FDIC v. Keating

• Court: Court of Appeals for the First Circuit
• Decided: December 29, 1993
• Docket: 93-1230
• Status: Published

Opinion

USCA1 Opinion

United States Court of Appeals
                            United States Court of Appeals
                                For the First Circuit
                                For the First Circuit
                                 ____________________
        No. 93-1230

                     FDIC, FEDERAL DEPOSIT INSURANCE CORPORATION
                        AS RECEIVER OF VANGUARD SAVINGS BANK,

                                Plaintiff, Appellant,

                                          v.

                     PAUL KEATING, INDIVIDUALLY; PAUL F. KEATING
                  AS TRUSTEE OF THE PJ THREE REALTY TRUST AND OF THE
                   FOUR "K" TRUST; LUCILLE SAMSON AS TRUSTEE OF THE
                      KELLOGG REALTY TRUST; LUCILLE SAMSON AND 
                         PAULA J. KEATING AS TRUSTEES OF THE
                          111 ALLEN AVENUE REALTY TRUST; AND
                         VICTORIA MUTUAL LIMITED PARTNERSHIP,

                                Defendants, Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. Joseph L. Tauro, U.S. District Judge]
                                            ___________________
                                 ____________________

                                        Before

                                 Stahl, Circuit Judge,
                                        _____________
                            Rosenn,* Senior Circuit Judge,
                                     ____________________
                         and Campbell, Senior Circuit Judge.
                                       ____________________
                                 ____________________

            Daniel  H. Kurtenbach, with whom Ann S.  Duross, Assistant General
            _____________________            ______________
        Counsel and  Richard J. Osterman,  Jr., Senior Counsel, were  on brief
                     _________________________
        for appellant.
            Philip D. Moran for appellees.
            _______________
                                 ____________________

                                  December 29, 1993
                                 ____________________
        ____________________
        *Of the Third Circuit, sitting by designation.

Per  Curiam.   In this  appeal, plaintiff-appellant
                      ___________

            Federal Deposit Insurance Corporation (FDIC) asserts that the

            district court  erred when  it  determined that  12 U.S.C.   

            1819(b)(2)(B) (1988 &  Supp. IV 1992) does  not allow removal

            of a state court proceeding to federal district  court during

            the pendency of a state appeal and after the window for post-

            judgment relief has closed.   See generally FDIC v.  Keating,
                                          ___ _________ ____     _______

            812 F. Supp. 8 (D. Mass. 1993).  We reverse and remand. 

                                          I.
                                          I.
                                          __

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                      On  February   15,  1990,  Vanguard   Savings  Bank

            (Vanguard)  filed suit  in Massachusetts state  court against

            Paul F. Keating and several other individuals and entities to

            collect on  a  promissory  note  signed by  Keating.    After

            Vanguard  foreclosed on the  property securing the  note, the

            case was  tried and,  on November 18,  1991, the  state court

            entered a deficiency judgment.   The parties did not file any

            motions  for post-judgment  relief.   On  December 11,  1991,

            defendants nevertheless filed a notice of appeal.

                      On   March  27,   1992,   the  Massachusetts   bank

            commissioner declared Vanguard  insolvent.  On May  13, 1992,

            the FDIC,  having been  confirmed as  liquidating agent,  was

            substituted   into  the  state  court  case  as  receiver  of

            Vanguard.   On August 10,  1992, the FDIC timely  removed the

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case to the United States  District Court for the District of

            Massachusetts.  See 12 U.S.C.   1819(b)(2)(B). 
                            ___

                      Because no  motions for  post-judgment relief  were

            pending  (nor were  any filed  after  removal), the  district

            court  found itself  in the  somewhat  anomalous position  of

            receiving a case that was  solely appellate in nature.  After

            a   hearing  at  which  the  district  court  questioned  its

            jurisdiction over the case, the court remanded the proceeding

            to state court.   Relying on  the dissent in In  re Meyerland
                                                         ________________

            Co., 960  F.2d 512, 522-26  (5th Cir. 1992) (en  banc), cert.
            ___                                                     _____

            denied, 113 S.  Ct. 967 (1993), the district  court held that
            ______

            12 U.S.C.   1819(b)(2)(B) does not allow removal when a state

            appeal  is pending.   The  court  further held  that, in  any

            event, it lacked jurisdiction because (1) the time for filing

            post-judgment motions under  both state and federal  rules of

            procedure   had   elapsed;1    (2)   the   court's   original

____________________

            1.  The  district court's  finding on  the  unavailability of
            post-judgment  relief  is  not challenged  on  appeal  and we
            therefore decline to review this  aspect of its decision.  We
            note,  however, that  at least  two  circuits have  suggested
            that,  even if  post-judgment relief  is  no longer  possible
            under state procedural rules, the time period for such relief
            under the federal rules  begins on the date of removal.   See
                                                                      ___
            Jackson v. American Sav. Mortgage  Corp., 924 F.2d 195, 199 &
            _______    _____________________________
            n.9  (11th  Cir.  1991) ("[E]ven  if  state  procedural rules
            contain a Rule 59-type motion . . . and removal occurs during
            the running  of the time for such a  motion or after the time
            for such a motion has run, a  party would still have ten days
            after removal  to file a  Rule 59 motion in  federal district
            court."); Resolution Trust  Corp. v. Nernberg, 3 F.3d  62, 68
                      _______________________    ________
            (3d Cir.  1993) (noting  similarity between Resolution  Trust
            and  FDIC removal statutes and establishing circuit rule that
            "[i]n all cases removed to the district  court after judgment

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jurisdiction  does not  include mere  processing  of a  state

            judgment for federal appeal; and  (3) a district court cannot

            exercise appellate  jurisdiction  over a  state trial  court.

