*Pursuant to 5TH CIR. R. 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

 

2 Andrew Cuomo is the current secretary for HUD.

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

_______________________________________________

No. 97-30147

Summary Calendar

_____________________________________________

GINGER MAE, INC., A SUBSIDIARY OF

UNITED COMPANIES FINANCIAL CORPORATION, 

Plaintiff-Appellant,

VERSUS

HENRY CISNEROS, AS SECRETARY AND 

THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT,

 

Defendans-Appellees.

___________________________________________________

Appeal from the United States District Court 

for the Middle District of Louisiana

(95-CV-678-A)

____________________________________________________

August 8, 1997

Before REYNALDO G. GARZA, SMITH, and BENAVIDES, Circuit Judges.

PER CURIAM:*

This is an appeal from the granting of a summary judgment in

favor of Henry Cisneros2, as secretary and the United States

Department of Housing and Urban Development (“HUD”), defendantappellee, on an action for alleged violations of the Administrative

Procedure Act (“APA”), 5 U.S.C. § 701 et. seq. In sum, Ginger Mae,

appellant and subsidiary of the United Companies Financial

Corporation, applied to the HUD’s Office of Housing and Federal 
2

Housing Commissioner (“HUD-FHA”) for approval to do business as a

“HUD-FHA Investing Mortgagee.” HUD denied Ginger Mae’s application

on the grounds that its name resembled that of the Government

National Mortgage Association, otherwise known as “Ginnie Mae.”

Ginger Mae subsequently filed suit against the defendants

alleging that the government arbitrarily and capriciously denied

Ginger Mae’s application, in violation of 5 U.S.C. § 706, because

it did not specifically spell out the reasons for its decision.

The district court granted summary judgment in favor the defendants

and Ginger Mae appeals this ruling.

Discussion

The appellant claims that the appellees’ decision to deny its

application, solely based on its name, is a violation of 5 U.S.C.

§ 706, as being “arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with the law.” “The central focus of

the arbitrary and capricious standard is on the rationality of the

agency’s decision making process, rather than its actual decision

... [and] ... an agency’s decision must be upheld if at all on the

basis articulated by the agency itself.” United States v. Garner,

767 F.2d 104, 116 (5th Cir. 1985). Ginger Mae argues that the

appellees failed to present evidence to develop their basis for

denying the application and that the lower court ignored the

evidence presented by the appellant.
 

3 Ginnie Mae is a wholly owned corporation of the United

States within HUD. It authorizes private entities to issue

federally insured or guaranteed home mortgages to investors. These

investors are encouraged to purchase these securities because they

are backed by the full faith and credit of the United States. The

purpose of the Ginnie Mae program is to attract private capital

into low and moderate income housing.

3

As the administrative record suggests, the appellees denied

the application because the use of the appellant’s name would be

violative of 18 U.S.C. § 709, a statute imposing criminal penalties

upon:

[w]hoever uses as a firm or business name the words 

‘Department of Housing and Urban Development’, ... or the

letters ‘HUD’, or any combination or variation of these

words or the letters ‘HUD’ ... alone or with other words

or letters reasonably calculated to convey the false 

impression that such name or business has some connection

with, or authorization from, the Department of Housing and

Urban Development ... (emphasis added)

The denial letter also states that:

the name Ginger Mae is quite similar to and likely to be

confused with that of Ginnie Mae. To avoid misleading the

public, Ginnie Mae prefers that the name Ginger Mae not be

used...

Although the basis for appellees’ denial may not be extensive,

it is certainly sufficient. Merely from the letter of denial, we

can determine that the appellees believe that the name Ginger Mae

suggests that it is affiliated with the Federal Government, and

that because of this the public may confuse it with Ginnie Mae.3

The appellees’ concerns center around the fact that investors might

erroneously think that the appellant, Ginger Mae, sells mortgaged

backed securities from the United States Government.
4

Analysis

The similarities between the two names, Ginger Mae and Ginnie

Mae, are immediately apparent. Substantial evidence by the

appellees about the confusion that the appellant’s name may produce

is hardly required as it is self-evident. Extensive research is

not needed to determine that the name Ginger Mae is similar to

Ginnie Mae and that this could cause some public confusion.

The appellant assures that it does not intend to purchase or

hold FHA-insured loans. However, this does not relieve HUD of its

duty to determine whether the name Ginger Mae is similar to Ginnie

Mae and whether this could cause the public some confusion. HUD

has a duty to prevent confusion and there is no question that such

confusion would be significantly heightened if the appellant were

permitted to deal HUD-FHA securities.

The only other argument by the appellant which merits notice

is its allegation that it only deals with sophisticated

institutions who would be arguably less confused than nonsophisticated investors. An institution’s level of sophistication

is relative and difficult to measure. The assertion that Ginger

Mae’s investors are less likely to get confused than other

investors does not make Ginger Mae’s name less similar to that of

Ginnie Mae. The possibility for confusion remains and that is a

risk that the appellees cannot afford.

Based on the submitted briefs and record, we find that the
5

appellees have a legitimate concern. We are particularly aware of

the language in 18 U.S.C. § 709. The identical suffixes of both

institutions and the similarity between the names “Ginger” and

“Ginnie” are enough for us to find that the actions of the appellee

were not arbitrary, capricious, an abuse of discretion, or in any

way a violation of 5 U.S.C. § 701 et seq.

Based on the foregoing, we accordingly 

AFFIRM.