Petition for Writ of Certiorari — Arnold Tours, Inc. v. Camp

VAV 19 1969

4a f paws CLER

| Sapreme Court of the United States.

Oc TOBER TERM, 1969.

No. 5 at

“ARNOLD TOURS; INC, er au, >

Petitioner 8,

: 1p v. ; |

WILLIAM B. CAMP er au,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF ae eee FOR THE

FIRST CRUSE

Timotny J. Murpuy,

Ricuarp W. Murpuy,

- One State Street, |

Boston, Massachusetts 02109.

ADDISON C, GETCHELL & SON, INC., LAW PRINTERS, BOSTON.

Table of Contents.

Opinions below | | ta

Jurisdiction |

Question presented

Statute involved —

Statement of the case

Reasons for gr anting the writ

Conclusion -

Appendix ‘‘A’’

Appendix ‘‘B”’

Appendix TT Oe | ns cae

| Appendix wie lata | ies

Table of Authorities Cited.

CASES.

- Aetna Life Insurance Co. v. Haworth, 300 U.S. 227

© * & bd dO’ >

a oe a

oo - © &

8

American President Lines v. Federal Maritime :;

‘Board, 112 F. Supp. 346

Association of Data Processing Service or ganiza-

tions, Ine. v. ‘Camp, 279 F. Supp. 675, aff'd,

2/6/69 F.2d | /

Baker, Watts & Co. v, Saxon, 261 F. Supp. 247

Citizens Association of peangerewn v. Simonson,

F. 2d

Flast v. Cohen, 392 U.S. 83

Frost v. Corporation Conimission of Oklahoma, 278

U.S. 515 FA

Frothingham v. Mellon,-262-U.S. 447

4n.

4n.,8

omUm™

li . TABLE OF CONTENTS .

Investment Company iustitute v. Camp, 274 F.

Supp. 624 i 4n.

Rural Electrification Administration v.: Northern

State Power Co., 373 F.2d 686 Sn.

Saxon v. Georgia Association of Independent Insur-

_ ane® Agents, 399 F. 2d-1010 ; 4n., dn., Tn.

Texas & Pacitie Railway Co. v. Pottortf, 291 U.S. 245

Wingate Corporation, The, v. Industrial Xational

Bank, =F. Supp. ., rev'd, 3/27/69 F. 2d 4n.

Sratutes, Erc.

Administrative Procedure Act, See. 10(a), 5 U.S.C.

See. 702 8.9

12 U.S.C. See. 24(7) 3,7

28 U.S.C. See. 1254(1) 2

Rules of the Comptroller of the Currency, Rule 67 3

/ ‘’

MISCELLANEOUS.

Comptroller's Manual for National Banks, . Para-

graph No. 7475 s ‘

Davis, Administrative Law Treatise, sec. 22.02

Time Magazine, Business Section, p. 101, Nov. Ss,

Supreme Court of the United Sttutes.

October TERM, 1969. :

No. iceeat

“ARNOLD TOURS, INC., er au,

Petitioners,

v.

WILLIAM B. CAMP er au.

— - Respondents.

\ |

PETITION FOR A WRIT OF CERTLORARE TT) THE.

UNITED STATES COUR T QF ARES ALS. RU IR THE

_ FIRST CIRCUIT.

sia a

. Petitioners pray that a writ of certiorari issue to review

the judgment of the United States Court of \yppexaik for

the First Circuit, entered in the above entitled) ces an

March 27,1969. anon a?

Opinions Below.

The opinion of the Court of Appeals for the First: \lireni:

is reprinted in Appendix Q appended hereto. ‘Nhe Hninian

of the District Court is reported in 286 F. Sapp. 771) 1f48s)

and is reprinted in the Record herein commenging its

*«*R’’ hereinafter refers to the Appendix to Brief a Pbaainitiits.

Appellants, filed in the First Cireuit Court of Appeal.

a

° 7

2

Jurisdiction.

. The opinion of the Court of Appeals was filed on Marelr

27, 1969, and judgment was entered on Mareh 27, 189.

(App. A). “The jurisdiction of this Court is invoked yader

28 U.S.C. See. 1254(1). ‘-

Question. Presented.

_ Whether the petitioners have legal standing to challenge

(a) the decision of the Comptroller of the United States

Currency in allowing national banks to enter:the travel |

agency business and (b) the actual entry of the South Shore

National Bank into the travel business.

Statute Involved.’ .

The releyant (provisions of the National Bank Aet, as

amended (12 U.S.C. See. 24(7)), are printed as Appendix

‘B to this petition. }

The Comptroller's ruling contained in- Comptreller’s

Manual for National Banks, Paragraph No. 7475, is prRnted

as Appendix C to this petition.

e

J Statement of the Case.

The petitioners are forty-two pdeesbiient, travel agents

of Massachusetts engaged in the travel ageney business.

Many of the activities and obligations of the travel agenfs

are controlled by conferences of air and steamshi p carriers

which are in certain instances supervised by the Civil

Aeronautics Board and the Federal Maritime Commission

(R. 2 and Exhibit A).

The petitioners brought this: suit individually and also

as a class on behalf of all other Massachusetts firms in 1 the

travel business (R. : 2-3).

