MARTIN, Circuit Judge:
This is a consolidated appeal of six orders from the Southern District of Georgia denying motions for remand to state court, granting summary judgment to the FDIC on federal claims, and refusing to exercise supplementary jurisdiction over remaining state law claims against other defendants. After careful review, and having had the benefit of oral argument, we affirm the District Court's denial of remand and award of summary judgment to the FDIC. However, we reverse the District Court's dismissal of the remaining claims against the non-FDIC defendants.
The original plaintiffs in this action are various parties (Tenants) that independently leased or purchased floor space in the Drayton Tower building in Savannah, Georgia.
Against Darby Bank (now the FDIC), the Tenants alleged fraud and negligent misrepresentation based on statements made about when funds would be made available for renovation of Drayton Tower. The Tenants point to a letter dated May 20, 2005, written by Darby Bank Vice President Salita Hill on bank letterhead, and addressed to the Drayton Tower Condominium Association (Hill Letter). Among other things, the Hill Letter says that "for the refurbishing of Drayton Towers.
Against the Drayprop Defendants, the Tenants alleged fraud and negligent misrepresentation based on statements about when renovations to Drayton Tower would be finished, and breach of contract based on the Drayprop Defendants' failure to finish the work by the dates promised.
After Darby Bank's failure, the FDIC was substituted as a party for Darby Bank in each of the Tenants' lawsuits. The FDIC then removed each case to the U.S. District Court under 12 U.S.C. § 1819(b)(2)(B). The Tenants each moved for remand, citing a limited exception to the FDIC's removal authority for cases in which "only the interpretation of the law of [the] State is necessary" to the disposition. 12 U.S.C. § 1819(b)(2)(D). The FDIC opposed the motions for remand, and moved for summary judgment in each case, arguing that beyond the state law issues presented, federal law compelled dismissal under §§ 1823(e) and 1821(d)(9)(A), and the D'Oench Doctrine.
In each case, the District Court agreed with the FDIC and, over the Tenants' objections, denied the motions for remand and dismissed all claims against the FDIC. Then, assuming that it lacked original jurisdiction over the Tenants' pendent state law claims against the Drayprop Defendants, the District Court declined to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c)(3), and dismissed these claims as well. These appeals followed. After each serving individual notices of appeal, the Tenants filed a "Joint Motion to Consolidate Appeals," which was granted. The Tenants' appeals are now consolidated "for all purposes."
The Tenants raise two issues on appeal. First, they argue that the District Court was wrong to deny their motions for remand to Georgia state court on the ground that it lacked jurisdiction over their state law claims. Second, they say that even if the District Court had jurisdiction over their claims against the FDIC, it was wrong for a number of reasons when it granted the FDIC's motions for summary judgment. In their cross-appeal, the Drayprop Defendants raise a third issue. The Drayprop Defendants now argue that after granting summary judgment to the FDIC, the District Court should not have dismissed the pendent state law claims. They point to § 1819(b)(2)(A) — the FDIC jurisdictional statute — to say that the District Court "ha[d] original jurisdiction over [the remaining] state law claims against non-FDIC defendants [even] after the FDIC [was] dismissed from the case."
We address each argument in turn. "We review de novo whether a district court had federal subject matter jurisdiction
The Tenants first argue that the District Court erred in denying their motions to remand because the District Court lacked jurisdiction over their claims. "Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant." Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987). The corollary to this rule is that absent diversity of citizenship, the only basis for removal is "when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Id. A case that has been removed to federal court "shall be remanded" "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c); see also Gravitt v. Sw. Bell Tel. Co., 430 U.S. 723, 723-24, 97 S.Ct. 1439, 1440, 52 L.Ed.2d 1 (1977) (per curiam).
Here, however, statutes establishing jurisdiction for FDIC matters trump the general rules governing federal subject matter jurisdiction and removal. Indeed, "special provisions" define a federal court's jurisdiction to hear cases involving the FDIC. Castleberry, 408 F.3d at 781. First, "all suits of a civil nature at common law or in equity to which the [FDIC], in any capacity, is a party shall be deemed to arise under the laws of the United States." 12 U.S.C. § 1819(b)(2)(A). Second, with one limited exception, "the [FDIC] may ... remove any action, suit, or proceeding from a State court to the appropriate United States district court." Id. § 1819(b)(2)(B) (emphasis added). In fact, § 1819(b)(2)'s grant of jurisdiction is so robust that it "creates a rebuttable presumption of federal question jurisdiction to
The sole exception to the FDIC's authority to remove a case once it becomes a party is triggered when: (1) a state authority appointed the FDIC as receiver; (2) the litigation involves only the pre-closing rights against the failed institution; and (3) only state law need be interpreted. 12 U.S.C. § 1819(b)(2)(D). To defeat removal under this "state law exception," "each of these three prongs must be established." Castleberry, 408 F.3d at 785. Also, "[t]he FDIC may raise a federal defense to rebut a plaintiff's showing that only interpretation of state law is necessary to the disposition of the case." Lazuka, 931 F.2d at 1535.
