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FDIC Enforcement Decisions and Orders

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   [8001A] FDIC Docket No. FDIC-85-326b (7-29-86).

   A state insured nonmember bank was denied its motion to dismiss an action for a cease and desist order because the bank did not show that it was prejudiced by a delay in conducting a hearing.

   [.1] Motion to Dismiss—Appeal
   A ruling of an ALJ on a motion may only be appealed by "special permission" of the FDIC's Board of Directors.

   [.2] Hearing—Time
   A Notice of Hearing shall fix a time and place for a hearing not earlier than 30 days nor later than 60 days after service of the notice, unless an earlier or later date is set at the request of any party served with the notice.

   [.3] Time Limitations—Purpose
   Congressionally imposed time limitations may serve any of the following purposes: to protect the finality of administrative actions; guarantee prompt adjudication of sensitive issues; and assure the progression of an orderly proceeding. The time limitation is not mandatory when only the third purpose—assurance of an orderly proceeding—is contemplated by the statute.

[.4] Hearing—Delay
   If a bank shows that it was prejudiced by a delay in conducting a hearing, or that the FDIC acted in bad faith in its failure to hold a hearing within 60 days, a motion to dismiss may be an appropriate remedy.

[.5] Hearing—Failure to Comply with Time Period
   The FDIC did not willfully fail to comply with a 60-day time period in which to hold a hearing when the 60 days expired while the FDIC was waiting for Office of Personnel Management to appoint an ALJ.

   [.6] Remedies—Dismissal
   Dismissal of an action for failure to hold a hearing within 60 days is a drastic remedy and should not be invoked when no substantial prejudice warranting dismissal of the action is shown.

In the Matter of * * * Bank (Insured State Nonmember Bank)
DECISION AND ORDER GRANTING
RESPONDENT'S REQUEST FOR
SPECIAL PERMISSION TO APPEAL
AND DENYING RESPONDENT'S
MOTION TO DISMISS

FDIC-85-326b

DECISION
A. Statement of the Case
   On March 17, 1986, counsel for the * * * Bank, * * * ("Respondent"), filed with the Administrative Law Judge ("ALJ") a motion to dismiss this action for a cease and desist order under section 8(b) of the Federal Deposit Insurance Act ("Act"). As its basis, Respondent argued that the hearing on the Notice of Charges and of Hearing ("Notice") served on the bank by the Federal Deposit Insurance Corporation ("FDIC") did not commence within 60 days as provided in 12 U.S.C. § 1818(b)(1) and 12 C.F.R. § 308.35. Respondent argued that this 60-day period is mandatory and jurisdictional.
   On March 28, 1986, the FDIC filed an opposition to Respondent's motion to dismiss alleging that the FDIC's jurisdiction over the bank was obtained when the Notice was served, and that the only issue in the case is whether Respondent is prejudiced by the failure to hold the hearing within 60 days of receipt of the Notice. Respondent filed a Supplemental Memorandum In Support Of Its Motion To Dismiss ("Supplemental Memorandum") on April 16, 1986. By letter dated April 18, 1986, the FDIC responded to new issues set forth in Respondent's Supplemental Memorandum.
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   The ALJ rendered his Order on April 30, 1986, denying Respondent's Motion to Dismiss. On May 7, 1986, Respondent filed with FDIC's Board of Directors ("Board") a Request For Special Permission to Appeal under 12 C.F.R. § 308.12(e) ("Request"). On May 16, 1986, the FDIC filed with the Board an opposition to Respondent's Request. By a Notice dated May 16, 1986, the ALJ correctly gave notice to the parties that the hearing would proceed as required under 12 C.F.R. § 308.12(f) unless otherwise ordered by the Board. As discussed more fully below, the Board grants Respondent's Request for Special Permission to Appeal and has concluded that the Motion To Dismiss should be denied.
B. Special Permission to Appeal Should be Granted