The respondent William B: Camp is the ¢ ‘osaptioller of

the Currency, who is charged by law with administrative

and regulatory authority with respect te national banks.

Mr. Camp’s predecessor, Comptrollér James J. Saxon, a

former lobbyist and attorney for the national banks, in

1963: arbitrarily ruled, without notice and without a hear-

ing, that national banks may enter into the travel busittess

on a full-seale basis for profit (R. 14). This decision repre-

sented a change in policy on the part of the Comptroller

(R. 4).

-

Rule 67, issued by the Comptr oller in ‘1949 ‘ . stated: ‘*It is |

the position of this office that a national batik does not have

~ the legal right to act as agent .°. . of transportation com-

‘panies in the operation of a regular travel ageney . . 2”? |

‘In November, 1966,” respondent South Shore National

Bank availed itself of -the Comptroller’s‘ruling and entered

into the travel agency business. . Said ‘Bank, with approxi-

mately twenty-seven branches, is the first and only bank in

Massachusetts to engage in the travel agency business (R.

5): It has entered into the travel business on a large-seale

basis and has launched: a massive advertising program,

complete with seven roadway billboards, full-page news-

paper ads and a radio saturation program (R. 5 and Ex-

hibit B). | Ne i

There are approximately ninety other national banks in

‘Massachusetts with approximately three hundred forty tive

branches (R. 6). ,

The petitioners contend that the C omptroller Gacniied his

authority in allowing the national banks to enter into the

travel business and that the South Shore National Bank is

illegally competing with them for travel customers: The

4

| ~

petitioners have lost substantial. busitiess and profits and

— stand to lose even greater business and profits in the future

as a result of the South Shore National Bank’s ‘sag entry”

-into the travel business (R. 3, 5, 6, 7, 24, 27).

As a result thereof, on May 8, 1967, the petitioners

brought suit for a declaratory nen and mandatory

injunction: (R. 2-8).

On July 11,1968, motions for summary judgment brought

by the respondents were allowed by the District Court and

a similar motion brought by the petitioners was denied

.(R. 44, 48-49). The court held that. the re had no. .

‘standing oe Ss

From such order of the Distriet Coat thie sulsiioniave

_ appealed to the United States Court of Appeals for the. ;

' Pirst Cireuit (R. 49). That court affirmed the judgment

of the District Court in a written opinion (Appendix D

herein). ; ;

Reasons for Granting the Writ. |

f

The issue as to whether small: itidependent businesses.

have standing to challenge competition presented by the

national banks pursuant to authority given by the Comp-

' troller: has sprung up all over the country. Ineonsistent

opinions have been rendered by the various courts based

upon varied and diverse reasoning.’

The Court of Appeals in: the instant ‘case, by its own ad-—

mission, has tendered a decision in conflict with the’ de-

=

‘1Compare Saron vy. Georgia Association of Independent Insir-

ance Agents, 399 F. 2d 1010 (5th Cir. 1968); Baker, Watts & Co.

_ ¥. Saron, 261 F. Supp. -247 ¢D. D.C. 1966), and Investment Com-

pany Institute vi Camp, 274 F. Supp. 624 (D. D.C. 1967), with

‘Association of Data Processing Service Organizations, Inc. v. Camp,

279 F. Supp. 675 ‘aff’ d,8th Cir. 2/6/69, F.2d ‘and The Win- ~

Vv, Industrial National Bank, F.Supp. (RI.

gate Corporation

D.C. 1968), rev'd, Ist Cir. 3/27/69 F. 2d

‘

5

cision of at least one other Court of Appeals on the same

matter.2 In fact’, this Court of Appeals has rendered con-

flicting decisions within a singular opinion inasmuch as ‘it,

held that data’ processing service corporations do have

standing to challenge competition by national banks but

that travel agents: do not have standing to challenge such

competition. The obvious anomaly is that the business of

data processing is more closely related to the business of

. banking than is the busmess of travel service.

‘With the recent phenomenon of one-bank. holding ‘eom-.

panies and with the growing invasion of conglomerate’ in-.

dustries, it is apparent.that illegal competition by national

banks should be stopped. The Chairman of. the Federal

Reserve Board, William McChes1 Martin, said in oppo-:

sition to the Comptroller that the y by the banks into

unrelated business ‘‘. . . can affect the whole capitalistic

system in the United States. The line between banking

and commerce should not be erased.’’* The travel agents. _

attempted to prevent the. line from being erased but have

‘been denied even the opportunity. to raise the issue. This.

recent trend by national banks to invade ‘business: areas -

totally unrelated to the business of banking poses an im-

portant question of federal law, namely, what are the limits

of power that Congress has given national banks. — ;

The. Court of -Appeals said in effect that the national

banks have the right to choose what they want to do, both

literally and figuratively, and such conduct is ‘‘none of

. plaintiffs’ business’? (App. D, p. 14). Further the First

Circuit implied that the South Shore National Bank is in-

volved in illegal ‘‘ultra vires’’ activity but ‘‘even assuming

‘that [they]... are prohibited by ‘section 24 ( 7) from en-

2 Saxon v. Georgia. Association of Inde} pendent Insurance Aye nts,

399 F. 2d 1010 (5th Ciy. 1968).

3 Time Magazine, Business Section, p. 101, Nov. 8, 1968.

6

tering into the [travel] business . . . this is not sufficient

to provide a statutory aid to standing’? (App. -D, p. 17).

