IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 93-1329
Summary Calendar
_____________________
JOHN H. CARNEY and
JAMES R. FISHER, a/k/a
Bill Fisher,
Plaintiffs-Appellants,
versus
RESOLUTION TRUST CORPORATION,
as receiver for MeraBank Savings,
in its corporate capacity and as
conservator of New MeraBank Texas,
FSB El Paso, Texas, as receiver for
MeraBank Savings,
Defendant-Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Northern District of Texas
_________________________________________________________________
(April 14, 1994)
ON PETITION FOR REHEARING
(Opinion January 11, 1994, 5th Cir. 1994, 10 F.3d 1164)
Before KING, HIGGINBOTHAM and BARKSDALE, Circuit Judges.
PER CURIAM:
The opinion in this case filed on January 11, 1994, and
reprinted at 10 F.3d 1164 (5th Cir. 1994), is withdrawn and the
following opinion is substituted therefor.
John H. Carney and James R. Fisher brought a declaratory
judgment action against the Resolution Trust Corporation (RTC) in
its corporate capacity and its capacities as receiver for
MeraBank Texas, FSB El Paso, Texas (MeraBank), and as conservator
of New MeraBank Texas, FSB El Paso, Texas (New MeraBank). Carney
and Fisher also asserted pendent state law claims. The district
court granted the RTC's motion to dismiss. Carney and Fisher
appeal. We affirm in part, reverse in part, and remand the case
to district court.
I. FACTS AND PROCEDURAL HISTORY
Monzer Attar brought an action in the 364th District Court
of Lubbock County (the state court action) seeking damages from
MeraBank and EquiSource Realty Corporation (EquiSource). On May
30, 1991, the Office of Thrift Supervision (OTS) appointed the
RTC as receiver for MeraBank and as conservator of New MeraBank.
The RTC as receiver for MeraBank was substituted for MeraBank in
the state court action as the party defendant.
On September 23, 1991, the RTC as receiver for MeraBank
filed a motion requesting permission from the state court to file
a third party action against Carney and Fisher, former officers
of EquiSource. Carney and Fisher then filed their original
complaint in federal district court on December 18, 1991, against
the RTC as receiver for MeraBank seeking a resolution of the
matters in controversy in the state court action. Carney and
Fisher asserted that the district court had jurisdiction to
decide the declaratory judgment action under 28 U.S.C. § 1346.
On December 26, 1991, the RTC as conservator of New MeraBank
filed a third party petition against Carney and Fisher in the
2
state court action alleging that the damages that Monzer Attar
sought were caused by EquiSource and by Carney and Fisher,
individually. The RTC as conservator of New MeraBank had
previously intervened in the state court action because it owned
the claims asserted against Carney and Fisher. The RTC then
filed its answer and a motion to dismiss Carney and Fisher's
complaint. The RTC argued that Carney and Fisher's complaint
should be dismissed because 28 U.S.C. § 1346 does not authorize
the award of declaratory relief against the United States.
Carney and Fisher then moved for leave of the court to file
an amended complaint, which the district court granted. On March
12, 1992, Carney and Fisher filed their first amended complaint.
In their first amended complaint, Carney and Fisher asserted, in
addition to their claim for declaratory relief, injunctive relief
for denial of due process, monetary damages for intentional
infliction of emotional distress, and injunctive relief and
monetary damages for tortious interference with prospective
contractual relations. Additionally, they asserted that the
district court had jurisdiction pursuant to 28 U.S.C. §§ 1346,
1338.
On March 23, 1992, the RTC as receiver for MeraBank filed a
motion to dismiss Carney and Fisher's first amended complaint for
lack of subject matter jurisdiction or, alternatively, for
failure to state a claim for which relief could be granted. The
district court granted the RTC's motion. The district court
determined that it lacked subject matter jurisdiction under 28
3
U.S.C. §§ 1346, 1338. Carney and Fisher then filed a motion for
reconsideration. In their motion for reconsideration, Carney and
Fisher argued that the district court did have jurisdiction in
this case pursuant to 12 U.S.C. § 1441a(l)(1), the Federal Home
Loan Bank Act. Carney and Fisher further argued that the
reference in their complaint to § 1338 was a typographical error
and that the complaint should have stated § 1331. The district
court reinstated the case and vacated its prior order. On April
3, 1992, the OTS replaced the RTC as conservator of New MeraBank
with the RTC as receiver for New MeraBank.
