside default judgment); Vernon Sav.
and Loan Ass'n v. Commerce Sav. and Loan Ass'n, 677 F. Supp. 495
IN THE MATTER OF MEYERLAND CO. 17
actions pending in a state appellate court,’ in each of those
cases, the time had not yet expired for the trial court to grant
relief from the final judgment. Because the trial court could
have altered, vacated, or otherwise reconsidered the judgment,
those cases could be properly removed. Ward v. Resolution
Trust Corp., 91-3015EA (8th Cir. July 30, 1992) (Rule 60(b)
yet to be ruled on by the federal district court).
In our case, due to the amount of time that passed
since judgment was entered, the federal district court could no
longer exercise any original jurisdictional powers under Rule
60(b). This is the distinction drawn by Chief Judge Politz and
four other members of the Fifth Circuit in their dissenting
opinion. In re Meyerland Co., 960 F.2d 512, 526 (Sth Cir.
1992). The district court, and the dissenting members of the
Fifth Circuit, correctly recognized that a case can not be
removed to federal court once the district court loses the
power to reconsider the merits of the state claims under Rule
60(b) of the Federal Rules of Civil Procedure. As such,
(N.D. Tex. 1988) (removed prior to case determination on the merits).
” Federal Deposit Ins. Corp. v. Yancey Camp Development, 889
F.2d 647 (Sth Cir. 1989) (could still be vacated under Rule 60(b) at
time of removal); Jackson v. American Sav. Mortg. Corp., 924 F.2d
195 (11th Cir. 1991) (judgment entered March 20, 1989, case removed
on June 21, 1989, Rule 60 relief still available); Addison Airport of
Texas, Inc. v. Eagle Investment Co., 691 F.Supp. 1022 (N.D. Tex.
1988) (removed a de novo appeal from state county court).
* Rule 59 of the Federal Rules of Civil Procedure sets a ten day
time limit from the date judgment was entered to file a motion for new
trial, for a judgment non obstento verdicto or for an amendment to the
judgment. Rule 60(b) of the Federal Rules of Civil Procedure places
a one-year limitation from the date of judgment for a party to file a
motion for relief from a judgment. Rule 6(b) of the Federal Rules of
Civil Procedure provides that the court may not extend the time
limitations set forth in either Rule 59 or Rule 60. The only exception
to the mandatory provisions of Rule 6(b) is for “unique circumstances. “
18 IN THE MATTER OF MEYERLAND COMPANY
Judge Hoyt properly remanded the case to the state appellate
court.
2. An action pending in a state appellate court is not
"appealable" within the meaning of 12 U.S.C. §
1821(d)(13).
The FDIC has wrongfully asserted that this provision
independently allows for removal jurisdiction over matters
pending in state appellate courts. Judge Duhe’ admitted
§ 1821(d)(13) does not establish that the FDIC may remove a
case on appeal. Jn re Meyerland Co., 960 F.2d 512, 516 n.
7 (5th Cir. 1992).
A clear reading of the statute fails to support the
FDIC’s position as it specifically requires the FDIC to “abide
by a final unappealable judgment of any court of competent
jurisdiction which was rendered before the appointment of the
Corporation as receiver" (emphasis added). 12 U.S.C.
§ 1821(d)(13). Subsection B of the provision provides that,
with respect to an “appealable" judgment, the FDIC has the
same rights of the insured institution before appointment of the
receiver, "including removal to federal court and all appellate
rights."
In FIRREA, the proper construction of "appealable"
necessarily refers to the capacity for appeal, not the existence
of a prior appeal. The only judgment which may be removed
for further proceedings in federal court is one from which the
time for appeal has not already expired. In the present case,
the time for appeal had expired 13 months prior to the
FSLIC’s intervention in this dispuie. Tex. R. App. P. 46.
Under this exception, a party who has detrimentally relied on action
taken by the Court and as a result of that reliance has missed the
relevant time deadlines may be granted additional time to file a motion.
See Thompson v. Immigration and Naturalization Service, 375 U.S. 384
(1964), on remand to, 323 F.2d 167 (7th Cir. 1964). These conditions
are not present here.
IN THE MATTER OF MEYERLAND CO. 19
Additionally, the term "appellate rights" refers to state
as well as federal appeals. These rights depend upon the
posture of the case at the time of removal. Granny Goose
Foods, Inc. v. Brotherhood of Teamsters and Auto Truck
Drivers Local No. 70 of Alameda County, 415 U.S. 423
(1974). If at the time of removal, the state court judgment is
appealable, but has not yet been appealed, appellate rights
may be pursued in either the state or federal system. If,
however, the case has already been appealed in the state court
system, the "appellate rights" refers to those being pursued in
State appellate courts. Griggs, 459 U.S. at 58. In the present
case, the failed savings institution did not have any removal
rights, but chose to exercise its state appellate rights prior to
the receivership.
The legislative history behind 12 U.S.C. § 1821(d)( 13)
also illustrates the congressional intent of Congress in passing
this provision. Section 212 of FIRREA, now codified at 12
U.S.C. § 1821(d)(13), includes the following language:
Section 212(5) defines the FDIC’s authorities
and duties as conservator or receiver. The
authorities essentially parallel those heretofore
exercised by the FSLIC and the FDIC, and are
designed to give the FDIC power to take all
action necessary to resolve the problems posed
by a financial institution in default.
House Report 101-54(1), p. 330, U.S.Code Congressional and
Administrative News, 10lst Cong. 1989, Vol. 2, p. 330.
This indicates Congress intended FIRREA to continue, not
expand, the powers the FSLIC and the FDIC had previously
exercised.
The failed savings institution could not remove the case
to federal court before the FDIC intervened. The FDIC
inherits whatever rights the insured bank has on appeal, and
no more. Since an insured bank has no power to remove a
pending appeal, neither can the FDIC. Federal Deposit
20 IN THE MATTER OF MEYERLAND COMPANY
Ins. Corp. v. Sellards, 731 F. Supp. 1300 (N.D. Tex. 1990).
The reasoning of the Fifth Circuit departs from the normal
course of judicial proceedings and _ highlights the
appropniateness of review of this important question of federal
law.
II. IN THE ALTERNATIVE, THE FIFTH CIRCUIT
ERRONEOUSLY HELD THAT THE UNITED
STATES CONSTITUTION ALLOWED A
FEDERAL DISTRICT COURT TO EXERCISE
REMOVAL JURISDICTION OVER A CASE
PENDING IN ANY PHASE OF A STATE
APPELLATE PROCESS.
If FIRREA stands for the legal proposition advanced
by the FDIC and upheld by the Fifth Circuit Court of
Appeals, the statute is repugnant to the United States
Constitution. Lower federal courts possess no power to sit in
direct review of state court decisions. Atlantic Coast Line Ry.
Co. v. Brotherhood of Locomotive Eng’rs., 398 U.S. 281
(1970). In fact, the only federal tribunal with the power to sit
in review of state court judgments is this Honorable Court.
When the case is removed to a federal district court
and the state court can no longer exercise original jurisdiction,
the district court can be nothing more than a “rubber stamp"
on the state court action. This is not a constitutional function
of a United States District Court. Nevertheless, the Fifth
Circuit offered two alternatives to circumvent this
constitutional deficiency. First, a federal district court could
blindly adopt the judgment of the state district court as its
own. Second, a federal district court could entertain a Rule
59 or Rule 60 motion for relief from the state
IN THE MATTER OF MEYERLAND CO. 21
court judgment.
Both approaches gloss over the constitutional
impediments posed by the facts of this case. The state trial
court entered the judgment on May 26, 1987. This case was
not removed by the FDIC until September 7, 1989.° As a
result of the passage of time, Rule 59 and Rule 60 relief is not
available. The trial court, and therefore the federal district
court, is without any meaningful original jurisdiction.
Federal courts are courts of limited jurisdiction.
Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803);
Immigration and Naturalization Serv. v. Chadha at 942. They
may only exercise that power authorized by Article III of the
United States Constitution, and those specific statutes enacted
by Congress pursuant to Article III. Bender v. Williamsport
Area School Dist., 475 U.S. 534 (1985). Unless a dispute
falls within the confines of the jurisdiction conferred by
Article III and Congress, the federal court has no authority to
issue any orders regarding its resolution. Giannakos v. M/V
Bravo Trader, 762 F.2d 1295 (Sth Cir. 1985). Additionally,
a Statute conferring federal removal jurisdiction must comport
with the protection afforded by other provisions of the
Constitution.
This Court has created rules of justiciability which
further limit the jurisdiction of the federal court. In defining
the subject matter jurisdiction of federal courts, Article III
provides that a federal court can only consider the merits of
a case or controversy. This Court has defined "case" and
“controversy” by looking to the concepts of justiciability, such
as standing, mootness, ripeness, and abstention. These
principles require a federal district court to refrain from
considering the merits of an appeal. This Court has fashioned
such doctrines as self-imposed restraints on the federal courts
in deference to the constitutional authority of the states.
Atlantic Coast Line, 398 U.S. 281; see also Evans, supra
* This case was first removed by FSLIC on October 26, 1988, and
remanded to the state appellate court on April 24, 1989.
22 IN THE MATTER OF MEYERLAND COMPANY
at 16.
Under the procedures established by the Fifth Circuit
for removed "appeals," no justiciable case or controversy
would be presented to the federal district court. The district
court would have no power to act on the removed "appeal" in
any meaningful fashion. The district court would only adopt
the actions of the state court rendering the judgment in
question, regardless of whether that judgment was appropriate
or allowed by law. Thus, a federal district court could be
presented with an unconstitutional application of law and have
absolutely no choice but to accept the state court’s judgment
as its Own.
A. Concepts of Comity and Federalism Require that a
Federal Court Refrain from Exercising Appellate
Jurisdiction Over Final State Court Judgments.
One of the benefits of our dual court system is the
principle that a federal court will give “full faith and credit"
to judgments from state courts. U.S. Const. art. IV, § 1.
Ordinarily, this concept ensures that a citizen from one state
will enjoy the same general rights in another state. However,
it also prevents a federal court from ignoring the res judicata
effect of a state court action in a federal forum. See Kremer
v. Chemical Const. Corp. , 456 U.S. 461 (1982), reh’g denied,
458 U.S. 1133 (1982). A federal court should accept the
rules chosen by a state court from which the appeal is taken.
Mills v. Duryee, 11 U.S. (7 Cranch) 481 (1813).
This constitutional principle ensures that a federal court
should give the same preclusive effect to a state court
judgment as another court of that state would give. Parsons
Steel, Inc. v. First Alabama Bank, 474 U.S. 518, 523 (1986),
on remand to, 758 F.2d 929 (11th Cir. 1986), on remand to,
NO. Civ. A. 83V-181-N (M.S. Ala., 1986), j. aff'd, 825 F.2d
1475 (11th Cir. 1987), cert. denied, 484 U.S. 1060 (1988).
Federal courts may not "employ their own rules of res
judicata in determining the effects of state court judgments. ’"
Id. at 523. The Constitution demands a federal court accept
IN THE MATTER OF MEYERLAND CO. 23
the rules chosen by the State from which the judgment is
taken. Jd., at 523 (quoting Kremer, 456 U.S. at 461).
In Texas, this case could not be retried on the merits
unless the case was remanded back to the trial court. The
issues would be barred by the doctrine of res judicata and
collateral estoppel. Mitchell v. Carter, 545 S.W.2d 869
(Tex.Civ.App.--Waco 1977); Corpus Christi Taxpayers Ass’n
v. City of Corpus Christi, Texas, 858 F.2d 973 (Sth Cir.
1988), reh’g denied, 860 F.2d 437, cert. dism’d, 490 U.S.
1032, cert. denied, 490 U.S. 1065. Under the full faith and
credit clause of Article IV § 1, both sister state and federal
courts should defer to Texas’ ability to make substantive
decisions about its own laws. See Federal Savings and Loan
Ins. Corp. v. Templeton, 700 F. Supp. 456 (S.D. Ind., 1988).
Texas’ interests in enforcing its judgments are so
important that the exercise of federal power would disregard
the comity between states and the national government.
Huffman v. Pursue, Ltd., 420 U.S. 592, 603 (1975), reh’g
denied, 421 U.S. 971 (1975); Coyle v. Oklahoma, 221 U.S.
559, 565 (1911); Marcal Paper Mills, Inc. v. Ewing, 790
F.2d 195, 196 (1st Cir. 1986). The Fifth Circuit refused to
defer to Texas’ right to determine its own substantive law and
instead returned the case to federal district court, contradicting
this Court’s holdings in both Gregory and Evans. The Fifth
Circuit has failed to give full faith and credit to the judgment
of the Texas courts and has forced the parties to begin anew
in federal court. This constitutional infirmity in the Fifth
Circuit’s holding begs review of this decision.
B. The Tenth Amendment Obligates Congress and
Federal Courts to Respect a Final State Court
Judgment
Any exercise of jurisdiction over final state court
judgments would necessarily violate the provisions of the
Tenth Amendment:
The powers not delegated to the United States
24 IN THE MATTER OF MEYERLAND COMPANY
by the Constitution, nor prohibited by it to the
States, are reserved to the States respectively,
or to the people.
U.S. Const. amend. X.
The Fifth Circuit has forced United States District
Judge Hoyt to ignore the finality of the state judgment and
reexamine the validity of the verdict rendered by a jury. This
severely impacts a state’s right of sovereignty under the Tenth
Amendment to protect its citizens and enforce the judgments
of its court system.
This is a case of great concern for states in our
federalist system as it questions the ability of a state to protect
its judicial system by enforcing its judgments. If a federal
court is free to disregard the preclusive effect of a final state
court judgment, then the principles behind the Tenth
Amendment are completely ignored. Indeed the very concepts
of constitutional law and federalism are called into question,
as enunciated in Evans v. U.S., 112 S.Ct. 1881, 1901 (1992).
c. The Seventh Amendment Precludes Federal
Reexamination of a Final State Judgment.
The Fifth Circuit’s decision violates protection afforded
by the Seventh Amendment:
[No fact tried by a jury shall be otherwise
reexamined in any Court of the United States,
than according to the rules of common iaw.
U.S. Const. amend. VII. By allowing removal after the case
has already been tried by a state jury, the Fifth Circuit permits
lower federal courts to reexamine the judgment. The common
law recognizes only two modes by which facts may be
reexamined: the granting of a motion for new trial; and the
award of a venire facias de novo. See Parsons v. Bedford,
Breedlove & Robeson, 28 U.S. (3 Pet.) 433 (1830). Neither
IN THE MATTER OF MEYERLAND CO. 25
is present here. As there is no basis for the lower federal
court to reexamine facts tried by the jury, the Fifth Circuit
erroneously authorized the federal district court to reconsider
facts previously resolved by the state trial court and jury in
violation of the Seventh Amendment to the United States
Constitution.