   [.1] Section 308.12(e) provides that a ruling of an ALJ on a motion may only be appealed by "special permission" of the Board of Directors. The regulation also specifically provides that all rulings on motions "shall" be considered by the Board in reviewing the record in the proceeding. Section 308.12(e) lists no criteria for the Board to consider in its decision to grant or deny a motion for special permission to appeal. As such, this is a discretionary determination left to the Board to decide on a case by case basis. The Board has granted special permission for an interlocutory appeal where issues of first impression were involved, where significant policy considerations were raised, or where there existed a substantial danger of irreparable harm to a party.1
   Whether the 60-day time period, found at 12 U.S.C. § 1818(b)(1) and 12 C.F.R. § 308.35, is mandatory and jurisdictional is a question of first impression for the Board.2 The Board has never before been required to consider whether an action should be dismissed for failure to commence a hearing within 60 days of a respondent's receipt of a Notice of Charges and Hearing. While the regulations do not favor interlocutory review of the ruling of an ALJ, where the issues have been fully briefed by both parties and all factual issues have been resolved, as in this case, no purpose would be served by deferring the issue for later consideration. Therefore, the Board chooses to exercise its discretion under section 308.12(e), for the reasons set forth above, and grants Respondent's Request for Special Permission to Appeal.

C. Facts and Contentions

   On November 20, 1985, the Deputy Executive Secretary of the FDIC issued the Notice. This Notice was received by Respondent on November 29, 1985. On December 4, 1985, Respondent sent its answer to the Executive Secretary which was received December 9, 1985.
   On December 18, 1985, FDIC requested that the Office of Administrative Law Judges, Office of Personnel Management ("OPM"), provide FDIC with an ALJ to preside over this proceeding. On February 13, 1986, pursuant to FDIC's request, an ALJ was appointed.
   Respondent argues that because a hearing was not held within 60 days, as provided in 12 U.S.C. § 1818(b)(1) and 12 C.F.R. § 308.35, the cease and desist proceeding must be dismissed. Without the sanction of dismissal, Respondent reasons, the statute and incorporating regulation would prove meaningless.
   FDIC argues that it made a good faith attempt to hold the hearing within the 60 days, but due to factors beyond its control, it was unable to comply. FDIC does not employ its own ALJ's. FDIC borrows judges from other agencies through OPM. FDIC asserts that dismissal of the case is an extreme action and is only appropriate if Respondent can establish that it was prejudiced by the delay.
   Respondent has countered that prejudice need not be shown for dismissal to take place, but that, if a showing of prejudice must be met, it has met this burden.


1 We note that the expenditure of time and resources by a respondent in defending an action is not considered by the courts to be irreparable harm. See e.g., Renegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1, 94 S.Ct. 1028, 39 L.Ed. 2d 123 (1974); Rosenthal & Co. v. Bagley, 581 F.2d 1258 (7th Cir. 1978); Frey v. Commodity Exch. Auth., 547 F.2d 46 (7th Cir. 1976); State of Cal. ex rel. Christensen v. FTC, 549 F.2d 1321 (9th Cir.), cert. denied, 434 U.S. 876 (1977).

2 As we show infra, the courts have adopted a well-recognized rule that statutes with language similar to section 1818(b)(i) are directory and not mandatory.

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D. The ALJ's Recommendations

   In his April 30, 1986 Order, the ALJ made the following findings: (1) the 60-day time period is equitable in nature, not jurisdictional; (2) a good faith effort was made by the FDIC to obtain an administrative law judge in a timely manner; and (3) the Respondent was not prejudiced in any way by the delay. These findings are dealt with in detail in the ALJ's Order and need not be repeated here.
   The ALJ concluded that Respondent's Motion to Dismiss be denied and recommended entry of such an order.
   The Board agrees with the ALJ, and therefore the Board adopts the ALJ's Order in its entirety.3 The Board, to assure clarity, and to expand upon the ALJ's recommendation, sets forth its Decision and Order in full text below.

E. Discussion

   [.2] The central argument raised by the parties focuses on the interpretation of 12 U.S.C. § 1818(b)(1) and 12 C.F.R. § 308.35. Section 1818(b)(1), which is substantially tracked by § 308.35, provides:

