Opposition Brief — Meyerland Co. v. Federal Deposit Insurance

QUESTION PRESENTED

Whether the Federal Deposit Insurance Corporation

may remove a case pending in a state appellate court to

the appropriate United States district court under 12

U.S.C. 1819(b)(2)(B) (Supp. III 1991).

Fe ee Se ee to aA See = rt

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

American Nat’l Red Cross v. S.G., 112 S. Ct. 2465 (1992) . 16

Church of Scientology v. United States, No. 91-946 (Nov.

RE ED ianincin icant inhsinsatiocnicinnnnadhbdhsanshannesdaiabassinaerinbendes ll

Connecticut Nat'l Bank v. Germain, 112 S. Ct. 1146

CRGDRD .cccssicrcsiisnsg tsnineialdc casktediadiahicubhpaniel badeauighbaaseaanilus 14

Duncan v. Gegan, 101 U.S. 810 (1880) «20.0.0... ee eee ee eeee ee 9

FDIC v. Kahlil Zoom-In Markets, Inc., No. 92-1339 (5th

Cs Pn Fk Seen idcocabiapncaithoeahsahiaencenscine ahamgamavederes 9

5300 Memorial Investors, Ltd. v. RTC, 973 F.2d 1160

Gedy COU Ry sicsecesecsthbidetitctanctntatecacetadittbind ipcarmnqnaiiingnn 9, 10

Granny Goose Foods, Inc. v. Brotherhood of Teamsters,

Local No. 70, 415 U.S. 423 (1974) 0... cececesteneeeeeeneeeee 8, 9

Jackson v. American Savings Mortgage Corp., 924 F.2d

ROS. CRD GP, - SOIR ai rcencsenanstscttertecoarrinenediniiditda 12

Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.) 304

CRIED. c:cccnrcsutincishiniahicuiinaintinbicneninnndicninpeavinaiiiiiasidad Uti 16

Pacific R.R. Removal Cases, 115 U.S. 1 (1885) .............. 16

Parsons v. Bedford, 28 U.S. (8 Pet.) 483 (1830) .............. 17

Resolution Trust Corp., In re, 888 F.2d 57 (8th Cir.

RODD sccatiidiid iakennbids eaidiidied.camnibateiie dans 12

Savers Fed. Savings & Loan Ass’n, In re, 872 F.2d 963

CRG Cle. BI a cciicenencnctncorcennicinanesccnsnesmbiah idence 12, 14, 17

The Justices v. Murray, 76 U.S. (9 Wall.) 274 (1870) ....... 17

Walker v. FDIC, 970 F.2d 114 (5th Cir. 1992) ................. 9, 10, 11

Ward v. RTC, 972 F.2d 196 (8th Cir. 1992) .............0:eeeees 12, 16

(IID

IV |

Constitution, statutes and rules: Page

U.S. Const. :

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Federal Deposit Insurance Corporation Improvement

Act of 1991, Pub. L. No. 102-242, § 161(d), 105 Stat.

DOE caphsiabisdsstucencidcicimaanmiaamiaiaiiein 3

Financial Institutions Reform, Recovery, and Enforce-

ment Act of 1989, Pub. L. No. 101-73, 103 Stat. 183 .... 3

Bs EL IEE bilctenccdigsngidinniptncasatoneoebenesemniihuninrsiés 3

ps RLS oe RE ONNRAE RR UR PRO LOS SRL Aree en me Tee ST eo 14

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BD UB... BERD GR. Bee MBB E) ccreccecsivscvcssesccrsersrnees 3, 5, 13, 16, 17

12 U.S.C. 1819(bX2) (Supp. TIT 1991) .................ccescceeccess 11, 13

12 U.S.C. 1819(b)(2)(A) (Supp. ITT 1991) ...................sec00 3, 10, 16

12 U.S.C. 1819(b)(2)(B) (Supp. III 1991) «0.0... 3, 4, 6, 7, 14

12 U.S.C. 1819(b)(2)(C) (Supp. ITI 1991) .............. eee 3

Be UE as ee iain aee nr cereineicdp ecaniie enn gecnnnnenin 16

28 U.S.C. 1441-1451 (1988 & Supp. IIT 1991) ........ 6

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28 U.S.C. 1447(@) ............ ‘sdiapaldnguiivnidialniieiimiiiuiirdiasnauaaia 3

