Brief in Opposition — Arnold Tours, Inc. v. Camp

ze rt of the Ue a Sat |

a 122

: — TOURS, INC, sal a

CS, :

wa2.an R CAMP er a,

OX PETITION Por a wR fi cungenane w rae UNUTRD SrATHR

De ectlis bad Areaes FOR TRE FIRAT ROUT, Ries

BRIEF OF ate ian NATIONAL, ey:

‘Table of Contents. |

. Question presented me me

“Statement; ¢- | ae ie AP: SR

‘Argument 7 3 , Ty ee oe 4

Conclusion | : ) Bere

| Table of Authorities Cited.

‘i CASES.

- Alabama Power Co. ‘v. Tekes, 202 US. 464 (193s) 7

Flast v. Cohen, 392 U.S, 83 (1968) Oe.

Hardin v. Kentucky U tilities. Co., 390 U.S. 1 (1968) 10

Inland Waterways Corp. v. eames, 309 U.S. 517,

(1940) ; 9

M’Culloch v. Maryland, 4 Wheat. 316 (1819) 9

Railroad Co. v. Ellerman, 105 U.S. 166 (1881) 7

Saxon v. Georgia Association of Independent Tnsur-

_ance Agents, Inc., 399 F. 2d 1010 (1968) Psy pee

Tennessee Electric Power Co. v. Tennessee Valley — :

Authority, 306 US. 118 (193 9) on 7

7 STATUTES. ee :

5 U.S.C. § 702 ON ta oe 3

12 US.C. §§ 21, 22 and 26 ape 8

Cte a are 8

12 U.S.C. (c) (1) and (2) ot Ss

12 U.S.C. an es | ies. egy a

Use 49m° ¥ 8

ii _ TABLE OF AUTHORITIES CITED _

Glass-Steagall Act, 1938, 12 U.S.C. §§ 24, 78, 877 and

378 S.

Bank Service Corparation Act, 76 Stat. 1132 | ee Aa

» MISCELLANEOUS.

12 CPt. § 7.1 (1959), 24 Fed. Reg. 1900 re 2

Comptroller’s Manual for National Banks, par. 7475 # 2

28 Eneyclopedia Americana 621 (Int. Ed. 1967) > Qh.

1957, H.R. 5415 ae ee 5

1959, H.R. 2424 , 5

NR ee 5

“1965, ELR. 112 Pl ic ene

1967, H.R..11077- 2 ae Sete

1969, H.R. 6778 nit 5

e :

Supreme Court of the United States.

Ocroper Term, 1968, -

we Mapa ae ues

: ARNOLD TOURS, INC. er at,

Petitioners, .

2 Vv. y

WILLIAM-B. CAMP er an, °°

Respondeuts.

/

ON PETITION FOR. A WRIT OF CERTIORARL TO THE UNLPTED STATES ©

COURT OF APPEALS FOR THE BIRST CIRCUIT,

BRIEF’ OF SOUTH SHORE. NATIONAL BANK IN

OPPOSITION. |

Question Presented.

‘

Does alleged economic injury which results from competi-:

tion, in and of itself, confer standing on the alleged injured

business to question the legality of any aspect of its com.

petitor’s operation? a

Statement.

The gist of the, broad sweep of the complaint is that the

Comptroller of the Currency illegally authorized: national

banks to engage in the travel-agency business and that

national banks therefore engage in iHegal competition in

furnishing travel services. ;

5 .2&

: . . = ie

Barnstiag Qavel somioos has heon a part of banking

tor Mey EX ee WRT vais CA Mdleivit of MacLeod, Roo

Ms)!

Raenishing (aval series is stmthar ia nature to many

OLROE UE EER EAL Servis Comminonty performed by banks

< ‘ ° } a : a . . . ae . ‘ a

WHHROUET Sper OTRO athoritn CAfidavit ‘of Camp,

RUAN - : pent ces

ORR RO Se Tater ppotations ¢ 70 CAdidavit of Camp,

AR. BAL Wats prt vata ane the a ‘tonal Rogister, vol. 24, p.

UHR, i Ma are SL prov ‘dod in pertinent part:

) NSS hcoygneiatiue viene Of the Comptroller, ‘Title 12

ie py elowy tat national hanks may, as an in-

ARR PAON, yn ate travel serviees for their eus-

Tatars as FOV Nave hoon doing tor MANY years, and

Laat They Qa have te peasonable rights and benetits

That ta EROEOE ON

Moan Ray M Gidney -

— nptrotlor of the Curreney.”*

. eS eaves oes

Cotreptralion Rar Mo Gidney cin 1939 after thorough

study, Chore hy Hannay teaiivmed approval for national

Banks FO PEA BOT SOP toes |

Paragraph TO at ihe ewuuptrotler’s Manual for Na-

tonal Banks (aN AM, Wyn Whos:

\

*s

TATA NAM Aan wt) mks aeting as. travel agents. -

* breactome fa Pav NeW Ys vostead in them under 12

\ We Lhy Brat Be ad AY yah . Was Ws u rae abtixhed in haaktnn and.

