Freddie Mac v. Brooks, et al

Filing 45

MEMORANDUM OPINION AND ORDER that 1. The Motion to Remand 32 is DENIED. 2. Because the Motion to Remand has been resolved, Defendants shall show cause, if any there be, on or before July 15, 2011, why Plaintiff Freddie Mac's Motion to Dismiss 25 should not be granted. Plaintiff Freddie Mac shall have until July 22, 2011, to file any reply it may wish to file. The motion will be taken under submission on that day for determination without oral argument. 3. Pursuant to the Notice of Voluntary Dismissal with Prejudice 42 , McCalla Raymer, LLC is DISMISSED from this case with prejudice, on a pro tanto basis. Signed by Honorable Judge W. Harold Albritton, III on 7/1/2011. (Attachments: # 1 Civil Appeals Checklist)(jg, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
EASTERN DIVISION
FREDDIE MAC a/k/a Federal Home
Loan Mortgage Corporation,

)
)
)
Plaintiff,
)
)
v.
)
)
HOMER BROOKS and LETHA BROOKS )
)
Defendants / Counterclaim )
Plaintiffs,
)
)
v.
)
)
FREDDIE MAC a/k/a Federal Home
)
Loan Mortgage Corporation, PNC
)
MORTGAGE, a division of PNC Bank
)
National Association, McCALLA
)
RAYMER, LLC, MORTGAGE
)
ELECTRONIC REGISTRATION
)
SYSTEMS, INC., MERSCORP, INC.,
)
PROMMIS SOLUTIONS, a limited
)
liability company, PROMMIS
)
SOLUTIONS HOLDING CORPORATION )
)
Counterclaim Defendants.
)

Civil Action No. 3:11cv313-WHA
(WO)

MEMORANDUM OPINION AND ORDER
I. INTRODUCTION AND PROCEDURAL HISTORY
This case is before the court on a Motion to Remand (Doc. #32), filed by
Defendants/Counterclaim Plaintiffs Homer Brooks and Letha Brooks (collectively, the
“Brookses”).1

1

Homer Brooks is deceased.

In December, 2010, Plaintiff/Counterclaim Defendant Federal Home Loan Mortgage
Corporation (“Freddie Mac”) sued the Brookses, as well as fictitious defendants, in the Circuit
Court of Chambers County, Alabama. The Brookses answered Freddie Mac’s Complaint and
also brought counterclaims against Freddie Mac, PNC Mortgage (“PNC”), McCalla Raymer,
LLC, Mortgage Electronic Registration Systems, Inc., MERSCORP, Inc., Prommis Solutions,
and Prommis Solutions Holding Corporation. On April 22, 2011, Freddie Mac timely removed
the state court case to this court pursuant to 12 U.S.C. § 1452(f). Doc. #4. Subsequently, all of
the counterclaim defendants consented to removal.
For reasons to be discussed, the Motion to Remand is due to be DENIED.

II. MOTION TO REMAND STANDARD
Removal to federal court is proper for “[a]ny civil action brought in a State court of
which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a).
Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994);
Wymbs v. Republican State Exec. Comm., 719 F.2d 1072, 1076 (11th Cir. 1983). As such,
federal courts only have the power to hear cases that they have been authorized to hear by the
Constitution or the Congress of the United States. See Kokkonen, 511 U.S. at 377. Because
federal court jurisdiction is limited, the Eleventh Circuit favors remand of removed cases where
federal jurisdiction is not absolutely clear. See Burns, 31 F.3d at 1095.

III. DISCUSSION

2

The Brookses argue that this court should remand this case to state court because Freddie
Mac’s removal of this case was improper, due to the fact that Freddie Mac is not a defendant.
The Brookses base their argument on the general removal statute, 28 U.S.C. § 1441(a), which
reads:
Except as otherwise expressly provided by Act of Congress, any civil action
brought in a State court of which the district courts of the United States have
original jurisdiction, may be removed by the defendant or the defendants, to the
district court of the United States for the district and division embracing the place
where such action is pending.
28 U.S.C. § 1441(a) (emphasis added). This statute allows removal only “by the defendant or
the defendants.” Moreover, a counterclaim defendant is not a “defendant” within the meaning of
this statute. F.D.I.C. v. S & I 85-1, Ltd., 22 F.3d 1070, 1072 (11th Cir. 1994) (citing Shamrock
Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941)). Therefore, if the general removal
statute governed Freddie Mac’s removal rights in this case, Freddie Mac, a plaintiff and
counterclaim defendant, would not be able to remove this case to federal court because it is not a
“defendant” under the general removal statute.
However, § 1441(a) indicates, by the phrase “[e]xcept as otherwise expressly provided by
Act of Congress,” that Congress can create exceptions to the rule that only defendants may
remove a case to federal court. See, e.g., S & I 85-1, 22 F.3d at 1072-73 (11th Cir. 1994)
(analyzing a statute granting the Federal Deposit Insurance Corporation (“FDIC”) special
removal rights, and concluding that the statute enlarged the FDIC’s right of removal). Congress
has created such an exception in this case. Specifically, Congress enacted 12 U.S.C. § 1452(f),