BN UIE "sits intiatuhapnncansciiedettesnindceennannnibannaniplaicommnatlieg 9

Fed. R. Civ. P.:

ES SRR PANES U-0) EFS pep a mee A Re I LAE Re SRE 9,17

SII sidaincsncacncusanccebssreeciidbadineckececktbmcsoettenrtpuetins 12

Aas cols vsntainiccleiseina sdanevuaiialddbdlinccainavtainibibedesdaal 7,0, 17

PIII 1 \schiks init estereneieinnieaininonnnsabbainenielieeniannliibdenesinmnebiiibiasiae 7

IEEE siashisthdicensineshanbiivshialebnalideesbombvtaliahansetadnasubasicbes 7, 11, 12

Miscellaneous:

H.R. Rep. No. 54, 101st Cong., Ist Sess. Pt. I (1989) ........ 15

C. Wright, A. Miller & E. Cooper, Federal Practice &

IE TE. dhsteiemnticenasnnnavenniionnsinicitinaliiaidmbihnelias 16

In the Supreme Court of the Gnited States

OCTOBER TERM, 1992

No. 92-590

MEYERLAND COMPANY AND WILLIAM MICHAEL

ADKINSON, PETITIONERS

Vv.

FEDERAL DEPOSIT INSURANCE CORPORATION, ETC.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE

FEDERAL DEPOSIT INSURANCE CORPORATION

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals sitting en banc

(Pet. App. 1a-30a) is reported at 960 F.2d 512. The

order of the district court (Pet. App. 46a-47a) is

unreported.

JURISDICTION

The judgment of the court of appeals (Pet. App. 78a-

79a) was entered on May 13, 1992. The petition for a

writ of certiorari was filed on August 11, 1992. The

(1)

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

1. Petitioner Meyerland Company was the obligor

on a $25 million note ‘held by Continental Savings

Association. Petitioner William M. Adkinson was the

president of Meyerland and guarantor of the debt.

The note was also secured by a portion of the

Meyerland Plaza Shopping Center. Meyerland made

no payments on the note, and in September 1986

Continental posted the property for foreclosure.

Meyerland filed suit in state court against Con-

tinental, seeking a temporary restraining order and

damages for, among other things, usury and fraud.

Continental counterclaimed, seeking recovery on the

note and the guaranty and damages for fraud and

breach of contract. See Pet. App. 2a. After a jury

trial, the state trial court awarded Continental

damages of approximately $30 million, partially offset

by an award of approximately $1.1 million in favor of

petitioner Adkinson. /d. at 2a, 4la. Petitioners ap-

pealed to the state court of appeals. Jd. at 2a.

2. On September 26, 1988, while the state court

appeal was ‘pending, the Federal Home Loan Bank

Board declared Continental insolvent and appointed

the Federal Savings and Loan Insurance Corporation

(FSLIC) as receiver. On October 26, 1988, FSLIC

removed the case to the United States District Court

for the Southern District of Texas, acting under 12

U.S.C. 1730(k)(1) as then in effect. See Pet. App. 5a.

The district court, however, remanded the case to the

state appellate court on April 21, 1989. See id. at 2a,

44a-45a.

3

3. On August 9, 1989, the President signed the

Financial Institutions Reform, Recovery, and En-

forcement Act of 1989, Pub. L. No. 101-73, 103 Stat.

183 (FIRREA). Section 401 of FIRREA, 103 Stat.

354, abolished FSLIC and automatically su-bstituted

the Federal Deposit Insurance Corporation (FDIC)

as FSLIC’s successor in ongoing litigation. On

September 7, 1989, the FDIC again removed this case

to federal district court, this time acting under 12

U.S.C. 1819, as amended by FIRREA. Pet. App. 2a.

Section 1819(b)(2)(A) provides that, with immaterial

exceptions, “all suits of a civil nature at common law

or in equity to which the [FDIC], in any capacity, is a

party shall be deemed to arise under the laws of the

United States.” Section 1819(b)(2)(B) provides that

the FDIC may, again with immaterial exceptions,

“remove any action, suit, or proceeding from a State

court to the appropriate United States district

court.” On September 29, 1989, the district court

again remanded the case to the state appellate court,

and awarded $2,500 in sanctions against the FDIC for

having attempted the removal. Pet. App. 2a, 46a-47a.

