Federal Deposit Insurance v. North Savannah Properties, LLC
686 F.3d 1254
11th Cir.2012Background
- FDIC, as receiver for Darby Bank & Trust Co., appealed a district court remand order to federal court.
- North Savannah Properties sued Darby in Georgia state court in October 2010 asserting only state-law claims for equitable relief, damages, and fees.
- Georgia Department of Banking and Finance closed Darby and appointed the FDIC as receiver; the FDIC accepted appointment on November 12, 2010.
- FDIC filed a notice of appointment as Darby’s receiver on December 10, 2010 and a notice of substitution on December 21, 2010; it removed the case on December 22, 2010.
- The district court remanded, concluding the FDIC had not been substituted as a party and thus lacked jurisdiction; it did not address the § 1819(b)(2)(D) exemption.
- We vacate the remand and hold the FDIC is substituted as a party for removal purposes upon filing a notice of substitution, triggering federal removal under § 1819(b)(2)(B).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does substitution occur upon appointment or filing notice? | North Savannah argues no substitution without state-court order. | FDIC argues removal rights attach when substituted as a party per § 1819(b)(2)(B). | Substitution occurs when notice of substitution is filed; removal proper. |
| Is a state-court order needed for substitution under § 1819(b)(2)(B)? | Substitution requires a formal state-court substitution order. | Substitution can occur by filing notice, not necessarily by a state court order. | A state-court order is not required; filing notice suffices. |
| Does § 1819(b)(2)(A) federal-question jurisdiction exist after substitution? | No federal jurisdiction if no substitution. | Substitution confers federal-question jurisdiction regardless of party alignment. | Federal-question jurisdiction exists once substitution is filed. |
| Should the district court have remanded under § 1819(b)(2)(D) exemption for pre-closing state-law claims? | Exemption should apply, requiring remand. | Remand under exemption should be decided by the district court; not dispositive here. | Court leaves § 1819(b)(2)(D) remand issue for district court to address in the first instance. |
Key Cases Cited
- Buczkowski v. FDIC, 415 F.3d 594 (7th Cir. 2005) (removal right linked to substitution as a party)
- S & I 85-1, Ltd. v. FDIC, 22 F.3d 1070 (11th Cir. 1994) ( FDIC substitution timing and jurisdictional rules)
- Heaton v. Monogram Credit Card Bank of Georgia, 297 F.3d 416 (5th Cir. 2002) (FDIC becomes a party upon intervention)
- Castleberry v. Goldome Credit Corp., 408 F.3d 773 (11th Cir. 2005) (emphasizes federal forum preservation for FDIC)