            Pursuant to  12 U.S.C.    1819(b)(2)(C) (Supp. IV  1992), the

            FDIC brought this appeal.  See Demars v. First Serv. Bank for
                                       ___ ______    ____________________

            Sav., 907  F.2d  1237,  1241 (1st  Cir.  1990)  (noting  that
            ____

            section  1819(b)(2)(C) creates  an exception  to the  general

            rule against appellate review of remand orders).

                                         II.
                                         II.
                                         ___

                                      DISCUSSION
                                      DISCUSSION
                                      __________

                      Our review of a district court's interpretation  of

            a  statute, a  pure  question  of  law, is  plenary;  however

            reasonable  the district  court's decision,  we  are free  to

            exercise  our independent  judgment.   See  United States  v.
                                                   ___  _____________

            Barker  Steel Co.,  Inc., 985  F.2d 1123,  1125-26  (1st Cir.
            ________________________

            1993).  In so doing, we must first decide whether 12 U.S.C.  

            1819(b)(2)(B) permits  removal  of cases  already  tried  and

            awaiting  appeal  in  state  court.   If  so,  we  must  then

            determine  the proper role  of the district  court when post-

            judgment relief is no longer available.

                      1.  Removal
                      1.  Removal
                      ___________

____________________

            has been  entered by a  state court, the parties  may, within
            thirty  days of the date the case is docketed in the district
            court,  file   motions  to   alter,  modify,   or  open   the
            judgment.").

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Both  the plain language of the statute and circuit

            precedent  support removal in this case.  Congress authorized

            the FDIC  to "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).   While post-judgment  removal may not  be the

            statutory  norm, Congress  did  not  limit  removal  in  this

            instance to any particular phase of a state court proceeding.

            Cf. 12 U.S.C.   632 (1988 &  Supp. IV 1992) (limiting removal
            ___

            by  Federal  Reserve  member  bank  to  "anytime  before  the

            trial").  Nor may the  judicial branch impose such a limiting

            interpretation  where, as  here,  the  statutory language  is

            unambiguous  on its face and  the result is not "demonstrably

            at odds  with the  intentions of its  drafters."   Griffin v.
                                                               _______

            Oceanic  Contractors, Inc.,  458 U.S.  564, 571 (1982).   See
            __________________________                                ___

            also  Estate  of  Kaw v.  Commissioner,  Me.  Dep't of  Human
            ____  _______________     ___________________________________

            Servs., 951 F.2d 444, 445 (1st Cir. 1991) ("`When we find the
            ______

            terms  of   [a]  statute  unambiguous,  judicial  inquiry  is

            complete  except  in rare  and  exceptional circumstances.'")

            (quoting Rubin v. United States, 449 U.S. 424, 430 (1981) and
                     _____    _____________

            Paris v. Department of Hous. & Urban Dev., 843 F.2d 561,  569
            _____    ________________________________

            (1st Cir. 1988)).

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In  any event, we  believe that the  result in this

            case  is  controlled by  our  recent  decision in  Putnam  v.
                                                               ______

            DeRosa, 963 F.2d 480 (1st  Cir. 1992).  In Putnam, after  the
            ______                                     ______

            completion of  a state trial  and the filing  of a notice  of

            appeal,2 the  National  Credit  Union  Administration  (NCUA)

            became conservator for  one of the defendants and removed the

            case to federal court.   See id. at 483.  In noting that "[a]
                                     ___ ___

            special  statute [12 U.S.C.   1789(a)(2) (1988)] gives [NCUA]

            the right to bring this appeal in federal court," we also had

            occasion to  observe that  section 1789(a)(2)  is similar  to

            section 1819(b)(2).  Id.  We continue  to be impressed by the
                                 ___

            mutual  resemblance of the two removal statutes, and conclude

            that section 1819(b)(2)  gives FDIC the right  to remove this

            case to federal court.

                      Perhaps, as the district court opined, removal of a

            state appellate proceeding  is offensive to state  courts and

            unnecessary  for  the  achievement  of  legislative   goals.3

            Indeed, we are not as  confident as the Eleventh Circuit that

            "Congress  itself  has weighed  interests  of federalism  and

            comity" in granting appellate removal  power to the FDIC.  In
                                                                       __

____________________

            2.   Our research confirms that  a state notice of appeal was
            filed in  Putnam despite the  omission of this fact  from our
                      ______
            published opinion in that case.

