Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-01122/USCOURTS-azd-2_11-cv-01122-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

CML-AZ Blue Ridge, LLC, a Florida

limited liability company, 

Plaintiff, 

vs.

Sterling Plaza West, LLC, an Arizona

limited liability company, et al., 

Defendants/Third-Party

Plaintiffs, 

vs.

Federal Deposit Insurance Corporation, 

Third-Party Defendant. 

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No. CV 11-01122-PHX-FJM

ORDER

The court has before it defendants' motion to remand (doc. 14), third-party defendant's

response (doc. 21), and defendants' reply (doc. 22). The court also has before it third-party

defendant's motion to strike or sever the third-party complaint (doc. 6), plaintiff's motion for

leave to supplement its separate motion to strike (doc. 8), and defendants' motion to

accelerate consideration and determination of the motion to remand (doc. 20).

I

Defendants filed a third-party complaint in state court against the Federal Deposit

Insurance Corporation ("FDIC") on March 4, 2011, and served it on April 20, 2011. The

FDIC filed a notice of removal on June 3, 2011 (forty-four days after the complaint was

Case 2:11-cv-01122-FJM Document 23 Filed 09/13/11 Page 1 of 3
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served, ninety-one days after the complaint was filed). Defendants claim remand is proper

because the notice of removal was filed after statutory removal deadlines and after the FDIC

waived its right to remove by seeking a disposition in state court. The FDIC claims the

removal period had not yet expired when it filed its notice of removal, and therefore the

removal was timely. It also disputes that it waived its right to remove by filing a motion to

dismiss in state court.

II

The general removal statute, 28 U.S.C. § 1446, requires a defendant to file a notice

of removal within thirty days of service. The FDIC does not challenge the defendants'

contention that it missed this deadline. It does, however, argue that removal was timely

under 12 U.S.C. § 1819(b)(2)(B), which provides that the FDIC "may 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 Corporation or the Corporation is substituted as a party." According to the FDIC,

the plain language of this statute should be disregarded and we should interpret it to allow

the FDIC to remove within ninety days after it has been served with the complaint, instead

of ninety days after the complaint was filed. 

The FDIC had ample notice of its right to remove this case within the time to comply

with either deadline. Instead, it initially chose to litigate in state court by filing a motion to

dismiss. Not until after the state court had scheduled oral argument did the FDIC attempt to

remove to federal court. Only a reading of the statute which flatly contradicts its plain

language would support the FDIC's position. 

Contrary to the FDIC's argument, it would have had thirty days to remove under 28

U.S.C. § 1446(b), even if the defendant had waited to serve the FDIC until ninety days after

filing the complaint. The removal provisions in 12 U.S.C. § 1819(b)(2)(B) are intended "to

supplement, not supplant, the general removal statute." Kirkbride v. Cont'l Cas. Co., 933

F.2d 729, 733 (9th Cir. 1991) (quoting FDIC v. Norwood, 726 F. Supp. 1073, 1075 (S.D.

Tex. 1989)). As a result, the FDIC may remove if it complies with either time period. 

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Few cases have analyzed the issue of when a complaint is "filed" for purposes of this

statute. That is because there is no ambiguity here. Congress knows the difference between

filing and service. We respectfully disagree with Costin Engineering Consultants, Inc. v.

Latham, 905 F. Supp. 861, 864 (D. Colo. 1995), in which the court concluded the ninety-day

period began to run when the FDIC was served or entered an appearance. In that case,

though, the FDIC's removal was timely under 28 U.S.C. § 1446(b), because it was made

within thirty days after the FDIC was served. The court's discussion of 12 U.S.C. §

1819(b)(2)(B) was unnecessary dicta. Additionally, Costin and the cases it cited all involved

the FDIC as a substitute party, in contrast to where, as here, the FDIC was originally named

in the complaint.

III

Because we find the notice of removal was untimely, we do not consider whether a

motion to dismiss filed in state court is a "clear and unequivocal" waiver of the right of

removal. Resolution Trust Corp. v. Bayside Developers, 43 F.3d 1230, 1240 (9th Cir. 1994)

(quoting Beighley v. FDIC, 868 F.2d 776, 782 (5th Cir. 1989)).

IT IS ORDERED GRANTING defendants' motion to remand (doc. 14) and

defendants' motion to accelerate consideration of the motion to remand (doc. 20). 

IT IS FURTHER ORDERED DENYING the third-party defendant's motion to

strike or sever (doc. 6), and plaintiff's motion for leave to supplement (doc. 8), as moot. 

The clerk shall remand this action to the Superior Court of Arizona in Maricopa

County.

DATED this 12th day of September, 2011.

Case 2:11-cv-01122-FJM Document 23 Filed 09/13/11 Page 3 of 3