First National Bank of Southaven v. Camp
Decision Date | 28 October 1971 |
Docket Number | No. DC 7074.,DC 7074. |
Citation | 333 F. Supp. 682 |
Parties | FIRST NATIONAL BANK OF SOUTHAVEN, Plaintiff, v. William B. CAMP, Comptroller of the Currency, Defendant. |
Court | U.S. District Court — Northern District of Mississippi |
Rubel L. Phillips, Jackson, Miss., for plaintiff.
William M. Dye, Jr., Asst. U. S. Atty., Oxford, Miss., for defendant.
This is an appeal by plaintiff, First National Bank of Southaven, at Southaven, Mississippi (First National), from an adverse decision by defendant, Comptroller of the Currency (Comptroller), denying Southaven's simultaneous applications to move its main office from Southaven to Hernando, a distance of 12.5 miles within DeSoto County, Mississippi, and to retain its present main office as a branch. Seeking declaratory and injunctive relief, First National invokes this court's jurisdiction pursuant to the provisions of the National Bank Act, 12 U.S.C. § 21 et seq., 5 U.S.C. § 702, and 28 U.S.C. § 1394.1 The Comptroller has submitted the entire administrative file, consisting of voluminous documentary material and oral testimony. Both parties have moved this court for summary judgment.
First National, chartered in 1960 as a state bank in Mississippi under the name of Bank of DeSoto, started business operations in 1966; it was converted to a national bank on September 3, 1968. On May 28, 1969, First National filed with the Regional Administrator of National Banks, pursuant to 12 U.S.C. § 30,2 its application to move its head office to Hernando, and at the same time sought permission under 12 U.S.C. § 363 to operate its present facility as a branch. On July 2, a bank examiner submitted a written report recommending approval. The examiner's report concluded that the primary reason for the change in main office location was to enable First National to gain additional and more diversified business through more convenient service to DeSoto County as a whole; that since the City of Hernando was the county seat and geographical center of the service area, the establishment of the bank's main office in that municipality would place First National in a strategic location to play an important role in the future development of a rapidly growing area. The examiner further determined that Hernando had good prospect for economic growth and the move would have little effect on Hernando Bank, the only bank in the City of Hernando.
The Regional Administrator, on July 10, submitted his report to the Comptroller recommending approval of the removal application, and later his recommendation for approval of the branch application. Hernando Bank, on July 16, protested the removal application to the Regional Administrator, who at once forwarded the protest to the Comptroller, advising that the recommendation for approval was unchanged by the protest of Hernando Bank. Also, the Director of the Bank Organization Division and Deputy Comptroller Blanchard recommended approval of both applications. Nevertheless, the Comptroller, on July 30, disapproved them.
Soon thereafter an application for a second state-chartered bank at Hernando was filed by certain DeSoto County residents. First National, on September 8, filed its petition for Reopening, Administrative Hearing and Reconsideration, alleging that the incorporators of the proposed new state bank were acting with full knowledge and acquiescence of Hernando Bank's management, and the application for a second state bank was motivated by a desire to monopolize and preempt banking service in DeSoto County.
A hearing before the Regional Administrator was held on October 24, with the only protestant, Hernando Bank, being present. The Regional Administrator concluded that the real basis of the objection raised by Hernando Bank as protestant was to an established bank, rather than a newly created one, being located in the City of Hernando. The Regional Administrator, on November 4, forwarded a second report to the Comptroller recommending that the applications be approved.
Shortly thereafter both the Director of the Bank Organization Division and the Deputy Comptroller again recommended approval. Deputy Comptroller Gwin, who had originally opposed the applications, stated that "the proposed new bank probably strengthens the case of the proposed relocation."
At a hearing on October 31, the State Banking Board granted First National's request that consideration of the new state bank application be deferred until the Comptroller rendered a final decision on First National's applications. The hearing by the State Banking Board was continued until January 26, 1970, the Comptroller being fully advised.
