Meyerland Co., Matter of

Citation960 F.2d 512
Decision Date13 May 1992
Docket NumberNo. 89-6118,89-6118
PartiesIn the Matter of: MEYERLAND CO., and William M. Adkinson, Debtors. FEDERAL DEPOSIT INSURANCE CORP. as Manager of the FSLIC Resolution Fund as Receiver for Continental Savings Association, Appellant, v. MEYERLAND CO., and William Adkinson, Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Richard J. Osterman, Jr., Atty., F.D.I.C., Walter Clay Cooke, Brown, Maroney & Oaks Hartline, Houston, Tex., for appellant.

Michael L. O'Brien, Houston, Tex., for Meyerland Co.

Daniel Kistler, Robert L. Collins, Shannon M. Sanders, West, Adams, Webb & Allbritton, Houston, Tex., for Adkinson.

Appeal from the United States District Court For the Southern District of Texas.

Before POLITZ, Chief Judge, REYNALDO G. GARZA, KING, GARWOOD, JOLLY, HIGGINBOTHAM, DAVIS, SMITH, DUHE, WIENER, EMILIO M. GARZA, and DeMOSS, Circuit Judges. 1

DUHE, Circuit Judge:

Proceedings Below and Appellate Jurisdiction

Meyerland Co. and William M. Adkinson sued Continental Savings Association ("Continental") for, among other things, usury and fraud in state court. Continental counterclaimed for fraud and breach of contract. The trial court awarded Continental $30,031,089.99 and Adkinson $1,124,109.59 in damages. Meyerland and Adkinson appealed.

After the appeal was filed, the Federal Home Loan Bank Board declared Continental insolvent and appointed the Federal Savings and Loan Insurance Corporation (FSLIC) as receiver. The FSLIC removed to federal district court which remanded on April 21, 1989.

On August 9, 1989, the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), Pub.L. 101-73, 103 Stat. 183, 383, was enacted. The Federal Deposit Insurance Corporation (FDIC) succeeded the FSLIC as the receiver of Continental and the FDIC then removed this case on September 7, 1989 under § 209 of FIRREA (12 U.S.C. § 1819(b)(2)(B)). 2 The district court again remanded and awarded the appellees $2,500 in sanctions.

The FDIC appeals. Although remand orders are generally not appealable, 12 U.S.C. § 1819(b)(2)(C) authorizes an appeal in this case. This appeal presents two issues: (1) whether 12 U.S.C. § 1819(b)(2) authorizes the FDIC to remove a state court appellate proceeding, and (2) whether the district court erred in awarding sanctions.

I. Removal Power Under FIRREA

Congress enacted FIRREA, a broad revision in federal banking law, in response to the recent and ongoing savings and loan crisis. See Meliezer v. Resolution Trust Corp., 952 F.2d 879, 881 (5th Cir.1992); Smallwood v. Office of Thrift Supervision, 925 F.2d 894, 898 (6th Cir.1991). One of the ways FIRREA addresses the problems facing this nation's thrift institutions is through "provisions which expand, enhance and clarify enforcement powers of the financial institution regulatory agencies." H.R.Rep. No. 101-54(I), 101st Cong., 1st Sess. 291, 311, reprinted in 1989 U.S.Code Cong. & Admin.News 86, 107. Specifically, FIRREA greatly expands the FDIC's role in regulating and supervising such institutions. Id. at 310-11, reprinted in 1989 U.S.Code Cong. & Admin.News at 106-07. See also Note, The FDIC's Enhanced Powers Over Savings Associations: Does FIRREA Make It "SAIF"?, 59 Ford.L.Rev. S381, S382 (1991).

This case requires us to examine the extent of the FDIC's powers under FIRREA. At issue are jurisdictional and removal provisions giving the FDIC broad power to gain access to federal courts in actions to which it is a party pursuant to FIRREA. The provisions relating to removal, found in 12 U.S.C. § 1819(b)(2), read as follows:

(A) In general

Except as provided in subparagraph (D), 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.

