FEDERAL DEPOSIT INSURANCE CORPORATION, APPELLANT V. JAMES E. MALLEN, ET AL. No. 87-82 In the Supreme Court of the United States October Term, 1987 On Appeal from the United States District Court for the Northern District of Iowa Brief for the Appellant PARTIES TO THE PROCEEDING In addition to the parties to the proceeding named in the caption, Farmers State Bank of Kanawha, Iowa, was a plaintiff in the district court and an appellee when this appeal was docketed; it has since been placed in receivership, with the FDIC as receiver. TABLE OF CONTENTS Questions Presented Parties to the Proceeding Opinions below Jurisdiction Constitutional and statutory provisions involved Statement: A. Mallen's indictment and suspension B. Proceedings in the district court C. Subsequent events Summary of argument Argument: The suspension procedures set forth in 12 U.S.C. 1818(g)(3) comport with due process A. The 90-day period provided by Section 1818(g) for a banking agency to determine whether to continue, terminate, or otherwise modify a suspension under that section comports with due process B. The district court's reliance on Barry v. Barchi was misplaced C. Section 1818(g)'s grant of discretion to the banking agencies to decide whether to receive oral testimony at the suspension hearing is constitutional Conclusion OPINIONS BELOW The opinions of the district court holding 12 U.S.C. 1818(g) unconstitutional (J.S. App. 1a-18a), denying appellant's motion to alter or amend the judgment (J.S. App. 19a-23a), and denying its motion for a stay pending appeal (J.S. App. 24a-26a), are reported at 667 F. Supp. 652, 662, and 664, respectively. JURISDICTION The order of the district court holding Section 1818(g) unconstitutional was entered on February 17, 1987. The appellant filed its notice of appeal to this Court on March 11, 1987 (J.S. App. 33a-34a). By orders dated May 4 and May 30, 1987, Justice Blackmun extended the time within which to docket the appeal to June 9 and then to July 9, 1987. The FDIC filed its jurisdictional statement on the latter date. This Court noted probable jurisdiction on October 19, 1987. This Court's jurisdiction rests on 28 U.S.C. 1252. CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The Fifth Amendment provides in pertinent part: nor shall any person * * * be deprived of life, liberty, or property, without due process of law * * * . Section 1818(g) (12 U.S.C.) provides in pertinent part: Suspension or removal of director or officer charged with felony (1) Whenever any director or officer of an insured bank, or other person participating in the conduct of the affairs of such bank, is charged in any information, indictment, or complaint authorized by a United States attorney, with the commission of or participation in a crime involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding one year under State or Federal law, the appropriate Federal banking agency may, if continued service or participation by the individual may pose a threat to the interests of the bank's depositors or may threaten to impair public confidence in the bank, by written notice served upon such director, officer, or other person, suspend him from office or prohibit him from further participation in any manner in the conduct of the affairs of the bank. A copy of such notice shall also be served upon the bank. Such suspension or prohibition shall remain in effect until such information, indictment, or complaint is finally disposed of or until terminated by the agency. In the event that a judgment of conviction with respect to such crime is entered against such director, officer, or other person, and at such time as such judgment is not subject to further appellate review, the agency may, if continued service or participation by the individual may post a threat to the interests of the bank's depositors or may threaten to impair public confidence in the bank, issue and serve upon such director, officer, or other person an order removing him from office or prohibiting him from further participation in any manner in the conduct of the affairs of the bank except with the consent of the appropriate agency. A copy of such order shall also be served upon such bank, whereupon such director or officer shall cease to be a director or officer of such bank. A finding of not guilty or other disposition of the charge shall not preclude the agency from thereafter instituting proceedings to remove such director, officer, or other person from office or to prohibit further participation in bank affairs, pursuant to paragraph (1), (2), (3), or (4) of subsection (e) of this section. Any notice of suspension or order of removal issued under this paragraph shall remain effective and outstanding until the completion of any hearing or appeal authorized under paragraph (3) hereof unless terminated by the agency. * * * * * (3) Within thirty days from service of any notice of suspension or order of removal issued pursuant to paragraph (1) of this subsection, the director, officer, or other person concerned may request in writing an opportunity to appear before the agency to show that the continued service to or participation in the conduct of the affairs of the bank by such individual does not, or is not likely to, pose a threat to the interests of the bank's depositors or threaten to impair public confidence in the bank. Upon receipt of any such request, the appropriate Federal banking agency shall fix a time (not more than thirty days after receipt of such request, unless extended at the request of the concerned director, officer, or other person) and place at which the director, officer, or other person may appear, personally or through counsel, before one or more members of the agency or designated employees of the agency to submit written materials (or, at the discretion of the agency, oral testimony) and oral argument. Within sixty days of such hearing, the agency shall notify the director, officer, or other person whether the suspension or prohibition from participation in any manner in the affairs of the bank will be continued, terminated, or otherwise modified, or whether the order removing said director, officser or other person from office or prohibiting such individual from further participation in any manner in the conduct of the affairs of the bank will be rescinded or otherwise modified. Such notification shall contain a statement of the basis for the agency's decision, if adverse to the director, officer or other person. The Federal banking agencies are authorized to prescribe such rules as may be necessary to effectuate the purposes of this subsection. A related statutory provision, 12 U.S.C. 1829, provides: Conditions governing employment of personnel Except with the written consent of the (Federal Deposit Insurance) Corporation, no person shall serve as a director, officer, or employee of an insured bank who has been convicted, or who is hereafter convicted, of any criminal offense involving dishonesty or a breach of trust. For each willful violation of this prohibition, the bank involved shall be subject to a penalty of not more than $100 for each day this prohibition is violated, which the Corporation may recover for its use. QUESTIONS PRESENTED Under 12 U.S.C. 1818(g), whenever any director or officer of a federally-insured bank has been indicted for a crime involving dishonesty or breach of trust that is punishable by imprisonment for more than one year, the appropriate federal banking agency may suspend such person from office, pending resolution of the criminal charges, if his continued service may pose a threat to the interests of the bank's depositors or to public confidence in the bank. The questions are: 1. Whether Section 1818(g) is invalid under the Due Process Clause of the Fifth Amendment because it allows the agency a maximum of 30 days after receipt of a request to conduct a post-suspension hearing on the suspension and a maximum of 60 days after the hearing to issue a written decision whether the suspension order will be continued, terminated or modified. 