City National Bank v. Smith

Meadowbrook National Bank (Meadowbrook) applied to the United States Comptroller of the Currency, James Smith (defendant) for a national bank charter. Competitor banks were notified of Meadowbrook’s application. City National Bank (City) (plaintiff) opposed the proposed charter for Meadowbrook. City argued that there was no economic necessity for a new bank. City requested and was granted a public hearing on Meadowbrook’s application. At the hearing, Meadowbrook and City both presented evidence regarding the economic considerations of the proposed charter. At the close of the hearing, City suggested that Meadowbrook had misrepresented the identity of Dee Kelly, who was to become a 5 percent shareholder in Meadowbrook if the charter was approved. However, the regional administrator in charge of Meadowbrook’s application was aware of Kelly’s identity and provided such information to the comptroller as indicated by the administrative record. At any rate, the comptroller approved Meadowbrook’s application for a charter without mention of the misrepresentation allegation in his final decision, finding that the area’s population was adequate to support a new bank and that the existing bank in the area was of a sufficient size to handle competition. City filed a complaint against the comptroller in the district court, arguing that the failure to disclose Kelly’s identity in the application invalidated the comptroller’s approval of Meadowbrook’s application. The district court found that the comptroller’s decision to approve Meadowbrook’s charter application was substantially supported by the administrative record. City appealed.