       The notice...shall contain a statement of the facts...and shall fix a time and place for a hearing...not earlier than 30 days nor later than 60 days after service of the notice, unless an earlier or later date is set at the request of any party served with the notice.
We are faced with an issue of statutory construction to determine the purpose and legislative intent of this provision. The language of the statute is completely silent with respect to the breach of this time limit. No sanctions are specified. What the Board must decide is whether dismissal of the Notice is an appropriate sanction in light of the underlying legislative purpose.
   Although this issue has not been previously addressed by the Board, numerous courts have dealt with it in conjunction with statutes containing similar provisions. The courts have held that a failure to meet statutory time frames is not necessarily fatal to an administrative action. The well-recognized rule that has been uniformly applied by the courts4 was stated in Fort Worth National Corp. v. Federal Savings and Loan Insurance Corp., 469 F.2d 47, 58 (5th Cir. 1972), as follows:
       A statutory time period is not mandatory unless it both expressly requires an agency or public official to act within a particular time period and specifies a consequence for failure to comply with the provision.
   Section 1818(b)(1) does not specify a consequence for failure to hold a hearing within 60 days. Furthermore, the statute does not prohibit the hearing from commencing earlier or later than 60 days at the request of the party served with the notice. Therefore, the 60-day time period is directory only.5

   [.3] Congressionally imposed time limitations may serve any of the following purposes: (1) protect the finality of administrative actions; (2) guarantee prompt adjudication of sensitive issues, which, if adjudicated after the time period, would prejudice the litigant, and (3) assure the progression of an orderly proceeding. However, when only the third purpose—assurance of an orderly proceeding—is contemplated by the statute, the time limitation is not mandatory. Diamond Match Co. v. United States, n.4, supra.
   Respondent argues that the statute would prove meaningless if it is not construed as


3 The Order contains four distinct parts—a Background section, Arguments of the Parties, Discussion and Conclusion. All are made part of this Decision.

4 See e.g., Mayor's Office of Employ. v. U.S. Dept. of Labor, 775 F.2d 196, 201 (7th Cir. 1985) (construing 29 U.S.C. § 816(b)); St. Regis Mohawk Tribe, New York v. Brock, 769 F.2d 37, 41 (2d Cir. 1985) (construing 29 U.S.C. § 817(a)); Thomas v. Barry, 729 F.2d 1469, 1470 n. 5 (D.C. Cir. 1984) (construing Home Rule Act, Pub. L. No. 93–198, 87 Stat. 774 (1973)); Marshall v. Local Union No. 1374, 558 F.2d 1354, 1357 (9th Cir. 1977) (construing 29 U.S.C. § 482(b)); Usery v. Whitin Mach. Works, Inc., 554 F.2d 498, 501 (1st Cir. 1977) (construing 19 U.S.C. § 2273(a)); Maryland Casualty Co. v. Cardillo, 99 F.2d 432, 434 (D.C. Cir. 1938) (construing 33 U.S.C. § 919); Diamond Match Co. v. United States, 181 F. Supp. 952, 958-59 (Cust. Ct. 1960) (construing 19 U.S.C. § 1516(c)); Alberta Gas Chems., Inc. v. United States, 515 F. Supp. 780, 784-86 (1981) (construing 19 U.S.C. § 160(c)(1)); United States v. Log Mountain Mining Co., 550 F. Supp. 811, 815 (E.D. Tenn. 1882) (construing 30 U.S.C. § 1268(c)).


5 Compare, 12 U.S.C. § 1842(b), which provides that "In the event of the failure of the Board [of Governors of the Federal Reserve System] to act on any application for approval [filed under this section of the Bank Holding Company Act]...within the ninety-one day period which begins on the date of submission to the Board of the complete record on that application, the application shall be deemed to have been granted." [Emphasis added.] Since section 1842(b), unlike section 1818(b)(1), specifies a sanction for failure to comply with the statutory time period, it is mandatory, whereas section 1818(b) is directory. See Tri-State Bancorp, Inc. v. Board of Gov., Fed. Res. Sys., 524 F.2d 562, 565-66 (7th Cir. 1975).

{{4-1-90 p.I-8.1}}jurisdictional and mandatory and therefore the Motion to Dismiss should be granted. The authority of case law contradicts Respondent's position.6 Simply stated, where a mandatory construction might do great injury to persons not at fault, where there is no substantial reason why the thing required by statute might not as well be done after the time prescribed as before, where there is nothing to indicate that the legislature did not so intend, the courts will deem the statute to be merely directory.7 The ALJ noted in his Order that although dismissal was not the appropriate relief, a respondent aggrieved by a failure to hold a hearing within 60 days is not without a remedy. The Respondent may have a cause of action for mandamus to compel compliance, or Respondent might argue that the time limit prevents the FDIC from any avoidable postponement in the hearing.8

