United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
For the Fifth Circuit March 8, 2004
Charles R. Fulbruge III
Clerk
No. 02-41766
PEOPLES NATIONAL BANK, A National Banking Association,
Plaintiff-Appellant
VERSUS
OFFICE OF THE COMPTROLLER OF THE CURRENCY OF THE UNITED STATES,
and JOHN D. HAWKE, JR., COMPTROLLER OF THE CURRENCY,
Defendants-Appellees.
Appeal from the United States District Court
For the Eastern District of Texas
Before EMILIO M. GARZA, DENNIS, Circuit Judges, and DUPLANTIER,*
District Judge.
DENNIS, Circuit Judge:
Peoples National Bank appeals from an order of the district
court granting defendants’ motion to dismiss for lack of subject
matter jurisdiction. We affirm.
*
Senior District Judge of the Eastern District of Louisiana,
sitting by designation.
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I. BACKGROUND
Peoples National Bank (“PNB”) is a nationally-chartered bank
located in Paris, Texas. It is subject to supervision by the
Office of the Comptroller of the Currency (“OCC”), a bureau of the
Department of the Treasury.
On February 24, 2001, PNB began making small, short-term
consumer loans commonly referred to as “payday loans.” PNB entered
into Marketing and Servicing Agreements with subsidiaries of
Advance America, Cash Advance Centers, Inc., under which Advance
America agreed to market and service the payday loans as PNB’s
agent. In April 2001, the OCC began a regularly-scheduled exam of
PNB. The OCC ultimately notified PNB that its examination rating
would be unsatisfactory due to PNB’s practice of engaging in payday
loan transactions. The OCC also advised PNB that it intended to
initiate an enforcement action against PNB, primarily because of
PNB’s practice of making payday loans.
PNB then informed the OCC Ombudsman that the bank intended to
appeal the examination rating by utilizing the procedures set forth
in Banking Bulletin 96-18 (“BB 96-18"). The Ombudsman advised PNB
that newly-issued Banking Bulletin 2002-9 (“BB 2002-9") would apply
rather than BB 96-18. Like BB 96-18, BB 2002-9 provides that a
national bank may seek review of “examination ratings” but that
“[a] national bank may not appeal to the ombudsman or to its
immediate OCC supervisory office ... [a]ny formal enforcement-
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related actions or decisions.” But BB 2002-9 added Footnote 2
which provides that “a formal enforcement-related action or
decision includes the underlying facts that form the basis of a
recommended or pending formal enforcement action ... and OCC
determinations regarding compliance with an existing formal
enforcement action.” Thus, under BB 2002-9, PNB can appeal its
examination rating to the Ombudsman, but the Ombudsman’s review
will not encompass a review of the facts that form the basis of a
recommended or pending enforcement action or OCC determinations
regarding compliance with an existing formal enforcement action.
An exchange of letters ensued between PNB and the Ombudsman in
which the Ombudsman indicated his willingness to hear PNB’s appeal
of its examination rating but reaffirmed that the appeal would be
governed by BB 2002-9. PNB took no further action to seek intra-
agency review of the examination rating but instead filed this suit
in federal court on March 15, 2002, seeking injunctive and
declaratory relief against the Office of the Comptroller of the
Currency and John D. Hawke, Jr., Comptroller of the Currency. PNB
argues that the defendants violated 12 U.S.C. § 48061 as well as
PNB’s procedural due process rights by enacting BB 2002-9. The OCC
actually commenced its administrative enforcement action against
1
This statute mandates that “each appropriate Federal banking
agency ... shall establish an independent intra-agency appellate
process.” The statute further provides that the appellate process
“shall be available to review material supervisory determinations,”
which include examination ratings.
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PNB on March 18, 2002, by filing a “Notice of Charges for Issuance
of a Cease and Desist Order Against PNB.”
OCC and Hawke moved to dismiss PNB’s complaint in the district
court, contending that the district court lacked subject matter
jurisdiction. The district court granted the motion. The court
noted the prohibition of 12 U.S.C. § 1818(i)(1), which states that
“no court shall have jurisdiction to affect by injunction or
otherwise the issuance or enforcement” of a cease and desist order.
The district court concluded that PNB was essentially attempting to
obtain review of the OCC’s proposed enforcement action and that
section 1818(i)(1) thus stripped the court of jurisdiction.
Additionally, the district court stated that there had been no
final agency action that could be subject to judicial review under
the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq.
After PNB timely appealed, it entered into a consent order
with the OCC. Pursuant to the consent order, PNB agreed to end its
payday lending arrangement and to pay a civil penalty of $175,000.
PNB asserts that this consent order constitutes a settlement and
termination of the enforcement action. The OCC argues that the
enforcement action still exists. Either way, this appeal is not
moot. PNB still intends to appeal its examination rating, and
PNB’s challenge to the implementation of BB 2002-9 still exists.
If the enforcement action has terminated, section 1818(i)(1)
would no longer preclude jurisdiction. But the question of whether
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or not this jurisdictional bar has been removed is only of import
if there is a valid basis upon which the district court could have
asserted jurisdiction in the first place. We conclude that there
is not a valid basis for jurisdiction, and we affirm the district
court’s dismissal.
II. ANALYSIS
A. Standard of Review
This court reviews a district court’s dismissal based on lack
of subject matter jurisdiction de novo. Hashemite Kingdom of
Jordan v. Layale Enterp., S.A., 272 F.3d 264, 269 (5th Cir. 2001).
