Filed: Jun. 06, 1994
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 1994 Decisions States Court of Appeals for the Third Circuit 6-6-1994 Spring Garden Associates, L.P. v. Resolution Trust Corp. Precedential or Non-Precedential: Docket 93-1323 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1994 Recommended Citation "Spring Garden Associates, L.P. v. Resolution Trust Corp." (1994). 1994 Decisions. Paper 37. http://digitalcommons.law.villanova.edu/thirdcircuit_1994/37 This decision is brought to you
Summary: Opinions of the United 1994 Decisions States Court of Appeals for the Third Circuit 6-6-1994 Spring Garden Associates, L.P. v. Resolution Trust Corp. Precedential or Non-Precedential: Docket 93-1323 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1994 Recommended Citation "Spring Garden Associates, L.P. v. Resolution Trust Corp." (1994). 1994 Decisions. Paper 37. http://digitalcommons.law.villanova.edu/thirdcircuit_1994/37 This decision is brought to you ..
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Opinions of the United
1994 Decisions States Court of Appeals
for the Third Circuit
6-6-1994
Spring Garden Associates, L.P. v. Resolution Trust
Corp.
Precedential or Non-Precedential:
Docket 93-1323
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1994
Recommended Citation
"Spring Garden Associates, L.P. v. Resolution Trust Corp." (1994). 1994 Decisions. Paper 37.
http://digitalcommons.law.villanova.edu/thirdcircuit_1994/37
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
N0. 93-1323
SPRING GARDEN ASSOCIATES, L.P.,
Appellant
v.
RESOLUTION TRUST CORPORATION, IN ITS CAPACITY AS RECEIVER
OF BELL FEDERAL SAVINGS BANK, PA S.A.;
JAY M. GROSS; NATHANIEL D. GROSS; GARY L. WILSON
On Appeal From the United States District Court
For the Eastern District of Pennsylvania
(D.C. Civil Action No. 93-00205)
Argued February 28, 1994
BEFORE: STAPLETON and SCIRICA, Circuit Judges, and
SMITH, District Judge*
(Opinion Filed June 6, l994 )
* Honorable D. Brooks Smith, United States District Judge for the
Western District of Pennsylvania, sitting by designation.
1
Francis X. Clark (Argued)
John H. Kiefel
SILVERMAN, CLARK & VAN GALEN, P.C.
2000 Valley Forge Circle
Suite 109 West
King of Prussia, PA 19406
Attorneys for Appellant
P. Matthew Sutko (Argued)
Sheila Kraft Budoff
801 17th St., N.W.
Washington, D.C. 20434-0001
Cynthia Nimerichter
Northeast Consolidated Office
P.O. Box 1500
Valley Forge, PA 19482-1500
Bruce S. Haines
COHEN, SHAPIRO, POLISHER,
SHIEKMAN AND COHEN
2200 PFSF Building
12 S. 12th Street
Philadelphia, PA 19107
Attorneys for THE RESOLUTION
TRUST CORPORATION in its
capacity as Receiver of BELL
FEDERAL SAVINGS BANK, PA S.A.
OPINION OF THE COURT
STAPLETON, Circuit Judge:
The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 ("FIRREA") authorizes the Resolution
Trust Corporation ("RTC") to remove certain actions from state
court to federal court:
2
The Corporation, in any capacity and
without bond or security, may remove any
action, suit, or proceeding from a State
court to the United States district court
with jurisdiction over the place where the
action, suit, or proceeding is pending, to
the United States district court for the
District of Columbia, or to the United States
district court with jurisdiction over the
principal place of business of any
institution for which the Corporation has
been appointed conservator or receiver if the
action, suit, or proceeding is brought
against the institution or the Corporation as
conservator or receiver of such institution.
The removal of any such suit or proceeding
shall be instituted--
(i)not later than 90 days
after the date the Corporation is
substituted as a party, or
(ii) not later than 30 days
after service on the Corporation,
if the Corporation is named as a
party in any capacity and if such
suit is filed after August 9, 1989.
12 U.S.C. § 1441a(l)(3)(A). This case requires us to review a
district court's application of FIRREA's RTC removal provision to
an action by a borrower against a savings bank (now under RTC
receivership) and its directors. We find the district court's
result correct and will affirm.