   [.4] The 60-day period at issue here is to guarantee the orderly and expeditious progress of proceedings. It carries with it an equitable tolling. If Respondent could show that it was somehow prejudiced by the delay, or that the agency acted in bad faith in its failure to hold a hearing within 60-days, a motion to dismiss may be an appropriate remedy.
   The Administrative Procedures Act (APA) provides that a reviewing court shall set aside agency actions, findings and conclusions which do not follow procedures required by law and in so doing shall take into account prejudicial error. 5 U.S.C. § 706(2). By analogy to the APA, this Board would set aside an action if it could be shown that prejudicial error was involved.
   Respondent contends that it is "being forced to defend against allegations contained in a stale report of examination which is over 1 year old." Respondent alleges that it is thus prejudiced by FDIC's failure to meet the 60-day period. However, as the ALJ noted, Respondent is not prejudiced because it was on notice from the date of receipt of the Notice. The more significant time delay is likely to come in the initiation of a cease and desist proceeding following an examination of a bank. Yet, there is no time requirement that attaches to the initiation of such a proceeding.

   [.5] As previously noted, the 60 days expired while the FDIC was waiting for OPM to appoint an ALJ. Had an ALJ been appointed in a timely manner, the date of hearing presumably would have been set for no later than January 29, 1986 (60 days after Respondent received the notice). However, an ALJ was not even appointed


6 In its Request for Special Permission to Appeal, Respondent argues that "a May 5, 1986 Order by the United States District Court for the District of Columbia, in Krichner v. FDIC, Civ. No. 86-0877, provides that compliance with the time limitations in 12 U.S.C. § 1818 is not discretionary and must be strictly adhered to, which directly contradicts Judge Clark's [the ALJ's] ruling."
The Board finds the Kirchner holding to be inapposite to the case at hand. The relevant statute in Kirchner was 12 U.S.C. § 1818(f) which differs materially from 12 U.S.C. § 1818(b)(1). Section 1818(f) in pertinent part states that, "within ten days after any director...has been suspended...such director...may apply to the United States district court...for a stay of such suspension...and such court shall have jurisdiction to stay such suspension."
First, unlike the instant case, § 1818(f) addresses a situation where Respondent is appealing a final agency action. Second, there are no provisions written into the language of § 1818(f) to extend the 10-day limit. Finally, the statute explicitly confers jurisdiction upon the court if an application for a stay of suspension is filed within 10 days. Thus, it is reasonable to interpret § 1818(f) as a mandatory time limit unlike § 1818(b)(1).
The decision in United States v. Log Mountain Mining, 550 F. Supp. 815 (E.D. Tenn. 1982), is instructive on the difference between mandatory and directory time limits. The court in that case dealt with two different time provisions in the same statute (12 U.S.C. § 1268(c)), holding that one—the time for requesting a hearing—was mandatory, while the other—the time for service of the agency's notice of assessment of a money penalty—was not. The statute in that case provided that a failure to request a hearing within the time period prescribed in the statute would result in a waiver of the right to a hearing. The statute also states that a copy of a proposed penalty assessment must be served upon the person against whom it is assessed within 30 days of the issuance of the proposed assessment. Log Mountain failed to request a hearing within the prescribed time. The court held that "Defendant's failure to contest the proposed penalties through the available administrative procedures resulted in a waiver of his rights to contest the penalties ..." 550 F. Supp. at 815.
Log Mountain also contended that the penalties assessed were void because the agency had failed to inform it of the proposed penalty within 30 days of issuance. However, the court held that "[s]ince § 1268(c) does not specify any consequence for the Secretary's failure to act within 30 days, the provision is not jurisdictional. Since the provision is not jurisdictional, and the defendant has neither claimed nor shown any prejudice, we conclude that the penalties are not void." Id.

7 3 J. Sutherland, STATUTORY CONSTRUCTION, section 5816 (1937); State v. Industrial Commission, 233 Wis. 461, 289 N.W. 769 (1940).


8 The Board notes that these issues were not raised before the ALJ nor are they decided by the Board. The sole issue here today is whether a failure to comply with the 60-day period warrants the sanction of dismissal.

