Warren Lokey v. FDIC

• Court: Court of Appeals for the Eleventh Circuit
• Decided: August 16, 2013
• Docket: 12-12299
• Status: Published

Opinion

Case: 12-12015 Date Filed: 08/16/2013 Page: 1 of 30

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 12-12015 ________________________

D.C. Docket No. 4:11-cv-00147-BAE-GRS

STEPHANIE LINDLEY,

Plaintiff-Appellant,

versus

FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of the business and property of Darby Bank & Trust Company, et al., DRAYPROP, LLC, et al.,

Defendants-Appellees.

________________________

No. 12-12290 ________________________

D.C. Docket No. 4:11-cv-00143-WTM-GRS

ROBERT M. OSBORNE, JR., DONNA OSBORNE, et al., Case: 12-12015 Date Filed: 08/16/2013 Page: 2 of 30

Plaintiffs-Appellants- Cross-Appellees,

FEDERAL DEPOSIT INSURANCE CORPORATION As receiver of the business and property of Darby Bank & Trust Company, et al.,

Defendants-Appellees,

DRAYPROP, LLC, DRAYPARK, LLC, et al.,

Defendants-Appellees Cross-Appellants. ________________________

No. 12-12292 ________________________

D.C. Docket No. 4:11-cv-00144-WTM-GRS

DON REINKE, RESTORE SAVANNAH DEVELOPEMENT, LLC,

Plaintiffs-Appellants Cross Appellees,

DARBY BANK & TRUST CO., et al.,

Defendants-Appellees Cross Appellees,

Defendants-Appellees Cross Appellants. 2 Case: 12-12015 Date Filed: 08/16/2013 Page: 3 of 30

No. 12-12297 ________________________

D.C. Docket No. 4:11-cv-00172-WTM-GRS

JIM HUNT, trading as the Hunt Club Clothiers,

Plaintiff-Appellant Cross Appellee,

FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of the business and property of Darby Bank & Trust Company, et al.,

Defendants Cross Appellees,

DRAYPROP, LLC, MICHAEL BROWN, et al.,

Defendants-Appellees Cross Appellants.

No. 12-12299 ________________________

D.C. Docket No. 4:11-cv-00146-WTM-GRS

WARREN LOKEY,

3 Case: 12-12015 Date Filed: 08/16/2013 Page: 4 of 30

FEDERAL DEPOSIT INSURANCE CORPORATION, As receiver of the business and property of Darby Bank & Trust Co.,

Defendant-Appellee,

Defendants-Appellees- Cross Appellants.

No. 12-12359 ________________________

D.C. Docket No. 4:11-cv-00171-WTM-GRS

HARRIS BAKING COMPANY, formerly known as Regency Baking Company,

Defendants-Appellees- Cross Appellee,

4 Case: 12-12015 Date Filed: 08/16/2013 Page: 5 of 30

Appeals from the United States District Court for the Southern District of Georgia ________________________

(August 16, 2013)

Before MARTIN and FAY, Circuit Judges, and GOLDBERG, * Judge.

MARTIN, Circuit Judge:

This is a consolidated appeal of six orders from the Southern District of

Georgia denying motions for remand to state court, granting summary judgment to

the FDIC on federal claims, and refusing to exercise supplementary jurisdiction

over remaining state law claims against other defendants. After careful review,

and having had the benefit of oral argument, we affirm the District Court’s denial

of remand and award of summary judgment to the FDIC. However, we reverse the

District Court’s dismissal of the remaining claims against the non-FDIC

defendants.

I. BACKGROUND AND PROCEDURAL HISTORY

The original plaintiffs in this action are various parties (Tenants) that

independently leased or purchased floor space in the Drayton Tower building in

* Honorable Richard W. Goldberg, United States Court of International Trade Judge, sitting by designation. 5 Case: 12-12015 Date Filed: 08/16/2013 Page: 6 of 30

Savannah, Georgia.1 When funding for renovation of Drayton Tower dried up, the

Tenants each brought their own lawsuit against Darby Bank & Trust (Darby

Bank)2 and various real estate developers and contractors—including cross-

appellants Drayprop LLC, Draypark LLC, Michael Brown, Reuben Croll, and

Marley Management, Inc. (collectively, the Drayprop Defendants) 3—in the State

Court of Chatham County, Georgia. These actions alleged negligent

misrepresentation, fraud, breach of contract, and breach of warranty. In November

2010, the Georgia Department of Banking and Finance closed Darby Bank, took

possession of it, and appointed the FDIC as receiver.

Against Darby Bank (now the FDIC), the Tenants alleged fraud and

negligent misrepresentation based on statements made about when funds would be

made available for renovation of Drayton Tower. The Tenants point to a letter

dated May 20, 2005, written by Darby Bank Vice President Salita Hill on bank

letterhead, and addressed to the Drayton Tower Condominium Association (Hill

Letter). Among other things, the Hill Letter says that “for the refurbishing of

1 The Tenants are: Stephanie Lindley (appellant in Appeal No. 12-12015); Robert M. Osborne, Jr., et al. (cross-appellants in Appeal No. 12-12290); Don Reinke, et al. (cross-appellants in Appeal No. 12-12292); Jim Hunt (cross-appellant in Appeal No. 12-12297); Warren Lokey (cross-appellant in Appeal No. 12-12299); and Harris Baking Company (cross-appellant in Appeal No. 12-12359). 2 This is not the first time we have grappled with legal issues stemming from Darby Bank’s failure. E.g., FDIC v. N. Savannah Props., LLC, 686 F.3d 1254 (11th Cir. 2012). 3 The Drayprop Defendants are appellants in all of these appeals other than Appeal No. 12- 12015. 6 Case: 12-12015 Date Filed: 08/16/2013 Page: 7 of 30

