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{{4-1-90 p.A-1435}}
   [5135] Docket No. FDIC-88-247k (5-30-89).

   Civil money penalty assessed against Director who failed to answer Notice of Assessment in a timely manner. FDIC granted special permission to appeal ALJ's denial of enforcement counsel's Motions for Recommended Decision. FDIC found that Respondents' bankruptcy petition did not constitute good cause to toll the regulatory period for answers, and assessed civil money penalties on the basis of the facts set forth in the Notice of Assessment.

   [.1] Practice and Procedure—Interlocutory Appeals—Special Permission
   An interlocutory appeal of ALJ decision is an extraordinary action granted only in limited circumstances where issues of first impression are involved, where significant policy considerations are raised, or where there exists a substantial danger of irreparable harm to a party.

   [.2] Civil Money Penalties—Notice of Assessment—Time to Answer
   Failure to timely file an answer to Notice of Assessment can be excused only upon a showing of good cause.

   [.3] Bankruptcy—Effect of Bankruptcy Filing on FDIC Proceeding
   FDIC enforcement action for assessment of civil money penalty was not automatically stayed by Respondent's filing of bankruptcy petition, since the enforcement proceeding involves FDIC's regulatory authority. An entry of money judgement is distinguishable from execution of such judgement.

   [.4] Civil Money Penalty—Notice of Assessment—Good Cause for Failure to Answer
   ALJ can accept an untimely answer only upon a showing of good cause. The FDIC must independently make a determination of good cause absent a finding by the ALJ. Filing of a bankruptcy petition does not constitute good cause for failure to file a timely answer to a Notice of Assessment.

   [.5] Practice and Procedure—Untimely Answer—Waiver of Right to Appeal
   Failure to file a timely answer is deemed a waiver of the right to appear and contest allegations. The ALJ shall find the facts as alleged in the Notice.

   [.6] Civil Money Penalties—Notice of Assessment—Final Unless Contested
   An assessment of civil money penalties is final and unappealable unless both a request for hearing and an answer are filed in a timely manner.

   [.7] Practice and Procedure—Bankruptcy—Jurisdiction of ALJ
   An ALJ is competent to determine whether an enforcement action must be stayed pursuant to the U.S. Bankruptcy Code.

   [.8] Practice and Procedure—Bankruptcy—Automatic Stay
   A proceeding that involves an agency's policy or regulatory authority and the entry of a money judgement is exempt from the automatic stay in bankruptcy. However, where an agency's action seeks to establish a pecuniary interest in the bankruptcy estate by, for example, execution of a money judgment, then such an action comes within the automatic stay.

   [.9] Practice and Procedure—Bankruptcy—Assessment of Civil Money Penalties
   A proceeding before the FDIC to assess a civil money penalty is an exercise of the FDIC's police and regulatory powers and therefore is exempted from the automatic stay provisions of the U.S. Bankruptcy Code. Proceeding does not seek

{{4-1-90 p.A-1436}}to establish a pecuniary interest in the bankruptcy estate nor is it in the realm of executing on a money judgment.

In the Matter of
* * * and * * *, individually, and as
Directors of * * * BANK

(Insured State Nonmember Bank—In
Receivership)
DECISION AND ORDER GRANTING
SPECIAL APPEAL; ORDERING
PAYMENT OF CIVIL MONEY
PENALTIES

