### UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-30539

FEDERAL DEPOSIT INSURANCE CORPORATION, O rganized and E xisting Under the Laws of the USA, Plaintiff–Appellee,

v. SLE, INCORPORATED; FUTURE REVENUES, INCORPORATED; ROGER J. LEBLANC, Defendants–Appellants,

v. CADLEROCK JOINT VENTURE II, L

. P., Successor-in-interest and A ssignee from The Cadle Company, Interested Party–Appellee.

Appeal from the United States District Court for the Middle District of Louisiana

Before REAVLEY, PRADO, and ELROD, Circuit Judges. PER CURIAM: This c ase involves an appeal from the district court’s order denying Appellants’ Federal R u l e o f Civil Procedure 6 0(b)(4) motion to vacate. We AFFIRM. U n i t e d S t a te s C o u rt o f A p p e al s F i f t h C i rc u i t 

### F I L E D J uly 2, 2013 Ly l e W . Cay ce Clerk Case: 12-30539 Document: 00512294800 Page: 1 Date Filed: 07/02/2013No. 12-30539 I. In October 1995, the Federal Deposit Ins u r a n c e C o r p o r a tion (“FDIC”) filed

a compla i n t a g a inst S.L.E., Inc., Future R evenues, Inc., and Roger J. LeBlanc (collectively, “Appellants”) for sums due under v a r i ous p romissary n o tes. In February 1996, Appellants entered i n t o a S t ipulated J udgment in f avor of the FDIC and against Appellants. The Stipulated Judgment recognized the FDIC

as the holder in due course of five promissary notes in original principal sums, and recognized liability against Appellants for various amounts. 1 In February 2006, CadleRock Joint Venture II, L.P. (“CadleRock”) moved

ex parte to re-open the case to allow CadleRock to f ile the necessary pleadings to revive the Stipulated Judgment. The next d a y, the dis t r i c t court granted CadleRock’s motion to re-open the case. C adleRock t hen filed a n ex parte motion to revive the S tipula ted Judgment a s it pertained to Appellants (the “Revival Motion”). In the Revival Motion, CadleRock argued that: ( 1 ) i t was the successor-in-interest and assignee from The C a dleCompany, successor-ininterest and assignee from the FDIC; and (2) the Stipulated J udgment remained unsatisfied. C adleR o ck attached the affidavit of its account officer, Denise E. Harkless, to the Revival Motion to substantiate its claims that CadleRock was the sole owner o f the Stipulated Judgment, and t hat the Stipulated Judgm ent remained unsatisfied. Soon after, the district court granted the Revival Motion and revived the Stipulated Judgment (the “Revived Judgment”) as it p e rtained to Appellants. Five year s later, in June 2011, CadleRock commenced c o llection and served Appellants with pleadings identifying CadleRock as the assignee of the Stipulated Judgment. Appellants then moved to vacate a nd annul the Revived

1 The FD IC’s com p laint als o nam ed Phoenix F i n a ncial G roup , L td

. ( “Phoenix”) as a d ef end ant. T he Stip ulated Jud gm ent recognized liability agains t Phoenix as w ell, but Phoenix entered into a s ettlem ent agreem ent w ith Cad leRock bef ore this ap p eal. Accord in g l y , this f actual d es crip tion exclud es events p ertaining to Phoenix. 2 Case: 12-30539 Document: 00512294800 Page: 2 Date Filed: 07/02/2013No. 12-30539

Judgment (“Motion to Vacate”). In the Motion t o Vacate, Appellants argued that CadleRock d id not have standing t o file t h e R e v i v a l M o t ion because i t did not

move to s ubstitute as a party plaintiff in accordance w i th Federal Rules of Civil Procedure 25(c) and ( a) (3) before filing the Revival Motion. Appellants conceded, however, that “ [h]ad CadleRock prop e r l y moved to substitute as the plaintiff b e fore f iling the Revival Motion, it w ould have had standing t o do so . ” Appellants also argued in the Motion to V acate that t hey were never served with the Revi v a l M otion because i t had been filed ex parte— and, as a result, they

