Federal Deposit Insurance Corp v. Trade Street Holdings, LLC

Filing 9

ORDER REMANDING Case to State Court. Signed by Judge Robert N. Scola, Jr on 8/24/2012. (mmz)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 12-22810-Civ-SCOLA
FEDERAL DEPOSIT
INSURANCE COMPANY
Plaintiff,
vs.
TRADE STREET HOLDINGS, LLC
F/K/A BCOM CCB HOLDINGS, LLC
Defendant.
_____________________________________/
ORDER REMANDING CASE
THIS MATTER is before the Court on the Defendant’s Motion to Remand (ECF No. 8).
The FDIC has not filed a response or moved for an extension of time to file its response to the
Defendant’s motion. The deadline for filing its opposition to the Defendant’s motion has now
passed.
On March 3, 2011, Plaintiff’s predecessor in interest, Cortez Community Bank (“CCB”)
filed this action in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade
County. On Friday, April 29, 2011, CCB was closed by the Florida Office of Financial
Regulation and the FDIC was appointed Receiver. On July 11, 2011, the FDIC filed its Motion
for Substitution of Party with the Eleventh Judicial Circuit. That Motion stated that substitution
of the FDIC was mandated under 12 U.S.C. § 1819(b)(2)(B) and Fla. R. Civ. P. 1.260(c) as a
result of the FDIC’s appointment as Receiver. The state circuit court did not issue an order
granting the FDIC’s Motion for Substitution of Party until July 19, 2012. Then on July 31, 2012,
the FDIC removed this matter to federal court under its authority to do so under 12 U.S.C. §
1819(b)(2)(B).

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“The FDIC has the statutory right to remove to federal court certain state court actions
within the ‘90–day period beginning on the date the action, suit, or proceeding is filed against the
Corporation or the Corporation is substituted as a party.’” F.D.I.C. v. N. Savannah Prop., LLC,
686 F.3d 1254, 1258, (11th Cir. 2012)(quoting 12 U.S.C. § 1819(b)(2)(B))(emphasis in original).
The Defendant argues that this case should be remanded to the state circuit court because the
FDIC missed its ninety day deadline for removal that began running on July 11, 2011, the date it
filed its Motion for Substitution of Party. The Eleventh Circuit has recently ruled that “as a
matter of federal law, the FDIC is ‘substituted as a party’ in a state court proceeding under 12
U.S.C. § 1819(b)(2)(B) once it is appointed receiver and files a notice of substitution.” N.
Savannah, 686 F.3d at 1256 (emphasis in original). In North Savannah, the Eleventh Circuit
found that the district court had gone “too far in demanding that the state court grant a motion for
substitution in order that the FDIC be ‘substituted as a party’ for the purposes of §
1819(b)(2)(B).” Id. at 1259. The Eleventh Circuit noted that “as a matter of federal law a state
court does not have any discretion to deny substitution of the FDIC for a failed institution which
no longer has a separate existence.” Id. at 1260. And granting the state court the ability to
prevent removal by denying substitution would frustrate the purposes of § 1819(b)(2)(B) to
choose a federal forum. Id.
In the instant matter, the FDIC filed its Motion for Substitution of Party on July 11, 2011.
This filing started the running of the ninety day deadline for the FDIC to exercise its right to
remove the case to federal court. The FDIC had until October 10, 2011 to remove this case to
federal court. The FDIC’s attempt to remove the case on July 31, 2012 was clearly past the
ninety day deadline established by federal law and as illustrated in North Savannah.

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Accordingly, it is ORDERED and ADJUDGED that the Plaintiffs Motion for Remand
(ECF No. 8) is GRANTED. The Clerk shall CLOSE this matter, and take all necessary steps to
ensure the prompt REMAND of this action and transfer this file back to the Circuit Court for the
Eleventh Judicial Circuit in and for Miami-Dade County, Florida.

DONE and ORDERED in chambers, at Miami, Florida, on August 24, 2012.

___________________________________
ROBERT N. SCOLA, JR.
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of record

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