I.
Spring Garden Associates ("Spring Garden") filed this
suit in the Montgomery County Court of Common Pleas against Bell
Saving Bank ("Bell") and its directors, following a dispute over
a $9 million loan from Bell to Spring Garden. The five-count
complaint sought preliminary and permanent injunctive relief
3
prohibiting Bell from foreclosing on the loan, specific
performance of the loan agreement, and damages for Bell's alleged
failure to extend credit under that agreement.0 The court of
common pleas entered a "Temporary Restraining Order"0 against all
of the defendants.
In March 1991, the Treasury Department's Office of
Thrift Supervision appointed the RTC conservator and, later,
receiver of Bell. On January 12, 1993, the RTC filed a petition
for substitution with the court of common pleas. This petition
was followed on January 14, 1993, by removal of the case to the
district court pursuant to 12 U.S.C. § 1441a(l)(3). The RTC then
filed a motion in district court to vacate the state court
injunction, arguing that 12 U.S.C. § 1821(j) expressly prohibited
injunctions against the RTC.
Before the district court ruled on the RTC's motion,
Spring Garden filed a motion to remand to state court. Spring
Garden argued that the RTC had failed to file its notice of
removal within the time limit provided by 12 U.S.C.
§ 1441a(l)(3). Spring Garden further urged that 12 U.S.C.
0
Count I alleged breach of contract by Bell. Count II requested
preliminary and permanent injunctive relief against Bell to
prohibit foreclosure on the loan. Count III alleged intentional
or negligent misrepresentation by Bell and its directors. Count
IV alleged breach of fiduciary duty by Bell. Count V contained a
promissory estoppel claim against Bell and its directors.
0
The order entered by the court of common pleas is more properly
termed a preliminary injunction than a temporary restraining
order. It was issued upon notice to all parties, following a
hearing, and was, by its terms, to be in effect for an indefinite
period.
4
§ 1441a(l)(1), the statute conferring original jurisdiction on
the district courts in RTC cases,0 did not confer federal
jurisdiction over its claims against Bell's directors and,
accordingly, that the case had been improperly removed.
The district court denied Spring Garden's motion to
remand and granted the RTC's motion to vacate the injunction. The
dissolution of the state court injunction was based on 12 U.S.C.
§ 1821(j), which substantially restricts the authority of a court
to enter an injunction against the RTC.0 Spring Garden now
appeals.
II.
We begin by inquiring whether our appellate
jurisdiction extends to a review of the district court's order
dissolving the state court's injunction. Under 28 U.S.C.
§ 1292(a)(1), this court has jurisdiction to review orders of
district courts "dissolving injunctions." Spring Garden has
0
12 U.S.C. § 1441a(l)(1) provides:
Notwithstanding any other provision of
law, any civil action, suit, or proceeding to
which the Corporation is a party shall be
deemed to arise under the laws of the United
States, and the United States district courts
shall have original jurisdiction over such
action, suit, or proceeding.
0
12 U.S.C. § 1821(j) provides:
Except as provided in this section, no
court may take any action, except at the
request of the Board of Directors by
regulation or order, to restrain or affect
the exercise of powers or functions of the
Corporation as a conservator or a receiver.
5
challenged the portion of the order vacating the injunction, and
28 U.S.C. § 1292(a)(1) thus gives us appellate jurisdiction to
review that portion of the district court's order, even though
that order is not final.
As for the district court's denial of a remand, neither
28 U.S.C. §§ 1291 nor 28 U.S.C. § 1292 expressly confers
jurisdiction on this court to review orders denying a remand to a
state court. See Aberle Hosiery Co. v. American Arbitration
Ass'n, 461 F.2d 1005, 1006 (3d Cir. 1972); Albright v. R. J.
Reynolds Tobacco Co.,
531 F.2d 132, 134 (3d Cir.), cert. denied,
426 U.S. 907 (1976). In this case, nevertheless, we can review
the denial of a remand because that portion of the district
court's order is "closely intertwined" with the portion of that
order dissolving the injunction. Ortiz v. Eichler,
794 F.2d 889,
892 (3d Cir. 1986). We therefore conclude we have appellate
jurisdiction to review both portions of the district court's
order.