In arguing that the District Court should have remanded their claims to state court, the Tenants' invoke the state law exception. Specifically, they say "this action involves ... tort claims against Darby [Bank] outside the scope of [federal law]." Alternatively, they argue that their cases should have been remanded because the FDIC has failed to raise a federal defense that is "colorable for decision and is not meritless." See Diaz v. McAllen State Bank, 975 F.2d 1145, 1149-50 (5th Cir. 1992) (holding that to prevent remand to state court "the FDIC must assert a defense that raises colorable issues of federal law"). We are not persuaded by either of the Tenants' arguments. As we will explain, the FDIC has asserted a federal defense that is not only colorable, it is dispositive. Therefore, the District Court was right to deny the Tenants' motions for remand. See Castleberry, 408 F.3d at 785; Lazuka, 931 F.2d at 1535.
The FDIC moved for summary judgment on the basis of D'Oench, Duhme & Company v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942), and 12 U.S.C. §§ 1823(e) and 1821(d)(9)(A). The FDIC sought summary judgment, saying that the Tenants' claims were not based upon a fully executed, properly documented agreement that constituted an official record of Darby Bank, and therefore necessarily fail under federal law.
In D'Oench, the Supreme Court opined that "in litigation between a bank customer and the FDIC, as successor in interest to a bank, the customer may not rely on agreements outside the documents contained in the bank's records to defeat a claim of the FDIC." Baumann v. Savers Fed. Sav. & Loan Ass'n, 934 F.2d 1506, 1514-15 (11th Cir.1991) (citing D'Oench, 315 U.S. at 459, 62 S.Ct. at 680). The D'Oench case generated the so-called D'Oench Doctrine, which is simply a rule that:
Id. at 1515.
The D'Oench Doctrine is codified at 12 U.S.C. § 1823(e). See Twin Constr., Inc. v. Boca Raton, Inc., 925 F.2d 378, 382 (11th Cir.1991) ("[C]ourts have found the
12 U.S.C. § 1823(e)(1) (emphasis added). Section 1823(e) gets additional strength from § 1821(d)(9)(A) which provides, in part, that "any agreement which does not meet the requirements set forth in section 1823(e) ... shall not form the basis of, or substantially comprise, a claim against the [FDIC]."
A "narrow exception" to § 1823(e) and D'Oench exists when the plaintiff asserts "free standing tort claims." In re Geri Zahn, Inc., 25 F.3d 1539, 1543 (11th Cir.1994) (quotation marks omitted). The Tenants argue, among other things, that theirs are free standing tort claims. To determine if a tort claim is "free standing," "the key inquiry is one of relatedness." Id. "One obvious indicia of relatedness [is] whether the ... representations were of matters that would generally be reflected in the records of ordinary banking transactions." Id. at 1543-44. In other words, a tort claim is not free standing if it is "sufficiently intertwined with regular banking transactions, such that exclusion of the alleged secret agreement accords with the underlying policies of D'Oench." Id. at 1543 (quotation marks omitted); see also id. at 1544 ("[T]he relatedness requirement rests upon the recognition that the D'Oench doctrine does not encompass those free standing torts which do not implicate the records of regular banking transactions." (emphasis added)).
The Tenants make three arguments for why § 1823(e) and D'Oench do not bar their claims against the FDIC. First, they argue that their claims fall outside the scope of § 1823(e) and D'Oench because they "lack the potential to diminish or defeat the interest of the FDIC in [Darby Bank]," to the extent that liability for their claims would be covered by "a[] large insurance policy." Alternatively, they argue theirs are free standing torts outside the scope of D'Oench. This is so, they say, because the basis of their complaints — the Hill Letter — was "not [written] in connection with any regular banking transaction, but [rather] as part of an effort to induce potential buyers to purchase property in the Drayton Tower building from the developer and its agents." Finally, they argue that summary judgment was premature because discovery may yet produce additional "documents [that] would meet the requirements of D'Oench." For reasons we will discuss, each of the Tenants' arguments fails.
