The opinion of the court was delivered by: Kollar-kotelly, District Judge.
This case is before the Court on the following dispositive
motions: Defendant National Credit Union Administration's
("NCUA's") Motion to Partially Dismiss Plaintiff American Banker
Association and Plaintiff-Intervenor Independent Bankers
Association of America's (together "Plaintiffs") First Amended
Complaints; Defendant-Intervenor Credit Union National
Association's ("CUNA's") Motion to Dismiss Plaintiffs' Facial
Claims; Defendant-Intervenor National Association of Federal
Credit Union's ("NAFCU's") Motion for
Partial Summary Judgment;*fn1 Defendant's Motion to Dismiss
Plaintiff-Intervenor Irondequoit Federal Credit Union's
("Irondequoit's") First Amended Complaint; and
Defendant-Intervenor CUNA's Motion to Dismiss same. In their
amended complaints, Plaintiffs and Plaintiff-Intervenor challenge
certain aspects of the NCUA's regulations — IRPS 99-1, see 63
Fed.Reg. 71,998 (1998) — interpreting the Credit Union Membership
Access Act ("CUMAA") of 1998. Because the Court finds that the
challenged policies constitute permissible interpretations of
CUMAA, the Court shall dismiss Plaintiffs' and
Plaintiff-Intervenor's facial challenges to IRPS-99. Plaintiffs
also contest the NCUA's application of IRPS 99-1 in several
instances. Some of these as-applied challenges rely so thoroughly
on Plaintiffs' facial ones that they also must be dismissed.*fn2
In its earlier memorandum opinion denying Plaintiffs' motion
for a preliminary injunction against the NCUA's application of
IRPS 99-1, the Court engaged in a lengthy discussion of the
statutory history and related aspects of this suit. Rather than
reproduce that discussion, the Court incorporates it by reference
here, and gives merely a brief account of the relevant
background. See American Bankers v. Nat'l Credit Union Admin.,
38 F. Supp.2d 114, 116-20 (D.D.C. 1999). Congress enacted CUMAA in
1998 to amend the Federal Credit Union Act ("FCUA"),
12 U.S.C. § 1759, after the Supreme Court invalidated the reading NCUA had
given to this statute since 1982. See National Credit Union
Admin. v. First Nat'l Bank & Trust Co., 522 U.S. 479, 118 S.Ct.
927, 939-40, 140 L.Ed.2d 1 (1998). For those sixteen years, NCUA
interpreted Section 109 of FCUA, relating to federal credit union
membership, to permit the formation of "multiple common bond"
credit unions. Finding this interpretation at odds with
congressional intent, the Supreme Court held that the provision
authorized NCUA to charter only two kinds of credit unions:
"single common bond" credit unions, where a group sharing an
occupational bond wished to form a credit union, and
community-based ones. See id. In a demonstration of its
commitment to preserving the strength and viability of credit
unions, Congress assembled broad bipartisan support to enact the
CUMAA, which explicitly wrote into law the interpretation that
the Supreme Court had deemed impermissible under the former
version of the statute. See S. Rep. 105-193 (1998).
Beyond merely ratifying the NCUA's policy of authorizing
multiple common-bond credit unions, however, Congress also
enunciated certain limitations relating to group size and
geographic expansion. See H.R.Rep. No. 105-472, U.S.Code Cong.
& Admin.News 1998, at 18. For example, Congress distinguished for
purposes of analysis between groups with fewer than
3,000 members, which enjoy eligibility for inclusion in the field
of membership of an existing multiple common-bond credit union,
and those with more than 3,000 members, which must form separate
single common-bond credit unions unless they meet specified
criteria. See 12 U.S.C. § 1759(d)(1)-(2). In all cases, though,
Congress directed the NCUA to "encourage the formation of
separately chartered credit unions instead of approving an
application to include an additional group within the field of
membership of an existing credit union whenever practicable and
consistent with reasonable standards for the safe and sound
operation of the credit union. . . ." § 1759(f)(1)(A). Second,
Congress specified that, when deciding which multiple common-bond
credit union should absorb a given group, the NCUA must include
the group "in the field of membership of a credit union that is
within reasonable proximity to the location of the group." §
1759(f)(1)(B). Third, Congress described a community credit union
as being composed of "[p]ersons or organizations within a
well-defined local community, neighborhood, or rural district . .
.," § 1759(b)(3), appending the qualifier "local" to the extant
version of this provision. Compare CUMAA, § 1759(b)(3) (1998),
with FCUA, § 1759 (1989).
Following a sixty-day notice-and-comment period, the NCUA
promulgated IRPS 99-1 (the "final rule"), which established
updated criteria for implementing the new statute. Several days
after these regulations took effect (on January 1, 1999),
Plaintiff American Bankers Association came to this Court seeking
a preliminary injunction to enjoin several aspects of the final
rule. In a Memorandum Opinion filed on March 10, 2000, see
American Bankers, 38 F. Supp.2d at 114, the Court denied
Plaintiff's Motion, ruling that Plaintiff had not demonstrated a
likelihood of success on the merits of six out of seven claims.
On the remaining claim, the Court found that Plaintiff failed to
make its required showing of irreparable harm. See id. at 142.
After the Court denied its Motion for a Preliminary Injunction,
Plaintiff, along with Plaintiff-Intervenor Independent Community
Bankers of America, filed an Amended Complaint consisting of
seventeen (17) counts. Several of those counts replicate ones
preliminarily adjudicated on the earlier motion, and others,
including one facial and several as-applied claims, are new. In
addition, Plaintiff-Intervenor Irondequoit brings seven (7)
counts in its Amended Complaint, most of which reflect the same
Below, the Court first shall treat those counts of Plaintiffs'
Amended Complaint which it considered at the earlier stage, and
then shall turn to the remaining facial claim. To the extent
Irodequoit echoes facial claims contained in Plaintiffs' Amended
Complaint, the Court will not embark on a separate discussion of
those; claims that differ receive separate treatment.
