Brae Asset Fund, LP v. Dion, Civil Action No. 95-12002-DPW.

• Citation: 929 F. Supp. 29
• Decision Date: 29 February 1996
• Docket Number: Civil Action No. 95-12002-DPW.
• Parties: BRAE ASSET FUND, L.P., As Assignee of the Federal Deposit Insurance Corporation, Plaintiff, v. John A. DION, Stephen A. Dion and D & S Hy-Tec Tooling Co., Inc. d/b/a Starlight Luxury Limousine, Defendants.
• Court: U.S. District Court — District of Massachusetts

929 F. Supp. 29

BRAE ASSET FUND, L.P., As Assignee of the Federal Deposit Insurance Corporation, Plaintiff, v. John A. DION, Stephen A. Dion and D & S Hy-Tec Tooling Co., Inc. d/b/a Starlight Luxury Limousine, Defendants.

Civil Action No. 95-12002-DPW.

United States District Court, D. Massachusetts.

February 29, 1996.

Sharon F. Fearey, Brian K. Bowen, Winokur, Winokur, Serkey & Rosenberg, PC, Plymouth, MA, for plaintiff.

Michael P. Mason, Lewinger, Mason & Duffy, Hingham, MA, for defendants.

MEMORANDUM AND ORDER

WOODLOCK, District Judge:

The question presented is whether an assignee of the Federal Deposit Insurance Corporation is granted the FDIC's special rights to invoke federal court jurisdiction by removal of pending litigation from state courts.

Brae Asset Fund brought this action on March 31, 1995, in the Massachusetts state court to recover on several notes it purchased from the FDIC. On August 10, 1995, two of the defendants answered and counter-claimed alleging violations of federal law. The plaintiff thereupon removed the case to this court asserting that as assignee of the FDIC it succeeded "to all the procedural and substantive powers of the FDIC including but not limited to those" which grant the FDIC the right to remove actions in which the FDIC is a party "from a State Court to the appropriate United States District Court." 12 U.S.C. § 1823. Finding nothing which can properly support the plaintiffs contention that FDIC's special rights to federal jurisdiction have or can be assigned, I will remand this case to the state court.

Brae has cited no case, and research has not disclosed one, in which the assignee of the FDIC, which commences litigation as plaintiff in the state court regarding an asset assigned to it by the FDIC, may thereafter rely upon the FDIC's removal powers belatedly to remove the case to the federal court after receiving defendant's responsive pleading. In the ordinary removal setting it is only a defendant that can remove, 28 U.S.C. § 1441(a), and if the plaintiffs well-pleaded complaint discloses no basis for federal jurisdiction, the defendant must litigate the claims — even any affirmative federal defenses, Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908), or counterclaims, Rath Packing Co. v. Becker, 530 F.2d 1295 (9th Cir.1975), aff'd on other grounds, 430 U.S. 519, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977) (finding defendant cannot remove on the basis of a federal question counterclaim); Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941) (finding plaintiff cannot remove on the basis of a federal question counterclaim), it may assert — in state court.

To be sure, Congress undertook to grant the FDIC extraordinary rights of removal by treating most litigation involving the FDIC as within the federal question jurisdiction, 12 U.S.C. § 1819(b)(2)(A) & (D), and permitting removal even in the absence of a demonstration of federal jurisdiction in the complaint. Capizzi v. FDIC, 937 F.2d 8, 10-11 (1st Cir.1991).

Moreover, as the plaintiff notes, there are cases from the Fifth Circuit in which federal courts have retained jurisdiction after the FDIC or the FSLIC, a parallel federal entity, has left the case as a party whether by settlement, Walker v. FDIC, 970 F.2d 114, 120 (5th Cir.1992) or dismissal, Bank One Texas Nat'l Assn. v. Morrison, 26 F.3d 544, 547 (5th Cir.1994), or by assigning its interest to another FSLIC v. Griffin, 935 F.2d 691, 696 (5th Cir.1991), cert. denied sub nom, Griffin v. First Gibraltar Bank, 502 U.S. 1092, 112 S.Ct. 1163, 117 L.Ed.2d 410 (1992). The results in those cases, however, are consistent with the practical emphasis on efficient judicial administration which is directed by the concepts of supplemental jurisdiction now embodied in 28 U.S.C. § 1367. Cases from other jurisdictions have been unwilling to recognize the right of an FDIC assignee to avoid remand once the FDIC is no...