CONCLUSION
This Court should review the Fifth Circuit’s judgment
and en banc opinion. General removal statutes and the
language of FIRREA fail to confer removal jurisdiction over
actions pending in state appellate courts two years and three
months after a final state judgment has been entered.
Additionally, even if Congress intended this absurd result,
such a procedural track would necessarily violate provisions
of the United States Constitution. As such, petitioners
respectfully request that this Court review the Fifth Circuit's
judgment and en banc opinion.
Respectfully submi
MIKE O’BRIEN
Mike O’Brien, P.C.
440 Louisiana
Suite 2300
Houston, Texas 77002
Tel. (713) 222-0088
FAX (713) 222-6903
26 IN THE MATTER OF MEYERLAND COMPANY
CERTIFICATE OF SERVICE
I certify that a true and correct copy of this petition for
writ of certioramn of MEYERLAND COMPANY and
WILLIAM MICHAEL ADKINSON was sent by first class
mail, postage pre-paid on this 11th day of August, 1992 to all
counsel of record.
IKE O’BRIEN
IN THE MATTER OF MEYERLAND CO.
TABLE OF APPENDICES
APPENDIX A
I a re
APPENDIX B
er
APPENDIX C
a a a a
APPENDIX D
IE LS ko 5 0 os we wee
APPENDIX E
Order for Stay Pending Reconsideration .........
APPENDIX F
CO eee ee
APPENDIX G
sg ny 5 a & 4 6 058-wre eke
APPENDIX H
Order of Rehearing En Banc ................
APPENDIX I
Order Dismissing Appeal for
ee i ra
APPENDIX J
Judgment on Rehearing En Banc ..............
APPENDIX K
Ee ae
27
28 IN THE MATTER OF MEYERLAND COMPANY
APPENDIX L
ne hg a a as 6 eave Sa 8}
APPENDIX M
EO Rares er eae oe ee 82
APPENDIX N
a i a ea eee eee 84
APPENDIX O
sg 4 a ub ea ee ee 85
APPENDIX P
oon. -« & wine ho eee ee 87
APPENDIX Q
5k 3): OS er eae No meters eee 90
APPENDIX R
eT ol lo os ae oy 6 ale Se a 92
APPENDIX S
Sa od Aw a we 6 be ete ee 93
APPENDIX T
ie We OE EMULEAD 5 be vee ca ees ee eee 97
IN THE MATTER OF MEYERLAND CO. la
(APPENDIX A)
En Banc Opinion
IN THE MATTER OF MEYERLAND CO., and William
M. Adkinson, Debtors,
FEDERAL DEPOSIT INSURANCE CORP.
as Manager of the FSLIC Resolution Fund
as Receiver for Continental Savings Association,
Appellant,
v.
MEYERLAND CO., and William Adkinson,
Appellees.
United States Court of Appeals, Fifth Circuit.
No. 89-6118
May 13, 1992
Appeal from the United States District Court
For the Southern District of Texas.
Before Politz, Chief Judge, REYNALDO G. GARZA, KING,
GARWOOD, JOLLY, HIGGINBOTHAM, DAVIS, SMITH,
DUHE, WIENER, EMILIO M. GARZA and DeMOSS,
Circuit Judges.'
DUHE’, Circuit Judge:
' Judges Edith H. Jones and Rhesa H. Barksdale are recused.
2a IN THE MATTER OF MEYERLAND COMPANY
Proceedings Below and Appellate Jurisdiction
Meyerland Co. and William M. Adkinson sued
Continental Savings Association ("Continental") for, among
other things, usury and fraud in state court. Continental
counterclaimed for fraud and breach of contract. The trial
court awarded Continental $30,031,089.99 and Adkinson
$1,124,109.59 in damages. Meyerland and Adkinson
appealed.
After the appeal was filed, the Federal Home Loan
Bank Board declared Continental insolvent and appointed the
Federal Savings and Loan Insurance Corporation (FSLIC) as
receiver. The FSLIC removed to federal district court which
remanded on April 21, 1989.
On August 9, 1989, the Financial Institutions Reform,
Recovery and Enforcement Act (FIRREA), Pub.L.101-73, 103
Stat. 183, 383 was enacted. The Federal Deposit Insurance
Corporation (FDIC) succeeded the FSLIC as the receiver of
Continental and the FDIC then removed this case on
September 7, 1989 under § 209(4) of FIRREA (12 U.S.C. §
1819(b)(2)(B)).2 ‘The district court again remanded and
awarded the appellees $2,500 in sanctions.
The FDIC appeals. Although remand orders are
generally not appealable, 12 U.S.C. § 1819(b)(2)(C)
? Although the FIRREA was enacted after the current proceeding
was initiated, it is clear that the FDIC may utilize it. See Turboff v.
Merrill Lynch, Pierce, Fenner, & Smith, 867 F.2d 1518, 1521 (Sth Cir.
1989). ("When Congress adopts statutory changes while a suit is
pending, the effect of which is not to eliminate a substantive right but
rather to change the tribunal which will hear the case, those changes-
barring specifically expressed intent to the contrary-will have immediate
effect.") (citing Hallowell v. Commons, 239 U.S. 506, 36 S.Ct. 202,
60 L.Ed. 409 (1916)) and Jn re Resolution Trust Corp., 888 F.2d 57,
58 (8th Cir. 1989).
IN THE MATTER OF MEYERLAND CO. 3a
authorizes an appeal in this case. This appeal presents two
issues: (1) Whether 12 U.S.C. §1819(b)(2) authorizes the
FDIC to remove a state court appellate proceeding; and (2)
Whether the district court erred in awarding sanctions.
I. Removal Power Under FIRREA
Congress enacted FIRREA, a broad revision in federal
banking law, in response to the recent and ongoing savings
and loan crisis. See Meliezer v. RTC, 952 F.2d 879, 881 (5th
Cir.1992); Smallwood v. OTS, 925 F.2d 894, 898 (6th
Cir.1991). One of the ways FIRREA addresses the problems
facing this nation’s thrift institutions is through “provisions
which expand, enhance and clarify enforcement powers of the
financial institution regulatory agencies.". H.Rep. No. 101-
54(1), 101st Cong., 1st Sess. 291, 311, reprinted in 1989
U.S.Code Cong. & Admin.News 86, 107. Specifically,
FIRREA greatly expands the FDIC’s role in regulation and
supervising such institutions. Id. at 310-11, reprinted in 1989
U.S.Code Cong. & Admin.News at 106-07. See also Note,
The FDIC’s Enhanced Powers Over Savings Associations:
Does FIRREA Make It "SAIF"?, 59 Ford.L.Rev. $381, $382
(1991).
This case requires us to examine the extent of the
FDIC’s powers under FIRREA. At issue are jurisdictional
and removal provisions giving the FDIC broad power to gain
access to federal courts in actions to which it is a party
pursuant to FIRREA. The provisions relation to removal,
found in 12 U.S.C. § 1819(b)(2), read as follows:
(A) In general
Except as provided in subparagraph (D), all suits of a
civil nature at common law or in equity to which the
Corporation, in any capacity, is a party shall be
deemed to arise under the laws of the United States.
4a IN THE MATTER OF MEYERLAND COMPANY
(B) Removal
Except as provided in subparagraph (D), the
Corporation may, without bond or security, remove
any such action, suit or proceeding from a state court
to the appropriate United States district court
(emphasis supplied).°
The power conferred by FIRREA to invoke federal
jurisdiction and to remove from state court is substantial. See
Carrollton--Farmers Branch Independent School District v.
Johnson & Cravens, 889 F.2d 571, 572 (Sth Cir.1989). See
also Jameson v. FDIC, 931 F.2d 290, 291 (Sth Cir. 1991)
(FIRREA extends FDIC’s jurisdiction to include persons no
longer affiliated with insured institutions); FDIC v. Griffin,
935 F.2d 691, 696 (Sth Cir.1991) cert. denied, -- U.S.--, 112
S.Ct. 1163, 117 L.Ed.2d 410 (1992) (allowing federal
jurisdiction even when FDIC has been voluntarily dismissed
as a party). Access to federal courts in all actions to which it
is a party allows the FDIC to develop and rely on a national
and uniform body of law, consistent with eliminating the
problems identified by Congress in having less rigorous state
standards coexisting with federal ones.* See Smallwood v.
> 12 U.S.C. §1819(b)(2)(D), which relates to situations in which
State, as opposed to federal, authorities appoint the FDIC as receiver,
which involve only a state depository insurance system, and which
require only the interpretation of state law, does not apply to this case.
While this matter was pending before us, § (b)(2)(B) was
amended to add at the end thereof the following: “before the end of
the 90-day period beginning on the date the action, suit or proceeding
is filed against the Corporation or the Corporation is substituted as a
party. *
“ The House Report on FIRREA explained the problem with having
federal and state regulatory systems simultaneously supervising thrift
institutions: “In addition to having greater powers, many state-
IN THE MATTER OF MEYERLAND CO. Sa
Office of Thrift Supervision, 925 F.2d at 898 ("We read many
portions of the FIRREA as establishing the primacy of the
Federal interest as regards the solvency and viability of the
Federal deposit insurance system.").
In the case before us, first FSLIC and then the FDIC
sought removal from state to federal court, FSLIC under 12
U.S.C. § 1730(k)(1) (repealed by FIRREA) and the FDIC
under 12 U.S.C. § 1819(b)(2)(B), after a state court judgment
had been entered, without seeking relief from judgment under
Fed.R.Civ.P. 60, and while the case was on appeal to the
appropriate state appellate court. In each case, the federal
district court remanded to state court, concluding that neither
FIRREA nor 28 U.S.C. §§ 1441-51, the general removal
Statutes, authorized removal at this stage of the proceedings.
Although it is not clear whether the general removal
Statutes permit appellate removal,’ the dissent relies upon the
chartered thrifts found a far less rigorous regulatory and supervisory
environment at the state level ... As long as the federal government
was responsible for picking up the tab for a failed state-chartered thrift,
there was no great incentive for many state legislatures to deny the
sweeping demands for additional investment powers made by the thrift
industry. The results were tragic. Seventy percent of all FSLIC
expenditures during 1988 went to pay for problems created by high-
risk, ill-supervised, state-chartered thrifts in California and Texas.
Those same two states absorbed 54 percent of FSLIC expenditures in
1987." H.Rep. No. 101-54(1), 10ist Cong., 1st Sess. at 297, reprinted
in 1989 U.S.Code Cong. & Admin. News at 93.
* We do not decide whether this type of removal would be proper
under 28 U.S.C. § 1441. First, the FDIC could not remove the instant
case under § 1441. The dispute hinges on state law and, thus, there is
no federal question jurisdiction. Second, it is uncertain whether the
FDIC may utilize § 1441 to effectuate removal in any case, not just the
present one. In FDIC v. Sumner Financial Corp. , 602 F.2d 670 (Sth
Cir.1979) we held that the predecessor statute to 12 U.S.C. §
1819(b)(2) was a complete jurisdictional scheme and that both original
6a IN THE MATTER OF MEYERLAND COMPANY
rule that federal district courts lack jurisdiction to review final
state court judgments to support their position that § 1819
does not permit it. Specifically, they rely on District of
Columbia Court of Appeals v. Feldman, 460 U.S. 462, 476,
103 S.Ct. 1303, 1311, 75 L.Ed.2d 206 (1983), and Rooker v.
Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362
(1923). Their reliance is misplaced. Under the Rooker-
Feldman line of cases, federal statute defines “final state court
judgments" as those "rendered by the highest court of a state
in which a decision could be had." 28 U.S.C. §1257(a). The
judgment of the Texas state district court is not a "final"
judgment within this definition. Two higher courts within the
State judiciary could hear appeals. See Market St. Ry. Co. v.
Railroad Commission of State of California, 324 U.S. 548,
551, 65 S.Ct. 770,772, 89 L.Ed. 1171 (1945) (a state
judgment is final (1) if it is an effective determination of
litigation in that it is not an interlocutory or intermediate
judgment and (2) when it is subject to no further review or
correction in any other state tribunal).°
and removal jurisdiction over the FDIC was proper only if the case fell
within the ambit of § 1819. Jd. at 677-80. See also FDIC v. Elefant,
790 F.2d 661 (7th Cir.1986). It is not entirely clear, however, that
Sumner is still good law. In FSLIC v. Ticktin, 490 U.S. 82, 109 S.Ct.
1626, 104 L.Ed.2d 73 (1989) the Supreme Court held that the statute
granting jurisdiction over FSLIC, 12 U.S.C. § 1730(k)(1), was not
exclusive and did not preclude the exercise of jurisdiction under other
grants of jurisdiction. The FSLIC jurisdictional statute was very
similar to the statutory predecessor to the FDIC jurisdictional statute,
and Ticktin, therefore calls into question the result in Sumner.
6 Furthermore, the modern view of removal is that it is more
closely akin to original than to appellate jurisdiction because once the
case is removed, it is treated as if it had commenced in federal court.
See Freeman v. Bee Machine Co., 319 U.S. 448, 452, rehearing
denied, 320 U.S. 809, 64 S.Ct. 27, 88 L.Ed. 489 (1943), and Saveil
IN THE MATTER OF MEYERLAND CO. 7a
The FDIC directs us to the broad language of § 1819
in arguing that the statute authorizes removal in this case.
Under this reasoning, because the statute does not specifically
prohibit appellate removal, it authorizes it. Appellees, on the
other hand, insist that the language is so broad that the statute
is silent on this issue and that the FDIC should not be able to
remove Cases at this stage of state proceedings. To resolve
this issue, we must look to the piain language and meaning of
FIRREA, the Constitutional authority of Congress to grant this
sort of removal jurisdiction, and whether there is any reason
to think that Congress could not have intended this result.
A. Plain Meaning of the Statute.
As in any case requiring Statutory construction, the
High Court has instructed us to adhere to the plain language
of the law unless "literal application of a statute will produce
a result demonstrably at odds with the intentions of its
drafters." Griffin v. Oceanic Contractors, Inc. , 458 U.S.
34, 571, 102 S.Ct. 3245, 3250, 73 L.Ed.2d 973 (1982).
