Petition — Roslindale Cooperative Bank v. Greenwald

Supreme Court brief1981

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In The JUN 4 1981

Supreme Court of the Huited-States

October Term, 1980

ROSLINDALE COOPERATIVE BANK, et ai.,

Petitioners,

vs.

CAROL S. GREENWALD, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE FIRST CIRCUIT

ALBERT G. TOBIN

TOBIN AND TOBIN

Attorneys for Petitioners

735 South Street

Roslindale, Massachusetts 02131

(617) 325-1010

5048 LUTZ APPELLATE PRINTERS, INC.

NY (212) 840-9494 © (516) 222-1606 © (914) 683-9363

NJ (201) 257-6850 © PA (215) 563-5587 © DC (202) 783-7288 @ MA (617) 227-1133

QUESTIONS PRESENTED

1. Whether the district court must exercise its

jurisdiction?

2. Whether the Supreme Judicial Court, the district

court, and the appellate court have granted the respondents

defenses that the respondents did not plead, contrary to F.R.

Civ. Proc. Rules 8(c) and 56(e)?

3. Whether the petitioners have pleaded specific facts

which must be taken by the court as true, and therefore it is

the petitioners who are entitled to summary judgment?

4. Whether the district court has aided the respondents to

continue the violations of the petitioners’ rights by failing to

grant timely orders to enable the petitioners to obtain judicial

due process in either state or federal courts?

5. Are M.G.L. c. 170 App. 2, §§4 and 5, and M.G.L. c.

167, §5 unconstitutional on their face; or at least

unconstitutional without rules and regulations, and/or as used

by the respondents against the petitioners?

6. Whether the M.G.L. c. 167, §5 hearing was conducted

by a “judge” who was biased as a matter of law, and the

hearing procedures violated the petitioners’ (four)

constitutional rights of due process?

LIST OF PARTIES

All of the parties are not in the caption of the case and

are therefore listed in the footnote below.'

1. Petitioners:

A. Roslindale Cooperative Bank of Boston, Mass.

(1) The Roslindale Bank as a corporation;

(2) The shareholders of the Roslindale Bank.

B. Directors who have not been charged by any notice of any proceeding

as individuals, but who were de facto removed on October 28, 1977.

(1) Six directors who were elected and holding office on October 28,

1977, and who have been de facto removed since then:

(a) Benedetto Faletra;

(b) Harold T. Hourihan;

(d) Dr. Joseph Marcantonio;

(e) James J. Rock; and

(f) Charles W. Wiggins.

(2) One director who was not in office on October 28, 1977, and who

has been de facto not allowed to serve: Dr. H. Thomas O'Hara.

C. Four directors who were in office on October 28, 1977, and who were

de facto removed along with all of the other directors on October 29, 1977.

These four directors received notice of charges over one year later on

November |, 1978. They were then “purportedly” de jure removed on January

4, 1979. The petitioners claim that this de jure removal can never be established

lawfully because the respondent Greenwald refused to appoint a clerk, so that

the petitioenrs could summon records, this refusal contrary to M.G.L. c. 66 §6

procedures, results in no lawfully-made record of the M.G.L. ¢. 167. §5

hearing.

(Cont'd)

iii

(Cont'd)

(1) Leonard F. DeLosh;

(2) James M. Quinn:

(3) Albert G. Tobin; and

(4) Robert H. Tobin.

D. One director who was in office on October 28, 1977 and whe

subsequently resigned to avoid charges and impairing his failing health: Orest

Falcione

Respondents:

A. The former Commissioner of Banks, Carol S. Greenwald whose term

of office has expired on January 4, 1979, being sued in her official capacity and

as an individual.

B. The present Commissioner of Banks, Gerald T. Mulligan, is being sued

in his official capacity.

C. The Deputy Commissioner of Banks, Edward Flynn, who has been

Deputy Commissioner under Greenwald and Mulligan, and who is bcing sued

in his official capacity and as an individual.

D. Cooperative Central Bank.

E. The Executive Officer of Cooperative Central Bank and its fifteen

directors, who are being sued in their official capacities, and also as

individuals:

(1) Sydney Dunn, President;

(2) Earle C. Harvey. Vice-President;

(3) George Sutton, Clerk;

(4) James L. Burns, Executive Vice-President;

(5) Harold S. Adams;

(6) Robert F. Currie;

(7) Alexander J. Guittan;

(Cont'd

(8) Charles W. Hickson;

(9) Joseph W. Higgins:

(10) Felix A. Kulick;

(11) Francis M. Metterville;

(12) Joseph C. Murray;

(13) William D. Palmer;

(14) Everett P. Pope;

(15) John G. Wallwork;

(16) Henry S. Thompson; and

(17) James G. Perkins, Jr.

F. The Board created under M.G.L. c. 167, §5, who are being sued in

their official capacity, consisting of:

(1) Attorney General;

(2) The State Treasurer; and

(3) The Commissioner of Revenue.

TABLE OF CONTENTS

Page

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Table of Contents MPYYTTITIT Titi rrr rrr v

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NG OE PUREED oo vcckcvocceccncceccveceuecns 16

The Federal Questions Are Substantial ...............05+ 21

I. The district court must exercise its jurisdiction. .. 22

II. The Supreme Judicial Court, the district court, and

the appellate court, have granted the respondents

defenses that the respondents did not plead, contrary

to F.R.Civ. Proc. Rules 8(c) and S56(e). ......... 26

III]. The petitioners have pleaded specific facts which

must be taken by the court as true, and therefore it is

the petitioners who are entitled to summary

PURSE, Sicccciccospecedccovcuccescetecccess 29

Contents

Page

IV. The district court has aided the respondents to

continue the violations of the petitioners’ rights by

failing to grant timely orders to enable the

petitioners to obtain judicial due process either in

state or federal Courts. .....cssecccsccccseccces 32

V. M.G.L. c. 170, App. 2, §§4 and 5 and M.G.L. c. 167,

§5 are unconstitutional on their face, or at least

unconstitutional without rules and _ regulations,

and/or as used by the respondents against the

BOURIONETS. cc ccccncccccccccccccccccccesceccece 33

VI. The M.G.L. c. 167, §5 hearing was conducted by a

“judge” who was biased as a matter of law, and the

hearing procedures violated the petitioners’ (four)

constitutional rights of due process. ...........+: 35

EE nn ee ee et Pe Oe ey re 38

TABLE OF CITATIONS

Cases Cited:

Allen v. McCurry, —. U.S. —, 66 L. Ed. 2d 308, Sl. Dec.

T9D3S (Dec. 9, 1980) .ccccccccccccccccccsccescccecs 4, 23

Amos Treat Co. v. Sec. Exc. Com., 306 F. 2d 260 (1970)

vii

Contents

Page

Anderson v. Great Republic Life Ins. Co., _. Cal. __, 106

P. OO GRID see hcd as newedecrdcactidecsecucesvess 33

Armstrong v. Manzio, 380 U.S. 545)... cece cece ence eees 3,6

Athas v. United States, 597 F. 2d 722 (Ct. Cl. 1979) ...... 13, 16

Camero v. United States, 375 F. 2d 777 (1971) ............ 37

- Carey v. Phipus, 435 U.S. 247 (1978) ..ccccccccccccccvees 32

Central Motors v. City of Pepper, 65 Ohio App. Ct. 2d 34,

GOD TE... 20 250 (IGSS) cc cvecceddsiccdvcscsvccces 4, 5, 23

Citizens to Preserve Overton Park v. Volpe, 491 U.S. 402

CIRTE) ccccdscddbvccccccccncccsscdccascaccescessone 28

Com. v. Bank of Mutual Redemption, 4 Allen | (Mass. 1862)

CSededacdvcceneveccecdogegnethbectesesscbssccscces 35

England v. Louisa Bd. of Medical Examiners, 375 U.S. I11

SIFT vac cr deceSewes ec cdiccckisbobsesdecucnasecce 22, 23

Feinberg v. F.D.1.C., 420 F. Supp. 109 (1976) .... 22, 24, 34, 37

Ferguson v. Ominedia, 469 F. 2d 194 (Ist Cir. 1973) ....... 27

Fuentes v. Shevin, 407 U.S. 67 (1972) ......cceeeceeees 3, 6, 29

Gomez v. Toledo, SI. Dec. 79-5601, _.. U.S. —_, 64 L. Ed.

on Sra, 100 BS. CR. Ren (ISSR) ivicccces 5, 17, 23, 26, 27, 31

Goss v. Lopez, 419 U.S. 565 (1975) wo. cece cece cece eee eeee 24

viii

Conients —

Page

Grayed v. Rockford, 408 U.S. 108 ...-...cceeeeeeeeeeeees 36

In re Murchinson, 349 U.S. 133... ccc cece ceeeereeeeeees 36

Joint Anti-Facist Committee v. McGrath, 341 U.S. 123 (1951)

poe SeWee ecb ues dereececceesececasevebeesoonscecs 34

Kearny v. Bd. of Reg. Pharmacy, 4 Ma. Ap. Ct. 25, 340 N.E.

Bb BAe CUPTOD cvncccevavecceccascsusocséecvees 13, 24, 28

Kessler Shoe Co. v. Philadelphia Fire & Marine, 295 Mass.

ESD, F:Ts GEG? enrevacvevccdcccoccctacccestdeses 28

Latrobe Electric Steel Co. v. Vascomy Ramet Corp., 55 F.

Supp. 347 (D. Del. 1944) .cccccccccccccccccccccccece 27

Manges v. Camp, 474 F. 2d 97 (1973) ....ceseeeeeceveees 22, 24

McNeese v. Board of Education, 373 U.S. 668 ((1963)

Pe cecsSeeebboesssdseeeVedescencccsdoscecees 4, 21, 23, 25

Minn. v. Cloverleaf, __U.S. —_, 101 S. Ct. 2d 715, 66 L. Ed.

ME TTIG oc ends ccctccsescccccenctcedentedevecdears 30

Monroe v. Pape, 365 U.S. 167 (1961) ....ceeeeeeeeees 4, 23, 25

N.A.A.C.P. v. Button, 371 U.S. 415 (1963) ..... cece ee eees 35

National Pork Prod. Council v. Bergland, 484 F. Supp. 540

CUE ce bse Vdcusisehccccceveusbbesheheer siccccen 28

Contents

Page

Ottoway Newspapers v. Appeals Court, _Mass. —, 386

DE MEEEOTED deb ctnensensyeseesaccueesiseses 35

Owens v. City of Ind., Mo., _ U.S. __, Sl. Op. 78-1779

SURO bac ccccepenvsesendsnedsatse cciebsdacenenecans 8, 30

Powell v. Ward, 392 F. Supp. 628 (1975) ......eeeceeeeees 37

Pupecki v. James Madison Corp., Mass. A.S. 2340, 382 N.E.

PEPE REEVE ccucccccccccccctcotecscceeecese 11, 12, 27

Purity Supreme v. Attorney General, _. Mass. —, 407 N.E.

PET CEDEEE Reccucceccccnccccccscccessesiosceeses 28

Richmond Newspapers v. Va., _. U.S. ——, Sl. Dec. 79-243

GEEZ, TIGGD ccccwccccccccccccccncscscoccccoees 5, 7, 38

Roslindale Cooperative Bank v. Greenwald, 481 F. Supp.

EEE Fe BOTED cccvccccccccvcce 2, 20, 24, 26, 29, 30, 31

Roslindale Cooperative Bank v. Greenwald, No. 78-11-Z

CE A NEED ccccocccccoccesccccsvccnsece 1, 20, 24, 31

Roslindale Cooperative Bank v. Greenwald, No. 80-1280,

dies ON tee COM. G, TRB) cc ccccccescccceneses 1, 21,2

Saxon Coffee Shop v. Boston Lic. Bd., _.. Mass __, 407 N.E.

ED stclmesgvdctececevessssaeceeecaseoans 28

Service v. Dulles, 354 U.S. 363 (1957) ......cceeeeeeeeeees 24

Suburban Land Co. v. Billerica, 314 Mass. 184; 49 N.E. 2d

RS 2 ia calkendeese6006ssosunecteneeecewess 8, 28

Contents

Page

Susquehanna Valley v. Three Mile Island, 619 F. 2d 231

SEs doheomss bodess ococccsbabacddaedeercescveus 23, 24

Swan v. Stoneman, 634 F. 2d 97 (2d Cir. i980) ....... 4, 23, 25

Swartz v? Dep't of Banking & Insurance, _. Mass. —_, 382

PUB. 26 BOSD CSTE) cece ccccccccccccsccccccvcccses 8

Tobin v. Commissioner of Banks, 1979 A.S. 498, 380 N.E. 2d

PC as DOPED 060 dé bb secedccdbeesews 2, 9, 17, 20, 21

United States v. Lynd, 301 F. 2d 818 (Sth Cir.), cert.denied,

FEE Ue SOO TAPED 0 cheb bd bccccccscicsesveccsooonce 32

United States v. Ward, _ U.S. —_, SI. Dec. 79-349 (1980)

IDTD) ccccccccccccccccccccccccccscccscccccccccces 34, 37

(1DZS) .cccccccccccccccccvcccccccccccccccccccceeces 10

Watson v. Johnson, — ~ Wash. — , 24 P. 2d 592, 89 A.L.R.

SEEN cb Gyn 564 640s James e's 0c Ug beRb ees tcengiec 33

Whiteside v. Kay, 446 F. Supp. 716 (1978) ...........eeee- 24

Wood v. Strickland, 420 U.S. 308 (1974) ......ceeeeeeeee 32

Wong Yang Sun v. McGfath, 339 U.S. 33 (1950) .......... 34

Contents

Page

Worcester County Bank v. Com. of Banks, 340 Mass. 695, 166

Ne DE cccsecevaeetusUareswewsecsinssdcccccccrccss 17

Yeik v. Dept. of Taxation, 595 P. 2d 965 (1979) .......... 34, 37

Youngstown Sheet and Tube Co. v. Sawyer, 343 U.S. 579

CIFSE) occccccccvecccccecccccccccccccsssccececcees 11, 22

Statutes Cited:

BO VBR. GUA cccccccccscccscesccccccccssoccccececess 6

BB USC. GITGAO) cccccccccccccwccsccccccccccscesceces 20

BB USC. BISST ccccccccccccsccccccccccccccvescccces 4,7, a2

Be WI, BEIGE ccccescccesccnccncsvcncesectecsececees 17, 22

BO VBR. GIS cccsccccccsccvasesscvccccsscenccccecees 2

2B USC, GEOL cccccccicccccccccccccccccccceeseoes a, 17, 23

G2 US.C. BISSS .ccccccccccccccccccccccsccccccsccccsccs 2, 17

GB USC, GISES nccccccccccvvccccccssccccccscoscece 2, 15, 17

G2 UBL. GIGS oc ccccvsvesccccccccsccccccccsceseve 2, 15, 17

DE.G.L. 6. SOA: ccccccccscccccccccccccccccceece 6, 7, 13, 14, 30

DAG. 6. SOA, G2 ccccccccscccvenscscccovcesedscececes 28, 34

ES MA BONO i gic iicakscncip ces bocca ses 15, 28, 34

xii

Contents

Page

BEAR. ©: TOA, GOA cccvcccicccccccccccescoctocccesces 15, 34

BELG.L. € JOA, FD cccccccsccccdcccccecvcccvesosces 14, 34, 37

DA.G.L. 6. SOA, GEE cccccccccccccccccccccccsccccccsccees 7

BE.G.L. 6. SBA, GURE) sccccccccccccccccccccccccescccece 12

MLG.L. ©. SOA, GLIA .cccccccccccccccccccccccces 6, 7, 12, 30

DE.G.L. 6. SBA, GIG cc ccccvcccrccccccccccccccccecccccses 17

DE.G.L. 6. 6 ccccccccccccccccccsccaccceees 6, 13, 14, 30, 32, 38

DE.G.L. 6. 66, GGA ceccccccccvcccccccccccccccsoccces 7, 12, 18

DEGRA. 6. 46, G6 ccccccccccrcccscccccccccosece ii, 7, 12, 13, 18

PO PBe Gs GB, BID cccccaccccccccesccceccccccccscesccces 30

WE.G.L. 6, 66, GIS .nccccccccccccccccsccccccccccccccocs 32, 38

DO.GL. 6. GGjBET cc cccccccccscccescscoccccccscccccece 32, 38

DEG. 6. G6, GETS cccccccccccccccccccscccccccccesccee 30

BENE E. O. GGA cccccccccvccccccsccccsccccssees 6, 8, 13, 14, 30

DEAR. ©. TGF GE csc ccvcccccccsccccccccecvsceses 8, 13, 14

Ack A) POPeerererrerrrerrrrrr errs rere 18, 19, 36

DEG: BOF BO oc icc cccccnccrecscvctccesacccccescece 14

xili

Contents

, Page

M.G.L. c. 167, §5 ....i, ii, iv, 9, 10, 13, 14, 18, 33, 34, 35, 36, 37

ne, RDP ep Ey Sarr ois a a 16, 21

OR aor cehiska ec ee 12

M.G.L. c. 170, App. 2, §4 «++. i, 9, 10, 13, 14, 23, 28, 33, 34, 36

iE eS AI RO scoccickeovcessvesevesns’ i, 10, 23, 33

ee SA li, SN ds oy veal cheat ivaas 12

M.G.L. €. 170, App. 2,98 sccccccccsscsecceees 1, 12, 14, 28, 34

AE OO Hee SM oso 5s cadckaoceuit iced: 17, 21

Me Tey ee EN TR mNe POE 8, 13

pace, CIN a ie) heded cn odes vec) 8, 13

WN MNO elo serciavis vse sacees 4, 7, 18, 21, 23

NN a MEIN 5c otra cha ceacdedeesssieteevs 21

Mea i sevasdhiavsices avostlisy aes 34

United States Constitution Cited:

PE PUES nb cacweccdbesecrercecedsesseegecee 5,7, 38

PORTIS ARGON ic cc dccdvcccecccccsccccess 6, 7, 24, 29

xiv

Contents

Page

Rules Cited:

Federal Rules of Civil Procedure:

Rule B66) wcccccccccccccccccccccccccccvevcces i, 5, 26, 27

Rule 44 nccccccccccccccccccccccvcvcceseccees 5, 7, 27, 28

Rule S6()) wccccccccccccccccccccccccces i, 5, 12, 19, 26, 27

Rule ST wcccccccccccvcccccccccccvccveccscccscccese 32

FRAT TTT T TTT ere eee TT rT TTT iT ee 20

Massachusetts Rules of Civil Procedure:

Rule 1206) occcccccccccccccccccccvevcvcccccsccccces 12

Rule 12(BON6) occcccccvcccccccscccccccccccccces 4, 17, 19

Rule 44 ncccccccccccccccccccccccccccccccvcceeecens 5

PRUNS FEED co vcccccccccceccoccceccesccccecencece 5, 18, 19

United States Supreme Court Rule 18 ........eeeeeeeeeee 11, 22

Other Authorities Cited:

Regulations of the Commissioner of Banks, Sec. |-4 ........ 7,9

147 A.L.R. 660 .cccccccccccvccccccccccccsccccveveveees 8

Contents

Page

APPENDIX

Appendix A —- Order Denying Motion .........eeeeeeeee la

Appendix B — Motion ....cccccccccescscvssseseveveens 2a

Appendix C — Amended Decision Dated January 8, 1981

MPPTTTTITITITITT TILT TTTTT TT i Titi Sa

Appendix D — Decision Dated March 25, 1980 ........... lla

Appendix E — Roslindale Cooperative Bank, et al. v. Carol

Greenwald, et al., 481 F. Supp. 749 (1979) .......eee0s ISa

Appendix F — Tobin v. Commissioner of Banks, 1979 Mass.

