No. 95-1286

In the Supreme Court of the United States

OCTOBER TERM, 1995

PIETER BAKKER, ET AL., PETITIONERS

v.

FEDERAL DEPOSIT INSURANCE CORPORATION,
AS RECEIVER FOR HANSEN SAVINGS BANK, SLA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS 
FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

WILLIAM F. KROENER, III
General Counsel

ANN S. DUROSS
Assistant General Counsel 

THOMAS L. HINDES
Senior Counsel

SHEILA KRAFT BUDOFF
Counsel
Federal Deposit Insurance Corporation
Washington, D.C. 20006

DREW S. DAYS, III
Solicitor General

Department of Justice
Washington, D.C. 20530

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QUESTIONS PRESENTED

1. Whether the dismissal of petitioners' appeal for
failure to file a Rule 59 motion within ten days of the
Resolution Trust Corporation's postjudgment re-
moval of the state court action, as required by the
court of appeals' earlier decision in Jackson v.
American Savings Mortgage Corp, 924 F.2d 195 (11th
Cir. 1991), was consistent with due process.
2. Whether establishment and application of a
procedural rule, requiring compliance with Rule 59
after a post judgment removal, was a proper exercise
of the court of appeals' supervisory powers.

(I)

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TABLE OF CONTENTS

Page

Opinions below . . . . 1 
Jurisdiction . . . . 1
Statement . . . . 2
Argument . . . . 5
Conclusion . . . . 11

TABLE OF AUTHORITIES

Cases:

Aguilar v. FDIC, 63 F.3d 1059 (11th Cir. 1995) . . . . 7
Bakery Centre Ass'n v. Orientations Gallery, Inc,
54 F.3d 688 (11th Cir. 1995) . . . . 7
Cardinal Chemical Co. v. Morton Int'1, Inc, 113
S.Ct. 1967 (1993) . . . . 9
5300 Memorial Investors, Ltd., In re ,973 F.2d 1160
(5th Cir. 1992) . . . . 9
Jackson v. American Savings Mortgage Corp.,
924 F.2d 195 (11th Cir. 1991) . . . . 3, 4, 5, 6, 7, 8, 10 
Meyerland Co., In re, 960 F.2d 512 (5th Cir. 1992),
cert. denied, 506 U.S. 1049 (1993) . . . . 8
Resolution Trust Corp. v. Allen, 16 F.3d 568 (4th
1994) . . . . 8
Resolution Trust Corp. v. Bayside Developers, 43
F.3d 1230 (9th Cir. 1995) . . . . 8
Resolution Trust Corp. v. Nernberg, 3 F.3d 62
(3d Cir. 1993) . . . . 8
Summerchase Condominium Owners Ass'n, Inc. v.
RTC, 145 F.R.D. 583 (S.D. Ala. 1993) . . . . 7
Thomas v. Arn, 474 U.S. 140 (1985) . . . . 9, 10
Walker v. FDIC, 970 F.2d 114 (5th Cir. 1992) . . . . 9

Constitutions, statutes and rules:

U.S. Const. Art. III . . . .  9 
Federal Magistrates Act, 28 U.S.C. 631 . . . . 9 
12 U.S.C. 1441a(1)(3) . . . . 3, 11
12 U.S.C. 1441a(1)(3)(A) . . . . 11

(III)

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IV

Rules-Continued:

Page

12 U.S.C. 1441a(m)(1) . . . . 3
12 U.S.C. 1819(b)(2)(B) . . . . 11
Fed. R. App. P.:
Rule 4 . . . . 8
Rule 47 . . . . 9
Fed. R. Civ. P. 59 . . . . 3, 5, 6

Miscellaneous:

Federal Deposit Insurance Corp., l994 Annual
Report . . . . 11
Resolution Trust Corp. Office of Planning Research,
and Statistic, Statistical Abstract August 1989/
September 1995 . . . . 11

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In the Supreme Court of the United States

OCTOBER TERM, 1995   

No 95-1286

PIETER BAKKER, ET AL., PETITIONERS

v.

FEDERAL DEPOSIT INSURANCE CORPORATION,
AS RECEIVER FOR HANSEN SAVINGS BANK,  SLA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
                         
BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 5) is
reported at 51 F.3d 242 (11th Cir. 1995). The opinion
of the district court (Pet. App. 1) is unreported.