The Supreme Court recently re-affirmed this standard in
Demarest v. Manspeaker, which involved 28 U.S.C. § 1821.
-- U.S.-- , 111 S.Ct. 599, 112 L.Ed.2d 608 (1991). In
Demarest the Court said, "We do not believe that this is one
of those rare cases where the application of the statute as
written will produce a result ‘demonstrable at odds with the
intentions of its drafters.’" Jd. 111 S.Ct. at 604. We agree
that, on its face, the language of 12 U.S.C. § 1819(b)(2)(B)
V. Southern Ry., 93 F.2d 377, 379 (Sth Cir. 1937). The older approach
to removal jurisdiction viewed removal as an appeal because the
proceeding did not commence in federal court. See, e.g., Barrow v.
Hunton, 99 U.S. 80, 25 L.Ed. 407 (1879). Under the modem
understanding, removing this case does not constitute the appeal of a
State court judgment to federal court.
8a IN THE MATTER OF MEYERLAND COMPANY
allows removal at the procedural posture in which this case
comes to us.’ The statute states that the FDIC may “remove
any such action, suit, or proceeding from a state court to the
appropriate United States district court" (emphasis supplied).
The statute’s plain language is quite plain: Any action in a
state court may be removed. This language does not limit
removable actions to those that have not yet reached a state
trial court judgment, nor does it limit removable actions to
those that come to the federal courts from a specific state
court (i.e., from state trial, as opposed to appellate, court).
Furthermore, the contrast between the broad “a state court"
and the specific "United States district court" within the same
sentence strongly suggests that the drafters intended the
meaning urged by the FDIC.
Like the Eleventh Circuit, which considered this issue
under § 1819(b)’s predecessor statute, we can "discern no
reason to confine the interpretation of ‘action (from a state
court)’ to actions that have not reached judgment." In re
Savers Federal Savings & Loan Assoc., 872 F.2d 963, 966
(11th Cir. 1989). In Jn re Savers a debtor sued a financial
institution in state court claiming as here, breach of contract
and fraud and the institution counter claimed to recover on the
debtor’s note. After judgment and after deniai of post-trial
motions for hearing, new trial, and remittitur, the FSLIC was
’ The FDIC contends that the language of 12 U.S.C. §
1821(d)(18)(B) establishes its right to remove appellate proceedings.
This subsection states “In the event of any appealable judgment, the
Corporation as conservator or receiver shall have all the rights and
remedies available to the insured depository ... and the Corporation in
its corporate capacity, including removal to Federal court and all
appellate rights.” Although we agree that this case is removable, we
cannot accept this argument. While § 1821 makes it clear that the
FDIC may remove a suit after judgment, it does not clearly establish
that the FDIC may remove a case which is on appeal.
IN THE MATTER OF MEYERLAND CO. 9a
appointed conservator of the institution. It then filed notice of
removal. The district court remanded concluding that the case
was completed in state court and that defendant was, in effect,
seeking appeal. The Eleventh Circuit granted mandamus and
vacated the remand on the basis of § 1819 (b)(2)(B).
The Eleventh Circuit framed the question as "whether
after there has been a final judgment by the state trial court,
but when the period for appeal has not yet lapsed, a case
ceased to be an ‘action from a state court.’" 872 F.2d at 965-
66. The court concluded that it did not and stated: "Had
Congress intended to limit the removal power of FSLIC to
Suits pending before a state trial court, it could have explicitly
State as much, as it did in ... 12 U.S.C. §632 ..." Id. at 966.
In the instant case, it is true, removal is sought from
the state appellate court whereas in Savers no appeal had yet
been filed. The significant factor, however, is that state
appellate proceedings had not yet been exhausted when
removal was effected. Accord Murray v. Ford Motor
Company, 770 F.2d 461, 463 (Sth Cir. 1985) (per curiam);
Butner v. Neustadter, 324 F.2d 783 (9th Cir. 1963); Munsey
v. Testworth Laboratories, Inc., 227 F.2d 902, 903 (6th
Cir.1955) (per curiam). In FDIC v. Yancy Camp
Development, 889 F.2d 647, 648 (Sth Cir. 1989), a case which
was On appeal, we allowed removal and the district court set
aside a default judgment.
Therefore, unless Congress lacks the power under
Article Three of the United States Constitution to confer
federal jurisdiction upon federal district courts in cases such
as this one, or unless Congress could not have intended to do
so when it enacted FIRREA, the district court erred in
remanding this action to the state court.
B. Article III Power to Create Jurisdiction in
Federal District Courts.
10a IN THE MATTER OF MEYERLAND COMPANY
While it is black letter law than “Congress may not
expand the jurisdiction of the federal courts beyond the bounds
established by the Constitution," Verlinden B.V. v. Central
Bank of Nigeria, 461 U.S. 480, 491, 103 S.Ct. 1962, 1970,
76 L.Ed.2d 81 (1983), the power of Congress to authorize
removal of cases on appeal has been repeatedly affirmed. See
Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat) 304, 349, 4
L.Ed. 97 (1816) ("Congress...may authorize removal either
before or after judgment."); Gaines v. Fuentes, 92 U.S. 10,
18, 23 L.Ed. 524 (1876); and Tennessee v. Davis, 100 U.S.
257, 269, 25 L.Ed. 648 (1880). Congress, however, has
seldom chosen to exercise this power,® and we must decide
whether it has done so by enacting the FDIC removal statute.
S. The FDIC Removal Statute.
. History
Special considerations arise because § 1819 is a
jurisdictional _ statute. Jurisdictional statutes must be
interpreted with an eye towards history.’ The opponents
“Congress enacted at least one statute authorizing post-judgment
removal during the Reconstruction era. See the Habeas Corpus Act of
1863, ch. 81 § 5, 12 Stat. 755, 757 (“And it shall be lawful in any
such action or prosecution ... after final judgment, for either party to
remove and transfer, by appeai, such case.")
*Justice Frankfurter in Romero v. International Terminal Operating
Co., 358 U.S. 354, 360-379, 79 S.Ct. 468, 473-84, 3 L.Ed.2d 368
(1959) explained:
(a)bstractly stated, the problem is the ordinary task of a court
to apply the words of a statute according to their proper
construction. But ‘proper construction’ is not satisfied by
taking the words as if they were self-contained phrases. So
considered, the words do not yield the meaning of the statute.
IN THE MATTER OF MEYERLAND CO. lla
would have us believe that adopting the FDIC’s view of §
1819 thoughtlessly and improvidently pushes “arising under"
jurisdiction into a brave new world of expanded and
uncontrollable growth, with no historical basis for this
broadened approach. A review of the history of federal
jurisdiction reveals that this statute does not carve out a new
type of arising under jurisdiction never before seen. Rather,
FIRREA returns us to an older version of arising under
jurisdiction that existed until the early part of this century.
In Osborn v. Bank of the United States, 22 U.S. (9
Wheat) 738, 822, 6 L.Ed. 204 (1824) Justice Marshall
expounded on the outer limits of Article Three jurisdiction:
“when a question to which the judicial power of the Union is
extended by the constitution forms an ingredient of the
original cause, it is in the power of Congress to give the
circuit courts jurisdiction of that cause." Osborn "reflects a
broad conception of ‘arising under’ jurisdiction, according to
which Congress may confer on the federal courts jurisdiction
over any case or controversy that may call for the application
of federal law." Verlinden, 461 U.S. at 492, 108 S.Ct. at
1970. Even if the only issues to be decided are ones of state
law, Article Three permits the exercise of jurisdiction if one
of the parties is a federal corporation. See, e.g., The Bank of
the United States v. The Planters’ Bank of Georgia, 22 U.S.
(9 Wheat) 904, 6 L.Ed. 244 (1824).
The words we have to construe are not only words with a
history. They express an enactment that is part of a serial,
and a serial that must be related to Article III of the
Constitution, the watershed of all judiciary legislation, and to
the enactments which have derived from that Article. If the
history of the interpretation of judiciary legislation teaches
anything, it teaches the duty to reject treating such statutes as
a wooden set of self-sufficient words... (We must not forget
that it) is a statute, not a Constitution, we are expounding.
12a IN THE MATTER OF MEYERLAND COMPANY
Congress, however, did not actually grant the lower
federal courts removal jurisdiction over federal question cases
until 1875.'° This statute, the predecessor to 28 U.S.C. §
1441, was given an expansive interpretation in the Pacific
Railroad Removal Cases, 115 U.S. 1, 5 S.Ct. 1113, 29 L.Ed.
319 (1885). The Pacific Railroad Court relied on Osborn to
hold that "every case, irrespective of its nature, brought by or
against a federally charted corporation is a suit arising under
the ‘laws of the United States.’" Frankfurter, Distribution of
Judicial Power Between United States and State Courts, 13
Cornell L.Q. 499, 509 (1928).
The expansive reading given by the Pacific Railroad
Court to “arising under" was soon curtailed. /d. See also
Romero, 358 U.S. at 379 n. 50, 79 S.Ct. at 484 n. 50, 28
U.S.C. § 1331, for example, is interpreted more narrowly
than the Constitution permits. Verlinden, 461 U.S. at 494-95,
103 S.Ct. at 1971-72. The general removal statute, 28
U.S.C. § 1441, is also not interpreted as broadly as it could
be. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100,
108, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941) (the “policy of
the successive acts of Congress regulating the jurisdiction of
the federal courts is one calling for the strict construction of
(removal)") and Willy v. Coastal Corp., 855 F.2d 1160 (Sth
Cir. 1988), appeal after remand, 915 F.2d 965 (Sth Cir. 1990),
aff'd -- U.S.--, 112 §.Ct. 1076, 117 L.Ed.2d 280 (1992). See
also Collins, The Unhappy History of Federal Question
Removal, 71 Iowa L.Rev. 717 (1986).
It is clear that no federal jurisdiction exists over the
present dispute under either 28 U.S.C. § 1331 or § 1441
because the issues are governed by state law and federal law
is a small ingredient of the dispute. See Gully v First National
Bank at Meridian, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70
Act of March 3, 1875, ch. 187, §2, 18 Stat. 470.
IN THE MATTER OF MEYERLAND CO. 13a
(1936) (for a suit to “arise under" federal law, a “right of
immunity created by the Constitution or laws of the United
States must be an element, and an essential one, of the
plaintiff's cause of action") and Franchise Tax Bd. v.
Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct.
2841, 77 L.Ed.2d 420 (1983). It is equally clear that
Congress enacted 12 U.S.C. § 1819 precisely so that the
FDIC could enjoy federal question jurisdiction similar to that
articulated in Osborn and the Pacific Railroad Removal Cases.
See Pernie Bailey Drilling Co. v. FDIC, 905 F.2d 78 (Sth Cir.
1990); Franklin National Securities Litigation v. Andersen,
532 F.2d 842 (2nd Cir.1976); and FDIC v. George-Howard,
153 F.2d 591 (10th Cir.), cert. denied, 329 U.S. 719, 67
S.Ct. 53, 91 L.Ed. 623 (1946).
Thus, nothing in the history of federal jurisdiction
compels us to ignore the plain meaning of § 1819 and find
that it creates a more restricted type of removal jurisdiction
than its language allows. Similarly, a broader look at the
ways in which the statute enhances the FDIC’s procedural,
and in particular post-judgment powers reveals nothing
inconsistent with our finding that it authorizes removal in this
case.
ra Other Procedural Advantages in FIRREA.
We recently recognized an important way FIRREA
increases the FDIC’s post-judgment powers in RIC v.
McCrory, 951 F.2d 68, 71 (Sth Cir.1992). In that case, we
held that FIRREA permitted federal regulators to assert their
special defenses for the first time on appeal. See also Union
Federal Bank v. Minyard, 919 F.2d 335, 336 (Sth Cir. 1990)
(FDIC allowed to raise special defense for first time on appeal
because, as the Corporation was not a party in the trial court,
it had neither the occasion nor opportunity to raise it below);
l4a IN THE MATTER OF MEYERLAND COMPANY
FDIC v. Castle, 781 F.2d 1101, 1106 (Sth Cir. 1986) (FDIC
allowed to first raise defenses on appeal because applicability
of defenses clear under relevant statute). Generally arguments
not asserted until an action reaches an appellate level are lost.
See, e.g., Hulsey v. State of Texas, 929 F.2d 168, 170 (Sth
Cir.1991), and cases cited therein. FIRREA confers a
powerful litigation weapon by making such usually untimely
arguments available to the FDIC, but see Bawmann v. Savers
Federal Savings & Loan Assoc., 934 F.2d 1506, 1511 (11th
Cir.1991), petition for cert. filed, (U.S. January 6, 1992)
(holding that FIRREA does not allow Resolution Trust
Corporation to raise issues on appeal which were not raised
below.)
Furthermore, 12 U.S.C. §1819(b)(2)(C) allows the
FDIC to appeal orders remanding removed actions to state
courts. Under the general removal statutes, such orders are
not appealable. 28 U.S.C. § 1447(d). In addition, the FDIC
can remove in any case to which it is a party, even though
generally only defendants can remove. 28 U.S.C. §1441(a).
In Lazuka v. FDIC, 931 F.2d 1530, 1535 (11th Cir.1991), the
Eleventh Circuit held that § 1819 allows the FDIC to
overcome the "well-pleaded complaint" rule. Under this rule,
the basis for federal jurisdiction must appear on the face of the
complaint. Caterpillar Inc. v. Williams, 482 U.S. 386, 392,
107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987). Section 1819
allows the FDIC to invoke federal jurisdiction regardless of
what appears in the complaint. The Lazuka court found that,
in enacting FIRREA, “Congress used very strong language to
afford the FDIC every possibility of having a federal forum
within the limits of Article III." /d.'' Although this is not
'' Additionally, it is even possible for parties other than the FDIC
to remove an action once the FDIC becomes a party. FDIC v. Otero,
$98 F.2d 627 (ist Cir. 1979).
IN THE MATTER OF MEYERLAND CO. Sa
a post-judgment advantage, it is another indication of the
importance Congress placed on getting cases falling under the
scope of FIRREA into federal courts.
Cumulatively, these procedural advantages bestowed by
Congress tremendously increase the FDIC’s ability to carry
Out its regulatory and enforcement responsibilities under
FIRREA. These advantages allow the FDIC to step into the
shoes of a troubled financial institution at any stage of
proceedings without being penalized for the timing of that
Substitution and to effectively and aggressively protect the
institution’s interests and assets. Our finding that § 1819
allows removal in this case is completely consistent with the
other procedural advantages FIRREA gives the FDIC and with
the underlying goal of promoting uniform federal, as opposed
to state, regulation and supervision of thrift institutions.
