596 F.2d 1368 (9th Cir. 1979), 77-3485, Bankamerica Corp. v. Board of Governors of Federal Reserve System

Docket Nº77-3485, 77-3629 and 77-2173.
Citation596 F.2d 1368
Party NameBANKAMERICA CORPORATION, Plaintiff-Appellee, v. BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM, Defendant, National Computer Analysts, Inc., Defendant-Intervenor-Appellant. BANKAMERICA CORPORATION, Plaintiff-Appellee, v. BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM, Defendant-Appellant, National Computer Analysts, Inc., Defendant-Intervenor.
Case DateMay 14, 1979
CourtUnited States Courts of Appeals, United States Court of Appeals (9th Circuit)

Page 1368

596 F.2d 1368 (9th Cir. 1979)

BANKAMERICA CORPORATION, Plaintiff-Appellee,

v.

BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM, Defendant,

National Computer Analysts, Inc., Defendant-Intervenor-Appellant.

BANKAMERICA CORPORATION, Plaintiff-Appellee,

v.

BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM, Defendant-Appellant,

National Computer Analysts, Inc., Defendant-Intervenor.

BANKAMERICA CORPORATION, Petitioner,

v.

BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM, Respondent,

National Computer Analysts, Inc., Intervenor.

Nos. 77-3485, 77-3629 and 77-2173.

United States Court of Appeals, Ninth Circuit

May 14, 1979

Rehearing Denied in Nos. 77-3485 and 77-3629 June 8, 1979.

Page 1369

[Copyrighted Material Omitted]

Page 1370

[Copyrighted Material Omitted]

Page 1371

James V. Mattingly, Jr., San Francisco, Cal., for defendant-appellant.

H. Helmut Loring, San Francisco, Cal., Christopher S. Rooney, New York City, for plaintiff-appellee.

Appeal from a Judgment and an Order of the United States District Court for the Northern District of California.

Petition for Review of a Decision of the Board of Governors of the Federal Reserve System.

Before DUNIWAY, CHOY and SNEED, Circuit Judges.

DUNIWAY, Circuit Judge:

Under the Bank Holding Company Act, 12 U.S.C. § 1841 Et seq. ("the Act"), a bank holding company such as BankAmerica may not engage in or expand its nonbanking activities without the approval of the Board of Governors of the Federal Reserve System ("the Board"). In 1976 BankAmerica asked the Board to approve an expansion of the nonbanking activities carried on by its data-processing subsidiary, Decimus Corporation. Before any Board decision on its application, BankAmerica filed an action in the District Court for the Northern District of California for a declaration that its application had been granted by operation of law under Section 4(c) of the Act, 12 U.S.C. § 1843(c). Meanwhile, the Board ordered a hearing on the application. Later, the district court granted BankAmerica's motion for summary judgment.

In No. 77-3629, the Board appeals from the district court judgment, arguing that the district court did not have jurisdiction, and that in any event it was error for the district court to hold that BankAmerica's application had been granted by operation of law. In No. 77-3485, one of Decimus' competitors, National Computer Analysts, Inc. ("National"), appeals from the district court's denial of its motion to intervene in the declaratory judgment action. In No. 77-2173, BankAmerica petitions for review of the Board's order for a hearing on the application.

We hold that the district court had jurisdiction, but reverse its decision that the application had been granted by operation of law. We dismiss the petition to review the Board's order for a hearing because it is interlocutory. Because we reverse the district court's judgment on the merits, we need not reach National's appeal, and we dismiss it.

I. Background.

Under 12 U.S.C. § 1843(c),

In the event of the failure of the Board to act on any application . . . within the ninety-one day period which begins on the date of submission to the Board of the complete record on that application, the application shall be deemed to have been granted.

The parties agree that this ninety-one day rule applies to BankAmerica's application. If the ninety-one days had run, the district court would have been correct in holding the application granted by operation of law. It is the "submission to the Board of the complete record on (an) application" that triggers the running of the ninety-one days. Thus the validity of the district court's judgment depends upon when, if ever, "the complete record" was submitted to the Board. For this reason, we present the factual chronology in some detail.