When the Comptroller did not render a timely decision, the State Banking Board, after several continuances, set a hearing for August 3, 1970. First National then sought and obtained a preliminary injunction in this court4 to restrain the Board from hearing the application for charter of the new state bank until First National's pending applications were finally determined. First National then instituted a second federal action to require the Comptroller to act without further delay on its applications.5 Although no federal injunction was issued, the Comptroller, on November 9, 1970, disapproved First National's applications.
First National contends that the Comptroller's action was arbitrary, capricious and exceeded his discretion because his decision (i) was unsupported by a written opinion, findings or other process of reasoning, (ii) was contrary to the findings and recommendations of the Comptroller's staff, (iii) not only ignored the evidence offered on behalf of plaintiff but was inconsistent with the Comptroller's own positions taken in other cases, and (iv) improperly favored the organization of a new state bank.
The Comptroller counters that Congress vested in him the power of approval of the applications, that his judgment regarding them must prevail subject to judicial review that is limited merely to determining whether he acted rationally and in accordance with law, and, so measured, his action is clearly valid.6
As fixed by the Administrative Procedure Act, the standard of judicial review of the discretion delegated by Congress to the Comptroller is whether the action taken was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706 (2) (A). In a recent case, the Fifth Circuit adopted the generally accepted rule: "As a result of the wide discretion vested in the Comptroller in the complex field of national banking, every court which has considered the matter has concluded that judicial review is limited to determining whether or not the action of the Comptroller was arbitrary, capricious, an abuse of discretion, or otherwise not in accord with the law."7
The parties agree that whether the record supports the Comptroller's determination involves conclusions of law rather than issues of fact, and since there is no occasion for trial de novo, the questions of law may be determined upon the motions for summary judgment.
Although our review may be hampered by the lack of a written opinion to support the administrative decision,8 the validity of the Comptroller's determination in denying the applications is not thereby impaired. The statutes under which the Comptroller exercises his authority do not require "that the Comptroller support his decision with a written opinion, and we think it would be ill-advised for this court to impose a requirement which Congress has not seen fit to demand." Sterling National Bank v. Camp, supra at 517. First National was given a full and fair opportunity to present its case in support of its applications; there was no ambiguity in the Comptroller's decision—the applications were denied—and hence no supporting opinion was necessary.9 Thus the absence of a written opinion by the Comptroller is without legal significance.
Nor is the Comptroller bound by the recommendations of his subordinates, for the statutory authority to approve bank applications is alone vested in the Comptroller, who may, in his discretion, either accept or reject the findings and conclusions of his assistants. Since the Comptroller's decision is entitled to a presumption of regularity, no inference of arbitrary action may arise merely because he rejected, or differed from, the recommendations of subordinate officials. Indeed, in the matter of applications for branch banks and relocation of main offices, the Comptroller's own regulations make it clear that it is the Comptroller, and not his subordinates, who "determines whether or not approval of the application should be granted." 12 CFR 4.5(c), 4.6(c).
Plaintiff mounts its principal attack upon the Comptroller's decision as ignoring the largely uncontradicted evidence offered by it in support of its applications. That evidence stressed two main points: (1) First National had outgrown its facilities at Southaven and expansion at its present main office location was not feasible, and (2) relocation of its main office at Hernando would substantially promote the interest of both First National and the public since it would place the bank at the county seat and in a more central location to meet the needs of the primarily agricultural service area and also would bring to Hernando additional bank facilities that were needed. These reasons are certainly cogent. No matter how sound or otherwise appealing these considerations may be, however, the question is not what this court would do if it were making its own original determination, but whether there is substantial evidence in the record to support the Comptroller's decision. Indeed, we may not substitute our judgment for that of the Comptroller, nor our view of the merits for his.10 Necessarily, the Comptroller's decision must stand where the record discloses a basis in fact for his action, for in that case the court may not conclude that the...
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...the Comptroller's broad discretion to accept or reject the views of his subordinates as he sees fit. First National Bank of Southaven v. Camp, 333 F.Supp. 682, 686 (N.D.Miss.1971), aff'd mem., 467 F.2d 944 (5th Cir. 1972); see Sterling National Bank of Davie v. Camp, Our consideration of th......
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