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FDIC Enforcement Decisions and Orders |
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On appeal of ALJ's denial of FDIC Enforcement Counsel's Motion for Entry of Default Orders against eight respondents, Board rejects ALJ's decisions concerning seven respondents and adopts the decision regarding one. Board (1) remands for the ALJ to consider evidence concerning the proof of service of an answer offered by one respondent; (2) denies default order against one respondent whose pro se response was timely and sufficient to constitute an answer; and (3) grants default orders against six named respondents whose answer was not timely. (This decision was appealed to the Fifth Circuit, which ruled that the FDIC had abused its discretion in entering the default order against six Respondents whose answer was not within the time limit set by FDIC regulations. Amberg v. FDIC, 934 F.2d 681. The FDIC remanded the case to the ALJ for further proceedings, by order dated 1-7-92; see ¶
[.1] Practice and ProcedureAnswerFailure to File
[.2] Practice and ProcedureAnswerPro Se Letter
[.3] Practice and ProcedureAnswerTime to Answer
[.4] Civil Money PenaltyLate AnswerALJ Authority
[.5] Civil Money PenaltyLate AnswerPermission to File
In the Matter of
This matter is before the Board of Directors (the "Board") of the Federal Deposit Insurance Corporation (the "FDIC") to appeal the administrative law judge's ("ALJ") denial of the FDIC Enforcement Counsel's Motion for Entry of Default Orders against [Respondent A], [Respondent B], James C. Amberg, Robert Ray Carroll, Roscoe P. Steen, W.M. Causey, Billy Ray Whitehead, and Benny Zeagler ("Respondents").
The FDIC issued the Notice against the Respondents pursuant to section 18(j)(4) of the Federal Deposit Insurance Act (the "FDIC Act"), 12 U.S.C. §1828(j)(4), on September 28, 1989. Certified mail receipts indicate that the Notice was received on October 3, 1989, by Respondents Carroll, Steen, Whitehead, and Zeagler; on October 4, 1989, by Respondents [A], Amberg, and Causey; and on October 12, 1989, by Respondent [B]. Respondents Carroll, Steen, Whitehead, Amberg, and Causey each filed requests for hearing by letter of their counsel dated October 16, 1989. Respondent [A] filed his request for hearing on October 20, 1989. By letter to the Board dated October 25, 1989, and received in the Office of the Executive Secretary on October 31, 1989, Respondent [B] requested a hearing and submitted an explanation of why he should not be assessed civil money penalties. All of the requests for hearing were filed within the prescribed period under the Rules.
The ALJ's Decision respecting Respondents [A] and [B] notes that [A] stated in a November 7, 1989, letter to the ALJ which enclosed an answer, that he had previously filed an answer to the Notice on October 18, 1989.
[.1] The ALJ's only analysis consists of a statement that "the FDIC has produced no evidence to the contrary, nor has any evidence been presented which would cast doubt on the credibility of [A], a practicing attorney in the State of Louisiana." However, in the Board's view, the ALJ has misplaced the burden of proof as to service and filing. The burden to proof proper service and/or filing of his answer is on [A], not on Enforcement Counsel. [A] has not submitted any affidavit or certification which is either under oath or in a form capable of supporting his assertion that he served or filed an answer to the Notice, even though his credibility has been brought directly into issue. Furthermore, [A's] status as an attorney bolsters his credibility no more than it heightens his responsibility to know and comply fully with the requirements of the FDIC Rules regarding service and filing of pleadings.
[.2] The ALJ's Decision respecting Respondents [A] and [B] also addresses the question whether [B's] October 25, 1989, letter to the Board, which was received in the Office of the Executive Secretary within the prescribed period, constitutes an answer pursuant to section 308.21(b).7The ALJ found that it does, and the Board agrees.
1. The ALJ Incorrectly Applied Section
Based upon a review of the record to date in this proceeding, it is clear that adoption of the ALJ's interpretation and application of section 308.14(c) to the facts presented here significantly alters the regulatory timeframes established under the FDIC Rules, 12 C.F.R. §308.14(c), a power reserved exclusively to the Board. Accordingly, the ALJ's interpretation and application of section 308.14(c) must be set aside.