2. Whether Section 1818(g) is invalid under the Due Process Clause because it gives the agency discretion as to whether to receive oral testimony at such a hearing. STATEMENT A. Mallen's Indictment And Suspension Appellee Mallen was, at the time of the events giving rise to this appeal, the president and a director of Farmers State Bank of Kanawha, Iowa (J.S. App. 2a). He was also the largest stockholder of Kanawha Investment Holding Company, a bank holding company that owned 92% of the stock of the bank (id. at 8a). On December 10, 1986, a federal grand jury in the Northern District of Iowa returned a two-count indictment against Mallen. Count 1 charged him with violating 18 U.S.C. 1014 by making false statements in a personal financial statement for the purpose of influencing the actions of appellant Federal Deposit Insurance Corporation (the FDIC). Violation of Section 1014 carries a penalty of up to two years in prison. Count 2 charged Mallen with violating 18 U.S.C. 1001 by making false statements to the FDIC, a charge that carries a penalty of up to five years in prison. When an officer or director of a federally-insured bank is indicted for a crime involving dishonesty or breach of trust that carries a penalty of imprisonment for more than one year, Section 1818(g)(1) authorizes the approprirate federal banking agency -- in the case of Farmers State Bank, the FDIC -- by written notice to suspend the officer or director from office or to prohibit him from further participation in the conduct of the bank's affairs, if his continued service "may pose a threat to the interests of the bank's depositors or may threaten to impair public confidence in the bank." The suspension or prohibition is effective upon service of the notice. Under Section 1818(g)(3), the suspended officer may, within 30 days after receipt of the notice, request "an opportunity to appear before the agency to show that the continued service to or participation in the conduct of the affairs of the bank by such individual does not, or is not likely to, pose a threat to the interests of the bank's depositors or threaten to impair public confidence in the bank." The agency is required to hold a hearing within 30 days after receipt of such a request. At the hearing, the suspended officer may "submit written materials (or, at the discretion of the agency, oral testimony) and oral argument." Ibid. The FDIC has by rule delegated to the hearing officer the authority to decide whether to receive oral testimony (12 C.F.R. 308.61(e)), which if received is subject to cross examination. /1/ Within 60 days after the hearing the agency is required to notify the suspended officer whether the suspension or prohibition will be continued, terminated or otherwise modified. If the decision is adverse to the officer, the agency is required to provide a statement of the basis for its decision. The suspension or prohibition remains in effect until the indictment "is finally disposed of or until terminated by the agency" (12 U.S.C. 1818(g)(1)). Subsection (g)(1) goes on to provide that if that final disposition is a judgment of conviction not subject to further appellate review, the appropriate federal banking agency may then remove the officer from office or prohibit him from further participation in the conduct of the bank's affairs except with the agency's permission. The hearing procedures provided in Section 1818(g)(3) with respect to a suspension are also provided with respect to such a permanent removal. /2/ On January 26, 1987, on the basis of the indictment described above, the FDIC served on Mallen, with a copy to the bank, a Notice and Order of Suspension and Prohibition, effective upon service, suspending him from office and prohibiting him from further participation in the affairs of the bank during the pendency of the criminal proceedings (J.S. App. 27a-29a). /3/ The Notice and Order advised Mallen of his procedural rights under Section 1818(g)(3) (J.S. App. 27a-28a). On January 30, 1987, Mallen requested an immediate administrative hearing, with opportunity to present written evidence and oral testimony (id. at 4a). After an exchange of views as to the timing of the hearing between Mallen's counsel and the FDIC's Regional Counsel, the FDIC's Executive Secretary scheduled a hearing for February 18, 1987, 19 days after the date shown on Mallen's request (ibid.). The FDIC's Regional Counsel initially "took the position that the hearings should simply be oral argument on written submissions" (ibid.), /4/ but it never became "clear whether oral evidence would be permitted, since denying permission to present oral evidence is in the discretion of the hearing officer" (ibid.), who was never given an opportunity to rule. B. Proceedings In The District Court On February 6, 1987, before the hearing could take place, Mallen filed this action in the United States District Court for the Northern District of Iowa, asking that Section 1818(g) be declared unconstitutional and that the FDIC be enjoined from enforcing the Notice and Order against him (J.S. App. 1a-2a). Mallen argued that the suspension and prohibition deprived him of liberty and property within the meaning of the Fifth Amendment. He claimed that the post-suspension hearing provided for in the statute was inadequate because (1) the delay permitted between his request for a hearing and a final decision by the FDIC was excessive and (2) the hearing officer was authorized, in his discretion, not to allow oral testimony. Mallen also argued that the statute was unconstitutional because it does not provide for judicial review of the FDIC's ultimate decision to continue, modify or terminate the suspension. /5/ Mallen sought a temporary restraining order, a preliminary injunction and a permanent injunction. Id. at 6a. The FDIC responded that the statute afforded Mallen due process. /6/ On February 17, 1987, the district court enjoined the FDIC from enforcing the notice of suspension and prohibition. /7/ The district court determined (J.S. App. 17a) that it had jurisdiction to decide the constitutional issue under 28 U.S.C. 1331. The court then concluded that both Mallen and the bank had property interests in Mallen's continued employment and participation in the bank's affairs (J.S. App. 9a). Citing this Court's formulation in Mathews v. Eldridge, 424 U.S. 319, 333 (1976), that due process requires "(an) opportunity to be heard at a meaningful time and in a meaningful manner," the district court next inquired whether it was permissible to suspend Mallen with no pre-suspension hearing (J.S. App. 9a). The court decided, citing Mackey v. Montrym, 443 U.S. 1 (1979), that the Constitution does not mandate a pre-suspension hearing because "in cases such as this there generally is a compelling (governmental) interest in a summary adjudication" (J.S. App. 10a). The court ruled, however, that the time periods set forth in Section 1818(g)(3) deprived Mallen of a meaningful hearing. /8/ The court found the situation analogous to that in Barry v. Barchi, 443 U.S. 55 (1979), in which this Court partially invalidated the New York State Racing Commission's procedures for summary suspension of horse trainers whose horses tested positive for drugs. In Barry, the Court noted that while Barchi had been suspended for 15 days, there was no time limit for the convening of a hearing, and the Racing Commission's procedures gave the Commission up to thirty days after the conclusion of a hearing in which to rule finally on the suspension (id. at 59-61). Thus, under the New York system trainers like Barchi could be subjected to brief suspensions with no timely opportunity to "put the State to its proof" (id. at 66). Noting (J.S. App. 5a) that, under the Speedy Trial Act, 18 U.S.C. 3161(c)(1), which requires that a criminal trial begin within 70 days (not including any "excludable time") after the filing of an indictment, Mallen's criminal trial could be over (assuming minimal "excludable time") before the expiration of the 90-day period permitted by Section 1818(g), the district court concluded that the statute's post-suspension hearing was a "toothless" remedy, because it would give Mallen meaningful process only if the FDIC wanted it to (J.S. App. 11a-12a). The district court was unable to find any persuasive reason why the FDIC should need 90 days to make a decision (id. at 16a). The district court also found the statute unconstitutional because it gives the FDIC discretion to receive or not receive oral testimony. The court stated that "at some point, the plaintiff in a case such as this should have an opportunity to present live witnesses" (J.S. App. 15a) and that the FDIC had given no persuasive reason why "denial of the opportunity to present (oral) evidence is in the sole discretion of a hearing officer" (id. at 16a). Rathefr than order the FDIC to adhere to a stricter timetable and to allow oral testimony at the hearing, the court concluded that the post-suspension procedures "violate due process" and enjoined the FDIC from enforcing the Notice and Order of Suspension and Prohibition against Mallen (id. at 18a). On February 27, 1987, the FDIC moved the district court to amend its order. The FDIC proposed that, rather than being enjoined entirely from enforcing the suspension order, it be required to provide Mallen with a prompt hearing, to hear oral testimony, and to make its decision promptly thereafter (J.S. App. 20a). At a March 6 hearing before the district court, the FDIC suggested that it hold a hearing on March 9, with an oral disposition by March 26 and written disposition by April 8 (ibid.). On March 10, 1987, the district court entered an order refusing to amend its earlier order. It noted that Mallen's criminal trial was scheduled to begin on March 16 and was estimated to last one week. Thus, as the district court understood the situation, the FDIC's decision on the suspension would be entered "only after Mallen has 'suffered the full penalty imposed' by the suspension." J.S. App. 20a (quoting Barry v. Barchi, 443 U.S. at 66). The district court also thought it unfair to Mallen to permit the FDIC to conduct a hearing on the suspension at a time so close to Mallen's criminal trial (J.S. App. 21a-22a). The next day, the district court denied the FDIC's motion for a stay pending appeal (id. at 24a-26a). /9/ The FDIC then noticed its appeal to this Court (id. at 33a-34a). C. Subsequent Events Mallen's criminal trial began on March 16 (before a different judge). On March 24, the jury convicgted him on both counts of the indictment. On May 1, the court in the criminal case sentenced Mallen on the second count to three years' imprisonment, suspended all but sixty days, and fined him $10,000. The court set aside the first count, finding the indictment defective. Mallen's appeal, and the Government's cross appeal of the dismissal of the first count of the indictment, are pending in the United States Court of Appeals for the Eighth Circuit (Nos. 87-1590 and 87-1722); oral argument was heard on December 14, 1987. Mallen has served his prison sentence and is currently on probation. Mallen's conviction brought him within a separate section, 12 U.S.C. 1829, which bars any person who has been convicted of a crime involving dishonesty or breach of trust from serving as an officer, director or employee of any insured bank, except with FDIC consent. /10/ After the conviction, the FDIC informed Mallen that it would not consent to his service at Farmers State Bank. On May 29, 1987, pursuant to Section 1829, at the FDIC's request, the presiding judge in the criminal case preliminary enjoined Mallen from serving as an officer, director, or employee of the bank. FDIC v. Mallen, 661 F. Supp. 1003 (N.D. Iowa 1987). Mallen has not appealed that order. On July 30, 1987, after the jurisdictional statement was filed in this case, the Iowa Superintendent of Banking closed Farmers State Bank and placed it in receivership. The FDIC was appointed receiver and immediately executed a "purchase and assumption" transaction under which the deposit liabilities of Farmers State Bank were assumed by First National Bank of Clarion, Iowa. /11/ Farmers State Bank's former offices are now a branch of First National Bank of Clarion. /12/ The former bank is no longer authorized to conduct operations but it has not yet been finally dissolved by the Iowa authorities and retains its corporate existence, subject to a receivership, until its affairs are finally wound up. We understand that Mallen is still President of the remaining shell corporation and still a stockholder in the holding company that owns most of the shell's stock. SUMMARY OF ARGUMENT The district court stated correctly (J.S. App. 8a) that a bank officer generally has a property interest in his position at the bank. It then recognized (id. at 9a-10a) that the dictates of due process, in connection with a temporary deprivation of such a position, are not rigid and universal but depend, under Mathews v. Eldridge, 424 U.S. 319 (1976), upon a careful analysis of what is at stake. Then, however, the district court all but ignored the fact that the premise for a Section 1818(g) suspension is an indictment for one or more felonies involving dishonesty or breach of trust. As a result, the district court did not soundly analyze either what is substantively at stake in a Section 1818(g)(3) hearing or what process is due. A suspension under Section 1818(g) rests on (a) the existence of a serious unresolved criminal charge plus (b) the agency's determination that the bank officer's continued service in that circumstance "may pose a threat to the interests of the bank's depositors or may threaten to impair public confidence in the bank" (12 U.S.C. 1818(g)(1)). It is plainly not the function of a Section 1818(g)(3) hearing to test the validity of the criminal charge: the grand jury's indictment, which neutrally establishes that there is probable cause to believe that the officer has committed a felony, is a constitutionally sufficient procedure to subject him to arrest, detention and trial (see Gerstein v. Pugh, 420 U.S. 103, 117 n.19 (1975)), and it is surely sufficient from a procedural standpoint to subject him to suspension from a position at a federally insured bank as well; after the indictment (and suspension), adjudication of the criminal charge is the function of the criminal process (which of course has its own provisions for speed and other safeguards); the Section 1818(g)(3) hearing proceeds on the assumption that there is a valid, but as yet unadjudicated, criminal indictment. The stated function of a Section 1818(g)(3) hearing is to give the indicted bank officer "an opportunity to appear before the agency to show that (his) continued service * * * does not, or is not likely to, pose a threat to the interests of the bank's depositors or threaten to impair public confidence in the bank" (12 U.S.C. 1818(g)(3)). There is every reason to assume that Congress wanted such a purported showing by an indicted officer to be accepted only with caution and that that is why it afforded the agency up to 90 days, a modest period in any event, to give the matter careful consideration before readmitting the indicted officer to the bank. As originally adopted Section 1818(g) provided for suspension following an indictment without any hearing at all. But while Congress expected that such suspensions would be "virtually routine" (S. Rep. 1482, 89th Cong., 2d Sess. 2 (1966)), it did not make suspension automatic but provided only that the agency "may" suspend. In Feinberg v. FDIC, 420 F. Supp. 109 (D.D.C. 1976), a three-judge court ruled that, since the agency did have discretion not to suspend, the officer had a constitutional right to be heard on the issue. The present statute, including its time limits, was enacted in direct response to Feinberg. There is no reason to believe that Congress intended to create a broad substantive exception to the presumption that an indicted bank officer will be suspended pending adjudication of the charge, or to conclude that the Constitution requires the agency to act on this important matter -- returning an indicted officer to his bank -- in less time than Congress thought appropriate. The 90 days that Congress allowed for a hearing and agency deliberation are in any event plainly not excessive in light of the three Mathews factors. The indicted officer's interest in his position is of course substantial, but that is not a fair measure of what he has at stake at the Section 1818(g)(3) hearing: his legal right to occupy that position has already been sharply impaired by the grand jury's decision to indict, which must be taken as given; what he has at stake at the hearing is only the chance of persuading the agency that, despite the indictment, he poses no threat to depositors or public confidence. On the other hand, the public's interest in not returning an officer, indicted for a felony involving dishonesty or breach of trust, to a federally insured bank without careful consideration is obviously substantial. Finally, "the risk of an erroneous deprivation" (424 U.S. at 335) is quite low, again