Drayton Towers . . . . Darby Bank & Trust Company will guarantee the availability

of funds up to the amount of $1,500,000.00.” The Hill Letter was not counter-

signed by any party. Neither was it presented to, or approved by, Darby Bank’s

board of directors (or anybody else at Darby Bank, for that matter). The Tenants

never confirmed the veracity of the Hill Letter with anyone at Darby Bank, nor did

they enter into any formal agreements with Darby Bank. Instead, their “allegations

against Darby Bank are predicated [solely] upon [the Hill Letter].”

Against the Drayprop Defendants, the Tenants alleged fraud and negligent

misrepresentation based on statements about when renovations to Drayton Tower

would be finished, and breach of contract based on the Drayprop Defendants’

failure to finish the work by the dates promised.

After Darby Bank’s failure, the FDIC was substituted as a party for Darby

Bank in each of the Tenants’ lawsuits. The FDIC then removed each case to the

U.S. District Court under 12 U.S.C. § 1819(b)(2)(B). The Tenants each moved for

remand, citing a limited exception to the FDIC’s removal authority for cases in

which “only the interpretation of the law of [the] State is necessary” to the

disposition. 12 U.S.C. § 1819(b)(2)(D). The FDIC opposed the motions for

remand, and moved for summary judgment in each case, arguing that beyond the

state law issues presented, federal law compelled dismissal under §§ 1823(e) and

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1821(d)(9)(A), and the D’Oench Doctrine.4 See D’Oench, Duhme & Co. v. FDIC,

315 U.S. 447, 62 S. Ct. 676 (1942).

In each case, the District Court agreed with the FDIC and, over the Tenants’

objections, denied the motions for remand and dismissed all claims against the

FDIC. Then, assuming that it lacked original jurisdiction over the Tenants’

pendent state law claims against the Drayprop Defendants, the District Court

declined to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c)(3), and

dismissed these claims as well. These appeals followed. After each serving

individual notices of appeal, the Tenants filed a “Joint Motion to Consolidate

Appeals,” which was granted. The Tenants’ appeals are now consolidated “for all

purposes.”

II. DISCUSSION

The Tenants raise two issues on appeal. First, they argue that the District

Court was wrong to deny their motions for remand to Georgia state court on the

ground that it lacked jurisdiction over their state law claims. Second, they say that

even if the District Court had jurisdiction over their claims against the FDIC, it was

wrong for a number of reasons when it granted the FDIC’s motions for summary

judgment. In their cross-appeal, the Drayprop Defendants raise a third issue. The

4 “The D’Oench decision is the origin of the rule that, in a suit against the maker of a note by a federal deposit insurer, the maker is not allowed to raise a secret agreement between the maker and the payee bank as a defense.” Bufman Org. v. FDIC, 82 F.3d 1020, 1023 (11th Cir. 1996). 8 Case: 12-12015 Date Filed: 08/16/2013 Page: 9 of 30

Drayprop Defendants now argue that after granting summary judgment to the

FDIC, the District Court should not have dismissed the pendent state law claims.

They point to § 1819(b)(2)(A)—the FDIC jurisdictional statute—to say that the

District Court “ha[d] original jurisdiction over [the remaining] state law claims

against non-FDIC defendants [even] after the FDIC [was] dismissed from the

case.”

We address each argument in turn. “We review de novo whether a district

court had federal subject matter jurisdiction following removal.” Castleberry v.

Goldome Credit Corp., 408 F.3d 773, 780–81 (11th Cir. 2005). We also review a

District Court’s grant of summary judgment de novo, considering the evidence in

the light most favorable to the nonmoving party. Iberiabank v. Beneva 41-I, LLC,

701 F.3d 916, 921 (11th Cir. 2012). “Summary judgment is appropriate when

there is no genuine issue of material fact and the evidence compels judgment as a

matter of law in favor of the moving party.” Id.; Fed. R. Civ. P. 56(a). Finally, we

review questions of subject matter jurisdiction and statutory interpretation de novo.

Holston Invs., Inc. B.V.I. v. LanLogistics Corp., 677 F.3d 1068, 1070 (11th Cir.

2012) (“Whether a court has subject-matter jurisdiction to hear a matter is a

question of law that we review de novo.”), cert. dismissed, 133 S. Ct. 499 (2012);

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Rine v. Imagitas, Inc., 590 F.3d 1215, 1222 (11th Cir. 2009) (“The interpretation

of a statute is a question of law subject to de novo review.”).5

A. THE DISTRICT COURT’S DENIAL OF THE TENANTS’ REQUESTS FOR REMAND

The Tenants first argue that the District Court erred in denying their motions

to remand because the District Court lacked jurisdiction over their claims. “Only

state-court actions that originally could have been filed in federal court may be

removed to federal court by the defendant.” Caterpillar Inc. v. Williams, 482 U.S.

386, 392, 107 S. Ct. 2425, 2429 (1987). The corollary to this rule is that absent

diversity of citizenship, the only basis for removal is “when a federal question is

presented on the face of the plaintiff’s properly pleaded complaint.” Id. A case

that has been removed to federal court “shall be remanded” “[i]f at any time before

final judgment it appears that the district court lacks subject matter jurisdiction.”

