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IN RE UNITED INDEP. FEDERAL CREDIT UNION

June 26, 1991

IN RE CONSERVATORSHIP OF UNITED INDEPENDENT FEDERAL CREDIT UNION, CHARTER NUMBER 01603.


The opinion of the court was delivered by: Spatt, District Judge.

MEMORANDUM AND ORDER

By Order dated November 29, 1990, the National Credit Union Administration Board (the "NCUAB") appointed itself conservator of the United Independent Federal Credit Union (the "Credit Union"), located in Valley Stream, New York, pursuant to 12 U.S.C. § 1786(h)(1) ("The Board may, ex parte without notice, appoint itself as conservator and immediately take possession and control of the business and assets of any insured credit union in any case in which — ").

On December 10, 1990, the Court signed an Order To Show Cause

  "why the Court should not issue an Order, pursuant to Title 12,
  United States Code, Section 1786(h)(3), enjoining the Board
  from continuing possession and control of the Credit Union.
  Located at 147 South Franklin Avenue, Valley Stream, New York
  11580[.]"

The Order To Show Cause was unaccompanied by a Complaint.

There are presently three issues before the Court: (1) the NCUAB's motion to dismiss the Order To Show Cause for insufficiency of process; (2) Aaron Baer's and Maurice Baer's motion to intervene; and (3) the NCUAB's motion to dismiss the Order To Show Cause on the merits.

I. THE SUFFICIENCY OF PROCESS

The NCUAB moves to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(4) for insufficiency of process.

The NCUAB contends that Federal Rule of Civil Procedure 3 requires the Credit Union to file a complaint with its Order To Show Cause, and that the Credit Union's failure to do so precludes the Court from hearing the Order To Show Cause.

Rule 3 provides:

  "[a] civil action is commenced by filing a complaint with the
  court." (Fed.R.Civ.P. 3)

12 U.S.C. § 1786(h)(3) provides in relevant part as follows:

  "Not later than ten days after the date on which the Board
  takes possession and control of the business and assets of an
  insured credit union pursuant to paragraph (1), such insured
  credit union may apply to the United States district court
  for the judicial district in which the principal office of such
  insured credit union is located . . . for an order requiring
  the Board to show cause why it should not be enjoined from
  continuing such possession and control. Except as provided in
  this paragraph, no court may take any action, except at ...

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