In so concluding, we reject the RTC's contention that
28 U.S.C. § 1447(d) bars review of the order denying remand.
While § 1447(d) precludes an appeal of an order granting remand,
that statute does not prohibit appellate review of orders denying
remand. See Aliota v. Graham, 984 F.2d 1350, 1353 (3d Cir.),
cert. denied,
114 S. Ct. 68 (1993) (28 U.S.C. § 1447(d) only
concerns appellate review of "[a]n order remanding a case to the
State court from which it was removed"); see also Doe v. American
Red Cross,
14 F.3d 196, 199 (3d Cir. 1993) ("It is axiomatic that
6
remanding a case to state court terminates the jurisdiction of a
. . . district court over that case.").
III.
We next look to whether the district court had
jurisdiction to enter its order. See Employers Insurance of
Wausau v. Crown Cork & Seal Co. Inc., 905 F.2d 42, 45 (3d Cir.
1990) ("every federal appellate court has a special obligation to
satisfy itself not only of its own jurisdiction, but also that of
the lower courts in a cause under review").
Section 1441a(l)(3) authorizes the RTC to remove any
"action, suit or proceeding from a state court to" a United
States district court "with jurisdiction over" designated places.
Section 1441a(l)(1) confers original jurisdiction on United
States district courts to hear cases involving the RTC:
Notwithstanding any other provision of law, any civil
action, suit, or proceeding to which the Corporation is a party
shall be deemed to arise under the laws of the United States, and
the United States district courts shall have original
jurisdiction over such action, suit or proceeding.
Both Spring Garden and the RTC accept the proposition
that § 1441a(l)(3) authorizes the RTC to remove cases over which
the district court would have original jurisdiction under
§ 1441a(l)(1). They then part ways. The RTC insists that
§ 1441a(l)(1) confers original federal jurisdiction over all the
claims asserted in Spring Garden's state court action. Spring
Garden, on the other hand, argues that this section confers
original federal jurisdiction only over the claims against Bell
and not over its claims against Bell's directors.
7
We confess that we have some difficulty understanding
Spring Garden's legal analysis of the removal jurisdiction issue.
Spring Garden contends in its brief that (1) 12 U.S.C.
§ 1441a(l)(1) "only states that federal question jurisdiction is
applicable to any claim to which the RTC is a party," (Brief, p.
12) (emphasis added); (2) under the general removal statute, 28
U.S.C. § 1441, district courts can exercise jurisdiction over
pendent claims as well as federal question claims, but "the
district court could not invoke pendant jurisdiction over Spring
Garden's action against the officers of Bell" who would be
impermissible pendant parties (Brief, p. 18); (3) the only
situation in which a suit including both removable claims and
non-removable claims can be removed to a district court is the
one described in subsection (c) of the general removal statute,
28 U.S.C. § 1441(c)0, and, under that subsection, removal can
occur only if the removable claim is "separate and independent"
of the non-removable claims; and (5) since Spring Garden's claim
against Bell is not "separate and independent" of its claims
against the officers of Bell, there was no authority to remove
any of the claims asserted in the state court and the district
0
28 U.S.C. § 1441(c) provides:
(c) Whenever a separate and independent
claim or cause of action within the
jurisdiction conferred by section 1331 of
this title is joined with one or more
otherwise non-removable claims or causes of
action, the entire case may be removed and
the district court may determine all issues
therein, or, in its discretion, may remand
all matters in which State law predominates.
8
court had no removal jurisdiction. (Brief, pp. 18-20.) We have
a number of difficulties with Spring Garden's analysis, but it
will suffice for present purposes to indicate that we find its
first step fatally flawed.
The proper starting point of our inquiry is, of course,
the language of 28 U.S.C. § 1441a(l)(1) itself. See Smith v.
Fidelity Consumer Discount Co., 898 F.2d 907, 909-10 (3d Cir.
1990) ("'[t]here is, of course, no more persuasive evidence of
the purpose of a statute than the words by which the legislature
undertook to give expression to its wishes.'") Section
1441a(l)(1) does not confer original federal jurisdiction over
"any claim" asserted by or against the RTC, as Spring Garden
insists. Rather, it confers original federal jurisdiction over
"any action, suit or proceeding to which the [RTC] is a party."