First, the Tenants offer no authority to support the idea that their claims fall outside D'Oench's scope because Darby Bank's insurance policy protects the FDIC from any diminution in Darby Bank's value. As capably explained by the District Court:
Lindley v. FDIC, No. 4:11-cv-147, slip op. at 4, 2012 WL 27576 (S.D.Ga. Jan. 4, 2012). Thus, the Tenants do not carry the day with their argument that D'Oench does not apply to their case because Darby Bank's insurance policy protects the FDIC's interest.
Next, the Tenants have failed to allege "free standing tort[s]" because their claims obviously "implicate the records of regular banking transactions." See In re Geri Zahn, 25 F.3d at 1544. The Hill Letter's promise to make funds available is precisely the sort of agreement that constitutes a "regular banking transaction[]," as opposed to a "free standing tort." See OPS Shopping Ctr., Inc. v. FDIC., 992 F.2d 306, 310-11 (11th Cir.1993). Thus, claims based on the Hill Letter must satisfy the requirements of § 1823(e) and D'Oench if the Tenants are to prevail. See id. (holding that an extension of credit through a writing not contained in bank records was related to "regular banking transactions" and subject to D'Oench); see also In re Geri Zahn, 25 F.3d at 1544 (holding that terms and conditions established during "loan negotiations" were related to "regular banking transactions"); Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 593-94 (11th Cir.1995) (holding that an agreement to loan "additional monies" related to "regular banking transactions"); Motorcity of Jacksonville, Ltd. v. Se. Bank N.A., 83 F.3d 1317, 1338 (11th Cir.1996) (stating that "negotiations and representations ... intimately related" to lending are at "the very core of the D'Oench doctrine"), vacated on other grounds by Hess v. FDIC, 519 U.S. 1087, 117 S.Ct. 760, 136 L.Ed.2d 708 (1997).
In contrast to their claims that the Hill Letter reflects regular banking transactions, the Tenants point to Vernon v. Resolution Trust Corporation (Vernon I), 907 F.2d 1101 (11th Cir.1990), and its companion case Vernon v. FDIC (Vernon II), 981 F.2d 1230 (11th Cir.1993), in support of the opposite proposition — that they alleged free standing tort claims. In the Vernon cases we addressed the plaintiffs' ability to recover against federal receivers (including the FDIC) in the context of claims that a failed savings and loan institution fraudulently induced the plaintiffs to purchase its stock. See Vernon I, 907 F.2d at 1103; Vernon II, 981 F.2d at 1231. In these circumstances — where the failed savings and loan profited from the alleged fraud, the plaintiffs were saddled with worthless stock certificates, and the alleged fraud would not be expected to show up in the records of regular banking transactions — we held that D'Oench did not bar the
Our Court has since elaborated on our rationale in the Vernon cases:
Motorcity of Jacksonville, 83 F.3d at 1337-38 (quoting OPS Shopping Ctr., 992 F.2d at 310-11).
Here, we are not talking about claims related to "automobile accidents," "employment discrimination," "violations of securities laws," or stock sales. See id. Instead, we have allegations about a promise to extend credit — the quintessential "ordinary banking transaction[]" — that, if true, would "be reflect[ed] in the records of banking transactions." Id. Thus, D'Oench and § 1823(e) each apply, and the Tenants' claims are barred unless they satisfy each prong of the § 1823(e) inquiry. This, they cannot do.
Contrary to the Tenants' argument, there are no remaining disputes about facts which would impede the disposition of their claims against the FDIC. Before the District Court, the Tenants admitted: (1) their "allegations against Darby Bank are predicated [solely] upon [the Hill Letter]"; and (2) "[t]he Hill Letter was not reviewed or approved by anyone else at Darby Bank prior to Ms. Hill's issuance of the letter." It is also obvious from the face of the Hill Letter that none of the Tenants were party to its "execution." Thus, the Tenants cannot rely on the Hill Letter as a basis for their claims. At a minimum, it fails two prongs of the § 1823(e) test: specifically, it was not "executed [i.e. signed] by the depository institution and [the] person claiming an adverse interest thereunder." Neither was it "approved by the board of directors of the depository institution or its loan committee." 12 U.S.C. § 1823(e) (emphasis added); id. § 1821(d)(9)(A).