A.S. 498, 380 N.E. 2d 1248 (1979) ...cccceeeeeeeeeees 29a

Appendix G — Relevant Statutes and Constitutional Pro-

VIRIONS seccccccccncccreccccncccoccccscesedocosoces 34a

No.

Supreme Court of the Huited States

o—

October Term, 1980

ROSLINDALE COOPERATIVE BANK, et ai.,

Petitioners,

VS.

CAROL S. GREENWALD, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FIRST CIRCUIT

OPINIONS BELOW

1. Denial of petitioners’ motion to recall mandate dated

January 30, 1981 and denied by the appellate court on

February 11, 1981 (see Appendix A and B, infra, la-4a).

2. Roslindale Cooperative Bank v. Greenwald, No. 80-

1280, _.. F. 2d —— (January 8, 1981) hereinafter called

Roslindale III (see Appendix C, 5a-10a). °

3. Roslindale Cooperative Bank v. Greenwald, No. 78-

111-Z (March 25, 1980) hereinafter called Roslindale II (see

Appendix D, | la-14a).

4. Roslindale Cooperative Bank v. Greenwald, 481 F.

Supp. 749 (December 7, 1979) hereinafter called Roslindale |

(see Appendix E, 15a-28a).

5. Tobin v. Commissioner of Banks, 1979 A.S. 498, 380

N.E. 2d 1248 (February 28, 1979) hereinafter called Tobin (see

Appendix F, 29a-33a).

STATEMENT AS TO JURISDICTION

I. This is a petition for review of a decision of the

District Court of Massachusetts, for a complaint brought

under the authority of 28 U.S.C. §§1331, 1343 (ie., 42 U.S.C.

§§1983, 1985, 1986) and 28 U.S.C. §2201, by a financially

sound bank, its shareholders and directors, acting both as a

collective board in their official capacity, and as individuals.

The financially sound bank was “seized” and its directors and

shareholders’ rights to control its possessions were “removed”

by the Commissioner of Banks by the unauthorized use of a

“liquidation statute” which appointed the respondent Central

Bank, “a statutory administrative receiver” for liquidation

purposes. Neither the bank nor its officers have yet to receive

administrative notice of charges or a hearing after over three

years from October 28, 1977, and the petitioner bank has not

been “liquidated” but has been continued in business by the

administrative statutory receiver, Central Bank.

The petitioners say that the Supreme Judicial Court of

Massachusetts has decided a federal question which conflicts

with the decision of the First Circuit Court of Appeals and

with decisions of other circuit courts of appeal and also with

decisions of the Supreme Court of the United States.

The petitioners say that the First Circuit Court of

Appeals has decided a federal question, which conflicts with

the decision of the Supreme Judicial Court of Massachusetts,

other circuit courts, and also with decisions of the Supreme

Court of the United States.

The petitioners further say that the Supreme Judicial

Court of Massachusetts, the First Circuit Court of Appeals,

have decided an important question of law which apparently

has not been, but apparently should be settled by the Supreme

Court of the United States. Both decisions not only conflict

with each other but also conflict with applicable decisions of

the Supreme Court of the United States.

The petitioners say the gravamen of their complaint is

that they have been denied by the respondent administrators

as required by both constitutional law, and the statutes of

Massachusetts, as well as regulations of the Division of Banks,

“prior notice of charges” (or arguing in the alternative), “post

prompt” notice of charges, as well as the other requisites of

due process; an administrative confrontation hearing with a

record of findings of fact and law that a court can review; as

well as rights of review and appeal. The petitioners say no

administrative hearing at this late date can correct these

constitutionally required deficiencies of procedure within the

time frame set by Armstrong v. Manzio, 380 U.S. 545 and

Fuentes v. Shevin, 407 U.S. 67 (1972).

The petitioners say that the confusion in the decisions of

the district court, the appellate court and the Supreme

Judicial Court relative to the Doctrines of Primary Resort,

Primary Jurisdiction, and Exhaustion of Administrative

Remedies, in this case, has had a total effect worse than the

Doctrine of Abstention; for at least in abstention, the court

stays the action. See Am. Trial Lawyers Assoc. v. N.J. Sup.

Ct., 409 U.S. 467 (1973). It is to be noted that the district

court refused a motion copied exactly from American Trial

Lawyers, supra. Thus the petitioners have been subject to

“unfettered freedom” of administrators, who have continued

to refuse the petitioners administrative due process, over any

issue, and who have continued to do so for over three years,

without court intervention, and there still remains no record

that any court can review of any of the respondents’

adjudications.

To further explain the petitioners’ difficulties, the District

Court of Massachusetts and the First Circuit Court of

Appeals have, in fact, extended the doctrines to state that the

petitioners must use available State Judicial Declaratory

Judgment Procedures, M.G.L. c. 231A, contrary to the Supreme

Court decision of Monroe v. Pape, 365 U.S. 167 (1961) as

elaborated by McNeese v. Board of Education, 373 U.S. 668

(1963) and as recently elaborated in Allen v. McCurry, U.S.

——., 66 L. Ed. 2d 308, Sl. Dec. 79-935 (Dec. 9, 1980).

The conflict of decisions between the various circuit courts

on the Exhaustion Doctrine is set forth very clearly in Swan v.

Stoneman, 634 F. 2d 97 (2d Cir. 1980).?

The petitioners say that the Supreme Judicial Court allowed

a dismissal of the petitioners’ complaint under M.R.C.P. Rule

12(b)(6), because the petitioners failed to exhaust administrative

remedies, which were not offered by the agency and which did

not exist. The Supreme Judicial Court, sua sponte, allowed this

affirmative defense which the respondents did not raise by

pleadings. See Central Motors v. City of Pepper, 63 Ohio App.

2. Swan v. Stoneman, 634 F. 2d 97 (2nd Cir. 1980) at p. 103:

“The law is less clear, however with respect to

exhaustion of state administrative remedies. The language

of a number of Supreme Court decisions suggest that state

administrative remedies, like state judicial remedies, need

not be exhausted prior to commencement of a federal civil

rights suit. See e.g. Ellis v. Dyson supra; Steffel v.

Thompson, 415 U.S. 452, 472-473, Carter v. Stanton, 405

U.S. 669, 671 (1972); Houghton v. Shafer, 392 U.S. 639, 640

(1968); King v. Smith, 392 U.S. 309, 312 n4 (1968) Damico

v. California, 389 U.S. 416, 417 (1967). Several courts have

interpreted these decisions as laying down a flat rule that

exhaustion of administrative remedies is not required in

such cases. See e.g. Green v. Ten Evck, 572 F.2nd 1233,

1239-40 (8th Cir. 1978); McCray v. Bunell, 516 F.2nd 357,

361-365 (4th Cir. 1975) en banc cert. granted 423 U.S. 923

(1975) cert dismissed, 426 U.S. 471 (1976); Hawkins v.

Town of Shaw, 461 F.2nd 1171, 1176 (Sth Cir. 1972) (en

banc).”

“... We have held that before relinquishing its 1983

jurisdiction, a federal court must Le ‘positively assured’ — it

may not presume — that there are speedy, sufficient, and

readily available administrative remedies remaining open to

pursue,”

Ct. 2d 34, 409 N.E. 2d 258 (1980). The court also looked to the

petitioners’ pleadings for authority contrary to Rule 9. The

respondents had not pleaded that Tobin had no authority.

In spite of Gomez v. Toledo, S|. Dec. 79-5601, _. U.S.

—~, 64 L. Ed. 2d 572, 100 S. Ct. 2. (1980) which overruled

Gomez v. Toledo, 602 F. 2d 1018, and which the district court

cited in its decision (see 481 F. Supp. at 755, par. 19). The First

Circuit is still granting the respondents affirmative defenses that

they have neither pleaded by answer or raised by affidavits, such

as immunities and the Exhaustion Doctrine, which are both

affirmative defenses which must be pleaded. See F.R.C.P. Rule

8(c).

The petitioners say that both the First Circuit Court of

Appeals and the district court decisions in effect, deny the

Roslindale Bank due process of law, because they refuse the

petitioners federal jurisdiction and also because they will not and

have not in the past, ordered the respondents to give to the

petitioner bank sufficient funds of its own money, which they

hold in their possession adversely, to enable the petitioner bank

to hire independent knowledgeable counsel, and/or pay the costs

of court necessary to obtain discovery.

The district court and the First Circuit Court of Appeals

also have refused the petitioners protective orders that would

protect the petitioners’ First Amendment rights to obtain “public

records” for court procedure. The district court also refused to

order the respondents to appoint a clerk to certify “public

records” or the “lack of public records” to enable the petitioners

to meet the requirements of F.R.C.P. Rule 44 (similar to Mass.

R.C.P. Rule 44) or F.R.C.P. Rule 56(e) [similar to Mass. R.C.P.

56(e)], which the petitioners need to receive due process in either

federal or state courts. The petitioners say that since Richmond

Newspapers v. Va., —_— U.S. ———, Sl. Dec. 79-243 (July 2,

1980) they have a First Amendment right to gather information

from the state respondents for the purposes of obtaining judicial

due process, as well as a right to an “open trial” in

administrative decisions that effect their constitutional rights, or

at least a right to an “open trial” post promptly or at least a

“closed” hearing “post promptly”.

Il. The dates of entry of the last order denied by the First

Circuit Court of Appeals is February I1, 1981. The motion

denied by the order is set forth as Appendix B at page 2a. The

order is set forth as Appendix A at page la. The amended

decision sought to be reviewed is dated January 8, 1981 and is

set forth in Appendix C at page Sa. This Court (Brennan, J.) on

April 7, 1980 granted petitioners’ motion for an extension of

time until June 7, 1981.

III. The statute that confers jurisdiction on this Court for a

petition for a writ of certiorari is 28 U.S.C. §1254.

CONSTITUTIONAL PROVISIONS, STATUTES AND

REGULATIONS INVOLVED

The basic constitutional issue involved is the Fourteenth

Amendment’s right to due process as elaborated by the other

amendments.

The petitioners also claim the equal protection of statutory

entitlements to procedural and substantive statutes that were

enacted by the Legislature to ensure that constitutional required

procedures were not violated by Massachusetts administrators

when dealing with its citizens’ constitutional rights.

The petitioners have pleaded that the respondents have

massively ignored and intentionally continue to violate the

following statutes: The Administrative Procedures Act; M.G.L.

c. 30A; M.G.L. c. 66; The Public Records Law; M.G.L. c. 66A;

The Fair Information Practices Act. All of, which similar to

their federal counterparts, are known and settled laws and have

known and settled court decisions, as well as the published

regulations of the Commissioner of Banks.

The petitioners say they are entitled by federal minimum

timely notice of charges and a hearing. Fuentes v. Shevin, 407

U.S. 67 (1972); Armstrong v. Manzio, 380 U.S. 545 and they are

also entitled to prior notice by M.G.L. c. 30A, §LIA'% of “48

3. Fourteenth Amendment (in pertinent part) can be found in the

appendix at p. 39a.

hours” notice,* and by M.G.L. c. 30A §11 of reasonable notice,‘

and by the Regulations of the Division of Banks of “ten days

notice”.®

The petitioners also say that since Richmond Newspapers v.

Virginia, _. U.S. —_, Sl. Op. 79-243 (1980), they have been

entitled to a First Amendment right to public records, especially

if these records are designed to be made to obtain judicial due

process and this is a guaranteed Fourteenth Amendment right.

However, the petitioners also say they were granted procedural

entitlements by M.G.L. c. 30A, §11A%’ and M.G.L. c. 66, §5A®

and §6° and the Regulations of the Commissioner of Banks.'°

The petitioners say that because the administrative bodies

have primary jurisdiction and the court has only the right of

review, the court is limited by F.R.C.P. Rule 44, to the

administrative record. M.G.L. c. 30A, certiorari and M.G.L. c.

231A give the court only secondary jurisdiction. As there was no

clerk appointed, or no record in anyone’s custody, any other

evidence as to the administrative hearings is barred by the parol

evidence rule. N.E. Box Co. v. C & R Const. Co., 313 Mass.

698, 49 N.E. 2d 121 (1943).!!

4. See appendix, infra at p. 39a.

5. See appendix, infra at p. 40a.

6. See appendix, infra at p. 4la.

7. See appendix, infra at p. 39a.

8. See appendix, infra at p. 40a.

9. See appendix, infra at p. 40a.

10. See appendix, infra at p. 4la.

Il. N.E. Box Co. v. C & R Const. Co., 313 Mass. 698, 49 N.E. 2d 121

(1943) at 127 N.E.:

“The provisions of section 6 of c. 66, to the effect that

all votes, orders, and proceedings shall be entered is

(Cont'd)

The parol evidence rule is not one merely of evidence but is

a rule of substantive law. Suburban Land Co. v. Billerica, 314

Mass. 184, 49 N.E. 2d 1013, 1016 (1943); 147 A.L.R. 660.'2

The petitioners also say that they have a “liberty right” to

privacy and ‘to enjoy their statutory entitlement to be bankers

and that the stigmatization cast upon them gave right to an

immediate name-clearing hearing. Owens v. City of Ind., Mo.,

— U.S. ——, Sl. Op. 78-1779 (1980); but the petitioners under

M.G.L. c. 214, §1B,"3 and §3B'* were given the right of privacy

and M.G.L. c. 66A, The Fair Information Practice Act, gives the

petitioners rights in the same vein but beyond the right. of

privacy.'* See Swartz v. Dep’t of Banking and Insurance, ——

Mass. ——, 382 N.E. 2d 1050 (1978).

The petitioners also claim the equal protection of special

statutory entitlements to procedures that the Legislature enacted

for the protection of banks and bankers, which the respondents

violated. M.G.L. c. 167, §2'5 sets forth procedures to be used for

(Cont'd)

sweeping. It is not confined merely to votes of a public

board, but includes also its orders and proceedings. The

obvious purpose of the section is to require that a public

board record of the proceeding shall be kept and it must

have been intended that a record so kept should constitute a

public record. We find nothing in the cases where the

provisions that suggest any other conclusion . . . As already

pointed out, the general rule forbids proof of acts of boards

by any other evidence other than a record.”

12. Suburban Land Co. v. Billerica, 314 Mass. 184, 49 N.E. at 1016:

“It is settled, as the plaintiffs correctly contend, that the

records of a town clerk, as of any public body are not open

to addition, contradiction, or variation by parol

evidence... .”

13. See appendix, infra at p. 4la.

14. See appendix, infra at p. 4la.

15. See appendix, infra ai p. 40a.

the determination of the value of a bank’s real estate mortgage

portfolio which requires prior notice and a “certified real estate

appraiser”.

The petitioners also claim that M.G.L. c. 167, §5'® sets forth

procedures to be used for the removal of bank officers which

entitle the petitioners to prior notice and procedures before

being removed. See Tobin v. Greenwald, supra, p. 1248. The

petitioner directors and individuals were removed on October

28, 1977 and their constitutional rights diminished. Four

directors received notice “not post promptly”, (one year later) on

November 1, 1978. Eight directors have never received any

notice at all.

The petitioners also claim the equal protection of

“regulatory entitlements” of prior notice and procedure in

published regulations of the Division of Banks entitled

“Regulations established in and in accordance with and under

the authority of section 9 of chapter 30A” (i.e., Administrative

Procedures Act) of the General Laws Governing the Conduct of

Adjudicatory Proceedings Before the Commissioner of Banks,

Department of Banking and Insurance, Division of Banks and

Loan Agencies.'’

One of the petitioners’ basic claims is for political reasons,

the respondent Greenwald maliciously misused the authority of

M.G.L. c. 170, App. 2, §4'8 and “certified” that the Roslindale

Bank was “unsafe” and “inexpedient to continue in business”,

when it was neither “unsafe” and three years later, it is still in

business. The petitioners have also pled that she had no

intention to order the bank liquidated.

The petitioners say the respondent deliberately misused

M.G.L. c. 170, App. 2, §4 to deliberately avoid giving the

petitioner bank’s directors and officers the due process of

16. M.G.L. c. 167, §5 is in full text in the appendix as it appeared in 1977.

17. See footnote 10.

18. M.G.L. c. 170, App. 2, §4 is found in the appendix in full text, as it

appeared in 1977 at p.*35Sa.

M.G.L. c. 167, §5; the officers removal statute to

administratively merge the petitioner individuals out of office; and

also to diminish the shareholders of Roslindale rights by

merging the shareholders with a larger bank whose voting offices

would not be in the Roslindale Bank’s geographical district.

Another important aspect of the petitioners’ complaint is

that M.G.L. c. 170, App. 2, §4, appoints Central Bank as an

“administrative statutory receiver” and M.G.L. c. 170, App. 2,

§5,'9 provides for return of the petitioner bank by Central Bank

with the approval of the Commissioner. The respondent Central

Bank resumed the petitioner bank’s business immediately

without turning it back. They continued to resume the business

even after they, themselves, decided, ex parte, at least on April

25, 1978, that the bank could not be liquidated. They have

ignored the Supreme Judicial Court’s decision of February 28,

1979, which stated that Vigilante v. Old South Church, 251

Mass. 385, 146 N.E. 670 (1925) applies toall(Roslindale) bank’s

business. Vigilante states that even the Commissioner cannot

appoint an agent to resume the business, “Great abuse might

result if he were allowed so to do... .”

At the time of the certification, there were no rules and

regulations enacted by the Commissioner of Banks as described

in M.G.L. c. 170, App. 2, §429, or by Central Bank as described

19. M.G.L. c. 170, App. 2, §5 is found in full text in the appendix at

p. 36a.

“At any time after the corporation has taken over

control . . . it may with approval of the Commissioner turn

back control... . to such member bank which may resume

business free from any control by the

corporation... subject to such conditions as the

commissioner may impose... .”

20. M.G.L. c. 170, App. 2, §4 is in full text in the appendix at p. 35a.

“... and shall operate such bank subject to such rules

and regulations as the commissioner may impose until the

bank shall resume business or until its affairs shall be finally

liquidated.”

in M.G.L. c. 170, App. 2, §8,?! to give the statute definition and

limit “overbreadth”, or “unfettered freedom”, or arbitrary

discretion, regarding the operation of or the return of the

Roslindale Bank’s assets and control.

