Heaton v. Monogram Crdt Card

Revised July 22, 2002
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________________
No. 01-30104
_______________________
PATRICIA HEATON,
Plaintiff-Appellee,
versus
MONOGRAM CREDIT CARD BANK OF GEORGIA,
Defendant,
versus
FEDERAL DEPOSIT INSURANCE CORPORATION,
Movant-Appellant.
Appeal from the United States District Court
for the Eastern District of Louisiana
_________________________________________________________________
July 8, 2002
Before JONES, EMILIO M. GARZA and STEWART, Circuit Judges.
EDITH H. JONES, Circuit Judge:
Like an earlier appeal, Heaton v. Monogram Credit Card
Bank of Georgia, 231 F.3d 994 (5th Cir. 2000), this appeal is from
an order remanding this case to state court for lack of subject
matter jurisdiction. The main issues in this appeal are
(1) whether appellate jurisdiction exists to review the district
court’s refusal to allow the Federal Deposit Insurance Corporation
(FDIC) to intervene as of right in the action; (2) if so, whether
the district court erred in denying intervention; (3) whether this
court has jurisdiction to review the district court’s remand order;
and (4) if so, whether the district court erred in remanding.
Because of the important role that the FDIC plays in enforcing
federal banking laws, as evidenced by its broad jurisdictional
statute, we answer all four of these questions in the affirmative
and reverse the district court’s orders denying the intervention
motion as moot and remanding to state court.
BACKGROUND
Patricia Heaton brought a class action suit against
Monogram Credit Card Bank of Georgia in Louisiana state court
alleging violations of state usury laws. Monogram removed the case
to federal district court on the ground that Heaton’s claims under
Louisiana law were completely preempted by section 27 of the
Federal Deposit Insurance Act (FDIA), 12 U.S.C. § 1831d. That
provision authorizes federally insured "State banks" to charge
certain interest rates and fees and preempts state laws to the
contrary. 12 U.S.C. § 1831d(a); Heaton, 231 F.3d at 995-96.
According to the FDIC, Monogram is “engaged in the business of
receiving deposits” and is thus a “State bank” pursuant to
§ 1813(a)(2) of the same statute. If Heaton’s claims were
completely preempted, the district court had federal question
jurisdiction over the claims and the case as pled. See, e.g., Hart
2
v. Bayer Corp., 199 F.3d 239, 244 (5th Cir. 2000); McClelland v.
Gronwaldt, 155 F.3d 507, 512 & n.12, 516-17 (5th Cir. 1998); Krispin
v. May Dep’t Stores Co., 218 F.3d 919, 922 (8th Cir. 2000).1
Heaton moved to remand, but her motion was initially
denied. The case was assigned to another district judge. Heaton
amended her complaint to add a claim under the Truth in Lending Act
(TILA), 15 U.S.C. §§ 1601-1667f. Later, she sought reconsideration
of the court’s denial of her motion to remand (and moved to dismiss
the TILA claim). The FDIC attempted to intervene in the case as a
party defendant either as of right or permissively pursuant to Fed.
R. Civ. P. 24(a) or (b). On the day the FDIC’s motion was filed,
the district court remanded for lack of jurisdiction and dismissed
the TILA claim. Two days later, a magistrate judge denied the
FDIC’s intervention motion as moot.
Monogram appealed the remand order to this court, and
the FDIC participated in the appeal as an amicus curiae. This
court held that it lacked jurisdiction over Monogram’s appeal of
the remand order, but reinstated Heaton’s TILA claim, holding that
once the district court remanded the case, it lacked jurisdiction
to dismiss the claim. Heaton, 231 F.3d at 1000 & n.6. This court
1
The provisions of § 1831d are quite similar to certain provisions of
the National Bank Act, 12 U.S.C. §§ 85 and 86. The courts of appeals are divided
as to whether §§ 85 and 86 completely preempt state-law usury claims against a
national bank so as to confer federal subject-matter jurisdiction over such
claims. Compare Anderson v. H & R Block, Inc., 287 F.3d 1038 (11th Cir. 2002),
with Krispin, 218 F.3d at 922 (citing M. Nahas & Co. v. First Nat'l Bank of Hot
Springs, 930 F.2d 608, 611 (8th Cir. 1991)).
