First Savings & Loan Association v. Vandygriff

In March 1979, the Savings and Loan Commissioner of Texas, L. Alvis Vandygriff (defendant) granted a charter for Citizens Security Savings and Loan Association (Citizens) to be located in Borger, Texas. The commissioner’s order granting the charter followed a denial of an earlier application for it, which was filed by a group of organizers (defendants) in 1978. The commissioner overruled the organizer’s motion to rehear the initial denial in August 1978, so five of the organizers visited the commissioner in Austin that September to provide a different view of the economic conditions related to the charter. In October 1978, the organizers filed the application that resulted in the charter, leaving the capital funds from the first application on deposit and submitting some of the same supporting documentation. One of the organizers expressed the view that the second application was ongoing from the first. First Savings and Loan Association of Borger, Texas (First Savings & Loan) (plaintiff) challenged the commissioner’s order granting the charter in state district court, having been an interested party to the organizers’ initial application but excluded from the meeting between the commissioner and the organizers. First Savings & Loan argued that the meeting was an unlawful ex parte communication despite the commissioner’s admission of the meeting in his order and declaration that the decision was based only upon the administrative record. The district court found in favor of the commissioner, and First Savings & Loan filed a motion for rehearing.