Independent Insurance Agents of America, Inc. v. Clarke

SILBERMAN, Circuit Judge,

dissenting:

My position might be thought counter-intuitive, but I would decide the case, as did the district court, without reaching the question the majority thinks is a necessary antecedent: whether section 92 is still good law. Appellants did not challenge the validity of section 92. Indeed, after the court ordered the parties to address the issue at oral argument and appellees filed supplemental materials supporting the conclusion that the statute was not repealed, counsel for appellants forthrightly said:

It would quite obviously be to the appellants’ advantage if section 92 were no longer in existence, since there would be no statutory basis for the Comptroller’s order. We have researched the issue, both earlier and in light of the court’s questions, and we have carefully reviewed the submission made by the government____ Given that the statutory issue involves a controversy over the use of punctuation, that Congress obviously intended to amend the law in 1982, and that the Supreme Court has in fact described the law as in effect, while noting its curious history, we have concluded that we cannot advance a substantial argument that section 92 no longer exists.

To be sure, when five months later the panel, having not decided the case, directed the parties to brief the issue, appellants— no doubt at that point realizing that their chances for success were dependent upon indulging the court — did so and partially switched their position, urging us to decide whether section 92 exists. But in answer to our question “whether this court should decide the validity of 12 U.S.C. § 92 in the absence of a challenge to its validity,” appellants could only suggest that the question might be jurisdictional — that if section 92 actually had been repealed in 1918, the case might be “moot” or perhaps might “not even arise.” I do not think there is very much to either argument 1 (nor, apparently, does the majority), but I agree with appellants’ implicit premise: that unless we *414 determine the validity question to be jurisdictional, we should not decide it.

My colleagues take a different position. Driven by the perceived duty to inquire, on their own, into section 92’s validity, they decide the issue. With all due respect, I think the majority is quite wrong in its perception of our judicial obligation. We owe no abstract duty to Congress (or the President) to enforce or not to enforce laws; all of our power derives from our constitutional duty to decide cases and controversies. The issue of section 92’s validity was decidedly not part of the “case or controversy” as it was brought to the district court or on appeal to us. It is quite fair to say that we have added it to the case; we have created a controversy that did not exist. That 1 U.S.C. § 204 (a) states that “matter set forth” in the Code “establish[es] prima facie the laws of the United States” hardly suggests any independent duty on the part of the judiciary to inquire whether matters not appearing in the Code, but which the parties agree continue to be law, remain valid. 2

I do not think my view has ever been stated better than in the passage the majority quotes from Carducci v. Regan, 714 F.2d 171 (D.C.Cir.1983), written by then-judge Scalia:

The premise of our adversarial system is that appellate courts do not sit as self-directed boards of legal inquiry and research, but essentially as arbiters of legal questions presented and argued by the parties before them.

Id. at 177 . The majority, however, trumps Judge Scalia in Carducci with Justice Scalia in Arcadia, Ohio v. Ohio Power Co., — U.S. -, 111 S.Ct. 415 , 112 L.Ed.2d 374 (1990). There the Supreme Court decided that a statute, whose exact application was in dispute, did not even apply to a particular transaction, see id. 111 S.Ct. at 418, 422 , notwithstanding that no party had even suggested such an argument in the Supreme Court or the court of appeals. Justice Scalia, writing for the Court, did not, however, make clear that the statutory construction adopted by the Court was not argued by the parties at any stage (Justice Stevens pointed it out in his concurring opinion, see id. 111 S.Ct. at 422-23 ). So, importantly, the Court never explained or justified what it did. I do not think that under these circumstances the Court meant to establish a precedent on the point. 3 As in the area of standing, I think we should follow only what the Court says it does, not merely what it does. Cf. Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 119 , 104 S.Ct. 900, 918 , 79 L.Ed.2d 67 (1984) (court addressing a jurisdictional issue is not bound by prior decisions that passed on the question sub silentio); Haitian Refugee Center v. Gracey, 809 F.2d 794, 800 (D.C.Cir.1987) (prior decision that reached merits without discussing standing did not constitute precedent on standing).

The next year in Kamen v. Kemper Financial Services, Inc., — U.S.-, 111 S.Ct. 1711 , 114 L.Ed.2d 152 (1991), the Court, relying on Ohio Power, said that “[w]hen an issue or claim is properly before the court, the court is not limited to the particular legal theories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of governing law.” Id. 111 S.Ct. at 1718. Of course, that statement in a sense begs the question, because the hard analysis comes in determining when an issue or claim is properly before the court. In Kamen , the petitioner had brought a shareholder derivative action under the Investment Company Act of 1940, 15 U.S.C. §§ 80a-1 to 80a-64, without making a demand for relief upon the board of directors, effectively asserting her right to do so under federal common law. She did not advert to state law until her reply brief in the court of appeals, and thus that court, *415 in shaping a federal common law rule, refused to consider state law. The Supreme Court reversed, holding that the court of appeals could and should look to state law to fashion the contours of the federal law that governed. See Kamen, 111 S.Ct. at 1718 . In other words, the petitioner in Kamen did assert a right not to make a demand under federal law, and the case was decided on that basis; the Supreme Court only thought that the court of appeals should have looked to state law for guidance. That does not seem to me much different than a court relying on a case not cited by the parties to support a contested proposition. And the Court continued: “We do not mean to suggest that a court of appeals should not treat an unasserted claim as waived____” Id. 111 S.Ct. at 1718 n. 5. This is that very case where the unasserted claim (that Congress repealed section 92 and therefore the Comptroller’s actions under it were unlawful) was waived; it was, in fact, carefully, deliberately, and thoughtfully waived.

