Fbme Bank Ltd. v. Lew
142 F. Supp. 3d 70
D.D.C.2015Background
- FinCEN issued a Final Rule finding FBME Bank "of primary money laundering concern" and prohibiting U.S. financial institutions from maintaining correspondent accounts for FBME; the Rule was preliminarily enjoined by the district court on August 27, 2015.
- The court concluded FBME was likely to succeed on APA claims that FinCEN failed to provide adequate notice of unclassified information used in the rulemaking and failed to consider obvious, viable alternatives to the imposed sanction.
- After the injunction, FinCEN moved for a voluntary remand and stay so it could reopen the rulemaking, disclose unclassified, non-privileged materials, solicit comments, and reconsider alternatives; FBME opposed and sought expedited final judgment.
- The court reviewed the standard for voluntary remand, noting courts favor allowing agencies to cure procedural defects and will consider prejudice to opposing parties.
- The court found FinCEN identified substantial and legitimate procedural concerns, that remand would conserve judicial resources, and that FBME would not be unduly prejudiced because the Rule remains enjoined.
- The court granted the motion: FinCEN must publish notice to reopen the Final Rule by Nov. 30, 2015; set a comments deadline within two months of that notice; decide within two months after comments close; and the case is stayed pending remand proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court should grant FinCEN's motion for voluntary remand and stay | FBME argued the court should deny remand, proceed to expedited summary judgment, and enter final judgment | FinCEN argued remand is appropriate to correct procedural deficiencies (notice-and-comment and consideration of alternatives) and conserve resources | Court granted voluntary remand and stayed proceedings pending agency action |
| Whether remand would deprive FBME of judicial review or allow FinCEN to evade judgment | FBME argued remand could destroy the court’s jurisdiction or let the agency evade review; sought vacatur of the Rule | FinCEN agreed the court would retain jurisdiction, the Rule remains enjoined, and agency seeks temporary stay only | Court found no loss of jurisdiction or prejudice; remand permitted while injunction remains in place |
| Whether allowing remand after a preliminary injunction is inappropriate or sets a bad precedent | FBME argued remand here is novel/dangerous and would prevent precedent development | FinCEN noted courts permit remand to cure procedural defects; this is proper corrective action | Court rejected the precedent argument and held remand appropriate and consistent with precedent |
| Whether FinCEN must vacate the Rule during remand | FBME sought vacatur; argued agency’s proposal to leave the Rule intact is insufficient | FinCEN noted the Rule is already enjoined and will remain so; it will revisit the Rule on remand | Court held vacatur unnecessary because injunction preserves FBME’s position and remand is adequate to address defects |
Key Cases Cited
- Ethyl Corp. v. Browner, 989 F.2d 522 (D.C. Cir. 1993) (courts prefer agencies be allowed to cure their own procedural errors via remand)
- Citizens Against Pellissippi Parkway Extension, Inc. v. Mineta, 375 F.3d 412 (6th Cir. 2004) (district court abused discretion in denying voluntary remand after preliminary injunction)
- Carpenters Indus. Council v. Salazar, 734 F. Supp. 2d 126 (D.D.C. 2010) (voluntary remand appropriate when agency raises substantial and legitimate concerns)
- Chlorine Chemistry Council v. EPA, 206 F.3d 1286 (D.C. Cir. 2000) (denial of remand appropriate when agency offers no plan to vacate or relieve plaintiff from rule)
- Anchor Line Ltd. v. Fed. Mar. Comm’n, 299 F.2d 124 (D.C. Cir. 1962) (agency seeking reconsideration should move to remand or hold case in abeyance)
- Sierra Club v. Antwerp, 560 F. Supp. 2d 21 (D.D.C. 2008) (courts may remand even absent new evidence when agency shows legitimate concerns)