We believe the commonly understood meaning of the wording of that
phrase encompasses the entirety of any case to which the RTC is a
party and not just those claims in such a case brought by or
against the RTC.
Cases from two other Courts of Appeal agree with our
common parlance reading of § 1441a(l)(1). In People of State of
Cal. By and Through Lungren v. Keating, 986 F.2d 346 (9th Cir.
1993), the Court of Appeals for the Ninth Circuit held that,
notwithstanding the fact that the general removal statute would
not have permitted any of the claims in the complaint to be
removed to federal court, the addition of the RTC as a party
"transforms the entire action into one that 'arises under' the
laws of the United States."
Id. at 347-48. The court determined
9
that "[t]he words 'action, suit, or proceeding' are not limited
to specific claims, but are synonymous with the term 'case' in
the constitutional sense." Id. at 348.
In Kansas Pub. Employees Retirement Sys. v. Reimer &
Koger Assocs., Inc., 4 F.3d 614 (8th Cir. 1993), the Court of
Appeals for the Eighth Circuit agreed with the Keating court's
interpretation of § 1441a(l)(1). The court was there required to
address whether a state court had violated the Constitution's
Supremacy Clause by severing the case before it in order to
preclude the RTC from removing the entire case.
Id. at 618. The
court of appeals held that because "the RTC had the right to
remove 'the entire case' to federal court,"
id. (citing Keating,
986 F.2d at 348-49), the state court's actions had run afoul of
the Supremacy Clause,
id. at 619.0
Further support of our reading of § 1441a(1)(1) is
provided by cases that have addressed the similar language0 of 12
U.S.C. § 1819(b)(2)(A), which provides:
. . . all suits of a civil nature at common
law or in equity to which the [FDIC], in any
0
While the issue raised here by Spring Garden has never before
been argued to this court, we have expressed views in passing
similar to those of the Courts of Appeals for the Ninth and
Eighth Circuits. In Adams v. Madison Realty & Dev., Inc., 937
F.2d 845, 855 (3d Cir. 1991), we stated: "Under 12 U.S.C.
§ 1441a(l)(1), any civil action in which the RTC is a party is
deemed to arise under federal law." And in Resolution Trust
Corp. v. Nernberg,
3 F.3d 62, 68 n.3 (3d Cir. 1993), we remarked
on the broad scope of 28 U.S.C. § 1441a(l)(1): "The language of
the statute thus allows Resolution Trust to remove routine
collection and foreclosure cases to the already overburdened
federal courts."
0
See Resolution Trust Corp. v. Nernberg,
3 F.3d 62, 66 n.2 (3d
Cir. 1993) (noting "close parallel" between enabling statutes of
RTC and FDIC).
10
capacity, is a party shall be deemed to arise
under the laws of the United States.
In National Union Fire Ins. Co. of Pittsburgh v. Baker &
McKenzie, 997 F.2d 305 (7th Cir. 1993), an insurer, seeking a
declaration that it was not liable under a malpractice policy,
sued three lawyers whom it had insured, their law firm, and the
FDIC, which was now a receiver for one of their former clients.
The court noted that the FDIC's "presence as a party conferred
federal jurisdiction over the suit" pursuant to § 1819(b)(2)(A).
Also helpful is Walker v. F.D.I.C.,
970 F.2d 114 (5th Cir. 1992),
in which developers sued a savings and loan and its directors in
state court after the savings and loan failed to provide a loan.
After the savings and loan became insolvent, the FSLIC was
appointed receiver and added as a party to the lawsuit. The FDIC
was later substituted for the FSLIC and the action was removed to
federal court under § 1819(b)(2)(A). The court approved of the
removal, noting that "where the FDIC is a party, federal question
jurisdiction exists and removal by the FDIC is proper."
Id. at
118. The court also noted that settlement of the developers'
claims against the FDIC did not oust the federal court of
jurisdiction to consider the developers' claims against the
directors.
Id. at 119.0
0
See also Buckner v. F.D.I.C.,
981 F.2d 816, 819 (5th Cir. 1993)
("as the FDIC is a party to a civil suit, that suit is
conclusively presumed to arise under the laws of the United
States, and thus is within the original subject matter
jurisdiction of the proper federal district court"); Matter of
Meyerland Co., 960 F.2d 512, 515 (5th Cir. 1992) (in banc), cert.
denied,
113 S. Ct. 967 (1993) ("Access to federal courts in all
actions to which it is a party allows the FDIC to develop and
rely on a national and uniform body of law . . ."); cf. American
11
Further and finally, we find support for our reading of
the relevant statute in the Supreme Court's decision in Finley v.