{{4-1-90 p.I-8.2}}by OPM until February 13, 1986. From this it is evident that FDIC did not willfully fail to comply with the 60-day period. Indeed, compliance was a practical impossibility.
   The legislative purpose of 12 U.S.C. § 1818(b) is to guarantee that the banks are operated safely and efficiently. Cease and desist orders are an effective way in which to enforce the laws governing the banks and to correct violations.9 Because of the delays currently being experienced in obtaining appointment of ALJ's by OPM, it is not unusual in this type of proceeding for a hearing to take place after the expiration of the 60 days. Moreover, delays are often requested by the parties themselves so that they may conduct discovery and prepare for the hearing more thoroughly. Respondent has not shown that it was harmed in a particular manner. There has been no showing of death or unavailability of an essential witness or physical destruction of evidence.

   [.6] The Board concludes that dismissal of this action for failure to hold a hearing within 60 days is a drastic remedy and should not be invoked. The Board also finds that Respondent has not made a sufficient showing of substantial prejudice to warrant dismissal of the action. See, e.g., U.S. Steel Corp. v. Environmental Protection Agency, 595 F.2d 207 (5th Cir. 1979)). While timely administrative hearings are beneficial to all parties involved in a cease and desist proceeding, to dismiss this case would only result in further delay, would frustrate the obvious purposes of section 1818(b)(1) and could have a harmful effect upon the public interest. In our view, the failure to act within the prescribed time does not deprive FDIC of its right to its "day in court", particularly where, as here, Respondent has not established any prejudice.

F. Conclusion

   For the reasons set forth herein, the Board (1) grants Respondent's Request For Special Permission to Appeal, and (2) denies Respondent's motion to dismiss.

ORDER

   The Board of Directors of the Federal Deposit Insurance Corporation having considered Respondent's Request for Special Permission to Appeal the ALJ's denial of its motion to dismiss, it is hereby
   ORDERED that the Motion for Special Permission to Appeal is GRANTED.
   It is further
   ORDERED that the Motion to Dismiss is DENIED.
   By direction of the Board of Directors.
   Dated at Washington, D.C., this 29th day of July, 1986.
/s/ Margaret M. Olsen
Deputy Executive Secretary

NOTICE OF ISSUANCE OF ORDER

FDIC-85-326b
   PLEASE TAKE NOTICE that the undersigned has this date issued an order denying the motion of the Respondent Bank for dismissal of these proceedings. A copy of this order is attached hereto.
   On May 5, 1986, at 1:30 in the afternoon, the undersigned intends to hold a telephone conference with counsel for the parties to discuss the scheduling of the hearing and any prehearing proceedings.
/s/ Harold R. Clark
U.S. Administrative Law Judge
1004 Savings Center Tower
411 Hamilton Boulevard
Peoria, Illinois 61602
April 30, 1986

ORDER OF ADMINISTRATIVE LAW JUDGE

FDIC-85-326b
   Counsel for the respondent bank has filed a motion to dismiss these proceedings because the hearing on the notice of charges served on the bank by the FDIC did not commence within the statutory time limit. (It is noted that the caption of the motion recites that it is based on "failure to adjudicate within statutory time limits," but the text of the motion makes it clear that counsel contends that the time limit applies to the commencement of the hearing and not to the final adjudication of a case.) The time limit involved is set forth in the Federal Deposit Insurance Act [12 USC § 18(b)(1)] and in the Rules of Practice and Procedures of the FDIC (12 CFR § 308.35). The time limit set forth is 60 days from the date of service of the notice of charges and of hearing.
   Subsequent to the motion to dismiss, the FDIC its Opposition as provided in the Rules [12 CFR 308.12(b)]. Thereupon, the


9 See S. Rep. No. 1482, 89th Cong. 2d Sess., reprinted in 1966 U.S. Code, Cong. and Ad. News 3532, 3536.
{{4-1-90 p.I-8.3}}respondent bank requested and was granted leave to file a reply to the Opposition. After the filing of this reply, the FDIC objected that the question of a dismissal with prejudice was a new issue not mentioned in the original motion, although the respondent bank apparently contends that its description of the relief sought in its motion clearly implied that the dismissal would be with prejudice. For the purposes of ruling on the motion, however, the Administrative Law Judge notes that the issues can be separated. Only if he would find that a dismissal would be appropriate, and recommend such action to the Board of Directors pursuant to 12 CFR 308.07(b)(9), need he address the question of whether his recommendation to the Board should specify that such a dismissal should be with prejudice or not. In light of the conclusion reached below, which holds that a dismissal is not appropriate, the effect of this dismissal and any further right of the FDIC to proceed in this matter is moot.