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which Freddie Mac asserts is the basis for removal in this case. Section 1452(f), entitled
“[a]ctions by and against [Freddie Mac],”2 states, in pertinent part:
(1) [Freddie Mac] shall be deemed to be an agency included in sections 1345 and
1442 of such Title 28; (2) all civil actions to which [Freddie Mac] is a party shall
be deemed to arise under the laws of the United States, and the district courts of
the United States shall have original jurisdiction of all such actions, without
regard to amount or value; and (3) any civil or other action, case or controversy
in a court of a State, or in any court other than a district court of the United
States, to which [Freddie Mac] is a party may at any time before the trial thereof
be removed by [Freddie Mac], without the giving of any bond or security, to the
district court of the United States for the district and division embracing the place
where the same is pending, or, if there is no such district court, to the district
court of the United States for the district in which the principal office of [Freddie
Mac] is located, by following any procedure for removal of causes in effect at the
time of such removal.
12 U.S.C. § 1452(f) (emphasis added).
The plain language of § 1452(f), especially when considered in contrast to § 1441(a), the
general removal statute, indicates that Freddie Mac need not be a defendant to remove a case to
federal court. Section 1452(f), unlike § 1441(a), does not state that the action “may be removed
by the defendant or the defendants,” rather, it states that Freddie Mac may remove “any civil or
other action, case or controversy . . . to which [Freddie Mac] is a party.” There is no limitation,
in § 1452(f), that the removing party be a “defendant,” rather, the prerequisite at issue is simply
that Freddie Mac be a “party” to the case. As a Plaintiff/Counterclaim Defendant in this case,
Freddie Mac is unquestionably a “party.” Therefore, because Freddie Mac is a party, Freddie
Mac has the right to remove the case to federal court.3 See Fed. Home Loan Mortg. Corp. v.

2

The statute refers to Freddie Mac as “the Corporation.” 12 U.S.C. § 1451 (defining
“Corporation” as “the Federal Home Loan Mortgage Corporation created by this chapter”).
3

Although the Brookses did not argue that the last part of § 1452(f), requiring that
Freddie Mac “follow[] any procedure for removal of causes in effect at the time of such
4

D’Antonio, No. 94-287, 1994 WL 117789, at *1 & n.1 (E.D. La. Mar. 30, 1994) (concluding that
§ 1452(f) gave Freddie Mac, as plaintiff, the right of removal); see also Franklin Nat’l Bank Sec.
Litig. v. Andersen, 532 F.2d 842, 845 (2d Cir. 1976) (concluding that the FDIC, as realigned
party plaintiff, could remove a case to federal court under 12 U.S.C. § 1819(4),4 which permitted
removal of “any suit ‘to which the Corporation shall be a party’”); S & I 85-1, 22 F.3d at 1072
(11th Cir. 1994) (concluding that the FDIC, as plaintiff and counterclaim defendant, could
remove a case to federal court under 12 U.S.C. § 1819(b)(2)(B), which stated that “the
Corporation may . . . remove any action, suit, or proceeding . . . [within 90 days after] the action,
suit, or proceeding is filed against the Corporation or the Corporation is substituted as a party”).5
PNC also filed a memorandum describing an alternative basis for removal in this case.
The court need not consider the validity of this alternative basis, because Freddie Mac’s decision
to remove this entire case applies to all of the parties in the case, and the Brookses have not
argued otherwise. See Fowler v. S. Bell Tel. & Tel. Co., 343 F.2d 150, 152 (5th Cir. 1965) (in
the context of removal by a federal officer, “it is settled that the filing of a petition for removal
by a single federal officer removes the entire case to the federal court.”).6
removal,” prohibits removal in this case, the court notes that such an argument has been rejected
by the Second Circuit. Franklin Nat’l, 532 F.2d at 846 (referring to “removal procedure” in a
parallel statute as the “where,” “when,” and “how” that a party must follow in petitioning for
removal).
4

Congress subsequently amended the relevant language in § 1819.

5

The Eleventh Circuit in S & I 85-1 contrasted § 1819(b)(2)(B) with the general removal
statute by stating that “[t]he general removal statute expressly limits the power of removal to
defendants. Section 1819 contains no such limitation.” S & I 85-1, 22 F.3d at 1072.
6

In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981), the Eleventh Circuit
adopted as binding precedent the decisions of the former Fifth Circuit issued before October 1,
1981.
5

V. CONCLUSION
For the reasons discussed, it is hereby ORDERED as follows:
1.

The Motion to Remand (Doc. #32) is DENIED.

2.

Because the Motion to Remand has been resolved, Defendants shall show cause,

if any there be, on or before July 15, 2011, why Plaintiff Freddie Mac’s Motion to Dismiss
(Doc. #25) should not be granted. Plaintiff Freddie Mac shall have until July 22, 2011, to file
any reply it may wish to file. The motion will be taken under submission on that day for
determination without oral argument.
3.

Pursuant to the Notice of Voluntary Dismissal with Prejudice (Doc. #42),

McCalla Raymer, LLC is DISMISSED from this case with prejudice, on a pro tanto basis.

DONE this 1st day of July, 2011.

/s/ W. Harold Albritton
W. HAROLD ALBRITTON
SENIOR UNITED STATES DISTRICT JUDGE

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