Investment Company Institute v. Board of Governors of the Federal Reserve System

100; U.S.Aрp.D.C. at repair.” cedure 271. F.2d at complaint below made no

Appellant inadequate, were

statutory procedures here, obtained not be could

relief extraordinary circum- other statutory mode pertained. The

stances adequately. served would have court. wrong Forge was

Standard

Affirmed.

WILKEY, Judge: Circuit dissent. respectfully

I COMPANY

INVESTMENT

INSTITUTE, Appellant, OF the FED- OF

BOARD GOVERNORS et al. SYSTEM

ERAL RESERVE 75-1822.

No. Appeals, Court of

United States Circuit.

District of Columbia Sept.

Argued Jan.

Decided Reserve Board

ed the Federal Compa- Holding the Bank amended, Act of ny 1843(c)(8) (1970). Appellant claims that ruling violate sections Banking (popular- Act of 21 of the Glass-Steagall Act), 12 ly known as the and, result, (1970), as a U.S.C. §§ authority under section exceed the Board’s Holding Company Act. 4(c)(8) of the Bank Court, memo- by District order and The July dis- opinion randum dated subject for lack of complaint missed the holding that section jurisdiction, matter Act, Company Holding the Bank nine of (1970) jurisdic- vests —which D.C., Vieth, with Washington, Duane G. courts of to review tion in the Jones and Leonard B. Si- James W. whom provides Board “orders” under Act — D.C., brief, mon, Washington, were on the obtaining for review of a exclusive means appellant. for by compre- regulation supported Atty., Dept, of Steinmeyer, J. Anthony record. For the rea- administrative hensive Justice, D.C., Washington, with whom Rex hereinafter, forth we affirm. set sons Gen., Silbert, Lee, Atty. Asst. Earl J. U. E. However, juris- since this court’s exclusive Glancz, Atty., Dept, Atty., and Ronald R. S. not of clearly established as diction D.C., Justice, on the Washington, were of considered, being appellant suit was time brief, appellees. for estopped reasserting from its claim in a deny of Board should McGOWAN, LEYENTHAL and Before petition by appellant future to amend or ROBB, Judges. Circuit repeal the rules at issue. Judge for the court Circuit Opinion I McGOWAN. Holding Company Act of 1956 The concurring opinion by Separaté Circuit prohibits holding companies bank generally