3
acknowledged that because of its reinstatement of the TILA claim,
“Monogram may file another petition for removal based on the TILA
claim once this case is returned to state court.” Id. at 1000 n.6.
Within a day of this court’s decision, Monogram again
removed the case to federal court, and the FDIC immediately filed
a second motion to intervene. Unbeknownst to Monogram and the
FDIC, however, Heaton had already obtained an ex parte state court
order dismissing her TILA claim. Consequently, Heaton moved to
remand; the district court complied, stating that it lacked
jurisdiction. The court rejected Monogram’s complete preemption
argument for federal jurisdiction, concluding that Monogram was not
“engaged in the business of receiving deposits” and thus was not a
“State bank” within the meaning of § 1813(a)(2). In its order
remanding the case, the court stated that it was dismissing as moot
the FDIC’s motion to intervene. The FDIC has appealed.
DISCUSSION
That the FDIC rather than Monogram has appealed makes all
the difference on this second run-through. In the first instance,
the effective denial of the FDIC’s motion to intervene may be
reviewed by this court notwithstanding the remand order according
to City of Waco v. United States Fid. & Guar. Co., 293 U.S. 140, 55
S. Ct. 6 (1934). The district court erred in refusing to allow the
FDIC to intervene as of right. And while a remand order based on
lack of jurisdiction cannot normally be appealed from, 28 U.S.C. §
4
1447(d), the FDIC is granted a statutory exemption from that
provision under the circumstances applicable here. 12 U.S.C. §
1819(b)(2)(C). Finally, the remand order was wrong because the
FDIC was entitled to intervene in the case, conferring instant
federal subject matter jurisdiction under the broad rubric of 12
U.S.C. § 1819(b)(2)(A) (“all suits of a civil nature at common law
or in equity to which the Corporation, in any capacity, is a party
shall be deemed to arise under the laws of the United States”).
I.
Under the City of Waco rule, “we may review any aspect of
a judgment containing a remand order that is ‘distinct and
separable from the remand proper’” even if this court lacks
jurisdiction to review the remand order. First Nat’l Bank v.
Genina Marine Servs., Inc., 136 F.3d 391, 394 (5th Cir. 1998)
(citation omitted). See Arnold v. State Farm Fire and Cas. Co.,
277 F.3d 772, 776-77 (5th Cir. 2001). According to City of Waco,
certain “separable” orders that (1) logically precede a remand
order and (2) are conclusive, in the sense of being functionally
unreviewable in state courts, can be reviewed on appeal even when
the remand order cannot be. Arnold, 277 F.3d at 776. These orders
must also be independently reviewable by means of devices such as
the collateral order doctrine. Id. Because the district court’s
denial of the intervention motion satisfies these requirements, it
is reviewable under City of Waco.
5
First, the denial of intervention preceded the district
court’s remand decision in logic and in fact. The remand decision
was necessarily predicated on the court’s refusal to consider the
jurisdictional significance of the motion to intervene. This
court’s decision in FDIC v. Loyd, 955 F.2d 316 (5th Cir. 1992), had
been cited to the district court to demonstrate that it had subject
matter jurisdiction over Heaton’s case under 12 U.S.C.
§ 1819(b)(2)(A) as soon as the FDIC filed its motion to intervene.2
Moreover, during a hearing on the remand and intervention motions,
the district court acknowledged that the two questions were
conceptually intertwined;3 the court also observed that Heaton’s
motion to remand would become moot if the court granted the FDIC’s
intervention motion first. The court went on to make clear that it
2
See also Farina v. Mission Inv. Trust, 615 F.2d 1068, 1075 (5th Cir.
1980) (regardless of whether district court had (a) treated FDIC’s motion to
remove case to federal court as motion to intervene and granted it or (b) added
FDIC on its own motion as party to case pursuant to Fed. R. Civ. P. 21, § 1819
conferred subject matter jurisdiction on court because FDIC “was properly a party
to the suit at the time of final judgment”).