WAP POR (CATA GUA POON) AbONE Tho tine -of the enactment

ate Ede Nu eons Band Agha Fed OS Bnevelopedia Americana,

ty } t' FA Max ) -

_ 7 Raborengon wativatat Re aby te appendin to brief for plain-

TiS, ape llatta, Wt WA bo profited the Court below. Refer-

wroes Wihioatal UNE aad aa App are te the petition and

‘ } e . a

Lo The APPOUMAN Fa BAG pebibhaay Pespoehively, tiled by the petitioner

te this Cour. * ‘ <2

3

U.S.C. 24, national banks may provide travel services

for their customers and. receive compensation therefor.

_ Such servieés may include the sale of, trip insurance

and the rental of automobiles as agent for a local rental

service. In connection, therewith, national banks may

advertise, develop, and extend such, travel services for

the purpose-of attracting customers to the bank. See

Bi see :

; Z eb ras ;

The District Court granted the defendants’ motions for

summary judgment on tlie grounds that the plaintiffs lacked

standing to maintain the action (Pet. App.). On appeal,

the Court of gd for the First Circuit aflirme don the

same grounds (Pet. 12-24). |

In its opinion (Pet. a the Court below held that an:

ordinary: competitor has no standing to complain ‘of

party's lack of legal authority to engage in his Sesaee

unless: | a ee

a The competition is unlawful apart from considera-

‘tions of corporate power or authority; or

b. the complainant-has a “legal right’? to be free from

the particular competition arising out of exclusive franchise,

restrictive license or the like; or

ce. the complainant has some ‘statutory aid to standing’

including ** judicial review’ of the particular administrator

in question for ‘*parties aggrieved,’’ ‘adversely affected?’ *

or the like (Pet. 14-16). ee

Both the District Court and the Court below held that.

the Administrative Procedure Act, 5 U.S.C. § 702, does not

confer standing on, the petitioners (Pet. App. Pet. 18-19),

Both Courts, in effect, held that the petitioners do not

qualify for any of the special categories wherein a com-

plainant has standing to attack his competitor” s right. to

compete,

* both—not the courts,

4

Furthermore, the petitioners admit that they ‘t. . . are

not the beneticiaries of a license, franchise, immunity stat-

ute or monopoly . .. 73. thate tt... there is no -specifie

statute protecting plaintiifs from competition . . 277; and

that **. . . there are no éxpress laws prohibiting national

lfrnks from engaging inthe travel business . . .°? (Petition-

ers’ Brief, pp. 6 and 1s).*

Pa

Argument.

Petitioners summarize that there are *tmany reasons why

this case should be reviewed”? (Pet. 8-9). They argue:

First, there are contlicting federal decisions on the

main issue of standing.as it relates to national banks

‘and there are conflicting federal decisions on the sub-

sidiary issue of standing reliting to the interpretation

and application of the last Case and the Administra-

tive Procedure Act, See. 10(a).. | .

Second, this casg involves an important federal

question of national magnitude and of grave concern

to our economie leaders. The time is ripe for a national

decision involving the national banks.”’

.

Pdtitioner’s seéond are? of which we shall treat briefly

first, is irrelevant. “**..... [FJederal question[s] of national

magnitude-and of grave concern to our economic leaders,’

where economic poli¢y rather than law are involv “cl, come

within the jurisdiction of Congress. National decisions in- :

volving the national banks are and should be made only by

the Comptroller of the Curreney or by the Congréss or by

» 4

» 9 . w . a . ~ ame 9 . . . .

% These admissions are from the plaintiffs’ brief filed in’ the

Court below,.ga certified copy of which, is tiled herewith.

—_—_— <7

8

‘

} as : %

Petitioners must have well recognized this principle when

they appeared before the House Committee on Banking and

Currency as recently as May 2d to press vigorously for con-

gressional action in the area of their concern (He: arings

on H.R. 6778; Bill to amend Bank Holding Co. Act of 1956).

This is the sixth attempt to induce Congress to act in this

area. Since 1957, five bills have’ been unsuccessfully in--

troduced in Congress to limit: banks’ powers including en-

gaging in the travel- -ageney businéss (1957, H. R. 5415; 195 9,

H.R. 2424; 1963, H.R. 9548; 1965, H.R. 112, and 1967, H.R.