Judge LEVENTHAL. companies owning shares in which are from 1843(a) Sec- banks. U.S.C. § McGOWAN, Judge. Circuit exception provides of the Act tion Court, appeal from the District In this general ban for to this agаin upon once called to determine are of company shares of the activities litigant appropri- has selected an whether Board after which [Federal Reserve] an adminis- judicial forum for review of ate opportunity due notice providing a statute regulation, given trative (by regulation) order or has determined “orders” in the direct review banking closely so related to or to be appeals. Appellant Investment courts of controlling be a managing banks as to Institute, Company a national association proper incident thereto. companies (commonly investment open-end 1843(c)(8)(1970). originally funds”), brought this to as “mutual 12 U.S.C. § referred Court, seeking declar- enacted version of this section allowed action in District “closely injunctive against regula- Board to make the related” deter- atory and relief order, case-by-case only by on a interpretative ruling, 12 C.F.R. mination tion and basis, hearing. adjudicatory after a full 225.4(a)(5)(H), promulgat- 225.125 §§ 240, 4(c)(6),1 decision 9,1956, Supreme over a recent May C. Act judicial re- Correspondingly, Company in Investment Institute v. Court Stat. 9, provid- section provision Camp, U.S. view “orders” in the review of Board ed which the Court had L.Ed.2d A add- 1970 amendment appeals. portions courts down those struck 4(c)(8) empower- language to section ed promulgated by Comptroller the Cur- regula- “by to act order or ing the Board rency purported to authorize banks 9 of tion,” change made no but operate establish collective invest- the Act.3 virtually indistinguishable funds ment id. mutual funds. See conventional 20, 1971, its May the Board exercised On 1091. The Court had found those promulgat- rule-making authority by new 16 of provisions to be in violation of section designated sec- (originally section 225.4 which, Glass-Steagall generally Y, 222.4) Regulation 12 C.F.R. buy- forbids a national bank from 225.4, speaking, to activities deemed listing several § own or banking. of stock “for its account” under- “closely to One related” be stock, any or as writing was: issue of securities activities these Act, of 21 the as section of well or financial ad- Acting as investment (5) company “engaged in the prohibits advisory viser, (i) serving as the including issuing, underwriting, selling, or of business or a estate mortgage real company for distributing” engage the securities to (ii) furnishing eco- trust and investment * * * banking. in the business of See information; time same or financial nomic 24, 378(a)(1) (1970). 12 U.S.C. §§ omitted). Fed.Reg. (1971) (footnote 10777 36 consideration, the Board Upon further noted, however, “[ajcting that as Board The Camp, holding that the in ICI v. determined open-end to invest- adviser an investment expansion did foreclose of invest- company regarded ... is not ment Thus, August on ment adviser activities. description the of this . as within 25,1971, following the (footnote the rulemak- regulation). id. to activity.” See Board — 4 of by section ing procedures prescribed caveat reflected the Board’s concern This court, lumbia, filing thirty by See within The was renumbered 1966. the 1. section 89-485, July order, entry of Pub.L. No. 80 days § Act of the Board’s the 239. Stat. praying petition of the Board the order copy be aside. A of such shall be set 91-607, 1970, Pub.L. No. Act of December 2. to the Board the transmitted forthwith I, The 1970 amend- 84 Stat. 1765. § Title thereupon the Board of and clerk the also established a second criterion which ment file in the court the record made before shall holding compa- be before a bank must satisfied Board, provided in of section 2112 as the may company engaging ny acquire shares in a filing Upon such 28. of Title activities, “public non-banking the so-called affirm, jurisdiction to set shall have Regardless of whether benefits” test. aside, modify the of the or order Board “closely related” criterion rules on the Board require to Board take such action with to adjudications, regulation or individual regard matter under review as to the “public issue must be resolved on benefits” findings proper. case-by-case of the deems basis. facts, supported by sub- as to the Board analysis requirements of For extensive evidence, shall be conclusive. Independent 4(c)(8), stantial Bankers Ass’n see section Governors, (1970). The version section § 12 U.S.C. 1848 v. Board of 170 (1975), granted aggrieved party an F.2d 1206 and National Courier in 1956 516 9 enacted Governors, days v. Board of Ass’n 301, which a to an order within 9, 1956, May brought. F.2d Act of C. be could A amendment reduced 138. 70 Stat. § currently provides: Section 9 filing days. current 30 Act the time aggrieved by Any party an order 1966, supra July 10. A 1958 § note "'of may chapter re- obtain a under changes im- involved amendment order the United States Court view such litigation. Au- instant Act of material Appeals circuit wherein such within 28, 1958, 85-791, Stat. business, gust § Pub.L. No. principal place party or has its Appeals in the District of Co- the Court approved following activity Administrative Procedure as “closely comment on a public propos- 553—invited related” to banking: § Regulation to amend 225.4 of Y to al (5) Acting investment or as financial ad- encompass following: viser, including (i) advisory serving as the (5) Acting as investment or financial ad- company mortgage for a or real estate viser, including (i) serving trust; advisory- as the (ii) serving investment as invest- mortgage a real company adviser, for a estate 2(a)(20) as defined in ment trust; (ii) serving as invest- investment Company Investment Act of company ment adviser to an investment company registered an investment Act; under the registered Compa- (iii) Investment furnishing economic ; (iii) furnishing information; ny eco- or financial nomic or financial information. Fed.Reg. (1971) (footnote omit- corrected, Fed.Reg. 36 ted) (emphasis added).4 By order of the Fed.Reg. (1971) (emphasis supplied). date, Board of Governors on the same Numerous written comments were received issued, interpretative ruling was expressing response proposed to this notice of rule- scope the Board’s view on the of the amend- making. Appellant filed two memoranda regulation in light ed of the restrictions arguing would allow imposed by Glass-Steagall Act and the create, holding companies sponsor, bank Supreme Camp. Court’s decision in ICI v. promote manage mutual- funds in viola- Fed.Reg. See 37 now codified at tion of sections 16 and 21 of the Glass-Stea- 12 C.F.R. 225.125 In addition to § Act, gall Camp, as construed in ICI v. and prohibiting practices several which appropriate therefore would not be an exer- directly Glass-Steagall contravene the the Board’s authority cise of under section ruling established a distinctiоn between Holding Company of the Bank Act. and “open-end” “closed-end” investment addition, appellant requested pub- that a companies.5 Camp The Board read ICI v. hearing proposed lic be held to consider the only to holding companies bar bank request granted, This amendment. sponsoring, organizing, controlling open- or hearing place and a took on November companies (i. e., investment end mutual appellant with and other interested funds): participating. parties (e) recognizes The Board presently that 20, 1972, January organized, spon On the Board entered most mutual funds are amending Regulation Y, managed an order effective and sored investment advis 1, 1971, February only slight with they modifi- ers with which are affiliated and in language proposal cation from the ad- that their securities are distributed to the hearing. regulation at the public by dressed The new such affiliated investment ad Subsequent regulation 225.4(a)(5) (1976) (footnotes amendments of the are 12 C.F.R. omit- § 225.4(a)(5) currently at issue here. Section not ted). following covers activities: distinguished “open-end” 5. The Board invest- (5) Acting investment as or financial advis- (mutual companies funds) ment and “closed- (i) serving advisory extent of er to the as the companies as follows: end” investment company mortgage for a or real estate invest- Briefly, a mutual fund is an investment com- trust; (ii) serving ment as investment advis- which, typically, continuously pany en- er, 