D. Procedural Results of Allowing Appellate
Removal.
Appellees argue against finding jurisdiction under
FIRREA because of the procedural consequences. Their
argument goes like this: If we allow removal after a final
State court judgment has been entered and where Rule 60
relief is not available, the federal district court would have no
original jurisdiction to exercise. Basically, it would face two
choices. First, it could review the state court judgment in an
appellate posture. We make no indication of the propriety of
such action because it is not necessary to force district courts
into this role when the other role available to them does not
present such complex constitutional and jurisdictional issues.
This second option is for the district court to take the
State judgment as it finds it, prepare the record as required for
16a IN THE MATTER OF MEYERLAND COMPANY
appeal, and forward the case to a federal appellate court for
review. We are not persuaded that this so-called "rubber-
stamping" by district courts is so at odds with Article Three
jurisprudence that it precludes following the plain language of
the statute or that Congress could not have intended this
result.
It is argued that district courts, in order to exercise
original jurisdiction, must “judge something" in order for
there to be a case or controversy before them under Article
Three. The case or controversy requirement does not,
however, preclude federal appellate courts from remanding
cases to district courts on a regular basis with instructions to
take a prescribed action, such as enter judgment for a
specified party. See, e.g., Mulligan v. Schultz, 848 F.2d 655,
658 (Sth Cir.1988) (district court’s dismissal for lack of
subject matter jurisdiction vacated and case remanded with
instructions to enter judgment for appellees); Ferguson v.
Heckler, 750 F.2d 503, 505 (Sth Cir.1985) (district court’s
upholding of an ALJ’s determination under Social Security
Act reversed and case remanded with instructions to enter
judgment in favor of the claimant); and Thorne v. Jones, 765
F.2d 1270, 1278 (Sth Cir.1985), cert. denied, 475 U.S. 1016,
106 S.Ct. 1199, 89 L.Ed.2d 313 (1986) (district court’s
judgment against defendants for violating _ plaintiffs’
constitutional rights reversed and case remanded with
instructions to enter judgment for the defendants.). The
district court’s role in these remand situations is no less
mechanical and involves no more active a judicial role than
does adopting a state court judgment and sending the
proceeding to an appellate court.’
'2 A compromise to the case or controversy issue would be to allow
removal only when Fed.R.Civ.P. 60 relief is available. We are
certain, however, that Congress did not intend to deprive the parties to
IN THE MATTER OF MEYERLAND CO. 17a
We have been presented with a parade of horribles
which it is argued will follow from our holding. These
premonitions unnecessarily complicate the matter. A case
removed from state court simply comes into the federal system
in the same condition in which it left the state system.
Granny Goose Foods, Inc. v. Brotherhood of Teamsters, Etc.,
415 U.S. 423, 435-36, 94 §.Ct. 1113, 1122-23, 39 L.Ed.2d
435 (1974). For instance, if the notice of appeal was adequate
in the state court system, it should be deemed adequate when
it enters the federal courts, regardless of whether the state
technical requirements for notice of appeal differ from the
federal. Granny Goose, 415 U.S. at 435-36, 94 S.Ct. at
1122-23 (“Judicial economy is promoted by providing that
proceedings had in state court shall have force and effect in
federal court, so that pleadings filed in state court, for
example, need not be duplicated in federal court.").
Finally, we do not intend by the holding in this case to
Suggest that the FDIC removal statutes “effect a wholesale
replacement" of the general removal statutes found in 28
U.S.C. §§ 1441-51. We agree that § 1819(b)(2)(B) invokes
Section 1441 by referring to "the appropriate United States
District Court" and that FIRREA’s lack of provisions for the
mechanics of removal necessitates reliance on the general
schema. Indeed, we recently held that the FDIC must adhere
to the timely filing requirements of the general removal
statutes. FDIC v. Loyd, 955 F.2d 316 (Sth Cir.1992) (28
U.S.C. § 1446(b) timely filing requirement applies to the
FDIC under FIRREA). FIRREA, however, confers a specific
removal power to a federal corporation. To the extent that the
specific powers or mechanisms in the statute are inconsistent
this dispute of their right to appeal and to relegate them to relief under
Rule 60 when it expanded the FDIC’s removal power by enacting the
FDIC removal statute.
18a IN THE MATTER OF MEYERLAND COMPANY
with the general removal statutes, FIRREA supersedes the
general statutes. This holding is consistent with the Eleventh
Circuit’s in Lazuka v. FDIC, which, like our decision in Loyd,
held that removal under FIRREA does fit into the general
removal scheme. 931 F.2d at 1536 (concluding that "the
FIRREA removal provisions located at 12 U.S.C. § 1819
should be viewed as specific exceptions from the relevant
provisions of general removal procedure, located at 28 U.S.C.
§§ 1441, 1446, 1447" but reaching a different conclusion than
Loyd concerning when the 80-day filing period under 28
U.S.C. § 1446 begins to run). Because the statutes and the
law that has evolved from them conflict on the issue before
us, FIRREA controls.
II. Sanctions
Since we reverse the district court’s decision to remand
the instant appeal, it is clear that its award of sanctions for
improper removal must also be reversed.
Conclusions
The decision of the district court remanding this matter
and assessing sanctions is REVERSED, its remand order is
VACATED and this matter is REMANDED to the district
court for further proceedings.
DeMoss, Circuit Judge, specially concurring:
During the pendency of this matter on appeal, 12
U.S.C. § 1819(b)(2)(B) was amended to read as follows:
"(B) Removal
Except as provided in subparagraph (D), the
IN THE MATTER OF MEYERLAND CO. 19a
Corporation may, without bond or security,
remove any action, writ or proceeding from a
State court to the appropriate United States
district court before the end of the 90-day
period beginning on the date the action, suit,
or proceeding is filed against the Corporation
or the Corporation is substituted as a party."
(Underlining added to indicate new language)
(Pub.L. 102-242, Title I, § 161(d), 105 Stat. 2236, 2286,
Dec. 19, 1991). Some of my colleagues think that this
amendment has little or no significance. I think it does. The
fundamental conflict in this case relates to the issue of whether
the provisions of § 1819(b)(2)(B) indicate anything regarding
Congress’ intention about the status of the case being
removed. Absent the new language added to this Section by
the 1991 Amendment, I am inclined to agree with the dissent
that the "general language does not address the trial/appellate
Status" of the case being removed.
With the new language of the 1991 Amendment in
place, however, the "plain meaning” argument of the majority
holds water, even in the unusual circumstances involved in
this case. The new language indicates two periods of time
when removal may be accomplished. The first period of time
begins with the filing date of an action, suit, or proceeding in
a state court in which "the Corporation" (FDIC) is a party
defendant and ends 90-days later. The second period of time
in which removal may be accomplished begins with the date
the Corporation is substituted as a party in any action, suit, or
proceeding in a state court and ends 90 days thereafter.
I recognize that the statutory language defining the
second period does not contain express language like
"regardless of the status of the case being removed." But the
language defining the first period does clearly indicate that the
Congress thought about the subject of status of the case being
20a IN THE MATTER OF MEYERLAND COMPANY
removed (and the status of the Corporation as a party
defendant therein) and the failure to use any language about
the status of the case being removed (or the status of the
Corporation as a party therein) in the definition of the second
period should, in my mind, properly be construed as being a
conscious omission; leading to the conclusion that whenever
removal is sought in a case in which the Corporation has been
substituted as a party, the status of the case being removed
(and the status of the Corporation as a party) is not material.
The first period for removal reflects the traditional
circumstances for removal as contemplated by 28 U.S.C. §
1441 et seq. but gives the Corporation 90 days instead of 30
days to effect removal. The second period for removal is a
special and unique right granted to the Corporation as part of
the broad remedial purposes of the FIRREA Legislation as
described in the majority opinion. Likewise, for the reasons
Stated in the majority opinion, Congress clearly has the
authority to establish this special and unique removal right.
In the best of all worlds maybe Congress should have more
thoroughly reflected its intentions with companion
amendments which would expressly solve the uncertainties
raised by the dissent. Obviously, we don’t live in the best of
all worlds. But I concur in the majority holding because I am
satisfied that the language added by the 1991 Amendment does
sufficiently express Congress’ intent that removal be permitted
even in the out-of-the-ordinary circumstances of this case.
POLITZ, Chief Judge, with whom GARWOOD,
HIGGINBOTHAM, WIENER and EMILIO M. GARZA,
Circuit Judges, join, dissenting:
I cannot accept the major disruption of federal
practices and procedures and the gross intrusion on the state
judicial systems fostered by the majority opinion and therefore
respectfully dissent. Persuaded that the removal of this case
IN THE MATTER OF MEYERLAND CO. 21a
was inappropriate and improper, I would affirm the order of
remand.
I briefly restate the procedural history and posture of
these proceedings. Meyerland Co. and William M. Adkinson
sued Continental Savings Association in state court in Texas
for usury, fraud, fraud in the inducement, and
misrepresentation. Continental counterclaimed for fraud and
breach of contract. As damages, the trial court awarded
Continental $30,031,089.99 and Adkinson $1,124,109.59.
Meyerland and Adkinson appealed.
The parties had submitted their appellate briefs when,
on September 30, 1988, the Federal Home Loan Bank Board
declared Continental insolvent and appointed the Federal
Savings and Loan Insurance Corporation as receiver. The
FSLIC removed to federal district court but the case was
remanded on April 21, 1989. On August 9, 1989, the
Financial Institutions Reform, Recovery and Enforcement Act
(FIRREA), Pub.L. 101-73, 103 Stat. 183, was enacted and the
FDIC succeeded the FSLIC as Continental’s receiver.
Claiming authority under FIRREA, 12 U.S.C. §
1819(b)(2)(B),' the FDIC removed the cause. Our district
court again remanded and imposed $2500 in sanctions upon
the FDIC. The FDIC timely appealed.”
FIRREA expands the original and removal jurisdiction
' FIRREA’s jurisdictional provisions apply to cases pending on the
date of its enactment. See Triland Holdings & Co. v. Sunbelt Service
Corp., 884 F.2d 205 (Sth Cir. 1989); see also Kirkbride v. Continentai
Casualty Co. , 933 F.2d 729 (9th Cir.1991); Federal Deposit Ins. Corp.
v. 232, Inc., 920 F.2d 815 (11th Cir.1991); Demars v. First Service
Bank for Savings, 907 F.2d 1237 (1st Cir. 1990); In re Resolution Trust
Corp., 888 F.2d 57 (8th Cir. 1989).
? Although remand orders generally are not appealable, 12 U.S.C.
§ 1819(b)(2)(C) authorizes appeal by the FDIC.
22a IN THE MATTER OF MEYERLAND COMPANY
of the district courts by permitting the FDIC to remove cases
which ordinarily would have been matters for the state courts.
See Carrollton-Farmers Branch Independent School District v.
Johnson & Cravens, 889 F.2d 571 (Sth Cir.1989); Triland
Holdings & Co. v. Sunbelt Service Corp., 884 F.2d 205 (Sth
Cir.1989). The majority accepts the FDIC contention that
FIRREA also allows the removal of a state court case even if
the time for relief from judgment has run and the action is
before a state appellate court. In cases in which Fed.R.Civ.P.
60 relief is not available, the disposition urged by the FDIC
mandates one of two results: The federal district court, in
reviewing the case on the merits, exercises appellate
jurisdiction over the state court; or the district court must
accept as its own the decision of the state court and
immediately turn the case over to the appropriate federal court
of appeals. I reject both alternatives and would conclude that
if Rule 60 relief is either unavailable or not sought, FIRREA
neither authorizes nor requires removal of a case from a state
appellate court to a federal district court.
FIRREA, at 12 U.S.C. § 1819(b)(2), provides in
pertinent part:
(A) In general
Except as provided in subparagraph (D), all
suits of a civil nature at common law or in
equity to which the Corporation, in any
Capacity, is a party shall be deemed to arise
under the laws of the United States.
(B) Removal.
Except as provided in subparagraph (D), the
Corporation may, without bond or security,
remove any action, suit, or proceeding from a
State court to the appropriate United States
IN THE MATTER OF MEYERLAND CO. 23a
district court.’
The FDIC insisted, and the majority now holds that the broad
statutory language “any action, suit, or proceeding from a
State court" permits removal regardless of the case’s status
within the state judicial system. Despite the breadth of the
description of the categories of removable cases, however, the
statute is silent on the critical question of the procedural
posture of the litigation. I am convinced that the broad
statutory language providing for removal of “any action, suit,
or proceeding” describes and is limited to the types of
removable matters; that general language does not address the
trial/appellate status.
I am persuaded beyond peradventure that if Congress
had intended to grant federal district courts the totally new
power to review state court decisions, it would have
articulated that authority with great specificity. An historical
comerstone of federal jurisdiction to federal district courts
does not include the power to review final state court
judgments.* It is therefore only reasonable to expect that if
Congress intended to vest the removal authority as embraced
by the majority that authority would have been expressed with
the same preciseness found in other specific jurisdictional
grants. For example, Congress has promulgated express,
succinct guidelines for judicial review of agency actions. See
the Administrative Procedure Act, at 5 U.S.C. §§ 701-706.
In empowering the courts of appeals with authority to review
particular agency orders, Congress has not required, as in the
FIRREA removal provision, that the case be presented initially
* Subparagraph (D) is inapplicable to the present inquiry.
“Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68
L.Ed. 362 (1923).
24a IN THE MATTER OF MEYERLAND COMPANY
to the district court but has, instead, expressly permitted filing
directly in the courts of appeals. Similarly, the distinct
boundaries of federal review of state court criminal procedures
have been detailed expressly by Congress. See 28 U.S.C. §§
2241-2254. One need be mindful that even the power of the
United States Supreme Court to review final state court
judgments has been legislatively defined. See 28 U.S.C. §
1257.
That section 1819’s broad statutory language is not
sufficient to create the exceptional removal right granted by
the majority should immediately be apparent when one
considers the consequences of that holding. Under today’s
holding we must either direct the district courts to sit as
appellate courts over the removed state court cases, or require
our trial courts to "rubber stamp" state court judgments and
forward them to federal appellate courts for review. The first
option requires the district court to exercise appellate
jurisdiction, not original jurisdiction. See 28 U.S.C.