[.3] While the Board believes that it is clear that section 308.14(c) does not apply to the time for an answer to the Notice, it notes that section 308.14(c) is nearly identical to Rule 6(e) of the Federal Rules of Civil Procedure. Generally, Rule 6(e) has no application when a statute or rule calls for a time period to commence only after actual receipt of the notice or paper.9The reason is that the rule is intended to put the recipient on equal footing with one who is personally served. Applying the rule in a case where the period commences upon receipt enlarges the prescribed period beyond that provided in the statute or rule when there is no valid purpose for doing so. The Board's intent in enacting section 308.14(c) and the literal language of the section is consistent with the general rule applicable to Rule 6(e) of the Federal Rules of Civil Procedure. Because service of the notice when mailed is accomplished only upon receipt by the Respondent, there is no basis for expanding the period to file an answer beyond 20 days.
2. The ALJ Lacked Authority To Allow A
[.4] The ALJ, after analyzing the reasons proffered by counsel for filing answers on behalf of her clients several days after they were due under the FDIC Rules, concluded that counsel's explanation was essentially that the untimeliness of the filings was due to excusable neglect and amounted to good cause for allowing the answers to be filed out of time. As set forth below, this finding was erroneous and must be rejected.
3. No Good Cause Shown
[.5] Nevertheless, since the Board has power to permit the filing of a late answer upon its own determination, it finds it appropriate to conduct an independent inquiry in this case as to whether good cause exists to warrant consideration of the answers of these Respondents even though the civil money penalties assessed have become final and unappealable under section 308.75.
The Board finds that: (1) additional evidence is required as to whether Respondent [A] filed a timely answer to the Notice; (2) Respondent [B] filed a timely answer to the Notice; and (3) no good cause exists for accepting the untimely answer filed on behalf of Respondents Amberg, Carroll, Steen, Causey, Whitehead, and Zeagler. Therefore, an appropriate order shall be entered as set forth below.
IT IS HEREBY ORDERED, that
In the Matter of
A. BACKGROUND
The FDIC issued a Notice of Assessment of Civil Money Penalties against Respondents on September 28, 1989. Certified mail receipts indicate that the Notices were received by Respondents Carroll, Steen, Whitehead, and Zeagler (or by others on their behalf) on October 3, 1989, and by Respondents Amberg and Causey (or by others on their behalf) on October 4, 1989.
B. COMPLIANCE WITH LAWFUL
Timeliness is an essential element in the conduct of all judicial proceedings. Compliance with statutory and regulatory timeframes promotes efficiency and furthers the orderly administration of the law. However, compliance with requirements for timeliness is not an end in itself. It is a means toward efficiency and certainty in the administration of justice. But fair and impartial adjudication is paramount. Thus time limits must be adhered to but they are not sacrosanctparticularly where the Government is the party moving to have a case decided on procedural grounds.
C. TIMELINESS OF FILINGS
1. Respondents Amberg and Causey
Counsel for Respondents Amberg and Causey filed a request for hearing on October 16 and filed an Answer on October 27, 1989. The FDIC maintains that a default order should be entered, pursuant to 12 C.F.R. §308.21(d), because these Answers were not filed by October 24, twenty days after the date when certified mail receipts were signed, indicating receipt of the Notice of Charges by Respondents Amberg and Causey or by others on their behalf.
2. Respondent Amberg
Section 308.21(a), cited above, requires an answer within twenty (20) days from the date when Notice is received by the Respondent. Since the certified mail receipts indicate that the Notice was received by a person other than Respondent Amberg, it is unknown when he received it.
D. GOOD CAUSE
By letter dated December 5, 1989, respondents' counsel, explained why she initially filed only a request for hearing and not an answer. Ms. Dunn stated that the FDIC's letter of September 28, 1989, requiring a response to the Notice of Assessment, provides information concerning the filing of a request for hearing but makes no mention of the requirement that an answer be filed.
Pursuant to 12 C.F.R. §308.07(7), IT IS HEREBY ORDERED that the motions of the FDIC for the issuance of default orders, pursuant to 12 C.F.R. §308.21(d), against Respondents James C. Amberg, Robert Ray Carroll, W.M. Causey, Roscoe P. Steen, Billy Ray Whitehead, and Benny Zeagler be denied.
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Last Updated 6/6/2003 | legal@fdic.gov |