Opinion ID: 751774
Heading Depth: 4
Heading Rank: 2

Heading: Availability of APA Review

Text: 55 Even if we agreed that section 1821(j) did not preclude the relief appellants seek, we would affirm the district court's dismissal of their claim for review under the APA because such review is not available in this instance. The APA grants a right of judicial review of an agency action to [a] person suffering legal wrong because of any agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute. 5 U.S.C. § 702. This right of review, however, is limited. First, the APA only provides for review of those actions made reviewable by statute and final agency action for which there is no other adequate remedy in a court. 5 U.S.C. § 704. Second, the APA withdraws the right of review to the extent that statutes preclude judicial review. 5 U.S.C. § 701(a)(1). 56 We find that the district court did not have jurisdiction to review the FDIC-Corporate's issuance of the Notification because (1) it was not a final agency action, and (2) review expressly is barred by 12 U.S.C. § 1818(i)(1) and jurisdiction therefore is withdrawn pursuant to 5 U.S.C. § 701(a)(1). 57 The APA provides for review of a final agency action for which there is no other adequate remedy in a court, 5 U.S.C. § 704, but the APA does not define what constitutes a final agency action. The Supreme Court has stated that the core question is whether the agency has completed its decisionmaking process, and whether the result of that process is one that will directly affect the parties. Franklin v. Massachusetts, 505 U.S. 788, 797, 112 S.Ct. 2767, 2773, 120 L.Ed.2d 636 (1992). The action must be a definitive statement of [the agency's] position with concrete legal consequences. FTC v. Standard Oil Co., 449 U.S. 232, 241, 101 S.Ct. 488, 493, 66 L.Ed.2d 416 (1980); see also Darby v. Cisneros, 509 U.S. 137, 144, 113 S.Ct. 2539, 2543, 125 L.Ed.2d 113 (1993). We have held that the finality of [an agency action] is determined by its consequences or its practical effects. Shea v. Office of Thrift Supervision, 934 F.2d 41, 44 (3d Cir.1991); see also In re Seidman, 37 F.3d 911, 923 (3d Cir.1994). 58 FDIC-Corporate issued Meritor a Notification which stated that, as a result of the grand-fathered goodwill no longer being considered in Meritor's capital base, Meritor was undercapitalized and in violation of the FDIC agreement. In the Notification, the FDIC also notified Meritor that procedures would be initiated to cancel Meritor's deposit insurance if Meritor did not come into immediate compliance with certain capital requirements. Based upon this information, the Secretary closed Meritor the same day that FDIC-Corporate issued the Notification. 11 59 We agree with FDIC-Corporate that the Notification at issue here was the first step in a multi-step statutory procedure which must be followed when FDIC-Corporate considers terminating an institution's deposit insurance. Br. of Appellee FDIC-Corporate at 12; see also 12 U.S.C. § 1818(a)(2). After such a notification is issued, to terminate an institution's deposit insurance, the FDIC also, inter alia, must give notice of a hearing and conduct a hearing pursuant to statutory requirements. See 12 U.S.C. § 1818(a). In the context of this statutory procedure, the issuance of the Notification does not represent the FDIC's definitive statement regarding the termination of a financial institution's insurance status. 60 In Standard Oil, the Supreme Court held that the Federal Trade Commission's (FTC) issuance of a complaint was not a final agency action and therefore was not reviewable under the APA. See Standard Oil, 449 U.S. at 238, 101 S.Ct. at 492. The Court reasoned that the complaint was, by its terms, not a definitive statement; rather, the complaint only was indicative of a reason to believe that the party was violating the law. See id. at 241, 101 S.Ct. at 493-94. The Court found that the complaint was a determination that an administrative proceeding would be commenced but did not have the legal force or practical effect on the party's daily business activities indicative of a final agency determination. See id. at 241-43, 101 S.Ct. at 494. The Court noted that the finality requirement has been interpreted in a pragmatic way. See id. at 239, 101 S.Ct. at 493. 61 We find that the issuance of the Notification was not the FDIC's definitive statement. See id. at 241, 101 S.Ct. at 493. Furthermore, the issuance of the Notification did not have the type of effect we described and required in Shea v. Office of Thrift Supervision to be a final, reviewable action, namely that the agency action must be one that impose[s] an obligation, den[ies] a right, or fix[es] some legal relationship as a consummation of the administrative process. Shea, 934 F.2d at 44. Rather, the action that had legal effect was the Secretary's decision to close the bank, not the FDIC's issuance of the Notification. 