In sum, the District Court properly decided that D'Oench and § 1823(e) applied to the Tenants' claims against the FDIC because their claims "relat[ed] to ordinary banking transactions and ... would ordinarily be reflected in the records of banking transactions." Motorcity of Jacksonville,
Upon dismissal of the Tenants' claims against the FDIC, the District Court went on to dismiss their remaining state law claims against the Drayprop Defendants. The Court assumed that it lacked original jurisdiction over these claims, and "careful consideration" yielded "no reason to exercise... supplemental jurisdiction" under 28 U.S.C. § 1367(c)(3). The final issue we must decide is whether the District Court was right to dismiss the Tenants' remaining state law claims.
The Drayprop Defendants argue that the District Court should not have dismissed the Tenants' remaining claims because under 12 U.S.C. § 1819(b)(2)(A) the District Court had original jurisdiction over all of the Tenants' claims, which necessarily persisted after their claims against the FDIC were dismissed. This is so, the Drayprop Defendants contend, because federal courts have original jurisdiction over all civil actions "arising under the... laws ... of the United States," 28 U.S.C. § 1331 (emphasis added), and because "all suits of a civil nature at common law or in equity to which the [FDIC], in any capacity, is a party shall be deemed to arise under the laws of the United States," 12 U.S.C. § 1819(b)(2)(A) (emphasis added). Thus, they argue that a District Court has original jurisdiction over state law claims against non-FDIC defendants once the FDIC is involved in the case, and this jurisdiction cannot be divested even if the claims against the FDIC are later dismissed.
Whether a federal court has jurisdiction over a pendent state law claim that the FDIC has removed to the District Court when the FDIC is later dismissed from the case is an issue of first impression in our Circuit. Ultimately, this question turns on the meaning of § 1819(b)(2)(A), and, in particular, the term "is a party" as used in that statute. See id.
"As with any question of statutory interpretation, we begin by examining the text of the statute to determine whether its meaning is clear." Harry v. Marchant, 291 F.3d 767, 770 (11th Cir.2002). "We do this because we presume that Congress said what it meant and meant what it said." Id. (quotation marks omitted). "Our inquiry must cease if the statutory language is unambiguous and the statutory scheme is coherent and consistent." Med. Transp. Mgmt. Corp. v. Comm'r of IRS, 506 F.3d 1364, 1368 (11th Cir.2007) (quotation marks omitted). However, "[w]e will... look beyond the plain language of a statute at extrinsic materials to determine the congressional intent if ... the statute's language is ambiguous." Harrison v. Benchmark Elecs. Huntsville, Inc., 593 F.3d 1206, 1212 (11th Cir.2010) (quotation marks omitted). "Statutory language is ambiguous if it is susceptible to more than one reasonable interpretation." Med. Transp. Mgmt. Corp., 506 F.3d at 1368. Where there can be more than one reasonable interpretation, "the courts are left to determine [the statute's] meaning by looking to the legislative history and employing the [other] canons of statutory construction." U.S. Steel Mining Co. v. Dir., OWCP, 719 F.3d 1275, 1283 (11th Cir. 2013). "Congress is presumed to know the content of existing, relevant law, and ...
Section 1819(b)(2)(A) reads, in full, as follows: "Except as provided in subparagraph (D),[
Turning next to the legislative history, U.S. Steel Mining Co., 719 F.3d at 1283, it is significant that § 1819(b)(2)(A) became law as a part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). See Pub.L. No. 101-73, 103 Stat. 183 (1989). FIRREA was enacted "[i]n the wake [of] a mounting crisis in the banking and thrift industry," and was sweeping in its scope. Motorcity of Jacksonville, 83 F.3d at 1326-27. Among its stated purposes was "[t]o curtail investments and other activities of savings associations that pose unacceptable risks to the Federal deposit insurance funds," and "[t]o strengthen the civil sanctions and criminal penalties for defrauding or otherwise damaging depository institutions and their depositors." Pub.L. No. 101-73, § 101(3), (10). Section 1819(b)(2) seeks to accomplish these goals by providing a federal forum for FDIC enforcement actions, as well as actions brought by non-FDIC plaintiffs. See 12 U.S.C. § 1819(b); Castleberry, 408 F.3d at 788 ("[T]he terms of 12 U.S.C. § 1819 evince a clear congressional intent to provide a federal forum when the FDIC is made a party to state court litigation."). These purposes are better served if § 1819(b)(2)(A)'s use of "is a party" means that the FDIC need