COMMUNITY S. & L. ASS'N v. Federal Home Loan Bank

• Decision Date: 31 January 1978
• Docket Number: Civ. A. No. 73-C-121 and 73-C-146.
• Citation: 443 F. Supp. 927
• Parties: COMMUNITY SAVINGS AND LOAN ASSOCIATION, a Wisconsin Corporation, First American Savings and Loan Association, a Wisconsin Corporation, and Wauwatosa Savings and Loan Association, a Wisconsin Corporation, Plaintiffs, v. FEDERAL HOME LOAN BANK BOARD, Thomas H. Bomar, Chairman of the Federal Home Loan Bank Board, Grady Perry, Jr., Member of the Federal Home Loan Bank Board, and First Federal Savings and Loan Association of Wisconsin, Defendants. MUTUAL SAVINGS AND LOAN ASSOCIATION OF WISCONSIN, Plaintiff, v. FEDERAL HOME LOAN BANK BOARD, Thomas H. Bomar, Chairman of the Federal Home Loan Bank Board, Grady Perry, Jr., Member of the Federal Home Loan Bank Board, and First Federal Savings and Loan Association of Wisconsin, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

443 F. Supp. 927

COMMUNITY SAVINGS AND LOAN ASSOCIATION, a Wisconsin Corporation, First American Savings and Loan Association, a Wisconsin Corporation, and Wauwatosa Savings and Loan Association, a Wisconsin Corporation, Plaintiffs, v. FEDERAL HOME LOAN BANK BOARD, Thomas H. Bomar, Chairman of the Federal Home Loan Bank Board, Grady Perry, Jr., Member of the Federal Home Loan Bank Board, and First Federal Savings and Loan Association of Wisconsin, Defendants.

MUTUAL SAVINGS AND LOAN ASSOCIATION OF WISCONSIN, Plaintiff, v. FEDERAL HOME LOAN BANK BOARD, Thomas H. Bomar, Chairman of the Federal Home Loan Bank Board, Grady Perry, Jr., Member of the Federal Home Loan Bank Board, and First Federal Savings and Loan Association of Wisconsin, Defendants.

Civ. A. Nos. 73-C-121 and 73-C-146.

United States District Court, E. D. Wisconsin.

January 31, 1978.

Clifford C. Kasdorf, Milwaukee, Wis., for plaintiffs, Community Sav. and Loan Ass'n and Wauwatosa Sav. and Loan Ass'n Edward A. Dudek, Milwaukee, Wis., for plaintiff, Mutual Sav. and Loan Ass'n of Wis.

Harold B. Shore, Harvey Simon and Steven J. Toll, Washington, D. C., for defendants, Federal Home Loan Bank Bd. and Its Individual Members.

David E. Jarvis, Milwaukee, Wis., for defendant, First Federal Sav. and Loan Ass'n of Wis.

DECISION AND ORDER

REYNOLDS, Chief Judge.

Plaintiff savings and loan associations seek review of a decision of the defendant Federal Home Loan Bank Board ("Board") approving the application of First Federal Savings and Loan Association ("First Federal") to establish a branch office in the vicinity of the Mayfair Shopping Center, Wauwatosa, Wisconsin.

The plaintiffs — Community Savings and Loan Association whose office is located at 9210 West North Avenue, Wauwatosa, Wisconsin; First American Savings and Loan Association whose office is located at 10045 West Lisbon Avenue, Milwaukee, Wisconsin; and Wauwatosa Savings and Loan Association whose office is located at 7500 West State Street, Wauwatosa, Wisconsin — commenced this action on March 12, 1973. The plaintiff Mutual Savings and Loan Association of Wisconsin whose home office is located at 510 East Wisconsin Avenue, Milwaukee, Wisconsin, commenced its action on March 19, 1973. The two actions were thereafter consolidated by order of the Court on June 13, 1973, pursuant to Rule 42(a) of the Federal Rules of Civil Procedure and with the agreement of the parties.

Jurisdiction is based on the existence of a federal question and a controversy exceeding $10,000, as an action arising under the Fifth Amendment to the U.S. Constitution, the Home Owners' Loan Act of 1933, as amended, 12 U.S.C. §§ 1461-64; 28 U.S.C. §§ 1331, 1337, 2201-02, and the Administrative Procedure Act, 5 U.S.C. §§ 701-06. Plaintiffs seek a declaratory judgment vacating Resolution 72-1161 of the Board, an injunction prohibiting the defendant First Federal from establishing or operating a branch office in the Mayfair Shopping Center environs; remand of the matter to the Board for reconsideration consistent with the Court's decision, or alternatively, for a trial de novo to determine the need for First Federal's proposed branch. The matter is before the Court on cross motions for summary judgment. Additionally, the plaintiffs have filed a motion to strike the affidavit of Edward A. Eckert. For the reasons stated hereafter, the plaintiffs' motion to strike the Eckert affidavit will be granted, plaintiffs' motion for summary judgment will be denied, and defendants' motion for summary judgment will be granted.