On September 4, 1992, Carney and Fisher filed their second
amended complaint. In their second amended complaint, Carney and
Fisher asserted that their claims were against the RTC in its
corporate capacity and in its capacities as receiver for MeraBank
and as conservator of New MeraBank. Carney and Fisher also
stated that the district court had jurisdiction to hear the case
under the Federal Home Loan Bank Act, 12 U.S.C. § 1441a(l)(1).
The RTC then filed a motion to dismiss Carney and Fisher's
second amended complaint. The RTC alleged three grounds for
dismissal: (1) lack of subject matter jurisdiction, (2) failure
to state a claim for which relief could be granted, and (3)
pendency of a state court action which will serve to resolve all
issues between the parties. The district court determined that
it lacked subject matter jurisdiction over Carney and Fisher's
claims for monetary damages because § 1821(d)(13)(D) of the
Financial Institutions Reform, Recovery, and Enforcement Act
4
(FIRREA) precluded Carney and Fisher from asserting those claims
against the RTC before exhausting their administrative remedies.
Therefore, the district court dismissed Carney and Fisher's
claims for monetary damages for intentional infliction of
emotional distress and tortious interference with prospective
contractual relations because it lacked subject matter
jurisdiction over those claims.
The district court went on to determine that FIRREA's
jurisdictional bar in § 1821(d)(13)(D) did not preclude the
plaintiffs from pursuing injunctive and declaratory relief
against the RTC. However, the district court determined that
Carney and Fisher's claims for injunctive relief for denial of
due process and tortious interference with prospective
contractual relations should be dismissed under Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim for which
relief could be granted. Finally, the district court also
dismissed Carney and Fisher's request for a declaratory judgment.
II. STANDARD OF REVIEW
We review the district court's dismissals under Federal Rule
of Civil Procedure 12(b)(6) and 12(b)(1) de novo. Benton v.
United States, 960 F.2d 19, 21 (5th Cir. 1992). We take the
allegations of the complaint to be true, and we will not affirm
the district court's dismissal unless it appears beyond doubt
that the plaintiff cannot prove any set of facts in support of
his claim which would entitle him to relief. Id.
5
III. DISCUSSION
A. CLAIMS FOR MONETARY DAMAGES
Initially, Carney and Fisher allege that the district court
erred in determining that it did not have subject matter
jurisdiction over their claims for monetary damages. Subject
matter jurisdiction is determined at the time that the complaint
is filed. Rosa v. Resolution Trust Co., 938 F.2d 383, 392 n.12
(3d Cir.), cert. denied, 112 S. Ct. 582 (1991); F. Alderete Gen.
Contractors v. United States, 715 F.2d 1476, 1480 (Fed. Cir.
1983). The district court determined that at the time Carney and
Fisher filed their second amended complaint the RTC had been
named as receiver for New MeraBank and that, therefore, the
jurisdictional bar of FIRREA required Carney and Fisher to
exhaust their administrative remedies before it could obtain
jurisdiction over their claims for monetary damages against the
RTC. Carney and Fisher argue, however, that their second amended
complaint relates back to the time that they filed their first
amended complaint and that FIRREA's jurisdictional bar would not
therefore apply to their claims for monetary damages because they
filed their first amended complaint before the RTC was named as
receiver.
In Sessions v. Rusk State Hosp., we stated that
[a] complaint that is defective because it does not allege a
claim within the subject matter jurisdiction of a federal
court may be amended to state a different claim over which
the federal court has jurisdiction. If the claim asserted
in the amendment arises out of the conduct or occurrence set
forth in the original complaint, the amendment is given
retroactive effect to the date the original complaint was
filed.