28 U.S.C. § 1447(c); see also Gravitt v. Sw. Bell Tel. Co., 430 U.S. 723, 723–24,

97 S. Ct. 1439, 1440 (1977) (per curiam).

5 Typically a District Court’s decision not to exercise supplemental jurisdiction over pendent state law claims is reviewed for abuse of discretion. Engelhardt v. Paul Revere Life Ins. Co., 139 F.3d 1346, 1351 n.4 (11th Cir. 1998). However, “[t]o the extent that the court’s decision was based on conclusions of law, we review the legal conclusions de novo.” Id. Here, the District Court expressly declined to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c)(3), which provides that a “district court[] may decline to exercise supplemental jurisdiction over a claim . . . if . . . the district court has dismissed all claims over which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3). Thus, although the District Court did not expressly say so, once it had dismissed the FDIC, it necessarily determined that it lacked original jurisdiction over the Tenants’ remaining claims against the Drayprop Defendants. This was a legal determination warranting de novo review on appeal. Holston Invs., 677 F.3d at 1070. 10 Case: 12-12015 Date Filed: 08/16/2013 Page: 11 of 30

Here, however, statutes establishing jurisdiction for FDIC matters trump the

general rules governing federal subject matter jurisdiction and removal. Indeed,

“special provisions” define a federal court’s jurisdiction to hear cases involving the

FDIC. Castleberry, 408 F.3d at 781. First, “all suits of a civil nature at common

law or in equity to which the [FDIC], in any capacity, is a party shall be deemed to

arise under the laws of the United States.” 12 U.S.C. § 1819(b)(2)(A). Second,

with one limited exception, “the [FDIC] may . . . remove any action, suit, or

proceeding from a State court to the appropriate United States district court.” Id.

§ 1819(b)(2)(B) (emphasis added). In fact, § 1819(b)(2)’s grant of jurisdiction is

so robust that it “creates a rebuttable presumption of federal question jurisdiction

to support removal in cases brought against the FDIC, and overcomes the well-

pleaded complaint rule by permitting the FDIC to assert a federal question in its

answer.” Lazuka v. FDIC, 931 F.2d 1530, 1532 (11th Cir. 1991) (quotation marks

omitted), superseded by statute on other grounds as recognized in FDIC v. S & I

85-1, Ltd., 22 F.3d 1070, 1073–74 (11th Cir. 1994).

The sole exception to the FDIC’s authority to remove a case once it becomes

a party is triggered when: (1) a state authority appointed the FDIC as receiver; (2)

the litigation involves only the pre-closing rights against the failed institution; and

(3) only state law need be interpreted. 12 U.S.C. § 1819(b)(2)(D). To defeat

removal under this “state law exception,” “each of these three prongs must be

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established.” Castleberry, 408 F.3d at 785. Also, “[t]he FDIC may raise a federal

defense to rebut a plaintiff’s showing that only interpretation of state law is

necessary to the disposition of the case.” Lazuka, 931 F.2d at 1535.

In arguing that the District Court should have remanded their claims to state

court, the Tenants’ invoke the state law exception. Specifically, they say “this

action involves . . . tort claims against Darby [Bank] outside the scope of [federal

law].” Alternatively, they argue that their cases should have been remanded

because the FDIC has failed to raise a federal defense that is “colorable for

decision and is not meritless.” See Diaz v. McAllen State Bank, 975 F.2d 1145,

1149–50 (5th Cir. 1992) (holding that to prevent remand to state court “the FDIC

must assert a defense that raises colorable issues of federal law”). We are not

persuaded by either of the Tenants’ arguments. As we will explain, the FDIC has

asserted a federal defense that is not only colorable, it is dispositive. Therefore, the

District Court was right to deny the Tenants’ motions for remand. See Castleberry,

408 F.3d at 785; Lazuka, 931 F.2d at 1535.

B. THE DISTRICT COURT’S GRANT OF SUMMARY JUDGMENT TO THE FDIC The FDIC moved for summary judgment on the basis of D’Oench, Duhme

& Company v. FDIC, 315 U.S. 447, 62 S. Ct. 676 (1942), and 12 U.S.C.

§§ 1823(e) and 1821(d)(9)(A). The FDIC sought summary judgment, saying that

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the Tenants’ claims were not based upon a fully executed, properly documented

agreement that constituted an official record of Darby Bank, and therefore

necessarily fail under federal law.

In D’Oench, the Supreme Court opined that “in litigation between a bank

customer and the FDIC, as successor in interest to a bank, the customer may not

rely on agreements outside the documents contained in the bank’s records to defeat

a claim of the FDIC.” Baumann v. Savers Fed. Sav. & Loan Ass’n, 934 F.2d 1506,

1514–15 (11th Cir. 1991) (citing D’Oench, 315 U.S. at 459, 62 S. Ct. at 680). The

D’Oench case generated the so-called D’Oench Doctrine, which is simply a rule

that:

In a suit over the enforcement of an agreement originally executed between an insured depository institution and a private party, a private party may not enforce against a federal deposit insurer any obligation not specifically memorialized in a written document such that the agency would be aware of the obligation when conducting an examination of the institution’s records.

Id. at 1515.

The D’Oench Doctrine is codified at 12 U.S.C. § 1823(e). See Twin

Constr., Inc. v. Boca Raton, Inc., 925 F.2d 378, 382 (11th Cir. 1991) (“[C]ourts

have found the aims of section 1823(e) and D’Oench identical and thus have

construed defenses premised upon section 1823(e) and D’Oench in tandem.”).