STATEMENT OF THE FACTS

It seems inconceivable to the petitioners, that any court

would allow a sound bank to be “seized” for over three years,

knowing there has been no notice of charges, and no

administrative hearing regarding the seizure, or why the receiver

continues to keep the assets.

These facts alone are proof of irreparable harm as a matter

of law.

The Supreme Court of the United States during a time of

war would not allow the President of the United States to seize a

steel mill manufacturing essential war materials and declared in

that case that a governmental seizure of private property was, as

a matter of law, irreparable harm. See Youngstown Sheet and

Tube Co. v. Sawyer, 343 U.S. 579 at 585-586 (1952). The

Roslindale Bank is the last community bank in Roslindale. This

unwarranted governmental seizure for political purposes is of

great concern to the depositors as well as the whole banking

industry in Massachusetts who have suffered from the “activist”

political Bank Commissioner Greenwald. Note Rule 18 of the

United States Supreme Court Rules cites Youngstown Sheet and

Tube, supra. The petitioners state this case lies within the

principles set forth in that case.

The facts as pleaded in a verified complaint, see Pupecki v.

James Madison Corp., Mass. A.S. 2340, 382 N.E.2d 1030 at

21. M.G.L. c. 170, App. 2, §8:

“The directors of the corporation may make such rules

and regulations, subject to the approval of the

commissioner, as they may deem necessary in order to carry

out the provisions of this chapter, and for such purposes the

commissioner may confer and advise with the directors and

furnish them such information as they request.”

1033 (1978)2? are supported by many affidavits and answered by

the respondents by a motion under 12(b), with no supporting

affidavits or counteraffidavits. See F.R.C.P. Rule 56(e).

The petitioners’ case concisely stated is that on October 28,

1977, the petitioner bank was a chartered cooperative bank

under the authority of M.G.L. c. 170. The petitioner directors

and officers were elected to serve under the authority of M.G.L.

c. 170, §§6 and 8. The petitioner shareholders had the right to

elect its officers and directors, who controlled the assets and

possessions of the Roslindale Bank.

On October 28, 1977, the Banking Commissioner, the

respondent Greenwald, knowing that the Roslindale Bank was

safe and it was expedient for it to continue in business, certified

the Roslindale Bank into a statutory administrative receivership,

and Greenwald, and her successor, Mulligan, and Central Bank

have taken a deliberate course of action by denying the

petitioners an administrative hearing to frustrate the Roslindale

Bank and its officers from proving that the Roslindale Bank was

wrongfully forced into receivership and has been wrongfully

kept in receivership for over three years.

The certification proceeding held by the respondent

Greenwald, was held in “secret” with no notice of charges given

to the petitioner bank, or any of its officers, either “prior” or

“post” promptly as required by constitutional law; or “48 hours

prior” as described in M.G.L. c. 30A, §11A4; or “within a

reasonable time” as described in M.G.L. c. 30A, §11(1); or “10

days prior” as described in the regulations in effect on October

28, 1977, of the Commissioner of Banks. No record of the |

proceeding was made in conformity with M.G.L. c. 66, §§5A or

6, and no clerk was appointed in accordance with M.G.L. c. 66,

22. Pupecki v. James Madison Corp., 78 Mass. A.S. 2340, 382 N.E. 2d

1030 (1978) at p. 1033:

“The complaint was verified and is therefore treated as

an affidavit insofar as it contains specific facts that the

signer knows to be true Khan v. Garanzini, 411 F. 2nd 210,

212-213 (6th cir. 1969) 2A Moores Federal Practice p. 1104

at 11-13 (2nd Ed 1975) 5 C.A. Wright and Miller, Fed. Prac.

and Proc. sec. 1335 at 508 (1969).”

§6. See Kearney v. Bd. of Reg. Pharmacy, 4 Ma. Ap. Ct. 25, 340

N.E. 2d 215 (1976), note Epray decision.

On October 29, 1977, the agents of Central Bank, knowing

that the Commissioner of Banks had avoided giving the

petitioners the procedural administrative due process of M.G.L.

c. 167, §5 (the removal statute), or M.G.L.c. 170, App. 2, §4, or

M.G.L. c. 30A, or M.G.L. c. 66, and the regulations of the

Division of Banks, seized the Roslindale Bank and ousted the

petitioners without giving the petitioner bank or the petitioners

any prior or post prompt administrative due process; and since

October 28, 1977, the respondents Greenwald, Mulligan and

Central Bank refuse to give the Roslindale Bank or any of its

officers administrative due process regarding the certification or

the continued possession of the Roslindale Bank or rights of

administrative or judicial review. See Athas v. United States, 597

F. 2d 722 (Ct. Cl. 1979).

On October 28, 1977, the respondents stigmatized the

petitioners by making statements to the public media that

contained falsehoods, half-truths, exaggerations and hearsay in

violation of the petitioners’ liberty rights. These statements were

made in violation of the petitioners’ constitutional liberty rights

and the petitioners’ “statutory entitlements” of M.G.L. c. 167,

§§2 and 5; M.G.L. c. 214, §1B*” and 3B** regarding M.G.L. c.

66A.

The respondent Central Bank's act of de facto removing the

petitioner individuals from office, coupled with the

stigmatization has actually denied to the petitioner individuals,

their careers in banking and their statutory entitlements, /.e., loss

of compensation and enjoyment of their elected offices. The

respondents did not give the petitioner individuals the

opportunity of a name-clearing hearing, either “prior” or “post

promptly” and denied to the petitioners, their rights of review as

set forth in statutory law, regulations and constitutional

decisions. See Athas v. United States, supra.

23. See footnote 13.

24. See footnote 14.

On October 28, 1977, the Roslindale Bank was safe and it

was expedient for the Roslindale Bank to continue in business.

The Roslindale Bank met or exceeded all statutory requirements

of a safe bank. The Roslindale Bank had been recommended

for approval by the Federal Home Loan Bank on September 27,

1977 (one month prior). No extraordinary situation existed at

the Roslindale Bank on October 28, 1977. On October 28,"1977,

the “purported” information the respondent Greenwald acted

upon was gathered and compiled in violation of M.G.L. c. 167,

§2, in that a certified appraiser was not appointed to value the

petitioners’ mortgage portfolio and no notice was given ‘o the

petitioners and the Division of Banks had no regulations relative

to gathering personal data as required by M.G.L. c. 66A.

The petitioner individual directors had a statutory

entitlement to due process regarding mismanagement claims

“prior” to their removal as officers as set forth in M.G.L. c. 167,

§5, and the respondent Greenwald, purposely knowing that the

financial conditions did not exist for authority to use M.G.L. c.

170, App. 2, §4, to certify the Roslindale Bank, knowingly and

maliciously for political reasons, certified that it was unsafe and

expedient for it to continue in business, in an attempt to remove

the petitioner directors permanently by way of a forced

“administrative merger” to deprive the petitioners of their

procedural due process rights set forth in M.G.L. c. 167, §5.

The Commissioner of Banks and Central Bank are subject

to M.G.L. c. 30A (The Administrative Procedures Act); M.G.L.

c. 66 (The Public Records Laws), and M.G.L. c. 66A (The Fair

Information Act), and they have massively violated same.

On October 28, 1977, the respondents, the Commissioner of

Banks and Central Bank, had promulgated no rules and

regulations as described in M.G.L. c. 170, App. 2, §§4 and 8 and

the Commissioner of Banks and the Board created under

M.G.L. c. 167, §5, had promulgated no rules and regulations as

required by M.G.L. c. 30A, §9 (as it appeared in 1977).

The respondents have used statutes arbitrarily, capriciously

and maliciously and they have failed to enact regulations, even

after demand by proper procedures that would give the statutes

requisite standards of definition and/or give the petitioners

procedural and substantive rights.

The respondents have made unlawful rules and regulations

not in accordance with M.G.L. c. 30A, §§2 to 6B th.at exceeded

their legislated authority and that are void by statutory mandate.

See M.G.L. c. JOA, §3A.

On or about November |, 1978, after a judicial conference,

in which the original district court justice had declared the

respondents had violated the petitioners’ rights and in which he

said he would appoint a master to assess damages against the

respondents, the respondent Greenwald had four of the

petitioners brought up on charges. The complaint consisted of

every minor violation that had occurred in banking division

reports for five years, committed by daily management. The

evidence consisted mainly of two reports and two witnesses, who

testified about the reports. Both witnesses testified the reports

contained “hearsay upon hearsay” evidence. The agency

stipulated that the four directors had no actual knowledge of the

violations they were charged with being responsible for and they

received no actual prior notice from the state as set forth in

M.G.L. c. 167, §5.

The prosecutor admitted in the record that he withheld

evidence. Both the prosecutor and the Commissioner, the

“judge”, had been in criminal violation of statutes. The “judge”,

the Commissioner of Banks, Greenwald, had determined on

three prior occasions ex parte that the petitioners were guilty as

charged and had made public statements defending her actions

by condemning the petitioners. The “judge” had been meeting ex

parte and corresponding ex parte for over one year with Central

Bank. The “judge” actually had conferences with the state's

witnesses during the trial. This fact was admitted by answer.

Evidence material to the petitioners was denied, monitored and

altered. Many other violations of due process were pleaded.

The petitioners also have pleaded that the respondents

conspired together to justify the original deprivations (1985),

and that all the respondents had it in their power to terminate or

to aid the termination of the constitutional violations (1986).

On October 31, 1977, the petitioner president Albert G.

Tobin had requested charges from the respondents Greenwald

and Central Bank, and in front of witnesses requested rights of

review. He was told that he and the bank had “no rights”. See

Athas v. United States, supra.

Course of Proceedings

On Friday, October 28, 1977, in a secret proceeding, the

respondent Greenwald, “purportedly” certified the Roslindale

Bank. On Saturday, after the close of business, also without

notice, the Central Bank seized the Roslindale Bank and ousted

its directors.

On Monday, October 31, 1977, the petitioners, in writing,

gave a request to the Commissioner and Central Bank for a bill

of particulars and a meeting, signed by all the directors, who met

on Sunday, October 30, 1977, with a copy of a vote authorizing

Tobin to bring a M.G.L. c. 167, §33 action.

On Monday, October 31, 1977, Tobin met with Deputy

Commissioner Flynn who told Tobin that the Roslindale Bank

and its directors had “no rights”, and the Commissioner wanted

the Roslindale Bank merged. Central Bank's executive officer

and its lawyer also had told Tobin, that he and the Roslindale

es had no rights, previous to Tobin's meeting with Deputy

ynn.

On November 8, 1977, the Roslindale Bank in its own name

and joined by Tobin as president, brought a petition to the

Supreme Judicial Court naming the Commissioner and Central

Bank as respondents.

This case was commenced in the Supreme Judicial Court

because the respondents denied that any of the petitioners had

rights of review under M.G.L. c. 30A, §14, and refused to give

the petitioners what their rights of review were, denying that the

petitioners had rights. See Athas v. United States, supra.

The petitioners complained to the Supreme Judicial Court

on November 8, 1977, because of M.G.L. c. 167, §33, in the

belief that possibly M.G.L. c. 170, App. 2, §10 was

unconstitutional if the respondents’ assertions were correct.

Words in Worcester County Bank v. Com. of Banks, 340 Mass.

695, 166 N.E. 2d indicate that the Superior Court has no

jurisdiction. The first count stated (1) there was no provision for

review, and (2) M.G.L. c. 30A, §14 was inapplicable to the fact

situation. Within thirty days, the petitioners, after they had

researched the law further added a count under M.G.L. c. 30A,

§14. One of the prayers was for the respondent Greenwald to

show cause.

The Supreme Judicial Court declined jurisdiction and

remanded the matter to the Superior Court. Since that time, the

Supreme Judicial Court has remanded related matters twice to

the Superior Court.

The Superior Court dismissed the petitioner bank's case

without prejudice and the petitioner Tobin's case under motions

for Rule 12(b)(6) and the petitioners appealed.

On January 11, 1978, after the Superior Court denied the

Tobin case, the petitioners brought this action in the United

States District Court of Massachusetts. The case was assigned to

Judge Freedman. The jurisdictional basis was 28 U.S.C. §§1331,

1341, ie., 42 U.S.C. §§1983, 1985, 1986; 28 U.S.C. §2201.

The respondents’ answers to the petitioners’ complaint were

motions under F.R.C.P. Rule 12(b)(6). However, the

respondents did not file then, or ever, any supportative affidavits

relative to the merits. On April 3, 1978, Judge Freedman heard

the motions and he took the matter under advisement. In an

effort to get Judge Freedman to act and because of the First

Circuit rule on pleading malice (i.e., Gomez v. Toledo, 602 F. 2d

1018, 1020 (Ist Cir. 1979), overruled by .—. U.S. —_, 64 L.

Ed. 2d 572, 100 S. Ct. (1980). The petitioners filed many

affidavits to make sure their pleadings exceeded this erroneous

rule.

On August 9, 1978, at the request of the petitioners, Judge

Freedman held a conference wherein he stated that although he

had not finalized his opinion, he believed the petitioners’ rights

had been violated. He would appoint a master to assess damages

against the respondents and he ordered the respondents to

report to his clerk by August 23, 1978, as to the status and/or

position Greenwald would take as to the return of the bank.

The respondent Greenwald answered the court that she was

going to call a M.G.L. c. 167, §2A presentation (not a due

process confrontation hearing). Instead of returning the bank,

the respondent Greenwald used this meeting to threaten five

directors with charges under c. 167, §5, and did not file a

complaint with the Superior Court as the statute directs.

The petitioners sought the protection of the district court

from a M.G.L. c. 167, §5 hearing on five grounds: (1) the

proposed hearing one year later was not “post prompt”; (2) both

the Commissioner and the Board created under M.G.L. c. 167,

§5 had no regulations as mandated by the Legislature; (3) the

respondents were suppressing evidence which the petitioners

needed for defense; (4) the obvious bias of the Commissioner

and (5) the petitioners requested additional time for discovery

purposes. The district court appointed a magistrate who granted

a one week postponement and refused the other requests, and on

appeal the First Circuit also refused the petitioners’ request.

Simultaneously the petitioner bank and the (four) directors

brought a M.G.L. c. 231A action on the same basis, and also

were denied temporary orders by the Superior Court and the

Appeals Court of Massachusetts.

One year after certification, without a hearing regarding the

certification, the respondent Greenwald as “judge” on her last

day as Commissioner, “purportedly” (there was no lawfully

made record, and no lawfully appointed clerk, see M.G.L. c. 66,

§§5A and 6) found the four petitioners guilty as charged and the

Board upheld the finding, who also had appointed no clerk.

On February 28, 1979, the Supreme Judicial Court filed its

decision. The decision stated the petitioner directors could

challenge the certification, but upheld the Superior Court for

reasons which the petitioners claim are affirmative defenses that

were not pleaded in accordance with M.R.C.P. Rule 56(e) by the

respondents, i.e., lack of authority of Tobin, and failure to

exhaust administrative remedies. This argument taken from the

respondents’ “brief” and not affidavits sua sponte denied the

petitioners the opportunity to deny the defense by affidavit,

under M.R.C.P. Rule 56(e) which is similar to F.R.C.P. Rule

56(e).

In April of 1979, the petitioners amended their complaint to

add current complaints relative to further violations of due

process. The respondents again answered with a 12(b)(6).

The petitioners filed more affidavits in an effort to get the

court to respond, but to no avail.

In early June, the case was reassigned to Judge Zobel, who

called for a new hearing for July 2, 1979 on respondents’ motion

for Rule 12(b)(6).

The respondent Mulligan as a result of new court activity

called another M.G.L. c. 167, §2A presentation for the seven

directors “not tried” and the petitioners filed the second

amended complaint.

At this M.G.L. c. 167, §2A presentation, the seven

petitioners were denied the right to have an attorney present

(one other than the Tobin's, as well as the Tobin's). The

petitioners filed a twelfth count. A §2A presentation is not a

due process hearing. The respondent Mulligan also did not file a

complaint with the Superior Court as the statute directs.

On July 2, 1979, the respondents’ attorneys stated to the

district court (without pleadings), that the respondents were

going to give the bank back to the seven petitioners not

“removed”. At this hearing the court also allowed the petitioners

amendments to their complaint about the respondents’ current

arbitrary activities.

By October 5, 1979, the directors of the petitioner bank

decided the respondents were not acting in good faith and sent a

letter to the court requesting some order. When the court gave

no indication of acting on November 29, 1977, the petitioners

sent a letter to Chief Justice McCaffrey complaining about “no

program for prompt disposition of protracted and widely

publicized cases” in the district court and indicating their

intention to appeal along with (1) motion to transfer; (2) motion

to request relief from regular assignments and (3) motion for

certification under 28 U.S.C. §1292(b).

On December 7, 1979, the court rendered its first decision

Roslindale I, dismissing the petitioner bank and all of the

directors, except the four petitioners.

In January 1980, after Roslindale I, the petitioners again

requested from the respondents Mulligan and Central Bank an

administrative hearing relative to the “certification” and the

continued possession of the petitioner bank as set forth in

Tobin, p. 1248 fn. 3 “before the Commissioner” and the request

was denied, the petitioners again requested “rights of review”

and this request was denied.

The petitioners appealed the case of Roslindale I, and asked

both the district court and the First Circuit Court for

preliminary and protective orders (1) motion to order the

respondents to comply with Massachusetts public meeting and

record laws; (2) motion for an advance for attorneys’ fees; (3)

motion for an advance for costs of court and (4) motion for a

protective order for the petitioners A. Tobin, R. Tobin, L.

DeLosh and J. Quinn.

On March 25, 1980, the district court decided Roslindale I]

and on April 23, 1980 the appellate court denied the appeal of

Roslindale I, 80-1069 and the petitioners’ motions. The

petitioners then appealed Roslindale I and // together.

On April 25, 1980, the petitioners brought a motion to

amend the judgment under F.R.C.P. Rule 59(e) requesting the

court to (1) retain jurisdiction but staying the proceeding and (2)

order a dismissal without prejudice, as set forth in Am. Trial

Lawyers Ass'n v. N.J. Supreme Court, 409 U.S. 497, 34 L. Ed.

2d 651 at 659 (1973). On April 29, 1980 the district court denied

the motion. The petitioners again appealed and consolidated

both appeals.

On June 6, 1980 after the decision of the district court of

Roslindale I and Roslindale II, the petitioners brought a motion

to amend the Tobin case to add a count under 231A, which was

denied by the Superior Court of Massachusetts.

The appellate court rendered its decision of Roslindale III

on November 21, 1980 stating sua sponte that the petitioners

should have pursued a cause of action under M.G.L. c. 167, §

33. This defense had not been pleaded by the respondents. The

petitioners had no opportunity to counter plead.

