Costin Engineering Consultants, Inc. v. Latham

905 F. Supp. 861, 1995 U.S. Dist. LEXIS 17239, 1995 WL 684562
CourtDistrict Court, D. Colorado
DecidedNovember 15, 1995
DocketCiv. A. No. 95-D-2127
StatusPublished
Cited by1 cases

This text of 905 F. Supp. 861 (Costin Engineering Consultants, Inc. v. Latham) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Costin Engineering Consultants, Inc. v. Latham, 905 F. Supp. 861, 1995 U.S. Dist. LEXIS 17239, 1995 WL 684562 (D. Colo. 1995).

Opinion

MEMORANDUM OPINION and ORDER

DANIEL, District Judge.

Having reviewed the file and considered relevant case law, plaintiffs Motion to Remand, filed September 12, 1995, is hereby DENIED for the reasons discussed below.

Plaintiff originally commenced this action by filing a Complaint in the District Court of the County of Adams, State of Colorado, on May 3, 1995. The Federal Deposit Insurance Corporation (FDIC), as receiver for Sil-verado Banking, Savings and Loan Association, was one of the named defendants in plaintiffs original Complaint. The FDIC, however, was never served with plaintiffs original Complaint. On May 31, 1995, plaintiff filed its First Amended Complaint, and the FDIC was served with the First Amended Complaint on July 18, 1995. Thereafter, on August 17, 1995, the FDIC removed the action to this Court under 12 U.S.C. § 1819(b)(2)(B), which provides:

Except as provided in subparagraph (D), the Corporation 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 Corporation or the Corporation is substituted as a party.

Plaintiff now contends that the action should be remanded to Colorado state court, arguing that the FDIC’s removal petition was untimely. More precisely, plaintiff argues that under the statute cited above, the FDIC had 90 days to remove the action from May 3,1995, the day plaintiff filed its original Complaint.

The plaintiff essentially contends that, even though the FDIC was never served with the original Complaint and was only served with the First Amended Complaint on July 18, 1995, the 90-day period for the FDIC to remove the case began to nonetheless run when it filed its original Complaint on May 3,1995. Put another way, plaintiff in effect contends that it can reduce, or perhaps even eliminate, the period in which the FDIC can remove an action filed in state court by filing a complaint and not serving it until the time for removal has expired. In response, the FDIC argues that its statutory 90-day window begins to run from the time it was served, or July 18, 1995, in this instance.

Apparently, this case presents an issue of first impression — that is, no published decision has considered whether a party can diminish or eliminate the FDIC’s 90-day removal right by withholding service of process. However, legislative history, case law, and most importantly, common sense, all dictate that plaintiffs argument must be rejected.

Tracing the history of 12 U.S.C. § 1819(b)(2)(B) [henceforth “the statute] is quite telling. Prior to 1991, the statute, which governs the removal of cases by the FDIC, provided as follows:

Except as provided in subparagraph (D), the Corporation may, without bond or se[863]*863curity, remove any action, suit, or proceeding from State court to the appropriate United States district court.

Although the statute did not provide a specific time period for removal of an action, courts interpreting it read the general 30-day removal requirement of 28 U.S.C. § 1446(b) into it, which meant that it began to run from the date the FDIC received a copy of a pleading, motion, order, or other paper from which it might ascertain that the case was removable.1 See, e.g., Lazuka v. FDIC, 931 F.2d 1530, 1537 (11th Cir.1991) (“Under the general removal provision, the thirty-day limit begins to run as soon as the defendant receives some written notice that the case against it is removable.”); Mtech Corp. v. FDIC, 729 F.Supp. 1134, 1135 (N.D.Tex.1990) (same).

However, by all indications, Congress amended the statute in 1991 in order to extend the removal period to 90 days, rather than the 30-day period that courts had read into the statute. As indicated by the House Banking Committee Report — which states that the “FDIC Removal Period [is] Made Consistent With [the] RTC Period” — the 1991 amendment is in harmony with the general congressional policy of providing the FDIC with every opportunity to litigate in a federal forum.2 See, e.g., Kirkbride v. Continental Casualty Co., 933 F.2d 729, 731 (9th Cir.1991) (stating that adoption of FIRREA was intended to expand federal jurisdiction when the FDIC is a party); Lazuka, 931 F.2d at 1535 (stating that in adopting the statute “Congress used very strong language to afford the FDIC every possibility of having a federal forum within the limits of Article III [of the Constitution]”).

As persuasively argued by the FDIC in its brief,

In order to avoid frustrating the clear Congressional purpose of granting the FDIC the opportunity to litigate in federal court, the 90-day time period set forth in § 1819(b)(2)(B) should be deemed to begin running only as of the date on which the FDIC is effectively joined to the proceeding through service of process. Such an interpretation would be consistent with the language of the statute providing that the 90-day period begins to run from the date the action, suit, or proceeding is filed “against” the Corporation. Until the FDIC is served with the complaint, the state court may not exercise jurisdiction over it and, accordingly, there is no action, suit, or proceeding “against” it. Such an interpretation also would be consistent with the prior practice under § 1819(b)(2)(B), the practice under the RTC’s closely-analogous removal provision, as well as the practice under the general removal provisions of 28 U.S.C. § 1446(b). See Lazuka, 931 F.2d at 1536-37. Adopting the plaintiff’s interpretation that the 90-day period for removal begins to run from the filing of the complaint, even though the FDIC is not served with the complaint, would be contrary to Congress’ clear policy of providing the FDIC with a federal forum. It is inconceivable that Congress’ intended to permit private parties [the opportunity] to abrogate the FDIC’s right to choose a federal forum: under plaintiffs interpretation, it could file a complaint and delay service for 90 days, [864]*864thereby denying the FDIC all right to remove the case to federal court.

Though deciphering Congress’ intent can sometimes be difficult, in this instance the FDIC is correct: all clues indicate that in amending 12 U.S.C. § 1819(b)(2)(B) in 1991, Congress expanded the FDIC’s ability to remove a ease to federal court. Even assuming the fact pattern now presented occurred pre-amendment, the FDIC would have timely removed this action since it filed its removal notice within 30 days of being served.3

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905 F. Supp. 861, 1995 U.S. Dist. LEXIS 17239, 1995 WL 684562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/costin-engineering-consultants-inc-v-latham-cod-1995.