FDIC v. Keating
| Decision Date | 26 January 1993 |
| Docket Number | No. 92-11969-T.,92-11969-T. |
| Citation | 812 F. Supp. 8 |
| Parties | FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of Vanguard Savings Bank, Plaintiff, v. Paul F. KEATING, et al., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Martine B. Reed, Cooley, Shrair, Alpert, Labovitz & Dambrov, Springfield, MA, for plaintiff.
Philip D. Moran, Salem, MA, for defendants.
The Federal Deposit Insurance Corporation ("FDIC"), cast in the role of plaintiff, seeks to remove this action in which its predecessor in interest has already obtained a favorable judgment in state court. At issue is whether it may do so, given the procedural history of this case.
In February of 1990, Vanguard Savings Bank ("Bank") sued defendants on a promissory note in the Massachusetts Superior Court. Defendants filed a counterclaim sounding in lender liability. The case was tried without a jury on September 25, 1991. On November 18, 1991, judgment was entered for the Bank in the amount of $156,761.14. Defendants' counterclaim was dismissed. Defendants filed a timely notice of appeal on December 11, 1991.1
On March 27, 1992, the Commissioner of Banks for the Commonwealth of Massachusetts declared the Bank insolvent. Shortly thereafter, the FDIC was confirmed as the Bank's Liquidating Agent. The FDIC's motion to substitute the Bank as the plaintiff in this action was allowed by the state court on May 13, 1992. Eighty-nine days later, on August 10, 1992, the FDIC filed a petition for removal to this court pursuant to § 209 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), Pub.L. No. 101-73, 103 Stat. 183, 216 (), and 28 U.S.C. § 1446.2
Standing alone, the entry of judgment by a state trial court does not foreclose the possibility of removal by the FDIC. FIRREA provides that in the event of any appealable judgment, the FDIC as conservator or receiver shall "have all the rights and remedies available to ... the FDIC in its corporate capacity, including removal to Federal court and all appellate rights." 12 U.S.C. § 1821(d)(13)(B)(i) (emphasis added). This provision, however, does not answer the question now before the court — i.e., whether the FDIC may remove an action to federal district court once a notice of appeal has been timely filed in state court.
This court approaches this question mindful of the First Circuit's observation that, "in light of FIRREA's prolixity and lack of coherence, confusion over its proper interpretation is not only unsurprising — it is inevitable." Marquis v. Federal Deposit Ins. Corp., 965 F.2d 1148, 1151 (1st Cir.1992). The portion of FIRREA upon which the FDIC bases its petition for removal reads as follows:
Except as provided in subparagraph (D), the FDIC may, without bond or security, remove any action, suit, or proceeding from a State court to the appropriate United States district court 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.
12 U.S.C. § 1819(b)(2)(B).3
It does not appear that the First Circuit has had occasion to address directly the question of whether this provision authorizes the FDIC to remove a state court appellate proceeding to a federal district court. At first glance, its decision in Putnam v. DeRosa, 963 F.2d 480 (1st Cir. 1992), would seem to provide guidance. In Putnam, the court of appeals entertained an appeal by the National Credit Union Administration Board ("Board") from an adverse state court judgment. Noting that a federal court of appeals "normally does not directly review a state trial court's decision," id. at 483, the court cited 12 U.S.C. § 1789(a)(2) as a "special statute" conferring upon the Board "the right to bring its appeal in federal court." Id.4 It does not appear, however, that the Board's removal was preceded by the filing of a notice of appeal in state court. Accordingly, the court's parenthetical reference to 12 U.S.C. § 1819(b)(2) as a "statute similar to 12 U.S.C. § 1789," id., is not dispositive of the issue presently before this court.
The Fifth Circuit seems to be the only court of appeals to have addressed the FDIC's authority to remove a state court appellate proceeding under FIRREA. In In re Meyerland Co., 960 F.2d 512 (5th Cir.1992) (en banc) (7-5 decision), cert. denied, ___ U.S. ___, 113 S.Ct. 967, 122 L.Ed.2d 123 (1993), the Fifth Circuit held that the language of 12 U.S.C. § 1819(b)(2) allows such removal.5 After considering the three opinions generated by that case,6 this court agrees with the dissenting opinion of Chief Judge Politz and, therefore, is disinclined to accept "the major disruption of federal practices and procedures and the gross intrusion on the state judicial system," id. at 522 (Politz, C.J., dissenting), fostered by the Fifth Circuit majority's interpretation of FIRREA.