because the grand jury's evaluation of the accusations against the individual must for this purpose be taken as given; it is only the agency's assessment of the risks to the interests of depositors and to public confidence that may be challenged as erroneous. The district court, relying on a faulty analogy to Barry v. Barchi, supra, found that the hearing provided by Section 1818(g)(3) was insufficiently prompt to be meaningful. In Barry, this Court ruled that horse trainers subjected to short disciplinary suspensions were not given a "meaningful opportunity to be heard" by a hearing process that would routinely result in a decision only after a suspension had run its course (see 443 U.S. at 66). Here, the district court thought that since the Speedy Trial Act requires that a criminal trial begin within 70 days, the 90 days allowed by Section 1818(g)(3) posed the same problems. But, first, the premise that the suspension will normally be shorter than 90 days is quite wrong: many criminal trials take considerably longer than 90 days from indictment to conviction and in any event a Section 1818(g) suspension continues, not until the end of the trial, but until any appeals are exhausted. More importantly, the district court wholly misunderstood the point of Barry. The Court's concern in that case was that suspensions constituting penalties for assumed misconduct might be imposed without any opportunity to challenge the assumption of misconduct, because the hearing would routinely come too late. Here, the bank officer's suspension rests on a criminal charge plus the agency's conclusion that his continued service might pose a risk to depositors or public confidence; he has opportunities to be heard in response to both the criminal charge and the agency's conclusion. The fact that the former opportunity may in some instances come more swiftly does not mean that the latter is constitutionally inadequate. The district court's conclusion that Section 1818(g) is unconstitutional because it does not give the suspended officer the right to present oral testimony is manifestly erroneous. The FDIC Regional Counsels normally do not object to a request to present oral testimony, and there has been no determination not to allow such testimony here. However, due process does not require that every indicted bank officer have the opportunity to present live testimony, in addition to written materials and oral argument, at a Section 1818(g)(3) hearing: the question whether the officer's continued service may pose a risk to depositors or public confidence will (especially since the criminal charge must be taken as given) generally turn on record facts and the agency's expert judgment, and not on the credibility of the officer or his witnesses. The possibility that there might be a case where due process requires an opportunity to present live testimony does not invalidate Section 1818(g). ARGUMENT THE SUSPENSION PROCEDURES SET FORTH IN 12 U.S.C. 1818(g)(3) COMPORT WITH DUE PROCESS A. The 90-Day Period Provided By Section 1818(g) For A Banking Agency To Determine Whether To Continue, Terminate, Or Otherwise Modify A Suspension Under That Section Comports With Due Process The district court correctly recognized (J.S. App. 9a-10a) that the dictates of due process are not rigid and universal but depend, under Mathews v. Eldridge, supra, on the interests of the individual, the interests of the government, and the risk of error in the particular circumstances. Then, however, the district court all but ignored the fact that the premise for a suspension under Section 1818(g) is a determination (generally, as here, by a grand jury) that there is probable cause to believe that the bank officer has committed a felony involving dishonesty or breach of trust. As a result, the district court failed to appreciate the function of the Section 1818(g)(3) hearing whose timetable it was trying to evaluate. Section 1818(g) was originally enacted as part of the Financial Institutions Supervisory Act of 1966, Pub. L. No. 89-695, Section 202, 80 Stat. 1050. /13/ As adopted in 1966, the section simply provided that an official of a federally insured bank "may" be suspended by the appropriate federal banking agency. Although the statute thus gave the agency discretion not to suspend, Congress expressly expected that suspension following indictment would be "virtually routine" (S. Rep. 1482, supra, at 2). There was no statutory predicate for a suspension other than the criminal charge, and there was no provision for a Section 1818(g) hearing of any kind: suspension would simply continue until the outcome of the criminal proceedings. The section as originally enacted was challenged in Feinberg v. FDIC, 420 F. Supp. 109 (D.D.C. 1976) (three-judge court). Feinberg had been indicted for conspiracy to commit mail fraud, and the FDIC had suspended him from his position as President and a director of the Jefferson State Bank of Chicago and had prohibited him from participating in the bank's affairs. Feinberg brought suit, claiming that he had been deprived of liberty and property without due process, since he had been provided with nothing more than an informal conference with FDIC officials prior to his suspension (id. at 111). The court in Feinberg recognized the dangers to banks and their depositors potentially arising from continued participation in their affairs by persons indicted for serious crimes, and it fully appreciated the need for summary suspensions. Based on its examination of the statute and its legislative history, the three-judge court said, "there is a strong governmental-public interest in speedily and efficiently removing indicted officers, directors or employees from financial institutions, the viability of which depend on the public's confidence" (420 F. Supp. at 119). The court found it "clear from the congressional history that Congress, in passing 12 U.S.C. Section 1818, was concerned with the dangerous effect of the public's loss of confidence in financial institutions" (id. at 120) and, after noting that Section 1818 originated with the banking agencies, added (420 F. Supp. at 120): In order to maintain the public's confidence, Congress agreed with the agencies that immediate action was necessary where a director, officer or employee of an insured bank was indicted for a felony involving dishonesty or breach of trust. To delay this action, which occurs in the form of a Notice and Order of Suspension, would thus seriously and directly undermine the congressional purpose behind section 1818(g)(1). Accordingly, the three-judge court ruled that a pre-suspension hearing was not constitutionally required (ibid.). The Feinberg court also observed that it "appears arguable that if the issuance of a Notice and Order of Suspension were automatic upon the return of an indictment or the filing of an information or complaint, then there might not be a need for a hearing" (420 F. Supp. at 116 (footnote omitted)). Noting, however, that the statute required the agency to decide whether the crime is one involving "dishonesty or a breach of trust" and that the word "may" (issue a notice of suspension) apparently contemplated some exercise of discretion, the court ruled that Section 1818(g) as originally enacted was unconstitutional for failure to provide any hearing at all. The court stated that at a minimum due process required an "immediate post-suspension hearing" (420 F. Supp. at 120). The court added that in its view "notice, the opportunity to be represented by counsel, for written submissions, and for oral argument, appear mandated by the circumstances" (ibid.), but that "'the nature of the relevant inquiry' * * * does not seem to require any more than written submission (of evidence)." Ibid. (footnote omitted) (quoting Mathews v. Eldridge, 424 U.S. 319, 343 (1976)). In direct response to Feinberg, Congress amended Section 1818(g) in two respects. First, it amended paragraph (1) to add the condition that "continued service or participation by the individual may pose a threat to the interests of the bank's depositors or may threaten to impair public confidence in the bank." Second, it added paragraph (3), providing for a post-suspension hearing at which the officer may appear before the agency to show that his continued service does not pose such a threat. Paragraph (3) generally affords the procedures outlined by the Feinberg