2(a)(20) in section as defined of the In- gaged in the issuance its shares and stands Company Act vestment to an invest- ready registered Act; at time to redeem the securities as company ment under issuer; (iii) providing portfolio to it is the a closed-end investment to invest- advice person; (iv) furnishing general company typically other eco- ment does not issue advice, generаl and organization nomic information eco- except shares after its initial forecasting nomic statistical services and in- infrequent ready intervals and does not stand studies, dustry (v) providing financial to redeem its shares. governments, advice to State and local such 225.125(c) (1976). § C.F.R. respect as with to the issuance of their secu- rities; been, being, pursued were there bank visers, or affiliates or subsidiaries (i) However, companies holding the Board believes regulation, of. per do not Glass-Steagall provisions as advisers to compa- primarily investment perform holding company purporting bank closed-end, to be mit nies and re- functions, (ii) is not it neces such on the all matter. quested gall form (f)In gage sale ing company sary for a bank does aPPly ily trol S.U. long a mutual fund. and distribution effectively the Board’s Supreme frequently engaged in all as such provisions, closed-end such believe functions in Court, companies sponsor, holding company to opinion, the described investment as However, the Board of securities. forbid interpreted by the such restrictions organize are the Glass-Stea order to en a bank hold companies issuance, activity. primar or con ^[*] per ^[*] Act. appellant’s section 9 decision tion. Board, eration and Board’s after the denial of its suit In a letter dated March 225.4(a)(5)(H), of the amended Instead, Appellant without the district original in a court arguments rescission, on May hearing, responded did promulgation Bank not regulation, and denied the 8, 1974, seek review of this appellant Holding Company interpretative challenging 8, 1974, for reconsid- pursuant two months 12 C.F.R. full to peti- por- rul- 225.125, allowing ing, C.F.R. bank hold- (f) (1976) (emphasis 225.125(e), 12 C.F.R. § ing companies serve as advis- investment any other appellant nor Neither supplied). companies. registered investment еrs in a judicial review party sought interested amended II ruling thir- within the interpretative or the The District Court’s dismissal for lack set forth ty-day limit major was based on two premis- Act, see note 3 Holding Company first, appropriate ap- that an es: supra. would have had under sec- peals appellant sub- December On tion 9 of the Holding Company Bank Act petition to the Board a for reconsid- mitted review the inter- amended and of 225.- rescission eration and ruling, appellant had filed a pretative if Y, portion of Regulation the 4(a)(5)(H) of second, court; timely petition in that regulation allowing bank hold- the amended statutory procedure special the review that companies to serve as investment advis- confers exclusive on the court In registered companies. investment ers to appeals applicable. in cases where it is of petition, a memоrandum attached to in propositions address each of these We the Board’s distinction appellant questioned turn. invest- open-end and closed-end between jurisdictional law Although the had companies its conten- and reiterated ment agen- fully crystallized of the time of the regulation permits that amended tion here, reasonably we are cy action at issue 21 of forbidden sections activities challenged regulations that certain Glass-Steagall sup- Appellant ‍‌​‌​​​​​​‌​‌​‌‌​‌‌​​‌​‌‌‌​‌​‌‌‌‌‌‌​‌​‌​​‌​‌​​‌‌​‍Act. been reviewable this ap- have its a factual ported memorandum with ripeness con- assuming for the moment that documenting the al- affidavit pendix and had fact would not have been bar.6 activities that siderations legedly unlawful Moreover, 185, (1974). jurisdictional if a ripeness Va.L.Rev. is 6. To the extent regulations challenge appeals prerequisite, to the did not become we that a court assume statutory filing “jurisdiction” ripe limit might time for lacked under within have legit- appeals, Holding Company one or- Note, imately regulations question promulgating regulations. review of the how See der However, as achieved. Administrative have been Review Federal could ever Jurisdiction to below, explain appropriate Appeals, we think the Court or Action: District Court party 980, remedy (1975). aggrieved in such circum- See Ver- for an 990-91 also Harv.L.Rev. kuil, Rulemaking, reconsider- stances is Judicial Review Informal 1194, 407, 62 S.Ct. 86 L.Ed. 1563 316 U.S. under event, no doubt that we have Although (1942). the Court did not ex- the court this circuit law current type of reject reasoning ad- pressly reg- to review such has Pipe Line, in United Gas vanced Storer review is timely petition for aif ulations Broadcasting illustrates a critical flaw in filed.7 analysis: a factual in the dis- time, this circuit entertained At one unnecessary judicial court trict аfter in promulgated view upon the administrative is based record. not reviewable rulemaking were formal Goodman, Currie & Judicial Review of jurisdic special under the courts Quest Action: Federal Administrative of “or providing for review statutes tional 1, Forum, 75 Optimum Colum.L.Rev. expressing po leading case ders.” 6; Verkuil, Note, supra supra note FPC, Pipe Line Co. v. Gas was United sition 6, Nathanson, at But note 989-90. see 796, cert. Probing the Mind of the Administrator: denied, 95 L.Ed. 340 U.S. 71 S.Ct. Hearing Variations and Standards of Judi- interpreted in which the court Review Under the Administrative Pro- cial Act, 15 19(b) of the Natural Gas U.S.C. § Statutes, Act and Other Federal cedure contemplate “review of a deci 717r(b), to (1975) 754-56 & n. 172 Colum.L.Rev. quasi- presented in on evidence sion based (suggesting contemplated that APA resolu- Commission,” before the proceeding judicial district factual issues (footnote F.2d at 798 omit id. at arising to informal rulemak- Congressional recog “evidеnce ted), and to Moreover, ing). if the administrative rec- has no intelli appellate nition review, requiring ord forms the basis for decision unless a subordinate gible basis go petitioners challenging regulations fully encompass made a record tribunal first to the district court results in unneces- issues,” 181 F.2d at 799. id. at ing the sary delay expense, see Currie & Good- CAB, Accord, Airways, Inc. v. g., e. Arrow 52-53; Verkuil, man, supra (constru 182 F.2d 705 reviewing undesirable bifurcation of the denied, 646), cert. 340 U.S. ing 49 function between the district courts and the (1950). 95 L.Ed. Jaffe, L. Judicial appeals, courts of see Con- Action 420—22 trol Administrative Nevertheless, in United States Storer Co., Broadcasting U.S. Supreme Court L.Ed. Although persist reading some courts jurisdiction in the court of covering special found review statutes “orders” as “orders,” see, g., addressed to encompassing regulations, a statute e. amending multiple SEC, (3d its FCC order Exch. v. 485 F.2d 718 review an PBW Stock denied, 969, regulations 1973), after informal rule- 416 94 ownership cert. U.S. Cir. 1992, (1974), gener also Frozen Food 40 L.Ed.2d 558 the making proceedings. See S.Ct. States, 40, Pipe approach 351 U.S. 76 taken United Gas Line Express v. United al 569, longer good 910 law in this circuit. In 100 L.Ed. Columbia is no S.Ct. Fund, States, Inc. v. United Environmental Defense Inc. v. Har- Broadcasting System, juris- regulations required review have a denial of ation of the that time would —with appeals under 9—when section suffi- court diction in the court reinstatement to the utilization information as actual cient District would suit in the Court not neces- authority given by regu- being the the made of contrary, sarily the answer. To we be the developed. See Section III lations has been underlying policies section 9 of believe that the infra. Holding Company Act can best be Bank the case, regardless of what out in this carried case, light it is our resolution of this 1972, by requiring ap- have occurred complete certainty unnecessary resolve with pellant the Board for reconsidera- question hypothetical of whether we would issue, at with subse- of the tion timely petition accepted if a had review have dispo- quent this court of the Board’s review in following regula- promulgation of the been filed petition. See Section IV infra. sition thought the law at 1972. Even if we tion in

