Fort Worth Nat. Corp. v. Federal Savings & Loan Ins. Corp.
| Decision Date | 12 October 1972 |
| Docket Number | 71-2828.,No. 71-2821,71-2821 |
| Citation | 469 F.2d 47 |
| Parties | The FORT WORTH NATIONAL CORPORATION, Plaintiff-Appellee, v. FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, Federal Home Loan Bank Board, et al., Defendants-Appellants. The FORT WORTH NATIONAL CORPORATION, Petitioner, v. FEDERAL HOME LOAN BANK BOARD and Federal Savings and Loan Insurance Corporation, Respondents. |
| Court | U.S. Court of Appeals — Fifth Circuit |
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Arthur W. Leibold, Jr., Gen. Counsel, Paul E. McGraw, Associate Gen. Counsel, Daniel J. Goldberg, Asst. Gen. Counsel, Washington, D. C., Phelps, Dunbar, Marks, Claverie & Sims, Philip deV. Claverie, New Orleans, La., for defendants-appellants.
Donald I. Baker, Stewart R. Smith, Attys., Dept. of Justice, Washington, D. C., amicus curiae.
Thomas H. Law, Boe W. Martin, Fort Worth, Tex., Eugene J. Metzger, Washington, D. C., for plaintiff-appellee.
Before WISDOM, GOLDBERG, and CLARK, Circuit Judges.
The two cases consolidated for purposes of appendix, briefs, and argument present important questions concerning (1) the appropriate review procedure under section 408 of the National Housing Act, as amended by the Savings and Loan Holding Company Amendments of 1967, 12 U.S.C. § 1730a et seq., and (2) the authority of the Federal Savings and Loan Insurance Corporation to disapprove applications for acquisitions of institutions insured by the Corporation on the ground that such acquisitions may substantially lessen competition. The first case, No. 71-2821, is an appeal by the Federal Home Loan Bank Board (Board), the Federal Savings and Loan Insurance Corporation (the Corporation), and the individual members of the Board from a preliminary injunction issued by the district court in an action commenced by Fort Worth National Corporation (FWN). The second case, No. 71-2828, is a petition by Fort Worth National Corporation to review an order of the Corporation disapproving FWN's application to acquire control of Mutual Savings and Loan Association, Fort Worth, Texas. Jurisdiction in the first case is based on 28 U.S.C. § 1292, and in the second on 12 U.S.C. § 1730a(k).
We reverse the decision of the district court in No. 71-2821 and affirm the order of the Corporation in No. 71-2828.
The Federal Savings and Loan Insurance Corporation is a corporate agency of the United States having responsibility for insuring the savings accounts of all federal savings and loan associations and other eligible institutions. 12 U.S.C. § 1725; 12 U.S.C. § 1730(k)(1). The Corporation is also responsible for administering the Savings and Loan Holding Company Amendments of 1967. 12 U.S.C. § 1730(a)-(l). The Federal Home Loan Bank Board is an independent agency of the United States which, along with other functions, is responsible for the direction of the Corporation.
Fort Worth National Corporation is a one-bank holding company. Its principal subsidiary is Fort Worth National Bank, the largest commercial bank in Fort Worth, Texas. The corporation also owns eight other financially related subsidiaries, including a mortgage banking company. On December 22, 1970, FWN entered into an agreement with Lacy Bogess, acting individually and on behalf of the other shareholders of Mutual Savings and Loan Association, for the purchase of one hundred percent of Mutual's issued and outstanding Permanent Reserve Fund Stock. Mutual is a savings and loan association insured under the National Housing Act and is the third largest savings and loan association in Fort Worth. The contract provided that Bogess would sell all the Mutual shares owned by him and use his best efforts to induce all other shareholders to sell their shares to FWN. The contract also stated that it was to continue in force until September 30, 1971, at which time the seller had the option to terminate the offer. All the shareholders subsequently agreed to sell their shares and delivered one hundred percent of Mutual's stock to an escrow agent under the contract.