The petitioners requested a rehearing on the basis of

McNeese v. Board of Education and the fact that M.G.L. c. 170,

App. 2, $10 explicitly denied to Roslindale Bank as a member of

Central Bank the use of M.G.L. c. 167, §33. The appellate court

then amended its decision and stated the same conclusion as the

district court that M.G.L. c. 231A afforded the petitioners relief.

The petitioners then requested the second rehearing on the

basis that M.G.L. c. 231A was a (1) state judicial remedy; (2) it

gave the court secondary jurisdiction only and it was a limited

review and not a hearing on the facts and (3) it was questionable

that it could be used because M.G.L. c. 231A, §3 required an

affidavit of known procedure.

The appellate court denied the petition for a second

rehearing.

The petitioners then brought a petition for recall of the

mandate, to allow the petitioners to bring a motion for

protective order to order the respondents to give the petitioner

bank an advance of its own funds to appeal to the United States

Supreme Court. The appellate court denied the motion. The .

motion is in the Appendix, infra at p. 2a.

THE FEDERAL QUESTIONS ARE SUBSTANTIAL

The first and foremost reason to require plenary

consideration of this Court is that it is perfectly permissible in

the First Circuit for an activist Bank Commissioner to order a

sound bank taken over and seized without any form of due

process for over three years in regard to the original seizure or to

the reason why the bank is still in the state of seizure when it

was never intended that it be liquidated nor were there any debts

and the bank’s reserves exceeded all statutory mandates. No

director was involved in any criminal or fraudulent scheme.

The petitioners state that a determination of the

constitutionality of these banking statutes are important because

all cooperative and savings banks in Massachusetts and their

officers are subject to these same laws. The petitioners say the

statutes contain “overbreadth” and permit too much arbitrary

discretion which subject the bankers to political wiiims of one

Banking Commissioner. See Manges v. Camp, 474 F. 2d 97 at

101 (1973) and Feinberg v. F.D.I, 420 F. Supp. 109 (1976). See

also, Youngstown Sheet and Tube Co. v. Sawyer, 343 U.S. 579

(1952) cited in Supreme Court Rule 18. The Roslindale Bank,

sound and healthy, remains “seized” by the government after

three years without due process.

IL.

The district court must exercise its jurisdiction.

The petitioners say that they have a constitutional right to

choose the federal forum for redress of their complaints against

the respondents for depriving them of their federal constitutional

rights “under color” of state law. England v. Louisa Bd. of

Medical Examiners, 375 U.S. 111 (1964) states at 415:

“When a federal cour? is properly appealed to in

a case over which it has jurisdiction .... The

right of a party to choose a federal court where

there is a choice, cannot be properly denied.”

The petitioners have pleaded that the United States District

Court has jurisdiction of this case under three separate and

distinct codes:

1. 28 U.S.C. §1331. The petitioners have pleaded their case

arises under the rights of the United States Constitution and that

their damages are in excess of $10,000.

2. 28 U.S.C. §1341. The petitioners have pleaded that their

constitutional rights have been violated under color of state law

(1982); that there has been a conspiracy by two or more persons

(1985) and that all of the respondents named had the power to

prevent or aid in the prevention of their constitutional rights

(1986).

3. 28 U.S.C. §2201, Declaratory Judgment. The Supreme

Judicial Court in Tobin, supra, states at p. 1248 fn. 3, that the

petitioners may challenge the “certification” before the

Commissioner or in some circumstances under M.G.L. c. 231A

(the Massachusetts declaratory judgment). The district court and

the First Circuit decline jurisdiction on the basis that a M.G.L.c

231A action will lie.

_ The petitioners say that this case is an actual controversy

and the petitioners are seeking to have their federal rights

declared, and if a, M.G.L. c. 231A action for a declaratory

judgment will lie then a 28 U.S.C. §2201 action for declaratory

judgment must also lie because the purposes of both are exactly

the same, to declare constitutional rights.

The petitioners say the law of Monroe v. Pape, 365 U.S.

167 (1961) as elaborated by McNeese v. Board of Education, 373

U.S. 668 (1963) and recently again reiterated in Allen v.

McCurry, 101 S. Ct. 2d 411 at 418, Sl. Op. 79-935 (Dec. 9,

1980). See also, England v. La. Bd. of Medical Examiners, 375

U.S. 111 at 115 (1964). The petitioners say the district court’s

application of withholding jurisdiction on a fiction that the state

respondents may return the bank, has in this case been worse

than if the court had immediately abstained, because the

petitioners were forced to wait over two years for the decision.

Furthermore, the petitioners say the Exhaustion Doctrine is an

affirmative defense and cannot apply to this case as the

respondents have not pleaded it. See Central Motors v. City of

Pepper Pike, 63 Ohio App. Ct. 2d 34, 409 N.E. 2d 258 (1980);

cf., Gomez v. Toledo, 64 L. Ed. 673, 100 S. Ct. 2d __, SI. Op.

79-5601 (1980). Even if it did apply, the petitioners have pleaded

there were and are no procedures available regarding M.G.L. c.

170, App. 2, §§4 and 5 for the petitioners to use. See Swan v.

Stoneman, 635 F. 2d 97 (2d Cir. 1980).25 Susquehanna Valley v.

25. See footnote 2.

Three Mile Island, 619 F. 2d 231 at 245 (1980); Feinberg v.

F.D.1.C., 420 F. Supp. 109 (1976) and Manges v. Camp, 474 F.

2d 97 (Sth Cir. 1973).

The petitioners say that no administrative hearing and/or

no judicial hearing held at this late date can timely correct these

constitutionally required deficiencies of procedure, and it does

not matter what the state law is. However, the petitioners also

claim that the respondents violated the state procedures which is

a separate and distinct constitutional-violation of the Fourteenth

Amendment’s equal application of the law clause. See Service v.

Dulles, 354 U.S. 363 (1957); Whiteside v. Kay, 446 F. Supp. 716

(1978) and Goss v. Lopez, 419 U.S. 565 (1975). See Kearney v.

Bd. of Reg. Pharmacy, supra; note Epray decision.

The denial of federal jurisdiction to the petitioners for a

complaint based upon violations of federally guaranteed rights

by the respondents is declared by the following court statements:

Roslindale I, 481 F. Supp. 749 at 754 (D.C. Mass. 1979);26

Roslindale II, —F. Supp. —— (D.C. Mass. 1980)?7;

26. Roslindale I, 481 F. Supp. 749 (D.C. Mass. 1979) at 754:

“The availability of equitable relief under Mass. Gen'l

laws ch. 231A, see Tobin v. Com. of Banks, 386 N.E.2d

1248, meets all requirements of due process in the context of

bank certification.”

27. Roslindale Ii, _. F. Supp. —. (D.C. Mass. 1980) at 4:

“As a matter of constitutional law, the only question

before me is whether the plaintiffs were afforded a fair

Opportunity to answer charges against them.”

At 5:

“Challenges to the sufficiency of the evidence upon

which Greenwald rendered her decision or to the soundness

of her evidentiary rulings are not within the subject matter

jurisdiction of this court, but may be, and are being,

pursued by the plaintiffs in accordance with their statutory

right of appeal within the state court system. See Mass.

Gen. Laws 167, sec. 5... .”

Roslindale III, _— F. 2d —— (Ist Cir. 1980).28

The petitioners say that these decisions are in conflict with

the Supreme Court decisions of Monroe v. Pape, 365 U.S. 167

(1961); McNeese v. Bd. of Education, 373 U.S. 668 (1963)?9 and

Swan v. Stoneman, 635 F. 2d 97 (2nd Cir. 1980).%

28. Roslindale, [1], _ F. 24 —— (Ist Cir. 1980) at 4:

“As for a post event hearing Mass. G.L. c. 167 sec. 33

provides for review in the Supreme Judicial Court whenever

any bank whose property and business feels itself aggrieved

thereby and files within ten days. In point of fact, while this

section originally covered Co-operative Banks, see Lowell

Co-operative Bank, 287 Mass. 338, 344-46, 191 N.E. 921,

924-25, it no longer does, Mass. G.L. 170 App. 2, sec. 10.

However, the broad provisions of the Massachusetts

Declaratory Judgment Act, Mass. G.L. c. 231 A, afforded

the plaintiffs an avenue for relief. See Tobin v. Com. of

Banks, ante 1979 Mass. A.S. at 499 n. 3, 386 N.E. 2d at

1248, n.3; Canney v. Mun. Court, 1975, 368 Mass. 648, 335

N.E. 2d 651; Franklin Fair Ass'n v. Sec. of the Comw.,

1964, 347 Mass. 110, 196 N.E. 2d 622... .”

29. McNeese v. Board of Education, 373 U.S. 668 (1963) at 671-72:

“That is the statute that was involved in Monroe v.

Pape. supra and we reviewed its history at length in that

case. 365 U.S. 171 et seq., 81 S. Ct. at 475, et seq. The

purposes were several-fold to overide certain kinds of state

law, to provide a remedy where the state remedy was

inadequate, to provide a federal remedy where the state

remedy, though adequate in theory was not available in

practice, and to provide a remedy in the federal courts

supplementary te any remedy any state may have... .”

30. Swan v. Stoneman, 635 F. 2d 97 (1980) at 102:

“It is well settled that exhaustion of state judicial

remedies is not a prerequisite to an adjudication of 1983

claims in federal court. Ellis v. Dyson, 421 U.S. 426 (1975),

Welwording v. Swenson, 404 U.S. 249, 251 (1971), McNeese

v. Board of Education. 373 U.S. 668 (1963); Monroe v.

Pape, 365 U.S. 167, 183 (1961).”

The Supreme Judicial Court, the district court, and the

appellate court, have granted the respondents defenses that the

respondents did not plead, contrary to F.R.Civ. Proc. Rules 8(c)

and 56(e).

The petitioners say that the acceptance by the courts in this

case, of the respondents’ arguments by either brief or motion not

supported by counter affidavits is wrong. The acceptance of

legal propositions that have as their basis facts not pleaded in

effect denies the the petitioners the opportunity to counter plead

by affidavit that is their right under F.R.C.P. Rule 56(e).

The petitioners filed a verified complaint on January 5,

1978. The state respondent filed a motion to dismiss on January

31, 1978 on the basis of two grounds (1) the complaint failed to

state a claim and (2) the petitioner bank and Albert Tobin had

commenced suit in the state court. The state respondents did not

file any supportative affidavits prior to the decision of

Roslindale I on December 7, 1979.

The Central Bank respondent filed a motion to dismiss

based upon (1) insufficiency of service which the petitioners

immediately corrected and (2) failure to state a claim. The

Central Bank did not file any supportative affidavits to challenge

the merits of the case prior to Roslindale I.

The respondents did not counter plead but continued to

argue only by briefs which were unsupported by affidavits.

Although the petitioners were not required to file

supportative affidavits the petitioners did file them concerning

ongoing additional violations of the respondents and also

because of the district court's inactivity as well as the First

Circuit’s erroneous rule regarding pleading of malice of the

respondents, which was overruled by Gomez v. Toledo, ——

U.S. —, supra.

The petitioners say that because their complaint was

verified it is similar to an affidavit which the respondents must

answer or it must be taken true as pleaded by the court. Pupecki

v. James Madison Corp., Mass. Adv. Sh. 2340, 2345-6, 382 N.E.

2d 1030 at 1033 (1978).3!

F.R.C.P. Rule 8(c) requires the respondents to plead “any

matter constituting an avoidance or affirmative defense.” see

Gomez v. Toledo, Sl. Dec. 79-5601 at p. 6.32

F.R.C.P. Rule 56(e)? requires the respondents, after a

motion for summary judgment has been made, to set forth

specific facts.

The court must view, because of the lack of the respondents’

affidavits, all of the petitioners’ pleadings in the light most

favorable to the petitioners. Ferguson v. Ominedia, 469 F. 2d

194 at 198 (Ist Cir. 1973) and all of the petitioners’ allegations

must be treated as facts. Latrobe Electric Steel Co. v. Vascomy

Ramet Corp., 55 F. Supp. 347 at 348, fn. 1 (D. Del. 1944).

The petitioners say they have plainly and clearly pleaded

that the respondents have made no record of any proceeding as

required by state law and many other violations of due process.

The petitioners say that the respondents can never plead an

affirmative defense that can justify their actions. Any affirmative

defense must have as a basis of origin in this case of either a

meeting in which there was a clerk appointed and a record made

that can be certified in accordance with Rule 44,* or rules and

31. See footnote 22.

32. Gomez v. Toledo, ___U.S_, 64 L. Ed. 2d 572, 100 S. Ct. _, SI.

Dec. 79-5601 (May 27, 1980) at 6:

“Since qualified immunity is a defense, the burden of

pleading it rests with the defendant. See Fed. Rule Civ.

Proc. 8(c) (defendant must plead any ‘matter constituting an

avoidance or affirmative defense’); 5 C. Wright & A Miller,

Federal Practice and Procedure, sec. 1271 (1969).”

33. See appendix, infra at p. 43a.

34. See appendix, infra at p. 42a.

regulations made under the authority of either M.G.L. c. 170,

App. 2, §§4 or 8. The petitioners say that no evidence of what

took place at the “purported” certification meeting can ever be

introduced in a trial because it would be in violation of not only

Rule 44, but also the parol evidence rule. See N.E. Box Co. v.

C.R. Construction Co.,*5 313 Mass. 698, 49 N.E. 2d 121 (1943)

and Suburban Land Co. v. Billerica, 314 Mass. 184, 49 N.E. 2d

1012 (1943).3* The parol evidence rule is a matter of substantive

law. Kessler Shoe Co. v. Philadelphia Fire & Marine, 295 Mass.

123, 3 N.E. 2d 257; see also, Kearney v. Bd. of Reg. Pharmacy,

supra, note Epray decision; cf, Citizens to Preserve Overton

Park v. Volpe, 491 U.S. 402 (1971) and National Pork Prod.

Council v. Bergland, 484 F. Supp. 540 at 544 (1980). The

petitioners say the respondents can never raise this affirmative

defense nor can the court accept evidence other than from a

record, which was never made. See N.E. Box. Co. v. C. & R.

Const., supra.

The respondents enacted rules and regulations but did not

file them with the state secretary as required by M.G.L. c. 30A,

§§2 to 6B and therefore the court can never take judicial notice

of them. This unlawful conduct of the respondents makes all

subsequent actions (after November 4 and 8, 1977) void by the

respondent Greenwald and Central Bank. See M.G.L. c. 30A,

§2, Saxon Coffee Shop v. Boston Lic. Bd., _. Mass. ——, 407

N.E. 2d 311 (1980);3’ Purity Supreme v Attorney General,

Mass. —_., 407 N.E. 2d 297 (1980).

35. See footnote 11.

36. See footnote 12.

37. Saxon Coffee Shop v. Boston Lic. Bd., __. Mass. —_., 407 N.E. 2d

311 (1980) at 316:

“The regulations of the Board are not published and

thus we are not permitted to take notice of them. see GL. c.

30A, sec. 6; Purity Supreme v. Attorney General, ——

Mass. —., 407 N.E. 2d 316 (1980).”

Il,

The petitioners have pleaded specific facts which must be

taken by the court as true, and therefore it is the petitioners who

are entitled to summary judgment.

The petitioners have clearly pleaded that they have a

“property right” and a “liberty right” and the district court in

Roslindale I agrees. The petitioners have pled that their property

interest and liberty interest have been denied for over three years

and the district court disagrees** even though the respondents

are in control of the petitioner bank's assets and the petitioner

individuals have not received compensation or controlled the

assets for three years.

In the respondents’ best light, the petitioners say that they

have at least temporarily diminished the petitioners’

constitutional rights without due proc:ss. It is no answer, that

the respondents may at some speculative time in the future

restore those rights. It is well settled that a temporary

deprivation is a protected right of the Fourteenth Amendment.

Fuentes v. Shevin, 407 U.S. 67 (1972).5%

38. Roslindale I, 481 F. Supp. at 754:

“A further reason compels dismissal of the plaintiff

directors’ claims arising out of certification of the bank. As

both the complaint and the certification statute indicate

Greenwald's action with respect to the bank did not

terminate the plaintiffs directorships. It is still possible that

the bank's business will be restored to full managerial

powers, indeed it appears from the complaint, steps toward

this end have been taken. In the absence of a conclusive

termination of status, plaintiff directors cannot argue that

they have been denied their constitutional rights. Board of

Regents v. Roth, supra; Paul v. Davis, 424 U.S. 701.”

39. Fuentes v. Shevin, 407 U.S. at 84-85:

“... But it is now well settled that a temporary non-

final deprivation of property is nevertheless a ‘deprivation’

in the terms of the Fourteenth Amendment. Snaidach v.

Family Finance Corp., 395 U.S. 337; Bell v. Burson, 402

U.S. 535. Both Snaidach and Bell involved takings of

property pending final judgment in an underlying dispute.”

The petitioners further say that the Roslindale Bank and its

directors were entitled to prior notice, by statute and by

regulations and that the district court had no right to

superimpose its wisdom on the Legislature or over the

regulations of the Commissioner of Banks. See Minn. v.

Cloverleaf, __. U.S. ——, 101 S. Ct. 2d 715 at 726, 66 L. Ed.

2d (1980).*°

The district court has also ignored the pleadings relative to

“stigmatization.” Owens v. City of Ind. Mo., __. U.S. ——.,

100 S. Ct. 1399 (1940).

The petitioners submitted an affidavit that contained 56

pages of derogatory newspaper articles which commenced with

the seizure. The local weekly newspaper's first edition in a

headline article after the seizure, quoted the respondent

Greenwald as saying: “No one in the bank could be trusted.”

Almost all the articles contained a charge of mismanagement.

The district court dispels this stigmatization pleaded in

Roslindale I, 481 F. Supp. at 754, fn. 3, by merely stating that

“the statute is neutral” and ignores the affidavits of the

petitioners containing derogatory newspaper articles that defame

the petitioner bank and the petitioner individuals.

The petitioners have pleaded that the respondents have

massively violated M.G.L. c. 30A, 66 and 66A. They have also

pleaded that at least three of the petitioners are registered voters

as described in M.G.L. c. 30A, §11A'4 and M.G.L. c. 66, §17C

and §10. These pleadings give rise to “statutory judicial

entitlements” which the district court has chosen to ignore, and

the respondents by failing to plead counter affidavits have

chosen not to sustain. These statutes place the burden of proof

on the respondents to show by a preponderance of the evidence

that the actions complained of in such a complaint are in

accordance with and authorized by the statutes involved or the

court must find summary judgment for the petitioners.

40. Minn. v. Cloverleaf, _. U.S. —— 101 S. Ct. 715 (1981):

“The Court has no authority to superimpose its wisdom

over procedures set forth by the Legislature.”

