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October 28, 1994

JAMES MADISON LIMITED, by Norman F. Hecht, Sr., Assignee, Plaintiff,

The opinion of the court was delivered by: ROYCE C. LAMBERTH

 This case comes before the court on defendants' motions to dismiss the complaint for lack of subject matter jurisdiction, Fed. R. Civ. P. 12(b)(1), failure to state a claim upon which relief can be granted, Fed. R. Civ. P. 12(b)(6), or, in the alternative, for summary judgment under Rule 56(b). *fn1" Upon consideration of defendants' motions, plaintiff's opposition thereto, and materials submitted by the parties in support of their positions, the defendants' request for summary judgment will be granted.

 I. Introduction

 In their motions to dismiss, or in the alternative for summary judgment, defendants argue that this court lacks jurisdiction to review the Office of the Comptroller of the Currency's (OCC) decision to declare banks owned by plaintiff James Madison Limited (JML) insolvent and place them in receivership. The court finds that it does have jurisdiction to review the OCC's actions under the Administrative Procedures Act (APA); however, such review is limited to ascertaining whether the OCC actions were "arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A).

 A. Summary Judgment Standard

 The court treats defendants' motions as a request for summary judgment under Fed. R. Civ. P. 56(b). The parties have had a "reasonable opportunity to present all material made pertinent to [the] motion by Rule 56," Neal v. Kelly, 295 U.S. App. D.C. 350, 963 F.2d 453, 456 (D.C. Cir. 1992), and indeed the parties have submitted affidavits, bank records, and other materials pertinent to the dispute. Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to summary judgment as a matter of law. E.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Inferences drawn from the facts must be viewed in the light most favorable to the party opposing the motion. E.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970).

 B. Background

 The OCC particularly noted that the banks' approach to calculating ALLL *fn2" demonstrated "continuing severe weaknesses," and it concluded that the banks were persistently underestimating the risk of loss associated with their outstanding loans. After initiating an on-site examination of the JML banks, the OCC prepared its own ALLL analysis to determine whether the banks' ALLL reserves were sufficient. In performing this analysis, examiners first reviewed a portion of the banks' outstanding loans in order to categorize them according to their quality. Next, the examiners performed a "migration analysis" to estimate necessary reserve amounts based on projected future losses from bad loans. Throughout this process, the banks were given an opportunity to and did comment on the examiners' classification of loans and their methodology in calculating ALLL. *fn3" Nevertheless, the OCC's determination of necessary ALLL reserves differed substantially from that of the JML banks and the banks' own auditors. In fact, the OCC found that based on its analysis, the amount needed to replenish ALLL at the banks would substantially exceed the banks' existing equity capital.

 As a result of these findings, the OCC advised the banks on May 1, 1991, that additional loan loss reserves of $ 31.65 million would be required at the JML banks. These additional reserve requirements resulted in substantial equity capital deficits at the banks, and the OCC requested the banks to submit a proposed Capital Plan which would remedy this shortfall. JML submitted a plan which relied in large part upon funds "to be raised from private sources or from or together with FDIC open bank assistance." The OCC rejected this plan on the grounds that it did not present firm sources of equity capital sufficient to meet the banks' short term needs. On May 10, 1991, the OCC declared the JML banks insolvent and appointed the FDIC as receiver for the banks. The FDIC then entered into a Purchase and Assumption Agreement with Signet Bank, under which Signet agreed to purchase certain assets, deposits and liabilities of the JML banks.

 In April of 1993 JML, through its assignee Mr. Norman Hecht, filed suit in this court seeking to have the actions of the OCC and the FDIC set aside. JML asserts that both the process by which the OCC calculated ALLL reserves for the JML banks and the OCC's rejection of JML's Capital Plan were improper. Also, JML claims that the FDIC wrongfully declined to provide it with funds in the form of Open Bank Assistance. Specifically, JML's complaint alleges that these actions were arbitrary and capricious, constituted an abuse of discretion, and were done without observance of procedure required by law under §§ 706(2)(A) & (D) of the Administrative Procedure Act. JML has also filed a motion for leave to amend its original complaint to add due process and Federal Tort Claims Act (FTCA) counts.

 II. Procedural Issues

 A. Jurisdiction

 Defendant OCC argues that this court lacks subject matter jurisdiction because the Comptroller's decision to declare a bank insolvent under § 191 of the National Bank Act, 12 U.S.C. § 191, is final and unreviewable. The court does not agree.

 Persons adversely affected by the action of a federal agency normally have a limited right to judicial review under the APA. See 5 U.S.C. § 702. However, this review procedure is unavailable in situations where a statute explicitly precludes judicial review, § 701(a)(1), or where "agency action is committed to agency discretion by law," § 701(a)(2). Nothing in § 191 of the National Bank Act affirmatively precludes judicial review. *fn4" The "agency action committed to agency discretion by law" exception applies "in those rare instances where statutes are drawn in such broad terms that in a given case there is no law to apply." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971) (internal quotations omitted). The key question is whether "the statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion." Heckler v. Chaney, 470 U.S. 821, 830, 84 L. Ed. 2d 714, 105 S. Ct. 1649 (1985).

 At the time the JML banks were declared insolvent and placed in receivership, § 191 of the National Banking Act *fn5" provided that "whenever the Comptroller shall become satisfied of the insolvency of a national banking association, he may, after due examination of its affairs . . . appoint a receiver, who shall proceed to close up such association." 12 U.S.C. § 191 (1988). Defendant OCC emphasizes the language of the statute which permits the Comptroller to appoint a receiver "whenever [he] . . . become[s] satisfied" of a bank's insolvency. The OCC suggests that whether a bank is in fact insolvent is irrelevant; all that matters is whether the Comptroller has subjectively ...

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