Lyons Savings & Loan Ass'n v. Federal Home Loan Bank Bd.

Decision Date27 March 1974
Docket Number73 C 3196 and 73 C 3197.,No. 73 C 2565,73 C 2677,73 C 3170,73 C 2595,73 C 2820,73 C 3175,73 C 2565
Citation377 F. Supp. 11
PartiesLYONS SAVINGS & LOAN ASSOCIATION, Plaintiff, v. FEDERAL HOME LOAN BANK BOARD et al., Defendants. GLENVIEW GUARANTY SAVINGS AND LOAN ASSOCIATION, an Illinois savings and loan association, et al., Plaintiffs, v. Thomas R. BOMAR et al., Defendants. SKOKIE FEDERAL SAVINGS AND LOAN ASSOCIATION, Plaintiff, v. FEDERAL HOME LOAN BANK BOARD and Talman Federal Savings and Loan Association of Chicago, Defendants. WINNETKA SAVINGS AND LOAN ASSOCIATION, an Illinois savings and loan association, et al., Plaintiffs, v. HOME FEDERAL SAVINGS AND LOAN ASSOCIATION OF CHICAGO, a Federal savings and loan association, et al., Defendants. AMERICAN HERITAGE SAVINGS AND LOAN ASSOCIATION, an Illinois Savings and Loan Association, Plaintiff, v. AUSTIN FEDERAL SAVINGS AND LOAN ASSOCIATION OF CHICAGO, a Federal Savings and Loan Association, et al., Defendants. HINSDALE FEDERAL SAVINGS & LOAN ASSOCIATION, an Association organized under the laws of the State of Illinois, 1st Savings of Downers Grove, an Association organized under the Laws of the State of Illinois, and Ben Franklin Savings and Loan Association, an Association organized under the Laws of the State of Illinois, Plaintiffs, v. MID AMERICA FEDERAL SAVINGS & LOAN ASSOCIATION, a Federal Savings and Loan Association, et al., Defendants. FIRST CALUMET CITY SAVINGS, an Illinois Savings & Loan Institution, et al., Plaintiffs, v. FINANCIAL FEDERAL SAVINGS & LOAN ASSOCIATION, a Federal Savings & Loan Association, et al., Defendants. FIRST CALUMET CITY SAVINGS, an Illinois Savings & Loan Association, et al., Plaintiffs, v. CALUMET FEDERAL SAVINGS & LOAN ASSOCIATION, a Federal Savings & Loan Association, et al., Defendants.
CourtU.S. District Court — Northern District of Illinois

COPYRIGHT MATERIAL OMITTED

Roy C. Palmer, and John J. Muldoon, Palmer, McHugh, Muldoon & Blackman, Ltd., Chicago, Ill., for plaintiffs Lyons Sav. and Loan Assn, American Heritage Sav. and Loan Assn, Hinsdale, Federal Sav. and Loan Assn, First Savings of Downers Grove, Ben Franklin Sav. and Loan Assn, First Calumet City Savings, First Sav. and Loan Assn of South Holland, Dolton-Riverdale Sav. and Loan Assn, First Sav. and Loan Assn of Hegewisch.

James S. Wirt, and A. Bradley Eben, Meyers & Matthias, Chicago, Ill., for plaintiffs Glenview Guaranty Sav. and Loan Assn, Niles Sav. and Loan Assn, The First Nat. Bank of Skokie, Old Orchard Bank and Trust Co.

Thomas H. Morsch, and Tomas M. Russell, Sidley & Austin, Chicago, Ill., for plaintiff Skokie Federal Sav. and Loan Assn.

Phillip E. Couri, Whitman, Kauffmann & Couri, Winnetka, Ill., for plaintiffs Winnetka Sav. and Loan Assn, Glenview Guaranty Sav. and Loan Assn.

Stuart B. Bradley, Bradley, Eaton, Jackman & McGovern, Chicago, Ill., for plaintiff Deerfield Sav. and Loan Assn.

David A. Bridewell, Russell, Bridewell & Lapperre, Chicago, Ill., for plaintiff The Winnetka Bank.

Francis J. McConnell, McConnell & Campbell, Chicago, Ill., for plaintiff First Nat. Bank of Winnetka.

Daniel J. Goldberg, Associate Gen. Counsel, Harvey Simon, Roland L. Marcotte, Jr., Federal Home Loan Bank Bd., Washington, D. C., for defendants Federal Home Loan Bank Board, Thomas R. Bomar, and Grady Perry, Jr.

Richard M. Calkins, Burditt & Calkins, Chicago, Ill., Donald E. Tolva, and Thomas B. Cassidy, Martin, Craig, Chester & Sonnenschein, Chicago, Ill., for defendant LaGrange Federal Sav. and Loan Assn.

Richard J. Troy, Geocaris, Sneider & Troy, Chicago, Ill., for defendant Brookfield Federal Sav. and Loan Assn.

Roger C. Wiegand, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., Irwin I. Zatz, Arvey, Hodes, Costello & Burman, Chicago, Ill., for defendant Talman Federal Sav. and Loan Assn. Leon E. Lindenbaum, Walsh, Case & Coale, Chicago, Ill., for defendant Home Federal Sav. and Loan Assn.

Emmett J. Galvin, Flynn, Galvin & Ryan, Chicago, Ill., for defendant Austin Federal Sav. and Loan Assn.