JURISDICTION

The judgment of the court of appeals was entered on
May 1, 1995. A petition for rehearing was denied on
November 20, 1995. Pet. App 17. The petition for a
writ of certiorari was filed on February 13, 1996. The
jurisdiction of this Court is revoked under 28 U.S C.
1254(1).

(1)

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2

STATEMENT

1. This case  arose  from a contract dispute between
petitioners, Pieter Bakker, Shirley Bakker, Pieter
Bakker Marketing, Inc., and Pieter Bakker Manage-
ment, Inc., and First Federal Savings and Loan of
Hammonton, New Jersey, 1. involving petitioners'
management and operation of a resort in Marathon,
Florida, owned by subsidiaries of First Federal. In
1985, First Federal filed a claim against petitioners in
state court for breach of contract. Petitioners
counterclaimed, alleging various torts and breach of
contract, and asserted third party claims against
officers and employees of First Federal. Pet. App. 6.
After lengthy proceedings, including entry of
partial summary judgments dismissing petitioners'
tort and third party claims and several appeals in the
state court system, the case was tried in 1991 before a
jury on First Federal's complaint and petitioners'
remaining counterclaim for breach of contract. The
jury awarded First Federal $6,380.73 in damages, and
awarded the petitioners $930,855.00 on their counter-
claim. The trial judge set aside the jury's verdict on
the counterclaim, granting First Federal's motion for
judgment notwithstanding the verdict and, alterna-
tively, First Federal's motion for new trial. Peti-
tioners appealed to the Florida Third District court
of Appeal. Pet. App. 6.

___________________(footnotes)

1 During the pendency of the original state court action,
First Federal was merged into Hansen Savings Bank, SLA,
another financially troubled thrift, in a federally-assisted mer-
ger. For convenience, however, the parties have continued to
refer to the plaintiff in the underlying action as First Federal,
and we adopt that convention here.

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2. During the pendency  of petitioners' state court
appeal, First Federal was declared insolvent by the
Office of Thrift Supervision and the Resolution Trust
Corporation (RTC) was appointed as receiver. 2.  On
April 15, 1992, the RTC filed a notice of substitution
and simultaneously removed the case to federal
district court pursuant to 12 U.S.C. 1441a(1)(3). On
May 20, 1992, petitioners filed a motion to remand.
That motion was denied on September 15, 1992. Pet.
App. 7.
On September 29, 1992, 167 days after the removal
and 14 days after their motion to remand was denied,
petitioners filed a motion pursuant to Fed. R. Civ. P.
59 asking the district court to vacate the state court's
judgment. The RTC opposed petitioners' Rule 59
motion as untimely and sought dismissal of this
action based on petitioners' failure to file a Rule 59
motion within ten days of removal, pursuant to the
procedures set forth in Jackson v. American Savings
Mortgage Corp., 924 F.2d 195 (11th Cir. 1991).
The district court held the Rule 59 motion timely,
but denied it without considering it on its merits,
reasoning that a district court "is not an appellate
court and is unwilling to act as such." Pet. App. 3.
Petitioners then appealed the underlying state court
judgment to the Eleventh Circuit Court of Appeals.
The RTC cross-appealed the district court's ruling
"that the petitioners' Rule 59 motion was timely and
that court's refusal to consider the petitioners'
motion on its merits. The RTC argued that, in both

___________________(footnotes)
                                     
2 The RTC terminated by operation of law on December 31,
1995. The FDIC succeeded the RTC by statute on that date
as receiver for Hansen Savings Bank, SLA. 12 U.S.C.
1441a(m)(1).

