This action was originally brought in the Circuit Court No. 2 of Baltimore City for a declaratory judgment under the Maryland Code of Public General Laws, Article 31A, sections 1-16, that the Federal Housing Administration was not entitled to inspect the books and records of .the plaintiff corporation or that, if a right to inspect existed, it was limited to determining whether or not the plaintiff had complied with the terms •of its Articles of Incorporation and that .any information so obtained could not be disclosed to others. The case was removed by the defendant to this court, and the plaintiff has filed a motion to remand.
The bill of complaint and exhibits annexed thereto show that the plaintiff was incorporated under the laws of Maryland, and its purposes as set out -in Article Third, paragraphs (a) and (d) of its Articles of Incorporation were to create a private corporation to provide housing, said corporation “To be regulated by -the Federal Housing Commission 1 as to rents or sales, charges, capital structure, rate of return and methods of operation, all pursuant to the provisions of Title VIII of the National Housing Act, as amended” and to obtain from the Federal Housing Commissioner mortgage insurance “pursuant to the provisions of the National Housing Act as amended and applicable Administrative Rules and Regulations- covering * * * evidence of indebtedness * * The mortgage insurance was obtained, and, as provided for in the Articles of Incorporation and the Articles of Amendment, 100- shares of preferred stock having a par -value of $1 a. share were issued to the Federal Housing Administration in order that the Federal Housing Commissioner might regulate and restrict the plaintiff as set out in its charter. Such regulation included the right to inspect all books and records, and, upon default, to require a complete audit at the expense of the plaintiff corporation and to call a special meeting to remove existing directors and elect their successors. When the defendant notified the plaintiff of its intention to examine the plaintiff’s books and implied that the failure to permit such an examination would constitute a default under the provisions of the Articles of Incorporation, the plaintiff immediately brought suit in the Circuit Court No. 2 of Baltimore City and asked that the defendant be required to post bond in the penal sum of $500,000 to insure the defendant’s compliance with any decree handed down by said court.
In its motion to remand the plaintiff alleges -that (1) this court is without jurisdiction to adjudicate under the Maryland Declaratory Judgment Act; (-2) . the amount in controversy does not *26 exceed $3,000 exclusive of interest and costs; (3) no removal bond was filed as required by Title 28 U.S.C. § 1446 (d); or (4) notice given thereof as required by Title '28 U.S.C. § '1446(e); and (5) an answer was not filed by the defendant within the time allowed by Rule 81(c) of the Federal Rules of Civil Procedure, 28 U.S.C.A.'
1. The court’s general authority to entertain suits for declaratory judgment is clearly provided for in Title 28 U.S.C. § 2201. In seeking a construction of certain provisions of its Articles of Incorporation, the plaintiff has raised a federal question. The bill of complaint and exhibits annexed thereto indicate that the plaintiff subjected itself to regulation by the Federal Housing Commissioner in accordance with the provisions of the National Housing Act, 12 U.S.C.A. § 1748(b), as well as all applicable administrative rules and regulations. A necessary adjunct to the right to regulate is the right to inspect. Inspection was provided for in the Articles of Incorporation. The plaintiff is seeking to have this right of inspection denied completely or limited “to the extent authorized by law and then only for the purposes of determining if the complainant has complied with the terms and conditions of said Articles of Incorporation.” To adjudicate such a matter must of necessity require an interpretation of the National Housing Act and of administrative rules and regulations issued pursuant thereto as well as their application to the present factual situation. More is involved than just the construction of the Articles of Incorporation of a Maryland corporation.
