Casey v. F.D.I.C.

• Decision Date: 20 October 2009
• Docket Number: No. 09-1096.,09-1096.
• Citation: 583 F.3d 586
• Parties: Michael CASEY; Julie Pennington; Michael Crider; Kathleen Keller; Richard Keller; Richard Piatchek; Heidi Piatchek, Plaintiffs-Appellants, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as receiver of Washington Mutual Bank, Defendant, North American Savings Bank; Heartland Bank; ABM AMRO Mortgage Group, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

583 F.3d 586

Michael CASEY; Julie Pennington; Michael Crider; Kathleen Keller; Richard Keller; Richard Piatchek; Heidi Piatchek, Plaintiffs-Appellants, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as receiver of Washington Mutual Bank, Defendant North American Savings Bank; Heartland Bank; ABM AMRO Mortgage Group, Inc., Defendants-Appellees.

No. 09-1096.

United States Court of Appeals, Eighth Circuit.

Submitted: September 24, 2009.

Filed: October 20, 2009.

Joe D. Jacobson, St. Louis, MO, Jonathan F. Andres and Allen P. Press, Clayton, MO, on the brief, for appellants.

Robert N. Hochman, argued, Chicago, IL, Kenneth J. Mallin and Joy Holley, Michael A. Campbell, Sanford J. Blocker, St. Louis, MO, Mark B. Blocker and Jeremy G. Mallory, Chicago, IL, on the brief, for appellees.

Before MURPHY, BRIGHT, and RILEY, Circuit Judges.

MURPHY, Circuit Judge.

The plaintiffs in this case were members of a class who brought claims in Missouri state court against their mortgage lenders, alleging that the lenders had engaged in the unauthorized practice of law by charging a fee for preparation of loan documents by nonlawyers. The state court dismissed the claims against four lenders who were federal savings associations (FSAs). While an appeal of that decision was pending, the Federal Deposit Insurance Corporation (FDIC) was substituted for one of the FSA lenders and it removed the claims to federal district court. That court¹ adopted the state court's preemption decision and then transferred the appeal to this court, together with a renewed motion to remand. We affirm.

I.

Appellants are seven homeowners whose claims against FSA lenders were dismissed by the state court based on federal preemption: Michael Casey, Julie Pennington, Michael Crider, Kathleen Keller, Richard Keller, Richard Piatcheck, and Heidi Piatchek (the homeowners). The original appellees were the FDIC and three FSA lenders: North American Savings Bank, Heartland Bank, and ABM AMRO Mortgage Group, Inc. While this appeal was pending, we granted Michael Crider's motion to dismiss his claims against the FDIC.

The FSA lenders are mortgage lenders or brokers who extended credit or refinancing for the homeowners' purchases of residential property. In the course of these transactions, the FSA lenders allegedly charged fees ranging from $100 to $250 in exchange for the preparation of mortgage documents. The homeowners allege that charging such fees constitutes the practice of law which Missouri reserves for licensed attorneys. They seek to enforce Missouri statutory and common law prohibiting the unauthorized practice of law, as well as the Missouri Merchandising Practices Act (MMPA).

The FSA lenders moved in the state court to dismiss the claims against them, arguing that the Missouri laws in question were preempted by 12 C.F.R. § 560.2, a federal regulation issued by the Office of Thrift Supervision (OTS) under the Home Owners' Loan Act (HOLA), 12 U.S.C. §§ 1461-1468. The state court agreed and granted the motion, concluding that the Missouri laws were preempted and therefore the claims failed to state causes of action.

The homeowners appealed to the Missouri Court of Appeals and while their appeal was pending, the FDIC was appointed receiver of Washington Mutual Bank, which was successor in interest to one of the FSA lenders, North American Mortgage Company (NAMCO). After its motions to be substituted for NAMCO and for a ninety day stay were granted under 12 U.S.C. § 1821(d), the FDIC removed all these claims to the United States District Court for the Eastern District of Missouri under § 1819(b)(2)(B).

The homeowners filed two motions in the federal district court. One was filed by Michael Crider who sought dismissal with prejudice of his claims against the FDIC pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure. The second was filed by the remaining homeowners who sought remand of their appeals to the Missouri Court of Appeals. The district court denied the first motion without prejudice but did not rule on the second. Instead it adopted the state court's order as its own, relying upon Metro North State Bank v. Gaskin, 34 F.3d 589 (8th Cir.1994), and transferred the case to this court for appeal.

The homeowners renewed both motions before this court. On February 3, 2009, we granted Michael Crider's motion to dismiss pursuant to Rule 42(b) of the Federal Rules of Appellate Procedure. We ordered that the remaining homeowners' renewed motion for remand be considered with the substantive appeal.

II.