United States, 490 U.S. 545 (1989). The court there examined 28
U.S.C. § 1346(b), the jurisdictional provision of the Federal
Tort Claims Act ("FTCA"). In interpreting the reach of the FTCA
to include only claims against the United States and not any suit
in which such a claim is asserted, the court wrote:
The FTCA, § 1346(b), confers jurisdiction
over "civil actions on claims against the
United States." It does not say "civil
actions on claims that include requested
relief against the United States," nor "civil
actions in which there is a claim against the
United States" -- formulations one might
expect if the presence of a claim against the
United States constituted merely a minimum
jurisdictional requirement, rather than a
definition of the permissible scope of the
FTCA actions. Just as the statutory
provision "between . . . citizens of
different States" has been held to mean
citizens of different states and no one else,
. . . so also here we conclude that "against
the United States" means against the United
States and no one else.
Id. at 552.
National Red Cross v. S.G., __ U.S. __,
112 S. Ct. 2465 (1992)
(holding "sue and be sued" provision of Red Cross charter to
confer original federal jurisdiction over all cases to which Red
Cross is a party and finding such jurisdictional grants to be
well within Article III limits); Kirkbride v. Continental
Casualty Co.,
933 F.2d 729, 731-32 (9th Cir. 1991) ("the grant of
subject matter jurisdiction contained in [the] FDIC's removal
statute evidences Congress' desire that cases involving [the]
FDIC should generally be heard and decided by the federal
courts").
12
The statutory language of § 1441a(l)(1) differs from
that of § 1346(b) in much the same way as the hypothetical
statutory text in the Finley court's analysis differs from
§ 1346(b) -- "civil actions, suits, or proceedings to which the
Corporation is a party" is very close to "civil actions in which
there is a claim against the United States." The common usage
reading of § 1346(b) in Finley thus supports the conclusion that
the language Congress chose in § 1441a(l)(1) evidences an intent
to confer original jurisdiction on the federal courts over the
entire case to which the RTC has become a party.
As Spring Garden apparently concedes, if 12 U.S.C.
§ 1441a(l)(1) does in fact provide federal jurisdiction over all
the claims contained in a case, as we believe it does, there is
no need to inquire as to pendent jurisdiction or pendant parties.
Accordingly, we hold that 12 U.S.C. §§ 1441a(l)(1) and (3)
authorized removal of the entire case.
IV.
Under 12 U.S.C. § 1441a(l)(3)(A)(i), the RTC may remove
a suit from a state court to a federal court "not later than 90
days after the date [it] is substituted for a party."
"Substitution" is defined for this purpose as the time when
either: (1) the RTC or another party files a copy of the order
appointing the RTC as conservator or receiver with the court in
which the suit is pending, or (2) the RTC or another party files
another pleading with the court in which the suit is pending
informing the court that the RTC has been appointed. 12 U.S.C.
13
§ 1441a(l)(3)(B). See Resolution Trust Corp. v. Bakker, 801 F.
Supp. 706, 707 (S.D. Fla. 1992) (pursuant to amended version of
§ 1441a(l)(3)(B), substitution occurred when RTC filed notice of
substitution, not when it was appointed receiver).
On January 12, 1993, the RTC filed a notice of
substitution with the state court. Two days later, on January
14, 1993, the RTC removed the case to the district court. We
therefore conclude that the RTC removed the action in a timely
fashion under 12 U.S.C. §§ 1441a(l)(3)(A) and (B). Since Spring
Garden does not challenge before us the district court's
conclusion that the state court's injunction was inconsistent
with the provisions of 12 U.S.C. § 1821(j), it follows that the
order appealed from must be sustained in all respects.
V.
The RTC's removal was timely and the district court
properly exercised jurisdiction over all claims against all
parties to this suit pursuant to 12 U.S.C. §§ 1441a(l)(1) and
(3). We therefore will affirm the district court's order of
March 16, 1993.
14
