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FBME Bank Ltd. v. Lew

United States District Court, D. Columbia

November 6, 2015

FBME BANK LTD., et al., Plaintiffs,
v.
JACOB LEW, in his official capacity as Secretary of the Treasury, et al., Defendants

Page 71

          For FBME BANK LTD., FBME LTD., Plaintiffs: Derek Lawrence Shaffer, QUINN EMANUEL URQUHART & SULLIVAN, LLP, Washington, DC.

         For JACOB J. LEW, in his official capacity as Secretary of the Treasury, DEPARTMENT OF TREASURY, JENNIFER SHASKY CALVERY, in his official capacity as Director of the Financial Crimes Enforcement Network, FINANCIAL CRIMES ENFORCEMENT NETWORK, Defendants: Lynn Yuhee Lee, LEAD ATTORNEY, Amy E. Powell, U.S. DEPARTMENT OF JUSTICE, Washington, DC.

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         MEMORANDUM OPINION AND ORDER

         CHRISTOPHER R. COOPER, United States District Judge.

         This Court recently issued a preliminary injunction against a rule promulgated by the U.S. Department of Treasury's Financial Crimes Enforcement Network (" FinCEN" ). Rather than appeal the injunction, move for reconsideration, or continue to defend its rulemaking, FinCEN seeks a do-over: an opportunity to correct any mistakes it might have made the first time around and to promulgate--following proper procedures--the same rule, a new rule altogether, or perhaps even no rule at all. A voluntary remand, FinCEN urges, would respect the agency's desire to correct its own errors, conserve judicial resources, and would not unduly prejudice parties aggrieved by the rule. The Court agrees and, accordingly, will grant FinCEN's motion for voluntary remand and stay the proceedings while FinCEN complies with the Court's remand order.

         I. Background

         On August 27, 2015, this Court preliminarily enjoined a Final Rule--promulgated by FinCEN--that would have prohibited domestic financial institutions from maintaining correspondent bank accounts with FBME Bank Ltd. (" FBME" ), a Tanzanian-chartered commercial bank that operates mainly in Cyprus. The Final Rule, which was designed to prevent FBME from continuing to do business in the United States or in U.S. dollars, was issued following a finding by FinCEN that FBME was of " primary money laundering concern" and thus a threat to national security and the U.S. financial system. 31 U.S.C. § 5318A; 79 Fed.Reg. 42639 (July 22, 2014). In issuing its preliminary injunction, the Court indicated that it was " not inclined to second guess FinCEN's exercise of its broad discretion in finding that FBME poses a primary money laundering concern," FBME Bank Ltd. v. Lew, No. 1:15-cv-01270, 125 F.Supp.3d 109, 2015 WL 5081209, at *2 (D.D.C. Aug. 27, 2015), but nevertheless found that FBME was likely to succeed on the merits of two of its claims against FinCEN: (1) that FinCEN provided insufficient notice of unclassified, non-protected information on which it relied during the rulemaking proceeding, in violation of the notice-and-comment requirement of the Administrative Procedure Act, and (2) that FinCEN failed adequately to consider at least one potentially significant, viable, and obvious alternative to the sanction it imposed, [WL] at *5.

         In light of the Court's ruling, FinCEN requested a " voluntary remand so that it may engage in further rulemaking relating to FBME Bank to address certain procedural issues raised by the court in its order." Defs.' Status Report, ECF No. 33, at 1-2. FBME opposed FinCEN's request and asked for briefing on the issue. Pls.' Proposed Schedule Mots. Voluntary Remand & Summ. J., ECF No. 37. The Court agreed that briefing was warranted and ordered FinCEN to submit a motion for voluntary remand, which FinCEN filed on September 28, 2015. Defs.' Mot. Voluntary Remand & Stay, ECF No. 38 (" Mot. Remand" ).

         In its motion, FinCEN proposes that the Court stay litigation pending a redo by the agency: On remand, " plaintiffs would have the opportunity to respond to unclassified, nonprivileged information on which FinCEN relied in its earlier decision, and FinCEN would consider plaintiffs' responses, as well as any additional information submitted by plaintiffs or others, during the new comment period." Id. at 2. FBME urges the Court instead to deny FinCEN's motion, order expedited summary-judgment briefing, and proceed to

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render final judgment " without ado." Pls.' Opp'n 2.

         II. Legal Standard

         Courts " prefer[] to allow agencies to cure their own mistakes rather than wast[e] the courts' and the parties' resources reviewing a record that both sides acknowledge to be incorrect or incomplete." Ethyl Corp. v. Browner,989 F.2d 522, 524, 300 U.S.App.D.C. 330 (D.C. Cir. 1993). As a result, " courts have long recognized the propriety of voluntarily remanding a challenged agency action without judicial consideration of the merits upon an admission of agency error." Carpenters Indus. Council v. Salazar,734 F.Supp.2d 126, 132 (D.D.C. 2010). Voluntary remand is typically appropriate " (i) when new evidence becomes available after an agency's original decision was rendered," id. (citing Ethyl Corp., 989 F.2d at 523), " or (ii) where 'intervening events outside of the agency's control' may affect the validity of an agency's actions," id. (quoting SKF USA Inc. v. United States,254 F.3d 1022, 1028 (Fed. Cir. 2001)). " Even in the absence of new evidence or an intervening event, however, courts retain the discretion to remand an agency decision when an agency has raised 'substantial and legitimate' concerns in support of remand." Id. (citing Sierra Club v. Antwerp,560 F.Supp.2d 21, ...


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