It is well established that a case removed from state court enters the federal system in the same posture in which it left the state system. Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers, 415 U.S. 423, 435-36, 94 S.Ct. 1113, 1122, 39 L.Ed.2d 435 (1974) (). Absent specific language in FIRREA to the contrary, logic dictates that FDIC removals be governed by this same principle. Woburn Five Cents Sav. Bank v. Robert M. Hicks, Inc., 930 F.2d 965, 968 (1st Cir. 1991). That being so, the present case arrives here in an appellate posture, given that defendants filed a timely notice of appeal in state court.
If FIRREA were read to authorize removal of defendants' appeal, this court would be faced with two options, neither of which fits neatly within the contours of its established jurisdiction. The first of these would entail exercising appellate jurisdiction and reviewing the state court's judgment on the merits. This court is not persuaded that the language of FIRREA confers upon federal district courts the extraordinary power to review state court decisions.7 As the Supreme Court observed in 1970:
While the lower federal courts were given certain powers in the Judiciary Act of 1789, they were not given any power to review directly cases from state courts, and they have not been given such powers since that time. Only the Supreme Court was authorized to review on direct appeal the decisions of state courts.
Atlantic Coast Line R.R. Co. v. Brotherhood of Locomotive Eng'rs, 398 U.S. 281, 286, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970) (emphasis added). See 28 U.S.C. § 1257 ().
If Congress had intended to confer such a power upon the federal district courts, it most assuredly would have done so explicitly. Even in contexts in which the concerns of comity and federalism are not implicated, grants of appellate jurisdiction to federal district courts are attended by some degree of specificity. See, e.g., 28 U.S.C. § 158(a) (); 28 U.S.C. § 636(c)(4) ().
The second option following removal would be for this court to adopt the state court's judgment as its own, prepare the record, and forward the case to the court of appeals.8 While such a clerical role may seem innocuous enough, it is far from certain that this court has jurisdiction to perform it. The filing of defendants' notice of appeal, which is deemed to have occurred in federal court, was "an event of jurisdictional significance — it conferred jurisdiction on the court of appeals and divested this court of its control over those aspects of the case involved in the appeal." Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58, 103 S.Ct. 400, 402, 74 L.Ed.2d 225 (1982) (per curiam) (emphasis added).
It is true that, even when an appeal is pending from a final judgment, parties may file Rule 60(b) motions directly in the district court, without seeking prior leave from the court of appeals. Puerto Rico v. SS Zoe Colocotroni, 601 F.2d 39, 42 (1st Cir.1979), cert. denied, 450 U.S. 912, 101 S.Ct. 1350, 67 L.Ed.2d 336 (1981). The district court's authority to consider and deny (but not grant) such motions without obtaining leave from the court of appeals is "based on the district court's continuing jurisdiction during an appeal to act in aid of the appeal." Id. at 41 (emphasis added).9
In the present case, however, defendants did not file any post-judgment motions, either here or in state court,10 and the time in which to do so has all but passed. Barring exceptional circumstances apparently not present here, failure to file a Rule 60(b) motion within one year of judgment "is an absolute bar to relief from the judgment." Gonzalez v. Walgreens Co., 918 F.2d 303, 305 (1st Cir.1990) (quoting United States v. Marin, 720 F.2d 229, 231 (1st Cir.1983) (per curiam)). Accordingly, post-judgment motions can no longer forestall the divestiture of this court's jurisdiction.
The majority in In re Meyerland Co. disposed of this jurisdictional issue by analogizing the "rubber-stamping" required by its holding to situations in which federal appellate courts remand cases to district courts with instructions to take a prescribed action. See 960 F.2d at 520 (). But this analogy misses the point, for it is not the perfunctory nature of the district court's proposed role which makes it objectionable. There can be no question that a federal appellate court is constitutionally empowered to remand a case to a lower federal court with instructions to take...
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