§ 1441(a). The language purportedly requiring this result is
contained not only in section 1819, but also in the very statute
that forges the original jurisdiction limitation. Compare 12
U.S.C. § 1819 (6)(2)(B) (“any action, suit, or proceeding
* 28 U.S.C. § 2342 (granting courts of appeals exclusive
jurisdiction to review final orders of the Federal Communications
Commission, the Secretary of Agriculture, the Secretary of
Transportation, the Federal Maritime Commission, and the Interstate
Commerce Commission); 8 U.S.C. § 110S5a (Immigration and
Naturalization Service order reviewed pursuant to 28 U.S.C. § 2341 er
seq.); 29 U.S.C. § 160(f) (National Labor Relations Board orders
reviewed by courts of appeals); and, 18 U.S.C. § 843(d)(2) (Secretary
of Treasury licensing decisions reviewed by courts of appeals). See
also 16 U.S.C. § 8251 (delineating the power of the United States Court
of Appeals for the District of Columbia to review final orders of the
Federal Power Commission) and 28 U.S.C. § 2645 (Court of
International Trade decisions reviewed by the Federal Circuit).
IN THE MATTER OF MEYERLAND CO. 25a
from a state court") with 28 U.S.C. §1441(a) (“any civil
action brought in a State court").
I see no conceivable support for the proposition that
FIRREA effects a wholesale replacement of the usual federal
schema, including the removal statues, 28 U.S.C. §§ 1441-
1451.° For example, by referring to the “appropriate United
States District Court," subsection 1819(b)(2)(B) obviously
invokes the venue provisions of 28 U.S.C. 1441(a). FIRREA
contains no provisions for the mechanics of removal. Without
resort to the general statutes the procedures for notice of
removal to the district court, for opposition thereto, and for
stay of the state court proceedings are non-existent. At this
point it is worthy of underscoring that when Congress took
FDIC cases out of the ordinary rule forbidding appellate
review of remand orders, it expressly detailed that exception
in 12 U.S.C. § 1819(b)(2)(C). By contrast, FIRREA contains
no waiver of the original jurisdiction limitation of district
court jurisdiction or of any of the other general federal rules
or procedures.
The majority finds the second FDIC suggestion
acceptable: I do not. A district court forced to adopt a state
trial court decision as its own would not be exercising original
jurisdiction over a case or controversy. I reject the suggestion
that Congress would consider, even momentarily, imposing
such a limiting function on an Article III court.’ Further,
* See, -.g. Lazuka v. Federal Deposit Ins. Corp., 931 F.2d 1530,
1536 (11th Cir.1991) (Congress intended “that the FDIC adhere in
most respects to general removal procedure"); Federal Deposit Ins.
Corp. v. Norwood, 726 F.Supp. 1073, 1075 (S.D.Tex. 1989).
” Congress’ power to confer jurisdiction on federal courts under
Article III of the United States Constitution is limited to "cases" and
“controversies.” In National Mutual Insurance Co. v. Tidewater
Transfer Co., 337 U.S. $82, 69 S.Ct. 1173, 93 L.Ed. 1556 (1949),
26a IN THE MATTER OF MEYERLAND COMPANY
assuming an adequate resolution of the district court’s role,
the incongruities inherent in this proposal extend even further
for we are forced to theorize on the subject of our own
jurisdiction. The FDIC suggests two procedural tracks for
today’s holding, one which requires a notice of appeal and one
which does not.* Both of these alternatives are in conflict
however, three Supreme Court Justices took the view, rejected by the
other Justices, that Article I of the Constitution empowers Congress to
confer on “constitutional” federal courts powers beyond those defined
in Article III. This theory has never been sanctioned by a majority of
the Court and it is not viable today. See L. Tribe, American
Constitutional Law, 68, 189-88 (1988) (footnote omitted); C.Wright,
The Law of Federal Courts 110 (1983).
Reserving comment on its validity, we also distinguish the
theory popularly known as “protective jurisdiction.” This theory has
been posited to justify congressional grants of federal subject matter
jurisdiction without concomitant substantive legislation, but not to
justify grants of jurisdiction without the power to judge the case. See
Bickel & Wellington, Legislative Purpose and the Judicial Process:
The Lincoin Mills Case, 71 Harv.L.Rev. 1, 21 (1957); C.Wright,
supra. at 110-11.
In addition “in order for a claim to be justiciable as an Article
III matter, it must ‘present a real and substantial controversy which
unequivocally calls for adjudication of the rights’ asserted." L. Tribe.
supra. at 68 (quoting Poe v. Ullman, 367 U.S. 497, 509, 81 S.Ct.
“1752, 1759, 6 L.Ed.2d 989 (1961) (Brennan, J., concurring in the
judgment)). The “justiciability” maxim is anchored in concepts of
“mootness,” “ripeness,” and “standing,” and does not precisely address
the “rubber stamp" theory before this court. See e.g., Flast v. Cohen,
392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968). Nonetheless, just
as it requires an adversarial context, the case-or-controversy requisite
of Article III would seem to require, at a minimum, the power to judge
something.
* One proposed procedural track that this court could adopt to
effectuate the FDIC's interpretation would not require a federal notice
of appeal. The FDIC suggests:
IN THE MATTER OF MEYERLAND CO. 27a
with other well-established rules. One rubric provides that
once a case has been removed to federal court its course is
governed by federal law. Granny Goose Foods, Inc. Vv.
Brotherhood of Teamsters & Auto Truck Drivers, 415 U.s.
423, 441, 94 S.Ct. 1113, 1125, 39 L.Ed. 2d 435, 451 (1974).
The majority embraces Granny Goose Foods. Another rule
obliges the federal court to accept the case "in its current
posture ‘as though everything done in state court had in fact
been done in the federal court.’" Nissho-lwai American Corp.
v. Kline, 845 F.2d 1300, 1303 (5th Cir. 1988) (quoting Savell
v. Southern Ry., 93 F.2d 377, 379 (Sth Cir.1937) and
discussing Granny Goose Foods). If a case is already on
appeal in state court and is subsequently removed to a federal
district court, however, we must either ignore the federal
notice of appeal requirements in order to accept the case in its
State posture, or we must ignore the state posture by requiring
Under this approach, an appeal perfected in state
court results in the perfection of an appeal in the
federal circuit court. Because a notice of appeal has
already been filed in state court and is, upon removal
on file in the federal district court, no new notice
would need to be filed in the federal court. The state
court notice of appeal would be given the same effect
as if it were a notice of appeal filed in federal court.
The federal district court need only transmit the
record to the federal court of appeals so that the case
can proceed from the point where it left off in state
appellate court.
The FDIC also proffers an alternative proposal, the procedure
followed by the Eleventh Circuit in Jackson v. American Sav. Morrg.
Corp., 924 F.2d 19S (11th Cir.1991). Under the Jackson procedure,
the FDIC must file a Rule 59 motion. If the district court refuses to
modify or vacate, then the state court judgment or order becomes the
district court’s judgment or order. A notice of appeal would follow the
district court’s disposition of the Rule 59 motion.
28a IN THE MATTER OF MEYERLAND COMPANY
a federal notice of appeal. With today’s holding, without any
congressional leave the jurisdictional notice of appeal simply
disappears. By a deft brush of legal legerdemain the majority
automatically vests federal appellate jurisdiction over a state
court case which has, somehow, passed through the precincts
of a powerless district court judge. Appellate jurisdiction is
just one example of the attendant clashes between state an
federal procedures. If, “any action, suit, or proceeding"
means any matter at any Stage in the litigation process, then
a case may be removed while a writ of certiorari is pending
before the state’s highest court or, even more startling, after
disposition by the state’s highest court and pending a petition
for rehearing before that court, or even thereafter pending a
writ application to the United States Supreme Court. In each
of those instances we must now fabricate the appropriate
procedural rules out of whole cloth. Are we to decide
whether the state court would consider the case important
enough to grant discretionary review? Should we apply our
own appellate rules and consider the appeal mandatory?
Should we grant the rehearing? What standard are we to
apply in reviewing the rehearing; should we seek to act as we
fathom the state court would act or should we independently
analyze the problem? Extending the majority’s analysis
perhaps we should mandate the adoption of the state appellate
court’s decision as our own decision and then allow the case
to proceed on a writ of certiorari from this court to the United
States Supreme Court. Or even more alarming, suppose the
supreme court of the state has granted a writ of certiorari to
an intermediate state appellate court at the time of the
FIRREA removal. Does that require the United States
Supreme Court to hear the case on certiorari? Under the
majority’s analysis of Granny Goose Foods that answer
apparently must be "yes." Other questions come to mind. I
entertain no doubt whatever that the simple broad language of
12 U.S.C. § 1819(b)(2)(B) was not intended to impose those
IN THE MATTER OF MEYERLAND CO. 29a
bizarre procedures upon the federal judiciary, either trial or
appellate.
These dizzying circumstances would not plague our
federal procedural scheme, however, if after removal the
district court were asked to grant Rule 60(b) relief. In that
setting the long established federal protocols would not be
shredded. In prior decisions we have allowed the removal of
a case subsequent to a state court default judgment where Rule
60(b) relief was still available. Federal Deposit Ins. Corp. v.
Yancey Camp Development Co., 889 F.2d 647 (5th Cir. 1989),
is the only prior case allowing removal after the state appellate
court has been vested with jurisdiction. In Yancey we held
that the district court improperly refused to set aside a state
default judgment. We did not discuss the removal question
but noted that a “state court judgment in a case properly
removed to federal court--like the one before us--can be
vacated under Federal Rule of Civil Procedure 60(b)." 889
F.2d at 648.
In Murray v. Ford Motor Co., 770 F.2d 461 (Sth
Cir. 1985), removal was effected while a timely motion to set
aside a default judgment was pending in the state trial court.
The state court had not received the removal notice and had
entered a default judgment after the removing party failed to
appear in court. Pursuant to Rule 60(b)(1) we allowed the
State judgment to be set aside. Similarly, in Beighley v.
Federal Deposit Ins. Corp., 868 F.2d 776 (Sth Cir. 1989),
motions to vacate the judgment and for a new trial were still
pending in the state trial court when the suit was removed.
In Northshore Development, Inc. v. Lee, 835 F.2d 580
(Sth Cir.1988), we interpreted 12 U.S.C. § 1730 (k)(1)
(repealed) to permit removal after entry of a state trial court
damages award; the FSLIC was seeking Rule 60(b) relief.
We have also permitted a district court on removal to set aside
a default judgment against a Jones Act defendant. Azzopardi
30a IN THE MATTER OF MEYERLAND COMPANY
v. Ocean Drilling & Exploraiton Co., 742 F.2d 890 (Sth Cir.
1984). The Ninth Circuit has permitted a district court on
removal to set aside a default judgment against a diverse
defendant on a state law claim. Butner v. Neustadter, 324
F.2d 783 (9th Cir.1963). In Munsey v. Testworth
Laboratories, Inc., 227 F.2d 902 (6th Cir.1955), the Sixth
Circuit did likewise. Removal in these cases did not require
or result in a disruption of the established federal procedural
practices.
I cannot accept the contention that congressional policy
behind FIRREA justifies the remarkable removal power which
today’s majority grants the FDIC. Indeed, the scant guidance
provided by FIRREA’s legislative history supports my
conclusion that the words "any" and "State court,” when
interpreted in the context of FIRREA and the general
procedural statutes, do not mean every matter at every
procedural stage of litigation. When FIRREA’s removal
provision was first submitted in a House of Representatives
amendment it was described as vesting in the FDIC only the
“authority to remove certain State court proceedings to
Federal court." H.R.Rep. No. 101-54(1), 101st Cong. Ist
Sess., reprinted in 1989 U.S.Code Cong. Admin.News 86,
124-25 (discussing H.R. 1278, 101st Cong., lst Ses. (Version
2 of May 18, 1989)) (emphasis added). Certain proceedings,
not all state court proceedings.
I would hold that 12 U.S.C. § 1819(b)(2) does not
permit the FDIC to remove a state court appellate proceeding
if, at the time of removal, relief is not available under Rule 60
of the Federal Rules of Civil Procedure, and therefore
respectfully DISSENT.
IN THE MATTER OF MEYERLAND CO. 31a
(APPENDIX B)
Trial Court Judgment
MEYERLAND COMPANY and WILLIAM M.
ADKINSON
v.
CONTINENTAL SAVINGS ASSOCIATION
In the District Court of Harris County, TEXAS
269th Judicial District
No. 86-36700
May 26, 1987
JUDGMENT
BE IT REMEMBERED that on the 23rd day of
March, 1989, the above-captioned cause came on to be
heard for trial with all parties having agreed to such trial
setting and to the assignment of this cause to this Court for
trial. All parties appeared either in person or by and
: through their counsel of record and announced ready for
trial. After hearing various preliminary matters, the Court
empaneled a Jury of twelve without objection by any party.
The Court and Jury thereupon heard the evidence
and argument of counsel through April 29, 1987, on which
date Plaintiffs Meyerland Company and William M.
Adkinson rested their case-in-chief. Defendant Continental
Savings Association thereupon moved for a directed verdict,
> in © tee ZS ttt eo eee i oh i
32a IN THE MATTER OF MEYERLAND COMPANY
which motion was granted in part and denied in part.
The trial then continued with the presentation of the
Defendant’s case-in-chief until May 6, 1989, on which date
the Defendant rested. Plaintiffs then moved for a directed
verdict, which motion was in all things denied. The trial
continued with the presentation of the Plaintiffs’ rebuttal
case on May 6, 1989, at the conclusion of which all parties
rested.
The trial then stood in recess while the Court
prepared its Charge to the Jury. On May 11, 1987, after
hearing the objections of all parties to the Charge, the Court
charged the Jury and permitted the parties to present their
summations of the evidence. The Jury then retired to
deliberate until May 13, 1987, on which date the Jury
returned its Verdict in open court. No objections were
made to the Verdict and all parties moved the Court to
receive and file the Verdict, which motions were granted.
The verdict of the Jury in answer to the special
Issues presented to it (omitting instructions, definitions and
such Issues as were not answered on the Court’s
instructions predicating certain Issues on previous answers)
were as follows:
SPECIAL ISSUE NO. 1
Do you find from a preponderance of the evidence
that First Western Equity, Inc. was an agent for Meyerland
Company in connection with the purchase of the Loan
Participations?
ANSWER: Yes
SPECIAL ISSUE NO. 2
Do you find from a preponderance of the evidence
i i i i ia si rs, inl
IN THE MATTER OF MEYERLAND CO. 33a
that, prior to February 3, 1986, Continental Savings knew
that First Western Equity, Inc. was acting as an agent, if it
was, for Meyerland Company in connection with the
purchase of the Loan Participations?
