# Jurisdictional Statement — Consumers Union of United States, Inc. v. Siebert

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Jurisdictional Statement
- **Published:** January 1, 1981
- **Citation:** 450 U.S. 901

## Text

a 80-801 - 17 1980

IN THE MICHAEL RODAK, JR., CLERK

Supreme Court of the United States
OCTOBER TERM, 1980

CONSUMERS UNION OF UNITED STATES, INC.
and EDWARD J. GORIN,

Appellants,

V.

MURIEL SIEBERT, Superintendent of
Banks of the State of New York,

Appellee.

On Appeal from the United States District Court
for the Southern District of New York

JURISDICTIONAL STATEMENT

MARK A. CYMROT
ALAN MARK SILBERGELD
(Counsel of Record)
1511 K Street, N.W.
Suite 1033
Washington, D.C. 20005
(202) 724-7203

KARPATKIN, POLLET, DEILIBERT
& BEIL
5 East 43 Street
New York, New York 10017
Attorneys for Appellants

aS
THE CASILLAS PRESS, INC.-1717 K Street. N. W.—Washington, 0. C.-223-1220

(i)
QUESTION PRESENTED

Does New York Banking Law § 268, by prohibiting the
sale of savings bank life insurance to most nonresidents of
New York, violate a fundamental right of those
nonresidents and create an unjustified discrimination in
New York’s life insurance market in violation of the
Privileges and Immunities Clause, Art. IV, § 2, and Com-
merce Clause Art. I, § 8, cl. 3, of the U.S. Constitution?

(iii)

TABLE OF CONTENTS

Page
ONT ins econ os coc cccccccecccci, (i)
JURISDICTIONAL STATEMENT............................ l
ye ayy iy sve ce ves odandcecnen.. 2
oo i ko bic deed nccévncccecnct..., 2
es oe eo ub ve c'e'edviccg een’ 3
Mueenumeten GP TRE CASE................................ 3
SO =. rere rr eee 3

2. Proceedings before the Three-J udge
oo dev sk oa sc is caccocescenccccc, 6
3. The Three-Judge Court’s Opinion...................... 8
Ua 6 6 oo s0 vos ce eccyccccococcececccccce, 10
go Fs vs vin cscccsccvceccecenccccnes...... 20
MESES Gece vss sccvdccvscetovscccoccccecccces., la

PREVIOUS PAGE WAS BLANK |

(iv)

TABLE OF AUTHORITIES
Cases: Page

American Commuters Ass’n v. Levitt,
279 F.Supp. 40 (S.D.N.Y., 1967) affd,
I BO 4 ic pe Saas ads ccsa bh ces eweebaws 14

Austin v. New Hampshire,
a IE eso os 5. vie Bog 60 a5 dS 0h beak en nvawnns 14, 18

Baldwin v. Fish and Game Commission of Montana,
nL eo adic c oe bn hewn ave nkaeraehees> 1,8, 10, 11

Brown v. Anderson,
ee ee, Es SN WED on. vans cee babes csee eet ness 18

Consumers Union of United States, Inc. v. Albright,
427 F.Supp. 840 (S.D.N.Y. 1977), vacated and
remanded sub nom. Consumer Union of United States, Inc.
ER be ke . Ser re ee errs e Pe

Corfield v. Coryell,
6 Fed. Cas. 546 (No. 3230) (CCED Pa. 1823) .............006. 11

Doe v. Bolton,
Mann, SENG e eo, oa ee Core et ce bce saa waenne 10

Great Atlantic & Pacific Tea Company, Inc.
cae EE ae ee ee ee 14, 16

Hicklin v. Orbeck, ;
aT OA: DONTE gdb o'vsos odin dae caso aeees 1,8, 11, 15, 16, 19

H.P. Hood & Sons, Inc. v. DuMond,
ae ee a ibs GG ate Vs by nara a kee koe ee es aN 16

Hughes v. Alexandria Scrap Corp.
a PS exe cku shy cu bbiae keke eadeee mene 8,9, 13

Hughes v. Oklahoma,
ee ee I ik os os Oa ek VA LAO Chae hae eee 14, 18

Lewis v. BT Investment Managers, Inc.,
Se: DES SVs we KS CWda OT cas eRbe iene wewnes 18

(v)

New York Savings Bank vy. Joseph,

188 N.Y.S.2d 893, 281 App. Div. 815 (1953) .................. 13
Paul v. Virginia

IN g's s 5 c's 4a Fa pee US ee velo te oP aaek 1]
Philadelphia v. New Jersey,

a cre he ct an wk ck cake tahn dee ie 13, 14, 19
Pike v. Bruce Church, Inc., allie

-cspsloenisomhcsspdin giitien OR OOL EER ET A

Reeves, Inc. v. Stake,
am ee aidan Belew 4ule 8,9, 13

Salla v. County of Monroe,
48 N.Y.2d 514, 399 N.E.2d 909 (1980),
cert. denied sub nom. Abrams v. Salla,
oi Ne ERE ee Pe error 8

Toomer v. Witsell,
Rg rn OU he oe OE 10

Travellers’ Insurance Co. v. Connecticut,
I Dc De ee a i Te 0 a end 14

Travis v. Yale & Towne Mfg. Co.,
Rae ee me eee eee oer mes 14

Ward v. Maryland,
Nee et ig, SRREEET TT TETET CERT CCE SORE T TT Seer Tee 11

U.S. Constitution:

Privileges and Immunities Clause, Art. IV, sec.2............ passim

Commenerce Clause, Art. 1, 000. 8, ch.3.. ccc cccccccccvccscs passim
Statutes:

AS MED 55's ss ob‘ Vw b WRN ER'e ws St Ragan awalew a le we 2

a STs Saris ck ch ching nde ba wks Buki web kde aaeee es 2

inate ecg EOL EEE RET RE PE EE A REE Ley re 2
PORE, 6A oa ii wwahak dd ddhame no isin ane eee eee 2

Banking Law of New York

Suny WHINE. o's ca ius oebamad cs ua bene eel uuu 1,3, 13
PM Dia Gh heen che aey ob bA dade vor cud hae ae aeeee 18
REPS EERE EeL TKDE R REL Or SEONG ta ig ee A on" 3
DY GG w sc vinadSunii on cucusnsemaledauannte 3,13
SE eh naw Geter eee. a a ee 2, 6,7
DCs Beer 6 ccer rere reerererwreereewewreseensanwanins passim
er ee TT SEXU EEE IERTIT 5, 13
ee ed Pee ee eR eee IP PAR yy ae he 5
Other:

American Council of Life Insurance
Life Insurance Fact Book 1978 (1979)... 0... 11

Louis D. Brandeis, “Life Insurance:
The Abuses and the Remedies”, published
By the Policy-Holders Protective Committee ................. 5

Louis D. Brandeis, “Savings Bank
Life Insurance For Wage-Earners,”
Pe IPE. 5A Cas choc Uap knee wed oad hb dd ek 5

“A Guide to Life Insurance,” Consumer
Reports [Jan., Feb., March, 1974 and
Cue cn, SoC eta e es + oe ane Gadi bets 4

“Insurance That Preys on
The Poor,” Consumer Reports
SU: SEE SS cus ou 20000 Weuaers Was ackcbaakouess aelelee 6

(vii)

Office of Policy and Planning,
Federal Trade Commission,
“Life Insurance Sold To The
Poor: Industrial And Other
Debit Insurance” (Jan. 1979)

S.S. Huebner & Kenneth
Black, Jr, Life Insurance
(8th Ed. 1972)

GA VARS ee ee eM RRR ee ae ea I ee ae oe ee oe oh a kh a te

IN THE

Supreme Court of the United States
OCTOBER TERM, 1980

No.

CONSUMERS UNION OF UNITED STATES, INC.
and EDWARD J. GORIN,
Appellants,

V.

MURIEL SIEBERT, Superintendent of
Banks of the State of New York,
Appellee.

On Appeal from the United States District Court
for the Southern District of New York

JURISDICTIONAL STATEMENT

This case was remanded for “further consideration in
light of Hicklin v. Orbeck, 437 U.S. 518 (1978).” 438 U.S.
901 (1978). Relying upon Baldwin v. Fish and Game Com-
mission Of Montana, 436 U.S. 371 (1978), the district
court reaffirmed its early judgment, holding that
nonresidents of New York do not have a “fundamental”
right under the Privileges and Immunities Clause, U.S.
Constitution, Art. IV § 2, to purchase life insurance from
New York savings banks. New York Banking Law, Art. .
VI-A authorizes New York savings banks to sell life in-
surance. However, under Banking Law § 268, only per-
sons who reside or regularly work in New York can pur-

2

chase this insurance. Nonresidents of New York are
denied the right to purchase a low cost, high quality life in-
surance and also are denied the benefits which competition
from savings banks could bring from other life insurers.
The district court’s decision permitting discrimination
against nonresidents of a state in the market for such an
important consumer product should be given plenary
review by this Court.