Section 1823(e) provides, in part:

In general 13 Case: 12-12015 Date Filed: 08/16/2013 Page: 14 of 30

No agreement which tends to diminish or defeat the interest of the [FDIC] in any asset acquired by it . . . shall be valid against the [FDIC] unless such agreement—

(A) is in writing,

(B) was executed[6] by the depository institution and any person claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the depository institution,

(C) was approved by the board of directors of the depository institution or its loan committee, which approval shall be reflected in the minutes of said board or committee, and

(D) has been, continuously, from the time of its execution, an official record of the depository institution.

12 U.S.C. § 1823(e)(1) (emphasis added). Section 1823(e) gets additional strength

from § 1821(d)(9)(A) which provides, in part, that “any agreement which does not

meet the requirements set forth in section 1823(e) . . . shall not form the basis of, or

substantially comprise, a claim against the [FDIC].”

A “narrow exception” to § 1823(e) and D’Oench exists when the plaintiff

asserts “free standing tort claims.” In re Geri Zahn, Inc., 25 F.3d 1539, 1543 (11th

Cir. 1994) (quotation marks omitted). The Tenants argue, among other things, that

theirs are free standing tort claims. To determine if a tort claim is “free standing,”

“the key inquiry is one of relatedness.” Id. “One obvious indicia of relatedness

6 In the context of § 1823(e), “executed” means “signed the agreement.” See Twin Constr., 925 F.2d at 384 (quotation marks omitted). 14 Case: 12-12015 Date Filed: 08/16/2013 Page: 15 of 30

[is] whether the . . . representations were of matters that would generally be

reflected in the records of ordinary banking transactions.” Id. at 1543–44. In other

words, a tort claim is not free standing if it is “sufficiently intertwined with regular

banking transactions, such that exclusion of the alleged secret agreement accords

with the underlying policies of D’Oench.” Id. at 1543 (quotation marks omitted);

see also id. at 1544 (“[T]he relatedness requirement rests upon the recognition that

the D’Oench doctrine does not encompass those free standing torts which do not

implicate the records of regular banking transactions.” (emphasis added)).

The Tenants make three arguments for why § 1823(e) and D’Oench do not

bar their claims against the FDIC. First, they argue that their claims fall outside

the scope of § 1823(e) and D’Oench because they “lack the potential to diminish or

defeat the interest of the FDIC in [Darby Bank],” to the extent that liability for

their claims would be covered by “a[] large insurance policy.” Alternatively, they

argue theirs are free standing torts outside the scope of D’Oench. This is so, they

say, because the basis of their complaints—the Hill Letter—was “not [written] in

connection with any regular banking transaction, but [rather] as part of an effort to

induce potential buyers to purchase property in the Drayton Tower building from

the developer and its agents.” Finally, they argue that summary judgment was

premature because discovery may yet produce additional “documents [that] would

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meet the requirements of D’Oench.” For reasons we will discuss, each of the

Tenants’ arguments fails.

1. The Tenants’ Claims Tend to Diminish the FDIC’s Interest in Darby Bank First, the Tenants offer no authority to support the idea that their claims fall

outside D’Oench’s scope because Darby Bank’s insurance policy protects the

FDIC from any diminution in Darby Bank’s value. As capably explained by the

District Court:

Congress’s use of the word “tends” [in § 1823(e)] demonstrates the needlessness of an exact determination of whether the FDIC[]’s interest in a particular asset is diminished or defeated in each case. Enforcement of a promise to make $1,500,000 available would certainly “tend[ ] to diminish or defeat the interest” of the FDIC[], regardless of whether the FDIC[] would see an actual diminution in value of its assets in this case. Because a tendency to defeat or diminish is all that is required for application of the statute, a precise computation of the FDIC[]’s net loss or gain in a particular case is unnecessary.

Lindley v. FDIC, No. 4:11-cv-147, slip op. at 4 (S.D. Ga. Jan. 4, 2012). Thus, the

Tenants do not carry the day with their argument that D’Oench does not apply to

their case because Darby Bank’s insurance policy protects the FDIC’s interest.

2. The Tenants Have Not Alleged Free-Standing Torts Next, the Tenants have failed to allege “free standing tort[s]” because their

claims obviously “implicate the records of regular banking transactions.” See In re

Geri Zahn, 25 F.3d at 1544. The Hill Letter’s promise to make funds available is

precisely the sort of agreement that constitutes a “regular banking transaction[],” as 16 Case: 12-12015 Date Filed: 08/16/2013 Page: 17 of 30

opposed to a “free standing tort.” See OPS Shopping Ctr., Inc. v. FDIC., 992 F.2d

306, 310–11 (11th Cir. 1993). Thus, claims based on the Hill Letter must satisfy

the requirements of § 1823(e) and D’Oench if the Tenants are to prevail. See id.

(holding that an extension of credit through a writing not contained in bank records

was related to “regular banking transactions” and subject to D’Oench); see also In

re Geri Zahn, 25 F.3d at 1544 (holding that terms and conditions established during

“loan negotiations” were related to “regular banking transactions”); Resolution

Trust Corp. v. Dunmar Corp., 43 F.3d 587, 593–94 (11th Cir. 1995) (holding that

an agreement to loan “additional monies” related to “regular banking

transactions”); Motorcity of Jacksonville, Ltd. v. Se. Bank N.A., 83 F.3d 1317,

1338 (11th Cir. 1996) (stating that “negotiations and representations . . . intimately

related” to lending are at “the very core of the D’Oench doctrine”), vacated on

other grounds by Hess v. FDIC, 519 U.S. 1087, 117 S. Ct. 760 (1997).

