Assoc. of Data Processing Svc. Orgs, Inc. v. Bd. of Govs. of the Fed. Sys. Case Brief Explained

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Association of Data Processing Service Organizations, Inc. v. Board of Governors of the Federal Reserve System, 745 F. 2d 677 (1984)
Standard of review is the level of deference a court grants the decision-maker below. Under the Administrative Procedure Act, or APA, an agency can take regulatory or adjudicatory actions. In Association of Data Processing Service Organizations versus Board of Governors of the Federal Reserve System, we examine if a court reviewing both kinds of actions should use the same level of deference.
The Board of Governors of the Federal Reserve System was a federal agency charged with administrating the Bank Holding Company Act of 1956. Under the act, bank holding companies were restricted from conducting nonbanking activities. However, if the board officially ruled that a proposed nonbanking activity was closely related to banking, the act’s restriction didn’t apply. A proposed nonbanking activity was closely related to banking if the activity was reasonably likely to produce public benefits that outweighed potential adverse effects. Under Section 1848 of the act, board rulings supported by substantial evidence were conclusive.
Citicorp, a bank holding company, wanted to conduct certain nonbanking activities, such as processing and transmitting banking, financial, and economic data. So, the company sought the board’s approval to do so. After a formal hearing, an administrative law judge found that Citicorp’s proposed activities were closely related to banking and would provide more benefits than costs to the public. Relying on the judge’s finding, the board approved Citicorp’s application in an adjudicatory order and amended a data-processing regulation to clear the way for the approved activities.
The Association of Data Processing Service Organizations and some constituents filed two lawsuits against the board in the United States Court of Appeals for the District of Columbia Circuit. In the first suit, the association sought review of the board’s adjudicatory order. In the second suit, the association sought review of the board’s amended regulation. In both suits, the association argued that the board needed to demonstrate that substantial evidence supported its actions.
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