In 1974 BankAmerica applied to the Board for permission for Decimus to open a data processing center in Piscataway, New Jersey. The Act permits bank holding companies and their subsidiaries to engage in activities other than owning and controlling banks if the Board determines that such nonbanking activities are "closely related to banking" and that such activities "can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). The Board has determined

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by regulation that certain types of activities such as providing financial data processing are closely related to banking. See 12 C.F.R. 225.4(a)(8). When a holding company proposes to engage in such activities or expand the scope of its involvement in such activities, the Board weighs the expected public benefits against the possible adverse effects on a case by case basis.

By regulation, the Board has delegated the power to approve such nonbanking activities to individual Federal Reserve Banks. 12 C.F.R. §§ 225.41(b)(1) and 265.2(f)(20)(i). BankAmerica is headquartered in San Francisco; so the Federal Reserve Bank of San Francisco passed upon and approved the application to open the Decimus data processing center in Piscataway in late 1974.

National is a data processing concern based in Philadelphia. The opening of the Piscataway operation made National a competitor of Decimus. Under 12 U.S.C. § 1850, National had "the right as an aggrieved party to obtain judicial review" of the Federal Reserve Bank's original approval of Decimus' Piscataway operation. National could have obtained such review by filing a petition for review within thirty days in the Court of Appeals for the Third Circuit, within which it had its principal place of business, or in the Court of Appeals for the District of Columbia. 12 U.S.C. § 1848. Instead, National tried to attack the approval collaterally by bringing an action against the Board in the District Court for New Jersey. National added its allegations against the Board to an earlier action filed by it against BankAmerica, Decimus, and Bank of America, N.T. & S.A. which alleged violations of the Sherman Act, violations on the anti-tying provisions of the Bank Holding Company Act (12 U.S.C. § 1971 Et seq.), violations of the New Jersey antitrust laws, and acts of unfair competition. On April 30, 1976, the District Court for New Jersey dismissed the claims in that action directed against the Board, holding that National should have utilized the direct review procedure in a court of appeals to challenge the Board's approval of the Piscataway office. National appealed to the Third Circuit.

While that appeal was pending, National complained to the Board that Decimus had begun soliciting business in Philadelphia. BankAmerica admitted the solicitations, but claimed that the 1974 approval had meant to authorize activities throughout Decimus' "natural market area" which it interpreted to include most of the east coast.

The Board disagreed, instructing BankAmerica that the 1974 approval did not authorize activities in Pennsylvania. To enable Decimus to solicit business throughout the northeastern and middle Atlantic states, BankAmerica then applied for the Board's approval to expand Decimus' activities, the matter which is at issue here.

In order to comply with Board regulations requiring notice to potential competitors, BankAmerica advertised its intended expansion by publishing two and one-half inch legal notices in the Wall Street Journal and eight other eastern newspapers between September 8 and 10, 1977.

On September 28, 1976, BankAmerica notified the Federal Reserve Bank of San Francisco of its intention to expand the operations of Decimus. On October 7, 1976, National protested the Decimus expansion, and it submitted further objections and requested a hearing in additional communications dated October 14 and 25, November 19 and 23, and December 1, 2, 3 and 8, 1976. On November 9, 1976, the Federal Reserve Bank of San Francisco notified BankAmerica that the Reserve Bank would not approve BankAmerica's application, but rather would refer it to the Board. The Reserve Bank directed BankAmerica not to consummate the expansion until specifically authorized by the Board. See 12 C.F.R. § 265.2(f)(20)(ii).

As news of the Decimus application spread, other competitors protested the proposed expansion of its activities into their areas, either directly or through various Congressmen and Senators. National Association of Bank Servicers of Columbus, Ohio, protested on November 21, 1976. On November 29, 1976, On-Line Service Corp. of Philadelphia protested and requested a hearing. The Board received additional

Page 1373

protests, comments, inquiries, and requests that it hold a hearing as follows: Congresswoman Fenwick of Philadelphia (December 13, 1976); Virginia Data Center of Norfolk, Virginia (January 4, 1977); Bankputer of West Haven, Connecticut (January 6, 1977); Datatel, Inc., of Alexandria, Virginia (January 12, 1977); System Development Corp. of Santa Monica, California (January 18, 1977); Senator Case of New Jersey (January 21, 1977); Delmarva Bank Data Processing Center, Inc. ("Delmarva") of Denton, Maryland (March 2, 1977); Senator Sarbanes of Maryland (April 13, 1977). Delmarva elaborated on its protest and submitted additional information on April 18, May 13, and May 17, 1977. On May 20, 1977, the Board responded to the protests and comments by ordering a hearing on the proposed geographic expansion of Decimus.