INTRODUCTION

   This matter is before the Board of Directors (the "Board") of the Federal Deposit Insurance Corporation (the "FDIC"), upon the request of FDIC enforcement counsel for special permission to appeal the administrative law judge's ("ALJ") denial of the FDIC's Motion for Recommended Decision against * * * ("Respondent").
   The FDIC's Motion was in the nature of a request for a default judgment against Respondent for failure to file a timely answer to the FDIC's Notice of Assessment of Civil Money Penalties, Findings of Fact and Conclusions of Law, Order to Pay and Notice of Hearing ("Notice"), as required by section 308.06(a) of the FDIC Rules of Practice and Procedures ("FDIC Rules").1Respondent's untimely filing of an answer is undisputed. An answer was not filed until 45 days after the expiration of the regulatory time period of 20 days from receipt of the Notice. However, the ALJ issued a "Decision and Order" ("Recommended Decision") which denied the FDIC's Motion for Recommended Decision against * * *. The ALJ found that Respondent's untimely Motion to Stay could toll the regulatory time period to file an answer. Thus he ordered the Respondent to file an answer within 20 days of his order.2FDIC enforcement counsel seeks special permission to appeal this order.3
   For the reasons more fully discussed below, the Board finds this case to be appropriate for the grant of a special appeal and further finds that the ALJ's Recommended Decision exceeds his authority. In the interest of administrative efficiency, rather than remand the proceeding to the ALJ for a recommended decision and order on the FDIC's Motion for Recommended Decision against * * *, in light of the findings made herein, the Board has at this time also considered the FDIC's Motion for Recommended Decision against * * *. Finding the FDIC's Motion meritorious, the Board hereby issues a final Decision and Order against Respondent assessing a civil money penalty as set forth in the Notice.

I. A SPECIAL APPEAL IS APPROPRIATE

   [.1] Section 308.12(e) of the FDIC Rules states, in pertinent part, that:

    Rulings of an administrative law judge or the Executive Secretary on any motion may not be appealed to the Board of Directors prior to its consideration of the administrative law judge's recommended decision, findings and conclusions, except by special permission of the Board. Such rulings shall be considered by the Board in reviewing the record. Requests to the Board for special permission to appeal from such rulings shall be filed promptly in writing, and shall briefly state the grounds for the request . . . . [Emphasis added.]

   The grant of an interlocutory appeal is an extraordinary action to be taken by the Board only in limited circumstances. Prior decisions of the Board have set forth the standards for granting such appeals: where issues of first impression are involved, where significant policy considerations are raised, or where there exists a substantial danger of irreparable harm to a party. FDIC-85-87k, 2 P-H FDIC Enf. Dec. ¶5095 (1987); FDIC-85-326b, 2 P-H FDIC Enf. Dec. ¶5070 (1986).
   The ALJ's Recommended Decision raises important questions of law and policy. First, it presents the question whether an

1The Notice alleged violations of section 23A(c) of the Federal Reserve Act, 12 U.S.C. §371c(c), by Respondent and Mr. * * *. Penalties of $25,500 and $8,500 were assessed against Respondent and Mr. * * *, respectively. The disposition of the proceeding against Mr. * * * is not a matter of record in this case.

2Citations to the Recommended Decision shall be: "R.D. at ____."

3Revisions to the FDIC Rules became effective January 1, 1989. However, all matters, including the instant case, which commenced prior to the effective date of revised Part 308 are governed by the prior version of the FDIC Rules. Revised section 308.03(b) of the FDIC Rules, 12 C.F.R. §308.03(b), provides that the Executive Secretary, the ALJ, and the Board may look to revised Part 308 for guidance in construing the provisions of Part 308 in effect prior to January 1, 1989.
{{4-1-90 p.A-1437}}ALJ, without making a finding of good cause, as required by 12 C.F.R. §308.06(a), can excuse a respondent's failure to file an answer within the regulatory time period.

   [.2] Respondent has presented no evidence indicating why he was unable to file in a timely manner, although the burden to do so is plainly his. The ALJ made no finding that Respondent has shown good cause to excuse his failure to file in a timely manner. The Board does not believe such a finding could be made on the record before it.
   Second, there is an important public interest in judicial and administrative economy which would be jeopardized by the failure to adhere to the regulatory timeframe. In deciding to publish its Board Decisions, the Board made a policy determination that public awareness of Board Decisions was in the public interest because, among other things, a body of law would be created which the public could follow. Prior decisions of the Board have concluded that a respondent will not be permitted to contest the charges after an unexcused waiver of that right occurs through failure to file a timely answer. Failure to adhere to these decisions would defeat the policy underlying the publication of decisions and deprive the public of the guidance and consistency intended to be provided by the publication of the Board's decisions.
   In addition, the Board notes, that because this action is in the nature of a default, the issues before it involve questions of law, rather than fact. Therefore, it is not necessary to develop a complete factual record in order for a decision to be reached on the various motions now before the Board.
   For these reasons, the Board chooses to exercise its discretion under section 308.12(e) of the FDIC Rules and permit interlocutory review of the FDIC's Motion for Recommended Decision against * * *.