1277 139-40; 391, U.S.App.D.C. F.2d 1093 F.2d 156 din, 428 469 at at U.S.App.D.C. 138 Bazelon, Judge 195, the author of (1970), 479 F.2d at 915-16. theAs court 194 — opinion, Pipe noted Profes- Line United Gas Deutsche Lufthansa observed: and, criticism, see L. Jaffe sor Jaffe’s availability of a is the record for re- It declared speaking holding quasi judi- not of a view and begin- authority its line of “[wjhatever [the jurisdiction- hearing which is now the cial Pipe Line’s continu- ning with United Gas ] touchstone. al vitality,” applicable its rationale is 195, at 479 F.2d at 916. Id. fact-finding expertise agency’s where if further to the treatment of cases under a remand Our dictates necessary, regardless development is Holding Company factual 9 of the Bаnk reviewing district of whether followed the standard established ‍‌​‌​​​​​​‌​‌​‌‌​‌‌​​‌​‌‌‌​‌​‌‌‌‌‌‌​‌​‌​​‌​‌​​‌‌​‍appeals. It ob- was court or a Corp. Deutsche Lufthansa and Mobil Oil “there in such circumstances served that In National Association of Insurance inject no reason to another seems to be Agents Governors, U.S.App. v. Board 160 at & process.” into See id. 396-397 tribunal 144, (1974), 489 F.2d 1268 D.C. found n. F.2d at 1098-99 & 27. 428 n. unripe for review a to an inter Line was further under Pipe construing Gas pretative ruling regula United FPC, Chicago City v. 147 U.S. mined in which identified certain activities tion F.2d 731 cert. de App.D.C. 458 “closely banking. interpre related” nied, U.S. ruling promulgated had been without tative (1972), in de L.Ed.2d hearing, year notice or more than a jurisdiction, that it had termined issued. underlying been had construed special review statute same Board itself had characterized Since Line, to Pipe regula Gas United “provisional interpretative ruling as evidentiary promulgated after formal tion nature,” concluded the court tentative Federal Power Commis hearings before the exempt rule was from the notice & 458 F.2d at at 321-322 n. sion. Id. hearing requirements of section distinguished n. The court & 45. 740-41 Holding Company Act. This Pipe Line on the basis of Gas United juris in turn created a serious circumstance evidentiary presently comprehensive record that sec question: the court noted dictional it, whether United questioned but before contemplates “explicitly review of at still viable all and Pipe Line was Gas Board,” made before the and there record is a available that “there record noted no whatsoever administrative record evidentiary hearings no even when ruling. See supporting interpretative F.2d held.” Id. at 322 n. have at F.2d the other id. On original), citing (emphasis at 741 n. hand, ripe regulation supported by where Ass’n, Inc. Parts & Accessories Automotive record has been chal an administrative 200, 206, F.2d Boyd, v. exercise lengеd, we have not hesitated to (1968). Finally, Corp. in Mobil Oil Thus, As in National Courier jurisdiction. FPC, 469 F.2d 130 v. Governors, Board of U.S. sociation denied, 412 (1972), cert. U.S. App.D.C. we re (1973), and Deutsche 37 L.Ed.2d argument that section 9 does jected the CAB, Aktiengesellschaft v. Lufthansa to a encompass review of an amendment (1973), F.2d Respondent Board regulation, see Brief jurisdiction to review informal court found at 46 National Courier n. of Governors re rulemaking providing statutes Association, the merits supra, and reached appeals, view of “orders” in courts order, promulgated after informal an Pipe result limited the United Gas Line Y Regulation rulemaking, amending cannot take which review to situations ruling on the setting interpretative forth an place on the basis the administrative 128-129, amendment. scope record. See 152 2(a) interpretative 2(b) than in of the § § Robinson- sup ruling at issue in the instant case are Act). Patman This is especiаlly given so of infor ported by eight-volume an record phrase “by fact that the regu- order or rulemaking before the Board. The is mal lation” was enacted at a different time than statutory appel construction which sue operative language in section 9. As raise, ripe, clearly could be resolved lants parties acknowledge, legislative both of the record. on the basis administrative history of the 1970 amendments is com- here, question like the rules in The rules pletely respect silent with to the forum in Courier, supra, National could therefore which Board would be reviewa- challenged through timely peti have light In predominant ble. of the case law tion in this court under section 9 of the construing jurisdictional statutes authoriz- Holding Company Act. ing review of “orders” to include review of regulations, we must assume that Con- analysis believe this embodies We gress’s failure amend seсtion 9 was either proper construction of the word “order” premised inadvertent upon the belief Indeed, in section 9. we note that the developing that case law made an en- actions, styled its in promulgating Board larging amendment unnecessary. regulations, However, as “orders.” turn, jurisdiction think should one do other, or the on way the label which the HI employ. Phillips chooses to Board Cf. Appellant contends, correctly, quite Exchange Commission, Securities precedents that the in this circuit establish view, (2d 1948). F.2d Cir. In our ing jurisdiction to review regula purposes underlying section 9 will best tions, g., e. Association, National Courier interpreted if “order” is to mean be served Lufthansa, supra; Deutsche supra; City of any agency capable action of review on the Chicago, supra, explicitly do not focus on of the administrative record. basis question of whether the court of ap recognize We that the word “order” peals’ is exclusive. While this meaning phrase a narrower in the “by strengthens appellant’s fact plea special regulation” order or in section of the relief, infra, see section IV we are con namely, a following Act: Board decision that allowing .aggrieved vinced parties the adjudicatory hearing. recognize We also option of choosing between review in the the Administrative Procedure Act district court and review in the court of 2(d), 551(6) defines an (1970),. appeals would policies contravene the un part “order” “the whole or a of a final derlying section 9 of the Bank Holding disposition . . . of an in a Company hold, therefore, Act. ” We rulemaking. matter other than . . . where cases section 9 confers on comparison But as a of these latter two appeals, jurisdiction the court of in the dis suggests, itsеlf the word