3
As a general rule, “[a]n existing suit within the court's
jurisdiction is a prerequisite of an intervention, which is an ancillary
proceeding in an already instituted suit or action by which a third person is
permitted to make himself a party, either joining the plaintiff in claiming what
is sought by the complaint, or uniting with the defendant in resisting the claims
of the plaintiff, or demanding something adversely to both of them.” Kendrick
v. Kendrick, 16 F.2d 744, 745 (5th Cir. 1926). It is a different matter,
however, when the issue of the propriety of intervention is intertwined with that
of subject matter jurisdiction. See Ceres Gulf v. Cooper, 957 F.2d 1199, 1202
n.7 (5th Cir. 1992) (electing to address intervention issue before subject matter
jurisdiction in case where rights and role of intervenor were “inextricably tied”
to jurisdiction).
6
did not favor the intervention motion on the merits.4 In these
circumstances, the court’s action effectively denied the motion to
intervene in a way that preceded its decision on jurisdiction both
in logic and in fact.5
Second, the denial of intervention was conclusive. Our
precedent holds that decisions on joinder of a party are
“separable” -- and, therefore, conclusive -- for City for Waco
purposes.6 A decision on the propriety of intervention is
indistinguishable from a joinder decision for these purposes.
Finally, the denial of intervention was an appealable
collateral order. Edwards v. City of Houston, 78 F.3d 983, 992 (5th
Cir. 1996) (en banc); Sierra Club v. City of San Antonio, 115 F.3d
4
Any such considerations cannot affect the FDIC’s right, granted by
Congress, to invoke the jurisdiction of federal courts. A district court “has
no discretionary authority to remand a case over which it has subject matter
jurisdiction.” Buchner v. FDIC, 981 F.2d 816, 817 (5th Cir. 1993). Cf. Bank
One, N.A. v. Boyd, 288 F.3d 181, 184 (5th Cir. 2002) (“The federal courts have
a virtually unflagging obligation to exercise the jurisdiction conferred upon
them.”) (citing Colorado River Water Conservation Dist. v. United States, 424
U.S. 800, 817, 96 S. Ct. 1236, 1246 (1976)).
5
See Americans United for Separation of Church and State v. City of
Grand Rapids, 922 F.2d 303, 305-06 (6th Cir. 1990) (where district judge delayed
hearing on motion for intervention until date by which prospective intervenor’s
interest would have disappeared, delay was practical equivalent to denial of
motion); Toronto-Dominion Bank v. Cent. Nat’l Bank & Trust Co., 753 F.2d 66, 68
(8th Cir. 1985) (“failure to rule on a motion to intervene can be interpreted as
an implicit denial”).
6
Arnold, 277 F.3d at 776 (citing Doleac ex rel. Doleac v. Michalson,
264 F.3d 470, 489 (5th Cir. 2001)); Doleac, 264 F.3d at 485-86, 489 (where
consideration of (a) whether to allow amendment adding a party and (b) whether
to remand for lack of subject matter jurisdiction was “simultaneous and
intertwined,” binding precedent requires conclusion that issues are separable
under City of Waco).
7
311, 313 (5th Cir. 1997). In sum, the denial is reviewable on
appeal.
II.
The district court erred on the merits in refusing to
allow the FDIC to intervene. A district court’s denial of a motion
to intervene as a matter of right is reviewed de novo, except that
the abuse of discretion test is applied to the court’s ruling on
timeliness of the prospective intervenor’s application. John Doe
No. 1 v. Glickman, 256 F.3d 371, 375 (5th Cir. 2001); Sierra Club
v. City of San Antonio, 115 F.3d at 314; Edwards, 78 F.3d at 995,
999-1000. Although the district court issued no written findings
on the propriety of the FDIC’s intervention, it made oral
statements that seem to bear on the timeliness issue. Assuming
arguendo that this aspect of the court’s decision is reviewed for
abuse of discretion, we hold that the court abused its discretion.
