First-Citizens Bank and Trust Company v. Camp

• Decision Date: 03 April 1969
• Docket Number: 12553.,No. 12552,12552
• Citation: 409 F.2d 1086
• Parties: FIRST-CITIZENS BANK AND TRUST COMPANY, Appellant, v. William B. CAMP, Comptroller of the Currency of the United States, Defendant, First Union National Bank of North Carolina, Intervenor, Appellees. FIRST-CITIZENS BANK AND TRUST COMPANY, Appellant, v. William B. CAMP, Comptroller of the Currency of the United States, Defendant, and North Carolina National Bank, Intervenor, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

409 F.2d 1086 (1969)

FIRST-CITIZENS BANK AND TRUST COMPANY, Appellant, v. William B. CAMP, Comptroller of the Currency of the United States, Defendant, First Union National Bank of North Carolina, Intervenor, Appellees.

FIRST-CITIZENS BANK AND TRUST COMPANY, Appellant, v. William B. CAMP, Comptroller of the Currency of the United States, Defendant, and North Carolina National Bank, Intervenor, Appellees.

Nos. 12552, 12553.

United States Court of Appeals Fourth Circuit.

Argued December 3, 1968.

Decided April 3, 1969.

John R. Jordan, Jr., Raleigh, N. C. (Jordan, Morris & Hoke, Raleigh, N. C., on brief), for appellant.

Walter H. Fleischer, Atty., Department of Justice (Edwin L. Weisl, Jr., Asst. Atty. Gen., and Alan S. Rosenthal, Atty., Department of Justice, and Robert H. Cowen, U. S. Atty., on brief), for appellee William B. Camp.

Hugh Cannon, Raleigh, N. C. (Sanford, Cannon, Adams & McCullough, Raleigh, N. C., on brief), for appellee First Union Nat. Bank of North Carolina.

Charles T. Hagan, Jr., Greensboro, N. C. (Robert G. Baynes and Adams, Kleemeier, Hagan & Hannah, Greensboro, N. C., and A. L. Purrington, Jr., and Purrington, Joslin, Culbertson & Sedberry, Raleigh, N. C., on brief), for appellee North Carolina Nat. Bank.

Before BOREMAN, WINTER and BUTZNER, Circuit Judges.

WINTER, Circuit Judge:

Plaintiff, First-Citizens Bank and Trust Company ("First-Citizens"), sued to restrain the opening of branch banks by First Union National Bank of North Carolina ("FUNB") and North Carolina National Bank ("NCNB") in the North Hills Shopping Center, Raleigh, North Carolina. The suits were against the Comptroller of the Currency, who approved the establishment of the branches, and FUNB and NCNB intervened.

When the consolidated cases first came before the district court on the merits, it, conceiving that the intervening decision in First Nat. Bank of Logan, Utah v. Walker Bank & Trust Co., 385 U.S. 252, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966), required the Comptroller to follow the North Carolina statutes, particularly N. C.Gen.Stat. § 53-62(b), in passing on branch applications,¹ remanded the case to the Comptroller for further hearings and findings in regard to the criteria established by state law. The Comptroller conducted further hearings, in which First-Citizens participated and made further findings, reaffirming his original determination to permit the branches to be established. The district court then considered the matter, on cross-motions for summary judgment, in the light of the Comptroller's redetermination. Judgment was granted for the Comptroller and the intervenors. We affirm.

On appeal, plaintiff makes three major contentions. First, it is claimed that plaintiff was not afforded a hearing on the crucial issue in the case — namely, that two new branches should be approved simultaneously. Second, it is asserted that the Comptroller and the district court improperly applied certain state standards for the approval of branches which were obligatory upon them. Third, it is argued that, under the proper standard of review (an issue itself in dispute) the approvals of the Comptroller cannot be permitted to stand. We deal with these issues, and the facts upon which they arise, seriatim.

— I —

First-Citizens is a state chartered bank, which operates a branch (opened in November, 1964, in a trailer) within the North Hills Shopping Center. Wachovia Bank & Trust Company ("Wachovia") also operates a branch in the center. When FUNB, on October 16, 1964, filed an application with the Comptroller to establish a branch in the same shopping center, First-Citizens filed a notice of protest with the Comptroller, together with a request for certain information and a request for a hearing. A conference was arranged but not held, and First-Citizens initiated litigation in the district court on January 14, 1965.

While the law suit was pending and following our decision in First National Bank of Smithfield, North Carolina v. Saxon, 352 F.2d 267 (4 Cir. 1965), the Regional Administrator of National Banks invited FUNB and other protestants to present evidence in the matter in Richmond. This was done on April 13, 1966.