‘Such a decision seems to elevate form over substance and

constitutes a convenient avoidance by the Federal Court to

stop conduct which is obv iously ‘illegal and prohibited by

_Congress. The fine technical distinctions enunciated by the

Court of Appeals in explaining why data processing com-

panies do have Standing and why travel agents do not have.

standing provide scholarly fodder for legal’ research

analysts but they provide double-talk and side-stepping to

the petitioners and other small businessmen. In getting

bogged down in the refinements of the standing i issue, the .

Court has allowed itself to get. further and further away

~ from the: realities of this age and opens itself to persuasive

attack by those who say ‘that the law has no relevance and

that the little man is prevented by the government from get-

| ‘ting his day i in court. One excellent example of overlegal-

ism and confusion in this case is w here the First Circuit said .

that the petitioners have standing to be told they have: no

standing, but they do not have standing to challenge illegal _

- ecompetition.*

The mere ‘fact that there is no explicit law allowing a

Comptroller’s decision to be judicially reviewed or. pro-

tecting the travel agents from competition should not’ pre-

vent this Court from granting standing to the petitioners,

In finding. standing, this Honorable Court would not be

usurping the powers of the Congress because it is clear

*that the banks’ participation in the travel business is illegal.

‘Congress has made it clear that national banks are only to

; exercise that power specifically given to them by Congress.

*The Court said as follows: ‘‘The © ‘omptroller argues at length

- that this [operating full travel serv ice] is traditional and legitimate -

bank activity. We do not, however, consider this matter except to

say that... the question of standing is pee before us.’

Bonin D, p. 14.) .

¥:

As Brandeis, J, said: ‘‘The measure of their [national.

banks] powers is the statutory grant; and powers not con- |

ferred by Congress are denied.’? Texas & Pacific Railway

Co. v. Pottorff, 291 U.S, 245, 253 (1934). ,, Section 24(7) of

the National Bank Act (12 U.S.C. See: lists numerous

powers explicitly granted ‘to banks a as the First Cir-

cuit held: ‘It has long. been settled .°. . that the enumera- .

tion of such powers is an effective seit strong prohibition

of all activities not enumerated and ihe incidental to bank- |

ing’’ (App. D, p. 16). Thus, it is clear that national banks

ihe prohibited by Section 24(7) fyom enteri ing into the

travel business. The petitioners are recipients by impli-

cation of Congressional protection and accordingly have

the requisite statutory aid to standing. Frost v. Corpora-

_ tion Commission of Oklahoma, 278 U.S. 515 (1929).

To affirm the First-Cirenit’s decision would be to sibaiit

the national banks to compete illegally in any businesses

they wanted to where there were no express laws protecting

the damaged businesses. For example, national banks could

go into the night club, laundry, liquor or construction busi-

ness, ete., without fear of reprisal.

- The doctrine of standing has been eroded almost com-

-pletely by its exceptions. Because it is a doctrine of ju-

dicial invention and convenience, it has been interpreted

and applied in many different ways. This Honorable Court

recently attempted to reshape the doctrine in the case of

Flast v.. Cohen, 392 U.S. 83 (1968). However, even: Flast

has been interpreted and applied differently. -

It is the petitioners’ contention that this Honorable

Court’s new philosophy on the doctrine of ‘*standing’’

should be applied to the case at bar. Accordingly, since

> Compare Judge Thornberry’s concurring opinion in Sazon v.

Georgia. Association of Indcpcndent Insurance Agents, 399 F. 2d.

1010 (5th Cir. 1968), and Citiz ae “Association of Georgetown v.

Simonson, F. 2d (D.C. Cir.. 958).

8

this case poses sufficient adversity and clarity, the Court

of Appeals should have found ‘‘standing.’’. |

Moreover, petitioners contend that Section 10(a) of the

-Administrative Procedure Act, 5 U.S.C. See. 702, pro-

vides standing for any persons claiming to be ‘‘adversely

affected in fact.’’ This contention has been supported by

some federal courts *® and by Professor Davis in his Ad-

ministrative Law Treatise.’ The interpretation and appli-

cation of Section 10(a) of the Administrative Procedure

Act is also ina state of confusion among federal courts

and should be resolved: by the Supreme Court.®

In the case at bar the Court is not burdened with de-

ciding a frivolous issue, a political issue, an abstract issue

or an issue where the plaintiffs’ interest is ‘“comparatively

minute and indeterminable,’’ which are the typical cases

wherein the legal roadblock of ‘‘standing’’ is invoked.

Frothingham v. Mellon, 262 U.S. 447 (1923); Aetna Life

Insurance Co, v. Haworth, 300 U.S. 227 (1937). Moreover,

“the fear expressed in Frothingham that allowing one tax-

payer to sue would inundate the federal courts with count-

_less similar suits has been mitigated by the ready availabil-

ity of the devices of class actions and joinder under the

Federal Rules of Civil Procedure .. .’’ Flast v. Cohen, .