Intervention as of right under Rule 24(a)(2) is based on
“four requirements: (1) the applicant must file a timely
application; (2) the applicant must claim an interest in the
subject matter of the action; (3) the applicant must show that
disposition of the action may impair or impede the applicant's
ability to protect that interest; and (4) the applicant's interest
must not be adequately represented by existing parties to the
litigation.” United States v. Franklin Parish Sch. Bd., 47 F.3d
755, 756 (5th Cir. 1995). "Federal courts should allow intervention
8
where no one would be hurt and the greater justice could be
attained." John Doe No. 1, 256 F.3d at 375 (citation omitted). In
this case, the FDIC’s application for intervention satisfies all
four requirements of Rule 24(a)(2). Edwards, 78 F.3d at 999.7
1. Timeliness. “The requirement of timeliness is not a
tool of retribution to punish the tardy would-be intervenor, but
rather a guard against prejudicing the original parties by the
failure to apply sooner.” Sierra Club v. Espy, 18 F.3d 1202, 1205
(5th Cir. 1994). This court considers four factors in determining
whether a motion to intervene was timely: (1) the length of time
during which the would-be intervenor actually knew or reasonably
should have known of its interest in the case before it sought to
intervene; (2) the prejudice that existing parties to the
litigation may suffer as a result of the would-be intervenor's
failure to apply for intervention as soon as it knew or reasonably
should have known of its interest in the case; (3) the prejudice
that the would-be intervenor may suffer if intervention is denied;
and (4) whether unusual circumstances militate for or against a
determination that the application is timely. There are no
7
When a district court has erred in denying a motion for intervention
as a matter of right, we may reverse the denial without remanding for further
proceedings in the district court concerning the propriety of intervention. John
Doe No. 1, 256 F.3d at 381; Americans United for Separation of Church and State
v. City of Grand Rapids, 922 F.2d 303, 305-06 (6th Cir. 1990). Compare Baker v.
Wade, 769 F.2d 289, 291-92 (5th Cir. 1985) (en banc) (this court has power to
allow intervention); Supreme Beef Processors, Inc. v. USDA, 275 F.3d 432, 437-38,
443 (5th Cir. 2001).
9
absolute measures of timeliness; it is determined from all the
circumstances. Id.; Edwards, 78 F.3d at 1000.
The first timeliness factor favors the FDIC. The FDIC’s
second motion to intervene was filed two business days after this
court’s decision in the first appeal and one business day after
Monogram removed the case to federal court.8 The FDIC did not act
in an untimely fashion when it moved to intervene to protect its
various interests.9
Heaton points out that the FDIC did not join in
Monogram’s appeal from the district court’s first remand order.
And rather than appeal from the district court’s dismissal of its
first intervention request as moot, the FDIC participated in the
first appeal in this case only as an amicus curiae. These facts do
not preclude the FDIC from seeking intervention after the second
8
As for the FDIC’s first motion to intervene, it was filed about six
weeks after Heaton moved for reconsideration of the district court’s initial
denial of her motion to remand and two weeks after the district court heard
argument on the motion, at which time the district court expressed a willingness
to grant Heaton’s reconsideration motion and remand. The district court had
initially denied Heaton’s motion to remand and, in particular, had concluded that
Monogram was a “State bank” under the FDIA, endorsing the FDIC’s reading of the
statute. The FDIC reasonably could have believed until at least the filing of
Heaton’s reconsideration motion that the case was likely to remain in federal
court; that the court was likely to continue to agree with its construction of
the FDIA; and thus that intervention was not necessary.
9
Edwards, 78 F.3d at 1000-01 (lapses of as much as five months not
unreasonable) (citing cases); Ozee v. Am. Council on Gift Annuities, Inc., 110
F.3d 1082, 1095-96 (5th Cir. 1997) (date when prospective intervenor became aware
of “immediate danger to his interests” is relevant to timeliness determination),
vacated on other grounds sub nom. Am. Bible Soc. v. Richie, 522 U.S. 1011, 118
S. Ct. 596 (1997), remanded to 143 F.3d 937, 941-42 & 941 n.7 (5th Cir. 1998)
(reversing order denying attorney general’s motion to intervene as of right and
granting motion; citing original vacated opinion in so doing); Diaz v. Southern
Drilling Corp., 427 F.2d 1118, 1125-26 (5th Cir. 1970).