(B) Removal

Except as provided in subparagraph (D), the Corporation may, without bond or security, remove any such action, suit, or proceeding from a state court to the appropriate United States district court. (emphasis supplied). 3

The power conferred by FIRREA to invoke federal jurisdiction and to remove from state court is substantial. See Carrollton-Farmers Branch Independent School District v. Johnson & Cravens, 889 F.2d 571, 572 (5th Cir.1989); Triland & Holdings & Co. v. Sunbelt Service Corp., 884 F.2d 205, 207 (5th Cir.1989). See also Jameson v. FDIC, 931 F.2d 290, 291 (5th Cir.1991) (FIRREA extends FDIC's jurisdiction to include persons no longer affiliated with insured institutions); FDIC v. Griffin, 935 F.2d 691, 696 (5th Cir.1991) (allowing federal jurisdiction even when FDIC has been voluntarily dismissed as a party), cert. denied, --- U.S. ----, 112 S.Ct. 1163, 117 L.Ed.2d 410 (1992). Access to federal courts in all actions to which it is a party allows the FDIC to develop and rely on a national and uniform body of law, consistent with eliminating the problems identified by Congress in having less rigorous state standards coexisting with federal ones. 4 See Smallwood v. Office of Thrift Supervision, 925 F.2d at 898 ("We read many portions of the FIRREA as establishing the primacy of the Federal interest as regards the solvency and viability of the Federal deposit insurance system.").

In the case before us, first FSLIC and then the FDIC sought removal from state to federal court, FSLIC under 12 U.S.C. § 1730(k)(1) (repealed by FIRREA) and the FDIC under 12 U.S.C. § 1819(b)(2)(B), after a state court judgment had been entered, without seeking relief from judgment under Fed.R.Civ.P. 60, and while the case was on appeal to the appropriate state appellate court. In each case, the federal district court remanded to state court, concluding that neither FIRREA nor 28 U.S.C. §§ 1441-51, the general removal statutes, authorized removal at this stage of the proceedings.

Although it is not clear whether the general removal statutes permit appellate removal, 5 the dissenters rely upon the rule that federal district courts lack jurisdiction to review final state court judgments to support their position that § 1819 does not permit it. Specifically, they rely on District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 476, 103 S.Ct. 1303, 1311, 75 L.Ed.2d 206 (1983), and Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923). Their reliance is misplaced. Under the Rooker- Feldman line of cases, federal statute defines "final state court judgments" as those "rendered by the highest court of a state in which a decision could be had." 28 U.S.C. § 1257(a). The judgment of the Texas state district court is not a "final" judgment within this definition. Two higher courts within the state judiciary could hear appeals. See Market St. Ry. Co. v. Railroad Commission of State of California, 324 U.S. 548, 551, 65 S.Ct. 770, 772, 89 L.Ed. 1171 (1945) (a state judgment is final (1) if it is an effective determination of litigation in that it is not an interlocutory or intermediate judgment and (2) when it is subject to no further review or correction in any other state tribunal). 6

The FDIC directs us to the broad language of § 1819 in arguing that the statute authorizes removal in this case. Under this reasoning, because the statute does not specifically prohibit appellate removal, it authorizes it. Appellees, on the other hand, insist that the language is so broad that the statute is silent on this issue and that the FDIC should not be able to remove cases at this stage of state proceedings. To resolve this issue, we must look to the plain language and meaning of FIRREA, the Constitutional authority of Congress to grant this sort of removal jurisdiction, and whether there is any reason to think that Congress could not have intended this result.

A. Plain Meaning of the Statute.

As in any case requiring statutory construction, the High Court has instructed us to adhere to the plain language of the law unless "literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters." Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 3250, 73 L.Ed.2d 973 (1982). The Supreme Court recently reaffirmed this standard in Demarest v. Manspeaker, which involved 28 U.S.C. § 1821. --- U.S. ----, 111 S.Ct. 599, 112 L.Ed.2d 608 (1991). In Demarest, the Court said, "We do not believe that this is one of those rare cases where the application of the statute as written will produce a result 'demonstrably at odds with the intentions of its drafters.' " Id. 111 S.Ct. at 604. We agree that, on its face, the language of 12 U.S.C. § 1819(b)(2)(B) allows removal at the procedural posture in which this case comes to us. 7 The statute states that the FDIC may "remove any such action, suit, or proceeding from a state court to the appropriate United States district court" (emphasis supplied). The statute's plain language is quite plain: Any action in a state court may be removed. This language does not limit removable actions to those that have not yet reached a state trial court judgment, nor does it limit removable actions to those that come to the federal courts from a specific state court (i.e., from state trial, as opposed to appellate, court). Furthermore, the contrast between the broad "a state court" and the specific "United States district court" within the same sentence strongly suggests that the drafters intended the meaning urged by the FDIC.

Like the Eleventh Circuit, which considered this issue under § 1819(b)'s predecessor statute, we can "discern no reason to confine the interpretation of 'action [from a State court]' to actions that have not reached judgment." In re Savers Federal Savings & Loan Assoc., 872 F.2d 963, 966 (11th Cir.1989). In In re Savers a debtor sued a financial institution in state court claiming as here, breach of contract and fraud and the institution counter-claimed to recover on the debtor's note. After judgment and after denial of post-trial motions for...

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