OPINIONS BELOW

The first opinion of the district court is reported at 427
F.Supp. 840 (S.D.N.Y. 1977), vacated and remanded, 438
U.S. 901 (1978). The opinion on remand is not yet
reported. It is set forth at pages la-22a herein.

JURISDICTION

This action originally «..allenged the constitutionality of
both Sections 266' and 268 of the New York Banking Law
on various constitutional grounds. Jurisdiction was based
upon 28 U.S.C. §§ 1331(a) and 1343(3). A three-judge
district court was convened pursuant to 28 U.S.C. § 2281.
Summary judgment was entered for the appellee on
February 28, 1977, and that judgment was vacated and
remanded by this Court on June 26, 1978.

On remand, summary judgment was entered in favor of
the appellee on August 14, 1980. A notice of appeal was
filed on September 17, 1980.

This Court has jurisdiction over the appeal under 28
U.S.C.§ 1253.

'Section 266 restricts the insurance on any risk to $30,000. The
judgment of the district court upholding the constitutionality of this
section was not appealed.

3

STATUTE INVOLVED
Section 268 of the New York Banking Law provides:
Geographical Limitation

No application for [savings bank life] insurance
shall be accepted except from a resident of this
state or a person working regularly therein.

STATEMENT OF THE CASE
1. Facts

On December 5, 1973, appellant Edward J. Gorin, a
resident of New Jersey employed in New Jersey, walked
into the Savings Bank of Rockland County and applied
for $30,000 of savings bank life insurance (“SBLI”). His
application was refused solely because as a nonresident
who worked in New Jersey, he was prohibited by Section
268 from purchasing SBLI. Stip.4 4.°

New York Banking Law, Art. VI-A authorizes savings
banks to “conduct the business of life insurance” by
establishing life insurance departments. Banking Law
§§ 262, 263. The savings banks may act with “all the
rights, powers, and privileges and subject to all duties,
liabilities and restrictions relating to domestic legal reserve
life insurance companies conferred or imposed by the in-
surance law. . .” /bid. One hundred twelve of New York’s
115 savings banks sell life insurance, either as issuing
banks or as agents for issuing banks. Stip.¢ 26. As of
1977, $6.8 billion of SBLI was in force, with $965.8
million sold that year. Stip.§ 38.

This life insurance is one of the best buys available
anywhere. In studies in 1974 and 1980, Consumers Union

?The factual records consists of the Stipulation on Remand (“Stip.”)
and joint appendix.

4

found only Massachusetts SBLI to be less costly in most
categories. Stip.§ 1.'Best Reports, an authoritative
publication on the characteristics of life insurance, rates
SBLI as “remarkably low” cost. Stip. 4 47. This difference
in premium costs can total many hundred of dollars over
the life of an insurance policy, even though the policies
have similar terms. Stip. 4 9; Pltfs. Exhs. 2-6. Further,
customer satisfaction appears to be high as the Banking
Department received no consumer complaints about SBLI
from 1971 to 1976, the period of the stipulation. Stip. 4
16.

Section 268 restricts the sale of SBLI to residents and
those regularly working in New York. On April 12, 1957,
the Board of Trustees of the Savings Bank Life Insurance
Fund interpreted Section 268 as restricting the sale of
SBLI to (1) natural persons who live or regularly work in
New York who insure themselves or a person with respect
to whom they have an insurable interest (the so-called
“blood relative” exception) and (2) New York corpora-
tions, foreign corporations with their principal place of
business in New York and unincorporated associations
with their principal place of business in New York if they
qualify for and purchase group policies. Those who pur-
chase SBLI may retain their policies if, subsequent to pur-
chase, they move away from the state or no longer regular-
ly work in the state. Stip.¢ 41.

The Saving Bank Life Insurance Fund was established
to provide insurance expertise for the savings banks. The
Fund acts in a fashion similar to the home office of a life
insurance company, providing all technical life insurance
services including actuarial, underwriting and medical ser-
vices. The Fund establishes uniform terms and conditions
for the policies, prescribes the standard form policies, ap-

3See, “A Guide To Life Insurance,” Consumer Reports, (January,
February, March, 1974, and February, March, 1980).

5

plications, schedules and other business records, and
establishes uniform premiums, annuity rates, loan values,
surrender charges, collection fees and reinsurance rates.
The banks sell the insurance, make the profit and retain
and invest the reserves. Banking Law §§ 270, 271. Stip.
q 28.

The Fund is supported entirely from assessments and
contributions from the savings banks and through invest-
ment of its own money. Stip. ¢ 29. Banking Law § 270
specifically prohibits the use of “public funds, moneys of
the state or under state control or subject to audit by the
state comptroller” to support the Fund or the savings
banks. The sale of SBLI is carried on through private
enterprise and for private profit. Stip. 44 29, 31, 32. The
regulation of the savings banks is designed to be as close as
practicable to the regulation of other insurers. Stip.
44 30-33. See also, Historical Note to Banking Law § 270.

Louis D. Brandeis first proposed savings bank life in-
surance in 1907 as a competitive alternative to industrial
life insurance,* which is sold in small face amounts
generally to blue-collar workers, with premiums collected
weekly or bi-monthly at the policyholder’s home. Stip.
q 12. Industrial life insurance is expensive and subject to
many abusive practices. Stip. 44 14-17. In 1905, industrial
life insurance was severaly criticized by Mr. Brandeis, as
counsel for policyholders of the Equitable Life Assurance
Society,> and by the Armstrong Committee, an in-
vestigative committee of the New York legislature. Stip.
44 14, 15. That criticism has continued through the years
as a result of several legislative inquiries and was recently

‘Louis D. Brandeis, “Savings Bank Life Insurance For Wage
Earners,” 1907 A/bany Law Journal 50. Stip. 4 19; Deft. Exh. A.

‘Louis D. Brandeis, “Life Insurance: The Abuses and the
Remedies,” published by the Policy-Holders Protective Committee.

6

renewed by Consumers Union® and by the Federal Trade
Commission’ Stip. 44 1,17. Although more strictly
regulated in recent years, $39.2 billion of this insurance
was in force nationwide in 1976. Stip. 413. No
geographical limitation is imposed by New York on the
sale of industrial life insurance.

Mr. Brandeis was convinced that workers would best be
protected from the abuses of industrial life insurance
through competition from mutual savings banks which
had been organized principally to serve the interests of
working people. Stip. ¢ 19. Massachusetts adopted the
Brandeis proposal in 1907. New York followed in 1938
after several unsuccessful efforts. Connecticut adopied an
SBLI program in 1941. No other state has authorized sav-
ings banks to sell life insurance. Stip. ¢ 20. The
geographical limitation is found in each of the state SBLI
statutes. Stip. ¢ 39.

2. Proceedings before the
Three-Judge District Court

On January 14, 1974, the appellant and Ira Furman, a
resident of New York seeking to purchase more than
$30,000 of SBLI, commenced this action against the
Superintendent of Banks of New York, Harry W.
Albright, Jr. (first succeeded by John G. Heimann and
now by Muriel Siebert). The amended complaint alleged
that Section 268 (“the geographical limitation”) and Sec-
tion 266 (“the policy ceiling”) violated various provisions
of the New York and United States constitutions. On
September 20, 1974, U.S. District Judge Lee P. Gagliardi

Insurance That Preys on the Poor,” Consumer Reports
(November 1978).

’Office of Policy and Planning, Federal Trade Commission, “Life
Insurance Sold To The Poor: Industrial And Other Debit Insurance,”
(January, 1979).

7

denied appellee’s motion to dismiss, and a three-judge
court was convened. On February 25, 1977, the three-
judge district court denied appellants’ motion for sum-
mary judgment and exercised its discretion to grant sum-
mary judgment for appellee who had not filed a cross-
motion.

Consumers Union and Edward Gorin filed a direct ap-
peal to this Court challenging the district court’s decision
upholding Section 268. Ira Furman did not appeal, and no
appeal was taken from the decision upholding Section 266.
This Court vacated the district court judgment and
remanded for further consideration in light of Hicklin v.
Orbeck, 437 U.S. 518 (1978), a decision made four days
prior to the remand. No mention was made in the remand
order of Baldwin v. Fish and Game Commission of Mon-
lana, 436 U.S. 371 (1978), a decision ,made one month
prior to Hicklin.

