Court Opinion

ID: 4120315
Source: CourtListenerOpinion
Date Created: 2017-01-27 22:46:47.210762+00
Date Added: 2024-06-11T09:20:55.055825
License: Public Domain

July 9, 1979

79-50    MEMORANDUM OPINION FOR THE SENIOR
         ASSOCIATE COUNSEL TO THE PRESIDENT

         Federal Home Loan Bank Board—Chairman—
         Vacancy—Reorganization Plan No. 3 of 1947 (5
         U.S.C. App. 1), Reorganization Plan No. 6 of 1961
         (5 U.S.C. App.)

   This memorandum confirms the oral advice this Office has recently
given you regarding the selection of a new Chairman of the Federal Home
Loan Bank Board. The facts, as we understand them, can be briefly
stated. At noon, on Saturday, June 30, 1979, Mr. McKinney resigned as a
member and Chairman of the Board. It is anticipated that his successor
will be named within 10 days. There are two other board members in ac­
tive service on the Board at this time.
   The first question is whether the President is required to name an Acting
Chairman (either one of the two members or someone else) to serve until a
successor is named. It is our opinion that the President is not required to
do so and that the Board ought to be able to perform its essential functions
without significant interruption until appointment o f a new Chairman.
Pursuant to Reorganization Plan No. 3 of 1947, the President is em­
powered to designate the Chairman. See § 2(b), reprinted in 5 U.S.C. App.
at 734 (1976 ed.). The plan also authorizes the Chairman to designate a
person to serve as Acting Chairman during the “ absence or disability” of
the Chairman. Id. There is no provision, however, that deals specifically
with the selection of an Acting Chairman to serve during a vacancy. In the
absence of any such specific provision, it should be assumed that the
power to designate an Acting Chairman remains in the President, and, in
fact, we have been informed by the General Counsel of the Federal Home
Loan Bank Board that historically the President has named Acting
Chairmen in cases in which vacancies have occurred.
   In the absence of a designation by the President of an Acting Chairman,
the question arises whether the Board may operate without a Chairman
for a short period of time. (We have been advised that a period of

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approximately 10 days is contemplated.) At least a partial answer is pro­
vided by Reorganization Plan No. 6 of 1961, which authorizes the Chair­
man to delegate any of his management and oversight functions to any ap­
propriate officer. See § 2(b), reprinted in 5 U.S.C. App. at 783. Pursuant
to that authority, on June 29, 1979, the Chairman delegated to the “ Chief
Administrative Officer of the Bank Board” all of his administrative func­
tions, including each of the eight listed functions set forth in § 1 of the
 1961 reorganization plan. This delegation should assure continuity during
the short period in which there will not be a sitting Chairman.
   Finally, a question has also been raised with respect to the ability of the
Board to meet in special or emergency session in the absence of a Chair­
man. Section 1(8) of the plan gives to the Chairman the power to call
special meetings. Under the June 29 delegation, that power has been trans­
ferred to the Board’s chief administrative officer. In any event, it is our
opinion that a special session could be called by the two sitting board
members even in the absence of such a call. This opinion is based on § 1(8)
of the 1961 plan which transfers to the Chairman “ [t]he calling of the
Board into special session * * * upon request of one or both of the other
members of the Board.” This subsection seems to render the Chairman’s
calling of special meetings merely ministerial when one or both of the
board members request a meeting. Furthermore, the Presidential message
accompanying the plan makes clear that the transfer of functions is in­
tended to strengthen internal management of the Board and not to change
the distribution of power within the Board. The message states:
      [n]othing in the plan impinges upon the ability of the members of
      the Board to act independently with respect to substantive mat­
      ters that come before them for decision, or to participate in the
      shaping of Board policies. In carrying out his managerial func­
      tions, the Chairman will be governed by the policies of the Board
      and the determinations it is authorized to make. [5 U.S.C. App.
      at 784.]
The plan and the President’s message lead us to conclude that the two re­
maining members of the Board have the authority to call a special meeting
if such a meeting is necessary to the proper functioning of the Board.
   It is also our view that if a meeting is held by the other two board
members any action taken at such meeting may not properly be challenged
on the ground that the calling of the meeting was not in conformance with
the reorganization plan. It appears that, as a matter of corporate common
law, business transacted at a meeting of a corporate board is valid so long
as there is sufficient notice to the board members enabling them to attend,
or if, in fact* all the members did attend. See 2 Fletcher, Cyclopedia o f the
Law o f Private Corporations §§ 404, 406, 411 (1969 ed,). We suspect that
in the absence of specific statutory language to the contrary, a Govern­
ment entity such as the Federal Home Loan Bank Board may rely on the
common law rule. C f, FTC v. Flotill Products,' Inc., 389 U.S. 1979
(1967). O f course, the notification and scheduling of any meeting would

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still have to comply with other applicable provisions of law, including the
provisions of the Sunshine Act, 5 U.S.C. §§ 552b.
   Given these considerations, it is our opinion that the Board may func­
tion appropriately during this brief period without a sitting Chairman.

                                 Larry A . H am m ond
                           Deputy Assistant Attorney General
                                               Office o f Legal Counsel

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