MARK A. GOLDSMITH, District Judge.
This case involves principally claims brought by a commercial tenant against its landlord and the successor holder of an assignment of rents. Although these purely state-law claims were asserted in a state court action, the case was removed to this Court because the tenant, Plaintiff/Counter-Defendant Rogers Mantese & Associates, P.C. (Rogers Mantese), had named the Federal Deposit Insurance Corporation (FDIC) — the receiver of the original holder of the assignment — as a defendant. As explained in greater detail below, the landlord's remand motion will be granted because no issues of federal law are raised and FDIC should never have been named in the state-court complaint.
Rogers Mantese leased a portion of the premises at 210 East Third Street in Royal Oak, Michigan from Defendant/Counter-Plaintiff Corp One, Inc. (Corp One), the owner and landlord of the property. In 2009, Rogers Mantese began disputing the amounts Corp One was assessing for common area maintenance (CAM), for which Rogers Mantese was obligated under its lease. While that dispute remained unresolved, Corp One apparently defaulted in its obligations to its lender Fidelity Bank (Fidelity). This triggered Fidelity's demands, beginning in June 2011, to Rogers Mantese under the assignment of rents held by Fidelity, that Rogers Mantese make future rent payments to Fidelity.
Running into financial difficulties itself, Fidelity was closed by the Michigan Office of Financial and Insurance Regulation on March 30, 2012; on the same day, FDIC was appointed receiver and sold Fidelity's assets, including the Corp One loan and related security, to Huntington Bank.
On July 16, 2012, Rogers Mantese filed this action, with the following claims:
Counts I through IV are directed at Corp One only and involve the above-described dispute over CAM expenses. Counts V and VI are directed at Fidelity and Huntington, although the former is not a Defendant in this case.
Corp One has filed a countercomplaint against Rogers Mantese, alleging that Rogers Mantese failed to make required CAM payments under the terms of the lease. The countercomplaint contains five counts:
Huntington has not asserted any claims against anyone in this matter; however, Corp One has sued Huntington in a separate action, now pending in state court, claiming the right to receive rent payments from Rogers Mantese and other tenants.
This case was removed on July 27, 2012 by FDIC. The basis for removal — and the sole asserted basis for federal court jurisdiction — is 12 U.S.C. § 1819(b)(2), which provides that federal question jurisdiction exists whenever FDIC is a party to a case, and that it may remove to federal court a case filed against it in state court (subject to an exception not invoked here). See 12 U.S.C. § 1819(b)(2)(A), (B).
On September 27, 2012, Corp One filed a motion to remand, arguing that FDIC's dismissal from the case vitiates federal court jurisdiction. Rogers Mantese disagrees, arguing that federal court jurisdiction remains proper even after the dismissal of FDIC.
As noted, 12 U.S.C. § 1819(b)(2) provides that federal question jurisdiction exists whenever FDIC is a party to a case, and authorizes FDIC to remove to federal court a case filed against it in state court. The principal issue dividing the parties is whether the Court must retain jurisdiction over the claims brought in this case even after dismissal of FDIC — the party whose involvement at the time of removal provided the sole basis for federal court jurisdiction.
Two views on this question have emerged. One is that district courts must, in all cases, retain jurisdiction over cases removed pursuant to § 1819(b)(2), even after FDIC has exited the case. Two circuits — the Second and Fifth — presently adhere to this view. See Adair v. Lease Partners, Inc., 587 F.3d 238 (5th Cir.2009); Fed. Savings & Loan Ins. Corp. v. Griffin, 935 F.2d 691 (5th Cir.1991); Fed. Deposit Ins. Corp. v. Four Star Holding Co., 178 F.3d 97 (2d Cir.1999).