On remand, appellants again moved for summary judg-
ment on September 13, 1978. At the request of the court,
the parties tried and were successful in reaching a stipula-
tion of facts and joint appendix. Appellee then filed a
cross-motion for summary judgment, and briefing was
completed. Oral argument was heard on September 17,
1979. The court reaffirmed its earlier ruling, upholding the
constitutionality of Section 268 by a decision filed on
August 14, 1980.

The New York State Association of Life Underwriters
filed an amicus curiae brief in support of the geographical
limitation. The Federal Trade Commission also submitted
an amicus curiae brief setting forth the findings of its
study of industrial life insurance.* The Commission did
not take a position on the legal issue or align itself with
either party.

8See ante footnote 7.

8
Se The Three-Judge Court’s Opinions

The first district court opinion rejected appellants’
Privileges and Immunities Clause challenge on the
grounds that valid independent reasons justified the
discrimination. 427 F.Supp. 840 (S.D.M.Y. 1977). The
district court found that there would be unspecified
“harmful effects of nationwide SBLI sales” and a “threat
lo traditional banking functions that sales to persons
without a nexus to the state (work or residence) would
create.” /d. at 846. Under the district court’s analysis, the
geographical limitation failed “in privileges and im-
munities terms, to place a burden or penalty on out-of-
state citizens for the benefit of in-state citizens.” /d. at
846.

On remand, the district court never reached an analysis
of Hicklin v. Orbeck, 437 U.S. 518 (1978), as ordered by
this Court. Instead, the court found that the geographical
limitation did not infringe a “fundamental” right under
Baldwin v. Fish and Game Commission of Montana, 436
U.S. 371 (1978). App. 14a. SBLI was deemed a “legislatively
created, non-state subsidized, social welfare program.”
App. I5a. As a state “resource,” New York was free to
limit SBLI’s sale to New York residents, as set forth in the
dissent in Sa/lla v. County of Monroe, 48 N.Y.2d 514, 399
N.E.2d 909 (1980), cert. denied sub noin. Abrams v. Salla,
100 S. Ct. 1836 (1980). /bid.

To bolster this conclusion, the court relied upon Hughes
v. Alexandria Scrap Corp., 426 U.S. 794 (1976) and
Reeves, Inc. v. Stake, 100 S.Ct. 2271 (1980), where states
had entered the markets for the purchase of automobile
hulks and the production of cement, respectively.
Although New York had not entered the life insurance
market, the court viewed New York as the creator of
SBLI. /bid. The court found that in this circumstance,

9

cumstance, Alexandria Scrap “suggest[ed] a growing
judicial solicitude for efforts by states to protect the...
needs of their residents .. .” App. 16a-17a.

The Reeves decision was found instructive in two
respects. Relying upon this Court’s finding that South
Dakota did not possess unique access to the materials
needed to produce cement, 100 S.Ct. at 2281, the district
court found that “each state is free to create its own SBLI
in ‘a condition of plentitude’ and each state’s SBLI pro-
gram operates without disadvantaging any other state’s
program...” App. 18a. Thus, the district court conclud-
ed that nonresident consumers should petition their own
state legislators to create “a form of low cost high quality
industrial life insurance. App. 19a.

In further reliance on Reeves, the district court found
that SBLI was “social insurance” designed to protect the
wage-earner and that it “was a legislatively created alter-
native to commercial industrial life insurance which was
designated to eradicate certain perceived social evils.”
App. 20a, 22a. Citing this Court’s statement in Reeves that
voiding South Dakota’s resident only policy “would in-
terfere significantly with a state’s ability to structure rela-
tions exclusively with its own citizens,” 100 S.Ct. at
2279-2280, the district court found that the sale of SBLI
was properly limited to those who were the “appropriate
objects of New York’s legislative concern.” App. 22a.

Thus, the district court upheld the constitutionality of
Section 268, denied appellant’s motion for summary judg-
ment and granted appellee’s cross-motion for summary
judgment.

10

ARGUMENT

Banking Law § 268 denies most nonresidents of New
York an excellent life insurance product, as well as the
benefits of competition which this insurance would provide
to other life insurers. Both the Privileges and Immunities
clause and the Commerce Clause were designed to assure
individuals and businesses access to the goods and services
of all states and to foster competition which would serve to
protect consumers nationwide. The geographical limitation
strikes at the very heart of these purposes.

Further, by ruling that discrimination in the life in-
surance market does not touch upon a fundamental right,
the district court has potentially eliminated almost every
consumer product from consideration under the Privileges
and Immunities Clause. By ruling that New York
“created” SBLI when it authorized its sale, the district
court has suggested that discrimination against
nonresidents is broadly permitted in regulated industries.
This Court should grant plenary review due to the poten-
tially broad impact of this decision on markets for con-
sumer products, particularly on the market for life in-
surance.

New York permits nonresidents to purchase the high
priced and highly criticized industrial life insurance, as
well as every other form of life insurance except its best
product, savings bank life insurance. This discrimination
violates nonresidents’ basic right of free access to trade
which has been consistently associated with the Privileges
and Immunities Clause. The Chief Justice noted while
concurring in Baldwin v. Fish and Game Commission of
Montana, 436 U.S. 371, 394 (1978), that, “The Clause
assures noncitizens the opportunity to purchase goods and
services on the same basis as citizens . . .” See also, Doe v.
Bolton, 410 U.S. 179 (1973). Cf. Toomer v. Witsell, 334

U.S. 385 (1948). This right has been repeatedly
enumerated as a fundamental right. Hicklin v. Orbeck,
437 U.S. 518, 524 (1978); Ward v. Maryland, 12 Wall.
418, 439 (1870) (“right . . . to acquire personal property”);
Paul v. Virginia, 8 Wall. 168, 180 (1868) (“acquisition and
enjoyment of property”); Corfield v. Coryell, 6 Fed. Cas.
546, 552 (No. 3230 (CCED Pa. 1825) ) (“the right to ac-
quire and possess property of every kind”). The Fourth
Article of Confederation from which the Privileges and
Immunities Clause was derived guaranteed nonresidents
“all the privileges of trade and commerce... .” Austin v.
New Hampshire, 420 U.S. 656, 660 (1975).

If discrimination in the market for life insurance does
not touch upon a fundamental right, then few consumer
products could meet the Ba/dwin test. In 1977, 86 percent
of American families owned life insurance. The average
policy was $36,900. $2,583 billion in life insurance was in
force and $367 billion was sold in that year. Premium in-
come was $33 billion.’ Very few goods or services are as
widely purchased by consumers in all economic strata as
life insurance.

Even in limiting the market to SBLI, the fundamental
right test should be met. In 1977, approximately $6.8
billion of New York SBLI was in force and approximately
$965.8 million was sold in that year. Stip. ¢ 38. In 1974,
New York SBLI ranked 70th in insurance in force out of a
total of 1800 life insurers in the United States, and it rank-
ed 6th in the sale of individual life insurance policies
among the 114 life insurers doing business in New York.
Ibid.

Thus, the district court has erred in analogizing SBLI to
the elk hunting in Baldwin. Baldwin involves a luxury

%American Council of Life Insurance, Life Insurance Fact Book,
1978, 7-9 (1979).

12

sport which is available to only a few wealthy individuals
even without price discrimination. That discrimination
hinders few, if any, from hunting. Yet, the licensing fee is
part of a regulatory scheme to protect a scarce natural
resource, a subject matter over which the states have tradi-
tionally had broad discretion. By contrast, the
geographical limitation infringes upon the right to free
trade which has consistently been found to be “fundamen-
tal.” Further, life insurance is considered a necessity by
many consumers and involves billions of dollars of com-
merce each year. By failing to distinguish Baldwin, the
district court has suggested a broad expansion of its scope
which could serve to undermine the protection provided
by the Privileges and Immunities Clause.

This district court, however, considered SBLI’s origins
as excluding it from the scope of the Privileges and Im-
munities Clause. The gist of the district court’s analysis
can be found in its description of SBLI as “a legislatively
created, non-state subsidized, social welfare program.”
App. 15a. In the district court’s view, New York “created”
SBLI and, therefore, can limit its sale to the “appropriate
objects of New York’s legislative concern.” App. 22a.