court: the hearing must be convened within 30 days, with a written decision to follow within 60 days; written submissions and oral argument are to be received, but the receipt of oral testimony is discretionary with the agency. Pub. L. No. 95-630, Section 111(a)(1), 92 Stat. 3665-3666. The House Report accompanying this amendment explained that Feinberg had held that "the removal statute was deficient since it did not provide opportunity for hearing and review of an agency's action. Under the provisions of H.R. 13471 an individual will now have that opportunity" (H.R. Rep. 95-1383, 95th Cong., 2d Sess. 19 (1978)). There is no indication in the legislative history that Congress, by adding the condition that there be a possible threat to the bank's depositors or public confidence, intended any substantial modification of the prior expectation that suspensions following indictment would be "virtually routine." The "may pose a threat" threshold is a very low one, evidently intended to provide some standard, to be applied at the hearing mandated by the Feinberg court, for the exercise of the discretion contained in the word "may." But there is no indication that the 1978 Congress considered summary and "virtually routine" suspension any less vital to the protection of federally-insured banks. And the time periods, totalling up to 90 days, that Congress gave the agency to consider any decision to terminate a suspension and return an indicted officer to an insured bank were chosen by Congress as part of its express response to the Feinberg court's requirement of a hearing that would afford due process. Congress's determination that the 30- and 60-day time periods struck the appropriate balance, between the need to protect depositors and the public from a too-hasty decision to terminate a suspension and the officer's right to be heard in connection with the agency's exercise of its discretion, is of course entitled to substantial deference. The deference the Court pays to "the duly enacted and carefully considered decision of a coequal and representative branch of our Government * * * must be afforded even though the claim is that a statute Congress has enacted effects a denial of the procedural due process guaranteed by the Fifth Amendment." Walters v. National Ass'n of Radiation Survivors, 473 U.S. 305, 319-320 (1985), citing Schweiker v. McClure, 456 U.S. 188 (1982), Mathews v. Eldridge, 424 U.S. 319, 349 (1976). The principle of deference to Congress's judgment is especially strong since "there is no obvious bright line dictating when a (post-deprivation) hearing must occur." United States v. Eight Thousand Eight Hundred and Fifty Dollars ($8,850) in United States Currency, 461 U.S. 555, 562 (1983); see also United States v. Von Neumann, 474 U.S. 242, 248 (1986) (citation omitted) (lower court's attempt to set specific time limits for post-seizure remission proceedings "'ill-advised'"). The district court's exercise of the federal courts' "ultimate and supreme (power)" (Chicago & Grand Trunk Ry. v. Wellman, 143 U.S. 339, 345 (1892)) to invalidate a deliberate congressional determination in an area known for "the impossibility of drawing firm lines" (Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 557 n.4 (1985) (Brennan, J., concurring in part and dissenting in part)), did not afford the appropriate deference to the weight Congress gave to the competing interests of the indicted officer and the public. In any event, the time periods allowed by Section 1818(g)(3) are well within the requirements of due process under the circumstances. The basic principle is that when the government deprives an individual of property he must receive a hearing "'at a meaningful time and in a meaningful manner.'" Mathews v. Eldridge, 424 U.S. at 333 (quoting Armstrong v. Manzo, 380 U.S. 545, 552 (1965)). In any particular case, "the timing and nature of the required hearing 'will depend on appropriate accommodation of the competing interests involved.'" Logan v. Zimmerman Brush Co., 455 U.S. 422, 434 (1982) (footnote omitted) (quoting Goss v. Lopez, 419 U.S. 565, 579 (1975)). The factors to be weighed "include the importance of the private interest and the length or finality of the deprivation * * * the likelihood of governmental error * * * and the magnitude of the governmental interests involved" (Logan, 455 U.S. at 434 (citations omitted)). In a case concerning the timing of a post-deprivation hearing, the inquiry into the governmental interests includes consideration of the reasons a particular amount of time may be required, while the inquiry into the individual's interests includes the length of time between the initial deprivation and the hearing as well as the length of the deprivation itself (see Eight Thousand Eight Hundred and Fifty Dollars, 461 U.S. at 565-568). /14/ (i) The suspended officer does, of course, have a substantial interest in his position, but that is not a fair measure of what he has at stake for purposes of assessing the need to expedite a Section 1818(g)(3) determination. Congress has made his right to occupy that position subject to suspension if he has been indicted for a felony involving dishonesty or breach of trust. /15/ The indictment represents a grand jury's determination that probable cause exists (United States v. Calandra, 414 U.S. 338, 343 (1974)); /16/ it is not the function of a Section 1818(g)(3) hearing to second-guess the indictment or anticipate the outcome of the criminal process. See 12 U.S.C. 1818(g)(3); 12 C.F.R. 308.56(a). What the suspended officer has at stake in a Section 1818(g)(3) hearing, for purposes of assessing the need for expedition, is the chance to persuade the agency that, notwithstanding the existence of probable cause to believe he has committed a felony involving dishonesty or breach of trust, his continued service does not pose a threat to depositors or public confidence. The time allowed for the FDIC's final determination, considered as a burden on the indicted officer, is a good deal shorter than other periods that this Court has found permissible for significant decisions. In Loudermill, the Court rejected the suggestion that due process was denied when nine months elapsed between the post-termination hearing and a final decision: "A 9-month adjudication is not, of course, unconstitutionally lengthy per se" (470 U.S. at 547). In Mathews, the Court found acceptable a one-year delay in the final decision on disability benefits (424 U.S. at 341-342), while in Eight Thousand Eight Hundred and Fifty Dollars an 18-month delay before the first hearing after a currency seizure at the border was determined to be "quite significant" but not excessive (461 U.S. at 565). /17/ Cf. Brock v. Roadway Express, Inc., No. 85-1530 (Apr. 22, 1987), slip op. 14 (declining to rule on constitutionality of 19-month delay in final adjudication by Secretary of Transportation). (ii) The public has a strong interest in giving the banking agencies the 90 days Congress afforded them to decide whether to allow an indicted officer to return to a position at a federally-insured bank. As the text of Section 1818(g) reminds us, banks and the banking system depend on public confidence and it is important not only that the decision be made correctly but also that it be perceived to have been made with due caution. The three-judge court in Feinberg (420 F. Supp. at 119) and the district court (J.S. App. 10a) here recognized that the need to protect both depositors and public confidence in the banking system is urgent enough to make the indictment of a bank officer the kind of extraordinary event that justifies suspension without a prior hearing. As this Court recently noted, the deposit insurance system itself was enacted because, "(f)aced with virtual panic, Congress attempted to safeguard the hard earnings of individuals against the possibility that bank failures would deprive them of their savings." FDIC v. Philadelphia Gear Corp., 476 U.S. 426, 432 (1986). Because of extreme sensitivity, banking has been "one of the longest regulated and most closely supervised of public callings." Fahey v. Mallonee, 332 U.S. 245, 250 (1947). The same urgency that justifies summary suspension without prior proceedings also justifies allowing the agencies enough time to proceed with appropriate caution before a suspension is terminated. Misconduct by officers and directors represents a