2. The amount in controversy is not the aggregate value of the 100 shares of preferred stock held by the Federal Housing Administration, or its par value of $100. It is rather the value of the property sought to be protected. (Hunt v. New York Cotton Exchange, 1907,
This cause of action, arising under the laws of the United States and-involving an amount in controversy in excess of $3,000 exclusive of interest and costs, is one over which this court has original jurisdiction under Title 28 U.S.C. § 1331. It is removable without regard to the citizenship or .residence of the parties under Title 28 U.S.C. § 1441(a) and (b). This court also has original jurisdiction of any civil action in which the requirements of the jurisdictional amount and of diversity of citizenship are met (Title 28 U.S.C. Sec. 1332), and such an action is removable under Title 28 U.S.C. § 1441 if the defendant is not a citizen of the State in which the action is brought. The plaintiff is a Maryland corporation while the defendant is a federal agency created under the laws of Congress, with its principal office and the official residence of its Commissioner in
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the District of Columbia. To treat the defendant for the purpose of determining diversity of citizenship as a federal corporation and a citizen of the District of Columbia would seem to be in line with the language of such cases as Keifer & Keifer v. Reconstruction Finance Corporation, 1939,
This case is a-lso removable under Title 28 U.S.C. § 1442(a) (1) which provides that any civil action begun in a State court against “Any officer of the United States or any agency thereof, or person acting under him, for any act under color of such office * * * ” may be removed to the District Court of the United States for the District embracing the place wherein the action is pending. The Reviser’s Note shows this section is intended to apply to all officers and employees of the United States or any agency thereof. Although the predecessor to this section, section 76 of Title 28 U.S.C., 1940 ed., was limited primarily to revenue officers enforcing criminal or revenue laws, cases under the present statute have extended its provisions to officials of the Veterans’ Administration for alleged malicious acts in dismissing an employee (De Busk v. Harvin, 5 Cir., 1954,
At the hearing on its motion to remand, the plaintiff took the position that the provision of 12 U.S.C.A. § 1702 authorizing the Commissioner of the Federal Housing Administration “ * * * to sue and be sued in any court of competent jurisdiction, State or Federal” in effect amends or creates an exception to the removal statute as set out in 28 U.S.C. §§ 1441, 1442, in that it not only allows the plaintiff the choice of forum when suing the Federal Housing Administration, but permits the plaintiff to maintain its suit to judgment no longer subject to the general statutory right of removal. In 28 U.S.C. § 1445 Congress has expressly denied a defendant the right of removal from a State court to a federal district court in civil actions arising under the Employers’ Liability Act, 45 U.S.C.A. §§ 51-60, and in civil actions against a common carrier arising under 49 U.S.C.A. § 20 unless in this latter type suit the amount in controversy exceeds $3,000 exclusive of interest and costs. The same bar to removal has been applied to suits by seamen under the Jones Act, 46 U.S.C.A. § 688, on the theory that all of the procedures applicable to the. Employers’ Liability Act have been incorporated into the Jones Act. (Petterson v. Standard Oil Co. of New Jersey, D.C.S.D.N.Y.1924,
A similar problem of interpretation has been before the courts dealing with section 16(b) of the Fair Labor Standards Act, 29 U.S.C.A. § 216(b), which provides “Action to recover such liability may be maintained in any court of competent jurisdiction * * The cases
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are in direct conflict as to the effect of this language on the right of removal. Those granting the right of removal have done so on the basis that as this important right has been expressly
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denied a litigant by Congress in several instances, in the absence of express denial, repeals by implication not being favored, an abrogation of the removal statute will not be implied. Those eases denying the right of removal have used the rationale that the word “maintained” denotes more than the right to begin a suit and includes “every requisite, step in carrying the suit, once commenced, to effect.” (Booth v. Montgomery Ward & Co., D.C.D.Neb., L.D., 1942,
“* * * the words * * * declaring they [actions] may be maintained in any court of competent jurisdiction are emptied of all meaning, and they become mere surplusage or idle words. This is so because no legislation was needed to vest either federal or state courts with jurisdiction. They both had it under the general federal jurisdictional laws, or general rules of jurisprudence. * * * The Clause * * * becomes meaningless unless it is interpreted as amendatory of the Removal Statute and preventing' removal.”