62 We also agree with the Court of Appeals for the Ninth Circuit, which has held that where a state actor relies upon a federal agency's notice, the state action does not convert the notice into a final agency act under the APA. See Air California v. United States Dep't of Transp., 654 F.2d 616, 621 (9th Cir.1981). In Air California, the Orange County Board of Supervisors (Board) had adopted a policy designed to freeze the level of operations at the Orange County Airport. See id. at 618. This policy resulted in the exclusion of new carriers, ultimately inuring to the benefit of Air California, an existing carrier at the airport. See id. 63 Thereafter, the Board entered into agreements with the Federal Aviation Administration (FAA) to gain federal airport funds, thereby subjecting the airport to federal regulations. See id. The FAA held a hearing to investigate allegations by carriers who unsuccessfully had applied for authorization to use the airport that the airport policy violated federal law. See id. Following an investigatory hearing, the FAA's Chief Counsel sent a letter to the Board warning that failure to comply with federal regulations would result in the FAA pursuing sanctions, but that no formal action would be taken for 30 days. See id. The FAA never took formal action, but as a result of the letter to the Board, the Board met and decided to reallocate the flights to include additional carriers, thereby reducing the number of flights for which Air California was authorized. See id. Air California then sought APA review of the FAA letter. See id. The court held that the letter was not a final agency order because the Board's action, not the FAA letter, immediately affected Air California's rights. See id. at 621. 64 We reject appellants' attempt to distinguish Standard Oil and Air California; according to appellants, these cases are distinguishable because of the conspiracy the appellants allege existed here. While appellants acknowledge that the Notification could have been the beginning of an internal adjudicative process, as in Standard Oil, they argue that this possibility is immaterial in this factual context. Here, appellants contend that the Notification was not intended to commence an administrative investigation. They assert that by virtue of the alleged conspiracy, the FDIC knew and intended that the Secretary would close Meritor immediately when he received the Notification. Appellants also argue that the complicity involved distinguishes the FDIC's Notification from the FAA letter in Air California because the FDIC issued the Notification knowing and intending it directly to affect Meritor. In addition, appellants assert that because the FDIC specifically targeted Meritor whereas the FAA directed its attention to the Board, not to the plaintiffs therein, there is a more direct effect on Meritor associated with the FDIC's action than there was on the plaintiff in Air California by reason of the challenged action in that case. 65 We acknowledge that the Secretary's closing of Meritor precluded the need for a final agency action terminating Meritor's insured status. However, appellants' failure to challenge the appointment of the receiver under the available state procedure, see Pa. Stat. Ann., tit. 71, § 733-605 (West 1990), does not convert the Notification, an otherwise preliminary step in FDIC procedure, into a final agency action reviewable under 5 U.S.C. § 704. 66 APA review is unavailable in this case also because 12 U.S.C. § 1818(i) precludes judicial review of the Notification, and the APA does not allow judicial review where another statute specifically prohibits it, see 5 U.S.C. § 701(a)(1). Section 1818(i) precludes review of orders and notices except as specifically provided elsewhere in section 1818. Section 1818(i)(1) provides in relevant part that 67 except as otherwise provided in this section ... no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under any such section, or to review, modify, suspend, terminate, or set aside any such notice or order. 68 The Supreme Court has found that this language is clear. See Board of Governors of the Federal Reserve System v. MCorp Financial, Inc., 502 U.S. 32, 39, 112 S.Ct. 459, 463, 116 L.Ed.2d 358 (1991). In MCorp, the Court held that section 1818(i)(1) provides us with clear and convincing evidence that Congress intended to deny the District Court jurisdiction to review and enjoin the Board's ongoing administrative proceedings. MCorp, 502 U.S. at 44, 112 S.Ct. at 466; see also Groos Nat'l Bank v. Comptroller of the Currency, 573 F.2d 889, 895 (5th Cir.1978) (noting that the section in particular evinces a clear intention that this regulatory process is not to be disturbed by untimely judicial intervention, at least where there is no 'clear departure from statutory authority' ). 69 The question we now face is whether section 1818(i) applies only where there is such an ongoing administrative proceeding. As discussed above, here there is no such proceeding because the Secretary's decision to close Meritor based upon the Notification eviscerated the need for further proceedings to terminate Meritor's insured status. Moreover, to our knowledge, the only case law involving section 1818(i) is in the context of an ongoing administrative proceeding. 