The material facts surrounding First Federal's application are not in dispute. On June 11, 1968, First Federal filed an application for permission to establish a branch office in the vicinity of the Mayfair Shopping Center in Wauwatosa, Wisconsin. The designated service area was identified in the application and supporting documents as being an area already served by ". . . ten savings and loan offices presently located within the boundaries of the immediate service area, plus two immediately adjacent to the immediate service area . . ." The Board disapproved this application in Resolution No. 22,291, dated November 21, 1968, stating:

"RESOLVED that the application of the First Federal Savings and Loan Association of Wisconsin, Milwaukee, Wisconsin, dated June 6, 1968, for permission to establish a branch office at, or in the immediate vicinity of North Mayfair Road, between the intersection of West North Avenue and West Center Street, Wauwatosa, Wisconsin, is hereby disapproved, by reason of insufficient evidence of necessity for such branch office, and of its reasonable prospects for usefulness and success without undue injury to existing thrift and home-financing institutions."

Pursuant to the regulations of the Board then in effect, First Federal requested a hearing on its application, which was conducted in February 1969. Based upon the evidence and data presented at the hearing, the Board on April 24, 1969, issued its resolution No. 22,757, again denying the application and stating:

"FEDERAL HOME LOAN BANK BOARD, No. 22,757. Date: April 24, 1969.

"WHEREAS, Federal Home Loan Bank Board Hearing Order No. 190-B, dated January 7, 1969, provided for a hearing upon the application of the First Federal Savings and Loan Association of Wisconsin, Milwaukee, Wisconsin, for permission to establish a branch office at, or in the immediate vicinity of, North Mayfair Road, between the intersection of West North Avenue and West Center Street, Wauwatosa, Wisconsin; and

"WHEREAS, the said matter came on for hearing before a Hearing Officer for the Federal Home Loan Bank Board in Suite 610, 400 First Street, N.W. (Railway Labor Building), Washington, D.C., on Monday, the third day of February, 1969, at ten o'clock in the forenoon; and "WHEREAS, the complete record of the cause and the merits of the application have been duly considered and it is determined that there is no necessity for the branch office in the community to be served, and that said branch office cannot be established in such locality without undue injury to properly conducted existing local thrift and home-financing institutions:

"NOW, THEREFORE, IT IS HEREBY RESOLVED That the application of the First Federal Savings and Loan Association of Wisconsin, Milwaukee, Wisconsin, for permission to establish a branch office at, or in the immediate vicinity of, North Mayfair Road, between the intersection of West North Avenue and West Center Street, Wauwatosa, Wisconsin, is hereby disapproved.

"By the Federal Home Loan Bank Board. s/Jack Carter, Jack Carter, Secretary."

A petition for reconsideration was then made by First Federal on May 3, 1969, which was also denied.

On February 25, 1972, First Federal again filed with the Board a further application for establishment of a branch office in the vicinity of the Mayfair Shopping Center, stating that ". . . The current proposed branch site and savings service area are essentially the same as those in the former application, except that the northeast service area boundary has been adjusted . . . Nine savings and loan associations are operating eleven facilities within or immediately adjacent to the boundary of the proposed branch service area." Pursuant to the regulations then in effect, protests in opposition to the branch were filed with the Board on behalf of the plaintiff associations: Community Savings and Loan Association ("Community"), First American Savings and Loan Association ("First American"), Wauwatosa Savings and Loan Association ("Wauwatosa"), and Mutual Savings and Loan Association of Wisconsin ("Mutual"). At the request of the protestants, oral argument was conducted in opposition to the application of First Federal. On October 3, 1972, the Board by its resolution No. 72-1161 conditionally approved the branch office of First Federal, stating:

"FEDERAL HOME LOAN BANK BOARD, No. 72-1161. Date: October 3, 1972.

"WHEREAS, by application, dated February 23, 1972, First Federal Savings and Loan Association of Wisconsin, Milwaukee, Wisconsin ("First Federal") seeks permission to establish a branch office at, or in the immediate vicinity of, the intersection of North Mayfair Road and West North Avenue, Wauwatosa, Milwaukee County, Wisconsin; and

"WHEREAS, certain local thrift and home-financing institutions have protected the said application, and the protestants were given the opportunity to submit, and have submitted, legal memoranda, economic data and other matter in opposition to the application; and "WHEREAS, oral argument in this cause has been held on May 24, 1972, before the Board's Supervisory Agent, at which time First Federal, and all but one of the protestants, appeared and argued their respective cases; and

"WHEREAS, subsequent to the oral argument the protestants were permitted to make an additional written submission in support of the protests; and

"WHEREAS, the Board has determined that a necessity exists for the proposed branch office in the community to be served, that there is a reasonable probability of its usefulness and success, and that said branch can be established at such locality without undue injury to the protestants and any other properly conducted existing local thrift and home-financing institutions; and

"WHEREAS, in making the determination referred to above, the Board has considered all relevant matters including, among others, the following: (1) the size, population, composition, rate of growth, new housing starts, income level, savings potential and lending needs of the proposed service area, (2) the number of existing local thrift and home-financing institutions already serving the area, (3) the size, location and rate of growth of the protestants, and other local thrift and home-financing institutions in or near the service area, (4) the distance between First Federal's proposed branch office and the nearby offices of the protestants, and the size and rate of growth of

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