Irving Bank Corp. v. Considine
| Decision Date | 23 February 1988 |
| Citation | 138 Misc.2d 849,525 N.Y.S.2d 770 |
| Court | New York Supreme Court |
| Parties | In the Matter of the Application of IRVING BANK CORPORATION, Petitioner, For a Judgment pursuant to Article 78 of the Civil Practice Law & Rules. v. Jill M. CONSIDINE, Superintendent of Banks of the New York State Banking Department and Chairman and Executive Head of the New York State Banking Board, David T. Halvorson, First Deputy Superintendent of the New York State Banking Department, and the members of the New York State Banking Board, Respondents. .A.S., Part 18 |
Marc Wolinsky, of Wachtell, Lipton, Rosen & Katz, with Winthrop, Stimson, Putnam & Roberts, New York City, for petitioner.
Robert Abrams, Atty. Gen. by Maryellen Chomsky, for Superintendent of Banking.
John L. Warden, of Sullivan & Cromwell, New York City, for intervenor Bank of New York Co.
This petition was commenced as a result of a filing by the Bank of New York Co., (BNY) of an application with the New York State Banking Board seeking approval to make a hostile takeover offer for the Irving Bank Corp. (IBC). Petitioner IBC brings this petition seeking:
1. Access to all information submitted by BNY to the Banking Board which it has not previously obtained;
2. An injunction enjoining respondents from making a determination on BNY's application until such information is disclosed; and
3. An injunction enjoining respondent Halvorson, from participating in the determination of BNY's application (This latter request has been withdrawn in view of the stipulation made in open court).
On September 25, 1987, BNY announced its intention to acquire IBC.
Under this State's banking law, prior Banking Board approval is required before a company may acquire a bank holding company. New York Banking Law Section 142(1). In addition, the prior approval of the Federal Reserve Board (FRB) is also required. Therefore, in October 1987 BNY filed an application with the Banking Department for such approval which application was revised and supplemented in November of 1987. The application consisted in part of the application previously submitted to FRB pursuant to Federal law (Bank Holding Company Act, 12 U.S.C., Section 1841, et seq.), and subsequent revisions and amendments to said application.
BNY sought confidential treatment of major parts of said application pursuant to Section 89(5)(a)(1) and Section 87(2)(d) Public Officers Law. After considering the matter, respondent Superintendent of Banking granted confidential treatment to part of the application and denied it as to other parts. When BNY had previously filed its application with FRB, it sought and obtained confidential treatment for parts of that application. Said decisions as to confidential treatment were rendered in writing in great detail.
On November 16, 1987, IBC filed a request with the Banking Board, under the Freedom Of Information Law ("FOIL") Article 6, et seq., Public Officers Law, for access to the non-public portions of BNY's application. On November 30, 1987, the Banking Department granted in part and denied in part IBC's FOIL request for the non-public portions of the State materials; on December 31, 1987 the Banking Board granted in part and denied in part that part of the FOIL request seeking disclosure of the non-public portions of the Federal parts of the application.
Previously, on December 11, 1987, IBC had submitted a comment on BNY's application to the Banking Department. IBC claims it was prejudiced in such submission because it did not have access to the confidential material. On December 29, 1987, BNY submitted response to the IBC comment for part of which response it claimed confidential treatment. On January 14, 1988, IBC made a further FOIL request for the withheld portions of that response.
On January 12, 1988, BNY appealed that part of the December 31, 1987 determination which granted IBC access to parts of the confidential information. On January 20, 1988, IBC appealed from those parts of both the November 30, 1987 and December 31, 1987 determinations which were adverse to it.
On January 22, 1988, the Superintendent, ruling on BNY's appeal affirmed in part and reversed in part the December 31 determination and denied IBC's appeal in its entirety.
Certain parts of BNY's application were not furnished to IBC, and IBC seeks an order of this Court directing that the complete application be made available to it pursuant to FOIL.
FOIL was enacted to provide the broadest possible access to Government records. All Government records are presumptively subject to disclosure, unless they fall within the statuto exemption. Matter of Miracle Associates v. Yudelson, 68 A.D.2d 176, 417 N.Y.S.2d 142. "The statutorily stated policy behind FOIL is to promote 'the people's right to know the processes of Governmental decision making and to review the documents and statistics leading to determinations' (citing statute)". Washington Post v. Ins., Dept., 61 N.Y.2d 557, 564, 475 N.Y.S.2d 263, 463 N.E.2d 604. However, consistent with the broad right to know is the right to privacy and the right to have certain documents remain confidential. Section 89(5) Public Officers Law, specifically permits a submitter of documents to seek exemption from disclosure if the documents are of the type described in Section 87(2)(d). Such exemption relates to records maintained which, if disclosed, would cause substantial injury to the competitive position of the subject enterprise.
Section 89(5) sets forth a very detailed schedule within which applications for confidential treatment and appeals therefrom must be made. Said schedule differs from the general schedule set forth for other FOIL applications for exemptions and appeals therefrom. The reason why the Legislature mandated said separate schedule is quite obviously because the information which is the subject of Section 89(5) is information submitted by non-governmental entities and is information which it is claimed could hurt the submitter's business and competitive position if released. In fact, the memorandum submitted in support of said section when it was enacted by the State Senate specifically stated that its purpose was "to provide for more secure handling of certain trade secret information submitted to State agencies, and for improved procedures for determining whether such information should be exempted from disclosure". 1981, Chapter Law Memorandum, 467. The section was to contain "a clear, fair and uniform procedural framework for the determination of requests for exceptions from disclosure in a range of cases (underlining added)". ibid.
IBC failed to appeal respondent superintendent's determination within the time set forth in the statute. By virtue thereof this proceeding can not be brought. On November 30 and December 31, 1987, the Banking Board rendered the determinations sought to be appealed herein. No appeal was filed by IBC to the Superintendent until January 20, 1988. This is thirteen business days after the latest decision was received.
This thirteen-day period is more than the seven business days permitted by Section 89(5)(c)(1) therefore, it was untimely. IBC's counsel argue that the Banking Department in its own rules permitted thirty days to appeal. 3 N.Y.C.R.R. Public Advisory Procedure G-106, Section 106.5(b). However, that provision does not relate...
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