Buck v. F.D.I.C., 95-1813

• Decision Date: 08 February 1996
• Docket Number: No. 95-1813,95-1813
• Parties: , 131 Lab.Cas. P 11,507, 11 IER Cases 554 Marjorie BUCK, Bryan Hubbard, and Carl Leeson, individually and as representatives of a class of persons similarly situated, Appellants, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as receiver for the Missouri Bridge Bank, N.A., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1285

75 F.3d 1285

64 USLW 2498, 131 Lab.Cas. P 11,507,

11 IER Cases 554

Marjorie BUCK, Bryan Hubbard, and Carl Leeson, individually and as representatives of a class of persons similarly situated, Appellants, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as receiver for the Missouri Bridge Bank, N.A., Appellee.

No. 95-1813.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 15, 1995.

Decided Feb. 8, 1996.

Appeal from the United States District Court for the Western District of Missouri; Fernando Gaitan, Judge.

Quentin L. Brown, Kansas City, MO, argued, for appellants.

Daniel H. Kurtenbach, Washington, DC, argued, for appellee.

Before FAGG, Circuit Judge, GARTH, ^* Senior Circuit Judge, and WOLLMAN, Circuit Judge.

GARTH, Senior Circuit Judge.

This appeal requires us to decide a matter of first impression: whether the Worker Adjustment and Retraining Notification Act (the "WARN Act"), 29 U.S.C. §§ 2101-2109, applies when the Federal Deposit Insurance Corporation (FDIC), pursuant to 12 U.S.C. § 1821(n), organizes a "bridge bank" and then sells the assets of the "bridge bank" to a healthy successor bank. We hold that the WARN Act does not apply in such circumstances. Accordingly, we will affirm the order of the district court granting summary judgment in favor of the FDIC.

I.

On November 13, 1992, the Federal Deposit Insurance Corporation (FDIC), pursuant to 12 U.S.C. § 1821(n), organized the Missouri Bridge Bank, National Association (the "Bridge Bank"), in order to purchase the assets and assume the liabilities of two failed banks, Metro North State Bank ("Metro North") and The Merchants Bank ("Merchants"). The FDIC chose to reduce losses occasioned by these bank failures through the use of a bridge bank because the FDIC had determined that the utilization of a bridge or transition bank presented the "least cost resolution" to the problem. The FDIC has a number of options for resolving a bank failure, including, but not limited to, an immediate liquidation, the sale of the failed bank, or the formation of a transition bridge bank with an eventual sale to a healthy succeeding bank. See, e.g., 12 U.S.C. §§ 1821, 1823, 1831o.

Pursuant to the Competitive Equality Banking Act of 1987, as amended, the FDIC has the authority to establish a bridge bank, which may be owned in whole or in part by the FDIC. In such a case, the bridge bank assumes a failed bank's deposits and other liabilities while acquiring its assets. A bridge bank is chartered by the FDIC, exists for only a limited time, and is used by the FDIC as a transition bank until the FDIC can transfer the assets and liabilities of the failed bank to a healthy institution. See 12 U.S.C. § 1821(n). The bridge bank is funded by the FDIC. The advantage of using a bridge bank is that it provides the FDIC with sufficient time to find a purchaser for failed banks.

Although the FDIC possesses a number of methods for resolving a bank failure, it is statutorily constrained to select the method which is "the least costly to the deposit insurance fund." 12 U.S.C. § 1823(c)(4)(A)(ii). In the present case, the FDIC, after conducting a thorough analysis and comparison of the cost of various alternatives, see Appendix 187-227, determined that an orderly auction of assets utilizing a transition bridge bank would result in savings over the cost of liquidating the two failed banks, see id. at 197, 209, 211, and would constitute the "least cost" method for resolving these bank failures, id. at 198.

Acting as receiver for Metro North and Merchants, ¹ the FDIC transferred certain assets of the failed banks to the Missouri Bridge Bank. The Bridge Bank also assumed certain liabilities of the failed banks, including the insured deposits. The Bridge Bank retained the employees of Metro North and Merchants.

On February 5, 1993, the FDIC Division of Resolutions met with potential acquirers of the Bridge Bank and solicited bids. Ultimately, the FDIC received seven bids for the purchase of the Bridge Bank. The FDIC solicited further bids from the two top bidders, Boatmen's First National Bank ("Boatmen's"), based in Kansas City, Missouri, and First Bank Systems, based in Minnesota.

On April 2, 1993, the FDIC announced that Boatmen's was the winning bidder. Pursuant to a Purchase and Assumption Agreement dated April 23, 1993, Boatmen's purchased certain assets and assumed certain liabilities of the Bridge Bank. Boatmen's offered employment to approximately 400 of the 626 employees of the Bridge Bank.

