Case Name: FIRST NATIONAL BANK OF ABBEVILLE et al. v. Clem H. SEHRT, State Bank Commissioner, State of Louisiana
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1971-03-15
Citations: 246 So. 2d 382
Docket Number: No. 8381
Parties: FIRST NATIONAL BANK OF ABBEVILLE et al. v. Clem H. SEHRT, State Bank Commissioner, State of Louisiana.
Judges: Before LANDRY, ELLIS and BLANCHE, JJ.
Reporter: Southern Reporter, Second Series
Volume: 246
Pages: 382–391

Head Matter:
FIRST NATIONAL BANK OF ABBEVILLE et al. v. Clem H. SEHRT, State Bank Commissioner, State of Louisiana.
No. 8381.
Court of Appeal of Louisiana, First Circuit.
March 15, 1971.
Rehearing Denied En Banc April 19, 1971.
Writ Refused June 2,1971.
Carlos G. Spaht, of Kantrow, Spaht, Weaver & Walter, Baton Rouge, Roger C. Edwards, Abbeville, Oliver P. Stockwell, of Stockwell, St. Dizier, Sievert & Viccel-lio, Lake Charles, for appellants.
Ben Daly Bridgeman, New Orleans, for appellee.
Before LANDRY, ELLIS and BLANCHE, JJ.

Opinion:
ELLIS, Judge.
This is a suit by three banks operating in the Abbeville area of Vermillion Parish to enjoin Clem H. Sehrt, then State Bank Commissioner, from issuing a certificate of authority to Gulf Coast Bank to operate in Abbeville. From an adverse judgment, they have appealed.
The record shows that application for the certificate of authority was filed with the Commissioner, and that an investigation was made by the Chief Bank Examiner, who rendered a report to the Commissioner. Plaintiffs herein requested a formal hearing on their opposition, which was denied. However, the Commissioner did have an informal hearing in his office on December 4, 1969, at which plaintiffs presented their opposition. After considering the evidence, the Commissioner issued a conditional certificate of authority, on December 11, 1969. This suit was filed on February 12, 1970, asking that the Commissioner be enjoined from issuing the final certificate of authority.
The trial court held that he could reverse the decision of the Commissioner only if it were arbitrary or capricious, and that he was unable to reach that conclusion on the basis of the evidence presented.
Plaintiffs applied for a new trial, claiming that they were entitled to a formal hearing before the Commissioner under the Administrative Procedures Act, R.S. 49:951 et seq., and that they were denied due process of law because the hearing was not granted. They re-urged their contention that the Commissioner's decision was arbitrary and capricious because the hearing was not granted. They re-urged their contention that the Commissioner's decision was arbitrary and capricious because not based on substantial evidence. The new trial was denied, and this appeal followed.
R.S. 49:955(A) provides that:
"In an adjudication, all parties who do not waive their rights shall be afforded an opportunity for hearing after reasonable notice."
R.S. 49:951 contains the following provisions :
"As used in this Chapter:
"(1) 'Adjudication' means agency process for the formulation of a decision or order
"(3) 'Decision' or 'order' means the whole or any part of the final disposition of any agency, in any matter other than rule making, required by constitution or statute to be determined on the record after notice and opportunity for an agency hearing >>
The foregoing can only be construed to make the Act applicable only when a hearing is presently provided for by law. It does not create the right to a hearing when none is presently required. It provides the procedures to be followed when holding administrative hearings otherwise required by law.
There is no statutory requirement that the Commissioner hold hearings. His authority is set forth in R.S. 6:241, as follows :
"Before issuing a certificate of authority to any banking association or savings bank, the commissioner shall examine the qualifications, responsibility, and standing of the persons organizing the association or bank. If he finds that the public interest will not be subserved by permitting such persons to organize the association or bank, he shall refuse to issue the certificate."
Plaintiffs concede the foregoing, but claim to be entitled to a hearing under the due process clauses of the 14th Amendment to the Constitution of the United States and Article I, Section 2 of the Louisiana Constitution. These provide, of course, that no person may be deprived of life, liberty, or property without due process of law.
We can see no denial of due process in this case. Primarily, we do not believe that the due process clause can be invoked to prevent lawful competition. It can hardly be argued that there is a deprivation of property simply because another bank might be established in the area. Plaintiffs have no vested interest in the banking business of their area, and hold no exclusive franchise.
Second, we find that the requirements of due process have been satisfied herein. No one questions the absolute right of the Legislature to regulate banking and to provide the means for the establishment of banks within the State. It has chosen to delegate this authority to the State Bank
FIRST NATIONAL BANK OF ABBEVILLE v. SEHRT La. 385 Cite as, La.App., 246 So.2d 382 Commissioner. His determinations in this respect are subject to judicial review and opponents have standing to demand the same under Article I, Section 6 of the Louisiana Constitution, which provides: "All courts shall he open, and every person for injury done him in his rights, lands, goods, person or reputation shall have adequate remedy by due process of law and justice administered without denial, partiality or unreasonable delay." Similar procedures provided by both State and Federal laws have been upheld as providing due process. Webster Groves Trust Company v. Saxon, 370 F.2d 381 (8th Cir. 1966); Cement National Bank v. Dept, of Banking, 425 Pa. 554, 230 A.2d 209 (1967). In this case, the Commissioner, by giving plaintiffs an informal hearing, has done more than he is required by law to do. Plaintiffs' recourse is to judicial review if they are not satisfied with the decision reached by him. The scope of judicial review of the decisions of administrative agencies is set forth in Moffett v. Calca-sieu Parish School Board, 179 So.2d 537 (La.App. 3 Cir. 1965), as follows: "Generally, the scope of judicial review of administrative agencies, although varying with the statutes involved, is limited to a determination of whether the action of the agency was: (1) in accordance with the authority and formalities of the statute; (2) supported by substantial evidence; and (3) arbitrary or an abuse of discretion." [4]It is also true that a presumption of validity attaches to administrative enactments, and the burden of proving the invalidity thereof falls on the opponents. Interstate Oil Pipe Line Co. v. Guilbeau, 217 La. 160, 46 So.2d 113 (1950). The Commissioner based his decision on the following items: (1)The application submitted by the proponents of the bank 246 So.2d—25 (2) An economic report furnished him by the proponents (3) A personal visit made by him to Abbeville (4) An economic report submitted by the opponents, plaintiffs herein (5) An informal hearing granted by him to the opponents (6) The report of the investigation made by the Chief Bank Examiner The report submitted by the Chief Bank Examiner showed that he considered the deposit growth projected by the proponents was double his own estimate, based on ex- ' perience of other banks. He felt the future earnings prospects to be unsatisfactory, and the need for an additional bank to be marginal. He found all other factors to be favorable. He made no recommendation, being of the opinion that the decision could go either way. The economic report submitted by the opponents, as well as all of their other evidence, was unfavorable to the need for a third bank in Abbeville, and as to the ability of the economy to support such a bank. The economic report submitted by the proponents drew the opposite conclusion. This report was objected to by opponents as constituting hearsay evidence, since it was offered without supporting testimony. However, in view of the presumption of validity which attaches, we think the burden is on the opponents to discredit the report, and that they failed to bear the burden. The statistics produced showed Abbeville and Vermillion Parish to be declining in population and business activity, and that, at best, the economy of the area is stable. On the other hand, bank deposits were increasing steadily. [5] Based on the foregoing, we believe that there was substantial evidence on which the Commissioner based his conclusion, and that his action in issuing the cer-
tificate of authority was not arbitrary or an abuse of discretion.
The judgment appealed from is affirmed, at plaintiffs' cost.
Affirmed.