6
648 F.2d 1066, 1070 (5th Cir. 1981) (citations omitted).
Relation back to the date of the original filing applies even
when the amendment states a new basis for subject matter
jurisdiction. Berkshire Fashions, Inc. v. M.V. Hakusan II, 954
F.2d 874, 887 (3d Cir. 1992) (determining that when the
plaintiffs amended their complaint to establish diversity
jurisdiction the amendment related back to the date of the filing
of the original complaint so that the statutory requirement of
$10,000 to establish diversity jurisdiction applied instead of
the new $50,000 requirement); 3 JAMES WM. MOORE ET AL., MOORE'S FEDERAL
PRACTICE ¶ 15.15[3.—2], at 15-154 (2d ed. 1993) (noting that an
amendment which changes the jurisdictional basis of an action
will relate back to the date of the filing of the original
complaint, if the factual situation alleged otherwise remains
unaltered); 6A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE & PROCEDURE §
1497, at 80 (2d ed. 1990) ("Amendments curing a defective
statement of subject matter jurisdiction . . . will relate
back."). In this case, the district court should have determined
whether Carney and Fisher's second amended complaint related back
to the time that they filed their original complaint or their
first amended complaint. For purposes of this appeal, however,
we need not determine whether Carney and Fisher's second amended
complaint should be characterized as relating back to the time of
the filing of the original complaint or the first amended
complaint. Under either scenario, Carney and Fisher would have
7
filed their claims for monetary damages before the RTC was
appointed receiver for New MeraBank.
We now address Carney and Fisher's argument that because
they filed their claims for monetary damages before the RTC was
appointed receiver for New MeraBank, FIRREA's jurisdictional bar
does not apply to those claims. Section 1821(d)(13)(D) of FIRREA
provides that:
Except as otherwise provided in this subsection, no court
shall have jurisdiction over—
(i) any claim or action for payment from, or any action
seeking a determination of rights with respect to, the
assets of any depository institution for which the
Corporation has been appointed receiver, including assets
which the Corporation may acquire from itself as such
receiver; or
(ii) any claim relating to any act or omission of such
institution or the Corporation as receiver.
12 U.S.C. § 1821(d)(13)(D) (Supp. IV 1992). In Meliezer v.
Resolution Trust Co., we determined that § 1821(d)(13)(D) of
FIRREA deprived a district court of subject matter jurisdiction
over claims brought against the RTC after the RTC was appointed
receiver of a depository institution. 952 F.2d 879, 881-82 (5th
Cir. 1992). In this case, however, the claims asserted by Carney
and Fisher against the RTC relate back to a date before the RTC
was appointed receiver of New MeraBank. The question presented
here is whether claims filed, under a relation back theory,
before the RTC is appointed receiver are also subject to FIRREA's
jurisdictional bar.
We note initially that FIRREA makes participation in the
administrative claim review process mandatory, regardless of
whether the claims were filed before or after the RTC was
8
appointed receiver of the failed institution. Bueford v.
Resolution Trust Corp., 991 F.2d 481, 485 (8th Cir. 1993);
Marquis v. FDIC, 965 F.2d 1148, 1151 (1st Cir. 1992); Resolution
Trust Corp. v. Mustang Partners, 946 F.2d 103, 106 (10th Cir.
1991); see Meliezer v. Resolution Trust Co., 952 F.2d 879, 882
(5th Cir. 1992) (holding that FIRREA establishes a statutory
exhaustion requirement). Naturally, the RTC argues that FIRREA's
jurisdictional bar applies to both pre- and post- receivership
claims. However, we agree with other circuits that have
addressed this issue and conclude that when claims for monetary
damages are brought before the RTC is appointed receiver, a court
continues to have subject matter jurisdiction over those claims.
Brady Dev. Co. v. Resolution Trust Corp., 14 F.3d 998, 1003 (4th
Cir. 1994); Marquis, 965 F.2d at 1152-53; Rosa v. Resolution
Trust Corp., 938 F.2d 383, 392 (3d Cir.), cert. denied, 112 S.