Plaintiffs contend that, in several respects, the NCUA's final
rule contravenes Congressional intent in drafting and enacting
the CUMAA. Since "`statutory interpretation begins with the
language of the statute itself,'" Butler v. West, 164 F.3d 634,
639 (D.C.Cir. 1999) (quoting Pennsylvania Dep't of Pub. Welfare
v. Davenport, 495 U.S. 552, 557-58, 110 S.Ct. 2126, 109 L.Ed.2d
588 (1990)), as a general matter the Court first must determine
whether Congress has spoken directly to the issue at hand.
Following Chevron U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694
(1984), this step has become known as Chevron step one. If,
using "traditional tools of statutory construction," Natural
Resources Defense Council, Inc. v. Browner, 57 F.3d 1122, 1125
(D.C.Cir. 1995), the Court answers this inquiry in the
affirmative, then "that is the end of the matter; for the court,
as well as the agency, must give effect to the unambiguously
expressed intent of Congress."
Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778.
But Chevron review also concerns itself with the extent and
application of agency discretion in interpreting the statute at
issue. In other words, "a reviewing court's inquiry under
Chevron is rooted in statutory analysis and is focused on
discerning the boundaries of Congress' delegation of authority to
the agency." Arent v. Shalala, 70 F.3d 610, 615 (D.C.Cir.
1995). To resolve the issue, "the question for the reviewing
court is whether the agency's construction of the statute is
faithful to its plain meaning, or, if the statute has no plain
meaning, whether the agency's interpretation `is based on a
permissible construction of the statute.'" Id. (quoting
Chevron, 467 U.S. at 843, 104 S.Ct. 2778). If this
interpretation is "reasonable and consistent with the statutory
scheme and legislative history . . .," Cleveland v. United
States Nuclear Regulatory Comm'n, 68 F.3d 1361, 1367 (D.C.Cir.
1995), then the Court must defer to the agency. This inquiry into
the agency's interpretation constitutes Chevron step two.
Having already found significant ambiguity and/or delegation of
interpretive authority to the agency in most of the relevant
provisions of the CUMAA, see, e.g., American Bankers, 38 F.
Supp.2d at 125 ("Congress's intent, whatever it may be, is by no
means `express' or `clear' as the ABA maintains."), the Court
shall concentrate on this second line of inquiry.
Below, the Court reviews first those facial challenges to the
NCUA's final rule on which it ruled preliminarily at the earlier
proceeding, and then the only new facial challenge in Plaintiffs'
Amended Complaint, contesting the NCUA's interpretation of "local
community" in section 1759(b)(3). Following the discussion of
Plaintiffs' facial claims, the Court addresses each of
Plaintiffs' as-applied challenges that Defendants have moved to
dismiss, and, finally, considers Irondequoit's claims in light of
the rulings below.
A. Facial challenges to IRPS 99-1
1. Challenges addressed at the preliminary injunction stage
Plaintiffs challenge the following aspects of the NCUA's final
rule in their most recent Complaint, all of which this Court
addressed during the earlier proceeding: the NCUA's exclusion of
family and household members when determining whether the group
in question has fewer than 3,000 members for eligibility to join
a "multiple common-bond credit union" (Count 1); the NCUA's
alleged policy of permitting common-bond groups with more than
3,000 members to join existing credit unions even where they
could "feasibly or reasonably establish a new single common-bond
credit union" (Count 2); the rule requiring common-bond groups
with fewer than 3,000 members to demonstrate their ability to
successfully operate a credit union, rather than merely
encouraging such groups to form separately chartered credit
unions (Count 7); the alleged policy of permitting multiple
common-bond credit unions to add new common-bond groups not
"within reasonable proximity" to the existing credit union (Count
8); the policy of permitting persons who, after August 7, 1998,
join a group whose members constitute a portion of a federal
credit union to "grandfather" membership into the credit union
(Count 15); the policy of permitting family and household members
to enjoy "grandfathered" membership although not counted for the
purpose of discerning whether the group has fewer than 3,000
members (Count 16); and the alleged policy of permitting
"unlawfully formed credit unions" to grandfather membership
eligibility (Count 17). Each of these claims arose at the earlier
stage, and each received extensive treatment in the Court's
memorandum opinion denying Plaintiff's application for a
preliminary injunction. Plaintiffs have failed to persuade the
Court that its original analysis of these claims was in error.
Accordingly, with respect to each of these Counts, the Court
incorporates by reference its earlier discussion of
Plaintiffs' facial challenges to the NCUA regulations, and
provides merely a brief summary below.
In addition, Plaintiffs challenge the NCUA's policy of
permitting "financially healthy credit unions" comprised of
groups with fewer than 3,000 members to merge together without
undergoing exacting scrutiny (Count 10). Although the Court found
previously that Plaintiffs had demonstrated a likelihood of
success on the merits of this claim, upon further review of the
pleadings, the relevant provisions of both the CUMAA and the
FCUA, and the legislative history, the Court has revised its
opinion. In consequence, the Court includes a separate and
lengthier discussion of this claim.
a. Family and household members
The Court finds, once again, that Plaintiffs' challenge to the
NCUA's decision not to include family members when calculating
the membership of a group comports thoroughly with the statute.
See American Bankers, 38 F. Supp.2d at 127-29. Section
1759(e)(1), which renders family and household members "eligible
for membership in a credit union," suggests that this eligibility
derives not from these members' common bond with the group, but
rather from their intimate connection to persons in the group who
share the common bond. Hence, FCUA's policy of excluding family
and household members from the primary ...