particularly severe threat to depositors and banking. The Chairman of the FDIC recently estimated that as many as one third of bank failures involve insider fraud and abuse, while "outright criminal activity is a factor in nearly 15 percent of recent failures" (Statement of L. William Seidman, Chairman, FDIC, Before the Subcomm. on Commerce, Consumer and Monetary Affairs of the House Comm. on Government Operations 1 (Nov. 19, 1987)). In 1984, the House Committee on Government Operations stated that "(c)riminal misconduct by insiders of financial institutions has been a major contributing factor in approximately one-half of all commercial bank failures * * * between 1980 and 1983." H.R. Rep. 98-1137, 98th Cong., 2d Sess. 7 (1984). The report accompanying the 1978 legislation that, among other things, modified Section 1818(g) in response to Feinberg, explained that Congress was tightening controls on bank officers, directors and shareholders because "(p)roblem banks and insider abuses have been virtually synonymous." H.R. Rep. 95-1383, 95th Cong., 2d Sess. 10 (1978). Mallen's case presents a clear example of the dangers of insider misconduct. Mallen was accused (and subsequently convicted) of making false statements on an FDIC financial disclosure form; the FDIC maintained that he concealed his own interests in certain entities that borrowed from Farmers State Bank (see Aff. of FDIC Review Examiner Bruce Holmgren (attached to Feb. 9, 1987 FDIC Opp. to Temp. Relief); see also J.A. 17 (indictment); cf. Langley v. FDIC, No. 86-489 (Dec. 1, 1987), slip op. 4-5 (importance of accurate information to FDIC)). Because it gives bank managers a financial interest as borrowers that may be contrary to interests of depositors, lending to officers and directors is strictly limited (see Iowa Code Ann. Sections 524.612, 524.613, 524.706, 524.710 (West 1970 & Supp. 1987) (limits on loans to and overdrafts by officers and directors of Iowa banks); 12 U.S.C. 1828(j)(2) (limits on loans to officers and directors of federally-insured state banks)); attempts to evade those regulations through false statements are unacceptable. See, e.g., United States v. McCright, 821 F.2d 226, 231-233 (5th Cir. 1987) (upholding conviction under 18 U.S.C. 1005 for false statements regarding bank officer's interest in loan recipients), petition for cert. pending, No. 87-553; First Nat'l Bank v. Comptroller, 697 F.2d 674, 683 (5th Cir. 1983). The public and the FDIC, whose insurance fund bears the financial risk of bank failure, must be able to repose absolute confidence in bank managers. Congress was amply justified in concluding that it might require as much as 90 days for an agency to determine with due caution that an indicted officer's continued service would not pose a threat to depositors or public confidence. /18/ Where possible, as in this case, the FDIC schedules the hearing to be held in less than 30 days, /19/ but the process of preparing for and scheduling a hearing plainly can take the full period. /20/ And it is obvious that as much as 60 days might be required for a sound decision favorable to the officer after the hearing. During the 60 days, both the hearing officer and the FDIC Board of Directors must act. The hearing officer must sift the evidence and the parties' submissions; these may concern troublesome issues of bank regulation, including the financial situation of the bank and the opportunity for a particular officer or director to endanger depositors. The hearing officer must prepare a proposed disposition that fairly sets out the circumstances and his views. The regulations provide for this process to be expedited when it can be: "where possible," the proposed disposition is to be submitted to the FDIC "within 10 days after the record is closed" (12 C.F.R. 308.61(h)). That proposed disposition must then be reviewed (normally after preparation of an analysis by FDIC legal staff not previously involved in the case) by the Board of Directors of the FDIC (12 C.F.R. 308.62), a collegial body with extensive other responsibilities. Congress's conclusion that this process may take up to 60 days was plainly reasonable. /21/ (iii) Finally, under the circumstances "the risk of an erroneous deprivation" (J.S. App. 9a (quoting Mathews v. Eldridge, 424 U.S. at 335)) is small. The principal fact supporting suspension -- the existence of probable cause to believe that the officer has committed a felony -- will have been determined by a grand jury, whose determination not only provides an "initial check against mistaken decisions" (Loudermill, 470 U.S. at 545-546), but must be taken as given for purposes of a Section 1818(g) suspension. The remaining statutory requirement for suspension is -- deliberately -- easy to meet: whether the officer's continued service "may" pose a "threat" to the interests of depositors "or" public confidence. While the agency may, after careful consideration, decide that it is safe to allow the indicted officer to return to the bank, the likelihood that its initial decision was overcautious is very small. B. The District Court's Reliance On Barry v. Barchi Was Misplaced The district court's conclusion that the time limits in Section 1818(g)(3) were not prompt enough to satisfy due process turned, not on a balancing of the competing interests, but primarily upon its analogy to Barry v. Barchi, supra. Barry involved a 15-day suspension of the license of a horse trainer whose horse had allegedly failed a post-race drug test. The statute provided for a post-suspension hearing but did not specify when the hearing must be convened, although it required a decision within 30 days after the hearing (443 U.S. at 59-61). This Court held that the hearing was insufficiently prompt for "relatively brief suspensions" because it was likely to take place after the licensee had incurred "the full penalty imposed" (id. at 66), denying the trainer any effective review. The district court in this case concluded that Section 1818(g) suffered from the same defect. The court reasoned that, since the Speedy Trial Act, 18 U.S.C. 3161(c)(1), requires that a criminal trial begin within 70 days (plus any "excludable time") after indictment, a suspended officer's criminal trial would generally be over, and his Section 1818(g) suspension ended, before the banking agency would have to decide the bank official's challenge to his suspension. J.S. App. 12a-13a. The district court's reliance on Barry was wholly misplaced. First, the premise is wrong: where the criminal case is not terminated by a guilty plea but goes to trial, a Section 1818(g) suspension will normally last longer than 90 days, often substantially longer. The 70-day period provided for by the Speedy Trial Act is subject to several categories of "excludable time" (18 U.S.C. 3161(h)) and a great many criminal trials, including Mallen's, have taken more than 90 days from indictment to verdict. /22/ More importantly, a Section 1818(g) suspension order remains in effect, unless terminated by the agency, "until such * * * indictment * * * is finally disposed of * * * " (12 U.S.C. 1818(g)(1) (emphasis added)). As the structure of Section 1818(g)(1) makes clear, where the trial leads to a conviction, the case is not "finally disposed of" until the completion of the appellate process: the ensuing remedy, permanent removal after conviction, may not be imposed until the conviction is no longer subject to appellate review. The district court in Feinberg understood this point and noted that "such a final disposition, considering the possible appellate avenues, presents the possibility of a substantial passage of time" (420 F. Supp. at 119). Second, and more fundamentally, Barry was altogether unlike this case. What troubled the Court in Barry was that a penalty could be imposed on a trainer suspected of misconduct, without any effective opportunity for the trainer to challenge the penalty, because it was "as likely as not that Barchi and others subject to relatively brief suspensions would have no opportunity to put the State to its proof until they (had) suffered the full penalty imposed" (443 U.S. at 66). There is no such lack of opportunity under Section 1818(g). A Section 1818(g) suspension is based on two premises -- the criminal charge and the possible threat to depositors or public confidence -- each of which is subject to appropriate subsequent proceedings in its own