On February 24, 1971 FWN submitted its application to the Corporation, in accordance with section 408(e) of the National Housing Act, as amended, 12 U.S. C. § 1730a(e), requesting approval of the proposed acquisition of Mutual. Under the Act, all acquisitions of insured savings and loan institutions must be approved by the Corporation. After receiving the application, the Federal Home Loan Bank Board, because of its responsibility for direction of the Corporation, sent two letters to FWN outlining deficiencies in the application and requesting additional information. FWN complied by filing two amendments to its application, the first on April 14 and the second on April 25.
In response to its request, the Board received a letter dated June 22 from the Assistant Attorney General, Antitrust Division, Department of Justice, which set forth an analysis of the anticompetitive effects of FWN's purchase of Mutual and stated that the proposed acquisition would "eliminate substantial direct competition between FWN Corporation's subsidiaries and Mutual Savings and . . . have a significantly adverse effect on competition in . . . Fort Worth. . . ."
After receiving the Department's opinion letter, the Board's staff completed processing of FWN's application and submitted the staff reports and the application to the Board on August 13, in time for the matter to be placed on the agenda for the August 17 meeting. At the same time, FWN was advised by letter that its application would be considered at the next meeting of the Board. The Board then met on August 17 and voted unanimously (Resolution 17836) to disapprove FWN's application because of its anticompetitive effect. The Board directed its Secretary to send a letter, stating the reasons for the disapproval of the application, to the President of the Federal Home Loan Bank Board of Little Rock for transmittal to FWN. The Board's decision was not then made public or communicated to FWN, however, since it was decided that release of the resolution should await completion of the opinion letter, which would take several days to draft.
FWN's contract with Mutual was to expire on September 30. Unaware of the Board's decision, FWN decided to file a complaint for injunctive and declaratory relief against the Board, the Corporation, and the individual members of the Board. Early on the morning of August 25, FWN's counsel delivered copies of the complaint and a supporting memorandum to the office of the Secretary of the Board. The complaint had not been filed with the Clerk of the district court at this time, however. Later the same morning, counsel for the Board telephoned FWN's counsel to inform him that the Board had disapproved FWN's application on August 17. On the afternoon of August 25, the Board met and authorized issuance of an opinion letter stating the reasons for its disapproval of FWN's application. About an hour after the Board's meeting, FWN filed the complaint in the present action.
On August 27, the Board mailed copies of its resolution and the opinion letter to FWN's counsel. On September 3, 1971, FWN received a copy of the letter, forwarded by the Federal Home Loan Bank Board of Little Rock.
The district court held a hearing on September 13, and on September 14 issued a preliminary injunction restraining the Board, the Corporation, and the Board members from "interfering with FWN or pursuing sanctions against FWN . . . in acquiring the stock of Mutual and retaining it . . . during the life of this temporary injunction." The district court's order permitted FWN to acquire "legal and equitable title to the stock of Mutual," but required the stock to be held in escrow pending further proceedings. In its opinion, the district court concluded that the Court of Appeals have exclusive jurisdiction to review orders of the Corporation and therefore expressly declined to pass on the merits of the parties' contentions. Nevertheless, the Court stated that it was granting the injunction "solely for the purpose of maintaining the status quo and preventing irreparable injury" because there was "not sufficient time to get action on an appeal from the Board's order before the Court of Appeals before the expiration date of FWN's contract."
The district court denied the Board's motion for a stay pending appeal, and on September 15 FWN acquired the stock of Mutual. The parties appealed both the district court's order and the order of the Corporation to this Court.
The appellant contends that under section 1730a(k) the exclusive method for review of the Corporation's order disapproving FWN's application was by petition for review in the Courts of Appeals and that the district court therefore had no jurisdiction to issue a preliminary injunction. We agree.
When Congress has prescribed a particular method of review, that procedure is exclusive. Whitney National Bank in Jefferson Parish v. Bank of New Orleans, 1965, 379 U.S. 411, 85 S. Ct. 551, 13 L.Ed.2d...
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