CITIZENS NATIONAL BANK OF SOUTHERN MARYLAND v. Camp, Civ. No. 70-1473.
| Decision Date | 21 September 1971 |
| Docket Number | Civ. No. 70-1473. |
| Citation | 345 F. Supp. 630 |
| Parties | CITIZENS NATIONAL BANK OF SOUTHERN MARYLAND v. William B. CAMP, Comptroller of the Currency of the United States Treasury Department. |
| Court | U.S. District Court — District of Maryland |
Donald N. Rothman and Robert E. Sharkey, Baltimore, Md., and Ernest N. Cory, Jr., and Cory, Boss & Rice, Laurel, Md., for plaintiff.
George Beall, U. S. Atty., Baltimore, Md., L. Patrick Gray, III, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., and John Austin, Staff Atty., Comptroller of the Currency, Washington, D. C., for defendant.
David F. Albright and Thomas W. W. Haines, Baltimore, Md., for Maryland National Bank.
This action arises out of plaintiff's objection to the approval by the Comptroller of the Currency of an application by Maryland National Bank to open a branch office in Lexington Park, St. Mary's County, Maryland. In a previous action arising out of the same application (70-620-T), this Court held that the Comptroller's original approval of that application was insufficient and invalid because it failed to show that the Comptroller had considered the applicable law and based his conclusion thereon. The case was remanded to the Comptroller to reconsider the application giving due weight to the applicable Maryland statute. 317 F.Supp. 1389.
On remand the Comptroller voluntarily gave both the applicant and the protestant the right to produce additional documentary evidence and to respond to or comment upon the evidence submitted by the other party. Subsequently, on December 3, 1970, the Comptroller issued an opinion setting forth his reasons for reaffirming the approval of Maryland National's application.
On December 30, 1970, Citizens filed the present action, alleging (A) that the refusal of the Comptroller to conduct an adversary hearing on remand and his failure to make known to plaintiff those factors upon which he based his decision entitled plaintiff to de novo review, and (B) that "the purported approval of the Comptroller issued on December 3, 1970 is based on misinterpretation of law, and is in fact contrary to, the substantial evidence of record, and is arbitrary and capricious, constituting an abuse of administrative discretion" for three reasons, which will be discussed below.
The Comptroller on March 19, 1971, moved this Court to dismiss the complaint or, in the alternative, to grant summary judgment in its favor.
The Comptroller contends that the defense of res judicata should be a bar to the present action, arguing that plaintiff is attempting to relitigate questions which it raised or could have raised in the prior action. That point is without merit.
Plaintiff's first contention—that he was denied an adversary hearing on remand—was not a matter capable of being raised in the former action. Similarly, plaintiffs' second point—that the approval on remand was arbitrary, unlawful and against the evidence of the record—was not a matter disposed of by this Court in the earlier action or which could have been raised by the plaintiff therein.
Plaintiff contends that it is entitled to de novo review (1) for lack of an adversary hearing on remand, and (2) because the Comptroller failed to make known the factors on which he intended to base his decision.
This Court remanded to the Comptroller "to reconsider the application, giving due weight to the applicable Maryland statute".1 This Court did not hold that further evidence need be taken. The Comptroller himself decided to reopen the record.
Plaintiff requested the Comptroller: (a) to conduct a further hearing relating to Maryland National's application; (b) at such hearing to summon or otherwise require four designated officers of Maryland National to be present so that plaintiff could cross-examine them; and (c) to receive additional evidence on plaintiff's behalf relating to the application. Plaintiff's request for another full hearing was denied, as was its request that it be permitted to cross-examine designated officers of Maryland National. The Comptroller allowed both sides to submit additional documentary evidence and to reply to the material furnished by the other side. As it turned out, most of the material submitted on reconsideration was duplicative of the original record before the Comptroller.
At a hearing in the present case, the Court requested counsel for plaintiff to submit a list of the points they considered to be new matters on which plaintiff contends that it was entitled to a full hearing, in order to aid the Court in determining whether plaintiff is entitled to a trial de novo because of any failure of the Comptroller to hold an adequate adversary hearing.
Counsel for plaintiff filed a list of four points (one with several subdivisions).2
The first two points were:
The issue of the successful operation of the Millison Shopping Center became an issue on remand when Citizens charged that Maryland National's "underlying motivation for its application is simply an attempt by it to rescue its investment in the Millison Shopping Center", and submitted documentary evidence in support of its contention. Maryland National sought to refute this charge by offering evidence of the facts set out in 1 and 2, above. Citizens had the opportunity to deny the truth of those facts (which do not appear to be disputed) and to present arguments with respect thereto. Sufficient information was placed before the Comptroller so that he could determine the facts and decide the point.
The issue of the proposed loans to these facilities was first raised by Citizens on remand. Maryland National responded to the charge, stating that the reason for the noncompletion of the loan was a legal question, which was not disputed.3 There was adequate information presented by the parties from which the Comptroller could decide the point.
On Page 111 of the Administrative File on Reconsideration Maryland National Bank listed "supplementary factual information (seven items)" to which Citizens responded.4
These items were matters of public record or knowledge, available after the original hearing, such as total retail sales in St. Mary's County for 1969, the opening of a new dormitory at the Patuxent Naval Air Station, the new housing construction in the County, and new construction at the Millison Shopping Center. Citizens responded to each item, admitting the truth of most of them, but disputing their significance. There was no need for a further hearing before the Comptroller with respect thereto. This Court rejects plaintiff's request for de novo review based upon the lack of an adversary hearing on remand.
Nor is Citizens entitled to a hearing de novo in this Court because the Comptroller denied its request to cross-examine certain personnel of Maryland National. Citizens did not state the purpose of the cross-examination. If it was to deal with the new matters discussed above, there was no prejudice from its denial; if it was intended to deal with the points raised at the original hearing, Citizens was not entitled to use the remand as an opportunity to bolster the original record. This is especially true when at the initial hearing counsel for protestants did not seek to cross-examine the officers or employees of Maryland National who were present.
Citizens requested that it be granted leave to present additional evidence relating to the application. This request was granted by the Comptroller to the extent that he permitted both parties to present written evidence and arguments, and to answer the evidence and arguments of the other side. The order of this Court in the previous case did not require the Comptroller to go even that far; his requirement that the new evidence be in writing was not unreasonable.
Citizens contends that it is entitled to a trial de novo because the Comptroller did not tell Citizens in advance all of the factors upon which he planned to make his decision and give Citizens an opportunity to present evidence on those factors.
It appears from Citizens' briefs and argument that the factors to which Citizens refers are concerned with the lending policies of Citizens itself and certain activities of its officers. The other factors referred to by the Comptroller were matters as to which evidence had been taken, or were matters of common knowledge, such as the population of the County and the development of the Patuxent Naval Air Station.
Citizens misconceives the nature of the proceeding before the Comptroller. It is not a civil action in which issues are framed by pleadings or pretrial orders.
The nature of such a proceeding is discussed at length in Farmers National Bank of Annapolis et al. v. Camp, Civil 71-70-T, decided this day, 345 F.Supp. 622. That discussion need not be repeated at length here, but is adopted as part of this opinion.
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