Village of Oakwood v. State Bank and Trust Co.

• Decision Date: 22 August 2008
• Docket Number: No. 07-4412.,07-4412.
• Citation: 539 F.3d 373
• Parties: VILLAGE OF OAKWOOD, Baughman Tile Company, Gene A. Baughman, Mary Ann Baughman, Gary C. Grant, Trustee, and Gary C. Grant Insurance Agency, Inc., Plaintiffs-Appellants, v. STATE BANK AND TRUST COMPANY and Federal Deposit Insurance Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

539 F.3d 373

VILLAGE OF OAKWOOD, Baughman Tile Company, Gene A. Baughman, Mary Ann Baughman, Gary C. Grant, Trustee, and Gary C. Grant Insurance Agency, Inc., Plaintiffs-Appellants, v. STATE BANK AND TRUST COMPANY and Federal Deposit Insurance Corporation, Defendants-Appellees.

No. 07-4412.

United States Court of Appeals, Sixth Circuit.

Argued: August 1, 2008.

Decided and Filed: August 22, 2008.

ARGUED: John C. Deal, Winkler & Winkler, Columbus, Ohio, for Appellants. Jaclyn C. Taner, Federal Deposit Insurance Corporation, Arlington, Virginia, Stephen A. Rothschild, Shumaker, Loop & Kendrick, Toledo, Ohio, for Appellees. ON BRIEF: John C. Deal, Winkler & Winkler, Columbus, Ohio, for Appellants. Jaclyn C. Taner, Federal Deposit Insurance Corporation, Arlington, Virginia, Stephen A. Rothschild, James H. O'Doherty, Shumaker, Loop & Kendrick, Toledo, Ohio, for Appellees.

Before: KENNEDY, GILMAN, and GIBBONS, Circuit Judges.

OPINION

RONALD LEE GILMAN, Circuit Judge.

On February 1, 2002, the Oakwood Deposit Bank Company (Oakwood) failed. The Federal Deposit Insurance Corporation (FDIC) was immediately appointed as receiver. On the following day, the FDIC signed a Purchase and Assumption Agreement (P & A Agreement) with State Bank and Trust Company (State Bank) that caused the insured deposits of Oakwood to be transferred to State Bank. A group of partially uninsured depositors (collectively referred to as the Uninsured Depositors) filed a complaint in state court against State Bank in an attempt to recover the value of their uninsured deposits.

The FDIC removed the case to federal district court. Despite a ruling on the merits by the district court, this court on appeal subsequently ordered that the judgment be vacated and the case remanded to the state court because the FDIC was not yet a party when it had sought removal. After remand, State Bank filed a third-party complaint against the FDIC, seeking indemnification under the terms of the P &amp A Agreement. The state court allowed the third-party complaint, following which the FDIC again removed the case to federal district court. State Bank and the FDIC then renewed their motions to dismiss the Uninsured Depositors' claims or for summary judgment, and the Uninsured Depositors once more filed a motion to remand.

The district court granted State Bank's and the FDIC's motions for summary judgment, finding that the Uninsured Depositors had failed to comply with the relevant statutory scheme for bringing their claims. It also denied the Uninsured Depositors' motion to remand, finding that federal jurisdiction was proper over the entire dispute. Those two decisions have been appealed by the Uninsured Depositors. For the reasons set forth below, we AFFIRM the judgment of the district court.

I. BACKGROUND

A. Factual background

This court aptly summarized the relevant facts of this case during the initial appeal:

The day after Oakwood Deposit Bank Company (Oakwood) was placed in federal receivership, the FDIC, as receiver, entered into a purchase and assumption agreement for State Bank and Trust (State Bank) to take over Oakwood's insured deposits and some of its assets. Using the best information available at the time, the FDIC set at four million dollars the premium State Bank would pay for these assets (mostly loans) and liabilities (deposits). Two weeks later, the FDIC returned half of the four million dollar premium to State Bank because it had overvalued some of the assets transferred to State Bank. Further investigation of Oakwood's records disclosed that insured deposits were nearly sixty million dollars more than previously thought. These additional deposits were liabilities of the receivership, not State Bank.

Village of Oakwood and a handful of individuals and businesses with deposits exceeding the FDIC's insurance limit, collectively the "uninsured depositors," filed suit in an Ohio court. Though the complaint alleged that the FDIC breached its fiduciary duty by not using the four million dollar premium to cover their losses, it named State Bank, rather than the FDIC, as defendant and alleged four Ohio causes of action: successor liability (State Bank being the successor of Oakwood), aiding and abetting the FDIC's breach of its fiduciary duty, equitable constructive trust, and "contract."