ANSWER: No
SPECIAL ISSUE NO. 3
Do you find from a preponderance of the evidence
that Meyeriand Company or First Western Equity, Inc.
knew that Continental Savings would not have made the
Loan in Question had Continental known that First Western
Equity, Inc. was acting as agent for Meyerland Company in
connection with the purchase of the Loan Participations?
ANSWER: No
SPECIAL ISSUE NO. 4
Do you find from a preponderance of the evidence
that the money for the purchase prices of the Loan
Participations came from the proceeds of the Loan in
Question?
Loan Answer
a Riddle/Crows Nest, Inc: -
Crows Nest Yes
y The Park, A Texas Joint
Venture - The Park Yes
3. Robert R. Burchfield, Trustee -
Crown Park Plaza I Yes
F
34a IN THE MATTER OF MEYERLAND COMPANY
4. Robert R. Burchfield, Trustee -
Crown Park Plaza II Yes
SPECIAL ISSUE NO. 5
Do you find from a preponderance of the evidence
that the money for the down payment for the purchase of
the R.E.O. came from the proceeds of the Loan in
Question?
Tract Answer
l. Fayette County Property Yes
pe Casselwood Apartments Yes
De Flagridge Property Yes
4. Continental Savings Building Yes
SPECIAL ISSUE NO. 6
Do you find from a preponderance of the evidence
that Continental Savings used the Meyerland Company $1
Million savings account to pay to itself interest on loans in
which Harry Terry was involved?
ANSWER: Yes
SPECIAL ISSUE NO. 7
Do you find from a preponderance of the evidence
that, in connection with their business dealings leading up to
the Loan in Question, the purchase of the Loan
Participations and the R.E.O. and the Terry Transaction,
IN THE MATTER OF MEYERLAND CO. 35a
from the Fall of 1985 through February of 1986,
Continental Savings entered into a confidential relationship
with Meyerland Company or Mr. Adkinson or both?
ANSWER as to Meyerland Company: No
ANSWER as to Mr. Adkinson: No
SPECIAL ISSUE NO. 12
Do you find from a preponderance of the evidence
that Continental Savings, as a condition to the funding of
the Loan in Question, required Meyerland Company to use
$8,355,000 to pay for the purchase of the Loan
Participations?
ANSWER: No
SPECIAL ISSUE NO. 13
Do you find from a preponderance of the evidence
that Continental Savings, as a condition to the funding of
the Loan in Question, required Meyerland Company to use
$1,742,961.26 to pay the down payments for the purchase
of the R.E.O.?
ANSWER: No
SPECIAL ISSUE NO. 14
Do you find from a preponderance of the evidence
that Continental Savings, as a condition to the Loan in
Question, required the purchase of the Loan Participations?
ANSWER: Yes
36a IN THE MATTER OF MEYERLAND COMPANY
SPECIAL ISSUE NO. 15
Do you find from a preponderance of the evidence
that Continental Savings, as a condition to the Loan in
Question, required the purchase of the R.E.O.?
ANSWER: Yes
SPECIAL ISSUE NO. 16A
Do you find from a preponderance of the evidence
that Meyerland Company had the purpose and
contemplation that the Loan in Question involved a
deceptive device?
ANSWER: Yes
SPECIAL ISSUE NO. 16B
Do you find from a preponderance of the evidence
that Continental Savings did not have the purpose and
contemplation that the Loan in Question involved a
deceptive device?
ANSWER: No
SPECIAL ISSUE NO. 17
Do you find from a preponderance of the evidence
that Meyerland Company is estopped to claim that the Loan
in Question is usurious?
ANSWER: No
SPECIAL ISSUE NO. 18
IN THE MATTER OF MEYERLAND CO. 37a
Do you find from a preponderance of the evidence
that Meyerland Company waived its right to claim that the
Loan in Question is usurious?
ANSWER: Yes
SPECIAL ISSUE NO. 19
Do you find from a preponderance of the evidence
that Continental Savings defrauded Meyerland Company or
Mr. Adkinson or both by making false representations
regarding the value or effect of the Loan Participations, the
R.E.O. or the Terry Transaction?
ANSWER as to Meyerland Company: No
ANSWER as to Mr. Adkinson: Yes
SPECIAL ISSUE NO. 20
What sum of money, if any, do you find from a
preponderance of the evidence would fairly and reasonably
compensate Meyerland Company or Mr. Adkinson for its
actual damages, if any, proximately caused by the fraud, if
any, Committed by Continental Savings?
ANSWER as to Mr. Adkinson: $1,000,000.00
SPECIAL ISSUE NO. 23
Do you find from a preponderance of the evidence
that the representations in the Opinion Letters were intended
by Meyerland Company or Mr. Adkinson or both to be
relied upon by Continental Savings?
ANSWER as to Meyerland Company: Yes
38a IN THE MATTER OF MEYERLAND COMPANY
ANSWER as to Mr. Adkinson: Yes
SPECIAL ISSUE NO. 24
Do you find from a preponderance of the evidence
that Continental Savings relied upon such representations in
making the Loan in Question?
ANSWER: Yes
SPECIAL ISSUE NO. 25
Do you find from a preponderance of the evidence
that Robert Collins, acting as attorney for Meyerland
Company and Mr. Adkinson in connection with the Loan in
Question, knew or should have known whether the Loan in
Question was or was not usurious?
ANSWER: Yes
SPECIAL ISSUE NO. 26
Do you find from a preponderance of the evidence
that in order to secure a loan from Continental Savings,
Meyerland Company or Mr. Adkinson knowingly
misrepresented any of the following facts, intending them to
be relied upon by Continental savings and which were in
turn relied upon by Continental Savings to the detriment of
Continental Savings?
a. That Meyerland Company and Mr. Adkinson were
financially secure?
ANSWER as to Meyerland Company: No
ANSWER as to Mr. Adkinson: No
IN THE MATTER OF MEYERLAND CO. 39a
That the financial statements delivered to Continental
Savings were true and correct in all material respects
and prepared in accordance with generally accepted
accounting principles consistently applied?
ANSWER as to Meyerland Company: No
ANSWER as to Mr. Adkinson: No
That the financial statements delivered to Continental
Savings fully and accurately presented the financial
condition of Meyerland Company as of the dates
thereof and no material adverse change has occurred
in the financial condition reflected in the financial
Statements prior to the closing of the transaction?
ANSWER as to Meyerland Company: No
ANSWER as to Mr. Adkinson: No
That Meyerland Company would expend all proceeds
for the purposes specified in securing the loan and
for no other purpose?
ANSWER: No
That Meyerland Company would make all payments
due on the Loan in Question?
ANSWER: No
That First Western Equity, Inc. was purchasing the
Loan Participations for its own (that is, First
Western Equity’s) account?
ANSWER: No
40a IN THE MATTER OF MEYERLAND COMPANY
SPECIAL ISSUE NO. 29
Do you find from a preponderance of the evidence
that Meyerland Company or Mr. Adkinson delayed for an
unreasonable length of time before asserting their claims in
this case and that Continental Savings was disadvantaged by
such delay? __
ANSWER as to Meyerland Company: No
ANSWER as to Mr. Adkinson: No
All parties moved the Court to enter a Judgment
upon certain various terms.
Pursuant to the stipulation of all parties, all questions
of fact and law regarding Defendant’s prayer for attorneys’
fees were submitted to the Court. The Court, after hearing
evidence on such matters, hereby finds and concludes that
Defendant Continental Savings Association is entitled to
recover attorneys’ fees as follows:
- $230, 423.50 as attorneys’ fees for services
rendered at the District Court level;
- $75,000.00 as attorneys’ fees in the event of
an appeal here.
-- $15,000.00 as attorneys’ fees in the event an
application for writ of error to the Texas
Supreme Court is filed in connection with this
cause; and
- $10,000.00 as attorneys’ fees in the event an
application for writ of error is granted by the
Texas Supreme Court in connection with this
cause.
IN THE MATTER OF MEYERLAND CO. 4la
Based upon the verdict of the Jury and such findings
of fact and conclusions of law as the Court is entitled to
make, the Court finds as follows: that
Defendant/Counterplaintiff Continental Savings Association
is entitled to recover the sum of $30,031,089.99 from
Counterdefendants Meyerland Company and William
Michael Adkinson, jointly and severally; that Plaintiff
William Michael Adkinson is entitled to an offset against
such award in the amount of $1,124, 109.50; that under the
circumstances said offset should apply to reduce the
indebtedness owed by Plaintiff Meyerland Company also;
and that the total judgment should include the first award of
attorneys’ fees found above.
The Court does not grant the motions for judgment
of any party in toto but hereby grants the same to the extent
reflected in this Judgment but otherwise denies the same. It
is accordingly
ORDERED, ADJUDGED and DECREED that
Defendant Continental Savings Association as
Counterplaintiff have and recover, and there is hereby
awarded to it, the total sum of TWENTY-NINE MILLION
ONE HUNDRED THIRTY SEVEN THOUSAND FOUR
HUNDRED THREE AND 99/100 DOLLARS
($29, 137,403.99) against Plaintiffs/Counterdefendants
Meyerland Company and William M. Adkinson, jointly and
severally. This award shall bear post-Judgment interest at a
rate of 18%/annum. It is further
ORDERED, ADJUDGED and DECREED that
Defendant/Counterplaintiff Continental Savings Association
have judgment and recover from Meyerland Company or
William Michael Adkinson or both the sum of $75,000.00
in the event that it, he or they file an appeal bond for costs
herein or otherwise perfect and appeal from this Judgment.
It is further
42a IN THE MATTER OF MEYERLAND COMPANY
ORDERED, ADJUDGED and DECREED that
Defendant/Counterplainuff Continental Savings Association
have judgment and recover from Meyerland Company or
William Michael Adkinson or both the sum of $15,000.00
in the event that any party files an application for writ of
error to the Texas Supreme Court. It is further
ORDERED, ADJUDGED and DECREED that
Defendant/Counterplaintiff Continental Savings Association
have judgment and recover from Meyerland Company or
William Michael Adkinson or both the sum of $10,000.00
in the event the Texas Supreme Court grants an application
for writ of error in connection with this cause. It is further
ORDERED, ADJUDGED and DECREED that all
night, title and interest of Meyerland Company, of William
M. Adkinson and of both in and to and derivative of that
certain promissory note in the face amount of
$1,000,000.00 made by Harry B. Terry in February of
1986 to William M. Adkinson as payee be and they are
hereby awarded to Continental Savings Association. It is
further
ORDERED, ADJUDGED and DECREED that
Continental Savings Association have and recover all cash
deposits in lieu of bond previously made with the District
Clerk of Harris County in connection with the granting of
any temporary restraining order or temporary injunction in
connection with this cause, including but not limited to
those deposits made on or about January 18, 1987, and on
or about April 7, 1987. It is further
ORDERED, ADJUDGED and DECREED that all
costs of Court incurred herein be and they are hereby taxed
against Plaintiffs Meyerland Company and William M.
Adkinson, jointly and severally. It is further
ORDERED, ADJUDGED and DECREED that each
and every order granting temporary equitable relief,
whether styled as a temporary restraining order, a
IN THE MATTER OF MEYERLAND CO. 43a
temporary injunction or otherwise, be an they are hereby
DISSOLVED.
All relief not expressly granted herein is hereby
DENIED.
SIGNED this 26th day of May, 1987.
The Honorable David West
Judge Presiding
dita IN THE MATTER OF MEYERLAND COMPANY
(APPENDIX C)
Order of Remand
Meyerland Company and William M. Adkinson,
Appellants,
v.
Continental Savings Association,
Appellee.
United States District Court
for the Southern District of Texas
Houston Division
Civil Action No. H-88-3783
April 23, 1989
ORDER OF REMAND
It appearing that Appellants’ Amended Motion for
Remand is well taken, it is, accordingly,
ORDERED, ADJUDGED AND DECREED that the
Amended Motion to Remand is granted, and that Civil
Action No. H-88-3783, Meyerland Company, et al vs.
Continental Savings Association be, and hereby is, ordered
remanded to the Court of Appeals for the First Supreme
Judicial District of the State of Texas, sitting in Houston,
4
IN THE MATTER OF MEYERLAND CO. 45a
Texas.
SIGNED the 21st day of April, 1989.
/s/
Hon. Kenneth Hoyt
Judge Presiding
46a IN THE MATTER OF MEYERLAND COMPANY
(APPENDIX D)
Order Remanding Case
Meyerland Company and William M. Adkinson,
Appellants,
7,
Continental Savings Association,
Appellee,
Federal Deposit Insurance Corporation
as Manager of the FSLIC Resolution Fund
as Receiver for Continental Savings Association,
Intervenor/Receiver.
In the United States District Court
for the Southern District of Texas
Houston Division
Civil Action No. H-89-3015
September 29, 1989
ORDER REMANDING CASE
ORDERED that this cause of action is remanded to the
Court of Appeals for the First Supreme Judicial District of
the State of Texas, at Houston, Texas.
This case was previously removed to this Court and
was remanded on April 21, 1989. No good purpose is
served by this second removal and the Court concludes that
the removal is violative of the purpose and spirit of 28
IN THE MATTER OF MEYERLAND CO. 47a
U.S.C. 1447(c) and Rule 11 of the Federal Rules of Civil
Procedure.
Appellants are awarded $2,500 as their costs, to be
paid by Federal Deposit Insurance Corporation and its
counsel Lee Larkin.
SIGNED this 27th day of September, 1989.
—/s/
Kenneth M. Hoyt
United States District Judge
)
.
= ——E
48a IN THE MATTER OF MEYERLAND COMPANY
(APPENDIX E)
Order for Stay Pending Reconsideration
Meyerland Company and William M. Adkinson,
Appellants,
Vv.
Continental Savings Association,
Appellee
Federal Deposit Insurance Corporation
as Manager of the FSLIC Resolution Fund
as Receiver for Continental Savings Association,
Intervenor/Receiver.
In the United States District Court
for the Southern District of Texas
Houston Division
Civil Action No. H-89-3015
October 12, 1989
ORDER FOR STAY PENDING RECONSIDERATION
Came on for consideration the Motion of the Federal
Deposit Insurance Corporation as Manager of the FSLIC
Resolution Fund as Receiver for Continental Savings
Association for Reconsideration of Remand Order and
Sanctions and to Stay Order of Remand and Sanctions
Pending Reconsideration and the Court, having considered
the motion, brief, and argument of counsel, is of the
IN THE MATTER OF MEYERLAND CO. 49a
opinion that it is without jurisdiction because the case was
remanded on October 4, 1989.