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instances, the post judgment removal procedures
previously established by the Eleventh Circuit in
Jackson-a case on which petitioners had relied in
their remand motion-had been violated. Pet. App. 7.
3. The court of appeals held that the district court
failed to follow the procedures set forth in Jackson by
refusing to consider that motion on its merits if it
was timely, Pet. App 9-11, and by erroneously con-
cluding that the petitioners' Rule 59 motion was
timely filed, Pet. App. 11-13. The court of appeals
stated that, in Jackson, it had noted that its role was
"to review the actions of federal. district court, not to
exercise appellate jurisdiction over state court
proceedings." Pet. App. 8. Therefore, Jackson had
established a procedure whereby, if an appealable
order was pending in the state court case at the time
it was removed, the party aggrieved by the order
should move in federal district court to have it
vacated or modified  In that way, "the fiction that the
state court judge's acts were the acts of the district
judge will have been converted into reality," Ibid.
(quoting Jackson, 924 F.2d at 199), and, if the district
court denies relief, the issue will be properly posed
for resolution by the court of appeals. The court also
noted that in Jackson it had set a time limit for the
aggrieved party's motion. The court had "stated that,
pursuant to Rule 59(b) and (e): The district judge
should give a dissatisfied party ten days from the
removal date to file the motion.'" Pet. App. 9 (quoting
Jackson, 924 F.2d at 199 n.9).
The court of appeals concluded:

Thus, Jackson mandates that before this Court
will review a state court order or judgment in a
case that has been removed to federal court, the

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party seeking appeal must first file a Rule 59
motion to modify or vacate the judgment in the
district court. Moreover, the motion must be filed
within ten days from the date of removal of the
case to federal court. If this procedure is complied
with, the district court is to consider and decide
all issues raised in the Rule 59 motion, and the
dissatisfied party may then appeal the district
court's decision to this Court. We will review the
district court's decision to grant or deny the Rule
59 motion, not the underlying state court judg-
ment per se.

Pet. App. 9.
The court of appeals affirmed the district court's
denial of petitioners' Rule 59 motion on the grounds
that the motion was untimely filed and petitioners'
right to appellate review of the underlying state court
judgment was thereby waived.

ARGUMENT

The court of appeals correctly applied Jackson to
hold that petitioners had waived their right to appel-
late review of the underlying state court judgment.
Petitioners did not file their Rule 59 motion until
September 29, 1992, 167 days after the RTC removed
the action to federal court. The procedures governing
review of actions removed in this posture were
clearly set forth by the Eleventh Circuit in Jackson,
and the district court and court of appeals were bound
to follow them.
1. Petitioners argue (Pet. 7) that "the court of
appeals erred in applying Jackson because it "took
precatory language" from the Jackson decision "and
created a hidden jurisdictional deadline" requiring
them to file a Rule 59 motion within ten days of the

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RTC's removal in order to preserve their right to
appellate review, Petitioners further argue that ap-
plication of this "new" rule in their case was "retro-
active" and contrary to due process.
Petitioners' argument (Pet. 5) that nothing in the
Jackson opinion "required or gave reasonable notice"
of the ten-day rule is inconsistent with the plain lan-
guage of that opinion. The entire focus of the Jackson
decision was the determination and announcement of
the procedures to be followed in reviewing cases re-
moved in this posture. The requirement to file a
motion to alter or amend the state court judgment is
set forth in the text of the opinion as well as in
footnote 9. See 924 F.2d at 199 & n.9  The footnote
indicates that the motion should be filed within ten
days of the removal the time limit under Federal
Rule, of Civil Procedure 59 for filing a motion for a
new trial or a motion to alter or amend the judgment.
Much of the opinion is devoted to explaining the ra-
tionale for adopting those procedures. The Jackson
court made it clear in its opinion it was establishing
the procedural rules that should henceforth be fol-
lowed by the district courts and the parties in cases of
this type in the Eleventh Circuit.
Petitioners argue (Pet, 4) that the Jackson rule
was "dictum," presumably because the Eleventh Cir-
cuit, consistent with its concern for applying a new
procedural ruling retroactively to a party that had no
opportunity to learn of it in advance, declined to apply
the ten-day rule to the appellant in that case. See 924
F. 2d at 199. Regardless of whether the Jackson rule
could be formally characterized as "dictum" for that
reason, however, the Eleventh Circuit in Jackson
made clear that it was making a considered legal
ruling that would be applied in future cases in which