            3.    The type  of reflexive  removal  apparent in  this case
            strikes us  as particularly  wasteful of  scant economic  and
            judicial  resources.  After  all, the FDIC's  predecessor was
            fully victorious at trial and received all the relief sought.

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re  Savers Fed. Sav.  & Loan Ass'n,  872 F.2d 963,  966 (11th
            __________________________________

            Cir.  1989)  (per curiam)  (analyzing predecessor  to current

            FDIC  removal statute).   Nevertheless, Congress  has clearly

            stated  in section  1819(b)(2)  that  "any  action,  suit  or

            proceeding"  is removable.   Accordingly, we join  with every

            other  circuit that has  addressed the statutory  language at

            issue in holding that the pendency of a state appeal does not

            bar  removal under  12 U.S.C.     1819(b)(2).   Accord In  re
                                                            ______ ______

            Meyerland Co., 960 F.2d at 517; In re Savers Fed. Sav. & Loan
            _____________                   _____________________________

            Ass'n, 872 F.2d at 966; cf.  Nernberg, 3 F.3d at 67  (holding
            _____                   ___  ________

            that 12 U.S.C.   1441a(l)(3)(A)  (Supp. IV 1992), the removal
                                   _

            statute  for  Resolution  Trust   Corporation,  identical  in

            relevant part to  the FDIC removal provision,  allows removal

            while  state appeal is  pending); Lester v.  Resolution Trust
                                              ______     ________________

            Corp., 994 F.2d  1247, 1251-52 (7th Cir. 1993)  (same); In re
            _____                                                   _____

            5300 Memorial Investors, Ltd., 973 F.2d 1160,  1162 (5th Cir.
            _____________________________

            1992) (same); Ward v.  Resolution Trust Corp., 972 F.2d  196,
                          ____     ______________________

            198 (8th Cir. 1992) (similar),  cert. denied, 113 S. Ct. 1412
                                            _____ ______

            (1993).

                      2.  The Role of the District Court
                      2.  The Role of the District Court
                      __________________________________

                      Where, as  in this appeal, post-judgment  relief is

            no  longer available,4  the district  court  shall adopt  the

____________________

            4.   Without deciding the question, we assume that, following
            removal,  a district court could entertain timely motions for
            post-judgment relief  despite the  fact that  the trial  took
            place  elsewhere.   Cf.  Nernberg,  3  F.3d at  68  (allowing
                                ___  ________
            district court to accept motions to alter, modify or open the

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decision of the state court as its own, prepare the record as

            required  for appeal,  and forward  the case  to the  federal

            appeals court for  review.  Accord In re  Meyerland, 960 F.2d
                                        ______ ________________

            at 520.5

                      Echoing the district court's memorandum, defendants

            suggest that the minimal nature of this clerical role for the

            district   court  indicates  the   absence  of  a   "case  or

            controversy,"  a  necessary  predicate  to  the  exercise  of

            federal jurisdiction under  Article III of the  Constitution.

            See, e.g., Vote Choice, Inc. v. DiStefano, 4 F.3d 26, 36 (1st
            ___  ____  _________________    _________

            Cir. 1993).  We find this argument unpersuasive.  Despite the

            lack  of  post-judgment  motions for  the  district  court to

            decide,  this case  arrives  at  the  federal  doorstep  with

            "`questions  presented in an adversary context  and in a form

            historically  viewed as  capable  of  resolution through  the

            judicial process.'"  Santa Maria v. Owens-Illinois, Inc., 808
                                 ___________    ____________________

            F.2d 848,  851 n.5 (1st  Cir. 1986) (quoting Flast  v. Cohen,
                                                         _____     _____

            392 U.S. 83, 95 (1968)).  A contested appeal of a state court

            decision  is  clearly  a "case  or  controversy"  amenable to

____________________

            state court judgment).

            5.   In  theory, a  party need  not file a  second notice  of
            appeal in federal court if  the original notice of appeal was
            adequate in  the state  court system.   In re  Meyerland, 960
                                                    ________________
            F.2d  at 520 (citing Granny Goose  Foods, Inc. v. Brotherhood
                                 _________________________    ___________
            of Teamsters, 415  U.S. 423, 435-36 (1974)).   In practice, a
            ____________
            party should do  so as filing an additional  notice of appeal
            would facilitate the administrative processing of the case in
            the federal system.

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                                          8

judicial  intervention.    The jurisdictional  boundaries  of

            Article  III --  which does  not  itself create  distinctions

            among the "inferior Courts" to be established by Congress  --

            do not  prevent a bona  fide dispute from reaching  a federal

            appeals court  simply because  the district  court's role  is

            limited by the  awkward posture of a case  removed during the

            pendency of a state appeal.  

III.
                                         III.
                                         ____

                                      CONCLUSION
                                      CONCLUSION
                                      __________

                      For  the foregoing reasons, we reverse the judgment

            of the district court, vacate the order remanding the case to

            the state  court, and remand  the case to the  district court

            for proceedings consistent with this opinion.

                      So ordered.
                      So ordered
                      __________

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