In contrast to their claims that the Hill Letter reflects regular banking

transactions, the Tenants point to Vernon v. Resolution Trust Corporation (Vernon

I), 907 F.2d 1101 (11th Cir. 1990), and its companion case Vernon v. FDIC

(Vernon II), 981 F.2d 1230 (11th Cir. 1993), in support of the opposite

proposition—that they alleged free standing tort claims. In the Vernon cases we

addressed the plaintiffs’ ability to recover against federal receivers (including the

FDIC) in the context of claims that a failed savings and loan institution

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fraudulently induced the plaintiffs to purchase its stock. See Vernon I, 907 F.2d at

1103; Vernon II, 981 F.2d at 1231. In these circumstances—where the failed

savings and loan profited from the alleged fraud, the plaintiffs were saddled with

worthless stock certificates, and the alleged fraud would not be expected to show

up in the records of regular banking transactions—we held that D’Oench did not

bar the plaintiffs’ claims. We said “[w]e simply do not think the D’Oench doctrine

operates to bar free standing tort claims that are not related to a specific asset

acquired by the FDIC.” Vernon II, 981 F.2d at 1233–34; see also Vernon I, 907

F.2d at 1107–08 & n.6.

Our Court has since elaborated on our rationale in the Vernon cases:

The tort claims in Vernon II involved alleged violations of securities laws and related claims arising from the claimants’ purchase of preferred stock and warrants to purchase common stock in the failed institution itself. Because “the relevant records would reside in the department of the bank which handled the sale or transfer of the bank’s own stock,” and would not appear among the records of “regular banking transactions,” the claims in Vernon II constituted free standing torts, not barred by the D’Oench doctrine. Thus, the court drew a distinction: on the one hand, typical claims like employment discrimination and automobile accidents would be free standing torts not barred by D’Oench; on the other hand, those claims relating to “ordinary banking transactions” and imposing obligations on the bank with respect thereto—obligations that would ordinarily be reflected in the records of banking transactions—would be D’Oench- barred unless thus recorded.

Motorcity of Jacksonville, 83 F.3d at 1337–38 (quoting OPS Shopping Ctr., 992

F.2d at 310–11).

18 Case: 12-12015 Date Filed: 08/16/2013 Page: 19 of 30

Here, we are not talking about claims related to “automobile accidents,”

“employment discrimination,” “violations of securities laws,” or stock sales. See

id. Instead, we have allegations about a promise to extend credit—the

quintessential “ordinary banking transaction[]”—that, if true, would “be reflect[ed]

in the records of banking transactions.” Id. Thus, D’Oench and § 1823(e) each

apply, and the Tenants’ claims are barred unless they satisfy each prong of the

§ 1823(e) inquiry. This, they cannot do.

3. No Factual Disputes Remain to be Resolved Contrary to the Tenants’ argument, there are no remaining disputes about

facts which would impede the disposition of their claims against the FDIC. Before

the District Court, the Tenants admitted: (1) their “allegations against Darby Bank

are predicated [solely] upon [the Hill Letter]”; and (2) “[t]he Hill Letter was not

reviewed or approved by anyone else at Darby Bank prior to Ms. Hill’s issuance of

the letter.” It is also obvious from the face of the Hill Letter that none of the

Tenants were party to its “execution.” Thus, the Tenants cannot rely on the Hill

Letter as a basis for their claims. At a minimum, it fails two prongs of the

§ 1823(e) test: specifically, it was not “executed [i.e. signed] by the depository

institution and [the] person claiming an adverse interest thereunder.” Neither was

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it “approved by the board of directors of the depository institution or its loan

committee.” 12 U.S.C. § 1823(e) (emphasis added); id. § 1821(d)(9)(A). 7

In sum, the District Court properly decided that D’Oench and § 1823(e)

applied to the Tenants’ claims against the FDIC because their claims “relat[ed] to

ordinary banking transactions and . . . would ordinarily be reflected in the records

of banking transactions.” Motorcity of Jacksonville, 83 F.3d at 1337–38

(quotation marks omitted). Thus, because the Hill Letter failed to satisfy the

requirements of § 1823(e), and the Tenants’ failed to provide any other basis for

their claims against Darby Bank, the District Court correctly entered summary

judgment in favor of the FDIC.

C. THE DISTRICT COURT’S DISMISSAL OF THE REMAINING CLAIMS AGAINST THE NON-FDIC DEFENDANTS Upon dismissal of the Tenants’ claims against the FDIC, the District Court

went on to dismiss their remaining state law claims against the Drayprop

Defendants. The Court assumed that it lacked original jurisdiction over these

claims, and “careful consideration” yielded “no reason to exercise . . .

supplemental jurisdiction” under 28 U.S.C. § 1367(c)(3). The final issue we must

decide is whether the District Court was right to dismiss the Tenants’ remaining

state law claims. 7 Indeed, the Tenants also acknowledged at oral argument that their claims failed to satisfy certain prongs of the § 1823(e) analysis—specifically prong three (that the Hill Letter was approved by Darby Bank’s board of directors) and prong four (that the Hill Letter was among Darby Bank’s official records). See 12 U.S.C. § 1823(e). 20 Case: 12-12015 Date Filed: 08/16/2013 Page: 21 of 30

