Court Opinion

ID: 7820005
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:50:40.694958+00
Date Added: 2024-06-11T16:30:42.917634
License: Public Domain

John A. Fogleman, Justice, dissenting. I might feel that I am doing no more than again voicing my protest previously expressed in such cases as Arkansas Savings & Loan Association Board v. Coming Savings & Loan Ass’n, 253 Ark. 987, 490 S.W. 2d 460; Arkansas Savings & Loan Association Board v. Grant County Savings & Loan Ass’n, 256 Ark. 858, 510 S.W. 2d 863, were it not for the fact that the majority has ignored our own statement as to substantial evidence review in favor of that of another court which is in decided conflict with our own rule. In First Federal Savings & Loan Ass’n v. Union Fidelity Savings & Loan Ass’n, 257 Ark. 199, 515 S.W. 2d 75, decided November 4, 1974, and where we were cognizant of the Administrative Procedure Act, we said: The appellant recognizes our rule that in this type case we affirm the Board’s action if there is any substantial evidence to support its findings. Morrilton Fed. S&L v. Arkansas Valley S&L, 243 Ark. 627, 420 S.W. 2d 923 (1967). Furthermore, in determining if substantial evidence exists, we consider only the appellee’s testimony or that evidence adduced which is most favorable to the appellee. Baldwin v. Wingfield, 191 Ark. 129, 85 S.W. 2d 689 (1935); and Washington Natl. Ins. v. Meeks, 252 Ark. 1178, 482 S.W. 2d 618 (1972). In the case at bar, when we consider the evidence with all reasonable inferences deducible therefrom in the light most favorable to the appellees, as we do on appeal, we are firmly of the view there is substantial evidence to support the Board’s findings. Not only is that authority ignored, the majority has acted to the contrary. While I will continue my protest as long as I feel that the courts are invading the province of other agencies, I submit that if our own approach to determining substantial evidence is followed in this case, the result reached by the majority is not possible. I think I should also point out that there is a very significant difference between the statute considered in Universal Camera Corp. v. National L.R. Bd., 340 U.S. 474, 71 S. Ct. 456, 95 L. Ed. 456 (1950), relied upon by the majority, and our own act. This decision in itself, was a departure from previous practice of that court. This, however, was accomplished by legislative mandate which was based upon dissatisfaction with the substantial evidence rule as it previously existed. It required that substantial evidence determinations be made by consideration of the record as a whole in both the Administrative Procedure Act and the Taft-Hartley Act. The United States Supreme Court frankly stated that these acts were demonstrative of a legislative mood, which must be respected by the judiciary, when expressed in legislation. But the “new legislation” upon which the court acted, after it had found that the Administrative Procedure Act actually contained the clear expression of legislative intention in both acts, is far different from our own Administrative Procedure Act. The federal act contained and still contains the critical language which required the change of stance of the United States Supreme Court. As recited in 5 USCA § 706, it reads: In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error. Significantly, this language is absent from our Administrative Procedure Act, adopted after the United States Supreme Court decision. Its omission should mean that the General Assembly was satisfied with substantial evidence determinations as made under the traditional rule we so recently expressed. It seems to me that this court is in poor position to take such a drastic step based upon the authority of a case which simply recognized the legislative prerogative, particularly when our General Assembly deliberately omitted the mandate upon which that authority is based. The result of such action was aptly expressed in the cited case thus: We conclude, therefore, that the Administrative Procedure Act and the Taft Hartley Act direct that courts must now assume more responsibility for the reasonableness and fairness of Labor Board decisions than some courts have shown in the past. Reviewing courts must be influenced by a feeling that they are not to abdicate the conventional judicial function. Congress has imposed on them responsibility for assuring that the Board keeps within reasonable grounds. That responsibility is not less real because it is limited to enforcing the requirement that evidence appear substantial when viewed, on the record as a whole, by courts invested with the authority and enjoying the prestige of the Courts of Appeals. I respectfully submit that the majority has arrived at its conclusion only by picking fragments of testimony that would have supported a result contrary to that of the Board. This approach is even more revolutionary than would be the case if it had simply weighed the evidence on trial de novo. Even though done unconsciously, this is not the purpose of judicial review of administrative action. The effect of utilizing this type of review is to substitute the judgment of the court, which is without expertise on the subject, for that of the Board, which presumably is possessed of expertise. This approach was disavowed in Arkansas Savings & Loan Board v. Southerland, 256 Ark. 445, 508 S.W. 2d 326, where we reversed the action of the circuit court, which had done exactly what this court is doing in this case in reversing the action of the Board. I do not agree with appellants