were denied an opportunity to assess: (1) CadleRock’s standing to substitute as

a transferee of the FDIC, or (2) the a m ount t hat CadleRock claimed it was due. Appellants contended that no accounting h ad b e e n m a de for several years regarding the balance o wed on the Stipulated J udgment and that CadleRock did not include a balance statement in the Revival Motion. The di s t r ict court scheduled a status conference and ordered the parties to submit lists of legal a nd factual issues that they wished to discuss during the conference. Ap p e l l ants f ramed the standing i ssue narrowly in their list of submitted issues, contending that CadleRock did not have standing to o btain the Revived Judgment because it failed to substitute as a party plaintiff under Rules 25(c) a n d ( a ) ( 3 ). After the conference, the district c ourt denied the Motion to Vacate. Appellants timely appealed the district court’s ord e r d e n y i ng the Motion to Vacate. I I. Generally, we review a district court’s Rule 60(b) ruling for abuse of discretion. 2 Jackson v. FIE Corp ., 302 F.3d 515, 521 (5th Cir. 2002) ( citing Bludworth Bond Shipyard, Inc. v. M/ V Caribbean Wind , 841 F.2d 646, 6 49 (5th Cir. 1 988)). Rule 60(b)(4) m otions, h owever, “ leave no margin for consideration

2 While the M otion to Vacate d id not technically ref er to Rule 60(b) , it m aintained that the jud gm ent w as void , and Ap p ellants s p ecif ically id entif

ied Rule 60(b) ( 4) as a bas is f or the M otion to Vacate in their lis t of legal and f actual is s ues p res ented to the d is trict court. 3 Case: 12-30539 Document: 00512294800 Page: 3 Date Filed: 07/02/2013No. 12-30539

of the district court’s discretion as t he j u d g m ents themselves are by d e finition either legal nullities or not.” Id

. (citation and quotation omitted). For this
reason, our r eview of the issues raised in this appeal is “effectively de novo .” I d

. (citation omitted). III. Appellants r aise three argument s on appeal. First, Appellants contend that the Revived Judgment is void under R ule 6 0(b)(4) because C adleRock did not have standing to f ile the R evival Motion in light of its failure to substitute

as a p l a inti f

f u n der Rules 25(c) and (a)(3). S econd, Appellants argue that CadleRock’s failure to substitute under Rules 25(c) and (a)(3) violated their due
process r ights. Third, t hey claim that federal law preempts Loui s i a n a law regarding the revival of judgments. We address each argument in turn. A. Appellants argue that the Revived Judgment is void under R ule 60(b)(4) because CadleRock w as required to substitute as a transferee of the F DIC under Rules 25(c) a nd (a)(3) before filing the Revival Motion, a nd failed to d o so. 3 We disagree. As an initial matter, Appellants conceded before the d istrict c o urt that “[h]ad CadleRock properly moved to substitute as the plaintiff before filing the Revival Motion, it would h a ve had standing to do so.” Therefore, A p pellants’

s t a n d ing challenge is a narrow one—namely, whether CadleRock’s failure t o

s u b s titute as a transferee of the FDIC under R ules 2 5(c) and (a)(3) eliminated

3 A s a n as id e, Cad leRock argues that the Revived Jud gm ent is not void und er R u l e 60(b) ( 4) becaus e it revived the Stip ulated Jud gm ent in accord ance w ith Louis iana p roced ure, w hich d i d n o t r e quire Cad leRock to s ubs titute as a trans feree of the FD I C

. This argum ent lack s m erit becaus e w e have held that s tate proce d u ral rules involving s ubs titution cannot p revail over the requirem ents of Rule 25 in f ed eral courts

. See Ra nsom v . Brenna n , 437 F

. 2d 513, 520 (5th Cir. 1971) ( “Since Rule 25 is a valid p roced ural rule, it theref ore f ollow s that the term s of Rule 25, and f ed eral court d ecis ions interp reting its m eaning, control the m anner of ef f ecting s ubs titution in the f ed eral courts

. ”)

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CadleRock’s constitutional standing to file t h e Revival Motion. 4 Addressing this issue requires us t o det e r m i n e w h ether Rules 2 5(c) and (a)(3) impose a substitution requirement. As explained below, we conclude that they do not. Our analysis begins with the text of Rule 25(c), which provides: (c) Transfer o f I nterest. If an interest is t ransferred, the action m ay be continued by or against the original party unless the court, on motion, o rders the transferee to b e substituted in t h e a c t i on or joined with t h e original party. The motion m ust be served a s p rovided in Rule 25(a)(3). Fed. R. Civ. P. 25(c). As reflecte d a bove, Rule 25(c) includes permissive language, and does not r equire transferees to substitute in an action. See Wright, M iller, & Kane, Federal Practice and Procedure § 1958 (stressing that R u l e 25(c) “is wholly permissive”). Rule 25(a)(3), which governs the servi c e o f substitution, provides:

