Bailey v. Federal Intermediate Credit Bank of St. Louis

• Citation: 788 F.2d 498
• Decision Date: 09 April 1986
• Docket Number: No. 85-1660,85-1660
• Parties: Clarence B. BAILEY, Appellant, v. FEDERAL INTERMEDIATE CREDIT BANK OF ST. LOUIS, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 498

788 F.2d 498

Clarence B. BAILEY, Appellant, v. FEDERAL INTERMEDIATE CREDIT BANK OF ST. LOUIS, Appellee.

No. 85-1660.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 15, 1985.

Decided April 9, 1986.

Thomas E. Hankins, Gladstone, Mo., for appellant.

George F. Smith, St. Louis, Mo., for appellee.

Before ARNOLD and WOLLMAN, Circuit Judges, and GUNN, ^* District Judge.

WOLLMAN, Circuit Judge.

Clarence B. Bailey, formerly chief executive officer of the Osage Production Credit Association, seeks a declaratory judgment that the Federal Intermediate Credit Bank of St. Louis exceeded its lawful authority when in March 1984 it removed him from that position. The district court ¹ on cross motions for summary judgment found for the Bank, Bailey v. Federal Intermediate Credit Bank, 608 F.Supp. 1009 (W.D.Mo.1985), ² and on appeal we affirm.

The Osage Production Credit Association and the Federal Intermediate Credit Bank of St. Louis both are federally chartered instrumentalities of the United States functioning within the federal farm credit system as that system was reorganized by the Farm Credit Act of 1971, Pub.L. No. 92-181, 85 Stat. 583 (codified as amended at 12 U.S.C. Secs. 2001-2260 (1982)). The farm credit system consists of twelve districts, each headed by a board of directors and each including one federal intermediate credit bank (plus other institutions not relevant here). The intermediate credit banks have responsibility for the production credit associations (PCA's) within their geographic areas, with the PCA's making the actual loans to individuals for farm-related purposes. PCA's, however, fund such loans primarily through money borrowed in turn from intermediate credit banks. The farm credit system as a whole is regulated by the Farm Credit Administration (FCA), an independent executive agency which sets policy and exercises supervisory authority. ³

The Federal Intermediate Credit Bank of St. Louis heads the farm credit district which encompasses the Osage PCA. In its letter removing Bailey as Osage chief executive officer, the Bank justified its action as an exercise of the supervisory powers vested in it by section 2072 of title 12 of the U.S.Code. Furthermore, it pointed to section 500.2 of the Osage PCA's bylaws, wherein it is provided that a chief executive officer should serve at the pleasure of the PCA board or until "removed * * * by the bank." PCA bylaws, however, are drawn up by the FCA and adopted in a standardized format (with options on some provisions) by the local associations. See 12 U.S.C. Secs. 2091, 2252(a)(2). Thus, Bailey argues, bylaw section 500.2 cannot be a source of authority for his removal by the Bank because the bylaw presumes to grant to the Bank powers in excess of those vested in that institution by the legislation that created it.

Our review of this assertion begins from the premise that an agency's view with regard to the proper construction of a statute it is charged with administering is entitled to considerable deference. Chemical Manufacturers Association v Natural Resources Defense Council, --- U.S. ----, 105 S.Ct. 1102, 1108, 84 L.Ed.2d 90 (1985). Though we may not uphold an interpretation contrary to the " 'clear meaning of a statute, as revealed by its language, purpose, and history,' " Southeastern Community College v. Davis, 442 U.S. 397, 411, 99 S.Ct. 2361, 2369, 60 L.Ed.2d 980 (1979) (quoting International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 566 n. 20, 99 S.Ct. 790, 800 n. 20, 58 L.Ed.2d 808 (1979) ), the agency's interpretation need not be shown to be the only permissible view. Chemical Manufacturers, 105 S.Ct. at 1108. If, upon our examination, Congress appears not to have actually formulated an intent with regard to removal of PCA officers, a finding that the FCA's interpretation of intermediate credit bank powers is rational and reasonable precludes us from substituting our own judgment on that issue. See id; Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 2783, 81 L.Ed.2d 694 (1984).

The removal bylaw is not contrary to the express language of the Farm Credit Act of 1971. The statute at no point mentions removal of PCA chief executive officers, neither granting nor denying such power to either the FCA, intermediate credit banks, or the PCA's themselves. Bailey, however, asserts that the absence of an express reference to removal among the Bank's enumerated powers, see 12 U.S.C. Sec. 2072, must indicate that Congress indeed possessed a specific intent to deny the existence of such a power.

