Court Opinion

ID: 9777054
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:53:00.434074+00
Date Added: 2024-06-11T07:32:46.762798
License: Public Domain

John A. Fogleman, Justice, dissenting. The troublesome problem of judicial review, both at the trial and appellate levels, now seems further from solution than ever. Nowhere does the process seem to rest on shifting sands more than in the type of case now before us, i.e., action on applications for the establishment of savings and loan associations or branch offices of established associations. When one views our decisions in these cases, it becomes obvious that a trial judge can only approach a case like this with uncertainty, and perhaps bewilderment, as to just which standard he should follow. See, e.g., Arkansas Savings & Loan Board v. Central Arkansas Savings & Loan Ass’n., 260 Ark. 58, 538 S.W. 2d 505; First Federal Savings & Loan Ass’n. v. Union Fidelity Savings & Loan Assn’., 257 Ark. 199, 515 S.W. 2d 75; Arkansas Savings & Loan Board v. Southerland, 256 Ark. 445, 508 S.W. 2d 326; Arkansas Savings & Loan Board v. Grant County Savings & Loan Ass’n., 256 Ark. 858, 510 S.W. 2d 863; Arkansas Savings & Loan Board v. Corning Savings & Loan Ass’n., 253 Ark. 987, 490 S.W. 2d 460; Morrilton Federal Savings & Loan Ass’n. v. Arkansas Valley Savings & Loan Ass’n., 243 Ark. 627, 420 S.W. 2d 923. In Arkansas Savings & Loan Board v. Central Arkansas Savings & Loan Ass’n., supra, a clear majority of the court (all but the writer) cast aside everything we had previously said on the subject and rejected the idea that, in determining the substantiality of evidence, we should be governed by the same rule of review as we follow in cases involving jury verdicts. In doing so, it adopted language from Universal Camera Corp. v. National L. R. Bd., 340 U.S. 474, 71 S. Ct. 456, 95 L. Ed. 456 (1950), ignoring all our previous statements and decisions on the question, but relating the quoted language to our Administrative Procedure Act [Ark. Stat. Ann. § 5-701 et seq (Repl. 1976)] and particularly to one section (Ark. Stat. Ann. § 5-713). The language adopted was: “Whether or not it was ever permissible for courts to determine the substantiality of evidence supporting a Labor Board decision merely on the basis of evidence which in and of itself justified it, without taking into account contradictory evidence or evidence from which conflicting inferences could be drawn, the new legislation definitely precludes such a theory of review and bars its practice. The substantiality of evidence must take into account whatever in the record fairly detracts from its weight . . . . ” The majority opinion there specifically stated that the court was construing our act to mandate that type of judicial review. Yet the very first time a trial court follows that mandate, the court retreats from that position. The portion of the circuit court judgment italicized by the majority clearly shows that the review was undertaken in the light of what was then our most recent decision. The court stated that its findings were reached on the review provided for in that case. The quoted portion of the circuit court’s findings are completely ignored by the majority. Every factual statement in the majority opinion to show substantial evidentiary support for the board’s action is based upon the applicant’s stated PSA (Proposed Service Area). I submit that whatever gauge is used in testing substantial evidence, the basis for this PSA was totally destroyed by the evidence, and that every estimate, projection or finding stated in the majority opinion and in the board’s findings of fact fell when its foundation, the PSA, failed. In this the trial court was eminently correct. The proposed service area consisted of the north half of Prairie County and portions of White, Woodruff and Monroe Counties, with a total population of 13,057. It was described in the application as a 25-mile area which would normally be considered commuting distance. It was determined solely by J. Darol Bell, White County Guaranty’s manager, who explained how he arrived at it by saying that he based it on his association’s experience in Bald Knob. The application recognized that savings and loan associations had branch offices outside the PSA in Brinkley, Bald Knob and Beebe, all of which are closer to most of the area than Searcy, the home office of White County Guaranty Savings & Loan Association, which also has the branch office at Bald Knob, with a service area population of 9,143. Most.of the applicant’s projections on the estimated income, operating expenses, deposits and loans of the proposed Des Arc branch were based upon the performance of the Bald Knob branch. All were based on this PSA. The population of Des Arc was 1,714 in 1970.1 It is 31 miles from Searcy by highway, 25 miles from Brinkely, 42 miles from Stuttgart, 34 miles from Lonoke, 18 miles from Hazen, 22 miles from DeValls Bluff and 26 miles from Car-lisle. Brinkley lies virtually on the perimeter of the PSA and much of the area is much nearer to Brinkley than Des Arc. Almost the same situation prevails as to Bald Knob. Some