forum. The fact that in some cases a judgment of acquittal (or dismissal of the indictment) will end the suspension before the agency issues its decision under Section 1818(g)(3) has no bearing on the reasonableness of the time allowed for that process where it must be carried to its conclusion. The district court's holding that the Section 1818(g)(3) process is unreasonably long, merely because the criminal process might in some cases finish sooner, was wholly illogical. C. Section 1818(g)'s Grant Of Discretion To The Banking Agencies To Decide Whether To Receive Oral Testimony At The Suspension Hearing Is Constitutional Section 1818(g)(3) provides that the suspended official shall have an opportunity to "submit written materials (or, at the discretion of the agency, oral testimony) and oral argument." The FDIC's regulations delegate the question whether to receive oral testimony to the hearing officer (12 C.F.R. 308.61(e)). In this case, since Mallen successfully challenged Section 1818(g) on its face before the hearing date, there was no decision by the hearing officer on whether to permit oral testimony. /23/ The district court, essentially without explanation, ruled that Section 1818(g) is unconstitutional because it does not mandate the receipt of oral testimony on behalf of the suspended officer in all instances (J.S. App. 14a-16a). Although, as we have noted, FDIC Regional Counsels normally do not object to oral testimony on behalf of the bank officer (and normally present oral testimony, subject to cross examination, to support the suspension), Section 1818(g)(3) is plainly not facially unconstitutional for failure to require the agency to accept oral testimony in every case. In the first place, as this Court has held repeatedly, "'due process is flexible and calls for such procedural protections as the particular situation demands.'" Greenholtz v. Nebraska Penal Inmates, 442 U.S. 1, 12 (1979) (quoting Morissey v. Brewer, 408 U.S. 471, 481 (1972)). While written submissions have been held to be an unrealistic and inadequate option in particular situations (see, e.g., Goldberg v. Kelly, 397 U.S. 254, 269 (1970) (welfare recipients)), there is no reason to think that written submissions plus oral argument are universally inadequate for suspended bank officers, particularly since the criminal charge is not at issue. The FDIC's decision, whether the suspended officer's continued service poses a threat to the interests of depositors or public confidence in the bank, may depend solely on record facts (such as the condition of the bank and the nature and responsibilities of the officer's position) plus expert agency judgment, and not at all on the credibility of the suspended officer or his supporters. "'(T)he nature of the relevant inquiry,' * * * does not seem to require any more than written submission" (Feinberg, 420 F. Supp. at 120 (citation and footnote omitted)). Cf. Mathews, 424 U.S. at 343; Califano v. Yamasaki, 442 U.S. 682, 695-696 (1979); Greenholtz v. Nebraska Penal Inmates, 442 U.S. at 14-15. Section 1818(g)(3) does give the suspended officer in all cases the right to present oral argument, as suggested in Feinberg, so that he has the opportunity "to mold his argument to the issues the decision maker appears to regard as important" (Goldberg v. Kelly, 397 U.S. at 269). More fundamentally, in any case where the question whether the indicted officer's continued service poses a threat to depositors or public confidence does turn on the credibility of the officer or his witnesses, the hearing officer will presumably hear oral testimony, as hearing officers commonly do in Section 1818(g)(3) hearings. The district court's invalidation of the statute on its face, without either finding that oral testimony was constitutionally required in this instance /24/ or awaiting the hearing officer's decision, was wholly unjustified. CONCLUSION The judgment of the district court should be reversed. Respectfully submitted. CHARLES FRIED Solicitor General RICHARD K. WILLARD Assistant Attorney General LOUIS R. COHEN Deputy Solicitor General JOHN HARRISON Assistant to the Solicitor General ANTHONY J. STINMEYER MICHAEL KIMMEL Attorneys JOHN L. DOUGLAS General Counsel RONALD R. GLANCZ Assistant General Counsel JAMES A. CLARK Senior Attorney Federal Deposit Insurance Corporation DECEMBER 1987 /1/ Hearings under Section 1818(g) are governed by 12 C.F.R. 308.55 et seq. Such hearings are adversarial in structure, involving the officer or director and the FDIC's Office of General Counsel's Compliance and Enforcement Section, usually acting through the concerned Regional Counsel. Administrative functions, including the provision of a hearing officer and scheduling the proceeding, are handled by the FDIC's Executive Secretary. The other federal banking agencies with suspension and removal authority under Section 1818(g) also have regulations setting out their procedures. See 12 C.F.R. 19.30-19.34 (Comptroller of the Currency); 12 C.F.R. 263.30-263.33 (Federal Reserve Board). /2/ An effective suspension or removal order under Section 1818(g) has collateral consequences under Section 1818(j), which prescribes criminal penalties for anyone subject to such an order who "(i) participates in any manner in the conduct of the affairs of the bank involved (including through the exercise of voting rights), * * * or (ii) without the prior written approval of the appropriate Federal banking agency, votes for a director, serves or acts as a director, officer, or employee of any bank" (emphasis added). /3/ The suspension prevented Mallen from acting as an officer or director of the bank. The prohibition more broadly prevented him from any participation in the bank's affairs. Its most important practical effect was to bar him from voting his shares in the holding company. /4/ FDIC Regional Counsels normally do not oppose oral testimony (see generally Hearing Tr. 60-61). The Regional Counsel's suggestion that oral evidence be dispensed with in the present case, set forth in a letter dated February 2, 1987, to the Executive Secretary of the FDIC and to Mallen's counsel (J.A. 28-30), was based in part on the fact that the record of a recent similar adversarial proceeding, which produced 1400 pages of sworn testimony, was available. Under a separate subsection, 12 U.S.C. 1818(e)(1), the appropriate federal banking agency may, after a hearing, suspend or remove a bank official for various kinds of misconduct. A Section 1818(e)(1) proceeding had been brought against Mallen in the fall of 1986, with hearings held in September and October 1986. Although a substantial evidentiary record was developed in that proceeding, no result was reached because the administrative law judge recused himself before ruling. See J.S. App. 3a n.1. /5/ The court did not reach this question. Section 1818)(i)(1) states that "except as otherwise provided in this section no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under this section, or to review, modify, suspend, terminate, or set aside any such notice or order." The FDIC took the position that this provision does preclude judicial review of the agency's decision to suspend an indicted officer or director and that it is constitutional to do so. Mallen's complaint also alleged that Section 1818(g) violates the Due Process Clause of the Fifth Amendment "because it discriminates against those indicted for federal offenses, but not similar state law offenses" (J.A. 7). The district court never ruled on this count. The statute refers to violations of "State of Federal law" (12 U.S.C. 1818(g)(1)). /6/ The FDIC also contended that the district court lacked jurisdiction over the case because of Section 1818(i)(1) (see note 5, supra). The district court understood, however, that it was "not contended that the Court has no jurisdiction to review the constitutionality of the statutory scheme," and found that it had jurisdiction under 28 U.S.C. 1331 (J.S. App. 17a). We do not argue that Section 1818(i) deprives federal courts of jurisdiction to consider the constitutionality of Section 1818(g). Cf. Johnson v. Robison, 415 U.S. 361, 366-367 (1974). /7/ The district court did not make clear whether its injunction was preliminary or permanent. On the one hand, it explained (J.S. App. 1a) that it was ruling on the motion for a preliminary injunction, recited the standard for granting preliminary relief (id. at 7a-8a) and later described its ruling as "based only on the record that had been made to the date of the preliminary injunction hearing" (id. at 19a n.1). On the other hand, the bulk of the court's discussion was on the merits of the claim, no further hearing was set and the Order was permanent in form (id. at 18a). Especially in light of the district court's subsequent refusal to modify its order, we understand it to have issued a permanent injunction. /8/ The section allows a maximum of 90 days to elapse between a request for a hearing and a final determination (assuming the hearing takes one day). The district court evidently believed that the FDIC's regulations allow a total of 95 days (J.S. App. 4a), but that is not correct. The applicable regulation, 12 C.F.R. 308.61(g), allows five days after the hearing for the record to be supplemented, but the regulation makes it clear that this does not toll the 60 day time period for a final agency decision after the hearing. 