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the parties had fair opportunity to learn of it and
comply with it. See pet. App. 12. The Eleventh 
Circuit has so understood Jackson in at least two
other cases. 3. District courts in the Eleventh Circuit
have also similarly understood the import of
Jackson's ten-day rule and have applied it against
both private parties and the RTC. 4.
Contrary to petitioners' contention (Pet. 8-10),
application of the Jackson rule in the instant case was
not retroactive. Jackson was decided on February 19,
1991, more than a year before the RTC filed its notice
of removal on April 15, 1992. The court of appeals
noted that it would be "reluctant to apply the Jackson
ten-day rule to [petitioners] if their failure to comply
with it had occurred before that decision was an-
nounced." 51 F.3d at 246. But, the court held, in light
of the fact that Jackson was decided more than one

___________________(footnotes)
                                    
3 See Bakery Centre Ass'n v. Orientations Galley, Inc., 54
F.3d 688, 689 (11th Cir. 1995) ("Under Jackson, the exclusive
procedure parties must follow upon the removal of a state
appeal is the filing of a timely Rule 59(e) motion."); Aguilar v.
FDIC, 63 F.3d 1059, 1061 n.1 (11th Cir. 1995) ("This [ten-day]
rule was first set out in Jackson ."). The Fourth Circuit in
RTC v. Allen, 16 F.3d 568 (4th Cir. 1994), summarized the
Eleventh Circuit's approach as "requir[ing] that the party
seeking appeal first file a motion in the district court to modify
or vacate the order or judgment within ten days from the
removal date." Id. at 572-573.
4 See Bakery Centre Ass'n, 54 F.3d at 688 (affirming district
court's ruling that appellant's right to appeal was waived by
failure to file timely motion to vacate); Summerchase
Condominium Owners Ass'n, Inc. v. RTC, 145 F.R.D 583, 584
(S.D. Ala. 1993) (enforcing "[t]he Jackson requirement that an
unsatisfied litigant file a Rule 59 motion within 10 days of
removal in order to obtain review of a state court judgment"
against the RTC, and dismissing the case).

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8                

Year before the removal of this case, "it is not unfair
to charge petitioner with knowledge of [Jackson]
and the ten-day rule announced  therein" 51 F.3d at
246. 5.
2. Petitioners also contend. that the Eleventh
Circuit's decision conflicts with decisions of the
Third, Fourth and Fifth Circuits. Although other    
circuits have employed different procedural ap-
proaches when addressing removal following a state
court trial decision, 6. all of those procedures permit
                
___________________(footnotes)
                        
5 Petitioners cannot and do not claim that they were
unaware of the existence of the Jackson decision.  They
themselves cited Jackson to the district court in support of
their May 20, 1992, motion to remand (R. 3, at 6, Record
Below), more than four months before they filed their untimely
motion to vacate.

6 The Fourth Circuit has adopted an approach whereby the
district court must "immediately after removal * * * adopt
the state court judgment as its own." Resolution Trust Corp. v.
Allen, 16 F.3d 568, 573 (4th Cir. 1994). The parties then have
the ordinary ten days to file motions for a new-trial under Fed.
R. Civ. P. .59, or the aggrieved party may file a notice of appeal
under the ordinary time periods applicable under Fed. R. App.
P. 4. Ibid. See also Resolution. Trust Corp. v. Bayside Devel-
opers, 43 F.3d 1230, 1238 (9th Cir. 1995) (following same ap-
proach). In jurisdictions that do not have applicable precedent,
the RTC and FDIC have advocated positions consistent with
the Fourth Circuit's approach. The Third Circuit has held
that in a case removed from a state. court after judgment,
parties should have thirty days to file. Rule 59 motions, after
which time "the district court should enter an order adopting
the state court judgment as its own," from which an appeal
may be taken, Resolution Trust Corp. v. Nernberg, 3 F.3d 62,
68 (3d Cir. 1993), The Fifth Circuit has adopted an approach
requiring the district court "to take the state court judgment
as it finds it, prepare the record as required for appeal, and
forward the case to a federal appellate court for review." In re
Meyerland Co., 960 F.2d 512, 520 (5th Cir, 1992) (en banc), cert.