392 U.S. 83, 94 (1968). The instant case involves a real,

‘serious and adverse case and controversy which should not

be sidetracked from the judicial artifice of ‘‘standing.”’

In summary, it is submitted that there are many reasons

why this case should be reviewed. First, there are con-

6 American President Lines v, Federal Maritime Board, 112 F.

Supp. 346 (D. D.C: 1953) ; Baker, Watts & Co. v. Saron, 261 F.

Supp. 247 (D. D.C. 1966). enn :

_* Davis, Administrative Law Treatise, sec. 22.02.

_* Compare. Baker, Watts & Co. vy. Saron, 261 F. Supp. 247 (D.

D.C. 1966), with Rural. Electrification Administration vy. Northern

States Power Co., 373 F. 2d 686; 692-693 (8th Cir. 1967):

9

flicting federal decisions on the main issue e of standing as it

relates to national banks and there are coflicting federal

decisions on the subsidiary-issue of standing relating to the

interpretation and application of the Flast case and the |

Administrative Procedure Act, Sec. 10(a). Second, this

case involves an important. federal question of national .

magnitude and of grave concern to our economic leaders.

- The time is ripe for a yational decision involving the na-

‘tional banks. hal ae 7 ees |

/

. / +» Conclusion.

It is respectfully submitted that, for the reasons above

stated, this petition for a writ of certiorari should be

granted.

~ Respectfully submitted,

| TIMOTHY J. MURPHY,

RICHARD W. MURPHY.

10

Appendix “A.”

Unitep States Court or APPEALS

‘For tHe First Circuit

No. 7192. 3

i, Arnotp Tovurs, INc., ET AL.,

| PLAINTIFFS, “APPELLANTS,

aoe

Wituram B. Camp b&T, AL.,

DEFENDANTS, APPELLEES.

JUDGMENT.

Entered March 27, 1969. 2G

This cause came on to be heard on appeal froin the

United States District Court for the District of Massa-

chusetts, and Was argued by counsel.

Upon consider: ation whereof, It is now here ordered,

adjudged and decreed as follows: The judgment of the

District Court is affirmed.

: By the Court:

/s/ Rocer A. “STINCHFIELD.

Clerk

Appendix “B.”

, ~* Srarute INvo.ven.

Title 12, United States Code, § 24, paragraph Seventh, in

pertinent part, states: a

* ; e . ° 4 . .

‘*Upon duly making and filing articles of association

and an organization certificate a national banking asso-

o

1

ciation shall become, as from the date of the execution

of its organization certificate, a body corporate, and

as such, and in the name designated in the organization

certificate, it shall have —

Seventh. To exercise by its:board of directors or

duly authorized officers or agents, subject to. law, all

such incidental powers as shall be necessary to carry

on the business of banking; by discounting and nego-

tiating promissory notes, drafts, bills of exchange, and

other evidences of debt; by receiving deposits; by buy-

ing and selling exchange, coin and bullion; by loaning

money on personal security; and by obtaining, issuing,

and circulating notes according to the. provisions of

this chapter.” ! anny

-

oak Appendix “C.”

.

CoMPTROLLER’s ManvuaL For National Banxs

No. 7475. National banks acting as travel agents.

Incident to those powers vested in them under 12 U.S.C;

24, national banks may provide travel services for their

customers and receive compensation therefor. Such serv-

ices may include the sale of trip insurance and the rental

of automobiles ,as agent for a local rental service. In

eonnection therewith, national banks thay advertise, de-

velop, and extend such travel-services for. the purpose of

: attracting customers to the bank.

12

Appendix ‘D.

Uxtrep States Court or APPEALS

° \

For tHe First Crrecvit

No. 7192.

. Arxotp Tovrs Ton St Al, \

PLAINTIFFS, APPELLANTS,

v. ao

Wirtiam B. Camp Et AL.,

DEFENDANTS, APPELLEES.

ay

_

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

and oi

No. 7186. :

nny -Tue WINGATE CoRPORATION,

PLALNTIFF, APPELLANT,

v..-

( 9. [xpustrian Nationat Bank ET AL,

DEFENDANTS, APPELLEES.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF, RHODE ISLAND

Before ALpbaicn, Chief Judge,

Woovsery,* Senior Circuit Judge, and

CorFix, Circuit Judge.

~, No. 7192. ‘“

Richard J. Murphy, with whom Timothy J. Murphy was on

brief, for appellants.

Alan 8. Rose nthal, Attorney, Department of Justice, with 1 whom

*Sitting by designation.

13 «

2 ARNOLD TOURS — WINGATE CORPORATION CASS.

+]

Edwin L. Weisl, Jr., Assistant Attorney General, aad) FP. Mark-

‘ham, United State Attorney, and Leonard Sehatiman. \Ateoornev.

Department of Justice, were on brief, for Williaa |}: ‘Camp.

Comptroller of the Currency, appellee.

Elliott V. Grabill, with whom Arihur H. Blound:

bill, Ley & Butterworth were on brief, for South

Bank, appellee.

ord land Gra-

Mute National

No. 7186.

Edward J. Regan, with whom Eustace! T. Plathus aan rakam.