Ct. 582 (1991). Several sections of FIRREA support this
conclusion. For example, § 1821(d)(6)(A) permits a claimant "to
continue an action commenced before the appointment of the
receiver" after the RTC has denied the claim. Additionally, §
1821(d)(5)(F)(ii) provides that the filing of a claim "with the
receiver shall not prejudice any right of the claimant to
continue any action which was filed before the appointment of the
receiver." It appears clear to us that a claimant could not
"continue" an action that should have been dismissed. Marquis,
965 F.2d at 1152-53 (noting that because § 1821(d)(5)(F)(ii)
refers to a claimant's right to continue an action, Congress did
9
not intend for the action to be dismissed); Guidry v. Resolution
Trust Corp., 790 F. Supp. 651, 653 (E.D. La. 1992) (noting that
the word continue in §§ 1821(d)(5)(F)(ii), (d)(6)(A) "strongly
infers that the court retains jurisdiction over a case that is
filed before a receiver is appointed"); Coston v. Gold Coast
Graphics, Inc., 782 F. Supp. 1532, 1535 (S.D. Fla. 1992) (stating
that "the term 'continue' in both § 1821(d)(5)(F)(ii) and §
1821(d)(6)(A) indicates that the Court is not deprived of
jurisdiction over the action"). Therefore, we conclude that
because Carney and Fisher filed their claims against the RTC
before the RTC was appointed receiver of New MeraBank, the
district court had subject matter jurisdiction over their claims.
However, our conclusion that the district court had subject
matter jurisdiction over Carney and Fisher's claims for monetary
damages against the RTC does not necessarily mean that Carney and
Fisher can assert their administrative and judicial remedies
concurrently. Congress enacted FIRREA to create an efficient
method for processing claims against failed banks. Meliezer v.
Resolution Trust Co., 952 F.2d 879, 881 (5th Cir. 1992). It
appears clear to us that allowing a claimant simultaneously to
pursue administrative and judicial remedies would thwart
Congress' purpose in enacting FIRREA. We conclude, as other
courts have done, that FIRREA creates a "scheme under which
courts will retain jurisdiction over pending
lawsuitsSQsuspending, rather than dismissing, the suitsSQsubject
to a stay of proceedings as may be appropriate to permit
10
exhaustion of the administrative review process as it pertains to
the underlying claims." Marquis, 965 F.2d at 1154; see also
Guidry, 790 F. Supp. at 654-55; In re FDIC, 762 F. Supp. 1002,
1004 (D. Mass. 1991).1
In summary, the district court erred in dismissing Carney
and Fisher's claims for monetary damages against the RTC for lack
of subject matter jurisdiction.
B. CLAIMS FOR INJUNCTIVE AND DECLARATORY RELIEF
1. Injunctive relief
The RTC asserts that § 1821(j) deprived the district court
of subject matter jurisdiction over Carney and Fisher's claims
for injunctive relief. Section 1821(j) provides:
(j) Limitation on court action
Except as provided in this section, no court may take
any action, except at the request of the Board of Directors
by regulation or order, to restrain or affect the exercise
of powers or functions of the Corporation as a conservator
or a receiver.
In Ward v. Resolution Trust Corp., 996 F.2d 99, 102-04 (5th Cir.
1993), we determined that § 1821(j) deprived the district court
1
The House Report discussing FIRREA's administrative review
process further supports our conclusion. The report states:
The agency's determination whether to allow a claim must be
made within 180 days after the claim is timely filed, unless
both parties agree to extend that time period. A notice of
disallowance becomes final unless the claimant files an
objection within 30 days of the mailing of such notice. Any
suit (or motion to renew a suit filed prior to appointment
of the receiver) must be brought by the claimant within 60
days after the denial of the claim. Resort to either the
District Courts or administrative process is available only
after the claimant has first presented its claim to the
FDIC. H.R. REP. NO. 101-54(I), 101st Cong., 1st Sess. 418
(1989), reprinted in 1989 U.S.C.A.A.N. 86, 214 (emphasis
added).
11
of subject matter jurisdiction over a party's claim seeking the
rescission of a sale of property by the RTC. In Ward, we stated
that
even if the RTC improperly or unlawfully exercised an
authorized power or function, it clearly did not engage in
an activity outside its statutory powers. Yet only the
latter type of act could conceivably subject the RTC to
injunction or rescission as an exception to the anti-
injunction provisions of § 1821(j)SQa possibility we need
not, and therefore do not, consider today.
Id. at 103. Therefore, in the instant case, if Carney and Fisher
are attempting to enjoin the RTC from exercising an authorized
power or function of the RTC, then § 1821(j) deprives the
district court of subject matter jurisdiction over the action.