Fredric G. Novy, Garvey & Novy, Chicago, Ill., for defendant Mid America Federal Sav. and Loan Assn.

Paul R. Hoffman, Mortimer Hoffman, Chicago, Ill., for defendant Calumet Federal Sav. and Loan Assn.

Frank W. Gasior, Olympia Fields, Ill., Sherlock J. Hartnett, Chicago, Ill., for defendant Financial Federal Sav. and Loan Assn.

Philip B. Kurland, and M. I. Mishkin, Chicago, Ill., for amici curiae Illinois Bankers Assn, Independent Bankers Assn of America.

MEMORANDUM OPINION

WILL, District Judge.

Plaintiffs in all eight of these actions are financial institutions located in Illinois. The complaints seek declaratory and injunctive relief from decisions made by the Federal Home Loan Bank Board (Board), a defendant in each of the suits, approving applications from various federally chartered savings and loan associations in Illinois to establish branch offices. The jurisdiction of the court is invoked pursuant to 28 U.S.C. § 1331(a) and 1337, and 28 U.S.C. §§ 2201 and 2202.

In addition to the Board and two individual members, Thomas R. Bomar and Grady Perry, Jr., various federal savings and loan associations whose branching applications have been approved are also named as defendants. All defendants have moved to dismiss either part or all of the respective complaints for failure to state a claim upon which relief can be granted. In accordance with Rule 12(b) (6), Fed.R.Civ.P., these motions are being treated as motions for summary judgment. For the reasons set forth below, they will be granted in part and denied in part.

I

The Federal Home Loan Bank Board is the agency charged with the regulation and supervision of all federal savings and loan associations in the United States. The Board is responsible for chartering any new federal association, as well as authorizing any of a broad range of activities in which existing federal associations may engage. Until January 12, 1973, the Board had never authorized de novo branches for federal associations in Illinois. On that date, the Board reversed its prior policy and voted to allow federal associations to apply for branching permits. The stated basis for its decision was, in part, a staff study which revealed "a multiplication of state approved savings and loan banking facilities, and the existence of substantial affiliate banking operations in Illinois." (Exhibit 2, Board's Memorandum). This circumstance, in the Board's view, put federal associations at a severe competitive disadvantage. Consequently, as of January 31, 1973, it began to accept, process and approve branch applications from federal savings and loan associations in Illinois. The instant suits all involve challenges to the Board's actions in approving certain applications.

Lyons Savings and Loan Association v. Federal Home Loan Bank and LaGrange Federal Savings and Loan Association and Brookfield Federal Savings and Loan Association, No. 73 C 2565 (the Lyons case), is brought by a state savings and loan association against the Board and two federal savings and loan associations, LaGrange and Brookfield, whose applications for branch offices in Countryside, Illinois, were approved by the Board on August 15, 1973, in Resolutions No. 73-1122 and No. 73-1123. Glenview Guaranty Savings and Loan Association, et al. v. Thomas Bomar, et al., 73 C 2595 (the Glenview case), involves a challenge by two state savings and loan associations, a state bank and a federal bank, to the approval of the application of Talman Federal Savings and Loan Association, for the establishment of a branch in Skokie, Illinois. (Board Resolution No. 73-1471, October 15, 1973). Skokie Federal Savings and Loan Association v. Federal Home Loan Bank Board, et al., No. 73 C 2677 (the Skokie Federal case), is brought by a federal savings and loan association and also challenges the Board's approval of the Talman branch. And, Winnetka Savings and Loan Association, et al. v. Home Federal Savings and Loan Association No. 73 C 2820 (the Winnetka case), involves a challenge by three state savings and loan associations, a state bank and a federal bank against the Board's approval of the application of Home Federal for a branch office in Winnetka, Illinois. (Board Resolution No. 73-1123, October 5, 1973).

American Heritage Savings and Loan Association v. Austin Federal Savings and Loan Association of Chicago, et al., No. 73 C 3170 (the American Heritage case), is brought by a state savings and loan association against the Board and Austin, a federal association, challenging the Board's approval of a branch office and redesignation of that office as a "home office." (Resolution No. 73-956, July 20, 1973). First Calumet City Savings, et al. v. Calumet Federal Savings & Loan Association, et al., No. 73 C 3197 (the Calumet Federal case), is the action by four state associations against the Board and Calumet, a federal association, challenging the approval of a Calumet branch in Dolton, Illinois. (Resolution No. 73-1554, October 17, 1973). Hinsdale Federal Savings & Loan Association, et al. v. Mid-America Federal Savings & Loan Association, et al., No. 73 C 3175 (the Hinsdale case) is brought by two state associations and one federal association against the Board and another federal association, Mid-America, for the approval of a branch in Clarendon Hills, Illinois. (Resolution No. 73-1679, November 14, 1973). And in First Calumet City Savings, et al. v. Financial Federal Savings & Loan Association, et al., No. 73 C 3196 (the Financial Federal case), three state associations are challenging the Board's approval of a branch office for Financial Federal in Calumet City, Illinois (Resolution No. 73-1620, October 29, 1973).

While there are some differences among the complaints, many of the issues raised by each are identical and will be treated together wherever possible. In brief, the complaints challenge: (1) the Board's authority to approve branch applications of federal savings and loan associations...

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