Heaton v. Monogram Credit Card Bank of Georgia

Decision Date08 July 2002
Docket NumberNo. 01-30104.,01-30104.
Citation297 F.3d 416
PartiesPatricia HEATON, Plaintiff-Appellee, v. MONOGRAM CREDIT CARD BANK OF GEORGIA, Defendant, v. Federal Deposit Insurance Corporation, Movant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Louis L. Plotkin (argued), Meyer H. Gertler, Gertler, Gertler, Vincent & Plotkin, Todd Robert Slack, Gainsburgh, Benjamin, David, Meunier & Warshauer, New Orleans, LA, for Plaintiff-Appellee.

Gene W. Lafitte, Sr. (argued), Liskow & Lewis, New Orleans, LA, Barbara Reesa Sarshik, FDIC, Washington, DC, for Movant-Appellant.

Jesse R. Adams, Jr., Adams, Hoefer, Holwadel & Eldridge, New Orleans, LA, for Amici Curiae Conference of State Bank Supervisors and Georgia Dept. of Banking and Finance.

Daniel M. Formby, State of Georgia Dept. of Law, Atlanta, GA, for Georgia Dept. of Banking and Finance, Amicus Curiae.

Kimberly A. Kralowec, Severson & Werson, San Francisco, CA, for American Financial Services Ass'n, American Bankers Ass'n and Consumer Bankers Ass'n, Amici Curiae.

Colvin G. Norwood, Jr., David S. Willenzik, McGlinchey Stafford, New Orleans, LA, Jerold Sherwin Solovy, Jenner & Block, Chicago, IL, Paul March Smith, Jenner & Block, Washington, DC, Alan S. Kaplinsky, Ballard, Spahr, Andrews & Ingersoll, Philadelphia, PA, for Monogram Credit Card Bank of Georgia, Amicus Curiae.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before JONES, EMILIO M. GARZA and STEWART, Circuit Judges.

EDITH H. JONES, Circuit Judge:

Like an earlier appeal, Heaton v. Monogram Credit Card Bank of Georgia, 231 F.3d 994 (5th Cir.2000), this appeal is from an order remanding this case to state court for lack of subject matter jurisdiction. The main issues in this appeal are (1) whether appellate jurisdiction exists to review the district court's refusal to allow the Federal Deposit Insurance Corporation (FDIC) to intervene as of right in the action; (2) if so, whether the district court erred in denying intervention; (3) whether this court has jurisdiction to review the district court's remand order; and (4) if so, whether the district court erred in remanding. Because of the important role that the FDIC plays in enforcing federal banking laws, as evidenced by its broad jurisdictional statute, we answer all four of these questions in the affirmative and reverse the district court's orders denying the intervention motion as moot and remanding to state court.

BACKGROUND

Patricia Heaton brought a class action suit against Monogram Credit Card Bank of Georgia in Louisiana state court alleging violations of state usury laws. Monogram removed the case to federal district court on the ground that Heaton's claims under Louisiana law were completely preempted by section 27 of the Federal Deposit Insurance Act (FDIA), 12 U.S.C. § 1831d. That provision authorizes federally insured "State banks" to charge certain interest rates and fees and preempts state laws to the contrary. 12 U.S.C. § 1831d(a); Heaton, 231 F.3d at 995-96. According to the FDIC, Monogram is "engaged in the business of receiving deposits" and is thus a "State bank" pursuant to § 1813(a)(2) of the same statute. If Heaton's claims were completely preempted, the district court had federal question jurisdiction over the claims and the case as pled. See, e.g., Hart v. Bayer Corp., 199 F.3d 239, 244 (5th Cir.2000); McClelland v. Gronwaldt, 155 F.3d 507, 512 & n. 12, 516-17 (5th Cir.1998); Krispin v. May Dep't Stores Co., 218 F.3d 919, 922 (8th Cir.2000).1

Heaton moved to remand, but her motion was initially denied. The case was assigned to another district judge. Heaton amended her complaint to add a claim under the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601-1667f. Later, she sought reconsideration of the court's denial of her motion to remand (and moved to dismiss the TILA claim). The FDIC attempted to intervene in the case as a party defendant either as of right or permissively pursuant to Fed.R.Civ.P. 24(a) or (b). On the day the FDIC's motion was filed, the district court remanded for lack of jurisdiction and dismissed the TILA claim. Two days later, a magistrate judge denied the FDIC's intervention motion as moot.

Monogram appealed the remand order to this court, and the FDIC participated in the appeal as an amicus curiae. This court held that it lacked jurisdiction over Monogram's appeal of the remand order, but reinstated Heaton's TILA claim, holding that once the district court remanded the case, it lacked jurisdiction to dismiss the claim. Heaton, 231 F.3d at 1000 & n. 6. This court acknowledged that because of its reinstatement of the TILA claim, "Monogram may file another petition for removal based on the TILA claim once this case is returned to state court." Id. at 1000 n. 6.