Despite its unique history, New York “created” SBLI
only to the extent it “created” all forms of insurance, by
authorizing its sale. As stated by Theodore Fuller, Presi-
dent of the Savings Bank Life Insurance Fund:

What is Savings Bank Life Insurance? It is
regular legal reserve life insurance sold by sav-
ings banks... .!°

Statement of Theodore Fuller, President, Savings Bank Life In-
surance Fund, New York, New York before the Senate Subcommittee
on Antitrust and Monopoly, hearings on competition in life in-
surance, February 21, 1973. Stip. 4 8. Def. Exh. B.

13

Through Banking Law, Art. VI-A, New York has
authorized savings banks to enter the “business of life in-
surance.” Banking Law § 263. Tiie insurance is actually
created in private contracts between the insurer and the in-
sured. Stip. § 11. The policies are of the same kind as
policies sold by other insurers. Stip. 44 44, 45. The savings
banks bear the entire cost of its sale and pay all policy pro-
ceeds. The profits are retained by the savings banks. Stip.
4 32. The regulation of the savings banks is designed to be
as close as practicable to the regulation of other insurers.
Stip. 44 30-33. See Historical Note to Banking Law § 270.
New York Savings Bank v. Joseph, 118 N.Y.S.2d 893, 281
App. Div. 815 (1953) (savings banks taxed as mutual in-
surance companies).

The district court’s reliance on Hughes v. Alexandria
Scrap, 426 U.S. 794 (1976) and Reeves, Inc. v. Stake, 100
S.Ct. 2271 (1980) to support its “creation” theory is
misplaced. In both cases, the states using taxpayer funds
entered the markets for the products at issue. New York
has not entered the market for life insurance. The district
court found that the insurance is “non-state subsidized.”
App. 15a. New York has simply authorized savings
banks to sell life insurance and has established a
regulatory structure for its sale. Banking Law § 270 ex-
plicitly prohibits the use of state funds to support these
sales. In Reeves, this Court said that, “The basic distinc-
tion drawn in Alexandria Scrap between States as market
participants and States as market regulators makes good
sense and sound law.” 100 S.Ct. at 2277. The district court
has failed to make this distiction.

Yet, the Court has considered this distinction to be ex-
tremely important. Under the Commerce Clause, “a vir-
tual per se rule” of invalidity exists for statutes that at-
tempt to prevent goods and services from crossing states
lines. Philadelphia v. New Jersey, 437 U.S. 617, 624

14

(1978). This Court has consistently struck down state
statutes which embargo the export of products. See, e.g.,
Hughes v. Oklahoma, 441 U.S. 322 (1979) (natural min-
nows); Pike v. Bruce Church, Inc., 397 U.S. 137 (1970)
(unprocessed cantalopes); H. P. Hood & Sons, Inc. v. Du-
Mond, 336 U.S. 525 (1949) (milk). Similar harsh treatment
has faced importation bans. See, e.g., Philadelphia v. New
Jersey, supra; Great Atlantic & Pacific Tea Company,
Inc. v. Cottrell, 424 U.S. 366 (1976) (milk).

Similarly, under the Privileges and Immunities Clause,
the Court has sought to prevent limitations on the flow of
goods and services by prohibiting discrimination against
nonresidents in the general economy of the states. The
Court has authorized discriminatory taxes and fees against
nonresidents to equalize the benefits and burdens of state-
funded activities. E.g., Travellers’ Insurance Co. v. Con-
necticut, 185 U.S. 364 (1902). See also, American Coin-
muter Ass’n v. Levitt, 279 F.Supp. 40 (S.D.N.Y. 1967),
aff'd, 405 F.2d. 1148 (2d Cir. 1969). However, when these
taxes and fees have gone beyond equalizers and have
discriminated against nonresidents, they have been struck
down. Austin v. New Hampshire, 420 U.S. 656 (1975);
Toomer v. Witsell, 334 U.S. 385 (1948). The Court has
never permitted the type of discrimination found in this
case where the residents make no special contribution to
SBLI and, therefore, can limit its sale to the “appropriate
objects of New York’s legislative concern.” App. 22a.

The district court has suggested that there is no
discrimination in the geographical limitation because New
York cannot prevent other state legislatures from enacting
an SBLI statute. App. 18a. However, this argument was
specifically rejected by this Court in Austin v. New Hamp-
shire, supra and Travis. v. Yale & Towne Mfg. Co., 252
U.S. 60 (1920). In both cases, nonresident income taxes
were being challenged under the Privileges and Immunities

15

Clause. Both states argued that the resident states of the
plaintiffs could eliminate the discrimination by enacting
similar taxing statutes. The Court rejected this argument,
and in Austin said:

_. . the constitutionality of one State’s statute af-
fecting nonresidents [cannot] depend upon the
present configuration of the statute of another
stale.
Id. 420 U.S. at 668. ven if other states enacted SBLI,
there still would be discrimination in the New York
market, and no guarantee that the SBLI sold would be as
inexpensive as New York SBLI.

The district court opinion implies that expanding the
availability of SBLI will undermine a New York “social
welfare program.” App. 20a-22a. However, the appellee
has not argued — and nothing in the record suggests —
that lifting the geographical limitation will impair the
SBLI system or limit the amount of insurance available to
New Yorkers. In tact, the district court found that SBLI is
created in a “condition of plentitude.” App. 18a. Further,
a basic tenet of insurance economics is that an insurance
system is made safer by expanding the base of the risks.!!

Expanding the availability of SBLI is likely to increase
competition in the insurance markets and possibly force
other insurers to lower their prices in order to compete.
Rather than denying New Yorkers benefits, the expansion
of SBLI may create greater benefits by making a wider
variety of inexpensive insurance available. The Commerce
Clause and the Privileges and Immunities Clause were
conceived, at least in part, to encourage nationwide com-
petition. See, Hick/lin \. Orbeck, 437 U.S. at 525; Great

''§.S. Huebner & Kenneth Black, Jr., Life Insurance, 3-7 (8th Ed.
1972).

16

Atlantic & Pacific Tea Company, Inc. v. Cottrell, 424
U.S. 366 (1976); //. P. Hood & Sons, Inc. v. DuMond,
366 U.S. 525, 539 (1949). In fact, it was the salutary ef-
fects of competition which prompted Mr. Brandeis to pro-
pose SBLI. Stip. 4 19.

Thus, Banking Liaw Art. VI-A is a business regulation
which through Section 268 discriminates against nonresi-
dent consumers. If the district court is correct, New York
or any other state could similarly restrict the sale of any
form of insurance to its residents and significantly
decrease the competition which protects all consumers.
The district court’s finding that Section 268 does not infr-
inge upon a fundamental right, therefore, cannot be sus-
tained.

Further, when reaching Hicklin v. Orbeck, 437 U.S. 518
(1978), as originally ordered by this Court, the purported
justifications for the discrimination do not support the
severe discrimination in Section 268. In its first opinion,
the district court found that the geographical limitation
was adopted as a means (1) to limit the life insurance
business of savings banks, (2) to provide a benefit to those
with an economic nevus to the state, and (3) to preserve
the local character of savings banks. 427 F.Supp. at 844,
845-846. On remand, the appellee tried to bolster its case
with two additional justifications: (4) to avoid a nation-
wide market for SBL.1, and (5) to allocate competition bet-
ween savings banks and other insurers in the interstate
sales of life insurance.

Under Hicklin, discrimination against nonresidents can
be justified only when nonresidents are the “peculiar
source of the evil” at which the legislation is addressed,
437 U.S. at 525, and even assuming that they “cause or ex-
acerbate” the problem, the solution must bear a

17

“reasonable relationship between the danger represented
by nonresidents as a chiss and the... discriminations
practiced against them.” //. at 526.

The “evil” which SBI was enacted to combat was the
abuses in the sale of industrial life insurance. Stip.
44 14-21. Rather than being among the “peculiar source of
the evil,” nonresidents of New York are among the injured
class. The “evil” at which the geographical limitation is
directed is unclear. The levislative history to Banking Law,
Art. VI-A does not provide any reasons for the enactment
of this limitation. There also is no evidence that the limita-
tion was contained in Brandeis’ original proposal. Further,
Harry Albright, as Superintendent of Banks, stipulated
that he did not know any reasons for the limitation. Stip.
q 43.

On its face, the geographical limitation appears simply
to be a means of limiting the competition which savings
bank could provide to other insurers. The limitation ap-
pears to provide no apparent benefit to residents of New
York since there is no limit on the amount of life insurance
a savings bank can sell. On the other hand, Section 268 ap-
pears to limit the taxes which New York would collect
from expanded sales. While the parties have no accepted
basis for estimating ‘he untapped demand, Stip. 4 42, on
each occasion when the policy ceiling has been raised, a
sharp increase in sales has tollowed.'? Further, New York
residents are denied potential benefits which added com-
petiton in the insurance markets could provide from out-
of-state insurers.