In the meantime, NCNB, on March 17, 1966, filed an application for authority to open a branch in the North Hills Shopping Center, and First-Citizens filed a protest and request for information and hearing with regard thereto. A hearing was held on May 2, 3, 1966, in Richmond before the Regional Administrator, at which NCNB, First-Citizens and another protestant presented evidence. On June 6, 1966, First-Citizens filed a second suit in the district court seeking declaratory and injunctive relief with regard to the NCNB application, and, on September 29, 1966, the Comptroller approved the simultaneous opening of both branches.

The Richmond hearings were conducted separately on each application. The proceedings were not consolidated as such, although the Comptroller granted both approvals in a single opinion which discussed both applications.

When the district court remanded the proceedings to the Comptroller, the reconvened hearing on the FUNB application was held on April 10-11, 1967, and on the NCNB application on April XX-XX-XX-XX and 28, and May 17-18-19, 1967. Again, the proceedings were conducted separately on each application and, again, in an opinion dated November 28, 1967, the Comptroller combined the applications and granted his approval as to both.

First-Citizens disavows any claim that the manner in which the Comptroller conducted the original and reconvened hearings denied it due process of law. Rather, it complains that the hearings were not "fair," essentially because the Comptroller conducted no hearing on the simultaneous opening of the two branches and, secondarily, because the personnel comprising the hearing panel shifted from session to session.

At the outset, we note that at the administrative stage, First-Citizens lodged no objection to the successive scheduling of hearings on the two applications, nor the composition of the hearing panel. Its right to raise at the judicial level procedural objections not advanced before the administrative agency is suspect, because, ordinarily, a litigant is not entitled to remain mute and await the outcome of an agency's decision and, if it is unfavorable, attack it on the ground of asserted procedural defects not called to the agency's attention when, if in fact they were defects, they would have been correctible at the administrative level. United States v. L. A. Tucker Truck Lines, 344 U.S. 33, 73 S.Ct. 67, 97 L.Ed. 54 (1952); Brotherhood of R. Trainmen v. Chicago, Milw., St. P. & P. R. Co., 127 U.S.App.D.C. 58, 380 F.2d 605, cert. den., 389 U.S. 928, 88 S.Ct. 289, 19 L.Ed.2d 279 (1967); Bower v. Eastern Airlines, 214 F.2d 623 (3 Cir.), cert. den., 348 U.S. 871, 75 S.Ct. 107, 99 L.Ed. 685 (1954); Marquette Cement Mfg. Co. v. F. T. C., 147 F.2d 589 (7 Cir. 1945), aff'd. on other grounds, Federal Trade Commission v. Cement Institute, 333 U.S. 683, 68 S.Ct. 793, 92 L.Ed. 1010 (1948); Red River Broadcasting Co. v. F. C. C., 69 App.D.C. 1, 98 F.2d 282, cert. den., 305 U.S. 625, 59 S.Ct. 86, 83 L.Ed. 400 (1938). Moreover, it would seem from United States v. Pierce Auto Lines, 327 U.S. 515, 66 S.Ct. 687, 90 L.Ed. 821 (1946), that the failure to consolidate the hearings on the two applications was not error.

A more basic answer with regard to the Comptroller's failure formally to consolidate the two applications is that, as a practical matter, they were considered together, so that it cannot be said that First-Citizens suffered prejudice by what occurred. First-Citizens main evidence in opposition to the grant of the two applications, an economic and marketing research analysis of the need for and economic feasibility of a new branch bank in the North Hills Shopping Center, presented in both proceedings, discussed the feasibility of two additional banking offices and concluded that "sufficient business would exist at a considerably later date for one additional office (but not two)." That the Comptroller treated the two applications as interrelated is manifest from his opinions. In his first opinion, dated September 29, 1966, in which he concluded to grant both applications, the Comptroller noted the filing of applications by FUNB and NCNB and stated, "even though each application must stand on its own merits, they are considered together in this opinion because the relevant economic data and banking factors are nearly identical and because the action taken on each application was a factor in the consideration of the other." (Emphasis supplied.) In his second opinion, dated November 28, 1967, after remand by the district court, the Comptroller reiterated the same approach.² Thus, contrary to First-Citizens' contention, in proof and in decision, the issue of the simultaneous opening of the two new branches was raised and decided.

Assuming that First-Citizens may be heard on that issue at this time, we do not find merit in the contention that the "fairness" of the hearings was destroyed by changing personnel in the hearing panel. In First National Bank of Smithfield we held that in considering an application for a branch bank the Comptroller is not bound to the requirements of § 7 of the Administrative Procedure Act, 5 U.S.C.A. § 556.³ Thus, the argument misconceives the function of the panel. It does not constitute a hearing officer or trial examiner such as play an important part in the administrative process of other agencies amenable to the Act. It is simply an investigatory or fact-gathering organ, not having any fact-finding function. The decision was made by the Comptroller who had initiated the practice of rendering a written opinion exposing the basis of his determination. Bloom, Hearing Procedures of the Office of the Comptroller of Currency, 31 Law and Contemp.Problems 723 (1966). Of course, even in a fact-gathering procedure, due...