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9

federal appellate review of the removed cases. As this
Court has observed on numerous occasions, "[t]he
Courts of Appeal have significant authority to fashion
rules to govern their own procedures." Cardinal
Chemical Co. v. Morton Int'1, Inc., 113 S. Ct. 1967,
1976 (1993). Federal Rule of Appellate Procedure 47
specifically authorizes the courts of appeal to "re-
gulate their practice in any manner not inconsistent
with these rules." The fact that the circuits have
different approaches to address the procedural effects
of removal of a case after an appealable order has been
issued by the state court, therefore, does not create a
conflict in the circuits that requires this court's
resolution. Local procedural rules adopted by the
circuits may differ, so long as they adequately protect
the parties' substantive legal rights.
In Thomas v. Arn, 474 U.S. 140 (1985), this Court
held that a rule promulgated by the Sixth Circuit
conditioning the right to appeal a district court's
order upon the filing of timely objections to the
magistrate's report and recommendation was within
the court's supervisory powers and violated neither
the Federal Magistrates Act nor Article III of the
Constitution. The Court affirmed the Sixth Circuit's
ruling that the petitioner had lost her right to appeal
the district court's order denying habeas corpus
relief by failing to file objections to the magistrate's
report and recommendation within ten days.  Al-
though different procedural approaches had been

___________________(footnotes)

denied, 506 U.S. 1049 (1993); accord In re 5300 Memorial
Investors, Ltd., 973 F.2d 1160, 1162-1163 (5th Cir. 1992);
Walker v. FDIC, 970 F.2d 114, 119-120 (5th Cir. 1992). Under
the Fifth Circuit's approach, it appears that the parties have
no opportunity to challenge the state court's judgment in
federal district court.

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10 
                           
taken by various circuits, the Court determined that
they were all legitimate exercises of the courts'
supervisory powers because they "were procedural
rules and not "restrict[ions] on the court's own
jurisdiction." Id. at 146-147, The Court further held
that the Sixth Circuit's rule did not violate due
process because the petitioner's right to appeal was
not denied, "it was merely conditioned upon the filing
of a piece of paper * * * [and] the State. certainly
accords due process When it terminates a claim for
failure to comply with a reasonable procedural or
evidentiary rule.'" Id. at 155.
The same reasoning applies here. The Jackson rule
requires that the parties articulate to the district.
court their specific challenge to the underlying state
court judgment, together with any federal issues
arising in connection with the substitution of the
RTC as a" party to the action in place of the failed
financial institution. The Jackson procedure also
provides an opportunity for the district court to
conduct additional proceedings and take new evidence,
if appropriate. The procedure is not inconsistent with
any constitutional or statutory provision.  See
Thomas, 474 U.S. at 148-155. Where, as here, the rule
has been set out clearly in a published decision, there
is no trap for the unwary; so long as a litigant follows
the procedures adopted by the Eleventh Circuit,
Appellate review is preserved. 7.
 
___________________(footnotes)
                            
7 The issues addressed by the Eleventh Circuit's Jackson
rule arise only when a case is removed from state court after a
state trial court judgment. That situation has not arisen
frequently; as a practical matter, it arises only when a financial
institution that is a party to a state court ease fails and a
federal receiver or conservator with removal powers is ap-
pointed after the state trial court has issued a judgment. See,

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CONCLUSION

The petition for a writ of certiorari should be
denied.

Respectfully submitted.

WILLIAM F. KROENER, III
General Counsel

ANN S. DUROSS
Assistant General Counsel

THOMAS L. HINDES
Senior Counsel

SHEILA KRAFT BUDOFF
Counsel
Federal Deposit Insurance Corporation

DREW S. DAYS, III
Solicitor General

MAY 1996

___________________(footnotes)

e.g., 12 U.S.C. 1441a(1)(3)(A); 12 U.S.C. 1819(b)(2)(B). Because
of the decline in the number of failures of banks and thrift
institutions in recent years-and therefore in the number of
instances when a federal receiver is appointed-that situation is
becoming even rarer. See Federal Deposit Insurance Corp.,
1994 Annual Report 125 (steady decline of FDIC-insured banks
"closed because of financial difficulties from 200 each in 1988 and
1989 to 13 in 1994); Resolution Trust Corp., Office of Planning,
Research, and Statistics, Statistical Abstract August 1989/
September 1995, at 9 (steady decline in number of institutions
taken over by RTC from 313 in 1989 to 2 in 1995).

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