10
remand. The district court had not claimed that it was deciding
the merits of the FDIC’s first motion to intervene; at the very
least, the FDIC reasonably could have believed that there was no
decision on this motion from which the FDIC could appeal and that
for this reason it was not a party when the district court remanded
the first time. Cf. Sierra Club v. Espy, 18 F.3d at 1206 (“Courts
should discourage premature intervention that wastes judicial
resources.”). The FDIC took prompt action to intervene in the
district court both before and after the first appeal.10 Its second
intervention motion was not untimely.
As for the second factor, “prejudice must be measured by
the delay in seeking intervention, not the inconvenience to the
existing parties of allowing the intervenor to participate in the
litigation.” Sierra Club v. Espy, 18 F.3d at 1206. In this case,
Heaton has identified, and we are aware of, no prejudice to her
that could have resulted from the insignificant delay by the FDIC
in seeking intervention. John Doe No. 1, 256 F.3d at 378; Ass’n of
Prof’l Flight Attendants v. Gibbs, 804 F.2d 318, 321 (5th Cir.
1986).
The third timeliness factor also favors the FDIC. To
deny intervention would deprive the FDIC of the opportunity to
exercise “the legal rights associated with formal intervention,
10
We note parenthetically that the FDIC sought to intervene in the case
in state court after the second remand, but that its motion was denied.
11
namely the briefing of issues, presentation of evidence, and
ability to appeal.” Edwards, 78 F.3d at 1003 (quoting Sierra Club
v. Espy, 18 F.3d at 1207). As a substantive matter, an adverse
ruling in this litigation could significantly affect not only the
validity of the FDIC’s decision to extend deposit insurance to
Monogram but its ability to regulate the federal deposit insurance
system as a whole. It cannot be assumed that the existing parties
to the litigation would protect the FDIC’s and the public’s
interest as to these matters. Ozee, 110 F.3d at 1096.
As for the fourth and final timeliness factor, no unusual
circumstances bearing on timeliness have been brought to our
attention. Compare Sierra Club v. Espy, 18 F.3d at 1207. The
district court abused its discretion in finding the FDIC’s
intervention untimely.
2. Interest of applicant. The FDIC’s interests in this
litigation are substantial. Of course, the FDIC has an interest in
defending its decision to grant deposit insurance to Monogram, a
decision drawn directly into question by Heaton’s contention that
Monogram is not a “State bank” for purposes of the FDIA.11 But the
11
As a statutory “State bank,” Monogram is deemed eligible for deposit
insurance and subject to the scheme of regulatory requirements that apply to such
entities. See Howell E. Jackson, Regulation in a Multisectored Financial
Services Industry: An Exploratory Essay, 77 Wash. U. L.Q. 319, 364-65 & 364 n.103
(1999) (under 12 U.S.C. § 1813, FDIC insurance, and attendant regulatory
obligations, is potentially available to "depository institutions,” including
“State banks”); Meriden Trust and Safe Deposit Co. v. FDIC, 62 F.3d 449, 452-53
(2d Cir. 1995) (because financial institution was “State bank” under 12 U.S.C.
§ 1813(c)(2), it was “insured depository institution” subject to cross-guarantee
liability under 12 U.S.C. § 1815(e)).
12
FDIC also has a broader interest in protecting the proper and
consistent application of the Congressionally designed framework to
ensure the safety and integrity of the federal deposit insurance
system. In this case, the FDIC has argued both that the district
court’s interpretation of 12 U.S.C. § 1831d is wrong on the merits
and that the district court lacked the power even to apply this
provision by deciding whether a particular financial institution is
a “State bank” under § 1831d. Taken together, these interests more
than suffice to meet the requirement of Rule 24. See Sierra Club
v. City of San Antonio, 115 F.3d at 315 (intervention as of right
granted to state of Texas to protect state’s interests in
environmental lawsuit); see also Ceres Gulf, supra fn3 (allowing
intervention as of right to Director, OWCP, to protect
administrative scheme).12
3. Whether disposition of the action might impair or
impede applicant’s ability to protect its interest. “[T]he stare
decisis effect of an adverse judgment constitutes a sufficient
impairment to compel intervention.” Sierra Club v. Glickman, 82
F.3d 106, 109-10 (5th Cir. 1996) (per curiam) (citing Sierra Club
v. Espy, 18 F.3d at 1207). The district court’s ruling
interpreting the FDIA for purposes of its removal jurisdiction will
12
FDIC appealed only the denial of intervention as of right, Fed. R.
