Court Opinion

ID: 8981622
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:30:33.636339+00
Date Added: 2024-06-11T17:10:42.335246
License: Public Domain

PATRICK E. HIGGINBOTHAM,
Circuit Judge, concurring in part and dissenting in part:
I concur in the reversal of the sanctions order, but I dissent from the remainder of my colleagues’ thoughtful opinion. The case is difficult and perplexing, but I am persuaded of a different course. 12 U.S.C. § 1819(b)(2)(B) does not permit the FDIC to remove all cases pending on appeal in the state courts. The statute limits the right of removal to cases over which the district court may exercise some original jurisdiction. It does not forbid all removals from state appellate courts. It permits them when Rule 60 relief is available and sought. But that is not this case.
I find the majority’s reading of the statute to be implausible, not required by precedent, and to rest upon judicial creation of new procedural tracks for removal without Congressional warrant. The majority leaves us with unacceptable alternatives: we must either permit the federal *1264district courts to exercise appellate jurisdiction over state trial judgments, or require them to enter judgments that do not reflect their own judgment at all. The majority chooses the latter path, imposing a clerk’s role on Article III courts; but neither alternative is consistent with the statute or the rest of the federal jurisdictional legislation.
I.
12 U.S.C. § 1819(b)(2)(A) provides that, subject to exceptions not applicable here, all civil suits to which the FDIC is a party are deemed to arise under the laws of the United States. 12 U.S.C. § 1819(b)(2)(B) provides that the FDIC may remove any such action, suit, or proceeding from “a State court to the appropriate United States district court.” These subsections expand the original and removal jurisdiction of the district courts, as they permit the FDIC to bring actions which, because of their subject matter, would ordinarily have been matters for the state courts. Carrollton-Farmers Branch Independent School District v. Johnson & Cravens, 13911, Inc., 889 F.2d 571 (5th Cir.1989); Triland Holdings & Co. v. Sunbelt Service Corp., 884 F.2d 205 (5th Cir.1989).
To permit the FDIC to remove this case, however, my brothers read the statute to do far more than add a new class of cases to the district courts’ federal question jurisdiction. They read it to permit the FDIC to remove cases to the district courts regardless of their procedural posture (so long as they are still pending somewhere in the state system). Ultimately, their reading is necessarily premised on an assumption that the general federal question removal statutes, 28 U.S.C. §§ 1441-1451, permit this as well. I do not think these statutes can bear that freight.
A.
The majority opinion suggests that § 1819(b)(2) creates in the FDIC a right of removal independent of the general removal statutes. As I noted, this is true to a point — the FDIC may remove any case to which it is a party, and is not constrained by the subject matter limits that bind other parties. But to conclude, without reference to the general removal statutes, that § 1819(b)(2) permits removal of any pending case regardless of procedural posture, we must find in FIRREA an independent procedural track for removed cases. I can find none, and must assume that Congress intended to rely on the procedural track established in the general removal statutes. For example, § 1819(b)(2)(B) provides that removal must be to the “appropriate” district court. As “appropriate” is not defined for these purposes in FIRREA, or anywhere else in the United States Code, it necessarily refers to the venue provision in 28 U.S.C. § 1441(a). That is, removal must be to the district court for the district and division in which the action is pending. Further, FIRREA simply makes no provision for much of the mechanics of removal. If the general removal statutes are not the guide, how is the FDIC to let the district court know it wishes to remove the case? How is the other party to oppose the removal? What happens to the proceedings in state court upon removal? What if the district court determines removal is not proper? It strains credulity to say that we are not to look to the general removal statutes for the answers.
When Congress wished to depart from the ordinary procedural track in FIRREA, it said so explicitly. That we are deciding this case at all proves the point, for ordinarily we do not hear appeals of remand orders — we are hearing this one because 12 U.S.C. § 1819(b)(2)(C) compels us to do so. But these express departures are few and far between, and do not in any sense constitute an entire procedural track. My brothers apparently do not dispute this, for their holding ultimately relies substantially upon cases involving removal under the general statutes.
B.
The argument that parties may remove all cases on appeal in the state court system relies upon the language of § 1819(b)(2), the general removal statutes, and decisions which purportedly have read that language to permit such removal. *1265Specifically, the argument urges that § 1441(a)’s language permitting the removal of “any such action, suit, or proceeding from a state court” means exactly what it says. Section 1819(b)(2)(B) likewise provides for removal of any action “from a State Court.” The argument continues that the cases clearly establish that any action may be removed until the state appellate process has been exhausted.