II. MOTION FOR DEFAULT ORDER
Procedural Summary

   The FDIC issued its Notice pursuant to section 18(j)(4) of the Federal Deposit Insurance Act (the "FDI Act"), 12 U.S.C. §1828(j)(4), on November 22, 1988. On December 10, 1988, Respondent filed a request for a hearing. No answer was filed by Respondent within the 20-day time period prescribed by section 308.06(a) of the FDIC Rules, which ended on December 21, 1988. On December 23, 1988, Respondent filed a Suggestion of Bankruptcy and Motion to Dismiss or Stay Proceedings ("Respondent's Motion"). Respondent's Motion failed to admit, deny, or state that he lacked sufficient information to admit or deny the allegations of the Notice, or to state that all of the Notice's allegations were admitted to be true, and failed to request leave to file an answer after the answer date. Thus, it did not meet the requirements of sections 308.06(b) and (c) of the FDIC Rules which set forth the required content of an answer.
   On January 26, 1989, FDIC enforcement counsel filed his Motion for Recommended Decision against * * * pursuant to section 308.06(d) of the FDIC Rules based upon Respondent's failure to file a timely answer. On February 7, 1989, 45 days after the answer period had run, Respondent filed an answer acknowledging his failure to file within the 20-day period, but asserting that he need not file an answer because the FDIC is stayed in its action by the Respondent's bankruptcy filing. The ALJ's Recommended Decision was issued on February 14, 1989.4On March 1, 1989, FDIC enforcement counsel filed a Request for Special Permission to Appeal, and on March 31, 1989, Respondent filed his Opposition to FDIC's Request for Special Permission to Appeal ("Respondent's Opposition").

The ALJ's Decision

   The ALJ's Recommended Decision addresses both Respondent's Motion to dismiss or stay the action and FDIC enforcement counsel's Motion to issue a recommended order to pay civil money penalties.
   [.3] First, with regard to Respondent's Motion, the ALJ discusses the legislative history and case law related to sections 362(a) and (b) of the United States Bankruptcy Code. He finds that the legislative history and the courts distinguish between entry of money judgments and execution on them. "So long as the proceeding involves the agency's police or regulatory authority, it is exempt from automatic stay, whether it seeks a civil fine or a backpay order running to specific individuals." R.D. at 5. See Mat-


4Apparently, at the time the ALJ issued his Recommended Decision, he had not yet received a copy of Respondent's February 7, 1989, answer.
{{4-1-90 p.A-1438}}ter of Nicholas, Inc., 55 B.R. 212 (Bkrtcy. 1985); NLRB. v. Evans Plumbing Co., 639 NLRB 291 (5th Cir., 1981); In re Tauscher, 7 B.R. 918 (Bkrtcy. E.D. Wis., 1981). He then concludes that this administrative proceeding involves, "first and fundamentally," an exercise of the FDIC police and regulatory powers and therefore:
a proceeding before the FDIC to assess a civil money penalty is exempted from the automatic stay provisions of Section 362 of the United States Bankruptcy Code, and . . . this litigation may continue. Whether or not such assessment as may be entered would be dischargeable under the Bankruptcy Code is another question, and one to be decided in another proceeding. [R.D. at 6].
Thus, the ALJ found that the FDIC enforcement action was not stayed by Respondent's bankruptcy filing and could proceed. Accordingly, he denied Respondent's Motion. The Board concurs in these findings and adopts them herein.
   With respect to FDIC enforcement counsel's motion, the ALJ noted that it is in the nature of a request for the entry of a default judgment based on Respondent's failure to file a timely answer and that, generally, defaults are "best suited where the Respondent is truly recalcitrant." R.D. at 7. The ALJ found that such was not this case because Respondent had filed a motion to dismiss or stay which "while not meritorious, was not frivolous." He then concluded that Respondent's Motion was "a sufficient responsive pleading to toll the time limit set in section 308.06(a) of the FDIC Rules," and ordered Respondent to file an answer within 20 days of receipt of the Recommended Decision. Id.
   The Board disagrees with this conclusion for the reasons discussed below.