4. The FDIC appealed the district court’s remand

order pursuant to 12 U.S.C. 1819(b)(2)(C) (Supp. III

1991), which varies the normal rule (see 28 U.S.C.

1447(d)) by providing that the FDIC may appeal such

orders. A divided panel of the court of appeals

1 Section 1819(b)(2)(B) was amended in 1991 to require that

any such removal take place “before the end of the 90-day

period beginning on the date the action, suit, or proceeding is

filed against the [FDIC] or the [FDIC] is substituted as a

party.” Federal Deposit Insurance Corporation Improvement

Act of 1991, Pub. L. No. 102-242, § 161(d), 105 Stat. 2286.

4

reversed. Pet. App. 52a-73a. Rehearing en banc was

granted, id. at 74a-75a, and the full court again held in

favor of the FDIC, reversing both the district court’s

remand order and the award of sanctions. I[d. at

la-30a. :

The court of appeals first recognized, Pet. App. 3a-

7a, that this case involved “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.” Z/d. at 3a. Noting that

those provisions had been broadly construed in favor

of the FDIC, the court explained that “[a]ecess 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.” Jd. at 4a. In this general

context, the court approached the specific issue in

this case by considering “the plain 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.” Jd. at

7a.

The court agreed with the FDIC, Pet. App. 7a-8a,

that Section 1819(b)(2)(B), on its face, allowed removal

of this case:

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 op-

posed to appellate, court).

5

Id. at 8a. The court concluded, id. at 9a, that under

the statutory language the only significant consider-

ation was whether state appellate proceedings had

beer fully exhausted when removal was attempted.

Moreover, the court concluded that although it had

seldom done so, Congress had clear constitutional

power to authorize removal of cases on appeal. Jd. at

10a.

The court found nothing in the history of removal

jurisdiction that would require a more restrictive

reading of Section 1819 than its language would

otherwise indicate. Pet. App. 10a-13a. Indeed, the

court found it clear that Congress enacted Section

1819 “precisely so that the FDIC could enjoy federal

question jurisdiction” of the broadest sort constitu-

tionally permissible. Jd. at 13a. In addition, the court

reviewed various other procedural advantages grant-

ed to the FDIC by FIRREA, and concluded that

allowing removal of cases on appeal was consistent

with the overall scheme and underlying goals of the

statute. Pet. App. 13a-15a.

Finally, the court of appeals considered the pro-

cedural aspects of removal from a state appellate

court to federal district court. Pet. App. 15a-18a. The

court found it unnecessary to consider the propriety

of having a federal district court conduct “appellate”

review of a state trial court judgment after removal,

id. at 15a, because it found it sufficient for the district

court to “take the state judgment as it finds it,

prepare the record as required for appeal, and forward

the case to a federal appellate court for review.” Id. at

15a-16a. In this way, the case would “simply comfe]

into the federal system in the same condition in which

6

it left the state system.” /d. at 17a. Pointing to the

frequently ministerial actions performed by district

courts on remand of cases from the courts of appeals,

the court found unpersuasive petitioners’ argument

that reducing the district court’s role on removal to

“rubber-stamping” the state trial court’s judgment

would deprive the federal court of a justiciable * ‘case

or controversy.” Id. at 16a.

The court concluded, Pet. App. 17a-18a, by noting

that it did not intend to suggest that the FDIC

removal provisions effected a wholesale replacement

of the general removal statutes, 28 U.S.C. 1441-1451

(1988 & Supp. III 1991). It held only that to the extent

the “specific powers or mechanisms” of FIRREA

were inconsistent with the general removal statutes,

the more specific provisions must be deemed to

control. Pet. App. 17a-18a.

Judge DeMoss concurred specially, Pet. App. 18a-

20a, on the basis of the 1991 amendment providing that

the FDIC must initiate removal under Section

1819(b)(2)(B) within 90 days of the later of the date the

action is filed or the date the FDIC is substituted as a

party. See note 1, supra. Although otherwise inc-

lined to find that the statutory language did not

address the issue of removal on appeal, he concluded

from the language and structure of the amendment

that Congress had considered the issue and intended

that where the FDIC was substituted as a party, the

fact that the case might be on appeal in the state

system should be immaterial to the agency’s right to

remove it to federal court. Pet. App. 19a-20a.