The other view is that the district court has discretion not to retain jurisdiction over cases removed pursuant to § 1819(b)(2) after FDIC's exit from the case. One Circuit — the Third — presently adheres to this view. See New Rock Asset Partners, L.P. v. Preferred Entity Advancements, Inc., 101 F.3d 1492 (3d Cir. 1996). The Sixth Circuit has not yet addressed the issue and, so far as this Court is aware, the issue has not been addressed by any district court within the Sixth Circuit.
One leading case illustrating the view that the court must retain jurisdiction is Griffin. There, the Fifth Circuit held that "[t]he policy reasons for insuring federal jurisdiction over cases involving the actions of failed thrifts continue when the FDIC is voluntarily dismissed as a party and the owner of the failed thrift's assets remains. A transferee from [Federal Savings and Loan Insurance Corporation] or FDIC, as successor of their interests, is still entitled to the protection of federal courts ..." 935 F.2d at 696. The court's conclusion was premised on the traditional view that jurisdiction is determined as of the date of the filing of the complaint and, as of that time, FDIC was named as a defendant. Id. at 695.
The contrary view is exemplified in New Rock. There, the Third Circuit concluded that "the reasons for federal jurisdiction end" upon the dismissal of the Resolution Trust Corporation (RTC), the federal agency that acted as a receiver for failed thrift institutions:
101 F.3d at 1500-1501. The court focused on the provision in FIRREA applicable to RTC, 12 U.S.C. § 1441a(l)(1), now repealed, which is identical to the provision applicable to FDIC, 12 U.S.C. § 1819(b)(2). The court stressed that the statute stated that federal courts have jurisdiction so long as the federal agency "is" (present tense) a party to the action. Id. at 1499. Because it viewed the departure of RTC as stripping the court of jurisdiction under FIREAA, it determined that jurisdiction could be sustained only under principles of supplemental jurisdiction pursuant to 28 U.S.C. § 1367. Id. at 1508.
The Court adopts the discretionary retention approach exemplified in New Rock over the mandatory retention approach exemplified in Adair, Griffin, and Four Star Holding. In support, the Court relies on the reasoning contained in the New Rock decision: (i) the express language of the statute (i.e., providing for federal court jurisdiction when the agency "is" a party) evinces a Congressional intent to create a federal forum while the federal agency remains in the litigation, see 101 F.3d at 1499; and (ii) the rationale for federal jurisdiction under FIREAA no longer applies "once the RTC has managed a thrift and its assets have been disposed." See id. at 1500-1501. Moreover, the policy reason given by Griffin in support of the mandatory retention approach — protecting a transferee's right to assert federal defenses — is not a convincing reason justifying mandatory retention of jurisdiction. After a transfer of assets by FDIC and its exit from a case, the transferee may not choose to assert any federal defense or have any desire to remain in federal court — precisely the circumstances in this case, where Huntington does not urge retention of the case in federal court. Additionally, New Rock's discretionary retention approach "gives a district court the flexibility to maintain or decline to exercise jurisdiction depending on the facts of the individual case," Pena, 2012 WL 2525601, at *5, which is critically important here given the unique circumstances of the present case, as discussed below.
Here, the Court concludes that the exceptional circumstances of this case militate strongly in favor of remand. First, FDIC's appearance in this case was extremely brief. The matter was removed on July 27, 2012, and FDIC was dismissed a mere 17 days later on August 13, 2012. Although Rogers Mantese argues that FDIC might later re-enter this case, this argument is speculative and overlooks the fact that FDIC has been dismissed from this lawsuit with prejudice.
Second, this is a recently-filed case that has been pending before this Court for less than eight months; discovery has not commenced, a scheduling order has not been issued, and the Court has not issued any substantive decisions. In fact, the Court has had virtually no involvement with this case apart from the pending motion. The age of the case and level of court involvement are factors here that weigh strongly against retaining jurisdiction. Cf. Destfino v. Reiswig, 630 F.3d 952, 958 (9th Cir.2011) (affirming district court's decision not to remand after dismissal of FDIC because "the [c]ourt had invested considerable time and effort to decide lengthy motions on complicated pleadings").