Discussion

A. Absence of Good Cause.

   [.4] The FDIC Rules contemplate certain extraordinary circumstances where an extension of time to file an answer may be appropriate. Section 308.06(a) of the FDIC Rules provides that "for good cause shown, the Board, the Executive Secretary or the administrative law judge may permit filing of an answer after expiration of the filing period," 12 C.F.R. §308.06(a). However, the ALJ did not invoke this provision in reaching his decision. He made no finding that good cause has been shown. However, because this section of the FDIC Rules gives the Board the authority to extend the filing time for an answer even where the ALJ has not found good cause to do so, the Board must independently determine whether good cause exists.
   In his Opposition, Respondent points to the filing of Respondent's Motion as an assertion of his "good faith belief that the FDIC no longer had jurisdiction to hold a hearing based upon the bankruptcy filing."5The Board assumes for the purpose of deciding this appeal that Respondent's submission attempts to make the showing of good cause required by the FDIC Rules. He does not, however, address or explain the fact that the filing of Respondent's Motion was itself untimely. In the letter dated February 7, 1989, transmitting Respondent's answer to the ALJ, counsel for Respondent indicates that Respondent's Motion notified the FDIC that "Respondent * * * filed Chapter 7 Bankruptcy Proceedings prior to the [issuance of the] Notice . . . ." This point does not assist Respondent's assertion of good faith or make his showing of good cause. Given that Respondent's bankruptcy preceded the commencement of this enforcement action, there appears to be no justification for the untimely filing of Respondent's Motion and, thus, no basis for determining that the filing of Respondent's Motion constitutes "good cause" for waiving the FDIC regulatory timeframe.
   In addition, the Board notes that, when Respondent requested a hearing on December 9, 1989, he did so through his attorney, and he has been represented by counsel throughout the proceedings. Finally, Respondent has never requested an extension of time in which to file an answer. In light of these facts the Board finds that the record does not contain a showing of good cause upon which to base a decision to accept Respondent's February 7, 1989, answer.

B. The Respondent's Motion does not Toll the Regulatory Timeframe.

   The only basis for an ALJ to accept an untimely answer is contained in the previ-


5Respondent appears to confuse the requirement of a showing of "good cause" with his alleged "good faith" belief in an erroneous legal conclusion. The mere assertion of a legal position without further support (even a position less obviously incorrect than the position asserted by Respondent) does not constitute "good cause."
{{4-1-90 p.A-1439}}ously-quoted language of section 308.06(a) of the FDIC Rules, which requires a showing of good cause. The FDIC Rules do not provide a basis for the ALJ to deem the regulatory time frame tolled by another filing. The decisions of the Board have consistently taken this position. A number of decisions have ordered the payment of civil money penalties where a Respondent had filed a request for a hearing in a timely fashion, but had failed to file a timely answer.6The filing of a request for a hearing is no less a filing than Respondent's Motion in this case. Nonetheless, neither type of filing constitutes an answer, satisfies the regulatory requirement to file a timely answer nor is a basis for tolling the regulatory timeframe, absent some other showing of good cause.