(3) S ervice

. A m otion to s ubstitute, together with a notice of h earing, must be s erved o n the parties as provided i n R u l e 5 and on nonparties as provided in Rule 4. A statement noting d eath must be served in t h e same manne r . Service may be made in any j udicial district. Fed. R

. C i v . P

. 2 5 (a)(3). The rules o f service in Rule 25(a)(3) govern any substitution motion that transferees choose t o file, but neither Rule 25(a)(3) nor (c) require a party t o move t o substitute. Simply put, t o r e a d a substitution requirement i nto Rules 25(c) and (a)(3) misconstrues their p lain terms. See Antonin Scalia & B ryan A. Garn e r , R e a ding Law: T he Interpretation of Legal

4 In s up p lem ental brief ing on ap p eal, Ap p ellants call our attention to tw o d ocum ents that w ere not includ ed in the ap p ellate record , w hich the d is trict court’s clerk ’s of fice f iled f or the f irs t tim e af

ter this ap p eal com m enced

. Ap p ellants argue that thes e d ocum ents cas t d oubt over Cad leRock ’s interes t in the Stip ulated Jud gm ent. We reject this argum ent becaus e, as exp lained above, Ap pellants conced ed bef ore the d is trict court that C ad leRock w ould have had
s tand ing to f

ile the Revival M otion but f or its f ailure to s ubs titute und er R ules 25( c) and ( a) (3)

.

5 Case: 12-30539 Document: 00512294800 Page: 5 Date Filed: 07/02/2013No. 12-30539

Texts 69 (1st ed. 2012) (“The ordina r y - m e a ning rule is the most fundamental semantic rule of interpretation.”). In spite of the plain language of Rule 2 5, Appellants r ely on two cases in support of th e i r position t hat CadleRock was required to substitute as a transferee o f the FDIC before f iling the R evival Motion. See Cadle Co. v. Neubauer , 562 F.3d 369, 371–72 (5th Cir. 2009); United States v. Transocean Air Lines , I nc. , 3 56 F.2d 702, 704 (5th Cir. 1 966). Both c a ses are readily distinguishable. In Transocean , a contingent fee agreement granted T ransocean’s counsel one-third of any judgment that Transocean recovered in a dispute pending in the District Court for the Southern District of Florida. 356 F.2d at 703–04. In the first a ppeal, we held that Transocean was e ntitled to awards, and set out the method to de t e r m i n e t hose awards. Id

. a t 7 03 ( discussing United States v. Associated Air Tran s . , 2 7 5 F.2d 827 (5th Cir. 1960)). On remand, the district court dire c t e d Transocean and the government to reach a n agreement on the award due under this method. Id

. at 7 04. Instead of stipulating to a judgment in the d istrict court, the government granted Transocean a $ 75,000 credit on a claim of the government against Transocean i n an entirely separate proceeding pending in b ankruptcy court in the N o r t h ern District of California. Id

. The government a rranged t h e c redit with Tra n s o cean’s trustee in the California bankruptcy proceedings without informing Transocean’s counsel in the Florida litigation. Id

. After the district court in California approved the agreement, the bankruptcy trustee filed a stipulation to dismiss Transocean’s claims in the Florida district court. Id . Transocean’s counsel objected to the entry of such a dismissal, arguing t hat the effect of the com p r o mise settlement would deprive Transocean’s counsel of its one-third interest i n Transocean’s recovery. Id

. The district court agreed, and the government appealed. Id

. In the s econd appeal, we aff i r m e d the district court’s judgment, concluding that the compromise settlement between the go v e r n ment and the bankruptcy
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trustee ignored the r ights of Tr a n s ocean’s counsel u nder the c ontingent fee ag r e e m e n t

. Id

. a t 705–06. Relying on Rule 25, we r easoned that “[t]he adjudication in bankruptcy of T ransocean did not, of i tself, substitute the Trustee in bankruptcy in the litigation pending in Florida. There should have been a motion a nd an order. Because the Trustee did n ot seek to b e substituted for Transocean, i t did not become a party.” Id

. at 704. Based on this view, we stressed that “ [o]nly where there has been a n o tice of dismissal f iled b efore the filing o f a n a n s w er or m otion for summary judgment, o r when a stipulation of dismissal has been filed by all parties, can a dismissal be effected without a court order.” Id . at 705 (citing Fed. R. Civ. P. 41(a)(1)). Ap p e l l a n t s a t t e m p t t o extend Transocean in order to argue that CadleRock

was required to substit u t e a s a transferee of the FDIC under Rule 2 5 in this

case. W e disagree for two reasons. First, unlike the situation here, Transocean involved two s e p a r ate legal disputes p e nding in two federal district c ourts in different states. Second, Transocean involved a s t i pulation to voluntarily dismiss ajudgment that involved a specific party without a court order, which implicated Rul e 4 1(a)(1)(A)(ii) on voluntary dismissals. 5 Even assuming arguendo that Transocean could impose a Rule 25 s ubstitution requirement in

cases that implicate voluntary dismissal under Rule 41, Appellants offer no argument or precedent supporting that t his potential requirement should apply when, as here, a case does not involve voluntary dismissal under Rule 41.