It is to be noted that in Roslindale I, 491 F. Supp. at 555,

the district court cites by name, Gomez v. Toledo, 602 F. 2d

1018 (Ist Cir. 1979). This citation by itself conclusively proves

that clear error exists in regard to the pleadings in both

Roslindale 1, 491 F. Supp. and Roslindale //1, _ F.2d

Therefore, both decisions are necessarily contrary to Gomez v.

Toledo, —.. U.S. —, supra.

The petitioners have pleaded many violations of due process

other than denial of their “property” and “liberty” rights, they

have far exceeded the minimum requirements of Gomez v.

Toledo, _.. U.S. —., supra. They have pled violations of basic

constitutional rights that go to the very heart of due process and

for which there could never be an affirmative defense pleaded to

justify the respondents’ actions (1) deliberate misuse of authority

of statutes; (2) suppression and alterations of “public records”;

(3) “missing” public records; (4) refusal to appoint clerks for the

obtaining of public records by subpoena; (5) one year of ex parte

conduct prior to trial by the “judge”; (6) ex parte conferences

between the “judge”, the prosecutor and the state witnesses

during the trial; (7) public pronouncements by the “judge” prior

to trial; (8) almost complete hearsay evidence; (9) bias of the

judge, which the district court finds “irrelevant™*'; (10) refusal of

the right of cross examination; (11) refusal of the right to have

an attorney present at an administrative hearing.

The petitioners say they have pleaded violations of

minimum requirements of the Federal Constitution regardless

what the state law is. If the state law approves this type of

41. Roslindale II Decision, March 25, 1980, last page:

“Nor do I find as relevant the allegations of

Greenwald's bias and malice. Whatever sentiments

Greenwald may have brought with her to the proceeding,

the end result was a fair, constitutionally adequate

administrative proceeding. Challenges to the sufficiency of

evidence upon which Greenwald rendered her decision, or to

the soundness of her evidentiary rulings are not within the

subject matter jurisdiction of this Court, but may be, and

are being, pursued by plaintiffs in accordance with their

statutory right of appeal within the state Court system. See

Mass. G.L. 167, sec. 5.”

conduct that law is unconstitutional. For violations of minimum

federal procedural requirements they are entitled to per se

damages, Carey v. Phipus, 435 U.S. 247 (1978) and

compensatory damages, Wood v. Strickland, 420 U.S. 308

(1974).

The petitioners also say they have pleaded sufficient facts to

prove subjective malice. There could be no possible affirmative

defense for the many violations committed and for the keeping

of the assets of a sound bank for over three years on the basis of

a liquidation statute, when only four directors out of twelve were

charged and the remaining majority of the board were willing to

serve. It is to be noted no “day to day” management has been

charged for any offenses, and the President of Central Bank has

testified he has seen no evidence of any criminal conduct or

fraudulent activity of any director who was “charged.”

IV.

The district court has aided the respondents to continue the

violations of the petitioners’ rights by failing to grant timely

orders to enable the petitioners to obtain judicial due process

either in state or federal courts.

The petitioners say that the failing to act on a declaratory

judgment for two years by itself is an abuse of discretion.

Declaratory judgments are supposed to be acted upon speedily.

_ See F.R.C.P. Rule 57; United States v. Lynd, 301 F. 2d 818 (5th

Cir.), cert. denied, 371 U.S. 893 (1962).

The petitioners had pleaded that the respondents were

violating M.G.L. c. 66 in full view of the district court, and they

called to the court's attention that violations of M.G.L. c. 66

were criminal violations. See M.G.L. c. 66, §§15 and 17.

The petitioners further say that they requested an

enlargement of time for filing affidavits until the respondents

allow the petitioners to obtain copies of their records which the

court refused to act upon.

The petitioners also requested funds to hire counsel and for

costs of court for the petitioner bank, to challenge the

“certification” which the court refused to act upon. See

Anderson v. Great Republic Life Ins. Co., _ Cal. —., 106

P. 2d at 82 (1940); Warson v. Johnson, _. Wash. —, 24 P.

2d 592, 89 A.L.R. 1527 (1933).

The petitioners say they have a First Amendment right tr

obtain “public records” for the purposes of obtaining judicial

due process. Richmond Newspapers v. Virginia, Si. Op. 79-243

(1980); see opinion of Brennan J., pp. 3-4 (the right to gather

information) and Stevens J.

Vv.

M.G.L. c. 170, App. 2, §§4 and 5 and M.G.L. c. 167, §5 are

unconstitutional on their face, or at least unconstitutional

without rules and regulations, and/or as used by the respondents

against the petitioners.

The petitioners say that M.G.L. c. 170, App. 2, §§4 and 5

are either unconstitutional on their face or their use by the

respondents in the manner used is unconstitutional, as the

respondents’ conduct toward the petitioners has been arbitrary

and capricious.

The petitioners say that M.G.L. c. 167, §5 is as serious, as

opposed to petty civil as well as penal contemnor,*? and their

trial by the administrative instead of the judicial branch of

government is a violation of the separation of powers of the

Constitution. United States v. Ward, _ U.S. —_, Sl. Dec. 79-

349 (1980).

The petitioners further say that M.G.L. c. 167, §5 mixes the

functions of adjudication-prosecution-and-investigation. See

42. M.G.L. ¢. 167, §5 (in pertinent part):

“.. Any person removed . . . who thereafter participates . . . shall

be punished by imprisonment . . . for not more than five years or by

fine of not more than five thousand dollars or both... .”

Joint Anti-Facist Committee v. McGrath, 341 U.S. 123 (1951)

and Wong Yang Sun v. McGrath, 339 U.S. 33 (1950).

One of the stipulations agreed to by the “prosecutor” Flynn

was that there have been no rules and regulations filed in

accordance with M.G.L. c. 30A, §2, by the Board created by

M.G.L. c. 167, §5, or the Commissioner. The petitioners also

pleaded that neither the Commissioner nor Central Bank have

enacted lawful rules as set forth in M.G.L. c. 170, App. 2, §4 or

§8, but enacted unlawful rules.

The petitioners say that the rules “adopted” by the Board

were not published by them as pertaining to M.G.L. c. 167, §5,

in accordance with M.G.L. c. 30A, §§2 to 6B, and were therefore

void. See M.G.L. c. 30A, §3A. The Commissioner’s “adopted”

rules were also void as repealed by the Acts of 1977 c. 963. (See

M.G.L. c. 30A, §9 as amended by Acts of 1977, c. 963), nor did

they meet the higher standards of jurisprudence as required by

the Acts of 1977 c. 963. The Board could have adopted the

tenative pre-published rules of the Commission of

Administration that met the higher standards required by the

Legislature and set forth in the Acts of 1977 c. 963, instead of

adopting the Commissioner of Banks Regulations without prior

publication as described in M.G.L. c. 30A, §2, that did not meet

the standards that were required by the Legislature.

The petitioners also say the failure of the agencies to make

the regulations set forth in the statutes, makes the use of the

statutes without the intended regulations to define or clarify the

statutes is a violation of due process because the statutes are

then overbroad and contain arbitrary discretion, or are vague as

to the petitioners’ procedural and substantive rights. Feinberg v.

F.D.L.C., 420 F. Supp. 109 at 114 (D.C. 1976); Van Wilpen v.

Van Wilpen, 370 So. 2d 231 (Fla. App. Ct. 1979); Yeik v. Dept.

of Taxation, 595 P. 2d 965 at 969 (1979).

VI.

The M.G.L. c. 167, §5 hearing was conducted by a “judge”

who was biased as a matter of law, and the hearing procedures

violated the petitioners’ (four) constitutional rights of due

process.

The petitioners have pleaded that in April 1978 the

respondent Flynn publically stated in a hearing before the

Legislative Committee on Banks and Banking that the reason

the Commissioner had not charged any person under M.G.L. c.

167, §5 was “In the absence of ‘real criminal activity’ I don't

think justice would be served by that approach.”

The district court completely ignored the stipulation agreed

to by the state at the M.G.L. c. 167, §5 hearing of the petitioners

(four); (1) that the directors charged had no actual notice of the

violations complained of (which were mostly attributed to daily

management, and not to the directors who met monthly [the

president is similar to the chairman of the board]); (2) that the

Commissioner of Banks and the Division of Banks gave no

notice to any of the individual directors, as described in M.G.L.

c. 167, §5; (3) that the petitioners (four) charged, or any other

director, had no opportunity to correct any violations

themselves (or to order the day-to-day management to correct

violations), as described in the procedures set forth in M.G.L. c.

167, §5.

It is the petitioners’ contention that unless the pre-notice

procedures set forth in M.G.L. c. 167, §5 are followed by the

Commissioner of Banks, that this statute is unconstitutional

because of overbreadth and vagueness, “regulatory standards are

narrower when amendment freedoms are at stake”, N.A.A.C.P.

v. Button, 371 U.S. 415 at 432 (1963). The petitioners say that if

M.G.L. c. 167, §5 is not a fair warning statute, as interpreted by

Kaplan, J. in Ottoway Newspapers v. Appeals Court, _ Mass.

——, 386 N.E. 2d 1189 at 1193 (1977), note fn. 6 and the “statute

is not singular”, fn. 6 contains the citation of six similar statutes

where prior notice and an opportunity to correct are

prerequisites, the statute lacks malice or scienter. See Com. v.

Bank of Mutual Redemption, 4 Allen | (Mass. 1862). It is to be

noted that the statute in 1932 was captioned “An Act for the

Removal and Punishment of Bank Officers Who Persist in

Improper Practices.” There are thousands of sections of banking

statutes and regulations that reasonable men may differ upon

the interpretation, and many enacted by Greenwald that

represented political activist ideas not based on sound banking

practices, as well as a usurping of authority.

The petitioners further state that the use of all banking

statutes, M.G.L. §§2A, 5, and M.G.L. c. 170, App. 2, §4, is a

latent example of the unequal treatment that the Roslindale

bankers have received from the Commissioners of Banks. The

reason there were no regulations is that the statutes have not been

used before in the manner in which the respondents applied

them to the petitioners. The court has allowed “unrestrained

discretion”. Grayed v. Rockford, 408 U.S. 108 at 109.

The Supreme Court has declared in /n re Murchinson, 349

U.S. 133, that, “Every procedure which would offer a possible

temptation to the average man as a judge not to hold the

balance clear and true between the state and the accused denies

the latter due process.” Yet after the district court made his

pronouncement that he believed the respondents were liable for

damages, both the district court and the appellate court allowed

the petitioners (four) to be the subject of a trial held by these

same respondents who the court had declared were to be liable

for damages.

It was not until Judge Freedman said in his conference that

(1) he believed the respondents had violated the petitioners’

constitutional rights; (2) that the respondents were liable for

damages; (3) that he intended to appoint a master to assess

damages. After this conference and over one year later than

their actual de facto removal, the petitioners (four) were brought

up on charges by the respondents.

The respondent Greenwald became the “impartial judge”.

The respondent Flynn became the “impartial prosecutor”. The

counsel for the respondent Central Bank “manufactured” an

“impartial report”, which was submitted in secret ex parte two

months before the hearing to the “impartial judge” Greenwald.

The assistant legal counsel for Central Bank became the

“impartial star witness” for the prosecution at the hearing. The

report he testified about was written by Central Bank’s legal

counsel and secretly given to Greenwald on the very same day

that the respondents were to report to Judge Freedman what

they were going to do about giving Roslindale Bank back, two

months earlier. .

The district court and the appellate court completely

ignored the petitioners’ verified fourth count as well as the

petitioners’ uncontroverted affidavits. The district court’s

statement, on page |4a, infra, “Nor do I regard as relevant the

allegations of Greenwald’s bias and malice.” shows the district

court’s strange concept of the requirements of a fair trial and an

impartial judge.

The petitioners’ verified fourth count and uncontroverted

affidavits which must be believed as true, stated: (1) the

respondent Greenwald continually for over one year engaged in

ex parte proceedings. During the trial, she engaged in ex parte

conferences not only with “her” lawyer, but also with the

prosecutor, the respondent Flynn and the state witnesses. This

fact was admitted in the respondent Greenwald’s answer and

also backed up by copies of the stenographic record of the

proceedings. See Camero v. United States, 375 F. 2d 777 (1971);

Amos Treat Co. v. Sec. Exc. Com., 306 F. 2d 260 (1970); Powell

v. Ward, 392 F. Supp. 628 (1975); (2) Neither the Commissioner

of Banks, the Board created under M.G.L. c. 167, §5, or the

Commissioner of Administration, had made rules and

regulations concerning M.G.L. c. 167, §5 as required by M.G.L.

c. 30A, §9 (cither prior or after the amendment change of July |,

1978). This fact was backed up by certificates from the Secretary

of State's office. See Yeik v. Dep't of Taxation, _.. Wyo. —_,

595 P. 2d 965 at 969 (1979); Van Wilpen v. Van Wilpen, —— Fla.

App. Ct. —, 370 So. 2d 231 (1979); Feinberg v. F.D.1.C., 420

F. Supp. 109 -at 114 (1976); (3) Prior to the hearing the

respondent Greenwald as “judge” “investigator” and

“prosecutor” had determined three times ex parte that the

petitioners were guilty of mismanagement and had made many

public statements to the media regarding the petitioners’ “guilt.”

These statements are backed up by facts pleaded in the verified

complaint and an affidavit consisting of about 56 pages of

various newspaper articles; (4) The respondents, including the

“impartial judge” were all in criminal violation of M.G.L. c. 66,

see M.G.L. c. 66, §§15 and 17, and that they had refused to

appoint a clerk so that the petitioners could summons records or

obtain records, or to prove the lack of records. The respondents

also suppressed records, altered records, monitored records, and

lied about the existence of records being available. This pleading

was backed up by certificates from the State Secretary, copies of

records blanked out, stenographic minutes wherein the

respondent Flynn admits he has denied the petitioners records

and testimony from the examiner that his report is “hearsay

upon hearsay” and that it had been altered.

The district court refused the petitioners’ motions to order

the respondents to appoint a clerk, or to make the respondents

comply with the Public Records Laws, M.G.L. c. 66; or the Fair

Information Practices Act, M.G.L. c. 66A. The petitioners claim

that since Richmond Newspapers v. Virginia, supra that these

statutes merely set forth procedures which are as a matter of law

a First Amendment right.

CONCLUSION

The petitioners say that this case is a perfect example of the

injustices created daily when “activist political appointees”

become administrative justices, and when citizens’ constitutional

rights have confrontations with the court-created doctrines of

primary jurisdiction, primary resort, and exhaustion of

administrative remedies. All of the doctrines should be abolished

because they diminish the jurisdiction of the court and cloud

sound judicial judgments when these type of cases reach the

judicial stage for any reason. At least in serious contemnors,

whether civil or penal in nature, the court should be

unhampered when it sees injustice by administrators.

The standard of jurisprudence that our country is noted for

in its court systems, i.e., impartial judges, discovery rules,

evidence rules should not be lowered merely because the

defendant is some administrative body. Political activist

appointees usually are blind experts to their particular field and

their particular viewpoints. Justice should not be lowered in

matters that concern citizens’ livelihoods. The above court-

created doctrines have led to administrative costs and to the

creation of an “administrative judiciary” that far exceeds the

reasons for their creation. The cases that have led to the

perversion of the doctrines of separation of powers should be

reviewed. Those cases have led to a revolt of the citizenry against

administrative regulation, which is a true function of the

Legislature not the executive. Decisions on adjudicatory

“serious” matters should remain unshackled in the judiciary,

who have limited time to read thousands of pages of “dry”

administrative hearing records.

The petitioners’ uncontroverted affidavits that are backed

up by supportative facts clearly prove that respondent

Greenwald and her political allies were engaged in seeking

federal block grants in the Roslindale Jamaica Plain area. The

petitioners’ facts prove without a doubt that Greenwald certified

the Roslindale Bank for political reasons. The act of certification

occurred within the hour that the president of the Roslindale

Bank, after being threatened, obtained an injunction for a pro-

life political community group led by a local parish priest. The

injunction was obtained against pro-abortion supporters of

Governor Dukakis’ administration who included the Bank

Commissioner's first administrative assistant. The respondent

supporters had been in constant communication with the first

administrative assistant, who was in communication with

Greenwald.

The petitioners say that state bankers in this situation need

the protection from state-elected officials that should be

obtainable in the federal courts. The shroud of secrecy that

surrounds the banking industry in administrative adjudicatory

decisions should not be allowed to act as a protective shield to

allow politically-appointed administrators to misuse their oath

of office to unlawfully thrust their activist ideas upon the

banking industry or upon bankers that disagree with the

political philosphy of the appointed commissioner.

The petitioners say the respondents have violated the

statutory scheme. However, if the court should determine that

the respondents have not violated the scheme, any statutory

scheme that clothes one person, unchecked by others, with the

power of the Legislature to enact or not to enact regulations,

and the power of the executives to investigate and enforce them,

is unconstitutional, if that scheme allows the same person to

have the powers of the judiciary to interpret the laws he enacted

and adjudicate the facts she investigated.

Respectfully submitted,

ALBERT G. TOBIN

TOBIN AND TOBIN

Attorneys for Petitioners

APPENDIX A — ORDER DENYING MOTION

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

No. 80-1280

ROSLINDALE CO-OPERATIVE BANK OF BOSTON, ET

AL.,

Plaintiffs, Appellants,

CAROL S. GREENWALD, ET AL.,

Defendants, Appellees.

ORDER OF COURT

Entered February 11, 1981

Upon consideration of appellants’ motion to recall

mandate.

It is ordered that said motion is hereby denied.

By the Court:

s/ Dana H. Gallup

Clerk.

[cc: Messrs. Tobin, Ostrach and McCarthy.]

APPENDIX B — MOTION

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

CIVIL ACTION NO-1280

ROSLINDALE CO-OPERATIVE BANK, OF BOSTON,

MASS., ET ALS

Plaintiffs-Appellants

vs.

CAROL S. GREENWALD, ET ALS,

Defendants-Appellees

MOTION TO RECALL MANDATE

And now comes the plaintiffs and moves the Court to recall

its mandate to allow the plaintiffs to file the Motion for a

Protective Order to order the defendant Central Co-Operative

Bank to advance to the Roslindale Co-Operative Bank, funds

that it has in its possession, to enable the Roslindale Co-

Operative Bank and its directors, (other than A. Tobin and R.

Tobin) to obtain due process from the Supreme Court of the

United States.

The directors of the Roslindale Co-Operative Bank say the

law imposes upon them a fiduciary duty to the thousands of

shareholders of the Roslindale Bank, to fight the liquidation

order of the defendant Greenwald of the financially sound,

Roslindale Bank. Anderson v. Great Republic Life Insurance

Co., Cal. 106 P. 2nd 75, (1940). Watson v. Johnson,

174 Wash. 12, 24 P. 2nd 592, 59 A.L.R. 1527, (1933).

The directors say that for three years the bank’s assets have

been seized in full view of the United States District Court of

Appendix B

Massachusetts by virtue of the defendant's violations of an

“emergency liquidation statute” without any form of

administrative due process afforded to the Roslindale Bank.

