Martin et al v. Rushing Creek Development Group, LLC et al

Filing 12

ORDER granting in part 11 Motion to Substitute Party. CADC/RADC 2011-1 Venture 2011-1 LLC added. Federal Deposit Insurance Corporation (as Receiver for a Georgia Corporation) terminated. Because the FDIC is no lon ger a party to this dispute, the Court questions whether it still has subject matter jurisdiction over this dispute and whether remand is now required. Accordingly, the Court DIRECTS the parties to appear for a hearing on Wednesday, November 30, 2011, at 3:00 p.m. in Courtroom 2 at the United States District Court Western District of North Carolina, Asheville Division, 100 Otis Street, Asheville, North Carolina. Signed by Magistrate Judge Dennis Howell on 11/17/2011. (thh)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
BRYSON CITY DIVISION
2:11cv10
ANTHONY MARTIN and KIM
MARTIN, husband and wife,
Plaintiffs,
v.
RUSHING CREEK DEVELOPMENT
GROUP, LLC, a North Carolina
Corporation, and FEDERAL DEPOSIT
INSURANCE CORPORATION, as
Receiver for BANK OF HIAWASSEE,
a Georgia Corporation,
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ORDER

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Defendants.
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Pending before the Court is the Motion to Substitute Party [# 11].
CADC/RADC 2011-1 Venture 2011-1 LLC (“CADC”) moves to substitute it as a
party defendant in this action in place of the Federal Deposit Insurance
Corporation, as Receiver for Bank of Hiawassee, a Georgia Corporation (“FDIC”).
CADC also requests a sixty day extension of the mediation deadline in this case.
All the parties to this dispute consent to the substitution. Upon a review of the
Motion to Substitute Party and the record in this case, the Court GRANTS in part
the motion [# 11]. The Court GRANTS the motion to the extent it seeks to

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substitute parties. The Court DIRECTS the Clerk to SUBSTITUTE
CADC/RADC 2011-1 Venture 2011-1 LLC as a party defendant in this action in
place of the Federal Deposit Insurance Corporation, as Receiver for Bank of
Hiawassee, a Georgia Corporation.
As a result of the substitution of CADC as a defendant in this action, the
FDIC is no longer a party to this dispute. The FDIC removed this action from state
court pursuant to 12 U.S.C. § 1819(b)(2), which provides that all civil actions
where the FDIC “is” a party are deemed to arise under the laws of the United
States and, therefore, are removal to federal court. Because the FDIC is no longer
a party to this dispute, the Court questions whether it still has subject matter
jurisdiction over this dispute and whether remand is now required. The Court,
however, recognizes that the Circuits are split as to whether a federal court retains
jurisdiction pursuant to Section 1819 once the FDIC is dismissed from a lawsuit.
See New Rock Asset Partners, L.P. v. Preferred Entity Advancements, Inc., 101
F.3d 1492 (3rd Cir. 1996) (holding that original jurisdiction does not continue);
Adair v. Lease Partners, Inc., 587 F.3d 238 (5th Cir. 2009) (holding that original
jurisdiction does continue); FSLIC v. Griffin, 935 F.2d 691 (5th Cir. 1991); FDIC
v. Four Star Holding Co., 178 F.3d 97 (2nd Cir. 1999); Skrabe v. Chase Home
Fin., No. C10-03230, 2011 WL 1044465 (N.D. Cal. Mar. 22, 2011). The Fourth

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Circuit has not addressed this issue. Accordingly, the Court DIRECTS the parties
to appear for a hearing on Wednesday, November 30, 2011, at 3:00 p.m. in
Courtroom 2 at the United States District Court Western District of North Carolina,
Asheville Division, 100 Otis Street, Asheville, North Carolina. At the hearing, the
parties should be prepared to address the issue of whether this Court retains
jurisdiction over this dispute. In addition, the parties should be prepared to discuss
what they have done to date to prepare this case for trial. The Court STAYS the
mediation and dispositive motion deadline in this case pending a determination as
to whether remand is required.

Signed: November 17, 2011

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