Reid, Ewing & Stapleton were on briet, for appeljarnt:

-Matthew W. Goring, with whom Edward M. Waésuen, ieohrr: W-

Meserée, John B. Newhall, Gordon L. Docrfer, Ihinekliue. Allen.

Salisbury & Parsons and Nutter, McClennen & Mish) xcere on

brief, for Industrial National Bank of Rhode Island, agypselie

Alan 8. Rosenthal, Attorney, Department of Justice, weith whom

Edwin L. Weisl, Jr., Assistant Attorney General, Hewure) DP. Gal-

logly, United States Attorney, and Stephen R. Felson, vitharney,

Department of Justice, were on bwief, for Williaa |} Canip,

Comptroller of the Currency, appellee. ;

Robert J. McOsker, City Solicitor, and Vineendé J) ) Pecei nit

Assistant City Selicitor, on brief for City of Previdernce, agpeliee.

Matthew Hale on brief for The American Bankers. syacusaation.

amicus curiae.

| March 27 1969.

Apricu, Chief Judge. These are two actions-liyv parties

engaged in certain business pursuits to restrain eamayeti-,

tion from national banks which, supported by ratings. «a? the

Comptroller of the. Currency, have entered thet elds.

Plaintiffs seek, basically, to attack. thes , rulings, lin beth

cases the district courts held that they were withwut:~<tand-

ing to do so, and dismissed the complaints on TROUT OLE at the

defendants. Plaintiffs appeal.

THE TRAVEL AGENCY BUSINESS

We consider first the action brought by Arno) Pours.

Ine. aid some forty other independent travel agemeeies in -

Massachusttts, allegedly on behalf of others. sitmtiaarty: ~<it-

14

»

OPINION OF THE COURT , a

uated as well as themselves, against the € er -r and

the South Shore ational Bank. The bank. in reliance » UPON

~.a ruling by defendant Comptroller’s predecessor is en-

gaging not merely in the financial aspeets of travel, bat

“full”? travel service, or a complete travel ageney basi-

ness. To quote from what is sail to be the bank”s owm an-

nouncement, its employees are prepared te y arrange for bi-

eyeles in Bermuda, villas on the Riviera, and howse)wiats

in Kashmir. The Comptroller argues at length that this is

traditional and legitimate bank activity. We do not. how-

ever, consider this matter except to say that plaintiffs pre-

sent. enough of an issue so that the question of standing

is properly before us. We also note that no question of re

-viewability of the Comptroller's rulings. has been raised.

See generally, Saferstein, Nonreviewability: A Funetional

‘Analysis of ‘‘Committed to Ageney Diseretion.”~ $2 Harv.

L. Rev. 367, 383 & n. 60 (1968). Our sole question is the eor-

rectness of defendants’ contention, which we will para-

phrase as saying that what the bank chogses to do is.’

both literally and figuratively, none of plaintit¥s” business.

It has long been-settled that an ordinary competitor has

no standing to complain of a party's lack of legal authority. |

to engage in his business, in-a suit against the eompeti-

tor, the government, or both. Reilroed Co. x. Elle rmuan,

1881, 105 U.S. 166; Alabama Power Co. v. Tekes. 1938, 302

U.S. 464; Tennessee Power Ch. v. TVA. 1959, 206 US 11S.

>

Despite numerous exceptions,|this principle has withst ood

-1°°97475. National banks acting as travel agents.

Incident to those powers vested in them under 12 US. 24.

national banks may provide travel services for their emstomers and

receive compensation therefor. Such services may imlade the

sale of trip insurance and tlle rental of automobiles as agert for

a local rental service. In connection, therewith. national benks

may advertise, develop, and extend such travel servives for the

_ purpose of attracting customers to the bank. See *TITé&

: | 15

+ ARNOLD TOURS — WINGATE CORPORATION CASES

a

erosion not only because 6f the traditional rationale be-

hind standing doctrines generally, see Flast v. Cohen, 1968,

. 392 U.S. 83,.91-101, but because of the policy encouraging

free and open competition—a policy that favors competi-

tion in the market place, not in the courts. The excep-

tions, where standing is recognized, are. as well estab-

lished as the principle itself. The first is fer complaints of

‘illegal’? competition, by which is usually meant competi-_

tion that is unlawful as to plaintiff apart from considera-

- tions.of corporate power or authority. See Alabama Power

Co. v. Ickes, supra at 479; Central Louisiana Elec. Co. v.

REA, W.D.La., 1964, 236 F.Supp. 271, 277, rev'd, 5 Cir,

354 F.2d 859, cert. denied 385 U.S. 815; but ef. Kansas City

Power & Light Co. v. McKay, D.C.Cir., 1935, 225 F.2d 924,

-cert, denied 350 U.S. 884. Plaintiffs do not suggest that |

the Comptroller has sanctionéd, or that the bank has under-

taken, any unfair, conspiratorial, or criminal methods of |

competition, or that there has been any violation of the anti! -

trust laws. The second exception is where it is claimed

that some ‘legal right’? has been injured, by which is

“meant, in its, nonconclusory sense, that plaintit® has an

independent property right, or a right to be free from the

particular kind of competition he is challenging.. Such a

right is attached to or arises out of an exclusive fran-

chise, on the one hand, or a restricted license or the like,

on the other. Frost v. Corporation Commission. 1929, 278

U.S. 515; cf. Whitney National Bank v. Bank of New Or-

leans, D.C.Cir., 1963, 323 F.2d 290, 299-300, rev'd on other

grounds, 379 U.S. 411. Plaintiffs fit in no such’eategory. -

The final general exception is where the plaintitl, ean

show the existence ofa ‘‘statutory aid to standing’ for a

class of persons which includes himself. This statutory

aid may take the form of a ‘judicial review"? provision of

the particular administrator in question for ‘parties ag-

16

a : OPINION OF THE COURT ~ 5)