It is therefore ORDERED that the Order for Stay
Pending Reconsideration is DENIED.
SIGNED this 11th day of October, 1989.
/s/
Kenneth M. Hoyt
United States District
Judge
50a IN THE MATTER OF MEYERLAND COMPANY
(APPENDIX F)
Order Denying Appeal
Meyerland Company and William M. Adkinson,
Appellants,
Vv.
Continental Savings Association,
Appellee
Federal Deposit Insurance Corporation
as Manager of the FSLIC Resolution Fund
as Receiver for Continental Savings Association,
Intervenor/Receiver.
In the United States District Court
for the Southern District of Texas
Houston Division
Civil Action No. H-89-3015
November 6, 1989
ORDER
The emergency motion for stay pending appeal has been
filed by the FDIC as manager of the FSLIC Resolution
Fund for the failed Continental Savings Association.
Previously, this case was removed from the First Court of
Appeals of Texas. It was remanded. Again, this case has
been removed because of the enactment of the Financial
Institutions Reform, Recovery and Enforcement Act of
IN THE MATTER OF MEYERLAND CO. Sla
1989,
It is the view of this Court that a final judgment has
been entered against Continental Savings Association and
that this Court has no authority to review the factual or
legal circumstances attendant to that judgment. In this
regard, there are no justiciable issues to be tried. Comity
dictates that this Court take a "hands-off" approach.
Because.there are no issues remaining between the
parties, an appeal would be frivolous.
The FDIC’s motion is DENIED.
SIGNED this 30th day of October, 1989.
/s/
Kenneth M. Hoyt
United States District
Judge
52a IN THE MATTER OF MEYERLAND COMPANY
(APPENDIX G)
Panel Opinion
In the Matter of MEYERLAND CO.,
and William M. Adkinson, Debtors.
FEDERAL DEPOSIT INSURANCE CORP.,
as Manager of the FSLIC Resolution Fund
as Receiver for Continental Savings Association,
Appellant,
Vv.
Meyerland Co., and William Adkinson,
Appellees.
United States Court of Appeals, Fifth Circuit
No. 89-6118
September 7, 1990
Rehearing and Rehearing En Banc
Deniexi Oct. 5, 1990
Appeal from the United States District Court for the
Southern District of Texas.
Before GARZA, HIGGINBOTHAM and DUHE’,
Circuit Judges.
DUHE’, Circuit Judge:
Proceedings Below and Appellate Jurisdiction
IN THE MATTER OF MEYERLAND CO. 53a
Meyerland Co. and William M. Adkinson sued
Continental Savings Association ("Continental") for, among
other things, usury and fraud in state court. Continental
counterclaimed for fraud and breach of contract. The trial
court awarded Continental $30,031,089.99 and Adkinson
$1, 124,109.59 in damages. Meyerland and Adkinson
appealed.
After the appeal was filed, the Federal Home Loan
Bank Board declared Continental insolvent and appointed
the Federal Savings and Loan Insurance Corporation
(FSLIC) as receiver. The FSLIC removed to federal
district court which remanded on April 21, 1989.
On August 9, 1989, the Financial Institutions
Reform, Recovery and' Enforcement Act (FIRREA),
Pub.L. 101-73, 103 Stat. 183 was enacted. The Federal
Deposit insurance Corporation (FDIC) succeeded the FSLIC
as the receiver of Continental and the FDIC then removed
this case on September 7, 1989 under § 209(4) of the
FIRREA (12 U.S.C. § 1819(b)(2)(B)). The district court
again remanded and awarded the appellees $2,500 in
sanctions.
The FDIC appeals. Although remand orders are
generally not appealable, 12 U.S.C. § 1819(b)(2)(C)
authorizes an appeal in this case. This appeal presents two
issues: (1) Whether 12 U.S.C. § 1819(b)(2) authorizes the
' Although the FIRREA wes enacted after the current proceeding
was initiated, it is clear that the FDIC may utilize it. See Turboff v.
Merrill Lynch, Pierce, Fenner, & Smith, 867 F.2d 1518, 1521 (Sth
Cir. 1989) (Jones, J.) ("When Congress adopts statutory changes while
suit is pending the effect of which is not to eliminate a substantive nght
but rather to change the tribunal which will hear the case, those
changes—barring specifically expressed intent to the contrary--which
have immediate effect.") (citations omitted); and Jn re Resolution Trust
Co., 888 F.2d 57, 58 (8th Cir. 1989).
S4a IN THE MATTER OF MEYERLAND COMPANY
FDIC to remove a State court appellate proceeding; and (2)
Whether the district court erred in awarding sanctions.
(1) Whether Congress meant what it said.
12 U.S.C. § 1819(b)(2) states:
(A) In general
Except as provided in subparagraph (D), all suits of a civil
nature at common law or in equity to which the
Corporation, in any capacity, is a party shall be deemed to
arise under the laws of the United States.
(B) Removal
Except as provided in subparagraph (D), the Corporation
may...remove any such action, suit or proceeding from a
State court to the appropriate United States district court.
(emphasis supplied).
The exception in subparagraph (D) does not apply to the
instant case and the sole issue to be decided, therefore, is
whether Congress meant to authorize the FDIC to remove a
state court appellate proceeding. To decide this issue, we
must first determine (A) whether Article Three authorizes
jurisdiction over this type of removal and, (B) if so,
whether Congress meant to authorize appellate removal
when it enacted § 1819(b)(2).?
*We do not decide whether this type of removal would be proper
under 28 U.S.C. §1441. First, it is clear that the FDIC could not
remove the instant case under §1441. The dispute hinges on state law
and thus, there is no federal question jurisdiction. Second, it is unclear
whether the FDIC may utilize § 1441 to effectuate removal in any case,
not just the present one. In FDIC v. Sumner Financial Corp., 602
F.2d 670 (Sth Cir.1979) we held that the predecessor statute to 12
U.S.C. §1819(b)(2) was a complete jurisdictional scheme and that both
Original and removal jurisdiction over the FDIC was proper only if the
case fell within the ambit of § 1819. Jd. at 677-80. See also FDIC v.
IN THE MATTER OF MEYERLAND CO. SSa
(A) Article Three
It is black letter law that “Congress may not expand
the jurisdiction of the federal courts beyond the bounds
established by the Constitution." Verlinden B.V. y. Central
Bank of Nigeria, 461 U.S. 480, 491, 103 S.Ct. 1962, 1970,
76 L.Ed.2d 81 (1983). The power of Congress to authorize
removal of cases on appeal has been repeatedly affirmed.
See Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.) 304,
349, 4 L.Ed. 97 (1816) ("Congress...may authorize removal
either before or after judgment."); Gaines v. Fuentes, 92
U.S. 10, 18, 12 L.Ed. 524 (1876); and Tennessee v. Davis,
100 U.S. 257, 269 25 L.Ed. 648 (1880). Congress,
however, has seldom chosen to exercise this power and we
must decide whether it has done so by enacting the FDIC
removal statute.*
(B) The FDIC Removal Statute
The FDIC argues that 12 U.S.C. § 1819(b)(2) means
exactly what it says and since it does not exclude appellate
Elefant, 790 F.2d 661 (7th Cir.1986). It is not entirely clear, however,
that Swmner is still good law. In FSLIC v. Ticktin, 490 U.S. 82, 109
S.Ct. 1626, 104 L.Ed.2d 73 (1989) the Supreme Court held that the
statute granting jurisdiction over the FSLIC, 12 U.S.C. 1730(k)(1), was
not exclusive and did not preclude the exercise of jurisdiction under
other grants of jurisdiction. The FSLIC jurisdictional statute was very
similar to the statutory predecessor to the FDIC jurisdictional statute
and Ticktin, therefore, calls into question the result in Sumner.
> Congress enacted at least one statue authorizing post-judgment
removal during the Reconstruction era. See the Habeas Corpus Act of
1863, ch. 81, §5, 12 Stat. 755, 757 (“And it shall be lawful in any
such action or prosecution ... after final judgment, for either party to
remove and transfer, by appeal, such case.")
56a IN THE MATTER OF MEYERLAND COMPANY
removal, then it authorizes appellate removal. We would
agree with the FDIC that the plain meaning of the statute
controls its interpretation. See Mills v. Director, 877 F.2d
356, 362 (Sth Cir. 1989) (en banc) (Duhe’, J., dissenting).
Jurisdictional statutes, however, must also be interpreted
with and eye towards history. Justice Frankfurter in
Romero v. International Terminal Operating Co., 358 U.S.
354, 360-379, 79 S.Ct. 468, 473-484, 3 L.Ed.2d 368
(1959) explained:
abstractly stated, the problem is the ordinary
task of a court to apply the words of a statute
according to their proper construction. But
‘proper construction’ is not satisfied by taking
the words as if they were self-contained
phrases. So considered, the words do not
yield the meaning of the statute. The words
we have to construe are not only words with
a history. They express an enactment that is
part of a serial, and a serial that must be
related to Article III of the Constitution, the
watershed of all judiciary legislation, and to
the enactments which have derived from that
Article.
If the history of the interpretation of judiciary
legislation teaches anything, it teaches the
duty to reject treating such statutes as a
wooden set of self-sufficient words . . . (We
must not forget that it) is a statute, not a
Constitution, we are expounding.
History tells us clearly what Congress meant when it
enacted 12 U.S.C. § 1819(b)(2). In Osborn v. Bank of the
United States, 22 U.S. (9 Wheat) 738, 822, 6 L.Ed. 204
IN THE MATTER OF MEYERLAND CO. S7a
(1824) Justice Marshall expounded on the outer limits of
Article Three jurisdiction: “when a question to which the
judicial power of the Union is extended by the constitution
forms an ingredient of the original cause, it is in the power
of Congress to give the circuit courts jurisdiction of that
cause." Osborn “reflects a broad conception of ‘arising
under’ jurisdiction, according to which Congress may
confer on the federal courts jurisdiction over any case or
controversy that may call for the application of federal
law." Verlinden, 461 U.S. at 492, 103 S.Ct. at 1970.
Even though the only issues to be decided are ones of state
law, Article Three permits the exercise of jurisdiction if one
of the parties is a federal corporation. See, e.g., The Bank
of the United States v. The Planters’ Bank of Georgia, 22
U.S. (9 Wheat) 904, 6 L.Ed. 244 (1824). Congress,
however, did not actually grant the lower federal courts
removal jurisdiction over federal question cases until 1875.‘
This statute, the predecessor to 28 U.S.C. § 1441, was
given an expansive interpretation in the Pacific Railroad
Removal Cases, 155 U.S. 1, 5 S.Ct. 1113, 29 L.Ed. 319
(1885). The Pacific Railroad Court relied on Osborn to
hold that "every case irrespective of its nature, brought by
or against a federally charted corporation is a suit arising
under the ‘laws of the United States.’" Frankfurter,
Distribution of Judicial Power Between United States and
State Courts, 13 Cornell L.Q. 499, 509 (1928). The
expansive reading given by the Pacific Railroad Court to
“arising under" was soon curtailed. Id. See also Romero,
358 U.S. at 379 n. 50, 79 S.Ct. at 484 n. 50. 28 U.S.C. §
1331, for example, is interpreted more narrowly than the
Constitution permits. Verlinden, 461 U.S. at 494-95, 103
S.Ct. at 1971-72. The general removal statute, 28 U.S.C.
* Act of March 3, 1875, ch. 137, §2, 18 Stat. 470.
58a IN THE MATTER OF MEYERLAND COMPANY
§ 1441, is also not interpreted as broadly as it could be.
See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100,
108, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941) (the “policy
of the successive acts of Congress regulating the jurisdiction
of the federal courts is one calling for the strict construction
of (removal)") and Willy v. Coastal Corp., 855 F.2d 1160
(Sth Cir.1988). See also Collins, The Unhappy History of
Federal Question Removal, 71 Iowa L.Rev. 717 (1986). It
is clear that no federal jurisdiction exists over the present
dispute under either 28 U.S.C. § 1331 or § 1441 because
the issues are governed by state law and federal law is a
small ingredient of the dispute. See Gully v. First National
Bank at Meridian, 299 U.S. 109, 57 S.Ct. 96, 97, 81 L.Ed.
70 (1936) (for a suit to "arise under" federal law, a "right
or immunity created by the Constitution or laws of the
United States must be an element, and an essential one, of
the plaintiff's cause of action") and Franchise Tax Bd. v.
Construction Laborers Vacation Trust, 463 U.S. 1, 103
S.Ct. 2841, 77 L.Ed.2d 420 (1983). It is equally clear that
Congress enacted 12 U.S.C. § 1819 precisely so that the
FDIC could enjoy federal question jurisdiction similar to
that articulated in Osborn and the Pacific Railroad Removal
Cases. See Pernie Bailey Drilling Co. v. FDIC, 905 F.2d
78, 19-80 (Sth Cir.1990); and FDIC v. George-Howard,
153 F.2d 591 (8th Cir.), cert. denied, 329 U.S. 719, 67
S.Ct. 53, 91 L.Ed. 623 (1946). Thus, § 1819 authorizes
the exercise of jurisdiction over a dispute which involves
only issues of state law and to which the FDIC is a party.
History does not tell us, however, whether 12
U.S.C. § 1819 supports the exercise of removal jurisdiction
over an appellate proceeding. The appellants rely on
Barrow v. Hunton, 99 U.S. 80, 25 L.Ed. 407 (1879) to
argue that the removal of a post-judgment proceeding is
improper. In Barrow, Hunton won a state court judgment.
IN THE MATTER OF MEYERLAND CO. 59a
The judgment debtor moved to have the judgment nullified
and Hunton removed. The Supreme Court reasoned that if
the removed proceeding was an appeal or similar to an
appeal of a state court judgment, then removal would be
improper because "(o)therwise, the (lower federal courts)
would become invested with power to control the
proceedings in the state courts, or would have appellate
jurisdiction over them... Such a result would be totally
inadmissible. Jd. 99 U.S. at 83.