Civ. P. 24(a). Based on this court’s above-cited caselaw, we need not address
the application of permissive intervention, Rule 24(b).
13
undoubtedly, unless changed, be relied upon as a precedent in
future actions involving the FDIC. Glickman, 82 F.3d at 110.
4. Whether existing parties adequately protect
applicant’s interest. The district court thought, incorrectly,
that intervention was unnecessary because the FDIC and Monogram
agreed on the merits of the substantive issues to be litigated. An
applicant for intervention, however, has only a minimal burden as
to inadequate representation. All he needs to show is that
representation by the existing parties may be inadequate. Edwards,
78 F.3d at 1005; Supreme Beef Processors, Inc. v. USDA, 275 F.3d
432, 437-38 (5th Cir. 2001). Government agencies such as the FDIC
must represent the public interest, not just the economic interests
of one industry. That the FDIC’s interests and Monogram’s may
diverge in the future, even though, at this moment, they appear to
share common ground, is enough to meet the FDIC’s burden on this
issue.13
The FDIC was, for all these reasons, clearly entitled to
intervene here.
III.
Because the FDIC was entitled to intervene, it is
entitled to appeal the remand order in this case under 12 U.S.C.
13
See Sierra Club v. City of San Antonio, 115 F.3d at 315 (“axiomatic”
that interests of persons pumping water from aquifer, including local cities and
government entities, would diverge from those of various state agencies and of
state qua state and as parens patriae); Ozee, 110 F.3d at 1096.
14
§ 1819(b)(2)(C), which provides that the FDIC “may appeal any order
of remand entered by any United States district court.” This
provision creates an exception to 28 U.S.C. § 1447(d)’s bar on
appellate review of remand orders. Diaz v. McAllen State Bank, 975
F.2d 1145, 1147 (5th Cir. 1992). In cases where the FDIC has become
a party, we have already heard appeals under § 1819(b)(2)(C) where
the district court remanded for lack of subject matter jurisdiction
on the ground that the FDIC had not articulated a convincing
interest in the litigation or was not properly a party before the
district court. See NCNB Tex. Nat’l Bank v. Fennell, 942 F.2d 934,
935-36 & 935 n.2 (5th Cir. 1991) (reversing remand order, holding
that the FDIC was a party properly before district court); Pernie
Bailey Drilling Co. v. FDIC, 905 F.2d 78, 79-80 (5th Cir. 1990) (per
curiam) (same). Likewise, this court has jurisdiction to review
the remand order.14
14
It is unnecessary to decide to what extent the “expansive language”
of § 1819(b)(2)(C), Hellon & Assocs., Inc. v. Phoenix Resort Corp., 958 F.2d 295,
298 (9th Cir. 1992) (construing identical “any order of remand” language in
statute securing broad removal rights to Resolution Trust Corporation (RTC)), may
allow the FDIC to appeal remand orders in cases to which it has no party status
and is not entitled to party status. Compare In re Resolution Trust Corp., 888
F.2d 57, 59 (8th Cir. 1989) (in provision allowing appeal by RTC of remand
orders, “[o]bviously ‘any’ cannot extend to orders remanding cases removed by
wholly unrelated parties”), dismissed as moot on reh’g on other grounds sub nom.
Ward v. Resolution Trust Corp., 901 F.2d 694 (8th Cir. 1990) (per curiam).
15
IV.