of the PSA is actually nearer Stuttgart than Des Arc. Carlisle is served by a mobile unit of a Little Rock association twice weekly. A considerable portion of the PSA is nearer Carlisle than Des Arc. DeValls Bluff is as close to Stuttgart, where there is an established association, and to Brinkley, where there is a branch office of White County Guaranty, as it is to Des Arc. Most of the White County area in the PSA is closer to Searcy than it is to Des Arc. A portion of the PSA in the Northern District of Prairie County is closer to Beebe than it is to Des Arc. The applicant explained that its PSA boundaries were established by considering the factors of convenience and needs of potential customers within the proposed service area. It would include both Hazen and De Vails Bluff in the Southern District of Prairie County. The evidence that these towns and their surrounding area were not in the Des Arc trade area was overwhelming. Dr. Donald R. Market, an economist employed to make an economic report for the applicant,2 said that he took the PSA as determined by the management of the applicant and analyzed the data. He said that he did not attempt to justify the PSA. After testimony which clearly showed that it was overextended, Dr. Taylor stated that he thought the applicant was a little “exuberant” in defining its service area. He did say that he thought it was “somewhat bigger” than that stated by Dr. Dominick, an economist employed by the protestant. He did not attempt to describe or justify this “somewhat bigger” area. He said that the PSA or market area described by Dr. Dominick had a population of 5,205. The only figures or estimates he really adjusted for this area were his estimate of per capita income, and those dependent on this estimate. Dr. Dominick, Professor of Finance and holder of the Chair of Banking at the University of Arkansas, had made an independent study of the service area to determine the market area of a financial institution located in Des Arc. He demonstrated that the travel distance from a considerable portion of the proposed White County area would be nearly twice as great to Des Arc as to Searcy. When it was equal or virtually so, he pointed out that at least one-half of the people would go to' Searcy, a city of 10,000 population, rather than to Des Arc. He also pointed out that Beebe was a larger town than Des Arc, and as close or closer to a substantial portion of applicant’s PSA than Des Arc. He also pointed out the attractiveness of travel on Interstate Highway 40, passing south of Des Arc and through or near Brinkley, Hazen and Carlisle, dividing Prairie County. Dr. Dominick referred to the testimony of an implement dealer, who was the only witness whose testimony even tended to justify the applicant’s PSA.3 This witness, a John Deere dealer, had testified that individuals from Stuttgart and from beyond both Searcy and Carlisle came to buy his product and that the implement company’s service area reached from Beebe to Carlisle to Lonoke, as far as Stuttgart and beyond Cotton Plant and Hunter., The probative value of this testimony had been virtually, if not totally, negated by the reason this witness gave for those distant customers. He said they came “because we offer them something they can’t get at a closer location. ” Nothing in this record even suggests that White County I Guaranty Savings & Loan Association will offer people outside the area, as limited by Dr. Dominick, anything they can’t get at a closer location. But Dr. Dominick pointed out that one purchasing a $30,000 tractor, or seeking the services of a good attorney or good dentist or medical doctor or for special shopping, might drive from De Vails Bluff to Searcy, Des Arc, Brinkley or Stuttgart but would not drive that far to do business with a financial institution, unless he hated everyone in his market area. He said that the major consideration in consumer selection of a financial institution is convenience. There is no substantial contradiction of this testimony by Dr. Dominick. The board simply stated that the PSA consisted of that described in the application. It really made no finding of fact on this critical point, satisfying itself by saying that applicant’s economic experts, using the protestant’s adjusted PSA, projected personal income to grow from $39.6 million in 1975 to $56.8 million in 1980, with a savings flow during the same period growing from $2.4 million to $3.4 million. The board added that per capita income for this adjusted area would be $7,608 as opposed to a national average of $5,832. I repeat that the circuit court was eminently correct in the finding quoted in the majority opinion and submit that the circuit judge was not substituting his judgment for the expertise of the board. I further submit that the majority has failed to demonstrate that the circuit judge erred.   The population was estimated to be 2,200 at the time of the application.    Dr. Phillip Taylor, Jr. worked in conjunction with Dr. Market in making this study.    The manager of a factory in Des Arc testified that their employees were drawn from distances of “about 15 miles.”