That for three years the Roslindale Bank has been

financially solvent and has been seized and continued in business

in an arbitrary, capricious and malicious abuse of the defendant's

purported emergency powers in clear violation of constitutional

law, receivership law, and statutory law that was enacted by the

legislature to safeguard the constitutional rights of the citizens of

Massachusetts in adjudicatory matters.

Counsel for the Roslindale Co-Operative Bank has been

prosecuting the bank’s claims without advances funds from the

bank by “necessity” because of their fuduciary responsibility to

the shareholders, their accepted elected offices, and the fact that

Robert Tobin was general counsel at the time of the seizure

three years ago.

Counsel states that during these three ‘years it has been a

great sacrifice to their personal life and to their professional life

that they have performed their fiduciary duty.

Counsel say that they and the directors have diligently tried

to obtain outside experienced counsel.

Counsel wishes to withdraw their appearance and cease

their fiduciary responsibility due to the opinion of the Appellate

Court of January 8, 1981. They intend however to continue to

pursue their own rights to the fullest extent to clear their

reputations from the “hearsay upon hearsay” cast upon them.

Counsel does not wish the contrived dishonor cast upon

them by the conspiracies of the defendants to further prejudice

the Appellate Court’s thoughts, or for that matter the thoughts

of the United States Supreme Court, over what the law is, or

what the rights are, of the following parties:

Appendix B

1. The thousands of shareholder's of the Roslindale Co-

Operative Bank, the only Community Bank left, in Roslindale

due the state’s policy on mergers.

2. The remaining eight “uncharged” directors, whose

reputations have been tarnished because “no one in the bank

could be trusted.”

3. The three career banking officers, who have been

discharged over a $19,000 loss created by a head teller that was

fired in April and not them. Two were fired without a hearing

(they had received a hearing by the directors prior to Oct. 28 and

not fired) and one fired one year later, because he testified

truthfully at the M.G.L. c. 167 sec. 5 hearing, and also was

elected Treasurer after the seizure by the shareholders.

4. The Banking Industry of Massachusetts that will in the

future have to live with the pronouncement of the court that the

defendants should have “unfettered freedom” to violate all of the

laws of Massachusetts and of the United States.

Counsel would like to make the record clear that if in the

future they represent any of the above parties they do so by

necessity because of their fiduciary duties and not as a matter of

choice.

Respectfully submitted,

Albert G. Tobin,

Tobin and Tobin,

735 South St.,

Roslindale, Mass. 02131

325-1010

Filed Jan. 30, 1981

APPENDIX C — AMENDED DECISION DATED

JANUARY 8, 1981

United States Court of Appeals

For the First Circuit

No. 80-1280

ROSLINDALE COOPERATIVE BANK er At.,

PLAINTIFFS, APPELLANTS,

CAROL S. GREENWALD er At.,

DEFENDANTS, APPELLEES.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

(Hon. Rya W. Zonet, U.S. District Judge)

[481 F.Supp. 749]

Before

Corrin, Chief Judge,

Avpnicn and Bowness, Circuit Judges.

Robert H. Tobin, with whom Tobin and Tobin was on brief, for

appellants.

Stephen S. Ostrach, Assistant Attorney General, with whom

ig X. Bellotti, Attorney General, was on brief, for State ap-

ees

—° J. McCarthy, with whom Stanley V. Ragalevsky, and

Warner & Stackpole were on brief, for The Central Bank efend-

ants.

January 8, 1981

Avpricn, Senior Circuit Judge. On October 28, 1977 Carol

Greenwald, Massachusetts Commissioner of Banks, pursuant

to Mass. G.L. c. 170 App. §§ 2-4 certified to the Cooperative

Central Bank (Central Bank) that it appeared to her “unsafe

and inexpedient” for the Roslindale Cooperative Bank (the

Bank) to continue to transact its business. The Bank is a

mutual cooperative bank organized under Mass. G.L. c. 170.

* Previously released in unpublished form and judgment entered

on November 21, 1980

Appendix C

Central Bank is the reserve bank for all Massachusetts

cooperative banks. Mass, G.L. c. 170 App. §§ 1-1 et seq.In ac-

cordance with the statutory procedure Central Bank took im-

mediate possession and control of the Bank's assets and

business in place of its officers and directors, who were

notified of this action on November 2. It is still in such control.

A year later Greenwald commenced administrative pro-

ceedings under Mass. G.L. c.167 § 5 to remove five of the

Bank's twelve directors, one of whom forthwith resigned.

Plaintiffs having been notified and given a bill of particulars at

least a month in advance, a show cause hearing was held

beginning on December 8, 1978, attended by Creenwald, the

directors and their counsel, and a three-member statutory

board.' Following a ten day hearing, on January 4, 1979

Greenwald issued a 56 page opinion summarizing the evidence

and citing numerous infractions, including operation of the

Bank in an unsafe and unsound manner, negligence, and in

the case of two directors, direct violations of the banking laws

and self-dealing. She therefore removed all four. Her decision

was upheld a week later by the three member board, who,

having sat through the hearings, were fully informed.

The Bank purportedly, and its president Albert Tobin,*

brought an action in the state court promptly after the cer-

tification. The Bank's claim was dismissed without prejudice

on the ground that neither its attorney’ nor its president was

authorized, as required by Massachusetts law, to bring the suit

on its behalf. Tobin's individual claim was dismissed because

he had not exhausted available administrative remedies. The

Supreme Judicial Court affirmed in a rescript opinion. Tobin

v. Commissioner of Banks, 1979 Mass. A.S, 498, 386 N.E.2d

' The board consisted of designees of the state treasurer, the at-

torney general, and the commission of corporations and taxation, as

requir by the statute.

Tobin was one of the four later removed as officers and direc-

tors. ‘

9 Robert Tobin, Albert's brother and another of the directors later

removed.

Appendix C

1246. So far as appears, neither the Bank nor Tobin proceeded

further in the state court.

On January 11, 1978 the Bank and eleven of its directors fil-

ed the present action under 42 U.S.C. § 1983, seeking injunc-

tive relief and damages. After allowing several amendments,

chiefly to reflect the developments in the removal proceedings,

the court dismissed the complaint for failure to state a claim,

except for a count brought by the four removed directors. 481

F.Supp. 749. In due course this latter count was dismissed on

summary judgment. Both actions were correct.

Plaintiffs have done much to complicate a basically simple

case. The five volume Appendix contains almost two dozen of

‘ their motions and slightly more affidavits. Their brief on ap-

peal cites over ninety cases, over thirty Massachusetts statutes,

and a substantial number of federal statutes and rules. Their

contentions are equally diverse. Some are merely irrelevant.‘

Some are indecipherable.’ Even most charitably, some we can

only describe as silly.* Most consist simply of conclusory and

unsubstantiated allegations. With so much space and attention

given to such matters, even a court with unlimited time and

patience would run a serious risk of being distracted from ‘a

party's good points, if any there were. In fact — we hope not

for that reason — we find none.

* E.y., the observation that “Jailers have also been found liable

under 42 U.S.C. 1983.”

* E.y., that “M.G.L. ec. 170 Sec. 4 and 5, is unconstitutional due

to the conflict of interest of its members who have a paramount self-

interest and are not impartial as they are subject to the Commis-

sioner in their paramount interest, their other bank.”

* E.g., that defendants “have secretly communicated with each

other about plaintiffs’ affairs,” and, by way of elaboration, that

defendants “conspired ... to gather evidence against the plaintiffs

... Causing a report to be prepared containing evidence to be used

against the plaintiffs.” We may wonder how defendants, who in-

ude the Commissioner and Deputy Commissioner of Banks, the of-

ficers of Central Bank, the State Treasurer, and the Attorney

General, are expected to conduct their affairs, let alone defend this

lawsuit brought against them jointly.

Appendix C

The Bank's claim that it was entitled to a hearing prior to

certification is effectively disposed of by one of the authorities

it cites. Fahey v. Mallonee, 1947, 332 U.S. 245, 253-54; see

also Fuentes v. Shevin, 1972, 407 U.S. 67, 90-91 & n.23; Cof-

fin Bros. v. Bennett, 1928, 277 U.S. 29; Federal Deposit Ins.

Corp. v. American Bank Trust Shares, 4 Cir., 1980,

F.2d . The drastic consequences of bank failure or

mismanagement and “the impossibility of preserving credit

during an investigation,” Fahey, ante, 332 U.S. at 253, call for

prompt and decisive action and place this proceeding among

the “extraordinary situations” in which notice and hearing

may be postponed until after seizure. Fuentes, ante, 407 U.S.

at 90-91 & n.23.

As for a post-event hearing, Mass. G.L. c. 167 § 33 provides

for review in the Supreme Judicial Court “[w]henever any

bank of whose property and business the commission has taken

possession deems itself aggrieved thereby” and files within ten

days. In point of fact, while this section originally covered

cooperative banks, see Lowell Cooperative Bank v.

Cooperative Central Bank, 1934, 287 Mass. 338, 344-46, 191

N.E. 921, 924-25, it does no longer. Mass. G.L. c. 170 App. 2

§ 10. However, the broad provisions of the Massachusetts

Declaratory Judgment Act, Mass. G.L. c. 231A, afforded

plaintiffs an avenue for relief. See Tobin v. Commissioner of

Banks, ante, 1979 Mass. A.S. at 499 n.3, 386 N.E.2d at 1248

n.3; Canney v. Municipal Court, 1975, 368 Mass. 648, 335

N.E.2d 651; Franklin Fair Ass'n v. Secretary of the Com-

monwealth, 1964, 347 Mass. 110, 196 N.E.2d 622. The Bank,

purportedly, and Albert Tobin did start down this road, and

were dismissed on valid, non-pretextual grounds. They have

not explained their faiiure to pursue the matter further.

The availability of the statutory proceeding satisfies the re-

quirements of due process. Federal Deposit Ins. Corp. v.

American Bank Trust Shares, ante. We cannot be sympathetic

Appendix C

to a party who elects to forego the hearing provided him, and

then complains he received none. This is not a case of an inva-

sion of plaintiffs’ substantive civil rights, where they would

have the option of seeking federal rather than state redress.

Monroe v. Pape, 1961, 365 U.S. 167, 183. Rather, their com-

plaint is lack of due process, viz., the absence of a hearing.

Since a sufficiently timely hearing was available to them, they

cannot bootstrap themselves into the federal court by failing to

seek it.

Nor can the individual plaintiffs complain of the removal

procedure under chapter 167 § 5. That section provides for

notice and a reasonable opportunity to be heard prior to

removal,’ with post-termination review by the statutory three-

member board and, subsequently, in the Supreme Judicial

Court. These provisions are constitutionally generous; plain-

tiffs’ facial attack is frivolous.

There remains only plaintiffs’ contention that defendant

Greenwald so conducted the proceeding as to deny them a fair

opportunity to be heard. This claim survived defendants’ mo-

tion to dismiss. 481 F.Supp. at 755-56. In support of her subse-

quent motion for summary judgment, Greenwald submitted

her affidavit, together with the record of the proceedings. The

affidavit summarized the course of events and denied any

animus toward plaintiffs. The record amply refutes the direc-

tors’ allegations that they were given inadequate notice (a

month's formal; nearly two months’ more informal), and ac-

cess to evidence and the opportunity to cross-examine

witnesses.® It also sheds light on their contention that none of

7 We have recently indicated that, as in the case of certification,

even a post-termination hearing, if prompt, would be sufficient.

Rodriguez de Quinonez v. Perez, 1 Cir., 1979, 596 F.2d 486,

490-91, cert. denied, 444 U.S. 840.

* Plaintiffs were allowed extensive cross-examination of the Divi-

sion’s witnesses, but chose to spend much of their time (and to inter-

rupt the direct testimony as well) with lengthy speeches by the

Tobins charging persecution at the hands of the Division. _

10a

Appendix C

the discharged directors was allowed to take the stand except

Albert Tobin, who was allowed only one hour. Plaintiffs were

repeatedly told they would have four days following the Divi-

sion’s presentation to put on their substantive case. They

waited until the fourth day of their witnesses to complain that

they themselves had not been heard. The hearing was extend-

ed through the following morning; plaintiffs continued with

another witness until 11:30 A.M., when Albert Tobin took the

stand. His testimony consisted of a 96 page document which

he submitted as his statement for the record. None of the

others testified. The record abundantly demonstrates that

plaintiffs received an adequate opportunity to be heard. How

they chose to exercise it was their affair.

Finally, we are surprised, in the light of the evidence, that

plaintiffs could think they had legitimate complaints against

the Commissioner's findings of mismanagement, self-dealing

and illegality. The affidavits of Albert Tobin, to the extent

that they purport to bear on the issues, are merely conclusory

reiterations of the allegations of the complaint, and even at

that are often not made on personal knowledge. They are in-

sufficient. F.R.Civ.P. 56(e). Plaintiffs have failed to show the

existence of any genuine issue for trial, and summary judg-

ment was rightly entered.°

Affirmed.

* We are aware that plaintiffs have sought to raise a number of

other points. They require no discussion.

lla

APPENDIX D — DECISION DATED MARCH 25, 1980

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

CIVIL ACTION NQ. 78-111-Z

ROSLINDALE COOPERATIVE BANK, et al.

vs.

CAROL GREENWALD, et al.

MEMORANDUM OF DECISION

ZOBEL, D.J.

On December 7, 1979, I entered an order in this action,

brought pursuant to 42 U.S.C. $1983, granting certain of the

defendants’ motions to dismiss the complain’. The only claims

which survived that order are those of Albert Tobin, Robert

Tobin, Leonard DeLosh, and James Quinn against Carol S.

Greenwald, formerly the Massachusetts Commissioner of Banks,

for due process violations which allegedly occurred in the course

of an administrative hearing over which Greenwald presided.

The hearing, instituted at Greenwald's instance pursuant to

Mass. Gen. Laws ch. 167, §5, resulted in the removal of

plaintiffs from their positions as directors of the Roslindale

Cooperative Bank (the Bank). In her answer, Greenwald denies

the occurrence of any of the claimed constitutional violations,

advances an immunity defense, and urges that this court abstain

from review of the removal proceedings because such review is

pending in an action before the Massachusetts Superior Court

(DeLosh, et al. v. Commissioner of Banks, Suffolk Superior

Court Docket No. 33144). Greenwald also counterclaims for

abuse of process, and she requests an award of costs and of the

reasonable value of the services rendered by assistant attorneys

general who have conducted her defense. The case is before me

on Greenwald's motion for summary judgment.

In the amended complaint (Counts | and 4), plaintiffs allege

that Greenwald committed numerous procedural errors which in

12a

Appendix D

plaintiffs’ view, deprived them of their right to a fair removal

hearing. They also claim that personal bias and vindictiveness

motivated Greenwald's allegedly unconstitutional conduct.

Greenwald, in an affidavit submitted in support of her motion

for summary judgment, denies such animus and relies upon the

transcript of the hearing* and her report of findings as

conclusive refutations of plaintiffs’ assertions of unconstitutional

procedures.

When threatened with removal from their bank

directorships, plaintiffs were entitled to an opportunity to clear

their names and afiswer the charges made against them. Codd v.

Velger, 429 U.S. 624, 626-27 (1977); Rodriguez de Quinonez v.

Perez, 596 F.2d 486, 490-91 (Ist Cir. 1979). The thirteen-volume

transcript of the ten-day proceedings shows that plaintiffs were

abundantly afforded such an opportunity. During the first six

days of the hearing the Banking Division adduced evidence

against plaintiffs; however, much of this time was consumed by

plaintiffs’ lengthy cross-examination of the Division's two

witnesses. During the remaining four days plaintiffs called five

witnesses. The last day was also devoted to rebuttal testimony by

the Banking Division's third witness and to closing arguments by

both sides. Plaintiffs had a fair chance to confront the substance

_of the charges made against them, and Greenwald repeatedly

encouraged them to address the substantive issues efficiently.

That plaintiffs chose to fritter away so much of the opportunity

extended them by injecting personal invective and launching

* Plaintiffs attack the documents submitted in support of Greenwald's

mytion for summary judgment. They move for a “protective order” and to

strike the certification by Paul E. Bulman, Deputy Commissioner of Banks,

that the documents submitted comprise the entire record of the removal

proceedings on the ground that neither Paul E. Bulman nor anyone else was

appointed clerk for the proceedings in accordance with state law. Insofar as

these motions address the authentication of the record, they are denied as the

documents have been fully authenticated. A registered professional reporter

duly certified the accuracy of the transcript, and Greenwald in her affidavit

attests the accuracy of the copy of her decision. Insofar as plaintiffs’ motions

concern alleged violations of state law, they do not address the only issue in

this proceeding--whether the hearing comported with Due Process

requirements. Accordingly, both the motion to strike the certification by Paul

E. Bulman and for a “protective order” are denied.

13a

Appendix D

frivolous arguments into the midst of an evidentiary hearing was

their decision. The record controverts their claim of undue

curtailment of the proceedings by Greenwald.

Plaintiffs’ further assertion that they received untimely and

inadequate notice of the hearing flies in the face of the record.

The removal hearings were scheduled to begin December 1,

1978. Plaintiffs Albert Tobin, Robert Tobin, and Leonard

DeLosh were formally notified of the hearing date on November

1, 1978, Quinn on November 8, 1978. The notice included a bill

of particulars detailing the specific charges against the directors.

Moreover, as Greenwald states in her affidavit, plaintiffs were

aware of the matters contained in the bill of particulars as a

result of an earlier meeting with the entire Board of Directors of

the Bank convened on September 11, 1978 pursuant to Mass.

Gen. Laws ch. 167, §2A; on November 28, 1978, Greenwald and

other Banking Division officials met with plaintiffs for a pre-

hearing conference at which “an attempt was made to narrow

the areas of factual dispute, to exchange lists of witnesses, and to

provide plaintiffs wich copies of all the documents which would

be offered against them.” Plaintiffs sought and received a

postponement of the hearing which eventually commenced

December 8, 1978. In light of these uncontested facts, plaintiffs’

assertions of defective notice are frivolous.

Plaintiffs have also set forth claims that their ability to

defend themselves was impaired by Greenwald's failure to grant

them access to evidence. The record, however, does not bear out

these allegations either, and plaintiffs have pointed to no

instance of prejudice resulting to them from any obstructive

conduct by Greenwald. The record also discredits plaintiffs’

allegations that they were not permitted the assistance of their

chosen counsel—assuming that they had such a right—-or an

effective opportunity to cross-examine witnesses.