Finally, the district court erred in ordering remand for
lack of subject matter jurisdiction. 12 U.S.C. § 1819(b)(2)(A)
provides that, with exceptions not relevant to this case, “all
suits of a civil nature at common law or in equity to which the
Corporation, in any capacity, is a party shall be deemed to arise
under the laws of the United States.” “The statute indicates that
where the FDIC is a party, federal question jurisdiction exists,
except with respect to certain state law claims where the FDIC was
appointed receiver by the exclusive appointment of state
authorities.” Pernie Bailey Drilling Co., 905 F.2d at 80. As the
district court acknowledged, allowing the FDIC to intervene in this
case would have mooted Heaton’s motion to remand. Because the FDIC
is entitled to intervene in this case, it is a party for the
purposes of § 1819(b)(2)(A), which conferred instant subject matter
jurisdiction over the case.
Under FDIC v. Loyd, 955 F.2d 316 (5th Cir. 1992), the FDIC
became a “party,” for purposes of § 1819(b)(2)(A), as soon as it
filed its motion to intervene. In Loyd, the only basis for federal
jurisdiction was the FDIC’s status as a party for purposes of
§ 1819(b)(2)(A); and this court held that the FDIC initially
attained such status when it filed its motion to intervene in state
court. 955 F.2d at 327, 329. Loyd and other decisions allowing
the FDIC more latitude than other litigants require some connection
16
between the FDIC and the underlying action in order for the FDIC to
have party status for the purpose of removing a case.15 Although
Loyd, technically, interpreted “party” in § 1819(b)(2)(A) for
purposes of gauging the timeliness of FDIC’s subsequent removal of
a case from state to federal court, it wold seem that Loyd’s
definition of “party” -- applying that status whenever FDIC moves
to intervene -- should also apply to FDIC’s motion to intervene in
federal court. This uniform interpretation comports with the broad
jurisdictional grant in § 1819(b)(2)(A).
It might be argued that Loyd is distinguishable because
the FDIC’s stake in this litigation differs significantly from its
stake in Loyd. Here the FDIC does not seek to participate in its
capacity as receiver or insurer of a failed bank. Instead, it
seeks to intervene to protect its more general interest in ensuring
the correct interpretation of a statute that implicates the
stability and consistency of the FDIC’s regime of bank regulation.
This, however, is the ultimate interest intended to be furthered by
the broad grant of jurisdiction, removal rights, and appeal rights
in § 1819(b)(2). But that is not all. The FDIC’s role as insurer
15
“[W]e have never suggested that the FDIC has some cognizable status
as a party in the state court case unless the FDIC has had at least some contact
with the state court action. Or, stated another way, we have never suggested
that the FDIC was a cognizable [28 U.S.C.] § 1446 party in the state court case
in the absence of some appearance by the FDIC in that proceeding.” Id. at 326-27
(footnote omitted). See id. at 328 (“some party-status of the removing party is
critical”). Compare Bank One Texas Nat’l Ass’n v. Morrison, 26 F.3d 544, 547
(5th Cir. 1994) (per curiam) (stating concern that “federal jurisdiction should
not be manipulated by the FDIC’s simple intervention in a given case”).
17
of bank deposits is immediately relevant to the FDIC’s stake in
this litigation. If it proves correct that Monogram is not a
“State bank” within the meaning of 12 U.S.C. § 1831d (a question we
do not decide in this appeal), then the validity of the FDIC’s
extension of deposit insurance to certain deposits at Monogram is
called into question. The possible effect on the FDIC’s
obligations and rights as insurer of these deposits, coupled with
the effects on the FDIC’s regulatory interests, reassure us that as
in Loyd, the FDIC’s attempt to intervene conferred on it sufficient
“party” status to bring this case within the federal court’s
jurisdiction under § 1819(b)(2)(A).
V.
The FDIC seeks rulings on the amenability to judicial
review of its decision that Monogram was “engaged in the business
of receiving deposits” within the meaning of the FDIA, and,
alternatively, on the merits of this regulatory decision. We need
not resolve these questions in order to grant the FDIC the relief
that it has requested in this appeal. Instead, we hold that the
district court erred in refusing to allow the FDIC to intervene in
the case and in holding that it lacked jurisdiction. On remand,
the district court must allow the FDIC to intervene. See Sierra
Club v. City of San Antonio, 115 F.3d at 315.
18
For these reasons, the denial of intervention and the
remand order are REVERSED and the case is REMANDED for proceedings
consistent with this opinion.
REVERSED and REMANDED.
19