The majority’s reliance on Town of South Ottawa v. Perkins, 94 U.S. 260 , 24 L.Ed. 154 (1876), is equally misplaced, because the issue of the statute’s validity in that case was raised by the litigants. See id. 94 U.S. at 262, 266 . Similarly, although the “stipulation of law” cases also cited by the majority establish courts’ power to reach nonjurisdictional issues not raised by the parties, they do not suggest that it is always appropriate for courts to do so.

More in point, it seems to me, is McCormick v. United States, — U.S.-, 111 S.Ct. 1807 , 114 L.Ed.2d 307 (1991). In that case the Supreme Court refused to consider an appellant’s argument, made for the first time in his brief to that Court, that Congress did not intend the anti-extortion Hobbs Act, 18 U.S.C. § 1951 , to apply to campaign contributions. See McCormick, 111 S.Ct. at 1814 n. 6. Because he concluded that the statute did not apply, Justice Scalia in a concurring opinion said, “I think it well to bear in mind that the statute may not exist.” Id. at 1820 . But he made quite clear that he would not decide the case on that ground. See id. The approach taken in McCormick accords with other decisions in which courts have declined to consider nonjurisdictional issues not raised by the parties. See, e.g., Spaulding v. University of Washington, 740 F.2d 686 , 694 n. 2 (9th Cir.) (declining to decide, in a pre-Gama case involving a charge of discrimination under the Equal Pay Act, 29 U.S.C. § 206 (d)(1), whether the Act might be unenforceable against the university, a conceded state agency, “[b]ecause the parties neither raise the issue nor contend that it affects our jurisdiction”), cert. denied, 469 U.S. 1036 , 105 S.Ct. 511 , 83 L.Ed.2d 401 (1984).

As acknowledged by the McCormick majority, see McCormick, 111 S.Ct. at 1814 n. 6, some courts recognize an exception to the general principle of judicial restraint that I assert. The “plain error” doctrine is occasionally applied in the civil as well as the criminal context to decide issues not raised by the parties where manifest injustice might otherwise result. See, e.g., Anderson v. Group Hospitalization, Inc., 820 F.2d 465 , 469 n. 1 (D.C.Cir.1987) (discussing civil cases invoking the plain error rule in exceptional circumstances where error is obvious and grave); see also Singleton v. Wulff, 428 U.S. 106, 120 , 96 S.Ct. 2868, 2877 , 49 L.Ed.2d 826 (1976) (appellate court is justified in resolving issue not raised below if “the proper resolution is beyond any doubt” or “ ‘injustice might otherwise result’ ” (quoting Hormel v. Helvering, 312 U.S. 552, 557 , 61 S.Ct. 719, 721 , 85 L.Ed. 1037 (1941))). But I think that avenue is hardly open to us here, since — as appellants pointed out in their post-argument brief — for over seventy years the Comptroller, Congress, federal courts, and even the Supreme Court, see Commissioner of Internal Revenue v. First Security Bank, 405 U.S. 394 , 400 n. 12, 92 S.Ct. 1085 , 1090 n. 12, 31 L.Ed.2d 318 (1972), have assumed that the statute remains in effect. 4 (It actually appears in the United *416 States Code Service. See 12 U.S.C.S. § 92 .) Injustice is more likely to result from our reaching the issue than from our declining to do so, because the question of section 92’s validity affects many entities, including members of the insurance and banking industries who have relied on the law’s continued existence and who, having no notice that the question might be decided, had no opportunity to make their views known in this case. I would therefore affirm the district court on the ground that the Comptroller’s ruling is a reasonable interpretation of section 92, and note that we do not decide the significance of Congress’ actions in 1918.

. Although the repeal of a statute moots controversies over the law’s validity, see, e.g., Burke v. Barnes, 479 U.S. 361, 363-64 , 107 S.Ct. 734, 736-37 , 93 L.Ed.2d 732 (1987), here the parties agree that section 92 is valid, and they have a continuing controversy over the Comptroller’s authority to permit national banks to sell insurance nationwide. And the case obviously arises under federal law for purposes of 28 U.S.C. § 1331 , because, inter alia, the parties have stated a cause of action under the Administrative Procedure Act, 5 U.S.C. §§ 701-06 . See Japan Whaling Ass’n v. American Cetacean Soc’y, 478 U.S. 221 , 230 n. 4, 106 S.Ct. 2860 , 2866 n. 4, 92 L.Ed.2d 166 (1986); Robbins v. Reagan, 780 F.2d 37, 42 (D.C.Cir.1985) (per curiam).

. I do not think the majority is even correct in using the term "presumption," but our "duty" is not affected in any event.

. Perhaps because the Court did not wish to set forth a justifying principle that extended beyond that case. The Supreme Court, I gather, weighs docket management factors that the lower federal courts do not encounter. If the Court wants us to adopt a more relaxed stance than I think appropriate, this case may well offer a suitable vehicle to so instruct us.

. See Maj.Op. at 737-39. Although I agree that subsequent assumptions by the executive, legislative, and judicial branches cannot establish Congress’ intent in 1918, I do think that such widespread acceptance of section 92’s existence precludes us from reaching a different conclu *416 sion in the absence of a challenge by one of the parties.