definitions “order” precluded. trict frequently meanings has several utilized vary scope, and it is therefore Whitney National Bank v. Bank of surprising Orleans, different sections of the New 379 U.S.

same statute use the word differ- L.Ed.2d 386 Supreme Court.held ways. Anheuser-Busch, Inc., ent Cf. FTC v. that a Board Holding order under the Bank 536, 542, 549, 363 U.S. 4 Company following an adjudicatory remand, L.Ed.2d 1385 on hearing, only reviewable in the court of (7th 1961) (interpreting “price Cir. brought and dismissed a suit discrimination” to have a narrower mean- district court.8 The Court reasoned as fol- approved Comptroller Currency. However, 8. The Federal Reserve Board had three holding company’s plan organize bank a new banks state suit in the district court to begin operations, enjoin Comptroller issuing national bank. To the new the certifi- authority month, bank needed a certificate of from the Within the same cate. two of these

1279 Pitts, see, g., Camp 138, Holding e. v. 411 first, U.S. passing in lows: 142-143, 1241, Act, 36 rejected 93 S.Ct. L.Ed.2d 106 Congress expressly ‍‌​‌​​​​​​‌​‌​‌‌​‌‌​​‌​‌‌‌​‌​‌‌‌‌‌‌​‌​‌​​‌​‌​​‌‌​‍Company Jaffe, 422; supra L. at (1973). See Currie novo review of Board for de proposal a 52; Goodman, courts; supra Verkuil, second, supra at & district decisions 200, 204. Congress provided statutory re- has “where designed permit agency to procedures view Appellant places heavy reliance on R. A. brought on expertise particu- to be to bear SEC, v. U.S.App.D.C. & Co. 112 Holman 43 , procedures those are to be problems, lar 127, denied, 911, cert. F.2d 370 299 U.S. 82 exclusive”; third, allowing the and district 1257, (1962). 8 L.Ed.2d 404 to demon S.Ct. jurisdiction concurrent court to exercise proposition that concurrent dis strate “unnecessary duplication would result over jurisdiction agency regula trict court conflicting litigation,” as well as by is not foreclosed review statutes tions inherent in the of differ- prospect confusion jurisdiction establishing over “orders” in ent recоrds and standards of review. See Holman, appeals. R. A. court of 420-422, 85 at 557. id. at S.Ct. jurisdiction in the found district court court controlling eligibility review an SEC rule jurisdiction reasons for These exclusive types certain of securities. underwrite equal force apply with to review of Board However, expressly indicated re- regulations. proposal novo de juris not have had appeals court in the view of Board decisions district 46, upon id. at direct review. See diction bill, 6227, was embodied H.R. courts case, any nor F.2d at 130. Neither which Cong., specifi- 84th 1st Sess. e. by appellant, g., the other cases cited cally encompassed any “regulation” or Gardner, 387 Laboratories v. U.S. Abbott “order,” “rule,” “adjudica- as well as 1507, (1967); L.Ed.2d 681 tion,” “determination,” “other action.” or Council, Inc. v. Resources Defense Natural (1955). Cong.Rec. 8187 This See 101 version Train, F.2d rejected by the of the bill was full Con- Shaffer, U.S.App. (1975); O’Donnell рassing Compare the House. gress, F.2d National Pe D.C. May c. 70 Stat. Act of FTC, Refiners Association v. troleum Cong.Rec. with 101 cert. Moreover, the by jurisdic- standard denied, U.S. appeals tion in the court of defined— particular (1974), holds that a L.Ed.2d proper review is on the basis of the whether an action could have regula- administrative record —ensures that appeals in either the court brought if, tions will be reviewable in that court district court. only if, expertise may agency’s properly develop upon Indeed, be relied factual issues. impressive authority line of that, By hypothesis, factual the dis- contrary proposition even supports unnecessary court would be in such expressly trict conferred Congress where Allowing special circumstances. the district courts review jurisdiction, stat- exclusive particular concurrent could in a vesting jurisdiction to exercise ute delаy, original jurisdiction only unnecessary lead off courts’ therefore other cuts special statute. improper by result in consideration cases covered all record, See, g., Macauley e. v. Waterman S.S. of factors outside the administrative timely petition in the filed the Su- banks the district the suit started Holding by under section of the Bank preme held that the issues raised Court Company seeking direct review of the cognizable only Board, banks were state later, Several months the dis- actions. Board’s ap- exclusive in the court with permanent injunction court entered trict against peals to the Board’s determination. The review original Comptroller suit notice, however, took Court acting the state banks. Without pending in the court of direct upon for direct review of the parties to assert their claims invited the action, affirmed Board’s through medium. judgment. Upon court’s the distriсt 1280 540, 543-545, 712,

