Sears Sav. Bank v. Federal Sav. and Loan Ins. Corp.

• Decision Date: 31 October 1985
• Docket Number: No. 84-7844,84-7844
• Citation: 775 F.2d 1028
• Parties: SEARS SAVINGS BANK, Petitioner, v. FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION and Federal Home Loan Bank Board, Respondents.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1028

775 F.2d 1028

SEARS SAVINGS BANK, Petitioner, v. FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION and Federal Home Loan Bank Board, Respondents.

No. 84-7844.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 10, 1985.

Decided Oct. 31, 1985.

William J. Meeske, Latham & Watkins, Los Angeles, Cal., for petitioner.

William K. Black, Assoc. Gen. Counsel, Washington, D.C., for respondents.

On Petition for Review of the Resolution of the Federal Savings and Loan Insurance Corporation.

Before GOODWIN, ALARCON and POOLE, Circuit Judges.

PER CURIAM:

Sears Savings Bank ("Sears") petitions this court pursuant to 12 U.S.C. Sec. 1730a(k) (1982) for review of a resolution of the Federal Savings and Loan Corporation and the Federal Home Loan Bank Board ("Board") conditionally approving a proposed affiliate transaction between Sears and Dean Witter Reynolds, Inc. Sears challenges two of the six conditions imposed by the Board. Because we find that the Board failed to present an adequate basis and explanation for imposing the conditions, we remand this matter to the Board for a clarification of its decision.

The Board's action in granting conditional approval of Sears' proposed transaction with Dean Witter Reynolds may be set aside if found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 12 U.S.C. Sec. 1730a(k) (1982); 5 U.S.C. Sec. 706(2)(A) (1982); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 414, 91 S.Ct. 814, 822, 28 L.Ed.2d 136 (1971). Although this scope of review is narrow, the Board must examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made. Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983); Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 245, 9 L.Ed.2d 207 (1962). Furthermore, in reviewing that explanation, we must be able to "consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error in judgment." Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285, 95 S.Ct. 438, 442, 42 L.Ed.2d 447 (1974); Citizens to Preserve Overton Park, 401 U.S. at 416, 91 S.Ct. at 823. The administrative record, however, must sufficiently provide a clue to the agency's decisionmaking analysis for such review to be meaningful. This court should not supply a reasoned basis for the agency's action that the agency itself has not given. SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995 (1947). But a decision of less than ideal clarity will be upheld if the agency's path may reasonably be discerned. Bowman Transportation, 419 U.S. at 286, 95 S.Ct. at 442.

Here, the Board's resolution simply states that "subject to the conditions set out below, [the proposed] agreement would not be detrimental to the interests of the savings account holders or to the insurance risk of the Corporation." The Board provides no reasons for...