Long Beach Fed. S. & L. Ass'n v. Federal Home Loan Bk. Bd.

Decision Date18 November 1960
Docket NumberNo. 1039-60-PH.,1039-60-PH.
Citation189 F. Supp. 589
CourtU.S. District Court — Southern District of California
PartiesLONG BEACH FEDERAL SAVINGS AND LOAN ASSOCIATION, Petitioner, v. FEDERAL HOME LOAN BANK BOARD; Albert J. Robertson, Chairman; Ira A. Dixon, Member; William J. Hallanan, Member (or former member); John M. Wyman, Director and/or Chief Supervisor; A. V. Ammann, Assistant Director and/or Assistant Chief Supervisor; Federal Savings and Loan Insurance Corporation; William H. Husband, Manager of said Insurance Corporation, Respondents.
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Charles K. Chapman, Long Beach, Cal., for petitioner.

Marvin C. Taylor, Attorney, Department of Justice, Washington, D. C., for respondents.

HALL, Chief Judge.

The within proceeding was commenced on September 9, 1960, with the filing of what is designated as "Petition To Enforce Administrative Subpoenas And For Other Relief."

It is difficult to state in summary form either the factual or the legal contentions and questions which must be resolved, but they will become apparent as this memorandum proceeds.

I.

By F.R.Civ.P. 81(a)(3)1 the Federal Rules of Civil Procedure apply to proceedings to compel the giving of testimony or the production of documents in accordance with a subpoena issued by an officer or an agency of the United States under any statute of the United States except as "otherwise provided" by statute or rules of the District Court, or by an order of the court in the proceedings.

The Administrative Procedure Act 5 U.S.C.A. § 1001 et seq. and Section 503 (d) (1) of the Housing Act of 19542 12 U.S.C.A. § 1464 permit the issuance of subpoenas by the Federal Home Loan Bank Board or its designated representatives.

The Housing Act of 1954 in Section 503 (d) (1) specifically provides for the enforcement of subpoenas by the United States District Court in the District where the hearing is designated—this court in this instance—which section reads, inter alia, as follows:

"The board or any member thereof or its designated representative shall have power to administer oaths and affirmations and shall have the power to issue subpenas (sic) and subpenas (sic) duces tecum, and shall issue such at the request of any interested party, and the board or any interested party may apply to the United States District Court where such hearing is designated for the enforcement of such subpoena or subpoena duces tecum and such court shall have power to order and require compliance therewith."

Section 6(c) of the Administrative Procedure Act provides as follows:

"(c) Subpenas (sic).—Agency subpenas (sic) authorized by law shall be issued to any party upon request and, as may be required by rules of procedure, upon a statement or showing of general relevance and reasonable scope of the evidence sought. Upon contest the court shall sustain such subpena (sic) or similar process or demand to the extent that it is found to be in accordance with law and, in any proceeding for enforcement, shall issue an order requiring the appearance of the witness or the production of the evidence or data within a reasonable time under penalty of punishment for contempt in case of contumacious failure to comply."

That section must be read and applied in conjunction with the above-quoted provisions of Section 503 of the Housing Act of 1954. The sections are not in conflict, and if anything, Section 6(c) of the Administrative Procedure Act complements the provision of the Housing Act of 1954 in that it permits the production of documents or data without the necessity of having a witness present at all times while the documents or data are under examination.

Thus, there is no statute by which the procedure for enforcement of administrative subpoenas is "otherwise provided" than by Federal Rules of Civil Procedure as provided in F.R.Civ.P. 81(a)(3). There are no rules of this court, or order of this court in this proceeding "providing otherwise," and if there were, it is at least doubtful if either would prevail over the statutory command just above quoted.

The proceeding is and must be considered to be a proceeding on a motion under F.R.Civ.P. 7(b)(1) and (2), and the Federal Rules of Civil Procedure control it.

This proceeding to enforce subpoenas is completely independent of the proceedings before the Board or the Hearing Examiner.

The Ninth Circuit, in July of this year, in Flotill Products, Inc. v. Federal Trade Commission, 278 F.2d 850, had under consideration the enforcement of subpoenas under Section 9 of the Federal Trade Commission Act 15 U.S.C.A. § 49 which is substantially the same as the heretofore-quoted portion of Section 503 of the Housing Act of 1954. As to the nature of the proceeding in the District Court, that Court said, at page 852:

"The proceeding in the district court was not ancillary to prior administrative action but formed an independent cause of action framed by the pleadings therein. I.C.C. v. Brimson (1894) 154 U.S. 447, 487 14 S.Ct. 1125, 38 L.Ed. 1047. Once the order of the trial court was entered, the hearing examiner's subpoena was superceded and became inoperative and irrelevant."

See also Hubner v. Tucker, 9 Cir., 1957, 245 F.2d 35.

The motion is therefore, the pleading taking the place of the complaint in an ordinary civil action. Parties may rely on affidavits—F.R.Civ.P. 6(d)—or on oral or documentary evidence adduced at the hearing, or both.

