Allen v. FDIC

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Civil Procedure
  • Date Filed: 03-15-2013
  • Case #: 11-55129
  • Judge(s)/Court Below: Circuit Judge McKeown for the Court; Chief Judge Kozinski, Circuit Judge M.D. Smith
  • Full Text Opinion

In order to remove a case to federal court under 12 U.S.C. § 1819(b)(2), the FDIC must be a real party in interest, and not merely an intervenor; however such restriction may be overcome if the FDIC can show a “threat to federal interests.”

Tracey Allen sued OneUnited Bank for wrongful termination. The Bank objected to Allen’s discovery requests as confidential under FDIC rules and regulations. A motion to compel was granted, and FDIC started negotiating for resolution to the discovery dispute. A modified protective order was put into place so negotiations could move forward. FDIC moved for leave to file an intervention or for an order shortening the time of consideration of its motion. The judge denied the motion, and FDIC removed the action to federal court under its statutory removal authority. Allen moved to remand back to state court; the district court granted the motion and found FDIC could not remove the case because it was not a party. FDIC’s appeal was dismissed with prejudice to reinstatement, if the motion to remand was not granted or the state court did not enter the protective order. The district court imposed special instructions on the motion to remand, and the state court declined to enter the order. Ninth Circuit found removal by the FDIC permissible under 12 U.S.C. § 1819(b)(2), the when a suit is filed against FDIC, or when FDIC is substituted as a party in a state action. The panel concluded, based on case law and the authorizing statute, that a motion to intervene does not trigger removal authority because intervention is an interest in discovery, whereas a substitution makes FDIC a real party in interest. FDIC argued its removal power should be expanded when “there is a threat to federal interests,” or under the provision that FDIC has original jurisdiction in federal court. The panel found no threat to federal interests in this case, as FDIC’s motion to intervene was never denied, and it was responsible for much of the delay. Additionally, FDIC must still be a party to have original jurisdiction. AFFIRMED.

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