11077). These bills were referréd to. the House Committee

on Banking and Currency and were never acted upon, Con-

gress ‘has had ample opportunity to act t and has remained

silent.

| The petitioners do not distingnich between the economic

merit ot competition: offered by national banks, the deter-

mination of which rests in the sole discretion of Congress,

and the legal propriety of such competition which can only

bereviewed by the courts after Congress has spoken.

Unless this Court is going to substitute itself for the

Congress in deciding what policies should govern national

banks, and- whether or not travel agents are entitled to

court protection from competition offered by national

banks, this second reason given by the petitioners for

requesting the Court to review this case is unfounded.

Their first reason that ‘‘. .. there ‘are conflicting fed-

eral decisions on the main issue of standing as it relates

to national banks . . .’’ runs head-on into the decisions of

the District Court and the Court below. }

Far from involving an important and novel question, this

“ease is merely an example of the well-settled principle that

mere unwanted competition does not give. a complainant

the right to compel the courts to police the marketplace.

The decision below involves no federal question, in con-

fliet with appheable decisions of this Court or any Court

.

6

of Apperts, On the ¢ CONEMULY, the Court below has carefully

sorted the porting yt ‘decisions to itluminate the three paths

which ean lord to judicial review: Ulegal competition, ine

vasion Gta legal right to be free of the particular kind of

COMTPELTLON, and stututory aid te challenge rei’ Alona

kind of competition. :

The potitgoners point te no real coutliet. Instead, they

ask this Court, using Plest ve Cohen (190s), Sv. 2 US. SQ. as

a springbSard, to jump toa conclusion that any time com-

pedbion perose creates alleged adversity, studing ts auto:

matically conferred on a complainant.’ Such a hielding

would require a preliminary and anomalous finding that in-

cronaéd compellion is aM injury in: rbot. Allusion to. the

ditheutty of thas determination was 1 ude by the Court below >

in footnote, 7 of its opinion (Pet. 19).

Applying the first category for’standing, the petitioners —

fail te show that the act or manner of competing by the

respondenty is illegal’? Plaintit’s de net suggest that

the Comptroller has sanctioned, or that the bauk has under-

taken, ay unfair, conspiratorial, or criminal methods ot

competition, or that there has been any violation of: the

antitrust laws’? (Opinion, Pet. 15),

Related to this legal-ap prdae ‘hea simil: ur line also leads

to the eonelusion that the petitioners ado not have standing. -

By their admissions, the petitioners have shown that there

ean be vo legal competition, tn and of itself, in the travel

business, Thyy try te manufacture ‘illegal competition’

out of their eckims that nation’ banks engage in the travel

business without authority, that is, acting. wind vires,

,

They do not distinguish between ‘illegal competition’? and

‘acting ultea vires" as the courts have done, Ht has been

conclusively Weld that competitors in a none xelusive tield

have no right toe seek protevtion from competition from

others, even though the acts of the others ate ullra vives

‘

- &

7

cand not properly authorized. This was set forth in cila-

bama Power Co. v. lekes, 802 USS, 464 (19: Ss), quoting at

page 482 from Raitroa PCoy, Ele rman, 105°US. 166:

.

]

“<But- if the competition in itself; however in-

Jurious,” we said, pp. 173-174, ‘is not a wrong of which

he could complain against a natural person, being the

riparian proprietor, how does it become so merely be-

‘ause the author of it is a cprporation acting u/fra

vires? * The damage is attributable to the competition,

and to that alone. But the competition is not’ illegal.

Lt is not unlawful for any one to compete with the

company, although the lattersmay not be authorized to

engage In the, same businéss.* sie a

Soe Tennessee Electric Power Co, v. Tennessee

Valley Luthority, 306 U.S. 118, 139-141 (1939),

This it is plaint clear that, even if ‘petitioners could

- show that national banks were not granted the power to

engage in the travel-agency sree: and that therefore the -

banks’ aetivities are ultra vires, nevertheless, ‘the peti-

loners cannot maintain this-action Recause there is nothing

that makes compe tition in the travel-ageney business illegal.

The second eategory is where petitioners elaim a ‘legal

right** to be free from competition arising, generally, out

of an exclusive franchise or a restricted license or the like.

The petitioners claim uo set exclusive right and even

admit they have none (supra, po 4). As the Court -belotw

said, “Plaintiffs fit in no such pnairoge (Opinion, Pet.

1).