Mie

grieved,’’*‘adversely affected,’ or the like. In such a case, -

FCC y. Saiders Bros. Radio Station, 1940, 309 US. 470,

would presumably provide standing for legitimate competi-

tors. See generally, Jaffe, Judicial Control of Adminis-

trative Actions, 513-31." There is, however, no such

provision as to the Comptroller of the Currency.

An alternative statutory aid may be found if there

is an indication of Congressional intent, explicit or im-

plicit, in the relevant substantive acts to grant protec-

tion to the competitive interests of a class of businesses

~ whith iticludes the plaintiff. This in Hardin vy. Kentucky

‘ Utilities Co., 1968, 390 U.S: 1, the Supren 1e Court found

“that a competing .private utility company had standing

jto challenge the expansion of TVA into new. areas in al-

leged violation-of the area limitations of section 15d(a) of ”

the Tennessee Valley Authority Act, 16 U.S.C. § 831n-4

(a). The Court‘said, ‘*{O]ne of the primary purposes of

the area limitations in. § 15d of the Act ‘was to protect —

privajfe utilities from TV A competition. ... Since re-

spowdent is thus in the class which § 15d is designed to pro-

tect; it has standing . .”? 390 U.S, at 6-7.

The only possible statutory aid to the standing of travel

agents in nafional banking legislation exists in 12 U.S.C.

§24(7). This section states that national banks may ‘‘exer-

cise... all such incidental powers as shall be necessary

and then lists nu-. °

bed

to carry on the business of banking,’

merous powers explicitly granted. It has long been settled

in suits over private contracts that the enumeration of -

,such powers is an effective and strong prohibition of all

‘activities not. enumerated and not incidental, to: banking.

See First National Bank vel fational Exchange Bank; 1875,

92 U.S..122;.128; Natioual Bank v. Matthews, 1878, 98 U.S. -

. 621, 625; Logan County National Bank vy. Townsend, 1891,

ieee ce Tae

6 ARNOLD TOURS — WINGATE CORPORATION CASES

139 U.S. 67, 73. But even assuming that national banks

are prohibited by section 24(7) from entering into the

_busimess of procuring travel arrangements, this is not

sufficient to provide a statutory aid to standing. The pro-

hibition. must be demonstrably: intended to protect the.

ee interests of other members ‘of the prohibited |

: business. Sée the concurring opinion of Judge Thornberry

in Saxon v. Georgia Ass’n, of Independent Ins, Agents,..

1968,-5 Cir., 399 F.2d 1010, 1019 ;. Association of Data Proc-

essing Serv, Organizations. v. Camp, D.Minn., 1968, 279

F.Supp. 675, aff’d, 8 Cir. 2/6/69, . ° F.2d - - .."We,’

too, (see 8th Cir. opinion in Camp, n.10), cannot accept ;

the simplistic suggestion by the majority in Georgia Ass’n, ©

399 F.2d at 1016, that as soon. as it- appears. that the

competitive activities were unlawfully carried out the

plaintiffs have standing. _ ;

The plaintiffs have not pointed to, nor have we in our

research discoveréd, any ‘evidence that Congress’ in de-

limiting the scope of banking activity in-the ultra vires <ee-

tion, quoted supra, was concerned, in 1863 and’ 1864 when’

the national banks were formed,’ with competitors’ in the -

businesses impliedly prohibited, much less in any partieu-

larity with travel agents (if they then existed), Rather,

the limitations were for-the purpose of. insuring the sta-

. bility, liquidity, and safety of the banks. Sce National Bank

. Matthews, supra at 626; Davis, Barking. Regulation To- |

i A Banker’s View, 31 Law & Contemp. Problems 639 .

(1966). See also Million, The Debate of the National, Bank

Act of 1863, 2’\J. of Pol. Keon. 251 (1894). No doubt Con-’

gress has continuously, from 1864 to the present, been ~ -

‘‘very careful’? (see infra) in restricting the activities of*

“National Bank Act of 1863, ch, 58; 12 Stat. 665; National —

Bank Act of 1864, ch. 106, 13 Stat. 99.

18

OPINION OF THE COURT ah

banks; and no doubt Congress has been, as .we shall see

in the second portion of this opinion, specifically concerned |

_ with certain potential competitors of the hanks. But as

: Senator Proxmire pointed out while offering an amend-

ment to banking legislation * specifically designed to pro-

tect particular competitors, the thrust of the close regula-

tion of banks is for purposes of stability: ““We are very”

eareful in ‘the regulations of banks. This has principally

‘been done to assure the solvency of the banks. by limit-

ing the activities of banks to safe and relatively liquid

investments.’’ 108 Cong. Ree. 22031 (1962). (See also S.Rep.