5 Rule 41( a) provid es : ( a) Voluntary D is mis s al. ( 1) By the P laintif

f

. (A) Without a C ourt O rd er. Subject to Rules 23( e) , 23. 1( c) , 23. 2, and 66 a nd any ap p licable f

ed eral s tatute, the p laintif f m ay d is m is s an action
w ithout a court ord er by f iling: ( i) a notice of d is mis s al bef ore t h e o p p o s ing party s erves either an ans w er or a m otion f

or s um m ary jud gm ent; or ( ii) a s tip ulation of d is m is s al s igned by all p arties w ho have ap p eared

. Fed

. R. Civ. P. 41( a)

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Ne u b a u e r

—the second case that Appellants rely on—is a lso inapposite. 562 F.3d at 369. In Neubauer , the appellee obtained an interest in a loan that the Neubauers had previously guaranteed. I d

. at 370. The appellee filed a Notice of Filing of Foreign J udgment in federal district court and, pursuant to Rule 25(c), moved to substitute as a plaintiff for a portion of that judgment. I d

. The district court granted the substitution motion a nd the Neubauers and their trustee moved t o vacate the substitute order on t he grounds that the appellee had b een i mproperly su b s tituted. I d

. The district court denied the motion to vacate. Id

. On appeal, the Neubauers and t heir t r u stee argued that the appellee did not e stablish a n y i nterest i n t he judgment, and thus had no standing to move to substitute. Id

. at 370–71. On appeal, we affirmed the district court’s order denying the motion to v acate after conc l u d i n g t h at the appellee did have an int e r e s t in the judgment and had standing to substitute. Id

. at 3 72. To reach this conclusion, we relied on an affidavit that the appellee attached to its motion to s ubstitute, which s tated that it was a judgment creditor with respect to that judgment. Id . at 371. Appellants broadly interpret Neubauer as requiring a transferee to move to substitute u nder Rule 25(c) to e nforce its rights with r espect to an interest in

a judgment. Appellants m isconstrue our holding in Neubauer

. I n that case, the appellee had moved to s u b s t i t ute before the a ppeal—we did not hold that substit u t i o n w a s necessary o r required under Rule 25. Moreover, N eubauer actually c uts against Appellants’ posi t i o n t h a t C a d l e R o c k does not have standing to substitute in this case. Similar to the affidavit in Neub a u e r d e monstrating th e appellee’s interest in the judgment a nd standing to move to substitute, CadleRock attached an affidavit to the R evival Motion from its accoun t i n g o f f i c er stating that CadleRock was the sole owner of the Stipulated J udgment. See id

. Therefore, i n l ight of Rule 25’s wholly permissive terms, we conclude that CadleRock w as not required under Rules 2 5 (c) and (a)(3) to substitute a s a