Corp., Litigants 327 U.S. who S.Ct. file suit in the district (1946); L.Ed. 839 E. I. duPont de court, Nemours when exclusive lies in the Train, 1136, v. 1, Co. 528 F.2d & 1137 & n. may not discover their (4th 1975), granted, Cir. cert. 425 U.S. 30-day mistake until after the limit has (1976); L.Ed.2d 174 may expired deprived therefore be Industries, Seaborg, UMC Inc. v. 439 F.2d to any opportunity challenge an pro order (9th 1971); Cir. United v. States improper But, mulgating regulations. at Co., Ry. (4th 380 F.2d Southern 53-54 on, least from now this situation need never Note, 1967); supra note Cir. at 982-983 & If doubt as to the proper arise. forum n. 17. The Administrative Procedure Act exists, careful counsel should file suit in provides itself proceed form of “[t]he appeals the court of both and the district judicial special review is the statuto or, since there would be no time bar proceeding review relevant to ry the sub proper court, to a action in the district statute,” ject specified by matter in a court bring only suit appeals. the court of except where such review would bе inade suggestion hardly unprecedented; This is quate. 10(b), APA (1970); U.S.C. § the plaintiffs Whitney National Bank v. Note, supra see note at 983. Orleans, supra, Bank of New were able to protect their rights by following the double-

