FDIC v. Keating

United States Court of Appeals
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.

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.

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

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

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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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.

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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