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FDIC Enforcement Decisions and Orders

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{{6-30-97 p.A-2796}}
   [5237] In the Matter of Roger J. LeBlanc, First Bank, Pineville, La., Docket No. FDIC 94-17k (8-20-96)

   FDIC affirms and adopts administrative law judge's recommended decision to deny respondent's application, pursuant to the Equal Access to Justice Act, for an award of fees and costs defending a civil money penalty action.

In the Matter of
ROGER J. LEBLANC, individually,
as an institution-affiliated
party, and/or as a person
participating in the affairs of
FIRST BANK,
PINEVILLE,LOUISIANA
(Insured State Nonmember Bank)
DECISION AND ORDER
FDIC-94-17k

I. INTRODUCTION

   This matter is before the Board of Directors ("Board") of the Federal Deposit Insurance Corporation ("FDIC") following the issuance of a Recommended Decision by Administrative Law Judge Arthur L. Shipe ("ALJ") to deny the Application of Roger J. LeBlanc ("Respondent") for an award of fees and costs of defending a civil money penalty action by the FDIC ("Application"). In his Recommended Decision, the ALJ set forth his Findings of Fact and Conclusions of Law that led to his Recommended Decision to deny Respondent's Application.
   Respondent submitted his Application pursuant to the Equal Access to Justice Act ("EAJA" or "the Act"), 5 U.S.C. § 504 within the requisite thirty-day period to cover costs and fees incurred in defense of the civil money penalty action brought by the Board. Respondent prevailed in the civil money penalty action because the ALJ found that the FDIC lacked jurisdiction to assess penalties against Respondent under section 8(i) of the Federal Deposit Insurance Act ("FDI Act").
   The Board adopted the ALJ's Recommended Decision and dismissed the proceeding. In the Matter of Roger J. LeBlanc, First Bank, Pineville, Louisiana, FDIC Enf. Dec. and Orders ¶5229, at A-2730. The Board concluded that the case by case application of the standard used to determine whether a person is an "institution-affiliated party" did not sufficiently establish such status with respect to the Respondent on the specific facts of this case.
   On November 16, 1995, the Respondent through his counsel, served the Application asserting that he was entitled to an award of costs and fees because he was the prevailing party in the civil money penalty assessment proceeding and that the FDIC was not substantially justified in bringing that action.

II. BACKGROUND

   The FDIC brought a civil money penalty assessment proceeding against the Respondent. Oral hearing on that action was held on January 10–12, 1995, in Baton Rouge, Louisiana, where the parties appeared through Counsel. In the action the FDIC contended that the Respondent was involved in proposing, explaining, modifying, and seeking regulatory approval of a plan intended to recapitalize an institution. As a result of such efforts, his involvement went beyond the role of a borrower and transformed the Respondent into one "participating in the conduct of the affairs" of the bank.
   On June 7, 1995, the ALJ issued a Recommended Decision in which he recommended that the civil money penalty assessment proceeding be dismissed. He found that the FDIC lacked jurisdiction to assess penalties against Respondent pursuant to section 8(i) of the FDI Act, 12 U.S.C. § 1818(i) because he was not an "institution-affiliated party" as defined in 12 U.S.C. § 1813(u). The Board issued its Final Decision on October 21, 1995, adopting the Recommended Decision of the ALJ and dismissing the proceeding. In the Matter of Roger J. LeBlanc, First Bank, Pineville, Louisiana, Pineville, Louisiana, FDIC Enf. Dec. and Orders ¶5229, at A-2730.
   On November 16, 1995, the Respondent served on Enforcement Counsel and the ALJ an Application for an award of fees and costs of defending the civil money penalty action brought by the FDIC. Respondent con- {{10-31-99 p.A-2797}}tended that as the prevailing party in a matter where the FDIC was not substantially justified in bringing the action, he wasentitled to an award of fees and costs under the Act.
   Enforcement Counsel argued that the Application must be dismissed for lack of subject matter jurisdiction because Respondent did not file the Application with the FDIC Executive Secretary as required by section 308.170 of FDIC Rules of Practice and Procedure, 12 C.F.R. § 308.170(a). Enforcement Counsel also contended that the Application did not demonstrate Respondent's eligibility for an award under the applicable net worth standards, that Respondent did not incur legal fees within the meaning of the Act, and that FDIC's actions were substantially justified.
   On April 29, 1996, the ALJ issued his Recommended Decision denying Respondent's Application on the ground that the FDIC's actions were substantially justified.

III. DISCUSSION

   The Board affirms and adopts the ALJ's Recommended Decision to deny Respondent's Application.

ORDER

   The Board of the FDIC, having considered the entire record of the Application adopts the ALJ's Recommended Decision, including, without limitation, all of the Findings of Fact and Conclusions of Law therein.
   ACCORDINGLY, IT IS HEREBY ORDERED, that Respondent's Application for an award of fees and costs pursuant to the Equal Access to Justice Act associated with defense of the FDIC's civil money penalty assessment action is denied. By direction of the Board of Directors.
   Dated at Washington, D.C., this 20th day of August, 1996.

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