Appellant argues closing also filing procedure. challenges the district courts to against reg ulations work an undue burden on Furthermore, standpoint aggrieved parties, and therefore Congress judicial efficiency, the court appeals could not have intended section 9 to estab opportunity pass should have the first to on lish exclusive over jurisdictional question. Under the stan appeals. in the courts of This is a substan discussed, dard have the vast majority— argument, tial since section 9 requires that if not all—of the pursuant Board’s actions petitions be filed within 30 days after the Holding to of the Bank Com agency being questioned, action see note 3 pany only Act will be reviewаble supra, days provide only very short appeals, if they sufficiently courts of are potential time in which a complainant can judicial And, final anywhere.9 precise ascertain use which will be made a case should arise in which the court of authority regulation. contained in a appeals determines that review cannot take 30-day limit important pur serves an place on the basis of the administrative pose, it brings however: some measure of record, jurisdiction and, it can deny in ef finality to determinations, thereby fect, remand the case to the district court. conserving administrative resources and Cf. Administrative Orders Review protecting the reliance interests of holding 2347(b)(3)(1970) (authorizing companies applications whose engage proceedings transfer non-banking approved. activities have been a district court when hearing before the S.Rep.No.1095, pt. 84th Cong., 2d agency required by is not genuine law and a S.Rep.No.1179, Sess. 87th Cong., of material presented), issue fact dis (1966). Moreover, 2d Sess. hope as we Note, supra cussed in note at 999 & n. clear, problems make raised the 30- day require limit do not litigants be given option of bringing challenges to Where right regulations in the district courts. days within 30 promulgation See, g., FPC, Corp. opment. See, g., Mobil e. Oil e. Portland Cement Ass’n v. Ruckelshaus, U.S.App.D.C. 308, 469 F.2d at 140. Even if adequately denied, factual issues have not been re- cert. 417 U.S. presented solved (1974); Note, the record to the supra 41 L.Ed.2d 226 note generally Goodman, review on the basis of ‍‌​‌​​​​​​‌​‌​‌‌​‌‌​​‌​‌‌‌​‌​‌‌‌‌‌‌​‌​‌​​‌​‌​​‌‌​‍the administrative rec- at 990. See Currie & proper. denying still supra (discussing ord be Rather than at 49-50 various means for jurisdiction, resolving the court of can remand factual issues without a court). the case to the for further factual devel- the district 706(2)(A) provide 10(e), does an adе 5 regulation a not law.” APA U.S.C. § of § remedy, may be quate see, alternative means g., Regula (1970); e. Nader Nuclear v. bring a this court. to claim before Commission, 261, utilized 255, 168 tory U.S.App.D.C. 10(b), 5 Administrative Procedure § Cf. 1045, procedure F.2d 1051 (1975). 513 This if a example, 703 For § the challenge to superior delayed is far to ripe does not for review regulation become to regulation in a district court: in addition an wait days, aggrieved party 30 can within layer judicial of avoiding unnecessary an regu as to the until sufficient information finality ensuring degree of review and some available, petition concrete effect is lation’s should have respect to claims which with regula of the Board for reconsideration the pro initial days within 30 after been raised information, the of on basis the new regulation, mulgation of the the and seek review of the Board’s decision issue is expertise with on the matters in court. Administrative Procedure Act this evaluate opportunity the first to afforded see, 4(d), 553(e) (1970); g., 5 U.S.C. e. § the implications the of new information.10 Organization Mari National for Reform of regulation might if a have been Even Ingersoll, Laws v. juana U.S.App.D.C. 162 days 30 ripe for within technically review AEC, 67, (1974); Gage 654 497 F.2d 156 promulgation, its new information after U.S.App.D.C. 239 & n. 479 F.2d the Board of might justify reconsideration (1973); Kesinger & n. 27 v. Uni above regulation. procedure The outlined Airlines, Inc., versal 474 F.2d as situations accommodate these should Music, 1973); Inc. v. (6th Cir. Functional problem more well.11 A delicate FCC, U.S.App.D.C. 34, 36-37 n. chal- aggrieved party arise if an wants denied, n. 545-46 cert. F.2d 30-day limit lenge regulation after the 361 U.S. L.Ed.2d presenting any infor- expired, without has Goodman, (1959); supra Currie & at 48. by the was mation which not considered Oljato Chapter Navajo also of Tribe v. See original rulemaking proceed- Board Train, F.2d legiti- aggrieved If the has a ing. party (1975). The administrative reсord 665-68 his having excuse for mate review would for include the information right to challenge days, within 30 the then agency by and affidavits submitted to the not be petition for immediate review should aggrieved party, the the of hear record adequate reme- matter, considered have been an ings on the the re Board’s circumstances, aggrieved dy. In such (which sponse might incorporate by refer asserting be estopped should not party the record of original rulemaking ence of of his claim in a court the merits proceedings). generally Oljato Chapter See Train, reconsider Navajo upon by Tribe v. a refusal supra. gen Board for would, record challenged regulation. The governing eral standard review course, might whether consist of little be the Board’s action was in such a case review petition “arbitrary, capricious, the Board’s denial of an abuse of discre more than tion, record by the supported or otherwise not in accordance with reconsideration for aggrieved Train, party only Navajo 1976); Oljato Chapter When wishes Tribe v. regulation applied particular to a n. at 200 activities, holding company’s bank and the particular claim arises after n. 6. If the ripe would not have been for review claim already ap- application company’s days promulgation regu within party petition aggrieved proved, could lation, appropriate remedy would be to application. reconsideration petition company’s Board for denial of that activities, engage application to with such only the new information involves If the appeals. review C.F.R. holding compa- particular bank activities 225.4(b) National Ass’n of Ins. appropriate ny, avenue for a more Governors, supra, Agents v. Board 160 U.S. adju- challenging petition the Board be a 145-146, App.D.C. at 489 F.2d at 1270-71. See applied regulation is which the dication Agents Ass’n Alabama of Ins. v. Board of also Governors, supra. company. See note 10 (5th F.2d 244-45 Cir. any certainty ascertained with not be but could rulemaking proceedings, original appropriate rem- Appellant’s outset. 9 at the 30-day limit established the Board met, that event was to edy since the could be

technically regulations when of the attacking the order reconsideration would be information was available.. Of regulation, sufficient reconsideration denying course, exactly appellant what did. which the the order But, filing petition in this rather than first Al- instance.12 promulgated the Board’s deni- days within 30 approach may appear somewhat court though this reconsideration, appel- for artificial, remedy petition al of its аdequate it ensures an for in the two months and filed agency lant waited aggrieved giving while the parties, which, upon actions District Court. any chance to correct a reflection, appear to have been er- further Nevertheless, special cir under the time, the must At the same roneous. case, not think of this we do cumstances determining in what strict constitutes be asserting from should be barred appellant excuse; otherwise, “legitimate” policy the court, should if the Board in this its claim will finality underlying 30-day the limit of for reconsideration petition deny second not be achieved.13 future, we In the regulations.14 peti to file competent counsel would expect

