The defendant, Mellon Bank, is a national bank, having its principal place of business in Pittsburgh, and according to the plaintiffs, it operates nearly one hundred branches in the surrounding six county area. The affidavit of Reed H. Albig, President of National Bank of McKeesport, indicates that Mellon Bank's deposits and loans constitute more than fifty percent of deposits and loans in all banks located in the six county area.
After purchasing a certain piece of property in McKeesport, Mellon Bank, on June 8, 1964, applied to the Comptroller of Currency for a certificate to operate a branch office. The Deputy Comptroller, after conference with protesting banks and investigation by his staff, indicated on December 27, 1965, that a branch certificate would be issued to operate a branch on that property.
The plaintiffs filed the within complaint on February 19, 1966. By agreement of the parties, the proceedings were stayed to allow the Comptroller to conduct further hearings to determine the appropriateness of issuing Mellon Bank such a branch certificate. Hearings were held on May 16 and 17, 1966, and the Comptroller filed further findings on November 25, 1966. In February 1967, the Comptroller indicated that a certificate was to be issued thereby removing the stay in the proceedings of this law suit. As a result of such hearing the plaintiffs now admit that the original allegation of lack of due process in the original administrative proceeding has been disposed of.
The defendants have moved for summary judgment on the record before the Comptroller, asserting that there "is no genuine issue of fact" open to establish that the Comptroller's decision was arbitrary and capricious.
The defendants argue that the Comptroller's opinion demonstrates as a matter of law that all of the Pennsylvania requirements for the issuance of a branch bank certificate to Mellon Bank were met in this particular instance. Defendants argue that there was ample evidence presented at the two hearings from which the Comptroller could find that the Mellon Branch would provide a useful public service in McKeesport. The defendants further contend that the determination of a Comptroller in the granting of a branch bank certificate is a discretionary matter and that 5 U.S.C. § 1009 of the Administrative Procedure Act excepts from judicial review "(2) agency action . . . committed to agency discretion."
The plaintiffs oppose the defendants' motion on a three-fold basis; one, that the Comptroller failed to consider certain requirements of branch banking under Pennsylvania law as he is obliged to do under 12 U.S.C.A. § 36(c); two, the Comptroller failed to consider overwhelming evidence presented at the hearings which demonstrated that no additional banking services were needed in the McKeesport area; and three, the Comptroller acted capriciously in not considering the effect of Mellon Bank's opening a branch in McKeesport under the various anti-trust laws.
The guidelines to be followed by the Comptroller in deciding on the appropriateness of granting a certificate to a national bank to operate a branch bank are established by 12 U.S.C.A. § 36(c). This federal statute requires the Comptroller generally to grant branches to national banks in those instances where the State Banking Authority in the state where the branch is to be located would grant a certificate to a state bank to open such a branch. Behind this statute was a congressional intention to foster a parity between the granting of certificates for branches of national banks and the granting of certificates for branches of state banks. First National Bank v. Walker Bank & Trusr Co., 385 U.S. 252, 261, 17 L. Ed. 2d 343, 87 S. Ct. 492 (1966).
The plaintiffs argue that there is an issue of fact as to whether the Comptroller found that this branch bank was needed in McKeesport. The Pennsylvania statute, 7 P.S. §§ 904, 905, requires that such a need be established in the area where the branch is to be located before the Pennsylvania authorities grant a state bank a certificate to operate a branch.
While the Comptroller in considering the state requirements when granting a bank a certificate to operate a branch must find that the branch is needed in the community where it is to be located, the Pennsylvania law does not specify how the need for a branch bank is to be determined or how the finding is to be made.
The Court finds that the Comptroller found a need for Mellon Bank's branch in McKeesport, because of the following language in the Comptroller's opinion:
" . . . there is every indication that this competition will promote the public interest rather than have a deteriorating effect upon it.
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