12 U.S.C. 1818(g)(3); 12 C.F.R. 308.62. /9/ The district court did stay its order "(t)o the extent that this Court's rulings have an impact on other cases involving indicted bank officers" (J.S. App. 25a). Mallen and the bank were the only plaintiffs in the district court proceeding. /10/ Unlike Section 1818(g), Section 1829 does not prohibit participation in the affairs of a bank otherwise than as a director, officer, or employee. Also unlike Section 1818(g), it does not require a triggering agency order, nor a determination that the officer's continued service may threaten depositors' interests or public confidence in the bank. /11/ The receivership and the purchase and assumption transaction were challenged in an action against the Iowa Superintendent of Banking in the Iowa courts. The lower court upheld the Superintendent and the case is currently pending before the Supreme Court of Iowa (No. 87-1199). /12/ Although Mallen's suspension appears to have limited practical significance in light of the closing of the bank, this case is not technically moot. Under Section 1818(g)(1), the Notice and Order of Suspension and Prohibition would, but for the district court's injunction, have remained in effect until Mallen's indictment "is finally disposed of or until terminated by the agency." As discussed (note 2, supra), the Notice and Order collaterally prevents Mallen from serving as an officer or director of any bank (12 U.S.C. 1818(j)). When Mallen's indictment is "finally disposed of," the relief currently sought by the FDIC -- reinstatement of the enjoined suspension -- would no longer be available, and this controversy may be moot. /13/ Section 1818(g) is only one of several provisions reflecting the importance of swift summary action by bank regulatory agencies to protect insured banks from conditions that threaten their depositors or public confidence. See, e.g., 12 U.S.C. 1818(c) (temporary orders to cease and desist from unsafe or unsound practices). /14/ Although Eight Thousand Eight Hundred and Fifty Dollars bears strongly on this case, we do not believe that its four-factor balancing test, derived from Barker v. Wingo, 407 U.S. 514 (1972), specifically governs the outcome here. Eight Thousand Eight Hundred and Fifty Dollars and Barker both involved delays in the government's decision to institute proceedings -- civil forfeiture in the former case, a criminal trial in the latter; that is why their test includes the individual's ability to trigger the process on his own (see 461 U.S. at 568-569). This case, by contrast, involves, not open-ended delay while the government decides how to proceed, but statutory time periods controlling a hearing and decision. /15/ Federal crimes for which the penalty may exceed one year in prison may be prosecuted only by indictment, unless the defendant waives that right. Fed. R. Crim. P. 7(a) and (b). Section 1818(g) also permits suspension of officers and directors accused in a complaint authorized by a United States Attorney, or in an information, including an information charging a state crime. A suspension based on an accusation lnot amounting to a determination of probable cause might present statutory or constitutional questions not presented in this case. /16/ The decision to indict "is made by a deliberative public body acting as an arm of the judiciary, operating under constitutional and other legal constraints." James A. Merritt & Sons v. Marsh, 791 F.2d 328, 330 (4th Cir. 1986). Such a decision is constitutionally sufficient to subject the defendant to arrest, detention, and trial (see Baker v. McCollan, 443 U.S. 137, 142-143 (1979), citing Gerstein v. Pugh, 420 U.S. 103 (1975)), and it is surely procedurally sufficient to support suspension from a position at a federally-insured bank. /17/ The burden of delay is generally greater when the affected individual is uncertain when he will receive a decision (see Loudermill, 470 U.S. at 550 (Marshall, J., concurring in part and concurring in the judgment)). A suspended bank officer knows that the hearing must take place within 30 days and that a decision will be made at most 60 days after the hearing. /18/ The present question is whether the statutory maximum time periods are ever justified, because the district court held the schedule inadequate on its face: "(a) facial challenge to (the validity of) a legislative Act is, of course, the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid." United States v. Salerno, No. 86-87 (May 26, 1987), slip op. 5. /19/ Cf. First Nat'l Bank v. Conover, 715 F.2d 234, 235 (6th Cir. 1983) (Comptroller of the Currency offered a post-suspension hearing within three to five working days, an oral decision 15 days later, and a written decision 30 days later). /20/ The FDIC, which does not employ administrative law judges, must identify an officer (generally a retired administrative law judge) to conduct the hearing. The hearing generally involves live testimony: it is the FDIC Regional Counsels' normal practice to offer oral testimony (subject to cross examination), and not to object to the presentation of oral testimony by the indicted officer (see generally Hearing Tr. 60-61). The hearing itself thus requires advance preparation by, and must be scheduled at a time mutually convenient to, a number of people with other responsibilities. See generally 12 C.F.R. 308.55 et seq. /21/ In United States v. Thirty-Seven Photographs, 402 U.S. 363, 373-375 (1971), this Court read into a statute, and found constitutional, a time period of 60 days for a district court to adjudicate a seizure application. In an FTC adjudication the administrative law judge generally is to file an initial decision within 90 days after the end of the hearing (16 C.F.R. 3.51); if there is no appeal that decision becomes the FTC's determination after another 30 days (ibid.). In a Consumer Products Safety Commission adjudication the Presiding Officer is to "endeavor to file an Initial Decision with the Commission within sixty (60) days after the closing of the record or the filing of post-hearing briefs, whichever is later" (16 C.F.R. 1025.51). Absent an appeal, the Initial Decision becomes final 40 days after issuance (16 C.F.R. 1025.52). /22/ In the year ending June 30, 1986, federal criminal prosecutions involving jury trials had a median time between indictment and judgment in the district court of 5.4 months. Director of the Administrative Office of the United States Courts Ann. Rep., Table D-6, at 267 (1986). /23/ The FDIC Regional Counsel stated in a February 2, 1987 letter his belief that oral testimony was not required in Mallen's impending suspension hearing (J.A. 28-30; see note 4, supra). Under the regulations, however, the decision is to be made by the hearing officer, who was "considering allowing the parties to present (oral) evidence" (J.S. App. 14a n.6). See also Hearing Tr. 60-61. /24/ The district court came no closer to finding a particular need for oral testimony in this instance than the observation that public confidence, which it thought the proper subject of live testimony, might be more easily undermined by the suspension than by the indictment of a bank president "in a small town such as Kanawha, Iowa" (J.S. App. 15a). The court did not mention the lengthy evidentiary hearing that was the reason why the FDIC Regional Counsel had suggested that in this instance an oral hearing might be unnecessary.