The homeowners argue that remand to the Missouri Court of Appeals is required by 28 U.S.C. §§ 1446(a), 1447(c) and that it is appropriate as a matter of judicial discretion under 28 U.S.C. § 1441(c) and Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). They also contend that the state court erred when it found their state law claims preempted by 12 C.F.R. § 560.2. We consider the renewed motion to remand before turning to the state court preemption decision which was adopted by the district court.

A.

The homeowners first argue that remand is required because the February 3, 2009 dismissal of the claims against the FDIC deprived this court of subject matter jurisdiction over their state law claims against the remaining FSA lenders. Section 1447(c) requires that a case removed to federal court be remanded if at any time it is determined that subject matter jurisdiction is lacking. Filla v. Norfolk Southern Ry. Co., 336 F.3d 806, 809 (8th Cir. 2003). Because we retain subject matter jurisdiction under 12 U.S.C. § 1819(b)(2)(A), however, remand is not required by § 1447(c).

We have not previously addressed the issue whether dismissal of the FDIC from a case predicated upon § 1819(b)(2) jurisdiction deprives a federal court of subject matter jurisdiction over remaining state law claims. We have however answered an analogous question in the negative: in Kansas Pub. Emples. Retirement Sys. v. Reimer & Koger Assocs., 77 F.3d 1063, 1067 (8th Cir.1996) (KPERS), we decided that dismissal of the Resolution Trust Corporation (RTC) from a case predicated upon 12 U.S.C. § 1441a(a)(11) jurisdiction did not divest federal subject matter jurisdiction over remaining state law claims for which no other basis of jurisdiction existed.

In KPERS, the plaintiff sued a bank and various individuals in state court, alleging violations of state law. Id. at 1065. After the RTC was substituted for the bank, it removed the entire case to federal court under § 1441 a(a)(11), which provided the sole basis for federal subject matter jurisdiction. Id. at 1066. Subsequently the RTC was dismissed from the case, and the plaintiff moved to remand the state law claims brought against the individual defendants. Id. We affirmed the district court's refusal to remand, holding that "under [§ 1441 a(a)(11)], once the RTC becomes a party to the case, the entire action is `deemed to arise under the laws of the United States' and is within the original jurisdiction of the district court." Id. at 1067 (quoting § 1441 a(a)(11)).

The language in § 1441 a(a)(11), upon which that holding turned, tracks the wording found in § 1819(b)(2)(A), the statute which serves as the sole basis for federal subject matter jurisdiction in this case. Compare § 1441 a(a)(11) ("[A]ny civil action, suit, or proceeding to which the Thrift Depositor Protection Oversight Board is a party shall be deemed to arise under the laws of the United States ....), with § 1819(b)(2)(A)" ("[A]ll suits of a civil nature ... to which the [FDIC], in any capacity, is a party shall be deemed to arise under the laws of the United States."). Employment of such similar language in these two closely related statutes implies an intent by Congress that the two be interpreted in the same way. See Atlantic Cleaners & Dyers v. U.S., 286 U.S. 427, 433, 52 S.Ct. 607, 76 L.Ed. 1204 (1932). The fact that the current versions of the two sections were enacted by the same act of Congress only buttresses that inference. See Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub.L. No. 101-73, 103 Stat. 183, 216, 367. Moreover, the law concerning the RTC often informs its analogue in the FDIC context, and vice versa. See, e.g., In re Collins Sec. Corp., 998 F.2d 551 (8th Cir.1993).

We find our holding in KPERS persuasive here and conclude that all claims in a case to which the FDIC is a party have "arising under" federal subject matter jurisdiction. The subsequent dismissal of the claim against the FDIC did not defeat that jurisdiction or withdraw the court's jurisdiction over the state law claims filed against the other FSA lenders. Because we retain jurisdiction over the latter claims, section 1447(c) does not require that they be remanded to the Missouri Court of Appeals.

The homeowners next argue that because the FSA lenders did not join in the FDIC's motion to remove, the rule of unanimity requires remand. The rule of unanimity ordinarily requires that a case be remanded to the state court from which it was removed unless all defendants join in the motion for removal. 28 U.S.C. § 1446(a); Horton v. Conklin, 431 F.3d 602, 604 (8th Cir.2005). This case was removed under § 1819(b)(2)(B), however, and that statute allows the FDIC to remove any case to which it is a party from state to federal court within ninety days of its becoming a party. The FDIC's authority to remove under the statute is unilateral: it does not depend upon the consent of other defendants. To read onto § 1819(b)(2)(B) a requirement that all defendants join in the FDIC's motion for removal would undermine the broad removal power that the statute grants the FDIC. We conclude that the rule of unanimity does not limit the FDIC's unilateral power of removal under § 1819(b)(2)(B). Accord Franklin Nat'l Bank Sec. Litig. v. Andersen, 532 F.2d 842, 846 (2d Cir.1976).

The homeowners argue in the alternative that remand is appropriate...