Apparently for the purpose of this suit, New York has
conjured up six purported evils to justify the harsh
discrimination in Section 268. None of the purported evils

'2See Answers of Theodore Fuller to Plaintiffs’ Interrogatories, No.
15. Pltfs. Exh. 1.

18

are uniquely caused by nonresidents, and the total ban on-
sales to nonresidents certainly is not in proportion to their
contribution to these so-called evils.

Specifically, nonresidents are not a potential unique
source for an imbalance between savings and insurance
business in savings banks. The same imbalance could be
caused by the insurance business from New York
residents. Further, other means to this end, like the
$30,000 policy ceiling, do not infringe upon nonresident
rights.

The purpose to provide a benefit for those with an
economic nexus to the state is not undermined by permit-
ting sales to nonresidents, since SBLI is not a limited
resource. App 18a. Further, if this justification were suf-
ficient, almost any discrimination against nonresidents
could be justified since almost all statutes that
discriminate against nonresidents benefit residents, direct-
ly or indirectly. Brown v. Anderson, 202 F. Supp. 96 (D.
Alaska 1962). The Privileges and Immunities Clause was
intended to eliminate “the practice of some States denying
to outlanders the treatment that its citizens demanded for
themselves...” Austin v. New Hampshire, 420 U.S. supra
at 660-661.

The purpose to preserve the local character of savings
banks appears to be particularly contrived. No such goal is
listed in the Declaration of Policy, Banking Law § 10, and
no other provision of the statute appears to be aimed at
that goal. The same justification recently was rejected by
this Court in Lewis v. BT Investment Managers, Inc., 100
S.Ct. 2009, 2019 (1980).

The purpose to avoid a nationwide market for SBLI is a
statement of “economic Balkanization” which is contrary
to the purposes of the Privileges and Immunities Clause
and the Commerce Clause. Hughes v. Oklahoma, 441

19

U.S. supra at 325. A state cannot “overtly [block] the flow
of interest commerce at its borders.” Philadelphia v. New
Jersey, 437 U.S. supra at 624. Further, no harmful effect
of a nationwide market has been explained by appellee.

Finally as a means to allocate competition, the
geographical limitation does not meet the Hicklin test.
Consumers are entitled to be protected by the competition
among insurance companies. Nonresidents do not present
a “peculiar evil” justifying interference with vigorous com-
petitoin, Allocation of markets cannot be accomplished at
nonresidents’ expenses.

Thus, the geographical limitation infringes upon a fun-
damental right of free access to trade which is protected
under the Privileges and Immunities Clause and the Com-
merce Clause. This infringement cannot be justified under
the analysis in Hicklin v.Orbeck, supra, and therefore the
limitation should be declared unconstitutional.

20

CONCLUSION

The foregoing considered, this Court should note pro-
bable jurisdiction because of the potentially broad impact
of the district court’s decision on markets for consumer
products, particularly the insurance market.

Respectfully submitted,

MARF A. CYMROT
ALAN MARK SILBERGELD
(Counsel of Record)
1511 K Street, N.W.
Suite 1033
Washington, D.C. 20005
(202) 724-7203

KARPATKIN, POLLET, DEILIBERT
& BEIL
5 East 43 Street
New York, New York 10017
Attorneys for Appellants

21

CERTIFICATE OF SERVICE

I hereby certify that three copies of appellants’ Jurisdic-
tional Statement were served by deposit in a U.S. post of-
fice box for first class mail, with postage prepaid, upon
counsel for all of the parties required to be served: Judith
A. Gordon, Asst. Attorney General, 2 World Trade
Center, New York, N.Y. 10047; Henry Mark Holzer, Ben-
nett, Ayervas & Bertrand, 70 Pine Street, New York, N.Y.
10005; Stephen H. Meyer, Federal Trade Commission,
Bureau of Consumer Protection, Washington, D.C.
20580, on the 17th day of November 1980, in accordance
with the provisions of Rule 28.

Alan Mark Silbergeld

la

APPENDIX A

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

CONSUMERS UNION OF
UNITED STATES, INC. and
EDWARD J. GORIN,
74 Civ. 234 (LPG)
Plaintiffs,

— against — OPINION

MURIEL SIEBERT,
Superintendent of Banks
of the State of New York,
Defendants.

6 es | a = + ee ween en ne: ee + ee

APPEARANCES

MARK A. CYMROT

ALAN MARK SILBERGELD
Attorneys for Plaintiffs

1714 Massachusetts Avenue, N.W.
Washington, D.C. 20036

JOHN LE MOULT, ESQ.
KARPATKIN, POLLET & LE MOULT
1345 Avenue of the Americas

New York, N.Y., 10019

Of Counsel

2a

ROBERT ABRAMS
Attorney General of the State
of New York

Attorney for Defendant

Two World Trade Center
New York, N.Y. 10047

JUDITH A. GORDON, ESQ.
Assistant Attorney General
Of Counsel

BENNETT, AYERVAIS

& BERTRAND, ESQS.
Attorneys for Amicus Curiae
70 Pine Street

New York, N.Y. 10005

HENRY MARK HOLZER, ESQ.
Of Counsel

Before VAN GRAAFEILAND, Circuit Judge, and
GAGLIARDI and KNAPP, District Judges

GAGLIARDI, District Judge

Plaintiffs, Consumers Union of the [sic] United States, |
Inc. (“Consumers Union”), a New York non-profit corpora-
tion, Edward J. Gorin, an individual who both resides and
regularly works in New Jersey, and Ira J. Furman, an in-
dividual, who resides in New Jersey but regularly works in
New York, commenced this lawsuit against the
Superintendent of Banks of the State of New York' to en-
join the enforcement of Sections 266 and 268 of New
York’s Banking Law, N.Y. Bank Law §§ 266 & 268
(McKinney 1971), on the ground that the statutes violate
various provisions of the state and federal constitutions.

'Muriel Siebert was substituted for John G. Heiman as defendant
pursuant to Rule 25(d), Fed. R. Civ. P.

3a

Article VI-A of the New York Banking Law authorizes
any savings bank in New York to sell life insurance (“sav-
ings bank life insurance” or “SBLI”) and establishes a pro-
gram to regulate its sale. Section 266 limits the maximum
policy that may be issued to $30,000 (“the policy limita-
tion”) and Section 268 limits the sale of SBLI to residents
of New York or persons who work regularly in New York
(“the geographical limitation”).2 By opinion dated
February 27, 1977, this three judge court’ upheld the con-
stitutionality of these statutes against a variety of constitu-
tional challenges‘, denied plaintiffs’ motion for summary
judgment and entered judgment for the defendant pur-
suant to Rule 54 (c), Fed. R. Civ. P. Consumers Union
Inc. v. Albright, 427 F. Supp. 840 (S.D.N.Y. 1977). Plain-
tiffs Consumers Union and Edward Gorin appealed to the
Supreme Court that portion of the judgment upholding
the constitutionality of Section 268.5 On June 26, 1978,
the Supreme Court vacated the judgment of this court and
remanded the case “for further consideration in light of
Hicklin v. Orbeck, 437 U.S. 518 (1978),” an Article IV
privileges and immunities clause case decided four days
earlier. Consumers Union v. Heiman, 437 U.S. 901 (1978).
On remand, plaintiffs and defendant cross move for sum-

2Section 268 provides that “[n]o application for insurance shall be
accepted except from a resident of this state or a person working
regularly therein.

‘The Honorable Ellsworth A. Van Graafeiland was substituted for
the Honorable Paul R. Hays by order dated July 6, 1979.

‘By its previous decision, this court upheld the constitutionality of
Section 268 under (1) the equal protection clauses of the Federal and
New York State Constitutions, (2) the due process clause of the State
Constitution, (3) the commerce clause of the Federal Constitution,
and (4) the privileges and immunities clauses in Article IV and the
fourteenth amendment of the Federal Constitution.

‘Plaintiff Ira Furman, who challenged only the policy limitation set
forth in section 268, did not appeal.

4a

mary judgment pursuant to Rule 56, Fed. R. Civ. P. For
the reasons set forth below, this court adheres to its
previous decision and grants defendant’s motion for sum-
mary judgment.