only be a party at the time the case is filed in order to establish jurisdiction over all pendent claims. If we look to the time of filing to determine jurisdiction over pendent claims, non-FDIC plaintiffs may continue uninterrupted in their claims against non-FDIC defendants, even after the FDIC is dismissed from the case. See Fed. Sav. & Loan Ins. Corp. v. Griffin, 935 F.2d 691, 696 (5th Cir.1991) ("Congress enacted FIRREA to correct any possible jurisdictional defects existing at the time of removal; the fact that ... [the] FDIC is [not] a party at the time of appeal cannot defeat this intent."); cf. FDIC v. Four Star Holding Co., 178 F.3d 97, 100 (2d Cir.1999) (recognizing that a contrary rule "could well have the effect of deterring normal business transactions during the pendency
An interpretation that establishes jurisdiction over pendent state law claims at the time of filing is also consistent with other "canons of statutory construction." U.S. Steel Mining Co., 719 F.3d at 1283. "Congress is presumed to know the content of existing, relevant law." Griffith, 206 F.3d at 1394. Again, "where Congress knows how to say something but chooses not to, its silence is controlling." Id. (quotation marks and alterations omitted). Our earliest jurisprudence provided "that the jurisdiction of the Court depends upon the state of things at the time of the action brought, and that after vesting, it cannot be ousted by subsequent events." Mullan v. Torrance, 22 U.S. (9 Wheat.) 537, 539, 6 L.Ed. 154 (1824); see also Dole Food Co. v. Patrickson, 538 U.S. 468, 478, 123 S.Ct. 1655, 1662, 155 L.Ed.2d 643 (2003) (same). The time-of-filing doctrine also applies to removal. Ehlen Floor Covering, Inc. v. Lamb, 660 F.3d 1283, 1287 (11th Cir.2011). With the time-of-filing rule's "pedigree of almost two centuries," Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 582, 124 S.Ct. 1920, 1930, 158 L.Ed.2d 866 (2004), we cannot doubt that members of Congress knew of its existence when they passed FIRREA. Neither do we doubt that if Congress intended to reject the time-of-filing rule where the FDIC is concerned, it would have said so. Thus relevant canons of construction support an interpretation of § 1819(b)(2)(A) that creates federal jurisdiction over pendent state law claims at the time the FDIC becomes involved in the litigation. See Griffith, 206 F.3d at 1394; see also Adair v. Lease Partners, Inc., 587 F.3d 238, 245 (5th Cir. 2009) (citing time-of-filing rule for recognizing federal jurisdiction over pendent state law claims after the dismissal of the FDIC from the case); Four Star Holding, 178 F.3d at 100-01 (same); Griffin, 935 F.2d at 696 (same). But see New Rock Asset Partners, L.P. v. Preferred Entity Advancements, Inc., 101 F.3d 1492, 1495, 1503-04 (3d Cir.1996) (rejecting "the invocation of the `black letter rule' that jurisdiction is only determined at the time of the filing of the complaint" when addressing a similar jurisdictional issue presented by FIRREA).
Finally, this conclusion is consistent with what this Court has already said about § 1819(b)(2)(A). See N. Savannah Props., 686 F.3d at 1258 ("Federal-question jurisdiction generally exists whenever the FDIC is a party to litigation."); Castleberry, 408 F.3d at 788 ("[T]he terms of 12 U.S.C. § 1819 evince a clear congressional intent to provide a federal forum when the FDIC is made a party to state court litigation."); Lazuka, 931 F.2d at 1535 ("[S]ection [1819(b)(2)(A)] creat[es] a rebuttable presumption of federal jurisdiction.").
After careful review, we join the Second, Fifth, and Eighth Circuits in concluding that when the FDIC is a party to a civil suit and removes that case to federal court, the District Court has original jurisdiction over claims against non-FDIC defendants, and this jurisdiction is not lost if the FDIC is later dismissed from the case. The language of § 1819(b)(2)(A), the legislative history of FIRREA, other canons of statutory construction, our own precedent, and the weight of persuasive authority from other Circuits all lead us to this interpretation.
Thus, as applied to this case, § 1819(b)(2)(A) operated to create arising under jurisdiction over the Tenants' claims against the Drayprop Defendants, and the dismissal of the Tenants' claims against the FDIC did not divest the District Court's jurisdiction over those claims. See
The District Court properly granted summary judgment to the FDIC on the Tenants' claims against Darby Bank. However, the District Court improperly dismissed the remaining claims against the non-FDIC defendants because § 1819(b)(2)(A) operated to create original jurisdiction over those claims. Thus, we AFFIRM in part, REVERSE in part, and REMAND for proceedings consistent with this opinion.