As a matter of constitutional law, the only question before

me is whether plaintiffs were afforded a fair opportunity to

answer the charges against them. Greenwald has come forward

with materials clearly showing that such an opportunity was

Appendix D

extended plaintiffs, and plaintiffs have produced no affidavits or

other documents to suggest that there is a genuine issue for tria!

with respect to 1¢ constitutionality of the procedures followed

by Greenwald. Such affidavits as plaintiffs have submitted

merely reiterate in conclusory terms the allegations in the

complaint. They are, therefore, inadequate for purposes of Fed.

R. Civ. P. 56(e). Hahn v. Sargent, 388 F. Supp. 445 (D. Mass.

1975), aff'd, 523 F.2d 461 (ist Cir. 1975), cert. denied, 425 U.S.

904 (1976). Having determined that the removal hearing

conformed with Due Process requirements, I need not address

the numerous allegations of noncompliance with ancillary

features of state law. Nor do I regard as relevant the allegations

of Greenwald's bias and malice. Whatever sentiments Greenwald

may have brought with her to the proceedings, the end result

was a fair, constitutionally adequate administrative proceeding.

Challenges to the sufficiency of the evidence upon which

Greenwald rendered her decision or to the soundness of her

evidentiary rulings are not within the subject matter jurisdiction

of this court but may be, and are being, pursued by plaintiffs in

accordance with their statutory right of appeal within the state

court system. See Mass. Gen. Laws ch. 167, §5.

Since plaintiffs have not shown that a genuine issue exists

for trial and Greenwald is entitled to judgment as a matter of

law with respect to her conduct of the removal hearing,

Greenwald’s motion for summary judgment is allowed. There

being no just reason for delay, judgment may be entered

pursuant to Rule 54(b) Fed. R. Civ. P. 28 U.S.C., for defendant

Greenwald.

March 25, 1980 s/ R.W. Zobel

DATE DISTRICT JUDGE

15a

APPENDIX E — ROSLINDALE COOPERATIVE BANK,

ET AL. v. CAROL GREENWALD, ET AL., 481 F. SUPP. 749

(1979)

ROSLINDALE COOPERATIVE BANK et al.

Carol GREENWALD et al.

Civ. A. No. 78-111-Z.

United States District Court, D. Massachusetts.

Dec. 7, 1979.

Bank and directors and shareholders brought civil rights

action charging the Massachusetts Commissioner of Banks and

others with violations of Fourteenth Armmendment due process

guarantees. The District Court, Zobel, J., held that: (1)

complaint failed to state a cause of action for deprivation of

constitutional rights resulting from certification by

Commissioner that it appeared to her unsafe and inexpedient for

bank to continue to transact its business, and (2) if show cause

hearing for removal of bank director was conducted in a way

which effectively denied removed directors an opportunity to

refute such charges, they would be entitled to relief for

deprivation of constitutional rights.

Motions to dismiss allowed in part and denied in part.

1. Constitutional Law

Bank and its directors had liberty or property interests

affected by certification by former Massachusetts Commissioner

of Banks that it appeared to her “unsafe and inexpedient” for

bank to continue to transact its business, which interests would

entitle bank and directors to procedural safeguards guaranteed

by due process clause. U.S.C.A. Const. Amend. 14.

16a

Appendix E

2. Civil Rights

Bank was entitled to maintain an action under section of

Civil Rights Act providing for civil actions for deprivation of

rights, despite claim that it could not do so as a creature of the

state. 42 U.S.C.A. §1983.

3. Civil Rights

Directors of bank had standing to institute civil rights

action in name of bank challenging a certification decision and

claiming that such amounted to deprivation of constitutional

rights. 42 U.S.C.A. $1983; U.S.C.A. Const. Amend. 14.

4. Constitutional Law

Where, since certification, shareholders’ duly elected board

of directors had not been in control of bank and where

defendants had ignored operative effect of two shareholder

votes, shareholders had property interest adequate to sustain

their claims that certification by former Massachusetts

Commissioner of Banks that it appeared to her “unsafe and

inexpedient” for bank to continue to transact its business,

resulting in second bank's taking possession and control of

bank’s property and business and assuming director’s managerial

responsibilities, denied shareholders’ constitutional rights. 42

U.S.C.A. §1983; U.S.C.A. Const. Amend. 14.

5. Constitutional Law

Whether corporation directors have constitutionally

protectable property interests must be determined by reference

to state law; similarly, existence of liberty interests in

directorships depends upon state law. U.S.C.A. Const. Amend.

14.

6. Banks and Banking

Under Massachusetts law, bank director may be removed

17a

Appendix E

for official delinquencies only after notice and an opportunity to

refute the charges of impropriety.

7. Civil Rights

A Massachusetts bank directorship does constitute an

interest which if denied contrary to due process requirements

would entitle plaintiffs to relief under section of Civil Rights Act

providing for civil action for deprivation of rights. 42 U.S.C.A.

$1983; U.S.C.A.Const. Amend. 14.

8. Banks and Banking

Potentially drastic effects of bank failure or

mismanagement justify unfettered freedom of state action and

warrant no requirement of a precertification hearing either with

respect to bank or the shareholder. U.S.C.A.Const. Amend. 14.

9. Constitutional Law

Availability of equitable postcertification relief under

Massachusetts General Laws meets all requirements of due

process in context of bank certification. M.G.L.A. c. 170 App.

§2-4; U.S.C.A.Const. Amend. 14.

10. Banks and Banking

Certification powers are delegated to the Massachusetts

Bank Commissioner by the legislature and are not subject to

judicial review except to extent of determining whether the

Commissioner exceeded statutory bounds of her authority.

M.G.L.A. c. 170 App. §2-4.

11. Banks and Banking

Language in Massachusetts statute providing that the

Massachusetts Bank Commissioner may certify a bank only if

she finds that it is in unsound or unsafe condition or that it is

unsafe and inexpedient for bank to continue its business refers

18a

Appendix E

to commonly accepted banking standards which afford a

reviewing court sufficiently precise means for evaluating the

Commissioner's action. M.G.L.A. c. 170 App. §2-4.

12. Banks and Banking

Certification standards set forth by Massachusetts statutes

are neutral and impose no statutory imprimatur of personal

dishonesty such as would trigger requirement of a hearing.

M.G.L.A. c. 170 App. §2-4.

13. Civil Rights

In light of fact that Massachusetts bank certification

standards and procedures met constitutional standards and fact

that it was still possible that bank’s business would be restored

to full managerial powers of its directors, complaint alleging that

certification by former Massachusetts Commissioner of Banks

that it appeared to her unsafe and inexpedient for bank to

continue to transact its business resulted in deprivation of

directors’ constitutional rights failed to state cause of action. 42

U.S.C.A. §1983; U.S.C.A.Const. Amend. 14.

14. Civil Rights

In light of concentration of all discretionary powers

exercisable in connection with bank certifications with

Massachusetts Commissioner of Banks, complaint alleging that

certification by former Massachusetts Commissioner of Banks,

resulting in second bank’s taking possession and control of first

bank’s property and business and assuming the directors’

managerial responsibilities, resulted in denial of bank directors’

constitutional rights failed to state cause of action with respect

to second bank and its directors. M.G.L.A. c. 167 §1 et seq.; c.

170 §1 et seq.; c. 170 App.-§§2-4, 2-5; 42 U.S.C.A. §1983.

15. Civil Rights

Complaint alleging that Deputy Commissioner of Banks of

Massachusetts deprived bank directors of their constitutional

19a

Appendix E

rights by his involvement in certification that it appeared unsafe

and inexpedient for bank to continue to transact its business

failed to state cause of action inasmuch as no allegations

appeared in complaint to suggest that deputy commissioner's

role exceeded bounds of his ministerial functions. 42 U.S.C.A.

$1983; U.S.C.A.Const. Amend. 14; M.G.L.A. c. 170 App. §2-4.

16. Banks and Banking

Constitutional Law

Massachusetts statute providing for administrative

proceedings to remove bank directors satisfies due process

requirements by guaranteeing notice and a hearing to bank

directors charged with professional malfeasance. M.G.L.A. c.

167 §5.

17. Civil Rights

Complaint alleging that show cause hearing for removal of

bank directors was conducted in a way which effectively denied

removed directors an opportunity to refute such charges stated

cause of action for deprivation of constitutional rights.

M.G.L.A. c. 167 §5; 42 U.S.C.A. §1983; U.S.C.A.Const.

Amend. 14.

18. Officers and Public Employees

Qualified immunity of executive department officials

extends to all official acts which have reasonable basis in light of

all circumstances existing at time action was taken, including

scope of official discretion, and which are the product of a good

faith effort to discharge official responsibilities; if, however, an

executive official acts without reason and for purpose of causing

injury to plaintiff, cloak of immunity is withdrawn, and official

may be charged with monetary liability.

19. Civil Rights

Plaintiff alleging cause of action against executive

20a

Appendix E

department officials under section of Civil Rights Act providing

for civil action for deprivation of rights must plead as well as

prove facts showing bad faith. 42 U.S.C.A. §1983.

20. Officers and Public Employees

Deputy Commissioner of Banks of State of Massachusetts

was absolutely immune from liability for alleged wrongful

actions pertaining to his participation in decision to initiate

removal proceedings against bank directors and for his

prosecutorial role at show cause hearing. 42 U.S.C.A. §1983;

M.G.L.A. c. 167 §5.

21. Banks and Banking

Massachusetts Commissioner of Banks who, under statute,

bears responsibility for conduct of hearing for removal of bank

directors alone is accountable for constitutional defects in

proceeding. M.G.L.A. c. 167 §5.

22. Civil Rights

Complaint alleging that Attorney General, State Treasurer,

and Massachusetts Commissioner of Revenue, as members of

review board which did not reverse former Commissioner of

Banks’ order of removal of directors, had violated directors’

constitutional rights failed to state cause of action. M.G.L.A. c.

170 App. §2-4.

23. Civil Rights

Complaint alleging that Commissioner of Banks deprived

bank director of due process because, for example, he refused a

request to have counsel present at meeting, failed to state cause

of action inasmuch as there was nothing in complaint to indicate

that meeting implicated any constitutional interest to which due

process attaches but, rather, it appeared that meeting was part of

plan to accomplish eventual return of bank to its board of

directors. M.G.L.A. c. 170 App. §2-4; 42 U.S.C.A. $1983.

2la

Appendix E

Robert H. Tobin, Roslindale, Mass., for plaintiffs.

Thomas v. Urmy, Jr., Warner & Stackpole, Boston, Mass.,

for Cooperative Central Bank.

Andrew J. McElaney, Asst. Atty. Gen., Boston, Mass., for

Greenwald and Flynn.

MEMORANDUM OF DECISION

ZOBEL, District Judge.

Roslindale Cooperative Bank and eleven of its directors and

shareholders bring this civil rights action pursuant to 42 U.S.C.

§1983 charging the Massachusetts Commissioner of Banks and

others with violations of Fourteenth Amendment due process

guarantees. The several defendants named in the complaint are

Carol S. Greenwald, former Massachusetts Commissioner of

Banks and her successor in office, Gerald T. Mulligan; Edward

T. Flynn, Deputy Commissioner of Banks; Cooperative Central

Bank (Central Bank), the reserve bank for Massachusetts

cooperative banks, and Central Bank's board of directors; and

~ Attorney General, State Treasurer, and Commissioner of .

venue.

Plaintiffs’ amended complaint concerns essen! ily two

series of events. On October 28, 1977, Greenwald, pursuant to

Mass.Gen.Laws ch. 170 App., §2-4, certified to Central Bank

that it appeared to her “unsafe and inexpedient” for Roslindale

Cooperative Bank (the Bank) to continue to transact its

business. In response to the certification, Central Bank took

possession and control of the Bank’s property and business and

assumed plaintiff directors’ managerial responsibilities. Plaintiffs

did not learn of Greenwald's certification until November 2,

1977 when they received a letter from Centrai Bank

simultaneously informing them of Greenwald's action and

Central Bank’s intervention. The Bank, to this day, remains

under the control of Central Bank.

22a

Appendix E

The second series of events began approximately one year

later, when Greenwald, pursuant to Mass.Gen.Laws ch. 167, §5,

initiated administrative proceedings to remove four of the

plaintiffs, Albert G. Tobin, Robert H. Tobin, Leonard F.

DeLosh, and James Quinn, from the Bank's board of directors.

Plaintiffs allege that at a show cause hearing conducted by

Greenwald, they appeared to atiswer charges of professional

misconduct. The charges were presented by Deputy

Commissioner Flynn. As required by ch. 167, §5, the hearing

also was attended by a three-member board consisting of

designees of the Attorney General, State Treasurer, and

Commissioner of Revenue. At the conclusion of the hearing,

Greenwald ordered removal of the directors. The board, though

empowered by statute to do so, did not overrule her decision.'

Plaintiffs bitterly criticize the manner in which the hearing was

conducted alleging, inter alia, that they were not notified of the

specific charges they would be expected to refute and that only

one of the four was permitted to speak in his own behalf.

The Bank and its directors and shareholders now seek

compensatory and punitive damages, an injunction ordering

return of the Bank's property and business to the directors’

control, and a declaration that ch. 170 App., §2-4, the

certification statute, is unconstitutional, as well as other relief,

arguing they were denied their constitutional rights to notice and

a hearing on the advisability of certification. The removed

directors claim they are entitled to compensatory and punitive

damages, and reinstatement, because of allegedly

unconstitutional defects in the removal proceedings, and a

declaration that ch. 167, §5, the removal statute, is

unconstitutional. The defendants have moved to dismiss the

complaint for failure to state a claim. Fed.R.Civ.P. 12(b)(6).

1. The board does not have full powers of review but simply has the

limited statutory authority to reverse the Commissioner's order by a majority

vote of its members. Mass.Gen.Law ch. 167, §5.

23a

Appendix E

Certification

[1-3] Defendants argue that plaintiffs have no “liberty” or

“property” interests which would entitle them to the procedural

safeguards guaranteed by the Due Process clause. | disagree.

Certification removed the Bank's assets and placed them under

the control of Central Bank. Clearly the Bank has a property

interest in its assets. Moreover, defendants’ argument that the

Bank as a creature of the state is not entitled to maintain a

$1983 action is not a correct statement of the law. Advocates for

Arts v. Thompson, 532 F.2d 792, 794 (ist Cir. 1976);

Pennsylvania Bank and Trust Co. v. Hanisek, 426 F.Supp. 410,

412-13 (W.D.Pa.1977).?

[4] Plaintiffs, as shareholders, also have property interest

adequate to sustain their claims. Since certification, the

shareholders’ duly-elected board of directors have not been in

control of the Bank, and as the complaint further alleges

defendants have ignored the operative effect of two shareholder

votes. Under these circumstances, the shareholders are entitled

to due process protection. See, Feinberg v. Federal Deposit Ins.

Corp., 173 U.S.App.D.C. 120, 125, 522 F.2d 1335, 1340

(D.C.Cir.1975); Feinberg v. Federal Deposit Ins. Corp., 420

F.Supp. 109, 115 (D.D.C.1976) (where a holder of shares in a

state bank was held entitled to due process). But see, Smith v.

Witherow, 102 F.2d 638 (3d Cir. 1939) (where holders of

2. | also disagree with defendants that the directors lack standing to

maintain this action in behalf of the Bank. Relying on Vigilante v. Old South

Trust Co., 251 Mass. 385, 387-388, 146 N.E. 670 (1925), defendants argue that

only Central Bank can authorize litigation in the name of a certified member

bank. It does not necessarily follow, however, that the directors should be

precluded from instituting a civil rights action in the name of the Bank for

deprivations of its constitutional interests. See, Fahey v. Mallonee, 332 U.S.

245, 67 S.Ct. 1552, 91 L.Ed. 2030 (1945), Indeed, as the Supreme Judicial

Court has indicated, the fact that Vigilante applies to all of the business affairs

of a certified bank does not preclude the board of directors from challenging a

certification decision by mean: of a suit for declaratory or injunctive relief.

Tobin v. Commissioner of Banks, .. Mass. ——, 386 N.E.2d 1246, 1248, n.3

(1979).

24a

Appendix E

national banking shares were denied constitutional protection in

light of express statutory conditions imposed upon their

ownership interests).

[5-7] Whether the directors have a _ constitutionally

protectible property interest must be determines by reference to

state law. Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct.

2701, 33 L.Ed.2d 548 (1972); Bishop v. Wood, 426 U.S. 341,

345-46, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976). Similarly, the

existence of a liberty interest in the directorships depends upon

state law. Paul v. Davis, 424 U.S. 693, 709-710, 96 S.Ct. 1155, 47

L.Ed.2d 405 (1976). Under Massachusetts law, a bank director

may be removed for official delinquencies only after notice and

an opportunity to refute the charges of impropriety. Tobin v.

Commissioner of Banks, 386 N.E.2d 1246, 1248 (1979);

Mass.Gen.Law ch. 167, §5. A Massachusetts bank directorship

does, therefore, constitute an interest which if denied contrary to

due process requirements would entitle plaintiffs to relief.

[8-12] The next question to be resolved is whether

plaintiffs’ respective constitutional interests are adequately

safeguarded by procedures available to them under state law and

this question must be answered affirmatively. The potentially

drastic effects of bank failure or mismanagement justify

unfettered freedom of state action and warrant no requirement

of a pre-certification hearing either with respect to the Bank, see

Fahey v. Mallonee, supra, or the shareholders, Feinberg v.

Federal Deposit Ins. Corp., supra, 420 F.Supp. at 119-120. Post-

certification relief is a different matter, however, although it may

clearly be cast in a form which accommodates the regulatory

concerns of the Commonweath as well as the respective interests

of the Bank, Fahey v. Mallonee, supra, and its shareholders,

Feinberg v. Federal Deposit Ins. Corp., supra, 420 F.Supp. at

119-120. The availability of equitable relief under

Mass.Gen.Laws ch. 231A, see Tobin v. Commissioner of Banks,

supra, 386 N.E.2d at 1248, n.3, meets all the requirements of due

process in the context of bank certification. As the Supreme

Judicial Court indicated in Lowell Co-Operative Bank v. The

Co-Operative Central Bank, 287 Mass. 338, 191 N.E. 921 (1934),

25a

Appendix E

certification powers are delegated to the Commissioner by the

legislature and are not subject to judicial review except to the

extent of determining whether the Commissioner exceeded the

statutory bounds of her authority. The language in ch, 170 App.,

§™4, providing that the Commissioner may certify a bank only

if she finds that it is in “an unsound or unsafe condition” or that

it is “unsafe and inexpedient” for the bank to continue its

business refers to commonly accepted banking standards which

afford a reviewing court sufficiently precise means for evaluating

the Commissioner's action. Fahey v. Mallonee, supra, 332 U.S.

at 252-53, 67 S.Ct. 1552.)

