CU Defendants File Objections to Discovery in Utah FOM Case

WASHINGTON-NCUA filed an objection to a ruling by a magistrate judge Christmas Eve to allow for discovery in the American Bankers Association lawsuit against the agency. The other credit union defendants followed suit. The costs of discovery, including depositions from third parties, would likely tally in the thousands for all sides, CUNA General Counsel Eric Richard said, as well as many more man-hours. As it stands, the discovery portion is due to be completed by July 16, 2004, the order reads, and the final pretrial conference would be in December 2004. According to NAFCU Senior Vice President and General Counsel Bill Donovan, “The issues related to discovery are procedural in nature and it is not unusual for courts.to delegate resolution of procedural issue to judge magistrates.” A magistrate judge is a senior clerk to the district judge. However, Donovan added, the parties do have a right to appeal to the presiding judge to review or modify the magistrate’s decision. Both attorneys and the objections filed by the parties strongly oppose expanding the scope of the evidence provided to the court. NCUA’s brief (by the Department of Justice) states that Magistrate Judge David Nuffer’s decision “improperly permits broad discovery and the introduction of evidence outside the administrative record, in contravention of the Administrative Procedure Act (“APA”) and decisions construing the APA.” The objection cited previous rulings in the Supreme Court and Tenth Circuit that supported NCUA’s position. Specifically the Tenth Circuit in Olenhouse v. Commodity Credit Corp., called the review of agency action via pretrial discovery and motion proceedings to consider evidence outside the administrative record “illicit,” NCUA and the intervenors’ objections both stated. NCUA’s objection also cited Camp v. Pitts, which stated that even if the administrative record fails to explain the agency’s rationale, there can only be limited inquiry to establish the agency’s reasoning. If this is not sufficient, then the court must remand the case back to the agency, the brief read. NAFCU’s Donovan said the groups are hoping for the judge’s decision shortly after the first of the year, but that there is no set time frame. He added that the credit union groups are very optimistic the judge will see things their way. The ABA’s suit charges that NCUA acted in an “arbitrary and capricious” manner in approving the fields of membership for Tooele Federal Credit Union and subsequent credit unions approved for the same FOM. [email protected]