   [.5] Furthermore, section 308.06(d) of the FDIC Rules provides that failure of a party to file an answer within the required time "shall be deemed a waiver of the right to appear and contest the allegations" of the Notice and "shall authorize the administrative law judge, without further notice to the party, to find the facts to be as alleged in the Notice and to file with the Executive Secretary a recommended decision containing such findings and appropriate conclusions." 12 C.F.R. §308.06(d). Reading section 308.06(a) in conjunction with section 308.06(d) indicates the regulatory scheme. Section 308.06(a) enables the ALJ to extend the time to file an answer upon a showing of good cause, but not where a submission is made which, according to the ALJ herein, does not constitute an answer but is "sufficiently responsive to toll the time limit." Then, section 308.06(d) serves as a jurisdictional bar to the ALJ's authority to proceed with a hearing.

   [.6] It is significant that under revised Part 308, which became effective January 1, 1989, Respondent's Motion clearly would not satisfy the requirements for providing a timely answer. Section 308.21(a)(2) of revised Part 308 specifically provides that the time to file an answer is not extended by the making of any motion. Section 308.21(d)(1) of revised Part 308 further provides that, when an assessment of civil money penalties has been made under section 18(j) of the Act, it shall automatically become final and unappealable unless both the required request for hearing and an answer are timely filed. These revisions indicate an effort by the Board to reduce administrative delays and assure the orderly and rapid completion of enforcement proceedings.

   III. CONCLUSION

   The Board finds that no showing of good cause has been made to support the waiving of the regulatory answer period, and that it was not appropriate for the ALJ to deem the regulatory answer period tolled by the filing of Respondent's Motion. Therefore, an appropriate order shall be entered granting the FDIC enforcement counsel's Request for Special Permission to Appeal, granting FDIC enforcement counsel's Motion for Recommended Decision against * * *, and ordering the payment of a civil money penalty by Respondent as set forth in the Notice.

ORDER TO PAY CIVIL MONEY
PENALTIES

   The Board of Directors has considered the record before it, including the ALJ's Recommended Decision and Order, FDIC enforcement counsel's Request for Special Permission to Appeal the ALJ's Denial of FDIC's Motion for Recommended Decision against * * *, the Opposition of Respondent to the Request for Special Permission to Appeal, the Motion for Recommended Decision against * * *, and Respondent's Suggestion of Bankruptcy and Motion to Dismiss or Stay Proceedings. Upon this record the Board finds it appropriate to GRANT the Request for Special Permission to Appeal. Further, the Board finds Respondent has waived his right to appear and contest the allegations of the Notice in that good cause to excuse Respondent's failure to file a timely answer has not been shown and the filing of Respondent's Motion is not sufficient to excuse the failure to file answer. Therefore, the Board finds the facts to be as set forth in the allegations of the Notice. ACCORDINGLY, IT IS HEREBY ORDERED, that
   1. The Request for Special Permission to Appeal is GRANTED.
   2. By reason of the violations set forth in the Notice, a penalty of $25,500 be, and hereby is, assessed against * * *, pursuant


6FDIC-85-133k, 2 P-H FDIC Enf. Dec. ¶5093 (1987); FDIC-85-357k, 2 P-H FDIC Enf. Dec. ¶5087 (1987); FDIC86-104k, 2 P-H FDIC Enf. Dec. ¶5081 (1987).
{{4-1-90 p.A-1440}}to section 18(j)(4) of the Act, 12 U.S.C. §1828(4).
   IT IS FURTHER ORDERED, that this Order shall be effective and the penalty ordered shall be final and payable twenty (20) days from the date of this Order. The provisions of this Order shall remain effective and enforceable except to the extent that, and until such time as, any provision of this Order shall have been modified, terminated, suspended, or set aside by the Board.
   By direction of the Board of Directors.
   Dated at Washington, D.C., this 30th day of May, 1989.