Federal courts are courts of limited jurisdiction. Id. at
269. As courts created by statute, they have no jurisdiction
absent jurisdiction conferred by statute. Id. at 270. Thus, there
must be a statutory basis for federal court jurisdiction over PNB’s
claims. The party claiming federal subject matter jurisdiction has
the burden of proving it exists. Pettinelli v. Danzig, 644 F.2d
1160, 1162 (5th Cir. 1981).
B. Subject Matter Jurisdiction
PNB alleges that jurisdiction can be based upon the APA and on
the OCC’s alleged violation of 12 U.S.C. § 4806. The APA provides
that “[a]gency action made reviewable by statute and final agency
action for which there is no other adequate remedy in a court are
subject to judicial review.” 5 U.S.C. § 704. Thus, a federal
court may review an administrative agency decision if (1) the
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decision is made reviewable by statute or (2) there has been a
final agency action for which there is no other adequate remedy in
a court.2
As a starting point, section 4806 does not directly provide
for judicial review. Since the relevant administrative agency
statutory provision here does not directly provide for judicial
review, the APA authorizes judicial review only of “final” agency
action. If there is no “final agency action,” a federal court
lacks subject matter jurisdiction. American Airlines, Inc. v.
Herman, 176 F.3d 283, 287 (5th Cir. 1999). PNB argues that the
implementation of BB 2002-9 constitutes final agency action by the
OCC.
As a general matter, two conditions must be satisfied for an
agency action to be final: 1) the action must mark the
consummation of the agency’s decision-making process; 2) the action
must be one by which rights or obligations have been determined or
from which legal consequences will flow. American Airlines, 176
F.3d at 287-88 (citing Abbott Labs. v. Gardner, 387 U.S. 136, 149-
50 (1967)). Conversely, a non-final agency order is one that “does
not of itself adversely affect complainant but only affects his
rights adversely on the contingency of future administrative
2
At one point in its brief, PNB indicates specifically that it
believes jurisdiction is conferred by section 706 of the APA. But
it is well-established that section 706 is not an independent grant
of subject matter jurisdiction. Your Home Visiting Nurse Srvs.,
Inc. v. Shalala, 525 U.S. 449, 457-58 (1999).
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action.” Rochester Tel. Corp. v. United States, 307 U.S. 125, 130
(1939). The APA also states that a “preliminary, procedural, or
intermediate agency action or ruling not directly reviewable is
subject to review on the review of the final agency action.” 5
U.S.C. § 704.
There has been no final agency action in this case. The
agency’s decision-making process has not been consummated. PNB has
not utilized the procedure for appeal to the Ombudsman. The
letters from the Ombudsman to PNB indicate that the Ombudsman is
prepared to hear PNB’s appeal; PNB simply takes issue with the idea
that such appeal will be governed by BB 2002-9. BB 2002-9 may
place a limitation on the scope of review to be applied by the
Ombudsman. But this affects PNB’s rights adversely only “on the
contingency of future administrative action,” that being the
possibility that the Ombudsman will continue to view BB 2002-9 as
a limitation on the scope of review and that the Ombudsman will
rule against PNB. This intra-agency procedural rule should not be
reviewed by a court until it has been utilized and resulted in a
final agency action, in this case a ruling by the Ombudsman. If
PNB were to pursue its appeal to the Ombudsman, it is possible that
the Ombudsman would no longer view BB 2002-9 as limiting the scope
of review or that PNB would prevail in its appeal, thereby mooting
any potential judicial challenge. This indicates that PNB should
pursue its administrative appeal, not shortcut it by filing suit.
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American Airlines, 176 F.3d at 292.
Again, section 704 of the APA provides that any “preliminary,
procedural, or intermediate agency action or ruling not directly
reviewable is subject to review on the review of the final agency
action.” Thus, the time to challenge the appeals process is after
there is a final agency action. Because PNB has elected not to
pursue the agency appeal procedure provided for by BB 2002-9, PNB
cannot now complain that BB 2002-9 denied it a meaningful review in
violation of 12 U.S.C. § 4806. The time to make that argument is
after the appeals process in question has been utilized, resulting
in a final agency action.
III. CONCLUSION
The district court’s dismissal for lack of subject matter
jurisdiction is AFFIRMED.3
3
In its reply brief, PNB attached five documents as exhibits.
None of these documents were included in the record before the
district court. One document is a press release lauding PNB as one
of the top-performing banks in Texas according to the Independent
Bankers Association of Texas. The other four are e-mails from
various OCC employees. PNB contends these e-mails demonstrate the
OCC’s unfair treatment of the bank because of PNB’s participation
in payday loans.
The OCC has moved to strike these five documents because they
were not part of the record before the district court and because
PNB did not seek leave of this court before supplementing the
record. PNB opposes that motion and has moved to supplement the
record contending that these documents are relevant.
“Although a court of appeals will not ordinarily enlarge the
record to include material not before the district court, it is
clear that the authority to do so exists.” Gibson v. Blackburn,
744 F.2d 403, 405 n.3 (5th Cir. 1984). These documents are not
relevant to the disposition of this case. Thus, PNB’s motion to
supplement the record is denied, and the OCC’s motion to strike is
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denied as moot.
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