The Drayprop Defendants argue that the District Court should not have

dismissed the Tenants’ remaining claims because under 12 U.S.C. § 1819(b)(2)(A)

the District Court had original jurisdiction over all of the Tenants’ claims, which

necessarily persisted after their claims against the FDIC were dismissed. This is

so, the Drayprop Defendants contend, because federal courts have original

jurisdiction over all civil actions “arising under the . . . laws . . . of the United

States,” 28 U.S.C. § 1331 (emphasis added), and because “all suits of a civil nature

at common law or in equity to which the [FDIC], in any capacity, is a party shall

be deemed to arise under the laws of the United States,” 12 U.S.C. § 1819(b)(2)(A)

(emphasis added). Thus, they argue that a District Court has original jurisdiction

over state law claims against non-FDIC defendants once the FDIC is involved in

the case, and this jurisdiction cannot be divested even if the claims against the

FDIC are later dismissed.

Whether a federal court has jurisdiction over a pendent state law claim that

the FDIC has removed to the District Court when the FDIC is later dismissed from

the case is an issue of first impression in our Circuit. Ultimately, this question

turns on the meaning of § 1819(b)(2)(A), and, in particular, the term “is a party” as

used in that statute. See id.

“As with any question of statutory interpretation, we begin by examining the

text of the statute to determine whether its meaning is clear.” Harry v. Marchant,

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291 F.3d 767, 770 (11th Cir. 2002). “We do this because we presume that

Congress said what it meant and meant what it said.” Id. (quotation marks

omitted). “Our inquiry must cease if the statutory language is unambiguous and

the statutory scheme is coherent and consistent.” Med. Transp. Mgmt. Corp. v.

Comm’r of IRS, 506 F.3d 1364, 1368 (11th Cir. 2007) (quotation marks omitted).

However, “[w]e will . . . look beyond the plain language of a statute at extrinsic

materials to determine the congressional intent if . . . the statute’s language is

ambiguous.” Harrison v. Benchmark Elecs. Huntsville, Inc., 593 F.3d 1206, 1212

(11th Cir. 2010) (quotation marks omitted). “Statutory language is ambiguous if it

is susceptible to more than one reasonable interpretation.” Med. Transp. Mgmt.

Corp., 506 F.3d at 1368. Where there can be more than one reasonable

interpretation, “the courts are left to determine [the statute’s] meaning by looking

to the legislative history and employing the [other] canons of statutory

construction.” U.S. Steel Mining Co. v. Dir., OWCP, No. 11-14468, ___ F.3d ___,

___, 2013 WL 3213132, at *6 (11th Cir. June 27, 2013). “Congress is presumed to

know the content of existing, relevant law, and . . . where Congress knows how to

say something but chooses not to, its silence is controlling.” Griffith v. United

States, 206 F.3d 1389, 1394 (11th Cir. 2000) (quotation marks, citations, and

alterations omitted).

22 Case: 12-12015 Date Filed: 08/16/2013 Page: 23 of 30

Section 1819(b)(2)(A) reads, in full, as follows: “Except as provided in

subparagraph (D),[8] 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.” 12 U.S.C. § 1819(b)(2)(A). Obviously, this section confers

jurisdiction in very broad terms. See Lazuka, 931 F.2d at 1535; see also N.

Savannah Props., 686 F.3d at 1258. But it is not as clear as it is broad. Indeed,

there are at least two reasonable interpretations for the use of “is a party” in this

section. On one hand, “is a party” might mean that the FDIC need only be a party

when the suit is filed to create jurisdiction over all claims, including pendent state

law claims against non-FDIC defendants. Alternatively, “is a party” might mean

that the FDIC must be a party throughout the proceeding to maintain jurisdiction

over pendent state law claims. Thus, § 1819(b)(2)(A) is ambiguous on this point.

See Med. Transp. Mgmt. Corp., 506 F.3d at 1368. It is also true that other

provisions in § 1819, together with related sections, are not particularly helpful, so

we must look to extrinsic materials to help determine its meaning. See Harrison,

593 F.3d at 1212.

Turning next to the legislative history, U.S. Steel Mining Co., 2013 WL

3213132, at *17, it is significant that § 1819(b)(2)(A) became law as a part of the

8 Section 1819(b)(2)(D) outlines the state law exception to the federal courts’ jurisdiction over causes of action involving the FDIC which, for reasons already explained, does not apply here. See 12 U.S.C. § 1819(b)(2)(D). 23 Case: 12-12015 Date Filed: 08/16/2013 Page: 24 of 30

Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).

See Pub. L. No. 101–73, 103 Stat. 183 (1989). FIRREA was enacted “[i]n the

wake [of] a mounting crisis in the banking and thrift industry,” and was sweeping

in its scope. Motorcity of Jacksonville, 83 F.3d at 1326–27. Among its stated

purposes was “[t]o curtail investments and other activities of savings associations

that pose unacceptable risks to the Federal deposit insurance funds,” and “[t]o

strengthen the civil sanctions and criminal penalties for defrauding or otherwise

damaging depository institutions and their depositors.” Pub. L. No. 101–73,

§ 101(3), (10). Section 1819(b)(2) seeks to accomplish these goals by providing a

federal forum for FDIC enforcement actions, as well as actions brought by non-

FDIC plaintiffs. See 12 U.S.C. § 1819(b); Castleberry, 408 F.3d at 788 (“[T]he

terms of 12 U.S.C. § 1819 evince a clear congressional intent to provide a federal

forum when the FDIC is made a party to state court litigation.”). These purposes

are better served if § 1819(b)(2)(A)’s use of “is a party” means that the FDIC need

only be a party at the time the case is filed in order to establish jurisdiction over all

pendent claims. If we look to the time of filing to determine jurisdiction over

pendent claims, non-FDIC plaintiffs may continue uninterrupted in their claims

against non-FDIC defendants, even after the FDIC is dismissed from the case. See

Fed. Sav. & Loan Ins. Corp. v. Griffin, 935 F.2d 691, 696 (5th Cir. 1991)