Bailey first relies on the maxim of statutory construction "expressio unius est exclusio alterius"--i.e., the expression of one thing excludes others not expressed. Bailey asserts that since Congress set forth in section 2072 twenty-one powers to be vested in intermediate credit banks, all powers not so listed are denied to such banks. But this argument is actually too simple. The "expressio unius" maxim merely embodies a presumption that, rather than constitutes evidence that, Congress intended to deny all powers not expressly enumerated. See Illinois Department of Public Aid v. Schweiker, 707 F.2d 273, 277 (7th Cir.1983); United Steelworkers v. Marshall, 647 F.2d 1189, 1232 (D.C.Cir.1980), cert. denied, 453 U.S. 913, 101 S.Ct. 3149, 69 L.Ed.2d 997 (1981). As the Supreme Court said in considering an argument similar to Bailey's regarding the powers of the Interstate Commerce Commission,

Our function * * * does not stop with a section-by-section search for the phrase 'regulation of leasing practices' among the literal words of the statutory provisions. As a matter of principle, we might agree with appellants' contentions if we thought it a reasonable canon of interpretation that the draftsmen of acts delegating agency powers, as a practical and realistic matter, can or do include specific consideration of every evil sought to be corrected. But no great acquaintance with practical affairs is required to know that such prescience, either in fact or in the minds of Congress, does not exist.

American Trucking Associations v. United States, 344 U.S. 298, 309-10, 73 S.Ct. 307, 314, 97 L.Ed. 337 (1953). The applicability of "expressio unius" depends upon the intent of the drafters of a statute, and the maxim should be invoked only when other aids to interpretation suggest that the language at issue was meant to be exclusive. Ford v. United States, 273 U.S. 593, 611-12, 47 S.Ct. 531, 537, 71 L.Ed. 793 (1927) (quoting H. Broom, A Selection of Legal Maxims 653 (7th ed. 1874) ); cf. Crancer v. Lowden, 121 F.2d 645, 649 (8th Cir.1941) (doctrine of "expressio unius" not to be used to override a contrary intent). Specifically, "expressio unius" should not prevail when a nonexclusive reading serves the purposes for which the statute was enacted or allows the exercise of incidental authority necessary to an expressed power or right. 2A Sutherland Statutory Construction Sec. 47.25, at 209 (Sands 4th ed. 1984 rev.).

The district court pointed to three main clauses in rejecting an exclusive reading of section 2072 and finding the power of an intermediate credit bank to remove a PCA officer implicit in the scheme of the Farm Credit Act. First, section 2072(15) expressly gives an intermediate credit bank the power to approve the appointment and compensation of PCA chief executive officers. Second, the same section also gives an intermediate credit bank the power to "supervise the exercise by [PCA's] of the functions vested in or delegated to them," while third, section 2254 provides that PCA's are to be subject to annual audits that shall include "objective appraisals of the effectiveness of management and application of policies in carrying out the provisions of [the Farm Credit Act]." The power to control salary, the district court reasoned, means that an intermediate credit bank can at least indirectly terminate a PCA chief executive officer by refusing to approve compensation. Bailey, 608 F.Supp. at 1012. In addition, the court observed that the Farm Credit Act places no express limits on the power of an intermediate credit bank to remedy--for example, through removal of an officer--violations of farm credit policy found through audits. Id.; see 12 C.F.R. Secs. 611.1010(i), 614.4050 (1985). Finally, the court looked to the function of an intermediate credit bank in ensuring sound farm credit and concluded that a bylaw giving such a bank the power to remove a PCA chief executive officer reasonably could be seen as an appropriate expression of intermediate credit bank general supervisory power. Bailey, 608 F.Supp. at 1012; cf. American Trucking, 344 U.S. at 311, 73 S.Ct. at 315 ("It is an unnatural construction of the Act which would require the [administrative agency] to sit idly by and wink at practices that lead to violations of its provisions.").

We conclude that this grant of supervisory power plus the need for incidental powers to effectuate the purposes of the Act indicates that Congress did not intend its enumeration in section 2072 to be exclusive and that the "expressio unius" maxim thus is not applicable. ⁴

Bailey further argues, however, that even if some intermediate credit bank powers may be implied as "supervisory," the power to terminate PCA officers is not one of those powers because Congress has shown that it knows how to grant removal power when it wishes. Specifically, Bailey points to some half dozen statutes that expressly mention removal, sometimes also with a separate grant of "supervisory" authority. While arguments such as Bailey's have frequently been adopted by courts in other circumstances, we are not persuaded here because of the dissimilarity between the Farm Credit Act and the statutes on which Bailey relies in terms of the overall structure of the legislation, the function of and autonomy accorded the entity whose officer is subject to removal, and the...