U.S. Supreme Court
FDIC v. Mallen, 486 U.S. 230 (1988)
FDIC v. Mallen
Argued March 22, 1988
Decided May 31, 1988
486 U.S. 230
Title 12 U.S.C. § 1818(g)(1) authorizes the Federal Deposit Insurance Corporation (FDIC) to suspend from office an indicted official of a federally insured bank if his continued service poses a threat to the interests of the bank's depositors or threatens to impair public confidence in the bank. Section 1818(g)(3) entitles a suspended official to a hearing before the FDIC within 30 days of his written request, and to a final decision within 60 days of the hearing. At the hearing, the official may "submit written materials (or, at the discretion of the agency, oral testimony) and oral argument." The FDIC suspended appellee, the president and a director of a federally insured bank, after he was indicted for making false statements to the FDIC and the bank for the purpose of influencing the FDIC in violation of 18 U.S.C. §§ 1001 and 1014. A hearing was scheduled to occur 19 days after his written request for an expedited hearing, but the FDIC's regional counsel took the position that the oral testimony appellee proposed to offer at the hearing would not be necessary. Before the hearing date, appellee filed suit in the Federal District Court, which preliminarily enjoined the FDIC from enforcing the suspension order. Although it rejected appellee's argument that the order was invalid because it was not preceded by a hearing, the court concluded that § 1818(g)(3)'s post-suspension procedure violates the Due Process Clause of the Fifth Amendment because it does not guarantee a suspended officer a sufficiently prompt decision or an unqualified right to present oral testimony.
1. Section 1818(g)(3)'s post-suspension procedure is not unconstitutional on its face. Pp. 486 U. S. 240-248.
(a) Appellee was not entitled to a pre-suspension hearing, since the important governmental interest in protecting depositors and maintaining public confidence, coupled with the fact that the felony indictment provided substantial assurance that the suspension was not baseless, justified prompt action before a suspension hearing was held. Cf. Barry v. Barchi, 443 U. S. 55. Pp. 486 U. S. 240-241.
(b) Appellee was not denied a sufficiently prompt post-suspension hearing. Although a bank officer has an important, constitutionally protected interest in continued employment, he also has an interest in seeing chanroblesvirtualawlibrary
that a decision concerning his continued suspension is not made with excessive haste. Moreover, a temporary suspension is not likely to augment the injury to the officer's reputation that has already been done by an indictment accusing him of serious wrongdoing. Thus, even a delay of the full 90 days allowed by § 1818(g)(3) for a post-suspension decision will usually be justified by the public interest in a correct decision as to whether depositors' interests or public confidence are threatened, and by the likelihood, arising from the grand jury's finding of probable cause that the officer has committed a felony involving dishonesty, that the suspension decision was not mistaken. The fact that the criminal proceedings might be concluded more promptly than the FDIC proceeding is irrelevant to the due process determination, since an acquittal will require that the suspension order be vacated, while a conviction will merely strengthen the case for maintaining the suspension. Barry v. Barchi, supra, distinguished. Pp. 486 U. S. 241-247.
(c) The District Court's reliance on § 1818(g)(3)'s failure to guarantee an opportunity to present oral testimony was misplaced. The relevant regulation delegates the discretionary decision whether to accept oral testimony to the hearing officer, but appellee never gave that officer the opportunity to render a decision. There is no inexorable requirement that oral testimony be heard in every administrative proceeding in which it is tendered, and unconstitutionality cannot be premised on the fact that discretionary authority to admit or reject such evidence may be applied in an arbitrary or unfair way in some hypothetical case. Pp. 486 U. S. 247-248.
2. There was no unfairness in the FDIC's use of the § 1818(g)(3) procedure in this case. P. 486 U. S. 248.
667 F.Supp. 652, reversed.
STEVENS, J., delivered the opinion for a unanimous Court.