Within a day of this court's decision, Monogram again removed the case to federal court, and the FDIC immediately filed a second motion to intervene. Unbeknownst to Monogram and the FDIC, however, Heaton had already obtained an ex parte state court order dismissing her TILA claim. Consequently, Heaton moved to remand; the district court complied, stating that it lacked jurisdiction. The court rejected Monogram's complete preemption argument for federal jurisdiction, concluding that Monogram was not "engaged in the business of receiving deposits" and thus was not a "State bank" within the meaning of § 1813(a)(2). In its order remanding the case, the court stated that it was dismissing as moot the FDIC's motion to intervene. The FDIC has appealed.

DISCUSSION

That the FDIC rather than Monogram has appealed makes all the difference on this second run-through. In the first instance, the effective denial of the FDIC's motion to intervene may be reviewed by this court notwithstanding the remand order according to City of Waco v. United States Fid. & Guar. Co., 293 U.S. 140, 55 S.Ct. 6, 79 L.Ed. 244 (1934). The district court erred in refusing to allow the FDIC to intervene as of right. And while a remand order based on lack of jurisdiction cannot normally be appealed from, 28 U.S.C. § 1447(d), the FDIC is granted a statutory exemption from that provision under the circumstances applicable here. 12 U.S.C. § 1819(b)(2)(C). Finally, the remand order was wrong because the FDIC was entitled to intervene in the case, conferring instant federal subject matter jurisdiction under the broad rubric of 12 U.S.C. § 1819(b)(2)(A) ("all suits of a civil nature at common law or in equity to which the Corporation, in any capacity, is a party shall be deemed to arise under the laws of the United States").

I.

Under the City of Waco rule, "we may review any aspect of a judgment containing a remand order that is `distinct and separable from the remand proper'" even if this court lacks jurisdiction to review the remand order. First Nat'l Bank v. Genina Marine Servs., Inc., 136 F.3d 391, 394 (5th Cir.1998) (citation omitted). See Arnold v. State Farm Fire and Cas. Co., 277 F.3d 772, 776-77 (5th Cir.2001). According to City of Waco, certain "separable" orders that (1) logically precede a remand order and (2) are conclusive, in the sense of being functionally unreviewable in state courts, can be reviewed on appeal even when the remand order cannot be. Arnold, 277 F.3d at 776. These orders must also be independently reviewable by means of devices such as the collateral order doctrine. Id. Because the district court's denial of the intervention motion satisfies these requirements, it is reviewable under City of Waco.

First, the denial of intervention preceded the district court's remand decision in logic and in fact. The remand decision was necessarily predicated on the court's refusal to consider the jurisdictional significance of the motion to intervene. This court's decision in FDIC v. Loyd, 955 F.2d 316 (5th Cir.1992), had been cited to the district court to demonstrate that it had subject matter jurisdiction over Heaton's case under 12 U.S.C. § 1819(b)(2)(A) as soon as the FDIC filed its motion to intervene.2 Moreover, during a hearing on the remand and intervention motions, the district court acknowledged that the two questions were conceptually intertwined;3 the court also observed that Heaton's motion to remand would become moot if the court granted the FDIC's intervention motion first. The court went on to make clear that it did not favor the intervention motion on the merits.4 In these circumstances, the court's action effectively denied the motion to intervene in a way that preceded its decision on jurisdiction both in logic and in fact.5

Second, the denial of intervention was conclusive. Our precedent holds that decisions on joinder of a party are "separable" — and, therefore, conclusive — for City for Waco purposes.6 A decision on the propriety of intervention is indistinguishable from a joinder decision for these purposes.

Finally, the denial of intervention was an appealable collateral order. Edwards v. City of Houston, 78 F.3d 983, 992 (5th Cir.1996) (en banc); Sierra Club v. City of San Antonio, 115 F.3d 311, 313 (5th Cir.1997). In sum, the denial is reviewable on appeal.

II.

The district court erred on the merits in refusing to allow the FDIC to intervene. A district court's denial of a motion to intervene as a matter of right is reviewed de novo, except that the abuse of discretion test is applied to the court's ruling on timeliness of the prospective intervenor's application. John Doe No. 1 v. Glickman, 256 F.3d 371, 375 (5th Cir.2001); Sierra Club v. City of San Antonio, 115 F.3d at 314; Edwards, 78 F.3d at 995, 999-1000. Although the district court issued no written findings on the propriety of the FDIC's intervention, it made oral statements that seem to bear on the timeliness issue. Assuming arguendo that this aspect of the court's decision is reviewed for abuse of discretion, we hold that the court abused its discretion.

Intervention as of right under Rule 24(a)(2) is based on "four...

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