Five judges dissented. Pet. App. 20a-30a. The

dissenters believed that the “broad statutory

AT ER OL EE CRN ARE re

7

language” addressed only the type of cases that could

be removed, not their trial or appellate status. Jd. at

23a. They therefore rejected a statutory construc-

tion that would require federal district courts either

“to sit as appellate courts over the removed state

court cases,” which would require them to exercise

appellate rather than “original” jurisdiction (see 28

U.S.C. 1441(a)), or “to ‘rubber stamp’ state court

judgments and forward them to federal appellate

courts for review,” in which case they would not have

before them a “case or controversy” of the sort re-

quired to support federal jurisdiction under Ar-

ticle III of the Constitution. Pet. App. 24a-25a & n.7.

After reviewing, id. at 26a-29a, a variety of hypo-

thetical procedural questions that might arise in a

case removed after judgment in the state trial court,

the dissent concluded, id. at 29a-30a, that its jurisdic-

tional and procedural concerns could be satisfied by

allowing post-judgment removal to the district court

only where that court could properly grant relief

from the state court’s judgment under Rule 60 of the

Federal Rules of Civil Procedure.’

2 Rule 60(a) allows a district court to correct clerical errors

and errors of “oversight or omission” at any time, but only

with leave of the appellate court where an appeal has been

docketed. Rule 60(b) allows the court to relieve a party from a

final judgment for a variety of reasons, including mistake or

inadvertence, newly discovered evidence, fraud, reversal of a

predicate judgment, other inequity of continued application, or

“any other reason justifying relief.” Any motion for relief

must be made “within a reasonable time” after entry of the

judgment from which relief is sought; where the ground is

mistake, new evidence or fraud, that time may not exceed one

year.

| |

8

ARGUMENT

1. Petitioners’ principal contention (Pet. 7-12, 20-

22) is that a case may not be removed to a federal

district court while pending in a state appellate court,

because the somewhat unusual procedural posture of

such a case on removal would vitiate the federal

court’s jurisdiction. Petitioners argue that a federal

district court cannot exercise original jurisdiction

once the_state trial court’s plenary jurisdiction has

been cut off by the entry of judgment and the

subsequent filing of a state appeal. Pet. 11.* Indeed,

petitioners maintain that the district court may not

take even the procedural steps approved by the court

of appeals in this case to “prepare the record as

required for appeal, and forward the case to a federal

appellate court for review,” Pet. App. 15a-16a, because

in doing so the district court would have no mean-

ingful opportunity to act on a justiciable “case or

_ controversy.” See Pet. 20-22.

It is true that in cases removed under Section

1819(b)(2)(B) it is incumbent upon the federal courts

“to deal with the unique problem of a shift in

jurisdiction in the middle of a case which arises

whenever cases are removed from state to federal

court.” Granny Goose Foods, Inc. v. Brotherhood of

Teamsters, Local No. 70, 415 U.S. 428, 485 (1974). As

the court below found, however, it is straightforward

3 Petitioners also argue that a federal district court can

never exercise “appellate” jurisdiction over a state court

judgment-—Pet. 11; see also Pet. App. 22a-24a (dissenting

opinion). The court of appeals found it unnecessary to consider

this argument in light of the post-removal procedure it pre-

scribed. Pet. App. 15a.

9

to address that problem in this case by heeding this

Court’s instruction that “[a]fter removal, the federal

court ‘takes the case up where the State court left it

off.’” Id. at 436 (quoting Duncan v. Gegan, 101 U.S.

810, 812 (1880)). That is, all that has occurred in state

court will be deemed to have occurred in federal court,

415 U.S. at 435-486; see 28 U.S.C. 1450, so that the

case “simply comes into the federal system in the

same condition in which it left the state system.”

Pet. App. 17a. In this case, because initial pro-

ceedings in the state trial court had been concluded

and an appeal perfected at the time of removal, it was

appropriate for the district court to “take the state

judgment as it [found] it,” id. at 15a, and to take only

such steps as were necessary to allow the appeal to

proceed in the federal system.

The operation of the procedure approved by the

court of appeals in this case is illustrated by 5300

Memorial Investors, Ltd. v. RTC, 973 F.2d 1160, 1162-

1163 (5th Cir. 1992), and Walker v. FDIC, 970 F.2d 114

(5th Cir. 1992), in each of which the same court

subsequently approved a district court’s adoption of a

state court judgment after removal. See also FDIC v.

Kahlil Zoom-In Markets, Inc., No. 92-1339 (5th Cir.