Third, the primary policy rationale driving courts adhering to the mandatory retention approach is not operative in the present case. In particular, Griffin was concerned about preserving a federal forum for FDIC transferees to assert their federal defenses. See Griffin, 935 F.2d at 696 ("A transferee from FSLIC or FDIC, as successor of their interests, is still entitled to the protection of federal courts applying D'Oench Duhme, even when FSLIC or FDIC is voluntarily dismissed."). FDIC's transferee in the present case — Huntington — has filed a supplemental brief asserting arguments that, if found persuasive, would require remand. Because FDIC's transferee in the present case clearly has no interest in maintaining this action in federal court, the main policy reason supporting the mandatory retention approach is not entitled to substantial consideration here.
Fourth, this case lacks any federal character. At bottom, the case is a landlord/tenant dispute involving quintessential state-law claims. Four of the six claims in the complaint and all of the claims in the counter-complaint address the landlord/tenant relationship between Rogers Mantese and Corp One. They are state-law claims, raising no federal issue. The same is true of the two claims asserted by Rogers Mantese regarding the interference of Fidelity and Huntington with the Corp One relationship.
First, citing a Tenth Circuit case for the proposition that the mandatory administrative claims process of § 1821(d) applies only to "creditor and related claims arising before an institution enters receivership," Homeland Stores, Inc. v. Resolution Trust Corp., 17 F.3d 1269, 1274 (10th Cir.1994) (emphasis added), Rogers Mantese argues that the purported claims asserted against FDIC in the present case "involve substantial post-receivership conduct" and are thus exempt from the administrative review process. Pl. Supp. Br. at 3 (Dkt. 27). However, as FDIC points out, the Sixth Circuit has rejected Homeland Stores for the proposition of law cited by Rogers Mantese. See Village of Oakwood, 539 F.3d at 387 ("The overwhelming majority of courts to address the issue have concluded that the administrative process applies to post-receivership claims.").
Second, Rogers Mantese argues that its claims against FDIC are exempt from § 1821(d)'s administrative claims process because its claims did not accrue until after the 90-day claim period had expired. However, Rogers Mantese's complaint contains no claims against FDIC. However, assuming that Rogers Mantese meant to assert Counts V and VI (tortious interference
Finally, Rogers Mantese's argument that its purported claim against FDIC is not subject to § 1821(d)'s administrative claims process because FDIC failed to notify Rogers Mantese of the administrative claims period is not supported by the weight of authority. See, e.g., Freeman v. Fed. Deposit Ins. Corp., 56 F.3d 1394, 1402 (D.C.Cir.1995) ("[T]he receiver's failure to mail the notice required under 12 U.S.C. § 1821(d)(3)(C) does not relieve the claimant of the obligation to exhaust administrative remedies, because the statute does not provide for a waiver or exception under those circumstances."); Tri-State Hotels, Inc. v. Fed. Deposit Ins. Corp., 79 F.3d 707, 716 (8th Cir.1996) (agreeing with Freeman); Meliezer v. Resolution Trust Co., 952 F.2d 879, 882-883 (5th Cir.1992) (failure to give proper notice does not excuse obligation to exhaust); Intercontinental Travel Marketing, Inc. v. Fed. Deposit Ins. Corp., 45 F.3d 1278, 1285 (9th Cir.1994) (same).
Because FDIC should never have been named as a Defendant in this case, the Court concludes that remand is the most appropriate course of action.
For the reasons stated above, Corp One's motion to remand (Dkt. 16) is granted. The matter is remanded to Wayne County Circuit Court.
SO ORDERED.
12 U.S.C. § 1819(b)(2).
As noted by the Ninth Circuit, "[t]he `except as otherwise provided' language refers to the provision that allows courts jurisdiction after the administrative claims process has been completed." Sharpe v. Fed. Deposit Ins. Corp., 126 F.3d 1147, 1156 (9th Cir.1997).