that the finding of the Savings & Loan Association Board that the operation of a new savings and loan association in Conway will not unduly harm any other financial institution is not supported by substantial evidence, whether the Board’s definition of undue harm was correct or not. However, I am unable to fathom the reasoning process by which the majority concluded that the Board erroneously found that there was no public need for the proposed savings and loan association and that. the volume of business in the area in which the association would conduct its business was not sufficient to indicate a successful operation. The Board made numerous specific findings by which its conclusion was reached. The weakening or elimination of one of them does not destroy the foundation of substantial evidence on which the conclusion was reached. I submit that the majority has done nothing more than attempt to demonstrate the weakness of one or more of those numerous findings, as if the Board’s conclusions were a three-legged stool, which would fall if one leg was sawed from under it. If those particular findings are eliminated, there is still a foundation for the ultimate holding. For instance, short of trial de novo by the courts, no amount of picking at minute details in expert and other testimony will destroy findings of underlying facts (a), (b), (c), (d), (h), (i), (1), (m), (n), (p), (q), (r), (s), (t), (u), (v) and (x), all of which are supported by substantial evidence. These seem to be actually supported by a clear preponderance of the evidence. Furthermore, there is no proper approach for our saying that (w), a matter clearly within the province of the Board, was incorrect, arbitrary, capricious or an abuse of the Board’s discretion. They simply found Dr. Lynch’s testimony plausible and that of Dr. Amis entitled to little weight. Morrilton Federal Savings & Loan Association had been in business 20 years and had 100% of the home loan market when Security Savings & Loan Association was founded. In the succeeding years, the ratio had become 70% by Security and 30% by Morrilton, excluding some 25% to 30% handled by other lending institutions. Morrilton had obtained approval of a branch office in Conway. The convenience of having this office will necessarily make this association much more competitive both in making loans and obtaining savings deposits, as many witnesses testified. In addition, there was testimony that the Morrilton association had stepped up its activities in Faulkner County and that three employees were actively soliciting business there. Obviously, there was basis for belief that the new branch office presented some of the aspects of a new savings and loan association in Faulkner County. The failure of Security to carry through on its protest of the branch office was explained and is understandable. Morrilton was already in business in Faulkner County and was seeking to retrieve business it had lost to Security. Security would have been in poor position to continue its protest. I submit that there was evidence other than that pointed out in the majoity opinion, that Security’s loan interest rates were competitive, even though there was some controverting evidence. But it would serve no useful purpose to go through the record and point out factors that subject the analysis made of the evidence in the majority opinion to question. I would point out that no statistical yardstick has been established for making the determinations intrusted to the Board. I must point out some significant factors that furnish a basis for the Board’s action that have been ignored. First, it was clearly shown that population figures relative to Conway and Faulkner Counties furnished a poor standard of comparison because college students comprise about one third of the population of Conway. Second, the growth rates of the county have declined. Third, Pulaski County institutions compete with Faulkner County institutions for both loans and savings dollars, and will continue to do so. Fourth, the banks in Conway are highly competitive for residential loans, because they are helpful in assuring that the borrowers will otherwise be their customers, and some borrowers prefer a one to five year loan with periodic payments no higher than on a long term loan, but with a “balloon” note for the bulk of the loan. This permits the borrower to readily renegotiate interest rates from time to time and to make larger payments of principal whenever advantageous to him. Fifth, home building was on a definite decline due to shortage and high cost of building materials and builders and developers were finding building of houses for the market less profitable. Probably the largest developer was phasing out its business. Others were building fewer houses. A trend to apartment living was noticeable. Sixth, the Quitman Bank and FHA and VA make residential loans in the county. Seventh, the attractiveness of putting savings into a savings and loan association was diminished because of money market conditions, which made other investments more attractive. Every one of these factors was important to the determination of both public need and probability of success. They themselves furnish a very substantial basis for, not only the opinion of Dr. Lynch, an eminently qualified economist, but also for the findings of the Board, which was in these respects exercising its expertise. I must also disassociate myself from the insinuation that the Board is acting to delay appellee’s application. I would reverse the action of the circuit court.