Nov. 18, 1992) (no appellate jurisdiction until district

court enters a final judgment, but district court may

adopt state court’s judgment as its own). By entering

judgment the district court puts the case, formerly

conducted under state court rules, into a proper

federal procedural posture. The district court is then

in the same position, with the same rights and powers

to act (such as by granting relief, if available, under

Fed. R. Civ. P. 59 or 60) as it would have been if the

10

case had originated in federal court. If an adopted

state court judgment is incorrect, that can and will be

determined by the federal court of appeals on direct

review. See 5300 Memorial Investors, 973 F.2d at

1163-1164 (vacating the judgment adopted by the

district court and remanding the case to that court

for retrial); Walker, 970 F.2d at 124 (reversing and

remanding in part state decision adopted by district

court).‘

Petitioners’ contention that the role of the district

court on removal is too insubstantial to support

federal jurisdiction is without merit. We do not

understand petitioners to question that FIRREA

properly granted the district courts original jurisdic-

tion over any civil suit (with exceptions not material

here) to which the FDIC is or becomes a party. See

12 U.S.C. 1819(b)(2)(A) (Supp. III 1991). This case

thus came within the district court’s subject matter

jurisdiction from the time that the FDIC was substi-

tuted as a party. Moreover, there is no question that

a live controversy existed between the parties at the

time of removal, and that a federal court could grant

4 As noted below, the cases litigated to date in the courts of

appeals have not established wholly uniform (or clearly exclu-

sive) post-removal procedures. We see no reason to believe,

however, that the general approach suggested by the court

below is unworkable, or that the lower courts will not be able to

develop adequate solutions for any problems that arise in

particular cases. In any event, because this case was decided on

appeal from a remand order, its facts present no actual post-

removal question. The court therefore correctly characterized

the dissent’s concerns as mere “premonitions” that would

unnecessarily complicate the consideration and decision of this

case. Pet. App. 17a.

11

effective relief to the prevailing party. Cf. Church of

Scientology v. United States, No. 91-946 (Nov. 16,

1992), slip op. 5-6 (appellate court has jurisdiction

where it can order effective relief from district court

order, regardless of whether enforcement of order has

divested district court itself of jurisdiction).

Under the decision below, to be sure, on removal of

this case from the state appellate court it is possible

that the district court will initially do no more than

adopt the state trial court’s decision, prepare the

record and forward it to the federal-appellate court.

See Pet. App. 15a-16a; Walker, supra. As the court of

appeals pointed out, however, Pet. App. 16a, district

courts are often required to take equally “mechan-

ical” actions when cases are remanded with in-

structions to enter a particular judgment, grant or

deny an injunction, or take some other action

consistent with the decision of the court of appeals.

In all such cases the district court’s jurisdiction is

unquestioned, although its power in exercising that

jurisdiction is severely constrained.

Petitioners appear to concede, moreover, Pet. 16-17,

that under Section 1819(b)(2) a district court would

have jurisdiction to consider and grant a motion for

relief from a state court’s judgment so long as that

motion was proper and timely under the Federal

Rules of Civil Procedure—presumably regardless of

the availability of such relief under state procedural

rules.® It is difficult to understand, however, how a

® It is not clear that relief from the state judgment under

Rule 60(b) would have been improper in this case. None of the

opinions in the court of appeals addressed this issue, although

the dissent apparently assumed that such relief was unavail-

12

district court with the power to reopen or modify a

state court judgment, subject only to federal procedu-

ral constraints, could lack the power to adopt that

judgment for the purpose of positioning it appropri-

ately for federal appellate review.

Petitioners suggest no conflict between the deci-

sion below and any decision of this Court or of

another court of appeals. Indeed, the decision is

consistent with those of other courts of appeals that

have considered similar issues. See, e.g., /n re Savers

Fed. Savings & Loan Ass’n, 872 F.2d 963 (11th Cir.

1989) (interpreting similar FSLIC statute to allow

post-judgment removals); Jn re Resolution Trust

Corp., 888 F.2d 57 (8th Cir. 1989) (interpreting similar

RTC statute to allow removal of case on appeal in

state court); Jackson v. American Savings Mortgage

Corp., 924 F.2d 195 (11th Cir. 1991) (same); Ward v.