(“Congress enacted FIRREA to correct any possible jurisdictional defects existing

24 Case: 12-12015 Date Filed: 08/16/2013 Page: 25 of 30

at the time of removal; the fact that . . . [the] FDIC is [not] a party at the time of

appeal cannot defeat this intent.”); cf. FDIC v. Four Star Holding Co., 178 F.3d 97,

100 (2d Cir. 1999) (recognizing that a contrary rule “could well have the effect of

deterring normal business transactions during the pendency of what might be

lengthy litigation, and could also deter transactions by FDIC that presumably are in

the public interest” (quotation marks and citations omitted)); Mizuna, Ltd. v.

Crossland Fed. Sav. Bank, 90 F.3d 650, 657 (2d Cir. 1996) (“In a general way, the

jurisdictional grant in FIRREA enhances the effectiveness and uniformity of

proceedings in which the FDIC exercises the sweeping powers conferred on it by

the Act.”).

An interpretation that establishes jurisdiction over pendent state law claims

at the time of filing is also consistent with other “canons of statutory construction.”

U.S. Steel Mining Co., 2013 WL 3213132, at *17. “Congress is presumed to know

the content of existing, relevant law.” Griffith, 206 F.3d at 1394. Again, “where

Congress knows how to say something but chooses not to, its silence is

controlling.” Id. (quotation marks and alterations omitted). Our earliest

jurisprudence provided “that the jurisdiction of the Court depends upon the state of

things at the time of the action brought, and that after vesting, it cannot be ousted

by subsequent events.” Mullan v. Torrance, 22 U.S. (9 Wheat.) 537, 539 (1824);

see also Dole Food Co. v. Patrickson, 538 U.S. 468, 478, 123 S. Ct. 1655, 1662

25 Case: 12-12015 Date Filed: 08/16/2013 Page: 26 of 30

(2003) (same). The time-of-filing doctrine also applies to removal. Ehlen Floor

Covering, Inc. v. Lamb, 660 F.3d 1283, 1287 (11th Cir. 2011). With the time-of-

filing rule’s “pedigree of almost two centuries,” Grupo Dataflux v. Atlas Global

Grp., L.P., 541 U.S. 567, 582, 124 S. Ct. 1920, 1930 (2004), we cannot doubt that

members of Congress knew of its existence when they passed FIRREA. Neither

do we doubt that if Congress intended to reject the time-of-filing rule where the

FDIC is concerned, it would have said so. Thus relevant canons of construction

support an interpretation of § 1819(b)(2)(A) that creates federal jurisdiction over

pendent state law claims at the time the FDIC becomes involved in the litigation.

See Griffith, 206 F.3d at 1394; see also Adair v. Lease Partners, Inc., 587 F.3d 238,

245 (5th Cir. 2009) (citing time-of-filing rule for recognizing federal jurisdiction

over pendent state law claims after the dismissal of the FDIC from the case); Four

Star Holding, 178 F.3d at 100–01 (same); Griffin, 935 F.2d at 696 (same). But see

New Rock Asset Partners, L.P. v. Preferred Entity Advancements, Inc., 101 F.3d

1492, 1495, 1503–04 (3d Cir. 1996) (rejecting “the invocation of the ‘black letter

rule’ that jurisdiction is only determined at the time of the filing of the complaint”

when addressing a similar jurisdictional issue presented by FIRREA).

Finally, this conclusion is consistent with what this Court has already said

about § 1819(b)(2)(A). See N. Savannah Props., 686 F.3d at 1258 (“Federal-

question jurisdiction generally exists whenever the FDIC is a party to litigation.”);

26 Case: 12-12015 Date Filed: 08/16/2013 Page: 27 of 30

Castleberry, 408 F.3d at 788 (“[T]he terms of 12 U.S.C. § 1819 evince a clear

congressional intent to provide a federal forum when the FDIC is made a party to

state court litigation.”); Lazuka, 931 F.2d at 1535 (“[S]ection [1819(b)(2)(A)]

creat[es] a rebuttable presumption of federal jurisdiction.”).9 We are also mindful

that when facing the same or substantially similar jurisdictional issues, the Second,