* * * and * * *, individually, and as
directors of * * * BANK
(Insured State Nonmember Bank—In Receivership)
RECOMMENDED DECISION AND
ORDER

   On January 3, 1989, Respondent * * *'s Motion to Dismiss or Stay Proceedings was referred to me for disposition. Subsequently, counsel for the Respondent filed a brief. Counsel for the FDIC filed a Motion for Decision based on the Respondent's failure to file a timely answer, and withheld filing or briefing the Respondent's motion on grounds that a favorable disposition of the FDIC motion would make this unnecessary. I conclude, however, that even if the FDIC were to prevail, the Respondent's motion would still have to be decided, inasmuch as it involves a jurisdictional question.
   Accordingly, by this decision I am resolving both motions.

A. MOTION TO DISMISS OR STAY

   Although I do not have authority to grant a motion to dismiss, 12 C.F.R. Sec. 308.07, or otherwise to rule in favor of a motion which decides the merits of the matter, in the appropriate case I could make such a recommendation to the Corporation Board. However, I decline to do so here because I conclude that the motion to stay, and therefore the motion to dismiss, should be denied.

   [.7] Though the issue raised by the Respondent is fundamentally one of interpreting the Bankruptcy Code, I have jurisdiction to decide it. Courts (and presumably administrative agencies) have competency to determine their own jurisdiction, which includes whether a proceeding must be stayed pursuant to the Bankruptcy Code. In re Baldwin-United Corp. Litigation, 765 F.2d 343 (2d Cir., 1985).

   [.8] Section 362(a) of the Bankruptcy Code states that a petition in bankruptcy, such as that filed by the Respondent herein, operates as a stay as to all judicial and administrative proceedings against the debtor including "any act to collect, assess or recover a claim against the debtor that arose before the commencement of the case under the title . . . ." Section 362(b), however, sets forth certain exceptions and provides that the filing of a petition in bankruptcy "does not operate as a stay . . . .

    (4) under subsection (a)(1) of this section, of the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power . . . .

   The House Report on these sections of the Bankruptcy Code gives the legislative intent:
    Paragraph (4) excepts commencement or continuation of actions and proceedings by governmental units to enforce police or regulatory powers. Thus, where a governmental unit is suing a debtor to prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay. Paragraph (5) makes clear that the exception extends to permit an injunction and enforcement of an injunction, and to permit the entry of a money judgment, but does not extend to permit enforcement of a money judgment. Since the assets of a the debtor are in the possession and control of the bankruptcy court, and since they constitute a fund out of which all creditors are entitled to share, enforcement by a governmental unit of a money judgment would give it preferential treatment to the detriment of all other creditors. (Emphasis supplied.) House Report No. 95-595, 95th Cong. 2d. Sess. at 343, reprinted in 1978 U.S. Code Cong. & Ad. News 6299.

   Almost uniformly the bankruptcy and circuit courts have held that where a governmental agency brings an action in the exercise of its police or regulatory power, such proceeding is exempted from the automatic {{4-1-90 p.A-1441}}stay provisions of the Bankruptcy Code. See, e.g., Matter of Nicholas, Inc., 55 B.R. 212 (Bkrtcy. 1985), and cases cited therein.
   In Nicholas, the debtor sought to enjoin litigation before the National Labor Relations Board. It was held that the Board is a governmental unit and that trial of an unfair labor practice complaint before the Board was the exercise of its police or regulatory power. The Court, in accordance with several circuits and other bankruptcy courts, concluded that the proceeding before the Board was not subject to automatic stay. The Court did note, however, that the matter had not yet reached the stage of enforcing a money judgment. The Court stated, again in accord with other bankruptcy and circuit courts, that the exception to the automatic stay provisions does not extend to the enforcement of a money judgment.