{13} A further reason compels dismissal of the claims of

plaintiff directors arising out of certification of the Bank.* As

both the complaint and the certification statute indicate,

Greenwald's action with respect to the Bank did not terminate

plaintiffs’ directorships. It is still possible that the Bank's

‘business will be restored to the full managerial powers of its

directors. Indeed, it appears from the complaint that steps

toward this end have been taken. In the absence of a conclusive

termination of status, plaintiff directors cannot argue that they

have been denied their constitutional rights. Board of Regents v.

Roth, supra; Paul v. Davis, supra, 424 U.S. at 701-12, 96 S.Ct.

1155.

[14] With respect to Central Bank and its directors, the

complaint fails for an additional reason. All discretionary

powers exercisable in connection with bank certifications are

vested in the Commissioner of Banks who alone has the

3. The certification standards are also neutral and impose no statutory

imprimatur of personal dishonesty such as that which triggered the

requirement of a hearing in Feinberg v. Federal Deposit Ins. Corp., 420

ae ta —_— 1976) and Rodriguez de Quinonez v. Perez, 596 F.2d 486

(Ist Cir, 1979),

4. Clearly, different issues are raised by the four directors who were

formally removed pursuant to the ch. 167 procedures which, of course, are

wholly separate and independent from certification procedures under ch. 170.

See discussion infra.

26a

Appendix E

statutory authority to certify banks, permit resumption of

normal operations, or order liquidation. Mass.Gen.Laws ch. 170

App., §§2-4, 2-5. Section 1983 imposes liability only on those

persons who subject others, or by their actions cause such others

to be subjected, to constitutional injuries. 42 U.S.C, §1983

(1974). The role of Central Bank and its directors in this

statutory scheme is purely ministerial: upon notification from

the Commissioner that one of its member banks has been

certified, Central Bank must intervene and must retain control

of the certified member bank until further action by the

Commissioner. The concentration of all discretionary powers in

the Commissioner removes Central Bank and its board of

directors from liability for damages under §1983. See e.g., Mims

v. Board of Education, 523 F.2d 711, 715 (7th Cir. 1975).

(15] Plaintiffs’ attempt to attribute liability to Deputy

Cominissioner Flynn is similarly misdirected. No allegations

appear in the complaint to suggest that Flynn's role in these

events exceeded the bounds of his ministerial functions,

therefore, he also is absolved of liability. Mims v. Board of

Education, supra.

Removal of Directors

[16,17] The only issues with respect to the removed

directors, are whether ch. 167, §5 was applied to them in an

unconstitutional manner and, if so, whether they are entitled to

relief against any of the defendants. The statute itself satisfies

due process requirements by guaranteeing notice and a hearing

to bank directors charged with professional malfeasance,

Rodriguez de Quinonez v. Perez, 596 F.2d 486 (Ist Cir. 1979),

but if, as the complaint alleges, the show cause hearing was

conducted in a way which effectively denied the removed

directors an opportunity to refute such charges, they would be

entitled to relief, Codd v. Velger, 429 U.S. 624-27, 97 S.Ct. 882,

51 L.Ed.2d 92 (1977); Rodriguez de Quinonez v. Perez, supra, at

490-91.

[18] Insofar as the removed directors seek damages from

Greenwald, their claim is circumscribed by the doctrine of

27a

Appendix E

qualified immunity of executive department officials. Scheuer v.

Rhodes, 416 U.S, 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). This

immunity extends to all official acts which have a reasonable

basis in light of all the circumstances existing at the time action

was taken, including the scope of official discretion, and which

are the product of a good faith effort to discharge official

responsibilities. /d., at 247-48, 94 S.Ct. 1683. If, however, an

executive official acts without reason and for the purpose of

causing injury to plaintiff, the cloak of immunity is withdrawn,

and the official may be charged with monetary liability. /d.

[19] The rule if this circuit is that a §1983 plaintiff must

plead as well as prove facts showing bad faith. Gomez v. Toledo,

602 F.2d 1018, 1020 (Ist Cir. 1979). The removed directors’

assertions that they were denied notice and an effective

opportunity to speak at their show cause hearing raise at least an

inference of bad faith sufficient to meet their burden of pleading

and to defeat Greenwald's motion to dismiss the complaint.

[20] Defendant Flynn's alleged wrongful actions against

plaintiffs pertain to his participation in the decision to initiate

the removal proceedings and for his prosecutorial role at the

show cause hearing. He is absolutely immune from liability.

Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 2915, 57

L.Ed.2d 895 (1978). Plaintiffs’ allegations of conspiratorial

liability, both as to Flynn and the other defendants, lack merit.

Griffin v. Breckenridge, 403 U.S. 88, 91 S.Ct. 1790, 29 L.Ed.2d

338 (1971); Harrison v. Brooks, 519 F.2d 1358 (Ist Cir. 1975).

(21,22] The liability of the Attorney General, State

Treasurer, and Commissioner of Revenue rests on the sole

allegation that, as members of the board constituted by ch. 167,

§5, they did not reverse Greenwald's order of removal. The

board's statutory power to reverse an order of the Commissioner

does not make them guarantors of constitutional rights. Under

the statute, the Commissioner bears responsibility for the

conduct of the hearing; therefore, within the limits permitted by

qualified executive immunity, she alone is accountable for

constitutional defects in the proceedings. The role of the board is

28a

Appendix ©

restricted to the merits of a removal decision—as to which there

is a right of judicial review in state court—and affords no basis

for a constitutional claim. The complaint as to the board

members, therefore, is groundless and may be dismissed.

[23] Four plaintiffs charge violations of their rights as a

result of certain actions by defendant Mulligan. The complaint

alleges that on June 25, 1979, Mulligan met with four of the

plaintiff directors pursuant to Mass.Geu.Laws ch. 167, §2A

which empowers the Commissioner of Banks to issue orders to

bank directors concerning banking operations. Plaintiffs who

were summoned to the §2A meeting, Beneditto A. Faletra, Jr.,

Charles Janotta, Harold T. WHourihan, and Joseph F.

Marcantonio, claim Mulligan deprived them of due process,

because, for example, he refused their requests to have counsel

present. There is nothing in the complaint, however, to indicate

that the §2A meeting implicated any of the constitutional

interests to which due process attaches. Indeed, it appears from

the complaint that the meeting was part of a plan to accomplish

the eventual return of the Bank to its board of directors.

Plaintiffs may take issue with Mulligan’s judgment concerning

the manner in which the return will happen, but this does not

rise to the level of a constitutional claim.

Disposition

Defendants’ motions to dismiss for failure to state a claim

are allowed except that Greenwald’s motion is denied as to

claims made by Albert G. Tobin, Robert H. Tobin, Leonard F.

DeLosh, and James Quinn in connection with the ch. 167, §5

removal proceedings.

29a

APPENDIX F — TOBIN v. COMMISSIONER OF BANKS,

1979 MASS. A.S. 498, 380 N.E. 2D 1248 (1979)

Albert G. TOBIN et al.!

Vv.

COMMISSIONER OF BANKS, et al.?

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Nov. 6, 1978.

Decided Feb. 28, 1979.

After Commissioner of Banks certified that it was unsafe

and inexpedient for a bank to continue its present operation, the

president of the bank brought an action challenging the

Commissioner's actions. The Superior Court, Suffoik County,

dismissed. The Supreme Judicial Court held that: (1) issue of

whether striking of the appearance of the attorney for the

plaintiff was proper was waived; (2) authority to file an action

against the Commissioner on behalf of the bank was vested in

the board of directors and not the president, and (3) president

could not maintain suit challenging his removal before

exhausting his administrative remedies.

Appeal dismissed in part and judgment affirmed in part.

1. Appeal and Error

Brief which did no more than state as an issue the striking

of the appearance of attorney and, in conclusion, asked that the

order be vacated contained insufficient appellate argument and

the issue would be deemed waived. Rules of Appellate

Procedure, rule 16(a)(4).

1. Roslindale Co-operative Bank.

2. Co-operative Central Bank.

30a

Appendix F

2. Banks and Banking

In the absence of a statute or a corporate bylaw, the

authority to file an action against the Commissioner of Banks on

behalf of the bank is vested in the board of directors and not in

the president. M.G.L.A. c. 170 §8.

3. Banks and Banking

Board of directors of a cooperative bank is not precluded

from challenging certification of the Commissioner of Banks

that it is unsafe and inexpedient for the bank to continue in its

present operation. M.G.L.A. c. 231A §§1, 2.

4. Banks and Banking

Before being removed as president of a bank upon the

certification of the commissioner that it is unsafe and expedient

for the bank to continue its operations, president has a statutory

right to hearing before the commissioner, to review of the

commisioner’s decision by an administrative board composed of

the state treasurer, the Attorney General, and the Commissioner

of Revenue, and to judicial review of the removal decision.

M.G.L.A. c. 167 §5.

5. Banks and Banking

Action brought by president of the bank challenging his

removal by the Commissioner of Banks following the

commissioner's certification that it was unsafe and inexpedient

for the bank to continue its operations could not be maintained

before the president resorted to his administrative remedies.

M.G.L.A. c. 167 §5.

Robert H. Tobin, Roslindale, for Roslindale Co-operative

Bank and another.

Andrew J. McElaney, Jr., Asst. Atty. Gen., for

Commissioner of Banks.

3la

Appendix F

John J. McCarthy, Wakefield, for Co-operative Central

Bank.

Before HENNESSEY, C.J., ana KAPLAN, WILKINS,

LIACOS and ABRAMS, JJ.

RESCRIPT.

On October 28, 1977, the Commissioner of Banks certified

to the Co-operative Central Bank (Central) that it was “unsafe

and inexpedient™ for the Roslindale Co-operative Bank

(Roslindale) to continue its present operation and therefore

Central was ordered to take possession and control of the

property and business of Roslindale. See St.1934, c. 73, §4.

Roslindale’s president, Albert G. Tobin, brought a

complaint alleging that the Commissioner's actions were

arbitrary and capricious and the certification was made “without

just cause.” The bank president also alleged an individual claim

based on the Commissioner's action. The defendants filed a

motion to strike the appearance of Roslindale’s attorney on the

ground that the attorney was not authorized to represent

Roslindale. The judge struck the attorney's appearance, ruling

that the “bank’s claims in this case have been brought by an

attorney who was not authorized to act in its behalf.” He

dismissed Roslindale’s complaint without prejudice and entered

a judgment to the effect that “there is no just reason for delay

and upon an express direction for the entry of judgment.”

Mass.R.Civ.P. 54(b), 365 Mass. 820 (1974). See New England

Canteen Serv., Inc. v. Ashley, _. Mass. ——, a 363

N.E.2d 526 (1977).

{1] We need not decide whether the judgment entered is

appealable, because on appeal, the plaintiff does no more than

state as an issue the striking of the appearance of the attorney

and, in his conclusion, he asks that the order be vacated. This is

an insufficient appellate argument. Mass.R.A.P. 16(a)(4), as

a. Mass.Adv.Sh (1977) 1186, 1194.

32a

Appendix F

amended, 367 Mass. 919 (1975). See, e.g. Olsson v. Waite,

Mass, —__., ___, 368, N.E.2d 1194 (1977); Mahoney v. Board

of Appeals of Winchester, 366 Mass. 228, 233 (1974), appeal

dismissed, 420 U.S. 903, 95 S.Ct. 822, 42 L.Ed.2d 834 (1975);

Ford v. Flaherty, 364 Mass. 382, 387, 305 N.E.2d 112 (1973);

Lolos v. Berlin, 338 Mass. 10, 14, 153 N.E.2d 636 (1958). This

issue is therefore deemed waived. Thus, Roslindale’s complaint

is not before us and the appeal must be dismissed.

[2,3] Furthermore, in the absence of a statute or a

corporate by-law, the authority to file an action against the

Commissioner on behalf of the bank is vested in the board of

directors, and not the president. See generally, G.L. c. 170 §8.

Cf. Kelly v. Citizens Fin. Co. of Lowell, Inc., 306 Mass. 531,

532, 28 N.E.2d 1055 (1940); Mahone v. Manchester & Lawrence

R.R. Corp., 111 Mass. 72, 75 (1872); Ashuelot Mfg. Co. v.

Marsh, | Cush. 507, 508 (1848). Accord, Pacific Bank v. Stone,

121 Cal. 202, 208-209, 53 P. 634 (1898). The pleadings are

devoid of any facts or any allegations concerning such

av*horization by Roslindale’s board of directors.’

[4,5] The judge dismissed the president's individual claim

on the ground that it failed to state a claim on which relief could

be granted. See Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974).

Before being removed, the plaintiff has a statutory right to a

hearing before the Commissioner, review of the Commissioner's

decision by an administrative board composed of the State

Treasurer, the Attorney General and the Commissioner of

Revenue and then judicial review of the removal decision. See

G.L. ¢. 167, §5. Since the plaintiff brought suit before his

b. Mass.Adv.Sh. (1977) 2175, 2180.

3. We think that Vigilante v. Old South Trust Co., 251 Mass. 385, 387-

388, 146 N.E. 670 (1925), applies to all the bank's business, but does not, as the

defendants suggest, preclude a co-operative bank's board of directors from

challenging the Commissioner's certification of the bank either before the

Commissioner or, in some circumstances, in court. See G.L. c. 231A, §§1, 2.

See also Samel v. Pittsfield Licensing Bd., _ Mass. — (Mass.Adv.Sh.

[1979] 117), 384 N.E.2d 1230. Cf. G.L. c. 167, §§22, 33.

33a

Appendix F

removal and before resort to the required hearing, his complaint

was rightly dismissed. See Gallo v. Division of Water Pollution

Control, __ Mass. —__, ~__°, 372 N.E.2d 1258 (1978); J. &

J. Enterprises, Inc. v. Martignetti, 369 Mass. 535, 540-541, 341

N.E.2d 645 (1976); Gordon v. Hardware Mut. Cas. Co., 361

Mass. 582, 587, 281 N.E.2d 573 (1972). Cf. Lowell Gas Co. v.

Attorney Gen., —_.. Mass. —., 1, 385 N.E.2d 240 (1979).

We conclude that the appeal from the granting of the

motion to strike the appearance of the attorney acting on behalf

of Roslindale has been waived. Therefore, that appeal is

dismissed. As to the individual complaint, the judgment is

affirmed.

So ordered.

c. Mass.Adv.Sh. (1978) 195, 208.

d. Mass.Adv.Sh. (1979) 49, 58-59.

34a

APPENDIX G — RELEVANT STATUTES AND

CONSTITUTIONAL PROVISIONS

42 §1983. Civil action for deprivation of rights

“Every person who, under color of any

statute, ordinance, regulation, custom, or usage,

of any State or Territory, subjects, or causes to

be subjected, any citizen of the United States or

other person within the jurisdiction thereof to the

deprivation of any rights, privileges, or

immunities secured by the Constitution and laws,

shall be liable to the party injured in an action at

law, suit in equity, or other proper proceeding for

redress.”

R.S. §1979

§1985. Conspiracy to interfere with civil rights — Preventing

officer from performing duties

(In pertinent part)

“Depriving persons of rights or privileges

(3) If two or more persons in any State or

Territory conspire or go in disguise on the

highway or on the premises of another, for the

purpose of depriving, either directly or indirectly,

any person or class of persons of the equal

protection of the laws, or of equal privileges and

immunities under the laws; or for the purpose of

preventing or hindering the constituted

authorities of any State or Territory from giving

or securing to all persons within such State or

Territory the equal protection of the laws: .. .”

$1986. Same; action for neglect to prevent.

“Every person who, having knowledge that

any of the wrongs conspired to be done, and

mentioned in section 1985 of this title, are about

35a

Appendix G

to be committed, and having power to prevent or

aid in preventing the commission of the same,

neglects or refuses so to do, if such wrongful act

he committed, shall be liable to the party injured,

or his legal representatives, for all damages

caused by such wrongful act, which such person

by reasonable diligence could have prevented;

and such damages may be recovered in an action

on the case; and any number of persons guilty of

such wrongful neglect or refusal may be joined as

defendants in the action; and if the death of any

party be caused by any such wrongful act and

neglect, the legal representatives of the deceased

shall have such action therefor, and may recover

not exceeding $5,000 damages therein, for the

benefit of the widow of the deceased, if there be

one, and if there be no widow, then for the

benefit of the next of kin of the deceased. But no

action under the provisions of this section shall

be sustained which is not commenced within one

year after the cause of action has accrued.”

R.S. §1981

C. 170 App’x 2

(In Effect on October 28, 1977)

§4. Taking Possession of Member Banks by Corporation.

“Whenever it shall appear to the

commissioner that any member bank is in an

unsound or unsafe condition to transact the

business for which it is organized, or that it is

unsafe and inexpedient for it to continue to

transact such business, he may so certify to the

corporation, and upon receipt of such certificate

the corporation shall, by notice in writing to the

commissioner and to the bank, take possession

36a

Appendix G

and control forthwith of the property and

business of such bank and shall operate such

bank subject to such rules and regulations as the

commissioner may impose until the bank shall

resume business or until its affairs shall finally be

liquidated. The corporation may, while thus

carrying on such business, pay to such bank out

of the Share Insurance Fund such suns as the

corporation's directors deem necessary for the

protection of the bank's shareholders, and may

order the same to be repaid when no longer

required for that purpose, or may purchase assets

from said bank to effect the purposes of this

chapter on such terms and conditions and at such

valuations as the directors, with the approval of

the commissioner, may determine.” (1934, 73,

§4.)

§5. Turning Back Control, etc., for Member Banks

“At any time after the corporation has taken

over the control, possession and operation of any

member bank as provided in section four, it may

with the approval of the commissioner turn back

the control, possession and operation thereof to

such member bank which may resume business

free from any control by the corporation

acquired under section four, subject to such

conditions as the commissioner may approve.

The corporation shall not thus turn back the

control, possession and operation of any bank

until there has been repaid into the Share

Insurance Fund all sums paid out by it from such

fund to such bank or its shareholders or until it

has received security for such repayment

satisfactory to the directors of the corporation.”

(1934, 74, §5.)

C. 167 §5. Commissioner May Report and Prosecute Violations

of Law; Publication of Certain Facts.

37a

Appendix G

(In Effect in 1977 and 1978)

“If, in the opinion of the commissioner, any

officer of any bank, including a director or

trustee thereof, has violated any law relating to

such bank or has conducted the business of such

bank in an unsafe or unsound manner or has

used his official position in a manner contrary to

the interests of such bank or its depositors or has

been negligent in the performance of his duties,

the commissioner may, in his discretion, send a

statement of facts about such conduct to the

executive officer, and each director or trustee of

the bank affected. Within such reasonable time as

the commissioner may direct, a special meeting of

the directors or trustees of the bank shall be held

with respect to the statement of the

commissioner. If, in the opinion of the

commissioner, appropriate action is not taken to

protect the interests of the bank or its depositors,

or if such conduct is continued, the commissioner

shall cause notice to be served on such officer,

director or trustee to appear, and show cause

why he should not be removed from office. A

copy of such notice shall be sent by registered

mail to each officer, director or trustee of the

bank affected. A

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