Fifth, and Eighth Circuits have each determined that under § 1819(b)(2)(A) a

District Court maintains original jurisdiction over pendent state law claims against

non-FDIC parties, even after the FDIC has been dismissed. See Adair, 587 F.3d at

244; Casey v. FDIC, 583 F.3d 586, 591 (8th Cir. 2009); Four Star Holding, 178

F.3d at 101. 10 Only the Third Circuit decided differently, interpreting a

substantially similar, but now repealed, provision of FIRREA to mean that the

District Court lacked original jurisdiction over pendent claims once the federal 9 North Savannah Properties, Castleberry, and Lazuka do not control our analysis here because those cases dealt with different questions under § 1819(b)(2). See N. Savannah Props., 686 F.3d at 1258 (interpreting the meaning of the phrase “substituted as a party” in § 1819(b)(2)(B)); Castleberry, 408 F.3d at 781–85 (addressing various issues related to removal under § 1819(b)(2), but not what happens to pendent claims against non-FDIC defendants after the FDIC is dismissed from the case); Lazuka, 931 F.2d at 1535–39 (discussing the “well-pleaded complaint” rule in the context of § 1819(b)(2)). However, our reasoning in those cases certainly informs our analysis of the issue presented here. 10 The Fifth Circuit has observed that the Second Circuit has not consistently applied its determination that § 1819(b)(2)(A) creates original jurisdiction over pendent state law claims. Adair, 587 F.3d at 244 n.39; compare Four Star Holding, 178 F.3d at 101 (holding that the removal of the FDIC from litigation “does not divest the court of subject matter jurisdiction under Section 1819”), with King v. Crossland Sav. Bank, 111 F.3d 251, 256 (2d Cir. 1997) (finding exercise of supplemental jurisdiction appropriate over pendent party claims pursuant to § 1367 in case removed pursuant to § 1819(b)(2)), and Mizuna, 90 F.3d at 657 (same). For reasons explained, we agree with the Fifth Circuit that the Second Circuit’s approach in Four Star Holding is preferable. See Adair, 587 F.3d at 244 n.39.

27 Case: 12-12015 Date Filed: 08/16/2013 Page: 28 of 30

receiver was dismissed. See New Rock Asset Partners, 101 F.3d at 1501

(interpreting 12 U.S.C. § 1441(l)(1), since repealed by the Dodd-Frank Wall Street

Reform and Consumer Protection Act of 2010, Pub. L. 111-203, § 364(b), 124

Stat. 1376, 1555 (2010)). Even the Third Circuit allows a District Court to

exercise supplemental jurisdiction over those claims, however. See id., 101 F.3d at

1508. 11

After careful review, we join the Second, Fifth, and Eighth Circuits in

concluding that when the FDIC is a party to a civil suit and removes that case to

federal court, the District Court has original jurisdiction over claims against non-

FDIC defendants, and this jurisdiction is not lost if the FDIC is later dismissed

from the case. The language of § 1819(b)(2)(A), the legislative history of

11 We are not persuaded by the Third Circuit’s holding in New Rock Asset Partners for two reasons. First, the Court was interpreting 12 U.S.C. § 1441a(l)(1), the section of FIRREA that created federal jurisdiction over claims involving the Resolution Trust Corporation. See New Rock Asset Partners, 101 F.3d at 1499. Although substantially similar in its terms to § 1819(b)(2)(A), § 1441a(l)(1) has since been repealed. See Pub. L. 111-203, § 364(b), 124 Stat. 1376, 1555 (2010). More significantly, however, New Rock Asset Partners relied heavily on an interpretation of the time-of-filing rule that has since been called into question by that Court, and is at odds with recent Supreme Court authority. See Nuveen Mun. Trust ex rel. Nuveen High Yield Mun. Bond Fund v. WithumSmith Brown, P.C., 692 F.3d 283, 294 (3d Cir. 2012) (“Although we once declined to apply the time of filing rule in a federal question case, [specifically, in New Rock Asset Partners], subsequent Supreme Court decisions demonstrate the continuing vitality of the rule.” (citation omitted)); cf. Grupo Dataflux, 541 U.S. at 582, 124 S. Ct. at 1930 (“We decline to endorse a new exception to a time-of-filing rule that has a pedigree of almost two centuries. Uncertainty regarding the question of jurisdiction is particularly undesirable, and collateral litigation on the point particularly wasteful. The stability provided by our time-tested rule weighs heavily against the approval of any new deviation.”).

28 Case: 12-12015 Date Filed: 08/16/2013 Page: 29 of 30

FIRREA, other canons of statutory construction, our own precedent, and the

weight of persuasive authority from other Circuits all lead us to this interpretation.

Thus, as applied to this case, § 1819(b)(2)(A) operated to create arising

under jurisdiction over the Tenants’ claims against the Drayprop Defendants, and

the dismissal of the Tenants’ claims against the FDIC did not divest the District

Court’s jurisdiction over those claims. See 12 U.S.C. § 1819(b)(2)(A). Therefore,

the District Court improperly dismissed the Tenants’ remaining state law claims

against the Drayprop Defendants under 28 U.S.C. § 1367(c)(3). See Hill v.

BellSouth Telecomms., Inc., 364 F.3d 1308, 1314, 1317 (11th Cir. 2004) (holding

that District Court improperly dismissed plaintiff’s claims under § 1367(c)(3)

where federal law operated to create “federal question jurisdiction for [plaintiff’s]

two remaining state-law causes of action”); see also Adair, 587 F.3d at 244–45;

Casey, 583 F.3d at 591; Four Star Holding, 178 F.3d at 101; Griffin, 935 F.2d at

696.

III. CONCLUSION

The District Court properly granted summary judgment to the FDIC on the

Tenants’ claims against Darby Bank. However, the District Court improperly

dismissed the remaining claims against the non-FDIC defendants because

§ 1819(b)(2)(A) operated to create original jurisdiction over those claims. Thus,

29 Case: 12-12015 Date Filed: 08/16/2013 Page: 30 of 30

we AFFIRM in part, REVERSE in part, and REMAND for proceedings consistent

with this opinion.

AFFIRMED in part, REVERSED in part, and REMANDED.