NLRB v. Evans Plumbing Co., 639 NLRB 291 (5th Cir., 1981), was in the Circuit Court to enforce an NLRB reinstatement and backpay order. The respondent argued that the matter should be automatically stayed. The Court found the NLRB to be a governmental agency and that the action was being undertaken to enforce federal law concerning employer-employee relations. The Court said: "We can safely conclude, therefore, that this is an exercise of police or regulatory powers which places it within the Section 362(b)(4) exemption to the automatic stay."
   The Board's petition for enforcement of a backpay award, among other things, was granted. The Court noted, however, that its decision would only permit the entry of a judgment. If it became necessary to enforce the judgment, a different question would be raised, on which the Court expressed no opinion.
   Similarly, EEOC v. Rath Packing Co., 787 F.2d 318 (8th Cir., 1986), involved an appeal from a money judgment award in favor of the Equal Employment Opportunity Commission in federal district court under Title VII of the Civil Rights Act. The Court there held that entry of a money judgment was permissible, but actual enforcement was not, and to the extent the district court went beyond mere entry of the judgment and moved into the area of enforcement, it erred.
   Closer to this case was In re Tauscher, 7 B.R. 918 (Bkrtcy. E.D. Wis., 1981). The Secretary of Labor had assessed a civil money penalty (to which the respondent excepted) and wished to proceed with a hearing before an administrative law judge. The Court held that such an action was not subject to automatic stay under the Bankruptcy Code, and the Secretary:

    . . . may continue with administrative procedures to the extent of fixing the penalties to be assessed for child labor violations, up to and including the entry of a money judgement. Enforcement of a money judgment would however be stayed by the automatic stay of Sec. 362(a). 7 B.R. at 920.

   [.9] Thus, in accord with the legislative history quoted above, the courts distinguish between entry of money judgments and execution on them. So long as the proceeding involves the agency's police or regulatory authority, it is exempt from automatic stay, whether it seeks a civil fine or a backpay order running to specific individuals. However, where the governmental action primarily seeks to establish a pecuniary interest in the bankruptcy estate, then it comes within the automatic stay. E.g., In re Charter First Mortgage, 42 B.R. 380 (Bkrtcy. Or., 1984). Also, actual enforcement of a money judgment (the assessment here) would be subject to the automatic stay provisions.
   This matter involves, first and fundamentally, an exercise of the FDIC's police and regulatory powers over a federally insured state bank. The assessment of a civil money penalty is levied on finding that one has violated the banking laws and to deter others from doing so. The action here is to vindicate public rights, not to establish a pecuniary interest in the bankruptcy estate. Nor is it at all in the realm of executing on a money judgment.

   [.10] Therefore I conclude that a proceeding before the FDIC to assess a civil money penalty is exempted from the automatic stay provisions of Section 362 of the United States Bankruptcy Code, and that this litigation may continue. Whether or not such assessment as may be entered would be dischargeable under the Bankruptcy Code is another question, and one to be decided in another proceeding.
{{4-1-90 p.A-1442}}
   The Respondent's motion to dismiss or to stay this matter is denied.

B. PETITIONER'S MOTION FOR
DECISION

   To date, the Respondent has not filed an answer as is required by 12 C.F.R. Sec. 308.06(a) of the FDIC Rules of Practice and Procedures applicable to this matter. Since more than 20 days has elapsed since service of the notice of assessment, counsel for the FDIC filed a Motion for a Recommended Decision and documents in support thereof.
   The motion for decision is in the nature of a default judgment based on the Respondent's failure to file a timely answer. Although default judgments can, and should, be entered in the appropriate case, as a general principle these matters ought to be decided on their merits. Generally, defaults are best suited where the respondent is truly recalcitrant.
   Such has not been the case here. The Respondent filed a motion to dismiss or stay which, while not meritorious, was not frivolous. I conclude that the Respondent's motion was a sufficient responsive pleading to toll the time limit set in Sec. 308.06(a).
   Having denied the Respondent's motion, I conclude it is appropriate to permit the Respondent to file an answer. The answer must be filed within 20 days of this decision, as calculated under the applicable FDIC Rules of Practice and Procedures.
   If the Respondent does not hereafter file a timely answer, I will rule favorably on the FDIC's motion.
   Dated at Washington, D.C. February 14, 1989

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