Plaintiffs Marjorie Buck, Bryan Hubbard and Carl Leeson are former employees of the failed banks. ² They continued working for the Bridge Bank when it took over both failing institutions. They were not offered employment by Boatmen's. On December 22, 1993, Buck sued the FDIC as receiver for the Missouri Bridge Bank under the Worker Adjustment and Retraining Notification Act (the "WARN Act"), 29 U.S.C. §§ 2101-2109, alleging that Buck had not received the statutorily mandated sixty-day notice of impending job loss.

On August 2, 1994, the parties filed a Joint Stipulation of Facts. The stipulations included:

4. Pursuant to 12 U.S.C. § 1821(n), the Missouri Bridge Bank was to exist for a limited time, as a transition bank, to effectuate a resolution of Metro North State Bank ("Metro North") and Merchants Bank ("Merchants").

* * * * * *

10. On November 13, 1992, at the time Metro North was closed, [CEO] Dietz spoke to employees of Metro North, and made available to employees a written Message to Employees, and a copy of an FDIC News Release of that date.... The Release stated that the FDIC expected to return the bank to the private sector in four to six months.

* * * * * *

13. On November 20, 1992, at the time Merchants was closed, [CEO] Dietz spoke to employees of Merchants, and made available to employees a written Message to Employees, and a copy of an FDIC News Release of that date.... The Release stated that the FDIC expected to return the bank to the private sector in four to six months.

* * * * * *

30. No formal notification pursuant to 29 U.S.C. § 2101 et seq. (the Worker Adjustment and Retraining Notification Act or "WARN") was served to employees of the Missouri Bridge Bank, to the State dislocated worker unit or to the appropriate unit of local government, by the Missouri Bridge Bank or by the FDIC-Receiver.

On August 5, 1994, the FDIC filed a motion to dismiss Buck's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), or in the alternative for summary judgment. On August 10, 1994, Buck moved for partial summary judgment. On November 30, 1994, Buck also filed a motion to certify the class. On January 13, 1995, the FDIC filed a motion to redefine the proposed class.

On February 22, 1995, the district court entered its order granting the FDIC's motion for summary judgment. The district court's order read:

Accordingly, it is ORDERED that:

(1) defendant's motion to dismiss or for summary judgment is GRANTED;

(2) plaintiffs' motion to certify a class is GRANTED;

(3) defendant's motion to redefine the proposed class is GRANTED;

(4) all other pending motions are DENIED as moot.

District Court Order (Feb. 22, 1995) at 12.

We will treat the district court's order as an order granting summary judgment rather than a Rule 12(b)(6) dismissal because the district court relied upon materials apart from the complaint. See Gibb v. Scott, 958 F.2d 814, 816 (8th Cir.1992) (holding that "a motion to dismiss pursuant to Rule 12(b)(6) 'must be treated as a motion for summary judgment when matters outside the pleadings are presented and not excluded by the trial court.' ") (quoting Woods v. Dugan, 660 F.2d 379, 380 (8th Cir.1981) (per curiam)); Sherwood Med. Indus., Inc. v. Deknatel, Inc., 512 F.2d 724, 725 n. 2 (8th Cir.1975).

While we do not rely on matters outside the complaint in ruling on the applicability of the WARN Act to bridge banks, the district court did in resolving the issues presented to the district court. In doing so, the district court had to treat the FDIC motion to dismiss as a motion for summary judgment and apply the relevant standards for summary judgment. ³

The district court provided three alternative grounds for its decision: (1) the WARN Act did not apply to a financial institution closed by a government agency; (2) the Bridge Bank fell within the WARN Act exemption for "temporary facilities"; and (3) the complaint was fatally defective because it failed to allege that at least fifty employees at a single site of employment were dismissed. The district court then granted certification of the class as redefined by the FDIC, but denied all other pending motions as moot. Buck filed a timely notice of appeal on March 20, 1995.

II.

The district court had jurisdiction over plaintiffs' WARN Act claim pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 2104(a)(5). We have jurisdiction over the district court's final order dismissing the complaint under 28 U.S.C. § 1291.

We also exercise plenary review over a grant of summary judgment. Hardin v. Hussmann Corp., 45 F.3d 262, 264 (8th Cir.1995). Summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). We must view the evidence in the light most favorable to the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2511-12, 91 L.Ed.2d 202 (1986).

Where the party moving for summary judgment does not bear the burden of proof at trial, that party must demonstrate "that there is an absence of evidence to support the non-moving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). If the moving party satisfies this requirement, the burden shifts to the nonmovant who ...