RTC, 972 F.2d 196 (8th Cir. 1992) (same).® There is

accordingly no reason for this Court to grant review.

able. Petitioners’ assertion, Pet. 17 n.8, that all motions under

Rule 60(b) are subject to a one-year time limitation is simply

inaccurate.

6 The decisions in the courts of appeals do not reflect

complete uniformity with respect to procedure after removal.

Compare the decision below (district court may enter state

court’s decision as its own, predicating federal appeal) with

Jackson v. American Savings Mortgage Corp., 924 F.2d at 198-

199 & nn.9-11 (party seeking appeal should file motion to alter

or amend judgment in district court within ten days after

removal, see Fed. R. Civ. P. 59(e), with federal appeal lying -

from grant or denial of that motion) or Ward v. RTC, supra

(reviewing denial of motion filed after removal under Fed. R.

Civ. P. 60(b)). Differences on post-removal procedure are sub-

sidiary, however, to the central issue of whether post-judgment

13

2. Petitioners’ contention that the court of appeals

has created a “wholly independent procedural track”

for removals under 12 U.S.C. 1819 (Supp. III 1991),

Pet. 12, misapprehends the court’s decision. As the

court specifically pointed out, Pet. App. 17a-18a, the

power to remove a case on appeal in state court does

not wholly displace the general removal statutes; it is

| merely one of several specific provisions relating to

the FDIC that supplement and partially supersede

the general statutes in the specific circumstances in

which they apply. In addition to the right to remove

cases on appeal, for example, Congress has provided

that the FDIC may remove a case without bond or

security; remove a case in which it is (or is sub-

stituted as) a plaintiff; remove within 90 (rather than

30) days of commencement of the action, or within 90

days of substitution of the FDIC as a party; and

appeal an ordinarily non-appealable order of remand.

12 U.S.C. 1819(b)(2) (Supp. III 1991); see Pet. App. 13a-

15a. Indeed, as the court of appeals found, the various

procedural advantages conferred on the FDIC with

respect to removal clearly indicate “the importance

Congress placed on getting cases falling under the

| scope of FIRREA into federal courts,” and are

completely consistent with the court’s holding that

Section 1819 allows removal at any stage before a

state judgment becomes final and non-appealable. Pet.

App. 15a. Together, these special removal rules

“allow the FDIC to step into the shoes of a troubled

removal is permissible at all. On that issue the lower courts are

in agreement. As noted above, this case was decided on appeal

from an order of remand, and its facts therefore present no

actual post-removal procedural question.

14

financial institution at any stage of [the] proceedings

without being penalized for the timing of that

substitution[,} and to effectively and aggressively

protect the institution’s interests and assets.” /bid.

3. Petitioners quarrel with the court of appeals’

reading of the statutory language. Pet. 14-17. As this

Court has frequently made clear, however, “courts

must presume that a legislature says in a statute

what it means and means in a statute what it says

there.” Connecticut Nat'l Bank v. Germain, 112 S.

Ct. 1146, 1149 (1992). The decision below gives full

scope to the plain language of Section 1819(b)(2)(B),

which provides for removal of “any action, suit, or

proceeding from a State court to the appropriate

United States district court” (emphasis added). Pe-

titioners, on the other hand, rely on an inconclusive

statement in a legislative committee report to argue

that “any action, suit, or proceeding” refers only to

the types of cases that the FDIC can remove, not to

the procedural status of the litigation. Pet. 15-16.

Yet the only limitation on the meaning of “any” found

in the statutory language is an express exception,

inapplicable here, for certain cases in which, among

other things, the FDIC was appointed as receiver

solely by state authorities. Moreover, as the court of

appeals remarked, Pet. App. 8a-9a, the lack of any

qualification of the phrase “a State court” implies

that it should be read broadly to include any such

court. Compare 12 U.S.C. 632 (providing for removal

of certain international banking law suits involving

federally chartered corporations “at any time before

the trial thereof’); see also Jn re Savers Fed.

Savings, 872 F.2d at 966.

15

As noted above, petitioners appear to concede the

propriety of removal after judgment under some

circumstances, but suggest that removal is prohibited

once a state notice of appeal has been filed. Pet. 11.

There is simply nothing in the statutory language (or

legislative history) to support such a result. Con-

gress’s primary concern in enacting the jurisdic-

tional provisions of FIRREA was to ensure that the

FDIC would have access to a federal forum in which

to litigate cases it inherited upon appointment as a

receiver. The key element in this access is the entry

of the FDIC into the litigation as a party, placing

important federal interests at stake. Congress un-

derstood that “(t]he appointment of a conservator or

receiver can often change the character of litigation.”