I agree that we should give a plain meaning to the statutory language to provide for the removal of “any” action, suit, or proceeding “from a State Court.” Congress swept broadly in describing the types of removable actions — “any” means just that. But, despite the breadth of the description of the categories of removable eases, the statute is silent as to their procedural posture. We could read these statutes to authorize removal regardless of procedural posture, which would include even cases under submission to a state’s highest court. That is the position the majority takes. It has also been argued that we should not go that far. This approach, understandably recoiling at the prospect of removal an instant before complete appellate exhaustion, asserts that at some point in the state appellate process, an action ceases to be removable — perhaps after an intermediate appellate decision. I do not find the principle that supports this limit, once one subscribes to the idea that the statute’s broad language is more than a broad description of the category of removable cases. If the statute’s broad language is not read as an effort to sweep broadly only in describing the type of removable litigation, but is rather read as describing all cases regardless of procedural posture, there is no point in the appellate process where removal will defy the statute.
These difficulties in themselves would lead me to have serious questions about the majority’s reading of the statutes. But in any event I am persuaded that the statutes’ plain language imposes the limit I have suggested. I have said that I believe that “any” refers solely to the type of cases that are removable, not to their procedural posture. The language of § 1441(a) confirms my belief. While the statutes provide for the removal of any action, suit, or proceeding from a state court, § 1441(a) states that to be removable, the case must be one over which the district court has original jurisdiction. This limit of course functions primarily to restrict the types of cases that may be removed, but it also serves to ensure that the district court will exercise original jurisdiction, and no other kind, over them.
Whatever jurisdiction the district court exercises over cases removed from state appellate courts, it cannot be original, if the time for relief from trial judgment has run. If the district court were to undertake a full examination of the merits, it would in effect exercise appellate jurisdiction over the state trial court’s judgment. That this contravenes the removal statutes and works a radical change in the federal jurisdictional legislation is plain. See Barrow v. Hunton, 99 U.S. 80, 25 L.Ed. 407 (1879). See also District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983); Atlantic Coast Line R. Co. v. Locomotive Engineers, 398 U.S. 281, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970); Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923). Perhaps for this reason, my brothers opt for the other approach, and require the district courts to rubber-stamp the trial judgments in these cases, so that they may be brought to the federal appeals courts for review.
There are no fewer problems with this approach. It simply vests federal appellate jurisdiction over the state court’s judgment in the circuit courts, rather than the district courts. And while it prevents the district courts from exercising appellate jurisdiction over the state trial judgments, it does not permit them to exercise original jurisdiction. It would take an overly strained reading of the term to conclude that the majority’s rubber stamp process constitutes the exercise of original jurisdiction. Finally, this approach has the added disadvantage of imposing a judicially crafted exception to the procedural track Congress established for removal. I find it difficult to believe that when Congress provided for *1266state cases to be removed to district courts, it intended that the district courts would be required to enter the state court judgment as its own. Congress can define jurisdiction, but it cannot dictate the outcome of an exercise of Article III power. United States v. Klein, 13 Wall. 128, 20 L.Ed. 519 (1871); Glidden Co. v. Zdanok, 370 U.S. 530, 82 S.Ct. 1459, 8 L.Ed.2d 671 (1962). Further, I think it plain that if Congress intended that removed cases flow directly to the United States Courts of Appeals, it would have said so.
Nonetheless, if our cases permitted removal in these circumstances, we would be bound to permit it here, for we cannot overrule prior panels. But unlike my brothers, I do not read our cases so broadly-
It is of course plain that no case may be removed once the state appellate process has been exhausted. See Four Keys Leasing and Maintenance Corp. v. Simithis, 849 F.2d 770 (2d Cir.1988); Ristuccia v. Adams, 406 F.2d 1257 (9th Cir.), appeal dismissed and cert. denied, 396 U.S. 1, 90 S.Ct. 24, 24 L.Ed.2d 3 (1969); Mestice v. McShea, 201 F.2d 363 (3d Cir.1953). It is equally beyond dispute that any case may be removed prior to trial judgment, provided the other criteria for removal are met. But, as I will demonstrate, things are not as clear in the gray area between trial judgment and appellate exhaustion. Principled line-drawing thus becomes necessary, and must be undertaken with strict attention to the removal scheme Congress has carefully crafted.
