Pitts v. Camp, 71-1965.
| Decision Date | 28 June 1972 |
| Docket Number | No. 71-1965.,71-1965. |
| Citation | 463 F.2d 632 |
| Parties | F. W. PITTS et al., Appellants, v. William B. CAMP, Comptroller of the Currency of the United States, Appellee. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Benny R. Greer, Darlington, S. C. (Greer & Chandler, Darlington, S. C., on brief) for appellants.
Walter H. Fleischer, Atty., Dept. of Justice (L. Patrick Gray, III, Asst. Atty. Gen., Stanton R. Koppel and Robert E. Kopp, Attys., Dept. of Justice, and John K. Grisso, U. S. Atty., and Wistar D. Stuckey, Asst. U. S. Atty., on brief), for appellee.
Before BRYAN, BUTZNER and FIELD, Circuit Judges.
An application for the organization of The First National Bank of Hartsville, South Carolina, was filed by F. W. Pitts and others with the Comptroller of the Currency in August 1967, under the provisions of the laws of the United States, 12 U.S.C. §§ 21-27.1 The request was rejected originally on April 15, 1968, and upon reconsideration on July 29, 1969. The soul of the Comptroller's decision was that "we were unable to reach a favorable conclusion as to the need factor". (Accent added.) The determination was stated in letters from the Comptroller to the applicants' attorney.
Concededly, the application complied with all of the statute's essentials. On that basis, suit was brought in the District Court to compel the Comptroller to grant the bank charter. No evidence was taken, decision going for the Comptroller on his motion, with affidavits, for summary judgment. Appealing, the applicants attack the denial on the ground that no hearing was granted them by the Comptroller prior to his decision. Also, it is averred that his action was arbitrary and capricious, wholly without supporting proof. Lastly, the appellants assert that the need for a new bank is a factor beyond the Comptroller's scope of consideration.
The District Judge upheld the Comptroller, although he was doubtful that the statute "commits the determination of * * * need to the Comptroller's discretion". However, he was persuaded by the "long and continued practice of the Comptroller of considering the need of the community". Continuing he said, "Although acknowledging that the plaintiffs presented a convincing case in favor of establishment of their bank, the court cannot say that the conclusion of the Comptroller is not adequately supported under the substantial evidence rule."
It is unnecessary, we think, to discuss the separate assignments of error ascribed by the appellants to the District Court. This is because in itself the ruling of the Comptroller is unacceptable. It does not comply with the bare, fundamental principle of agency decision: that its basis must be stated. FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 92 S.Ct. 898, 31 L.Ed.2d 170 (1972). Sperry reiterated the precept of SEC v. Chenery Corp., 318 U.S. 80, 94, 63 S.Ct. 454, 87 L.Ed. 626 (1943), that "the orderly functioning of the process of review requires that the grounds upon which the administrative agency acted be clearly disclosed . . . ." 405 U.S. at 249, 92 S.Ct. at 907. Indeed, the review of the agency action, and relief from any error therein, assured by sections 10(a), (b), and (e)(B) of the Administrative Procedure Act, 5 U.S.C. §§ 702, 703 and 706(2), would be impossible without a statement of such grounds. That the judicial review provisions of the Act apply to the Comptroller is unmistakably written in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 156-157, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970).
Even a cursory reading of the Comptroller's pronouncement here exposes his failure to observe the insistence of the law that the ground of determination be avowed. To begin with, the first word of the charter's denial appears in this brief letter to plaintiffs' counsel:
The Comptroller's response to the request for reconsideration of his initial ruling was likewise embraced in a letter:
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