Village of Oakwood v. State Bank & Trust Co., 481 F.3d 364, 366 (6th Cir.2007).

The FDIC also alleged that, following the transfer of the insured deposits to State Bank, it issued receivership certificates for the portions of the accounts that exceeded the $100,000 insurance limit. Receivership certificates entitle the holder to a pro rata share of any remaining money following the payment of secured creditors and administrative expenses. The FDIC, in its role as receiver, is entitled to the same pro rata share as the other holders of receivership certificates. At the time of briefing in this case, the FDIC's records reflected that the Uninsured Depositors had been paid dividends equal to 41% of their outstanding claims. Moreover, the FDIC states that further payments may be possible, although it offers no predictions as to the amount or the timing of such payments.

B. Procedural background

The Uninsured Depositors filed their initial complaint against State Bank in the Ohio Court of Common Pleas in December of 2004. In the state court, the FDIC filed a motion to intervene and to be substituted for State Bank as the defendant. Before the motion to intervene was ruled on by the state court, the FDIC filed a notice of removal to the federal district court pursuant to 12 U.S.C. § 1819(b)(2)(B). The Uninsured Depositors subsequently filed a motion to remand.

Initially, the district court granted the Uninsured Depositors' motion. The court then reconsidered, granted the FDIC's motion to intervene, and ultimately granted summary judgment to State Bank and the FDIC. On appeal, this court reversed the judgment of the district court and remanded the case to the state court. Remand was necessary because the FDIC had removed the case before the state court had granted the FDIC's motion to intervene, a defect that was not cured by the district court's subsequent grant of the FDIC's motion to intervene in the federal proceedings. Village of Oakwood, 481 F.3d at 368.

Following the remand to the state court in June of 2007, State Bank filed a third-party complaint against the FDIC. State Bank sought indemnification from the FDIC on the basis of the P & A Agreement between them. After the state court accepted the third-party complaint, the FDIC again removed the case to federal district court, having now become a party to the lawsuit. State Bank and the FDIC once more moved to dismiss the Uninsured Depositors' claims or for summary judgment, and the Uninsured Depositors moved to remand the case to state court. While those motions were pending, the parties filed a report of their planning conference, wherein they agreed that the formation of a discovery plan was "premature until the pending dispositive motions have been ruled upon."

The district court, in October of 2007, denied the Uninsured Depositors' motion to remand and granted the motions of State Bank and the FDIC for summary judgment. This timely appeal followed.

II. ANALYSIS

A. Standard of review

We review de novo the denial of a motion to remand. Roddy v. Grand Trunk W. R.R., Inc., 395 F.3d 318, 322 (6th Cir.2005). The party that removed the case to federal court bears the burden of establishing federal subject matter jurisdiction. Ahearn v. Charter Township of Bloomfield, 100 F.3d 451, 453-54 (6th Cir. 1996).

We also review de novo a district court's grant of summary judgment. Int'l Union v. Cummins, 434 F.3d 478, 483 (6th Cir.2006). Summary judgment is proper where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). In considering a motion for summary judgment, the district court must construe all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The central issue is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

B. The district court's jurisdiction

As a preliminary matter, the Uninsured Depositors argue that the district court did not have jurisdiction over the case, and that it therefore incorrectly denied their motion to remand to the state court. The Uninsured Depositors contend that exclusive jurisdiction over State Bank's third-party complaint lies in the Court of Federal Claims pursuant to the Tucker Act, 28 U.S.C. § 1491. Accordingly, the Uninsured Depositors assert that the third-party complaint should have been dismissed and the case remanded to the state court.

State Bank and the FDIC argue in response that the Tucker Act does not provide the sole grant of federal jurisdiction to claims brought against the FDIC. They contend that the Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA), Pub.L. No. 101-73, 103 Stat. 183, which specifically governs the FDIC, provides a broad grant of jurisdiction pursuant to 12 U.S.C. § 1819 that is not preempted by the Tucker Act. State Bank and the FDIC therefore contend that the Uninsured Depositors' motion to remand was properly denied.

The so-called Little Tucker Act, 28 U.S.C. § 1346, grants original jurisdiction to "[t]he district courts ..., concurrent with the United States Court of Federal Claims, of ... [a]ny ... civil action or claim against the United States, not exceeding $10,000 in amount, founded ... upon any express or implied contract with the United States." But the Tucker Act itself grants exclusive jurisdiction to the...