Hurry v. Federal Deposit Insurance Corporation

CourtDistrict Court, District of Columbia
DecidedMay 31, 2020
DocketCivil Action No. 2018-2435
StatusPublished

This text of Hurry v. Federal Deposit Insurance Corporation (Hurry v. Federal Deposit Insurance Corporation) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hurry v. Federal Deposit Insurance Corporation, (D.D.C. 2020).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

JUSTINE HURRY,

Plaintiff,

v. Civil Action No. 18-2435 (RDM) FEDERAL DEPOSIT INSURANCE CORPORATION,

Defendant.

MEMORANDUM OPINION AND ORDER

The Change in Bank Control Act of 1978 (“CBCA”), 12 U.S.C. § 1817(j), prohibits a

person from acquiring a controlling interest in a bank unless the relevant federal banking agency

has been given sixty days prior written notice. Subject to certain limited extensions, after an

agency receives a CBCA notice, it has sixty days to investigate, inter alia, the proposed

acquirer’s “competence, experience, integrity, and financial ability,” 12 U.S.C.

§ 1817(j)(2)(B)(i); id. § 1817(j)(1), and it may disapprove the proposed acquisition if, among

other things, the “acquiring person neglects, fails, or refuses to furnish the [agency] all the

information [it] require[s],” id. §1817(j)(7)(E). Plaintiff Justine Hurry alleges that the period for

disapproval with respect to a notice she submitted in November 2017 has long since passed, but

the Federal Deposit Insurance Corporation (“FDIC”) has unlawfully withheld its final

determination. Dkt. 1. She asserts a single count under the Administrative Procedure Act

(“APA”), 5 U.S.C. § 701 et seq., and 12 U.S.C. § 1817(j), for “agency action unlawfully

withheld or unreasonably delayed.” 5 U.S.C. § 706(1). As for relief, she requests that the Court

(1) declare that the agency “has unreasonably delayed rendering a decision concerning [her] Notice of Change in Control;” (2) declare “that the FDIC’s failure to disapprove the transaction

in accordance with its procedures and applicable law enables [her] to proceed with the

transaction;” and (3) issue “an injunction compelling the FDIC to take action promptly with

respect to [her] Notice of Change in Control, confirming that the transaction may proceed or

stating its purported basis for disapproving the transaction.” Dkt. 1 at 21 (Prayer for Relief).

The FDIC moves to dismiss Hurry’s complaint as moot, arguing that it has acted on the

notice and thus “agency actions” have not been “unlawfully withheld.” Dkt. 14. According to

the FDIC, although it has neither disapproved the transaction nor allowed the statutory clock to

run out, thereby permitting the transaction to proceed, it has taken a final agency action—it

closed Hurry’s application pursuant to 12 C.F.R. § 303.11(e) on the ground that Hurry had

“failed to furnish [the agency] with all the information needed to complete a review of her

competence, experience, integrity, and financial ability pursuant to 12 U.S.C. § 1817(j).” Dkt. 1-

14 at 2. In the FDIC’s view, that determination constituted “final agency action” and, thus, there

is no need—or basis—for the Court to order that the agency act on Hurry’s notice. Dkt. 14 at 5–

6. The FDIC also moves to dismiss for failure to prosecute because Hurry failed to comply with

the Court-issued deadlines for her to amend her complaint and to move for summary judgment.

Id. at 7–9.

For the reasons explained below, the Court will DENY the FDIC’s motion to dismiss

without prejudice.

I. BACKGROUND

A. The Change in Bank Control Act of 1978

Under the Change in Bank Control Act of 1978, Pub. L. No. 95-630, 92 Stat. 3683

(codified as amended at 12 U.S.C. §1817(j)), a person (either acting individually or in concert

2 with others) may not “acquire control of any insured depository institution” unless “the

appropriate Federal banking agency,” here, the FDIC, “has been given sixty days’ prior written

notice of [the] proposed acquisition and within that time period the agency has not issued a

notice disapproving the proposed acquisition,” 12 U.S.C. 1817(j)(1). A notice filed under the

CBCA must contain, among other things, information about the “identity, personal history,

business background, and experience of each person” acquiring the bank, “including [her]

material business activities and affiliations during the past five years,” id. § 1817(j)(6)(A).

Upon receiving a notice, the CBCA requires the FDIC to investigate “the competence,

experience, integrity, and financial ability of” the applicant and to “make an independent

determination of the accuracy and completeness of [the] information” the applicant submitted.

Id. § 1817(j)(2)(B). After conducting its investigation, the FDIC “may disapprove any proposed

acquisition” for several statutorily enumerated reasons, including, as relevant here, because the

applicant “neglect[ed], fail[ed], or refuse[ed] to furnish the [agency] all the information [it]

required.” Id. § 1817(j)(7)(E). Any notice of disapproval must be issued within sixty days after

the FDIC has received the notice of proposed acquisition, see id. § 1817(j)(1), although the FDIC

may, in its discretion, extend the “period for disapproval” an “additional 30 days,” id. After the

initial extended 90-day period, the FDIC may extend the “period for disapproval” again, but only

“2 additional times not for more than 45 days each,” and only if: (1) the agency determines that

“any acquiring party has not furnished all the information required” by the statute; (2) in the

agency’s judgment, “any material information submitted is substantially inaccurate;” (3) the

“agency has been unable to complete the investigation . . . because of any delay caused by, or the

inadequate cooperation of, [the] acquiring party;” or (4) “the agency determines that more time is

needed” to investigate or analyze certain aspects of the application. Id.

3 Under the CBCA, the issuance of a notice of disapproval triggers an administrative and

judicial appeals process. If the FDIC disapproves a proposed acquisition, “[w]ithin three days”

of its “decision to disapprove,” it must “notify the acquiring party in writing of the disapproval”

and must “provide a statement of the basis for the disapproval.” 12 U.S.C. § 1817(j)(3); see also

12 C.F.R. § 308.112(a)(2)(ii) (requiring that a notice of disapproval inform the applicant that “a

hearing may be requested . . . within ten days”). “Within ten days of receipt of such notice of

disapproval,” the acquiring party may then “request an agency hearing on the proposed

acquisition.” 12 U.S.C. § 1817(j)(4). If the person’s “proposed acquisition is disapproved after

agency hearings,” then the person “may obtain review by” the U.S. court of appeals in which the

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