The cases arising under the Fair Labor Standards Act which refuse to imply a repeal of the removal statute support the defendant’s position as the language of that section is more susceptible of the interpretation contended for by the plaintiff than the language, of section 1702 of Title 12 U.S.C. Moreover, the cases holding in favor of an implied amendment do not support the plaintiff's position in the instant case. It has been argued that the court should not engage in hairsplitting as to the difference in connotations given the word “maintained” as distinguished from “to sue and be sued”, and that if “maintained” means not only institute but carry through to final judgment “sue and be sued” should likewise be so interpreted. In Federal Housing Administration v. Burr, supra,
Other decisions, although not dealing with the effect of section 1702 on removability or remand, have construed this section to be an express waiver of the immunity of the sovereign to suit and nothing more. Korman v. Federal Housing Administrator, supra, held the agency’s claims were entitled to governmental priority in bankruptcy proceedings in the absence of an affirmative indication by Congress to the contrary. Section 1702 likewise does not authorize judicial review of discretionary determinations of the administrator (Choy v. Farragut Gardens, D.C.S.D.N.Y.1955,
“ * * * it must be presumed that when Congress launched a governmental agency into the commercial world and endowed it with authority to ‘sue or be sued’, that agency is not less amenable to judicial process than a private enterprise under like circumstances would be.”
A proper corollary to this statement would seem to be that if the authority to sue or be sued cannot make the agency “less amenable” to suit than a private enterprise, this language should not make the agency “more amenable” to suit than a private enterprise in that its statutory right of removal is thereby taken away. In Sarner v. Mason, supra, the effect of section 1702, Title 12 U.S.C.A., upon removability and remand was carefully considered, and the motion to remand denied. This court finds nothing in the language of section 1702 to sustain the construction that the removal statutes,were thereby impliedly repealed.
3. Whether or not the Federal Housing Administration is required to file a removal bond is the next problem to be considered. Title 28 U.S.C. § 1446(d) requires such a bond in civil actions except in petitions for removal “in behalf of the United States”. The court acquires its jurisdiction from the petition, while the bond is exacted to protect the plaintiff in case of an improper removal. Distinction should be made between liability for costs (Rule 54(d) of the Federal Rules of Civil Procedure; section 2412(a) of Title 28 U.S.C.), and liability for giving security for damages or costs (Title 28 U.S.C. §§ 1446(d), 2408). If the former does not exist, then logically the latter cannot either. On the other hand, because a governmental agency is answerable in costs, it does not necessarily follow it is required to give security for costs. In Reconstruction Finance Corporation v. J. G. Menihan Corporation, 1941,
However, assuming for the purposes of argument, such liability exists, the meaning and effect of section 1446(d) and section 2408 of Title 28 U.S.C. still remain to be determined. The Supreme Court has interpreted the words “The United States” appearing in section 2412 (a), Title 28 U.S.C., as applying to the Federal Security Administrator when acting in his official capacity (Ewing v. Gardner, supra). In Seven Oaks v. Federal Housing Administration, supra,
Moreover, section 1446(d) of Title 28 U.S.C. not requiring a bond where the petition for removal is filed in behalf of the United States is in pari materia with section 2408 of Title 28 U.S.C., which provides:
“Security for damages or costs shall not be required of the United States, any department or agency thereof or any party acting under the direction of any such department or agency on the issuance of process or the institution or prosecution of any proceeding.”
(Nelson v. Peter Kiewit Sons’ Co., D.C.D.N.J.1955,
4. As no removal bond is required in the instant case under the provisions of sections 1446(d) and 2408 of Title 28 U.S.C., section 1446(e) relating to the giving of notice of filing of the bond is not applicable.
5. Whether Rule 12(a) of the Federal Rules of Civil Procedure allowing an agency of the United States sixty days within which to file an answer, or Rule 81(c) setting out a much shorter period is controlling in this case, the failure to file an answer could in no way affect the validity of the removal, which is dependent upon the facts existing at the time of the filing of the removal petition. Pursuant to the discretion given the *31 courts by Rule 6(b), upon oral application by the defendant made during the hearing on the motion to remand, leave was granted to the Federal Housing Administration to file its answer within thirty days after the disposition of the plaintiff’s motion to remand.
The motion to remand is denied.
Notes
. Undoubtedly Administration was meant.
. For listing of cases either granting or denying removal prior to 1948 revision of the Judicial Code, see: Johnson v. Butler Brothers, 8 Cir., 1947,