The appellants’ reliance on Barrow, however, is
misplaced. First, the limits which Barrow placed on
removal jurisdiction are statutory.’ Thus, even if we were
to concede that Barrow is still good law for the purposes of
28 U.S.C. § 1441,° it is not conclusive for our purposes.
Congress clearly intended that the FDIC removal statute be
given a different interpretation than the general removal
statute. Second, Barrow relied on an interpretation of
removal which may well be no longer valid. Barrow rests
on the notion that removal is like an appeal because the
proceeding did not commence in federal court. The modern
view of removal, however, is that it is more closely akin to
original than to appellate jurisdiction because once the case
“Although Congress generally forbids the lower federal courts from
entertaining appeals from state courts—see, e.g., District of Columbia
Court of Appeals v. Feldman, 460 U.S. 462, 476, 482, 103 S.Ct. 1303,
1311, 1314, 75 L.Ed.2d 206 (1983) and Rooker v. Fidelity Trust Co.,
263 U.S. 413, 415-16, 44 S.Ct. 149, 68 L.Ed. 362 (1923), there is no
constitutional prohibition against it doing so. See The Federalist No.
82, at 494-95. (A.Hamilton) (Rossiter ed. 1961) ("I perceive...no
impediment to the establishment of an appeal from the State courts to
the subordinate national tribunals...")
‘See Beighley v. FDIC, 868 F.2d 776, 781 (Sth Cir. 1989)
(suggesting that Barrow’s reach has been curtailed by modern case
law).
60a IN THE MATTER OF MEYERLAND COMPANY
is removed, it is treated as if it had commenced in federal
court. See Freeman v. Bee Machine Co., 319 U.S. 448,
452, 63 S.Ct. 1146, 87 L.Ed. 1509, rehearing denied, 320
U.S. 809, 64 S.Ct. 27, 88 L.Ed. 489 (1943), and Svell v.
Southern Ry., 93 F.2d 377, 379 (Sth Cir.1937). See
generally J. Dillon, The Removal of Causes from State
Courts to Federal Courts with Forms 4 (Sth ed. 1889).
Although Barrow does not stand in the way of
exercising jurisdiction over the instant dispute, the bare
language of 12 U.S.C. § 1819 does not clearly support the
exercise of jurisdiction either. That the FDIC has the
authority to remove suits which “arise under” the laws of
the United States to the “appropriate United States district
court" does not establish the right of the FDIC to remove
appellate proceedings. The FDIC contends that this right is
established by 12 U.S.C. § 1821 (d)(13)(B) which states "In
the event of any appealable judgment, the Corporation as
conservator or receiver shall have all the nghts and
remedies available to the insured depository ... had the
Corporation in its corporate capacity, including removal to
Federal court and all appellate rights." This language
makes it clear that the FDIC may not remove a suit after
judgment. It does not, however, clearly establish that the
FDIC may remove a case which is on appeal. One reading
of 12 U.S.C. § 1821 (d)(13)(B) when it is read in pari
materia with the FDIC removal statute, 12 U.S.C. §
1819(b)(2)(B), suggests that a suit may not be removed once
it is On appeal because a case may be removed only to a
federal district court. The majority of the cases involving
post-judgment removal were removed from a state district
court, not the state court of appeals, to the federal district
court and then an appeal was filed or an attack was made on
the judgment via Fed.R.Civ.P. 60. See, e.g., Beighley v.
FDIC, 868 F.2d 776, 7779 (Sth Cir.1989); Northshore
IN THE MATTER OF MEYERLAND CO. 6la
Development, Inc. v. Lee, 835 F.2d 580, 582 (Sth
Cir. 1988); and In re Savers Federal Savings and Loan
Ass'n, 872 F.2d 963, 964 (11th Cir. 1989).’
In Jn re Savers a debtor sued a financial institution
in state court claiming as here, breach of contract and fraud
and the institution counter claimed to recover on the
debtor’s note. After judgment and after denial of post-trial
motions for hearing, new trial, and remittitur, the FSLIC
was appointed conservator of the institution. It then filed
notice of removal. The district court remanded concluding
that the case was completed in state court and that defendant
was, in effect, seeking appeal. The Eleventh Circuit
granted mandamus and vacated the remand on the basis of §
1819(b)(2)(B).
The Eleventh Circuit framed the question as
“whether after there has been a final judgment by the state
trial court, but when the period for appeal has not yet
lapsed, a case ceased to be an ‘action from a state court.’"
872 F.2d at 965-55. The court concluded that "(w)e can
discern no reason to confine the interpretation of ‘action’ to
actions that have not rendered judgment ... Had Congress
intended to limit the removal power of FSLIC to suits
pending before a state trial court it could have explicitly
Stated as much, as it did in U.S.C. § 632..." Id. at 966.
In the instant case, it is true, removal is sought from
the state appellate court whereas in Savers no appeal had yet
been filed. The significant factor, however, is that state
appellate proceedings had not yet been exhausted when
removal was effected. Accord Murray v. Ford Motor
Company, 770 F.2d 461,463 (Sth Cir. 1985) (per curiam);
” See also Azzopardi v. Ocean Drilling & Exploration Co., 742
F.2d 890 (Sth Cir.1984) and Butner v. Neustadter, 324 F.2d 783, 785
(9th Cir. 1963).
62a IN THE MATTER OF MEYERLAND COMPANY
Butner v. Neustadter, 324 F.2d 783 (9th Cir. 1963); Munsey
v. Testworth Laboratories, Inc., 227 F.2d 902, 903 (6th
Cir.1955) (per curiam). In FDIC v. Yancey Camp
Development, 889 F.2d 647, 648 (Sth Cir. 1989), a case
which was on appeal, we allowed removal and the district
court set aside a default judgment. We conclude that the
FDIC is entitled to remove the instant dispute as well.
C. Procedure
Our decisions here and in Yancey Camp, however,
entail certain procedural difficulties which we must now
face. In Yancey Camp, the case was removed from the
State court of appeals and the federal district court then
entertained an attack on the removed judgment under
Fed.R.Civ.P. 60. Once a case is removed, however, the
federal court takes the case as it finds it on removal.
Granny Goose Foods, inc. v. Brotherhood of Teamsters
Auto Truck Drivers, 415 U.S. 423, 94 S.Ct. 1113, 39
L..Ed.2d 435 (1974); In re Savers Federal Savings and Loan
Ass'n, 872 F.2d 963, 966 (11th Cir.1989); and Butner v.
Neustadter, 324 F.2d 783, 785 (9th Cir.1963). Federal
courts must "treat every thing that occurred in the state
court as if it had taken place” in federal court. Jn re
Savers, 872 F.2d at 966. Thus, since the instant case was
on appeal in the state court when it was removed, it will be
on appeal once the merits of this dispute are reached. We
are certain that Congress did not intend to deprive the
parties to the dispute of the right to appeal and to relegate
them to relief under Fed.R.Civ.P. 60 when it authorized
appellate removal by enacting the FDIC removal statute.
Thus, the role of the district court must be simply to treat
the removed proceeding as if it had originated in the district
court and adopt the state court judgment as its own. See
IN THE MATTER OF MEYERLAND CO. 63a
Yancey Camp.
Since the instant appeal only deals with the district
court’s decision to remand, we do not reach the merits of
the case. One further procedural point, however, must be
addressed. When this appeal was first filed, a motion panel
of this court decided not to enjoin the ongoing state appeal.
Its decision is not the law of the case. See Northshore
Development, Inc. v. Lee, 835 F.2d 580, 583 (Sth
Cir. 1988), and Browning v. Navarro, 887 F.2d 553, 557
(Sth Cir.1989), reh’g denied, 894 F.2d 99 (Sth Cir. 1990).
An injunction is proper because once a case is removed, the
state Court no longer has jurisdiction over the dispute. The
anti-injunction act, moreover, does not bar our injunction.
Federal courts are generally barred from enjoining state
court proceedings so as to preserve our system of
concurrent jurisdiction. See Atiantic Coast Line R. Co. vy.
Brotherhood of Locomotive Engineers, 398 U.S.281, 286,
90 S.Ct. 1739, 1743, 27 L.Ed.2d 234 (1970). However.
once a case is removed, the staie court no longer enjoys
concurrent jurisdiction over the dispute. The anti-injunction
act, therefore, does not bar an injunction of a state court
proceeding which purports to exercise jurisdiction over the
removed case. See French v. Hay, 89 U.S. (22 Wall) 250,
253, 22 L.Ed. 857 (1875).°
* 28 U.S.C. § 1446(d) recognizes this fact by stating that after
removal, the “State court shall proceed no further unless and until the
case is remanded.” 28 U.S.C. § 1446(d), therefore, provides support
for our decision to enjoin the state court appellate proceeding. We do
not rely on this statue, however, because it is not clear whether § 1446
may be utilized when removal is premised on 12 U.S.C. § 1819(b)(2).
The predecessor to the current statute stated that the FDIC could
“remove any such action... by following any procedure for removal
now or hereafter in effect." The Financial Institutions Supervisory Act
of 1966, Pub.L. No. 89-695, § 205, 80 Stat. 1028, 1055. In Jn re
<4
64a IN THE MATTER OF MEYERLAND COMPANY
(2) Sanctions.
Since we reverse the district court’s decision to remand the
instant appeal, it is clear that its award of sanctions for
improper removal must also be reversed.
Conclusions
The decision of the district court remanding this
matter and assessing sanctions is REVERSED and
REMANDED. Further state court proceedings are hereby
ENJOINED.
PATRICK E. HIGGINBOTHAM, Circuit Judge,
concurring in part and dissenting in part:
I concur in the reversal of the sanctions order, but I
dissent from the remainder of my colleagues’ thoughtful
opinion. The case is difficult and perplexing, but I am
persuaded of a different course. 12 U.S.C. § 1819
(b)(2)(B) does not permit the FDIC to remove ail cases
pending on appeal in the state courts. The statute limits the
right of removal to cases over which the district court may
Savers Federal Savings & Loan Assoc., 872 F.2d 963, 965
(__Cir.1989), for example, the court held that the procedural strictures
of § 1446 governed removal under 12 U.S.C. § 1730(k)(1) (repealed
by FIRREA, Pub.L. 101-73, Title IV, § 407, 103 Stat. 363 (1989))
which employed language similar to the now repealed FDIC removal
statute. The current FDIC removal statute says nothing about the
procedure which is to be followed on removal and it is possible,
therefore, that § 1446 no longer governs FDIC removal. See
Resolution Trust Corp. for Sandia Federal Sav. Assn. v. Key, 733
V.Supp. 1086, 1089 (N.D.Tex.1990) (holding that 28 U.S.C. § 1446
does not govern removal by the Resolution Trust Corporation). Since
we do not rely directly on § 1446, we need not to decide this issue.
IN THE MATTER OF MEYERLAND CO. 65a
exercise some original jurisdiction. It does not forbid all
removals from state appellate courts. It permits them when
Rule 60 relief is available and sought. But that is not this
case.
I find the majority’s reading of the statute to be
implausible, not required by precedent, and to rest upon
judicial creation of new procedural tracks for removal
without Congressional warrant. The majority leaves us with
unacceptable alternatives: we must either permit the federal
district courts to exercise appellate jurisdiction over state
trial judgments, or require them to enter judgments that do
not reflect their own judgment at all. The majority chooses
the latter path, imposing a clerk’s role on the Article III
courts; but neither alternative is consistent with the statute
or the res. of the federal jurisdictional legislation.
I.
12 U.S.C. § 1819(b)(2)(A) provides that, subject to
exceptions not applicable here, all civil suits to which the
FDIC is a party are deemed to arise under the laws of the
United States. 12 U.S.C. § 1819(b)(2)(B) provides that the
FDIC may remove any such action suit, or proceeding from
"a State court to the appropriate United States district
court." These subsections expand the original and removal
jurisdiction of the district courts, as they permit the FDIC
to bring actions which, because of their subject matter,
would ordinarily have been matters for the state courts.
Carrollton-Farmers Branch Independent School District v.
Johnson & Cravens, 13911, Inc., 889 F.2d 571 (Sth
Cir.1989); Triland Holdings & Co. v. Sunbelt Service
Corp., 884 F.2d 205 (Sth Cir. 1989).
To permit the FDIC to remove this case, however,
my brothers read the statute to do far more than add a new
Class of cases to the district courts’ federal question
66a IN THE MATTER OF MEYERLAND COMPANY
jurisdiction. They read it to permit the FDIC to remove
cases to the district courts regardless of their procedural
posture (so long as they are still pending somewhere in the
State system). Ultimately, their reading is necessarily
premised on an assumption that the general federal question
removal statutes, 28 U.S.C. §§ 1441-1451, permit this as
well. I do not think these statutes can bear that freight.
A.
The majority opinion suggests that § 1819(b)(2)
creates in the FDIC a right of removal independent of the
general removal statutes. As I noted, this is true to a point-
-the FDIC may remove any case to which it is a party, and
is not constrained by the subject matter limits that bind
other parties. But to conclude, without reference to the
general removal statutes that § 1819(b)(?) permits removal
of any pending case regardless of procedural posture, we
must find in FIRREA an independent procedural track for
removed cases. I can find none, and must assume that
Congress intended to rely on the procedural track
established in the general removal statutes. For example,
§ 1819(b)(2)(B) provides that removal must be to the
“appropriate” district court. As "appropriate" is not defined
for these purposes in FIRREA or anywhere else in the
United States Code, it necessarily refers to the venue
provision in 28 U.S.C. § 1441(a). That is, removal must
be to the district court for the district and division in which
the action is pending. Further, FIRREA simply makes no
provision for much of the mechanics of removal. If the
general removal statutes are not the guide, how is the FDIC
to let the district court know it wishes to remove the case?
How is the other party to oppose the removal? What
happens to the proceedings in state court upon removal?
What if the district court determines removal is not proper?
IN THE MATTER OF MEYERLAND CO. 67a
It strains credulity to say that we are not to look to the
general removal statutes for the answers.
When Congress wished to depart from the ordinary
procedural track in FIRREA, it said so explicitly. That we
are deciding this case at all proves the point, for ordinarily
we do not hear appeals of remand orders--we are hearing
this one because 12 U.S.C. § 1819(b)(2)(C) compels us to
do so. But these express departures are few and far
between, and do not in any sense constitute an entire
procedural track. My brothers apparently do not dispute
this, for their holding ultimately relies substantially upon
cases involving removal under the general statutes.
B.
The argument that parties may remove all cases on
appeal in the state court system relies upon the language of
§ 1819(b)(2), the general removal statutes and decisions
which purportedly have read that language to permit such
removal. Specifically, the argument urges that § 1441(a)’s
language permitting the removal of "any such action, suit,
or proceeding from a state court" means exactly what it
says. Section 1819(b)(2)(B) likewise provides for removal
of any action “from a State Court." The argument
continues that the cases clearly establish that any action may
be removed until the
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