Statement of Facts®

Commercial insurers, such as the Prudential Life In-
surance Company of America (“Prudential”) and
Metropolitan Life Insurance Company (“Metropolitan”),
have sold industrial life insurance since the 1870’s. Com-
mercial insurers have typically sold this type of life in-
surance in small face amounts (no more than $1,000) and
their agents have usually collected the weekly of bi-
monthly premiums at the policyholder’s home. Industrial
life insurance has been purchased usually by blue collar
wage earners for themselves and their dependents and has
been called “workingman’s insurance” for this reason.
Although commercial insurers other than Prudential and
Metropolitan began selling industrial life insurance in the
early portion of the twentieth century, Prudential and
Metropolitan were still writing seventy percent of the
$16.7 billion of the industrial life insurance policies in
force nationwide in 1939.

On September 5, 1905, a joint New York legislative com-
mittee, entitled the Armstrong Committee, commenced
a study of the then essentially unregulated commercial life
insurance industry in New York State. The Committee
found that “unchecked competition, particularly among

The Record before this court from which its factual recitation is
drawn consists of a stipulation entitled “Stipulation on Remand from
the Supreme Court of the United States” (hereinafter cited as “Stipula-
tion 4 ”), and a joint appendix consisting of plaintiffs’ and defen-
dant’s exhibits to the stipulation (hereinafter cited as “Joint App.”).
The stipulation expressly supersedes all Local Rule 9(g) statements
that had been previously filed in this action (Stipulation 46).

Sa

the large insurers that controlled the bulk of the business,
had produced a chaotic situation and permitted the
development of undesirable practices that were : -onsis-
tent with the public interest”. (Stipulation 414). The Com-
mittee found, infer alia, that commercial insurers earned
substantially higher profits from industrial life insurance
policies than from ordinary policies and that industrial life
insurance policyholders, compared to ordinary life in-
surance policyholders, paid higher premiums, obtained lit-
tle or no equity in their policies and held policies with
higher lapse rates.? The New York State Insurance Depart-
ment and various legislative committees made subsequent
studies of industrial life insurance between 1936 and 1939.
These studies, like the Armstrong Committee Report,
showed excessively high lapse rates for industrial life in-
surance policies and generally higher policy costs for in-
dustrial as compared with ordinary life insurance
policies. ®

’The parties agree that:

[a]pproximately 58% of industrial life policies lapsed in
the first three years they were in force compared with 42%
of ordinary life policies. Approximately one-third of in-
dustrial policies did not survive three months. Approx-
imately one-half did not survive one year. Industrially in-
sured individuals generally did not obtain equity in their
policies until the policies had been in force for five years.

(Stipulation 415).
‘Apparently very little has changed in the industry since 1939:

In January 1979, the Office of Policy and Planning of the
United States Federal Trade Commission issued a report
entitled “Life Insurance Sold to the Poor: Industrial and
Other Debit Insurance” that characterizes industrial
policies as expensive, having high lapse rates and affected
by questionable contract terms and selling practices when
compared to other (non-industrial) life insurance policies
now available.
(Stipulation 417).

6a

The New York legislature was not alone in its concern
about the undesirable practices occurring in connection
with the sale of industrial life insurance. In 1905,
policyholders of the Equitable Life Assurance Society
formed the Policyholders Protective Committee to in-
vestigate possible abuses in the management and ad-
ministration of that company and engaged Louis Brandeis
as its counsel. In 1907, Brandeis published an article in
The Albany Law Journal entitled “Savings Bank Life In-
surance for Wage Earners”.? After reviewing data regard-
ing such items as the cost and lapse rates of industrial life
insurance to both New York and Massachusetts “work-
ingmen”, Justice Brandeis concluded that:

[t]he extraordinary wastefulness of the present
system of industrial insurance is due in large part
to the fact that the business, whether conducted
by stock or by mutual companies is carried on
for the benefit of others than the policyholders.
...A life insurance company for workingmen
should, as to each policyholder, be conducted,
like a savings bank, as a benevolent institution.

(Joint App. 120-21). Brandeis proposed that “state
legislatures create an alternative form of insurance, ‘sav-
ings bank life insurance’, to be sold in competition with in-
dustrial policies through state chartered savings banks.”
(Stipulation $19). Savings banks, Brandeis contended,
were the type of institution “singularly conducive” to pro-
viding low cost, high quality life insurance to individuals
of moderate means since “the insurance department of
savings banks would open with an extensive and potent

91907 Albany Law Journal 50. Brandeis’ article refers to a similar
proposal made in 1865 by Elizur Wright. (Stipulation 410).

7a

goodwill. . . . The safety of the institution would be un-
questioned, and a small amount of advertising would soon
suffice to secure a reasonably large business without
solicitors.” (Joint App. 122). Indeed, the parties have
agreed that New York savings banks were organized prin-
cipally to provide working people with fiscally sound,
interest-bearing depositories for their savings and with
residential mortgages and loans to meet their personal and
family needs. Savings banks in the State “continue to be
known as thrift institutions because of their identification
with the economic transactions engaged in by people of
moderate means and their not-for-profit organizational
structure”. (Stipulation 4423, 24).

Massachusetts enacted SBLI legislation the same year in
which Brandeis published his article. New York, after un-
successful efforts to enact similar legislation in 1909 and
again in the early 1930's, finally did so in 1938. In 1941,
Connecticut became the third and presently the final state
to enact SBLI legislation.

New York’s law, codified at N.Y. Bank. Law §261 ef.
seq. (McKinney 1941), authorizes State chartered savings
banks to elect to establish separate insurance departments
for the purpose of selling SBLI policies.'° These depart-
ments are entitled to conduct the business of insurance
“with all the rights, powers, . . . duties, . . . and restrictions
relating to domestic legal reserve life insurance companies
conferred or imposed by the insurance law” so far as those
rights and duties are not in conflict with the State’s bank-
ing law. N.Y. Bank. Law §263 (McKinney 1971). A 1940

‘As of December 31, 1977, sixty-eight of New York’s 115 savings
banks had elected to establish insurance departments. Forty-four
other savings banks and insurance banks are agents for the sixty-eight
issuing banks. (Stipulation 426).

8a

amendment to the statutory scheme provided for the crea-
tion of the New York Savings Bank Life Insurance Fund
(“The Fund”). The Fund, acting in a fashion similar to the
home office of a life insurance company, provides par-
ticipating savings banks with a host of technical life in-
surance services. The Fund, inter alia, (1) establishes
uniform terms and conditions, including all health and ac-
ceptability standards, for the SBLI policies, (2) prescribes
the exclusive “standard form” policy and furnishes the in-
dividual insurance departments with application forms
and schedules, (3) fixes uniform premiums, annuity rates,
loan values and surrender charges, (4) provides all ac-
tuarial, underwriting and medical services, (5) approves
the issuance of every policy and the payment of every
claim and (6) handles all accounting, billing and advertis-
ing. N.Y. Bank. Law § 271 (McKinney 1971). (See also
Stipulation 428). The Fund obtains revenues from
assessments against and contributions from participating
savings banks as well as from its own investments. Not-
withstanding the variety of functions that the Fund per-
forms, each insurance department continues to own the
policies that it sells in much the same way that any other
insurance company owns its policies. Significantly, neither
the Fund nor any other aspect of the SBLI program can be
subsidized by “. . . public funds, moneys of the state or
under state control or subject to audit by the state comp-
troller.” N.Y. Bank. Law §270 (McKinney 1971).

New York SBLI insurers operate under three statutory
limitations. First, all policies must be sold by salaried bank
employees rather than commissioned insurance agents.
N.Y. Bank. Law §269 (McKinney 1971). Second, no in-
dividual policy can be issued in excess of $30,000 per risk.
N.Y. Bank. Law §266 (McKinney 1971). And finally, “[nJo
application for insurance shall be accepted except from a
resident of [New York State] or a person working regular-

9a

ly therein.” N.Y. Bank. Law §268 (McKinney 1971). By
resolution dated April 12, 1957, the Board of Trustees of
the Fund construed this provision, which has counterparts
in both the Massachusetts and Connecticut SBLI legisla-
tion, as restricting “the sale of SBLI to (1) natural persons
who live or regularly work in New York who insure
themselves or persons with respect to whom they have an
insurance interest . .. ; and (2) New York corporations,
foreign corporations with their principal place of business
in New York and unincorporated associations with their
principal place of business in New York if they qualify for
and purchase group policies.” (Stipulation 441).”'' The
geographic limitation embodied in Section 268 was part of
the original New York SBLI law. The act’s legislative
history, although it discusses the purposes of SBLI at
some length, fails to mention this provision directly.

