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February 14, 1995

JOHN FLOOD, et al., Plaintiffs,
NICHOLAS VEGHTS, et al., Defendants.

The opinion of the court was delivered by: JAMES H. ALESIA

 This case involves the rejection by the National Credit Union Administration Board of a proposed credit union's application for federal share insurance. The plaintiffs' complaint seeks judicial review of the agency's action pursuant to the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq., and due process in accordance with the Fifth Amendment of the Constitution. The defendants have moved for dismissal pursuant to FED. R. CIV. P. 12(b)(1), (2), and (6). For the reasons stated below, the motions to dismiss are granted in part and denied in part.


 The Federal Credit Union Act ("Act") provides for the chartering and incorporation of federal credit unions. 12 U.S.C. §§ 1751 et seq. A federal credit union is defined as a cooperative association organized in accordance with the provision of the Act for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes. Id. at § 1752(1). Membership is limited to groups that have a common bond of occupation or association, or to groups within a well-defined neighborhood, community, or rural district. Id. at § 1759.

 The Act designates the National Credit Union Administration ("NCUA") with the responsibility and authority for administering its provisions. See generally id. at §§ 1752a(a), 1781(a). The NCUA is an independent executive agency managed by a three-member board. Id. at § 1752a. Among its responsibilities, the Board insures the member accounts of all federal credit unions in the amount of $ 100,000 per account. Id. at § 1781(a). State-chartered credit unions may also qualify for insurance coverage. Id. at § 1781(a), (b).

 For a state-chartered credit union to gain insurance coverage, it must submit an application to the Board. Id. at § 1781(b). The Board, after considering a number of factors that reflect whether the applicant is a safe insurance risk, must approve or disapprove of the application. Id. at 1781(c). Upon the approval of any application, the Board shall notify the applicant and issue to it a certificate evidencing that it is a federally insured credit union. Id. at § 1781(d).

 The current dispute concerns the Board's denial of an application for insurance coverage. The plaintiffs are the subscribers and sponsor of the Police Credit Union, a newly chartered credit union under the laws of the State of Illinois. By law, each Illinois credit union must insure its share accounts with the NCUA or with such other insurers as approved by the state. 205 ILCS 305/58. In accordance with that, the Police Credit Union applied for insurance with the NCUA, as well as a private insurer.


 The plaintiffs now bring this action, making two claims for relief. First, the plaintiffs seek judicial review under the Administrative Procedure Act, 5 U.S.C. § 706. *fn1" Second, the plaintiffs contend that they were deprived of property without due process of law in violation of the Fifth Amendment. The court considers each in turn.

 A. Judicial Review of the Agency Action

 In the plaintiffs' first claim, they seek judicial review of the Board's decision to deny their application. Plaintiffs argue that the Board's findings and decision were arbitrary and capricious, as well as beyond the statutory and regulatory scheme set out in the Federal Credit Union Act. Meanwhile, defendants argue that this matter should be deemed by the court "committed to agency discretion by law."

 The court must begin with "the strong presumption that Congress intends judicial review of administrative action." Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670, 90 L. Ed. 2d 623, 106 S. Ct. 2133 (1986). That presumption may be overcome "only upon a showing of 'clear and convincing evidence' of a contrary legislative intent." Abbott Laboratories v. Gardner, 387 U.S. 136, 141, 18 L. Ed. 2d 681, 87 S. Ct. 1507 (1967) (citations omitted). With that, the court determines whether the plaintiffs are entitled to judicial review.

 The Administrative Procedure Act ("APA") provides that any person "adversely affected or aggrieved" by an agency action may obtain judicial review thereof, so long as the decision challenged represents a "final agency action for which there is no other adequate remedy in a court." 5 U.S.C. §§ 701-06. In the usual case, a litigant will contest an action (or failure to act) by an agency on the grounds that the agency has neglected to follow the statutory directives of Congress. Webster v. Doe, 486 U.S. 592, 599, 100 L. Ed. 2d 632, 108 S. Ct. 2047 (1988). Section 701(a) of the APA, however, limits the application of the APA to ...

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