BankAmerica concedes that the testimony and evidence presented at such a hearing would form a part of "the complete record on that application" within the meaning of the ninety-one day rule, and thus that the ninety-one days would not usually begin to run until the conclusion of such a hearing. It...

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9 practice notes
  • 994 A.2d 330 (Conn.App. 2010), 30471, Taylor v. King
    • United States
    • Connecticut Appellate Court of Connecticut
    • 11 Mayo 2010
    ...directly or indirectly to be considered in the rendering of a decision. See Page 337 Bankamerica Corporation v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir.1979); Lloyd v. Illinois Regional Transportation Authority, 548 F.Supp. 575, 590 (N.D.Ill.1982)." Frank v. Streeter, 192 Conn......
  • 702 A.2d 659 (Conn.App. 1997), 16705, Northeast Sav., F.A. v. Scherban
    • United States
    • Connecticut Appellate Court of Connecticut
    • 2 Diciembre 1997
    ...the elements directly or indirectly to be considered in the rendering of a decision. See Bankamerica Corporation v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir.1979); Lloyd v. Illinois Regional Transportation Authority, 548 F.Supp. 575, 590 (N.D.Ill.1982)." Frank v. Streeter, supr......
  • Ippolito v. Ippolito, 073191 CTSUP, 27 33 85
    • United States
    • Connecticut Superior Court of Connecticut
    • Invalid date
    ...of all the elements directly or indirectly to be considered in the rendering of a decision. See Bank America Corp. v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir. 1979)." Id. at 604. The court cited cases in other jurisdictions in determining that statutory provisions containing s......
  • 472 A.2d 1281 (Conn. 1984), Frank v. Streeter
    • United States
    • Connecticut Supreme Court of Connecticut
    • 3 Abril 1984
    ...the elements directly or indirectly to be considered in the rendering of a decision. See Bankamerica Corporation v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir.1979); Lloyd v. Illinois Regional Transportation Authority, 548 F.Supp. 575, 590 (N.D.Ill.1982). We agree that the trial in th......
  • Request a trial to view additional results
9 cases
  • 994 A.2d 330 (Conn.App. 2010), 30471, Taylor v. King
    • United States
    • Connecticut Appellate Court of Connecticut
    • 11 Mayo 2010
    ...directly or indirectly to be considered in the rendering of a decision. See Page 337 Bankamerica Corporation v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir.1979); Lloyd v. Illinois Regional Transportation Authority, 548 F.Supp. 575, 590 (N.D.Ill.1982)." Frank v. Streeter, 192 Conn......
  • 702 A.2d 659 (Conn.App. 1997), 16705, Northeast Sav., F.A. v. Scherban
    • United States
    • Connecticut Appellate Court of Connecticut
    • 2 Diciembre 1997
    ...the elements directly or indirectly to be considered in the rendering of a decision. See Bankamerica Corporation v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir.1979); Lloyd v. Illinois Regional Transportation Authority, 548 F.Supp. 575, 590 (N.D.Ill.1982)." Frank v. Streeter, supr......
  • Ippolito v. Ippolito, 073191 CTSUP, 27 33 85
    • United States
    • Connecticut Superior Court of Connecticut
    • Invalid date
    ...of all the elements directly or indirectly to be considered in the rendering of a decision. See Bank America Corp. v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir. 1979)." Id. at 604. The court cited cases in other jurisdictions in determining that statutory provisions containing s......
  • 472 A.2d 1281 (Conn. 1984), Frank v. Streeter
    • United States
    • Connecticut Supreme Court of Connecticut
    • 3 Abril 1984
    ...the elements directly or indirectly to be considered in the rendering of a decision. See Bankamerica Corporation v. Board of Governors, 596 F.2d 1368, 1378 (9th Cir.1979); Lloyd v. Illinois Regional Transportation Authority, 548 F.Supp. 575, 590 (N.D.Ill.1982). We agree that the trial in th......
  • Request a trial to view additional results