Notwithstanding the geographic restriction on the sale
of New York SBLI, approximately $6.8 billion of SBLI
was in force in New York State in 1977. (Stipulation 438).
In 1970, New York SBLI ranked 104th in amount of in-
surance in force out of a total of 1800 commercial and
SBLI insurers in the United States. In 1971, New York
SBLI’s rank was 87th and by 1974, it moved up to 70th.
(/d.) The reason for New York SBLI’s popularity is ap-
parent. The parties agree that while “there is no difference
between New York SBLI policies and commercial life [in-
surance] policies with respect to reliability, quality or
customer satisfaction” (stipulation 445), there is a signifi-
cani difference in price. Simply put, New York SBLI is
one of the best buys in life insurance. Best Reports, an
authoritative publication on the characteristics of life in-
surance, has established various categories for the net cost

''The parties also agree that “[pJolicyholders may retain New York
SBLI if, subsequent to purchase, they move away from the state or no
longer regularly work in the state.” (Stipulation 441).

19a

of life insurance policies to policyholders. Of the ninety-
eight insurers licensed to do business in New York for
which Best’s ratings are both available and applicable,
twenty-five, including SBLI, received the most favorable
rating of “remarkably low”. Of 619 insurers doing
business nationwide in 1973, Best gave this rating to only
forty-six. New York SBLI was also rated as one of seven
insurers licensed to do business in New York whose lapse
rate received the “most favorable” rating. Only nineteen of
the over six hundred insurers doing business nationwide in
1973 received a comparable rating. The relatively low cost
of New York SBLI policies has been said to be attributable
to (1) sales by salaried bank employees, rather than com-
missioned agents, (2) relatively low lapse rates, (3) possible
expense and federal tax advantages occasioned by the
structure and operation of the insurance departments
within participating savings banks and (4) favorable yields
on investments. !?

Discussion

As a threshhold matter, we note that although the
Supreme Court remanded this case “in light of Hicklin vy.
Orbeck, 437 U.S. 518 (1978),” lower federal courts are
obligated “to consider any change, either in fact or law,
which has supervened since the original judgment was

'2Insurance departments of savings banks are subject to the same
tax obligations as commercial insurers. (Stipulation 432). Although
the investments made by insurance departments of savings banks are
governed by N.Y. Bank. Law §235, as opposed to the provisions ap-
plicable to the investments of commercial insurers, see N.Y. Ins. Law
§§ 46-a, 79, 81-84, the resulting differences “do not provide an in-
herent advantage to either of the two insurer groups over the other.”
(Stipulation 433). Over the past five years, SBLI insurers have earned
1/2% higher return on investments than the average of all commercial
life insurers. (/d.)

lla

entered.” See, e.g., Baird v. Benton County Board of
Education, 421 F.2d 700, 701 (Sth Cir. 1970) citing Bell v.
Maryland, 378 U.S. 226 (1964). A month prior to render-
ing the decision in Hicklin, the Supreme Court decided
Baldwin v. Montana Fish & Game Commission, 436 U.S.
371 (1978), which, like Hicklin, involved an Article IV
privileges and immunities clause challenge to a state
statute. Accordingly, our reconsideration of the constitu-
tionality of Section 268 of New York’s Banking Law is, as
the parties have assumed, in light of the teachings of both
Hicklin and Baldwin."

In Baldwin, non-resident hunters challenged the con-
stitutionality of a Montana statute under which they were
charged seven and one-half times as much as were Mon-
tana residents for the privilege of hunting elk and other
animals in the state. The Supreme Court, in an opinion
authored by Justice Blackmun, upheld the statute on the
ground that the interest asserted by the plaintiffs was not
protected by the privileges and immunities clause. The
Court reasoned:

Some distinctions between residents and non-
residents merely reflect the fact that this is a Na-
tion composed of individual States, and are per-
mitted; other distinctions are prohibited because
they hinder the formation, the purpose, or the
development of a single Union of those States.
Only with respect to those “privileges” and “im-
munities” bearing upon the vitality of the Nation

'SAlthough much of our discussion may be applicable to both plain-
\iffs’ commerce clauses and Article IV privileges and immunities
clause arguments, see pp. 14-15, infra citing inter alia Hicklin v.
Orbeck, 437 U.S. at 531-32, we consider the Supreme Court’s remand
to be directed at plaintiffs’ privileges and immunities clause challenge
since Hicklin, and for that matter Ba/dwin as well, did not involve a
commerce clause challenge to the statute there under attack.

12a

as asi le entity must the State treat all citizens,
resident and nonresident, equally.

Id. at 383. The Court concluded that equal access to hunt
Montana elk for recreational purposes, unlike the right to
practice one’s livelihood or to institute actions in the
courts of any state, was not a “fundamental” right and
thus was outside the scope of the privileges and immunities
clause. /d. at 389.

Hicklin v. Orbeck presented the Court with a somewhat
different issue. In Hicklin, plaintiffs challenged the con-
stitutionality of the Alaska Hire statute which required
employers to give an absolute preference to Alaska
residents for all jobs which resulted in any way from
Alaska’s decision to develop its oil and gas resources. The
Court, in a unanimous opinion by Justice Brennan, had
little difficulty with the issue of whether or not access to
employment opportunities was a protected activity under
the privileges and immunities clause. It held that plaintiffs’
appeal to the protection of the clause was “strongly sup-
ported by [the] court’s decisions holding violative of the
Clause State discrimination against nonresidents seeking
to ply their trade, practice their occupation, or pursue a
common calling within the State.” Hicklin v. Orbeck,
supra, 437 U.S. at 524. The Court, went on to declare the
statute unconstitutional because it did not satisfy the two-
prong standard first enunciated in Toomer v. Witsell, 334
U.S. 385 (1948) in that (1) there was no showing that
nonresidents were “a peculiar source of the evil” that the
statute was enacted to remedy, and (2) the discrimination
against nonresidents did not bear a “substantial relation-
ship” to the problem they allegedly presented. /d. at
526-27.'4

'4Although this language appeared in Toomer, the Toomer court
also stated, as this court noted in its previous opinion, that the clause:

13a

Baldwin and Hicklin when read together, as we believe
they must be, create a two-tier mode of analysis for resolv-
ing whether or not a statute withstands scrutiny under the
inter-state privileges and immunities clause. See generally
The Supreme Court, 1977 Term, 92 Harv. L. Rev. 57,
75-86, Salla v. County of Monroe, 48 N.Y.2d 518; 423
N.Y.S.2d 878, 399 N.E.2d 909 (1979) (U.S. appeal pend-
ing). The first step requires determining whether the right
that nonresidents are prohibited from exercising is so
“basic” or “fundamental” that interference with it “would
frustrate the purposes of the formation of the Union. . .”
Baldwin v. Montana Fish & Game Commission, supra,
436 U.S. at 387. If such a protected activity is found, the
second step involves analyzing that activity under the
“peculiar evil” and “substantial relation” tests employed in
Hicklin. This two-prong standard embodies the competing
concerns of the privileges and immunities clause: a
recognition that federalism presumes an area within which
States may legislate with little judicial oversight and the
need to remove from citizens of each state “the disabilities
of alienage of other States” when important individual
rights are involved. See Baldwin v. Montana Fish & Game
Commission, supra, 436 U.S. at 380-81 & n.19 quoting

does not preclude disparity of treatment in the many situa-
tions where there are perfectly valid independent reasons
for it. Thus the inquiry in each case must be concerned
with whether such reasons do exist and whether the degree
of discrimination bears a close relation to them. The in-
quiry must also, of course, be conducted with due regard
for the principle that the States should have considerable
leeway in analysing local evils and in prescribing ap-
propriate cures.

Consumers Union Inc. v. Albright, 427 F. Supp. at 845 citing Toomer
v. Witsell, 334 U.S. at 396 (footnotes omitted). See also note 20, in-
Sra.

14a

Paul v. Virginia; see also The Supreme Court, 1977 term,
92 Harv. L. Rev. 57, 80-81 (1978).

Our initial question therefore is whether New York’s
decision to make New York SBLI available only to in-
dividuals who live or work in the State threatens a basic or
fundamental right essential to the well-being of the Union.
“Merely to ask the question seems to provide the answer.”
Baldwin v. Montana Fish & Game Comunission, 436 U.S.
at 388. The right of equal access to a particular type of life
insurance simply is not comparable to such rights as the
right to practice one’s livelihood, Mullaney v. Anderson,
342 U.S. 415 (1952), Toomer v. Witsell, 334 U.S. 385
(1948), Ward v. Maryland, 12 Wall. 418 (1870), the right
to own and dispose of private property, Blake v. Mc-
Clung, 172 U.S. 239 (1898), or the right to institute and
maintain actions in courts of a state, Canadian Northern
R. Co. v. Egger, 252 U.S. 553 (1920). See also Corfield v.
Corvell, 6 F. Cas. 546, 552 (No. 3,230) (CCED Pa. 1825).