_ No, 2105, 87th Cong., 2d Sess. (1962) (Supplemental views —

of Senators Proxmire, Douglas, and Neuberger) in 2.U.S.

Code Cong. & Admin. News, 1962, at-3887. While at some

point Congressional concern with a. sufficient quantity of

specific comp¢titors of banks might indicate a Congres-_

sional intent that section 24(7) should now be read as a

measure not only to protect inv estors but also to protect

all potential membes's of prohibited activities, such a point

has not been réached. More proof of Congressional solici- .

tude is required before this court or any court should’

convert an economic struggle’ into a legal one.

The. plaintiffs have suggested, however, that the’ gen-

eral rule denying competitors. standing is no longer valid,

or has undergone substantial change. — First, they argue

that section 10(a) of the "Administrative Procedure Act,

5 U.S.C. § 702 provides, standing for any persons claim-

a to be ‘‘adversely affected in fact. 9 This. contention

seems derived from. the: interpret tation’ of - section 10{a)

ufged by Professor Davis in his Administrative Law Trea-

tise, § 22.02, and presumably adopted in. American Presi-

_ * This legislation will form the basis. of our holding i in the second

half of this opihion.

aa

19°

8 — ARNOLD TOURS — WINGATE CORPORATION CASES

dent. Lines v. FMB, D.D.C., 1953, 112 F.Supp. 346.4 We,

however, choose to side with Professor Jaffe® and the

majority of the courts * in holding ‘that the passage of the

APA: was not intended to alter to such a drastic extent

previous law on the question of standing. Moreover, we .

should add that we have serious reservations whether a

test of ‘fadversely affected in fact”’ would provide a simpler

means of deciding the issue of standing. We do not pause

for such analysis in the present case, but. if, as has been

suggested, simplicity and ease of determination is a reason -

for preferring the riew interpretation, we do not find it.?

The plaintiffs alternatively urge that Flast v. Cohen,

supra, indicates a thajor shift in the judicial attitude to-

ward the general dpctrine of standing: and that while it.

is not directly in point, this decision indicates that the —

relevant test for determining standing: in this situation

‘is whether the parti ’s are sufficiently adverse to bring into ©

focus the issues raised. See also the concurrence of Judge

Thornberry in Saxon v. Georgia Ass’n of Independent Ins.

Agents, supra. Ou? first response to plaintiffs’ contention

is that Flast v. Cohen was not intended to have any major

* See also Baker, is atts & Co. v. Sasron, D.D.C., 1966, 261 -

F.Supp. 247.

* Jaffe, Judicial Control of Administrative Action 528-30. See

‘also. Note, Competitors’ Standing To Challenge Administrative

Action Under the APA, 104 U.Pa.L.Rev. 843° (1956). .

® See Saxon v. Georgia Ass’n of Independent Ins. Agents, supra,

at 1019 n.l; REA v. Northern States Power Co., 8 Cir... 1967.

373 F.2d 686, 692-93 & nn. 9-10, cert. denied 387 U.S. 945 ; Kansas

City Power & Light Co. v. MeKay, supra.

7 Indeed, one of the bases for the rule against competitors” suits

might well be the difficulty of determining whether mere increased

competition is an injury in fact, particularly where a new and

largely undeveloped market is involved. Cf. World Airways, lnc. \

Northeast Airlines, Inc., } Cir., 1966, 355 F2d 691.

20

OPINION OF THE COURT ©. - ©. 9.

reshaping effect outside the area of standing determina-

tions under Article III for taxpayer suits challenging the

constitutionality of a federal taxing. and spending. statute.

Such an approach toestanding as used in Flasf—one

focusing solely upon an assessment of the degree of ad-

versity and clarity of the particular case—if applied to

questions of administratiye law standing would’ disturb

the entire judicial relationship to the administrative as

presently understood by Congress. Congress now kniws. ’

that if it wishes a particular class of plaintiffs to have) or

not to have, standing to seek review of agency rulings,

it may make, or not make, the types of legislative provi-

sions discussed earlier in this opinion, and ‘that is am: end

to the matter. Under plaintiffs’ proffered approach, . the

courts would have the last word on standing, based upon

their view of the justiciability, of the particular cireum-

stances pleaded. When the conflict is one of constitutional

dimensions, such an approach may be necessary. In purely

administrative matters we think otherwise.

Our second answer is that even if we were to assume

that Elast v. Cohen was inténded to affect. other areas, we

do not re: ad that case to require all administrative stand-

ing determinations to be made solely upon-an assessment

"of the degree of adversity and clarity. Rather,.Flast was

concerned with reevaluating the standards for determin-

ing adversity” and clarity in a situation w here the relevant

sJanding doctrine was adjudged to. rest entirely upon such

éonsiderations. - Flast is inapplicable when the standing

doctrine in question rests upon a basis largely independ-

ent of the concerns for adversity and clarity-—namely,

the limited role of’ the judici lary in regulating. legitimate

. ‘competition.

