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Vartan National Bank v. Office of the Comptroller of the Currency

April 15, 2009


The opinion of the court was delivered by: Judge Conner


This is a challenge under the Administrative Procedure Act ("APA") to the Office of the Comptroller of the Currency's final agency decision denying plaintiffs' request to depose Maryann Kennedy. Presently before the court are the parties' cross-motions for summary judgment (Docs. 8, 17). For the reasons that follow, defendants' motion (Doc. 8) will be granted, and plaintiffs' motion (Doc. 17) will be denied.

I. Statement of Facts*fn1

The dispute in this case concerns plaintiffs' right to depose Maryann Kennedy ("Kennedy"), an employee of defendant the Office of the Comptroller of the Currency ("OCC"). Kennedy is an OCC bank examiner responsible for monitoring the activities of federally-insured depository institutions authorized under the National Bank Act of 1864. See 12 U.S.C. §§ 7, 9, 481; (Doc. 13 ¶¶ 1, 4-5; Doc. 15 ¶¶ 1, 4-5). In this vein, Kennedy met with plaintiff Vartan National Bank's ("VNB") board of directors on July 13, 2005. (See Doc. 20, Ex. 1-2.) Kennedy recorded shorthand notes during this meeting, which reflected various board disclosures, including its representations regarding the future employment of VNB president Frank Fato ("Fato"). (Doc. 13 ¶¶ 12-13; Doc. 15 ¶¶ 12-13.) After the board meeting, Fato met with Kennedy and allegedly relayed concerns related to VNB's corporate governance. (See Doc. 20, Ex. A.)

Fato was terminated as VNB president five days later. (Doc. 13 ¶ 9; Doc. 15 ¶ 9.) Fato subsequently filed a retaliatory discharge suit (hereinafter "the Retaliatory Discharge Suit") in this court against the above-captioned plaintiffs, alleging that he was fired because of the disclosures made during the July 13 conversation with Kennedy.*fn2 (See Doc. 20, Ex. 1; see also Civil Action No. 1:07-CV-1291, Doc. 1.) In an answer to Fato's complaint, plaintiffs claimed that the board reached its termination decision prior to Fato's meeting with Kennedy. (See Civil Action No. 1:07-CV-1291, Doc. 41 at 9, ¶ 4.) The Retaliatory Discharge Suit progressed into discovery, during which plaintiffs sent a document request to OCC pursuant to administrative regulations governing the production of non-public OCC information. (See Doc. 20, Ex. 1.) Specifically, plaintiffs sought materials pertaining to: (1) "Frank Fato's performance as President of Vartan National Bank during the period from August 2004 through July 2005"; (2) "the meeting Maryann Kennedy had with the Board of Directors for Vartan National Bank on July 13, 2005"; (3) "Maryann Kennedy's discussion with Frank Fato during or after a luncheon at Vartan National Bank . . . on July 13, 2005"; and (4) "any investigation the OCC initiated regarding Mr. Fato's comments to Maryann Kennedy during or after the luncheon at Vartan National Bank . . . on July 13, 2005." (Id.) Additionally, plaintiffs requested permission to depose Kennedy. (Id.)

On September 10, 2008, Senior Deputy Comptroller Jennifer Kelly ("Kelly") responded by letter to plaintiffs' request. (Doc. 20, Ex. 2.) Kelly indicated that OCC would disclose relevant portions of Kennedy's notes, taken during her meeting with the VNB board of directors. (Id.) However, Kelly rejected plaintiffs' request to depose Kennedy, explaining that plaintiffs "failed to demonstrate a compelling need, particularly in light of the release of the excerpt from the minutes of the board meeting." (Id.) Kennedy's meeting notes were produced to the parties in the Retaliatory Discharge Suit on October 17, 2008. (Doc. 13 ¶ 19; Doc. 15 ¶ 19.)

On October 31, 2008, plaintiffs commenced the instant action pursuant to the judicial review provisions of the APA. (Doc. 1.) Plaintiffs contend that Kennedy's testimony is essential to the ongoing litigation in the Retaliatory Discharge Suit and that OCC's refusal to permit Kennedy's deposition was "arbitrary, capricious, an abuse of discretion, and/or otherwise not in accordance with law." (Id.) OCC filed a motion for summary judgment on January 26, 2009,*fn3 (Doc. 8), and plaintiffs filed a cross-motion for summary judgment on February 10, 2009, (Doc. 17). The motions have been fully briefed and are ripe for disposition.

II. Standard of Review

Through summary adjudication the court may dispose of those claims that do not present a "genuine issue as to any material fact" and for which a jury trial would be an empty and unnecessary formality. See FED. R. CIV. P. 56(c). The burden of proof is upon the non-moving party to come forth with "affirmative evidence, beyond the allegations of the pleadings," in support of its right to relief. Pappas v. City of Lebanon, 331 F. Supp. 2d 311, 315 (M.D. Pa. 2004); FED. R. CIV. P. 56(e); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party on the claims. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89 (1986); see also FED. R. CIV. P. 56(c), (e). Only if this threshold is met may the cause of action proceed. Pappas, 331 F. Supp. 2d at 315.

In the instant matter, the parties have filed cross-motions for summary judgment. The court is permitted to resolve cross-motions for summary judgment concurrently. See InterBusiness Bank, N.A. v. First Nat'l Bank of Mifflintown, 318 F. Supp. 2d 230, 235 (M.D. Pa. 2004); 10A CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2720 (3d ed. 1998). According to the Third Circuit Court of Appeals:

Cross-motions are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist.

Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008) (quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968)). When confronted with cross-motions for summary judgment, the court is bound to view the evidence in the light most favorable to the non-moving party with respect to each motion. FED. R. CIV. P. 56; see also Lawrence, 527 F.3d at 310. Fortunately, the basic facts in the instant matter are substantially undisputed and have been borne out by the administrative record.

III. Discussion

The APA allows federal courts to review "final agency action for which there is no other adequate remedy." 5 U.S.C. § 704. Final agency decisions that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" may be set aside or held unlawful. § 706(2)(A). Judicial review pursuant to the arbitrary and capricious standard "focuses on the agency's decision making process, not on the decision itself," NVE, Inc. v. Dep't of Health & Human Servs., 436 F.3d 182, 190 (3d Cir. 2006) (emphasis in original); accordingly, the proper scope of inquiry "is narrow, and a court is not to substitute its judgment for that of the agency," CBS Corp. v. Fed. Commc'n Comm'n, 535 F.3d 167, 174 (3d Cir. 2008) (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41 (1983)). In short, ยง 706(2)(A) envisions a deferential standard of judicial review, under ...

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