expressed by a resolution of the board of directors or of its members, the Board is authorized to appoint a conservator or receiver for a Federal association without notice and without hearing. The Board shall have power to make rules and regulations for the reorganization, merger, and liquidation of Federal associations and for such associations in conservatorship and receivership and for the conduct of conservatorships and receiverships. Whenever a Supervisory Representative in Charge, conservator, or receiver, appointed by the Board pursuant to the provisions of this section, demands possession of the property, business and assets of any association, the refusal of any officer, agent, employee, or director of such association to comply with the demand shall be punishable by a fine of not more than $ 1,000 or by imprisonment for not more than one year or both by such fine and imprisonment.' 12 U.S.C.A. § 1464(d)(2).
In opposition to the plaintiff's request for equitable relief, the defendant moves to dismiss the complaint on the grounds that the Court is without jurisdiction over the subject matter and that the complaint fails to set forth a claim upon which relief may be granted. Under the circumstances of this case, the motion is denied.
Although the Court recognizes that it may not substitute its own determination for that of the Board's upon whether or not a ground for the appointment of a receiver or conservator exists and whether or not an emergency exists, clearly, this is not the only question posed by the motion. As we read the Act, we fail to see wherein the Board has the power to dictate merger or resignation terms in the absence of a receivership or conservatorship, and the latter only after a full and formal hearing at which the defendant has a right to be heard. It is therefore to this abuse of power that we direct our maintenance of jurisdiction. To compel the plaintiff Association to merge with another, or to compel the resignation of its entire board of directors under threat of the initiation of administrative proceedings would in effect deprive plaintiff of its right to be heard on these questions.
It is our conclusion that equitable relief is proper under the allegations that the Board has assumed powers which have not been granted to it by the Act. Nothing herein should be construed as an usurpation of the inherent power of the Board to make findings and act in accordance with the powers given to it by Congress. By maintaining jurisdiction, we merely wish to indicate that the defendant Board does not have the right or power to compel plaintiff to observe a course of conduct under threat of the institution of administrative proceedings, absent compliance with the formal procedures required by the Act.
It might be stated in addition that the plaintiff Association under this threat of irreparable injury consequent upon the Board's unlawful action is without an adequate administrative remedy. Although Congress has provided for emergency powers on an ex parte basis where the administrative process has been set in motion, we feel that where there is a patent abuse of the Board's authority, i.e. threatened action which would bypass the terms of the Act, equitable relief is altogether proper. See Utah Fuel Co. v. National Bituminous Coal Commission, 1939, 306 U.S. 56, 59 S. Ct. 409, 83 L. Ed. 483. Generally, Davis, Administrative Law, §§ 188, 189 (1951).
We have carefully examined the case of Beacon Federal Savings & Loan Ass'n v. Federal Home Loan Bank Board, D.C.E.D.Wis.1958, 162 F.Supp. 350, and find that case not applicable to this situation. In Beacon, the formal administrative procedures had already been initiated before the plaintiff association sought to restrain the Board. Here, no formal administrative process has been started.
For these reasons, the motion to dismiss is denied.
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