It is a summary proceeding.

Pursuant to the accepted practice, the Court issued an Order to Show Cause in lieu of a summons see F.R.Civ.P. 4(e); 28 U.S.C. § 1651(b) as to why the subpoenas should not be enforced. Service of the Order to Show Cause was made in accordance with the terms thereof and the Federal Rules of Civil Procedure, and was accepted by counsel for all of the above-named respondents.

The respondents filed what was designated as a "Motion To Dismiss," but which contained a prayer for affirmative relief, was verified generally by one of defendants' counsel, and had attached to it a transcript of the proceedings before the Hearing Officer, and an affidavit of the above-named Robertson and Dixon. The affidavit denied generally any bias or prejudice. Counsel for respondents, on the last day of the hearing, stated that 16 subpoenas should have been attached to the response, but the Court denied the motion to attach the subpoenas, and ordered the subpoenas filed merely as a part of the record.

The "Motion" of respondents was, therefore, more than a mere motion to dismiss. It was a legal and factual response, and in a summary proceeding of this nature must be considered as the answer of respondents raising, as it may, questions of law, F.R.Civ.P. 12(b).

Hearings were had on September 7, 12, 13, 14 and 15, 1960, devoted mostly to argument and the admission of documentary evidence.

The litigious history between the Long Beach Federal Savings and Loan Association and the Federal Home Loan Bank Board and its various members and officers, and agencies under its control, has been going for 14 years.3

In addition to many unreported memoranda, opinions, decisions and orders contained in the files and records, that litigation has been the subject of the following reported decisions: Mallonee v. Fahey, D.C.1946, 68 F.Supp. 418; Fahey v. Mallonee, 1947, 332 U.S. 245, 67 S.Ct. 1552, 91 L.Ed. 2030; Ex Parte Fahey, 1947, 332 U.S. 258, 67 S.Ct. 1558, 91 L.Ed. 2041; Mallonee v. Fahey, D.C.1949, 14 F.R.D. 273; Home Loan Bank Board v. Mallonee, 9 Cir., 1952, 196 F.2d 336, certiorari denied Mallonee v. Fahey, 345 U.S. 952, 73 S.Ct. 863, 97 L.Ed. 1374; Mallonee v. Fahey, 9 Cir., 1952, 200 F.2d 918; Fahey v. O'Melveny & Myers, 9 Cir., 1952, 200 F.2d 420, rehearing denied 12/17/52, certiorari denied Mallonee v. Fahey, 345 U.S. 952, 73 S.Ct. 863, 97 L.Ed. 1374, rehearing denied 345 U.S. 978, 73 S.Ct. 1120, 97 L.Ed. 1393; Fahey v. Calverley, 9 Cir., 1953, 208 F.2d 197, rehearing denied 12/29/53, certiorari denied Utley v. Fahey, 347 U.S. 955, 74 S.Ct. 681, 98 L.Ed. 1100; Mallonee v. Fahey, D.C. 1953, 117 F.Supp. 259; Federal Home Loan Bank of San Francisco v. Long Beach Federal Savings & Loan Ass'n, D.C.1954, 122 F.Supp. 401; Mallonee v. Fahey, D.C.1954, 122 F.Supp. 472; Federal Home Loan Bank of San Francisco v. Long Beach Federal Savings & Loan Ass'n, D.C.1954, 122 F.Supp. 960; Federal Home Loan Bank of San Francisco v. Hall, 9 Cir., 1955, 225 F.2d 349, rehearing denied 10/12/55, certiorari denied Mallonee, Bucklin & Fergus v. Federal Home Loan Bank, 350 U.S. 968, 76 S.Ct. 438, 100 L.Ed. 840; Long Beach Federal Savings & Loan Ass'n v. Federal Home Loan Bank of San Francisco, 1955, 76 S.Ct. 32, 100 L.Ed. 1517; Ammann v. Home Investment Co., 9 Cir., 1957, 243 F.2d 748.

The seizure of the Association in 1946, mentioned in Footnote 3, and the ensuing litigation was the subject of hearings and an investigation by Special Sub-committee of Congress in 1950, 1951 and 1952, and finally resulted in the adoption and passage of the National Housing Act of 1954 on August 2, 1954.4 That Act provides specific procedures—by Section 503 (d)(1)—in connection with the appointment of a conservator, and by Section 503 (d)(2) thereof permits the appointment of a Supervisory Representative in Charge by the Board without notice in case of an emergency if "a ground for the appointment of a conservator or receiver as herein provided exists."

II.

The Board, on April 19, 1960, adopted its Order Number 13,372 (Appendix "A") appointing C. E. Ault, an employee of the Board (or one of its agencies), as Supervisory Representative in Charge, who took possession and control of the Association's premises, assets and property on the evening of April 22, 1960. The Association had no notice of either the Board's Order of April 19, 1960, or of the intention to execute it until it was executed on April 22, 1960.

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