‘The final category ROME that the complainant show

that he has some ‘statutory aid** to standing. Decisions

proseribing the activities ef national banks in vations fields

of competition have relied upon specitie, relevant statutes,’

“3

. 8°

“«

in the absence of which’ no standing ww ould: have existetl;

' Those cases are readily cli assified under six-different types

of statutes. | |

They are: | i

(a) National Branch aniinas;

Statute: 12 U.S.C. § 36 (¢) (1) and (2), °

~ (b) Chartering of National Banks. baie

. Statute: 12 U.S.C. $§.21,.22 and 26. — .

(ec) Seeurities underwriting. : , ,

. Statute: 12 U.S.C. 4 24 (Seventh), and Glass-Stea. |

gall Act, 1933.. .

(d) Commingled investment accounts. ,

Statute: 12 U.S.C. § 92a, state banking law, and —

‘Glass-Steagall Act, 1933, 12 U.S.C. s§ 24, 78, 377

and 378, ‘ah

“(e@) Insurafice Agents, population under 5, 000.

Statute: 12 U.S.C. §.92.

(f) Data Processing.

‘Statute: Bank Service Comporation Act, 76 Stat.

1132 (W ingate, Opinion, Pet. 21-23).

None of these statutes is claimed by or avails the peti-

tioners. Therefore uone of the decisions relying on

these statutes could, he in conflict with the decision of tlie

Court below. paid fs : , co

The most the petitioners can rely on is their inte rpreta-

tion of subparagraph 7 of 12 U SAC. $24, Ww hich, i in relation

to the power of a national bank, states in pertinent part:

i. it shaJl have power ... Seventh. To exercise . >.

all suc ih incidental powers as: shall he necessary to carry on

the business \of banking BLT

_ passing that the Supreme Court definition of ‘*necessary,”’

first enunciatéd by Chief Justice Marshall (JM 'Calloch y

It is interesting to note in —

é

’ e

State of Maryland, 4 Wheat. 316, 413 (1819), and sti in

effect, is: “If reference be had to its use, in the common

affairs of the world, er in approved authors, we find that

i frequently imports no more than that one thing’ is con:

venient, or useful, or essential to another,”’

The petitioners cite 10 case in which a national hank has ,

heey prohibited from any field of competition solely wpon

‘this part of the statute. They cite nothing to show a ‘cons

gressional intent under this statute or any other statute

to protect the travel business from cofnpetition ly national

banks or to limit such activity by national banks.

As the Court below pointed og (Pet..17-18), Congress

intended these limitations to be hen purpose of insuring

the stability, liquidity and safety of the banks—not to pro-

tect competitors, : 7

When in doubt asx to whether or not the particular in-

“hibitive statute was intended to protect others from com-

petition. from national banks, the courts have looked to’

congressional history and other ‘statutes to judge the intent

of. Congress. See Saron y. Georgia Association of lnde-

pendent Insurance Agents, Inc., 399 F. 24.1010, 1017 (5th

Cir. 1968). Congress has been faced+with real, organized

«ffort to amend the statute. And as previously set fortli-

(supra,.p. 5), Congress, has had ample opportunity to act ,

— has remained ee

- In any event, ‘‘. .. when legality itself j is in 1 dispute

Saee Congress has spoken at best w ith ambiguous ‘silence

—a long continued practice pursued with the knowledge of

the Comptroller of the Currency is more persuasive than

considerations of abstract conflict between such a practice

and purposes attributed to Coitgress.”’ : setdplsed Water-

ways Corp. Vv. Young, 309 U JS. 9017, 924 (1940).

The petitioners haying failed to fit in any of the tliree eri-

teria’*mentioned, the words of tliis Court in 1968'in Hardin |

*

10°

v. Kentucky Utilities Co., 390 US. i, 5 5- ia answer the ques:

tion presented: :

+6 [E]conomic injury which results from lawful

competition caunot, in and of itself, confer standing

on the injured business to question the legality of any —

‘aspect of its competitor? s operations. sie (Emphasis

supplied. Bes |

Finally, this respondent submits that this ease and these

facts offer no cause for review by this Court, unless, under

the guise of the petitioners” hoped-for new doctrine of

“competitor standitig,”’ this Court desires to consider that

the ‘*standing categories’? should be abolished. Were this

to happen, every competing business; large or small, would

have the right to complain in ‘the. courts against’ the aets’

of its competitors, and existing limitations on witramime ted

litigation would disappear. *

Conclusion. _

The petitions for a writ of certiorari should be denied.

-Respeetfully submitted,

; DOUGLAS L. LE q,

/ . ELLIOTT V. GRABILL,

- ARTHUR H. BLOOMBERG,

Attorneys for Respondent |

ig ae Sovtu Si0RE NationaL Bank.

GrasiLi, Ley & Burrerwortn,

Of Counsel.

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