H.R. Rep. No. 54, 101st Cong., Ist Sess. Pt. I, at 331

(1989). The fact that a case is actually on appeal in

state court, rather than pending appeal or still

pending judgment in a trial court, does not change the

fact that once the FDIC becomes a party, a federal

statute vests jurisdiction in the appropriate federal

district court. The court of appeals’ decision properly

interprets the statutory language, and accords fully

with the legislative goal of affording federal interests,

represented here by the FDIC, the protection of a

federal forum. See generally Pet. App. 13a-l5a.

There is no reason for further review.

4. Finally, petitioners allege broadly, Pet. 22-25,

that the decision below violates constitutional princi-

ples of full faith and credit, comity, and federalism, as

well as the Tenth and Seventh Amendments.’ Spe-

7 Petitioners did not raise any of these arguments in their

briefs in the court of appeals.

16

cifically, petitioners object to the reexamination or

alteration of the state trial court’s judgment by any

lower federal court.® Petitioners’ arguments would,

however, impugn any provision for removal from a

state trial court after judgment, and therefore have

no merit.

As the court of appeals recognized, Pet. App. 10a, it

has long been settled that Congress may provide for

removal to federal court of cases otherwise within

their constitutional jurisdiction, and may authorize

such removal “either before or after judgment.” Mar-

tin v. Hunter’s Lessee, 14 U.S. (1 Wheat.) 304, 349

(1816); see generally C. Wright, A. Miller & E. Coop-

er, Federal Practice & Procedure § 3721 (1985).

Congress having explicitly provided that any case in

which the FDIC is a party shall be treated as arising

under the laws of the United States, 12 U.S.C. 1819

(b)(2)(A) (Supp. III 1991), and therefore within the

original jurisdiction of the federal district courts, 28

U.S.C. 1331,° it is within Congress’s constitutional

power to allow removal of such cases at any stage

8 Petitioners also argue that the court of appeals’ decision

violates principles of finality and res judicata. Such arguments

ignore the fact that the state trial court judgment was on

appeal and subject to modification or reversal. See Pet. App.

5a-6a; cf. Ward, 972 F.2d at 198 (res judicata inapplicable

where case removed while on appeal and subsequent state

appellate decision void).

® Petitioners do not question the propriety of this provision.

See Pet. App. 10a-18a (reviewing history of federal question

jurisdiction and concluding that Section 1819’s grant of

jurisdiction is constitutionally permissible); Pacific R.R. Re-

moval Cases, 115 U.S. 1 (1885); American Nat’l Red Cross v.

S.G., 112 S. Ct. 2465, 2475-2476 (1992).

17

before the ultimate conclusion of the state pro-

ceedings. Petitioners’ prudential arguments cannot

prevail “where, as here, Congress itself has weighed

interests of federalism and comity and given the

[FDIC] the power to remove cases to the federal

courts.” In re Savers Fed. Savings, 872 F.2d at 966.

Petitioners argue further, Pet. 24-25, that the

findings of the state court jury may not be re-

examined by a federal court, “otherwise * * * than

according to the rules of the common law.” U.S.

Const. Amend. VII. In 1870, this Court invalidated

under the Seventh Amendment a statute providing for

post-judgment removal and automatic retrial of civil

cases tried before a state court jury. The Justices v.

Murray, 76 U.S. (9 Wall.) 274, 276-282. Nothing in

Section 1819 or in the decision below suggests, how-

ever, that after removal the facts found by the jury in

this or any other case would be treated with any less

respect than would have been accorded to similar

findings had the case originally been tried in federal

court. See Fed. R. Civ. P. 59, 60; Parsons v. Bedford,

28 U.S. (3 Pet.) 433, 448 (1830) (common law rec-

ognized grant of new trial by trial or appellate court).

There is accordingly no valid Seventh Amendment

objection to post-judgment removal under Section

1819.

18

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

ALFRED J.T. BYRNE

General Counsel

JACK D. SMITH

Deputy General Counsel

ANN S. DuROoss

Assistant General Counsel

RICHARD J. OSTERMAN, JR.

Senior Counsel

DANIEL H. KURTENBACH

Counsel

Federal Deposit Insurance Corporation

DECEMBER 1992