We have faced the issue of post-trial-judgment removal only a few times. In Murray v. Ford Motor Co., 770 F.2d 461 (5th Cir.1985), the plaintiff brought a products liability action against Ford in a Texas court. The Texas court set Ford’s appearance date for a Tuesday, but Ford removed on the previous Friday. The Texas court did not receive notice of the removal, so when Ford failed to appear on Tuesday, the court entered a default judgment for the plaintiff. Ford convinced the district court to set the judgment aside under Rule 60(b)(6). We held this relief was inappropriate, but affirmed because Rule 60(b)(1) relief was still available.
FDIC v. Yancey Camp Development Co., 889 F.2d 647 (5th Cir.1989) presented circumstances more similar to those we now face. YCD filed an application in Texas court for a writ of garnishment against Highland Park National Bank, in an effort to collect a judgment against an entity YCD incorrectly believed had deposits at the bank. Internal problems prevented the bank from filing a timely answer, and the Texas court entered a default judgment for YCD. The bank appealed to the Texas Court of Civil Appeals, but went insolvent while the case was pending. The FDIC intervened and removed to the district court, seeking Rule 60(b) relief. We held the district court improperly refused to grant the relief. We did not discuss the removal question further than to say “[a] state court judgment in a case properly removed to federal court — like the one before us — can be vacated under Federal Rule of Civil Procedure 60(b).” 889 F.2d at 648.
In Beighley v. FDIC, 868 F.2d 776 (5th Cir.1989), the FDIC did not receive notice of the plaintiffs suit against the failed bank until after the state court had entered a default judgment in the plaintiffs favor. The FDIC filed motions in the state court to vacate and for new trial, but removed before the state court could rule on them. We held the removal proper.
We also held removal proper in Northshore Development Inc. v. Lee, 835 F.2d 580 (5th Cir.1988). There, the savings and loan had a judgment in its favor reversed by an intermediate Louisiana appellate court; that court further held the opposing party was entitled to damages against the savings and loan for wrongful issuance of a temporary restraining order and injunctions. The appellate court remanded the case to the trial court to fix damages. After the trial court made its award, the FSLIC intervened and removed the case to the district court seeking relief from judgment under Rule 60(b).
We have also permitted a district court on removal to set aside a default judgment *1267against a Jones Act defendant. Azzopardi v. Ocean Drilling & Exploration Co., 742 F.2d 890 (5th Cir.1984). The Ninth Circuit has permitted a district court on removal to set aside a default judgment against a diverse defendant on a state law claim. Butner v. Neustadter, 324 F.2d 783 (9th Cir.1963). In Munsey v. Testwortk Laboratories, Inc., 227 F.2d 902 (6th Cir.1955), the Sixth Circuit did likewise.
A search for an explicit unifying principle in these cases is in vain. Their language equally supports two implicit possibilities — that cases may be removed any time prior to final appellate judgment, or that cases may be removed only as long as the district court may exercise some form of original jurisdiction over the case, even if only of the limited Rule 60 variety. My reading of the removal statutes leads me to opt for the latter. Our holding in Yancey Gamp does not compel otherwise. The case there was removed from a state appellate court, but the FDIC sought Rule 60 relief, the exercise of original jurisdiction. This is consistent with our ordinary procedure. When a party in a case before us seeks Rule 60 relief, we remand to the district court for that determination before considering the appeal.
II.
The Eleventh Circuit, the only other circuit to have considered the problem, has taken the majority’s position. The Eleventh Circuit held the FSLIC could remove a case after trial judgment, but before the time for appeal has lapsed. The court approached the case the same way the majority does, and added that if Congress had intended to otherwise limit the right of removal to a particular point in the proceedings, it could have said so explicitly. Indeed, Congress did just that in 12 U.S.C. § 632 (1982), limiting the power of a Federal Reserve member bank to remove a suit to “any time before the trial thereof.” In re Savers Federal Savings and Loan, 872 F.2d 963, 964 (11th Cir.1989). I am not persuaded that the failure to place similar language in FIRREA compels the majority’s reading. No such language is in the general removal statutes either; the limit comes from the emphasis on original jurisdiction. Finally, the Eleventh Circuit did not address the difficulties of its holding, particularly the absence of fresh procedural tracks in FIRREA.