In connection with Carney and Fisher's claims for denial of
due process and tortious interference with prospective
contractual relations, Carney and Fisher sought, inter alia, to
enjoin the RTC from (1) making any statement that they converted
funds or are individually liable for the conduct of EquiSource
and (2) attempting to engage them in the state court action.
According to the RTC, the relief that Carney and Fisher request
would prevent the RTC from exercising its statutory authority to
"collect all obligations and money due" and to "preserve and
conserve the assets and property of" a failed financial
institution. 12 U.S.C. §§ 1821(d)(2)(B)(ii), (iv).2
2
In full, section 1821(d)(2)(B) provides:
(B) Operate the institution
The Corporation may, as conservator or receiverSQ
(i) take over the assets of and operate the
12
We agree with the RTC that § 1821(j) deprived the district
court of subject matter jurisdiction over Carney and Fisher's
claims for injunctive relief against the RTC. The RTC's ability
to seek damages from Carney and Fisher for losses that they
caused the failed financial institution is clearly within the
RTC's statutory powers. The district court does not have subject
matter jurisdiction over Carney and Fisher's claims for
injunctive relief.
2. Declaratory relief
The RTC also asserts that § 1821(j) deprived the district
court of subject matter jurisdiction over Carney and Fisher's
claim for declaratory relief. In support of this argument the
RTC relies on Texas Employers' Ins. Ass'n v. Jackson, 862 F.2d
491 (5th Cir. 1988) (en banc), cert. denied, 490 U.S. 1035
(1989), and California v. Grace Brethren Church, 457 U.S. 393
(1982).
In Jackson, Leroy Jackson brought suit in state court
against the Texas Employer's Insurance Association (TEIA) seeking
damages for mental anguish, stress, and anxiety consequent on
insured depository institution with all the powers of the
members or shareholders, the directors, and the officers of
the institution and conduct all business of the institution;
(ii) collect all obligations and money due the
institution;
(iii) perform all functions of the institution in
the name of the institution which is consistent with the
appointment as conservator or receiver; and
(iv) preserve and conserve the assets and property
of such institution.
13
TEIA's alleged fraud and bad faith in having delayed payment of
his Longshore and Harbor Workers' Compensation Act (LHWCA)
benefits. Id. at 493. After the state suit had proceeded for
about a year, TEIA filed suit in federal district court seeking
to enjoin Jackson's prosecution of the state suit and to declare
that Jackson's state law claims were preempted by the LHWCA. Id.
The district court enjoined Jackson's prosecution of the state
court action and rendered a declaratory judgment that his state
law claims were preempted by the LHWCA. Id.
Sitting en banc, this court determined that the Anti-
Injunction Act, 28 U.S.C. § 2283, prevented the district court
from issuing an injunction against Jackson's prosecution of his
state court action. Id. at 497-504. We also determined that the
Anti-Injunction Act prevented the district court from rendering
the declaratory relief which TEIA sought. Id. at 504-08. In
reaching this conclusion, we initially determined that
TEIA's federal action was not to resolve a controversy that
existed independently of Jackson's state suit; nor was it to
decide some other controversy, with merely incidental effect
on the state suit. It is plain that the only purpose and
effect of TEIA's federal suit was to defeat Jackson's state
suit against it . . . .
Id. at 505. We further stated that to allow the TEIA declaratory
relief in the circumstances of the case would provide the TEIA
with an end run around § 2283 and render the section a "minor
technicality." Id. Thus, § 2283 could easily be avoided by
"mere nomenclature or procedural sleight of hand" because a
federal declaratory judgment would be res judicata of the issues
decided in the case and could then be enforced by injunction
14
pursuant to section 2202. Id. Therefore, we held in Jackson
that "'[i]f an injunction would be barred by § 2283, this should
also bar the issuance of a declaratory judgment that would have
the same effect as an injunction.'" Id. at 506 (quoting CHARLES
A. WRIGHT, FEDERAL COURTS § 47, at 285 (4th ed. 1983)).
Likewise, in California v. Grace Brethren Church, 457 U.S.