70 Yet the plain language of section 1818(i) broadly precludes the review of the issuance of any notice under any subsection. See 12 U.S.C. § 1818(i)(1); Henry v. Office of Thrift Supervision, 43 F.3d 507, 512 (10th Cir.1994) (rejecting contention that the orders referred to in section 1818(i) are limited to those issued after administrative hearings). Further, while section 1818 provides for review of certain notices and orders, such as those issued after a hearing, see 12 U.S.C. § 1818(a)(5) (providing for review of an order terminating an institution's insured status); 12 U.S.C. § 1818(h) (providing for review of orders and notices issued after required hearings), it does not provide for review of the issuance of this Notification, which was issued pursuant to section 1818(a)(1). Thus, by its terms section 1818(i) applies to this case and is not restricted to precluding judicial review which would interfere with an ongoing administrative proceeding. Based upon this plain meaning, we conclude that the district court did not have jurisdiction to review the issuance of the Notification. 71 Courts, however, have recognized a limited exception to a statute's specific withdrawal of jurisdiction where the plaintiff claims that the agency acted in a blatantly lawless manner or contrary to a clear statutory prohibition. See, e.g., Abercrombie v. Office of the Comptroller of Currency, 833 F.2d 672, 674-75 (7th Cir.1987); First Nat'l Bank of Grayson v. Conover, 715 F.2d 234, 236 (6th Cir.1983); Groos Nat'l Bank, 573 F.2d at 895. The roots of this so-called statutory-authority exception are in Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958). 72 The Supreme Court has considered the application of this exception to section 1818(i). See Board of Governors of the Federal Reserve System v. MCorp Financial, Inc., 502 U.S. 32, 112 S.Ct. 459, 116 L.Ed.2d 358. In MCorp, the Court declined to apply the exception, distinguishing it in two respects from the situation in Kyne. First, the Court found that there were adequate means of review available upon a final determination by the agency. Second, the Court held that Kyne did not apply because there the preclusion was implied from congressional silence, whereas the preclusion of section 1818(i) was express and clear. See id. at 43-44, 112 S.Ct. at 465-66. 73 We recently have addressed the statutory-authority exception and emphasized that an integral factor in determining the applicability of the exception is the clarity of the statutory preclusion. See Clinton County Com'rs v. EPA, 116 F.3d 1018, 1028-29 (3d Cir.1997) (en banc) (citing Board of Governors of the Federal Reserve System v. MCorp Financial, Inc., 502 U.S. 32, 112 S.Ct. 459, 116 L.Ed.2d 358; Briscoe v. Bell, 432 U.S. 404, 97 S.Ct. 2428, 53 L.Ed.2d 439 (1977)), cert. denied, --- U.S. ----, 118 S.Ct. 687, 139 L.Ed.2d 633 (1998). In rejecting the plaintiffs' contention that review was available under Kyne, in Clinton County we held that, as with section 1818(i), the section precluding review provided  'clear and convincing evidence' ... that Congress intended to deny the district court jurisdiction to review EPA's ongoing remedial action. Clinton County, 116 F.3d at 1029. 74 We find that this exception does not apply to this case primarily for two reasons. First, the exception does not apply in the face of such clear preclusive language. Second, the FDIC did not act in a blatantly lawless manner. Although appellants may object to the FDIC's conclusions, the FDIC acted pursuant to the requirement that it notify a financial institution upon making a determination that the financial institution was operating in an unsafe financial condition. See 12 U.S.C. § 1818(a)(2). 75 We have not overlooked the appellants' arguments regarding the effect of our interpretation of the jurisdictional bar. First, they argue that where, as here, the FDIC knowingly acts to eliminate section 1818 administrative review, section 1818(i)(1) cannot preclude judicial review, because the effect would be to preclude all review of the issuance of the Notification. We reject this contention because the result of our holding with respect to the preclusion of section 1818(i) is to bar only APA review of the FDIC's issuance of the Notification. We are not moved by the lack of a remedy under the APA because section 1818(i) only precludes court action which would affect by injunction or otherwise the issuance or enforcement of the Notification. We see no reason why, under proper circumstances, a plaintiff could not institute, and a district court could not entertain, an action for damages based upon the FDIC's allegedly wrongful conduct without offending section 1818(i). 76 Second, appellants argue that that we should not construe section 1818(i)(1) to bar their constitutional claims because Congress clearly must express an intent to preclude review of constitutional claims. See Webster, 486 U.S. at 603, 108 S.Ct. at 2053. We reject this argument for the same reasons that we rejected it above in the context of the jurisdiction bar of section 1821(j). Again, section 1818(i)(1) precludes the declaratory and injunctive relief sought here, but on its face would not affect an appropriate constitutional claim for damages.