21

10 ARNOLD TOURS —# WINGATE CORPORATION CASES

‘In sum, we find no acceptable basis for standing for

the travel agents,

_“~ DATA PROCESSING

Turning to the second action inyolving the Comptroller,

here plaintiff, Wingate Corporation, which performs cer-

tain data processing services for ‘hire, brings suit to enjoin’

the defendant, Industrial National Bank of Rhode Island,

from performing’ data processing services for the City

of Providence, as sanctioned by a general ruling of the

Comptroller. While W ingate, like Arnold, complains that

the bank is violating section 24(7) of 12.U S.C. by provid-

_ing such services to: bank customers, its claim to stand-

ing is aided by the presence of specifie Congressional legis-

lation dealing with hanks and computer servicing. In

1962 Congress, after some .debate, enacted the Bank Serv-

ice Corporation Act, 76 Stat. 1132, which allowed small

banks to combine to form a separate corporation which

could own data. processing equipment. The primary pur-

pose of this legislation was to allow small banks to com-

_ pete more effectively with the larger banks, which had

sufficient capital and business to. buy thei own electric

data processing equipment. Tlowever, in order to prevent,

such corporations being used as a subterfuge for enter ing

into the nonbanking business of data processing, and to

protect the interests of certified public accounting firms,

Congress prov ided in section 4 of that Act, 12 U.S.C. ¢

1864, ‘No bank service corporation may engage: in any

activity’ other than the performance of bank services for

~ banks.*’?) The legislative history is clear. The prohibition

originated -in an amendment. proposed by the National

Society of Public Accountants, which objected to the origi-

nal version of the bill.that would haveallowed bank se rvice

cor porations to solicit outside business to some extent. The

22

OPINION OF THE COURT af 11

Accountants feared injury to their growing business of

bookkeeping with the aid of computers. The final pro-

vision was an obvious response. See 108 Cong. Ree. 16499,

22031 (1962); Hearings on Mise. Bank Bills Before: the

Comm. on Banking & Currency of the United States Senate,

87th Cong., 2d Sess., at. 79-80 (1962). —.

We conelude that the present plaintiff is within ‘the

class of persons intended to be proteeted by section :4 of

-the 1962 legislation,-and the only question is whether

standing exists to complain not of competition from bank

service corporations, but from national banks directly.

We conclude in the affirmative. When Congress so ex-

plicitly provides protection for a particular business against

competition from a -regulated national entity—even

though indirectly by regulating a subsidiary—standing

exists at least to entertain complaints: by that business

concerning: its competitive relationship to the national

entity. Section 4 had a broader purpose than regulating

only the service corporations. It was also a response to

the fears, expressed by a few senators, that without such

a prohibition, the bill would have enabled ‘‘banks to en-

gage in a nonbanking activity,’? S.Rep. No. 2105, supra

(Supplemental views of Senators Proxmire, Douglas, and -

Neuberger), and thus constitute ‘ta serious exception to’

the aecepted public poliey which strictly limits ‘banks to

banking.’’ (Supplemental views of: Senators Muskie and

Clark). We think Congress has provided the sufficient

statutory aid to standing exen though the competition

may not be the precise kind Congress legislated against:

‘But cf. Association of Data,Processing Serv. Organizations vy.

Camp, 5 Cir., 1969, F.2d , n.12, which stated that the re-

liance of similar plaintiffs upon the Act for standing was ‘* nus-

placed.’” ae eas: ano.

a

4 23

12 ARNOLD -LOURS — WINGATE CORPORATION CASES

Indeed, there ‘is a. plausible argument ihat the. Bank

Service Corporation Act, read in conjunction with 12 U.S.C.

§ 24(7), does in fact jmpliedly prohibit national banks

from directly oMcrind sata the data processing service

business. If the section four prohibition could be avoided

by a small national bank, member of.a group owning a

_ service corporation, soliciting’ its own data processing

customers to be serviced by the subsidiary via the bank,

the prohibition would. be largely illusory. And if a small

bank could not directly solicit such customers, it would fol-.

low ‘that the large banks, owning their own equipment,

could not, or the equalizing effect of the Bank Service

Corporation Act would be lost. To be considered? in -op-

~ position to such an argument is the Comptroller’s ruling

interpreting the section,” and the phenomenon of the one-

bank holding company, that is not cover red by the Bank

Holding Company Act of 1956, 12 U.S.C. §s .1841- 49, which

requires only multi-bank holding companies to divest them-

selves of all nonbanking interests. We leave the resolution

-of this conflict to future determination, For the purposes |

of the ifsue of standing, we need decide only that the pas- -

sage of the Bank Service Corporation Act arguably pro-

hibits direet entry by national banks into the data process-

ing, service business,

* Comptroller's Ruling "7: 39) prov ides in part that:

sae corporations may oniy perform bank services, for’

banks. Bank, services, however, as defined in {he Act, would

include any service which a bank would ordinarily perform

for a customer. Accordingly, if a bank undertakes to handle

the payroll accounts or the accounts receivable ‘of a customer,

a bank service corporation may perform for the bank the

service necessary to enable the bank to fulfill its undertaking.

24 ©

OPINION. OF THE COURT’: 13

In case No. 7192. the judgment of the District Court is

affirmed. |

In case No, 7186 the judgment of the District Court is

vacated and the case remanded for further proceedings not

inconsistent herewith.

3

se