393, 407-19 (1982), the Supreme Court determined that the Tax
Injunction Act, 28 U.S.C. § 1341, deprived the district court of
subject matter jurisdiction to declare a state tax law
unconstitutional and to enjoin the state defendants from
collecting taxes under the statute. The Tax Injunction Act
provides that the district courts "shall not enjoin, suspend or
restrain the . . . collection of any tax under State law where a
plain, speedy and efficient remedy may be had in the courts of
such State." 28 U.S.C. § 1341. In concluding that the Act
deprived the district court of subject matter jurisdiction to
issue declaratory as well as injunctive relief, the Court stated
that
[b]ecause the declaratory judgment "procedure may in every
practical sense operate to suspend collection of the state
taxes until the litigation is ended," the very language of
the Act suggests that a federal court is prohibited from
issuing declaratory relief in state tax cases.
Additionally, because there is little practical difference
between injunctive and declaratory relief, we would be hard
pressed to conclude that Congress intended to prohibit
taxpayers from seeking one form of anticipatory relief
against state tax officials in federal court, while
permitting them to seek another, thereby defeating the
principal purpose of the Tax Injunction Act: "to limit
drastically federal district court jurisdiction to interfere
with so important a local concern as the collection of
taxes."
15
Id. at 408-09 (citations and footnotes omitted).
The RTC argues that the logic of Jackson and Grace Brethren
Church compels this court to determine that just as § 1821(j)
deprives the district court of jurisdiction over Carney and
Fisher's claims for injunctive relief, so too does § 1821(j)
deprive the district court of jurisdiction over their claim for
declaratory relief. Indeed, we have already held that claims
other than claims for injunctive relief may be barred by §
1821(j). In Ward v. Resolution Trust Corp., 996 F.2d 99, 104
(5th Cir. 1993), we held that "[l]ike injunction, rescission is a
'judicial restraint' that is barred by 1821(j). . . . [T]he
district court had no jurisdiction to enjoin or rescind the
sale." Id. at 104; see also United Liberty Life Ins. v. Ryan,
985 F.2d 1320, 1328-29 (6th Cir. 1993) (concluding that the
district court did not have subject matter jurisdiction over the
plaintiff's claim seeking to rescind a transfer of a failed
institution's assets because such an order would limit the RTC's
exercise of power).
In the present case, Carney and Fisher sought a declaratory
judgment by the district court that they were not liable to the
RTC for the conduct of EquiSource. Carney and Fisher filed their
original complaint after the RTC had already filed a motion
requesting permission from the state court to file a third party
action against Carney and Fisher. Further, in their original
complaint, Carney and Fisher asserted that "on or about November
22, 1991, [Defendant] filed an Amended Motion for Leave to Bring
16
Third-Party Action against John H. Carney and James R. (Bill)
Fisher, Plaintiffs in the suit now before the Court." They also
asserted that "Plaintiffs are in great doubt as to the potential
liability in the case referenced above, and desire an efficient
resolution of this matter prior to embroiling themselves in
extensive and pointless litigation." Moreover, Carney and Fisher
stated that "Plaintiffs seek declaratory judgment that any
claims, actions, or otherwise asserted [sic] or which may be
asserted by Defendant against Plaintiffs, are claims for which
Plaintiffs have no individual capacity and at all times acted
solely as Officers of EquiSource Realty Corporation." It is
clear that Carney and Fisher attempted to enjoin the RTC from
including them in the state court action under the guise of
bringing a declaratory judgment action in federal court. Thus,
Carney and Fisher's claim for declaratory relief was an attempt
to "restrain or affect" the RTC's ability to exercise its
authorized powers or functions just as completely as an
injunction would. Therefore, we conclude that, under the
specific facts of this case, § 1821(j) deprived the district
court of jurisdiction over Carney and Fisher's claim for
declaratory relief.3
3
Naturally, we do not hold that § 1821(j) would bar all
actions for declaratory relief against the receiver of a failed
financial institution.
17
IV.
For the foregoing reasons, we REVERSE the district court's
determination that it did not have subject matter jurisdiction
over Carney and Fisher's claims for monetary damages, AFFIRM the
district court's dismissal of Carney and Fisher's claims for
injunctive and declaratory relief on the ground that the district
court lacked subject matter jurisdiction over those claims, and
REMAND for proceedings consistent with this opinion.
The mandate shall issue forthwith.
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