BACKGROUND

   On November 20, 1985, the Deputy Executive Secretary of the Federal Deposit Insurance Corporation issued the Notice of Charges and of Hearing. This was served on the respondent bank on or about November 27, 1985 (Motion to Dismiss at page 1). On December 4, 1985, counsel for the respondent bank sent its answer to the Executive Secretary, which was received December 9. On December 18, 1985, the Assistant General Counsel of the FDIC sent a request to the Office of Personnel Management requesting the designation of an Administrative Law Judge to preside in these proceedings. That letter indicated the FDIC's expectation that the hearing would commence on January 27, 1986, and specifically requested that "the Administrative Law Judge be made available at the earliest practical date." On February 13, 1986, the Office of Personnel Management selected the undersigned to conduct these proceedings. Notice of this designation was received by the undersigned on February 18. On February 24, 1986, the Assistant General Counsel of the FDIC transmitted the file to the undersigned. Shortly thereafter, the staff of the undersigned arranged for a telephone conference among counsel for both parties and the undersigned. This conference was held on March 7, at which time counsel for the respondent bank indicated her intention to file the motion to dismiss.

ARGUMENTS OF THE PARTIES

   The basic argument raised by counsel for the respondent bank is that the statutory 60-day time limit is a limit on the jurisdiction of the FDIC to issue cease and desist orders. She contends that, having failed to begin the hearing within 60 days of the service of the notice of charges, the FDIC has no option but to dismiss the proceedings.
   In response, the FDIC contends that the time limit is not jurisdictional, but merely directory. It is argued that, for dismissal to be appropriate, the respondent bank would have to establish that the FDIC had failed to act expeditiously in pursuing these proceedings and that the bank was prejudiced by the delay. It is not argued that the FDIC has, indeed, acted expeditiously and that the bank has failed to show that its interests have been prejudiced.
   In reply to the FDIC's Opposition, counsel for the bank argues that, even if a showing of prejudice were necessary to support its motion to dismiss, such prejudice has, indeed, been shown.
   It should be noted that among all of the cases cited by the parties, none construes the statutory provision at issue here. The staff of the undersigned has been able to locate no reported case that is precisely on point. Indeed, none of the cases reported appears to deal with a statute setting forth a time limit for the conduct of administrative proceedings by a federal agency begun on its own motion. We, therefore, have what is, in effect, a case of first impression.