8 Case: 12-30539 Document: 00512294800 Page: 8 Date Filed: 07/02/2013No. 12-30539

transferee of the FDIC before filing the Revival Motion. Acco r d i n g l y , we conclude that the Revived Judgment is not void under Rule 60(b)(4). B. Next, App e llants argue that CadleRock’s failure to substitute as a party under Rule 25(c) and (a)(3) violated their d u e process rights under the Fifth and Fourtee n t h Amendments o f the U.S. Constitution. Specifically, Appellants contend that because they did not learn of the Revival Motion until several years after it was g ranted, they were denied an opportu n i t y t o c o ntest or to compel proof of: (1) CadleRock’s standing, or (2) the amount C a d l e R o ck claims is due. They emphasize that no accounting has been made for several y ears regarding the balance o w e d on the Stipulated Judgment and that CadleRock did not include a balance statement in the Revival Motion. We have held that a judgment may be set aside under R ule 60(b)(4) when “the district c ourt acted i n a manner so inconsistent with due process as to render the judgment void.” Callon P etroleum Co. v . Frontier Ins. Co. , 351 F.3d 204, 210 (5th Cir. 2003) (inte r n a l c i tation and quotation omitted). The requirem e nts of procedural due p r ocess are “flexible and call[] for such procedural p r o t e c tions as the particular situation demands.” Morrissey v. Brewer , 408 U.S. 471, 481 ( 1972). At a minimum, due proc e s s r e q u i r es that notice and an opportunity to be heard “be granted at a m eaningful time and in a meaningful manner.” Fuentes v. Shevin , 4 07 U.S. 67, 80 (1972) (citation and internal quotation marks omitted). Both of Appellants’ d ue process challenges f ail. A s a general matter, Appellants admitted a t oral argument that there is no due process r equirement to a hearing under Rule 25(c). W i t h r e s p ect t o standing, we reiterate that Appellants conceded before the d istrict court that “ [h]ad CadleRock p roperly moved to substitute a s the plaint i ff before filing the Revival Motion, it would h a v e h a d standing to do so.” Moreover, as concluded above, a motion t o substitute under Rules 25(c) and (a)( 3 ) w a s n ot a prerequisite to CadleRock’s
9 Case: 12-30539 Document: 00512294800 Page: 9 Date Filed: 07/02/2013No. 12-30539

standing. Regarding the lack of a ccounting, Appellants do not dispute, and conceded at oral argument, that they stil l h a v e s e veral avenues to s ecure any relief that they are due f r o m t h e Revived Judgment. For instance, L ouisiana Code o f Civi l Procedure Article 2031(b) grants Appellants an opportunity to annul the Revi v e d J u d gment if they c an offer evidence s howing t hat they satisfied their obligation prior to the dist r i c t court’s entry of the Stipulated Judgment. La. Code C iv. Proc. art. 2031(b). 6 Therefore, Appellants still have an opportunity to be heard with respect to any relief that they are allegedly due. For these reasons, Appellants’ due process challenges fail. C. Finally, Appellants a rgue that the Supremacy Clause of the United States Constitution p reempts Louisiana procedures on revival of judgments because those procedures c onflict wit h R u l es 69(a)(1) and 25. The Supremacy Clause provides that federal law “ shall be the s upreme Law of the Land[,] any T hing in the Constitution o r Laws of a ny State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. It mandates that we “invalidate state law only if it conflicts with a federal statute.” Matter of Gary A i rcraft C orp ., 681 F.2d 365, 369–70 (5th Cir. 1982). A

bsent explicit p reemptive language, s tate law conflicts w ith federal law w hen “compliance with both federal and state regu l a t i o ns i s a physical impossibility, or where state law stands as an obstacle to th e a c c omplishment and execution of t he full purposes and objectives of Congress.” Pac. Gas & Elec. Co. v. S tate Energy R e s. Conservation & D ev. Comm ’ n , 461 U.S. 190, 204 (1983) (internal quotations and citations omitted). Rule 69(a)(1) r equires parties to follow state law procedure in execution of
money judgments and i n proceedings supplementary to and in aid o f judgment

6 Sp ecif ically, Article 2031( b) p rovid es that “[ a] t any tim e af ter the s igning of jud gm ent of r e v i v a l , t he jud gm ent d ebtor may, by contrad ictory m otion, have the jud gm ent of revival annulled , up on show ing that the jud gm ent w hich has been revived was in f act satis f

ied p rior to the s igning of the jud gm ent of revival. ” La. Cod e. Civ. Proc. art. 2031( b)

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or execution (which includes the revival of judgments), with one important exception—that a federal statute governs where it applies. See F ed. R. Civ. P. 69(a)(1). 7 Appellants concede that CadleRock followed proper pro c e d u r e to revive the S t i pulated Judgment under L ouisiana law, but argue t hat these procedures conflict with R ule 25 because they do not r equ i r e t r ansferees to substitute as a party. Appellants’ preemption claim assumes that Rule 25 requires a part y t o s ubstitute, which we h ave rejected a bove. Given that Appellants have not shown an actual co n f l i ct between f

ederal and s t ate law, their preemption claim fails. IV. For the foregoing reasons, t h e district court’s order denying Appellants’ Rule 60(b)(4) motion to vacate is AFFIRMED.

7 Rule 69( a) ( 1) p rovid es : “A jud gm ent is enf orced by a w rit of execution, unles s the court d irects otherw is e. The proced ure on execution— and in proceed ings sup p lem entary to and in aid of jud gm ent or execution— m us t accord w ith the p roced ure of the s tate w here the court is located , but a f

ed eral s tatute governs to the extent it ap p lies

. ” Fed

. R. Civ. P. 69( a) ( 1)

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