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October 28, 1980

MORSEMERE SAVINGS AND LOAN ASSOCIATION, Plaintiff, and Fort Lee Savings and Loan Association, Intervenor-Plaintiff,
Garth MARSTON, Robert H. McKinney, The Federal Home Loan Bank Board and Community Federal Savings and Loan Association, Defendants

The opinion of the court was delivered by: BIUNNO

This action challenges a resolution of the Federal Home Loan Bank Board (Board) authorizing Community Federal S & L Ass'n (Community) to open a branch office at or in the immediate vicinity of 1365 Inwood Avenue, Fort Lee, N.J., dated November 30, 1977.

It is brought by Morsemere Savings and Loan Ass'n (Morsemere), a New Jersey chartered institution. Fort Lee Savings and Loan Ass'n (Fort Lee), as intervenor, also challenges the resolution. Both were protestants to Community's application. A third protestant, First Federal S & L Ass'n of Paterson (First Federal), is not a party to the present action in any capacity.

 Morsemere's challenge is grounded entirely on the proposition that it was deprived of a property right without due process of law.

 Fort Lee's challenge joins in Morsemere's position without separate analysis or argument, and also asserts that the Board action is defective for failure to give reasons to support its findings that applicable criteria had been met.

 The matter was presented for decision by means of defendants' motion for summary judgment, with briefs and oral argument heard October 14, 1980. Since the statutory review is on the basis of the administrative record, which has been supplied, the motion for "summary judgment" is actually no more than a convenient device for initiating the filing of briefs and hearing of oral argument, as though before an appellate court. This is because on a § 706 review, or other kinds of review where there is no trial de novo, such as under 42 U.S.C. § 405(g), the only "facts" in the case consist of the administrative record. Once that has been supplied, as it has been here, the court has all the pertinent facts before it and what remains is argument on the law in the light of that record.

 At a hearing held March 30, 1978, the court did have before it fact presentations outside of, and later than, the agency record, and itself asked the parties for some external fact items. Those additional and subsequent items of fact were received and considered because the hearing was on Morsemere's application for a preliminary injunction to restrain Community from opening its branch for business, after having completed remodeling, in about 2 weeks. While essential for that hearing, those facts (outside the record) have no application at the present stage of the case and are not considered.

(An elaborate and detailed review of the procedural history before the Board, as well as of the contents of Community's application, of the formal protests filed by Fort Lee, First Federal and Morsemere, and of the response by Community is omitted from publication. It has too little content value to be worth the permanent space it would occupy, and the remainder of the opinion adequately discloses the issues and the rationale for the decision.)

 The Oral Argument (Record, pp. 239-339)

 The first item that came up at oral argument on the branch application was a reading into the record of the reply to Morsemere's letters received September 2. Record, pp. 244-245. It was also noted that two calls, on September 6 and September 7, had reported Morsemere's intention to file legal action, and then to suspend that step. Record, p. 246.

 Morsemere then urged that the matter be stayed to allow time to apply to federal court requiring the Board to allow Morsemere to refer in argument to the documentation it had submitted. Record, pp. 246-248.

 Community then summarized the highlights of its application, Record pp. 248-259.

 The combined oral argument summarizing the protests of Fort Lee and First Federal followed, Record pp. 260-295.

 Morsemere's argument opened by expressing the view that the area is healthy and viable, and that the site at Presidential Apartments and the Shoprite had very high volume. It believed the location needed, and would strongly support a savings and loan facility. It took no issue with viability and feasibility, viewing that as not a critical issue. Record, pp. 295-297. Rather, it viewed the issue to be whether it would support both Community and Morsemere, emphasizing that the latter would be a principal office, not merely a branch. It complained that it could not discuss its protest even though Community had said, in response, that if Morsemere opened it would take half the deposits. Record, pp. 297-298.

 Argument by Morsemere then followed, on the thesis that Morsemere fully intended to proceed and now had space, despite earlier difficulties including opposition from Fort Lee. With this as a fact, Community would now be obliged to take a hard look at the situation since the application was premised on Morsemere's failure to open. The view was expressed that Community would suffer severely; there would be loss to Morsemere as well but not so severe as to cause a problem or cause it to lose its desire to open. Reference is made to Community's response, which uses half the deposits in the event Morsemere opened. Relative locations in respect to the parking areas are discussed. At the end, Morsemere expressed appreciation for having been allowed to make its presentation; it said it had been given the opportunity it wanted to make a full statement and give an explanation, recognizing that this precluded any procedural problem. Record, pp. 308-316.

 Community then expressed surprise that Morsemere had been allowed to go into facts and events not covered by the filed presentation, and which it had understood would not be part of the record. It asked if the new data about the status of Morsemere's office would be available to and considered by the Board. The agent said: "The answer is yes and had it not been presented we would have requested it anyway". Record, p. 317.

 In rebuttal, Community first asked if it would be provided an opportunity to submit figures based on Morsemere's actual presence, so they would be part of the record. It was told that the answer would be given at the end of the rebuttal. Record, pp. 317-318.

 Community denied that its use, in the written response, of half the deposits originally projected was a concession that this would be the result. Rather, it was taken as a "worst case" example. Also, it asserted that its inquiry into space at Presidential Plaza carried no implication that it regarded that location as superior. It was merely a matter of having looked at all possibilities. Morsemere's statement that it could change the already approved location to another site without further (N.J.) review and approval was questioned. Also, Morsemere presented nothing about its space, or floor plan, or the lease, and the like. Record, pp. 318-323.

 Mr. Mitchell then rebutted the protestants arguments, and concluded by observing that Mr. Perkins had estimated only $ 9 million in deposits after 3 years, and even taking that figure the office would be successful and feasible, thus eliminating any need for extra time to develop figures in respect to Morsemere. Record, pp. 323-326. There is also rebuttal on differences due to using a smaller PMA, different income figures, and other like points. Record, pp. 327-331. Community then concluded and left the matter in the hands of the Board, Record p. 331, lines 7-9.

 The agent then asked Community to supply additional information, suggesting that the figures be based on deposits of about half what the budget would be without Morsemere. Record, p. 337.

 The agent said that protestants could be provided with a copy. "However, there will be no response to this material. You understand that somebody has to speak last. We are asking for this information for our own purposes." Fort Lee, First Federal and Morsemere noted their objections. Record, pp. 338-339.

 Judicial Review.

 The pattern of the law in respect to federal judicial review of actions of administrative agencies in the Executive Branch is far from clear. This is no doubt due to the "case or controversy" boundaries for Article III courts, and to the wide variety of statutory provisions in ...

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