DISCUSSION

   As the respondent bank points out, the statute requires that a hearing to determine whether an order to cease and desist shall issue "shall be fixed for a day not earlier than 30 days nor later than 60 days after the service" of the notice of charges [12 USC § 1818(b)(1)]. In substance, this same time limit is incorporated both into the Rules of Practice and Procedure of the FDIC and into the notice of charges in this case. The statute and the rules, however, are completely silent with respect to the breach of this time limit. No sanctions are specified. We are, therefore, faced with a significant {{4-1-90 p.I-8.4}}problem of statutory construction in order to determine the impact of this statutory time limit on the present case.
   In arguing that the time is jurisdictional, counsel for the respondent bank refers to cases involving time limits for taking an appeal from administrative action. Generally, these cases have held that failure to invoke the jurisdiction of the appropriate court to review an administrative action within a statutory time limit deprives the court of jurisdiction to act. It is argued that the same line of reasoning used by the courts in these cases would be applicable to the present situation. The Administrative Law Judge, however, is not persuaded by this argument. The cases cited deal with completed administrative actions of which independent review is being sought rather than a time limit for taking a particular step in the course of the Administrative proceedings. Similarly, counsel's argument that certain time limits imposed on actions of the International Trade Commission are equivalent in their effect to the time limit involved here (Motion to Dismiss at pages 9 through 11) is not particularly convincing. The time limit described in the law review article quoted is one which Congress imposed with respect to the completion of an administrative action. Here, the time limit is not on the adjudication, or even on the completion of the evidentiary hearing, but only on the commencement of the hearing. Similarly, the time limit here differs from any statutory time limits on the initiation of administrative proceedings.
   Congress' purpose in imposing the time limit in question here cannot have been to protect the finality of administrative action, as would be the case in a time limit for taking an appeal from an administrative action. Nor could the limit be designed to guarantee prompt adjudication of a sensitive issue, as may well be the case with the International Trade Commission limits described in the Motion to Dismiss. Similarly, this time limit could not be expected to protect a respondent from having to defend stale charges since it imposes no time limit within which the administrative action must commence and the notice of charges must be served after the allegedly unsafe or unsound banking practices have occurred. Thus, this time limit would seem to be quite different from all of the examples cited by counsel. The only purpose which the time limit in question here could conceivably be expected to serve is to provide some assurance of an orderly and expeditious progress of proceedings with respect to a cease and desist order. To require the dismissal of proceedings which involve a violation of this time limit would appear to be a disproportionate sanction in light of the relatively modest purpose being served. A dismissal, at least in the absence of a clear showing of prejudice by the respondent, would give extremely great weight to the respondent's interest in seeing the proceedings move along at a reasonable pace and very little weight to the interest of depositors which the FDIC is expected to protect. One cannot presume that Congress intended to impose such a drastic result in enacting this legislation.
   If a conclusion that violation of the time limit in question here does not require dismissal would make the statutory provision in question meaningless, it would admittedly violate sound principles of statutory construction. It is clear, however, that such is not the case here. A holding that a dismissal is not the appropriate relief for a respondent which feels aggrieved by the violation of the statutory time limit in question is not synonymous with a holding that such a respondent has no remedy for such a violation. The respondent may well have a cause of action for mandamus to compel compliance with the time limit. Moreover, a respondent might reasonably argue that the time limit prevents the FDIC from any avoidable postponement in the hearing, at least when objection is voiced. Thus, the conclusion of the undersigned herein does not suggest that the statute in question is meaningless.
   It is further noted that compliance with the time limit in this case may not have been a practical possibility for the FDIC. The time limit expired while the FDIC was awaiting the appointment of an Administrative Law Judge to hear the case. The record indicates that a rather prompt request was made of the Office of Personnel Management for such an appointment. Moreover, the Office of Personnel Management was apprised of the date the hearing was expected to commence. Nevertheless, it was more than 2 weeks after the time limit expired that the Office of Personnel Management acted. The FDIC's lack of control over the Office of Personnel Management in the designation of an Administrative Law Judge to hear this case exists for the {{4-1-90 p.I-8.5}}protection of the respondent. Thus, in the absence of a clear statutory mandate requiring the dismissal of these proceedings, it would seem quite inappropriate to penalize the FDIC because of the failure of the Office of Personnel Management to act more quickly.
   Finally, while a dismissal might be appropriate in this case if the respondent bank could show prejudice by reason of the failure to comply with the statutory time limit, the undersigned finds that there has been no showing of such prejudice. The prejudice that is alleged in the bank's memorandum of April 16, 1986, is that the bank is "being forced to defend against allegations contained in a stale report of examination which is over 1 year old" (at page 4). This, however, cannot be construed as a prejudicial impact flowing from the failure to commence the hearing in this case within 60 days of the notice of charges. While one might complain that delay in initiating the proceedings for a cease and desist order could cause problems for a respondent by calling on it to investigate events in the distant past and collect evidence with respect thereto, the service on the respondent of the notice of charges would place a limit on the harm caused the respondent in this regard. Once apprised of the charges, the bank was in a position to begin its investigation and to collect its evidence in its own defense. While it is possible to conceive of unusual events occurring between the service of the notice of charges and the commencement of a hearing which could cause a respondent to suffer prejudice by reason of a delay such as we have here—events such as the death or unavailability of an essential witness or a physical catastrophe which caused the loss of documentary evidence—no such event is suggested here. Since whatever problems the bank may have in presenting its case have not been shown to have any significant causal connection to the violation of the statutory time limit, no prejudice can be found.

CONCLUSION

   In view of the foregoing, IT IS HEREBY ORDERED that the motion of the respondent bank to dismiss these proceedings is OVERRULED.
/s/ Harold R. Clark
U. S. Administrative Law Judge
1004 Savings Center Tower
411 Hamilton Boulevard
Peoria, Illinois 61602
April 30, 1986

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