IV courts, or at least in the court tions in both is doubt as to the that, appeals, if there Appellant alleges at the time judicial review. appropriate forum for regulations promulgated, in issue were the However, un law was somewhat they operate whether would since the it was not clear suit, appellant filed the clear at the time a manner as to violate Glass in such dealing uncer procedures for with such Steagall Although appellant repeated Act. the court, by set forth Glass-Steagall tainty viola had not been ly spectre raised the adequate are not inclined to view as an prior during public both to and the tions right the to have regulations, remedy on the there is a cer in this instance following Board’s denial plausibility sought to the contention that the the tain rules, reconsideration. especially petition with of the first for actual effect the in this companies, investment if the existence of respect to closed-end Even analysis equally applicable particular applies to a 12. This method of aggrieved party aрplication engage situations in which an files a holding company’s in regula- second for reconsideration of a non-banking See 12 225.- activities. C.F.R. tion, citing any without information which was Agents 4(b) Ass’n of Ins. Alabama prior petition forth for recon- not sideration denied Governors, (5th 533 F.2d 235—236 Board by If the Board. the second However, supra. 1976); absent a note 10 Cir. convincing petition were denied on the basis of the Board’s justification, litigant should be decision, prior the record for review would con- contrary regulation. rule A bound merely supported sist second order underly- finality principle of would thwart ing proceedings surrounding record of the the first legitimate Nevertheless, petition. litigant if the has a having excuse for failed to argument, appellant’s counsel stated 14. At oral denial, estopped first he the raising should be impracticable would be to raise his that it upon the merits of his claim review of adjudi- context of a Board claim client’s denial. The standard the second holding company’s ap- an individual cation on plication course, would, be the same as the one de- activities, engage non-banking above for denials of an initial scribed impossible it would be since note 13 see apparent, for reconsideration. As will become company’s whether that ac- in advance to tell infra, section IV we think the instant case see regulation would violate the tivities under qualifies for such treatment. event, Glass-Steagall appellant Act. regulations themselves amended or wants the aggrieved party challenge Where an has a valid excuse rescinded, procedure more efficient is to failing promul- the initial order face, regulations on regulation, regulation may open their rather than gating be attack adjudication applied. upon review of a to attack Board as LEVENTHAL, Judge, Circuit concur- regulations should have to review ring: following the decision clear Lufthansa, expressly we had not Déutsche Judge entirely I concur in McGowan’s be such that declared opinion court. excellent for the And the itself ar- Government exclusive. advantage of the I take freedom as gued to this late concurring opinion hope express jurisdiction to re- lacked problem will be dealt with in core issued under the view future by the enactment of a reasonable Holding Company Act. Brief permitting statute transfer be- general Board of at 46 n. Respondent Governors district courts and courts of tween Ass’n v. Board of Gover- National Courier justice, including specifi- the interest nors, cally exclusively but not those instances enough the law uncertain If complaints in what are filed later when agenсy charged with administra- “wrong” to be the court. proves good faith argue of the Act could The Administrative Conference of the reviewed in regulations could not be that its States, by adopted resolution De- United court, has a appellant we infer that 10, 1976, entitled Judicial cember also Re- having excuse for chosen the legitimate Under the Air Act and Federal view Clean wrong forum.15 Act, approved Pollution Control Water Thus, for re- petition of a second denial recommendation, as follows: transfer in the should be reviewable consideration litigant’s from a prevent To unfairness presents appellant even if court, Congress wrong choice information Board which to the the same provide between for transfer dis- should petition. in the How- contained first was peti- courts and courts trict ever, as three approximately inasmuch complaints filed under thе and Acts. tions passed have the first years since provision Court Claims transfer The filed, take care that appellant should was good model.1 provides which has devel- any relevant information (Dec. 30, Fed.Reg. Reprinted interim is included in a second oped in the 1976). reconsideration, petition for one is filed. abound, ambiguities that now The Board, as reviewing as well The led what been de- sometimes have have benefit of all materials should badminton,”2 are “jurisdictional as scribed facilitate which would decision of the issues ambigui- edifying. Realistically, some presented. persist. only lawyer- The ‍‌​‌​​​​​​‌​‌​‌‌​‌‌​​‌​‌‌‌​‌​‌‌‌‌‌‌​‌​‌​​‌​‌​​‌‌​‍likely are ties judgment the District Court dis- remedy today, Judge McGowan like subject case for missing this lack of matter out, hardly filing. is double That is points jurisdiction is accordingly opinion Today’s crafts solution model. hardship at hand. A in the case avoids Affirmed course, University Chicago challenged regulations Law School. The when the rie of 15. Of promulgated, jurisdic- by appellant were referred to is 28 1506: “model” even law was more unclear than it was tional the exclusive If a case within time of the Board’s denial of the at the filed in the Court of courts is the district reconsideration, Corp. Mobil since Oil shall, Claims, if it be of Claims Court yet Lufthansa had not been decided. Deutsche justice, such case transfer interest Therefore, assuming even have it could court which district fully ripe immediately were filed, case was at the time such appellant’s promulgation, failure to seek their proceed as if it had been the case shall where clearly judicial review in 1972 should not be the date it the district court on filed in appel- of a bar to further relief than more of Claims. filed Court wrong in 1974. choice of the forum lant’s Council, Inc. v. Resources Defense 2. Natural EPA, approved the recommenda- 1. The Conference (1975) part). (dissenting report by David Professor Cur- made emi- sweeping approach more direct timely. eminently

nently desirable STATES of America for and on

UNITED

Behalf BOARD OF TRUSTEES

OF the NATIONAL AUTOMATIC

SPRINKLER INDUSTRY PENSION

FUND et al. COMPANY, INC., W.

J. BATESON al., Appellants.

et

No. 75-2199. Appeals,

United States Court of

District of Columbia Circuit.

Argued Dec. 1976.

Decided Jan.

Rehearing Denied Feb.

Certiorari 27,1977. Granted June

See 97 S.Ct. 2971.

Case Details

Case Name: Investment Company Institute v. Board of Governors of the Federal Reserve System

Court Name: Court of Appeals for the D.C. Circuit

Date Published: Jan 14, 1977

Citation: 551 F.2d 1270

Docket Number: 75-1822

Court Abbreviation: D.C. Cir.