Relying primarily on Chief Justice Burger’s concurring
opinion in Baldwin, plaintiffs argue that the right affected
by Section 268 of New York’s Banking Law falls within
the protected sphere of the privileges and immunities
clause because the clause “assures noncitizens the oppor-
tunity to purchase goods and services on the same basis as
citizens.” Baldwin v. Montana Fish & Game Commission,
436 U.S. at 394 (Burger, C.J., concurring).'* In continu-

'SPlaintiffs also rely upon broad dicta from Ward v. Maryland, 12
Wall. 418, 430 (1870) (“. .. the clause plainly and unmistakably
secures and protects the right of a citizen of one State to pass into any
other State of the Union. . . to acquire personal property. . .”); Paul
v. Virginia, 8 Wall. 168, 180 (1868) (“the clause was intended to pro-
vide nonresidents . . . the same freedom possessed by citizens of those
states in the acquisition and enjoyment of property”); and Corfield v.
Coryell, 6 F. Cas. 546, 552 (No. 3,230) (CCED Pa. 1825) (a state may
not interfere with the “right of a citizen of one state. . . to take, hold
and dispose of property, either real or personal . . .”).

15a

ing to explain the scope of the clause, the Chief Justice
stated that “it confers the same protection upon the buyer
of luxury goods and services as upon the buyer of bread.”
Id. While we have no quarrel with these general principles,
we would distort both their meaning and the delicate
balance of the federal system if we were to hold that the
type of “goods and services” that they envision includes
New York SBLI — a legislatively created, non-state sub-
sidized, social welfare program. In asserting that the right
of equal access to New York SBLI fits within the “basic”
or “fundamental” category, plaintiffs also rely on a series
of commerce clause cases which stand for the broad prop-
osition that “a State is without power to prevent privately
owned articles of trade from being shipped and sold in in-
terstate commerce on the ground that they are required to
satisfy local demands or because they are needed by the
people of the State.” Foster-Fountain Packing Co. v.
Haydel, 278 U.S. 1, 10 (1928); see also H.P. Hood & Sons,
Inc. v. Dumond, 336 U.S. 525, 539 (1949); Pennsylvania
v. West Virginia, 262 U.S. 553, 597 (1949); West v. Kansas
Natural Gas, 221 U.S. 229, 255 (1911). We believe,
however, that “[a]n entirely different question is presented

when a state seeks to preserve for the enjoy-
ment of its citizens a ‘resource’ it has created through its
own efforts.” Salla v. County of Monroe, 48 N.Y.2d at
527; 423 N.Y.S.2d at 885, 399 N.E.2d at 916 (Gabrielli, J.,
dissenting) citing L. Tribe, American Constitutional Law
[1979 Supp.] pp. 38-39; Baldwin v. Montana Fish & Game
Commission, supra.'®

'6In Salla, the New York Court of Appeals struck down a New
York statute which required the state, its subdivisions and contractors
in their employ to give an employment preference on all public works
projects to New York residents. Judge Gabrielli, writing for himself
and Judge Cooke, dissented and reasoned as follows:

While it is true that a state may not baldly exploit its
passive ownership of a resource by indirectly using it as a

l6a

In reaching this conclusion, we draw upon cases ad-
judicated under both the privileges and immunities clause
and the commerce clause since their “mutual reinforcing
relationship”, “common origin in Article IV or the Articies
of Confederation”, and “shared vision of federalism” have
been repeatedly noted. See e.g., Hicklin v. Orbeck, 437
U.S. at 531-32 citing Baldwin vy. Montana Fish & Gaine
Commission, 436 U.S. at 379-80; Austin v. New Hainp-
shire, 420 U.S. 656, 660-61 (1975). Some initial guidance is
offered by Hughes v. Alexandria Scrap Corp., 426 U.S.
794 (1976). There, the Supreme Court was confronted
with a Maryland statute in which the State agreed to pur-
chase crushed automobile hulks from scrap processors at
premium prices in order to remove abandoned vehicles
from the State’s roadways. Virginia scrap processors
claimed that Maryland violated the commerce clause by
effectively refusing to purchase hulks from out of state
processors. After recognizing that the case presented “a
situation. . . without precedent”, id. at 807, the Court
held that Maryland’s action was not “the kind of action
with which the commerce clause [was] concerned” because
the State had not interfered with the natural functioning
of the interstate hulk market but merely had entered that
market as a purchaser which chose to give its business to
in-state sellers. /d. at 806-08. While Alexandria Scrap is
admittedly distinguishable in many respects from the case
at bar, it, at a minimum, “suggests a growing judicial
solicitude for efforts by states to protect the. . . needs of

basis for requiring discrimination against nonresidents in
private hiring, nothing in Hicklin or the case preceding it
suggests that when a state has created a resource such as
job opportunities, it cannot direct that the resource be used
to the advantage of its own citizens.

Salla v. County of Monroe, 48 N.Y.2d at 529, 423 N.Y.S.2d at 886,
399 N.E.2d at 917.

17a

their residents...” L. Tribe, American Constitutional
Law 336, 337-38 (1978).

Most recently, in Reeves, Inc. v. Stake, 48 U.S.L.W.
4746 (June 17, 1980), a concrete distributor with its
facilities in Wyoming claimed that a South Dakota owned
and operated cement plant could not, in the face of in-
creased demands and limited supply, enact a policy “of
supplying all South Dakota customers first” and allocating
the remaining volume on a first-come first-served basis.
The Supreme Court disagreed. Reaffirming the holding of
Alexandria Scrap, the Court held that the commerce
clause did not forbid South Dakota, in the absence of con-
gressional action, from participating in the market and ex-
ercising its right to favor its own citizens. Reeves, Inc. v.
Stake, 48 U.S.L.W. at 4751.

The Reeves decision is instructive in two. salient

respects.'’ First, the petitioner in Reeves argued that “if a
state ... were allowed to hoard its commodities or

'’For the purposes for which this court relies on Reeves, we need
not reach the question of whether the State of New York became a
“participant” in the industrial life insurance market by merely
creating, and not itself purchasing or selling, a form of insurance. We
note, however, that SBLI, by providing an alternative to commercial
life insurance, both responded to a public need and altered market
patterns in the industry. At the Fifth Anniversary Dinner of Savings
Bank Life Insurance, the then Superintendent of Banks noted:

[t}wo of the insurance companies which were formerly very active in
writing industrial insurance have been relaxing their efforts in this
field since savings banks in the State began to write life insurance. The
number of their industrial policies in force declined about 2,000,000 in
the four years ended December 31, 1942. The gain in ordinary life
policies of these companies during the same period fell far short of
compensating for the reduction in the number of industrial policies.

(Joint App. 157). See also Salla v. County of Monroe, 48 N.Y. 2d at
526-27; 423 N.Y.S.2d at 884-85, 399 N.E.2d at 916 (1979) (Gabrielli,
J., dissenting).

18a

resources for use of their own residents only, . . . Penn-
sylvania or Wyoming might keep their coal, the northwest
its timber, and the mining states their minerals. The result
being that embargo may be retaliated by embargo and
commerce would be halted at state lines. /d. at 4750. See
also West v. Kansas Natural Gas Co., 221 U.S. at 255.
One of the grounds upon which the Supreme Court re-
jected this argument was that the petitioner had not
demonstrated that “South Dakota possesses unique access
to the materials needed to produce cement.” Reeves, /nc.
v. Stake, 48 U.S.L.W. at 4750. In the case at bar, plain-
tiffs similarly claim that Section 268 is unconstitutional
because New York, in effect, has embargoed the exporta-
tion of SBLI. Plaintiffs’ Brief at 16-17. This claim must be
rejected, as it was in Reeves, since New York hardly has
unique access to SBLI. As the defendant cogently argues,
each state is free to create its own SBLI in “a condition of
plentitude” and each state’s SBLI program operates
without disadvantaging any other state’s program.'* Cf.

'8 Austin v. New Hampshire, 420 U.S. 656 (1975), strenuously relied
upon by the plaintiffs, is inapposite. In Austin, Maine residents who
worked in New Hampshire challenged the New Hampshire income tax
system which taxed non-residents on the income they earned in New
Hampshire but did not levy any tax on the income earned by New
Hampshire residents. The State argued that the tax did not impose any
burden on the plaintiffs and thus did not violate the privileges and im-
munities clause because Maine awarded a tax credit to its residents for
income taxes paid to another state and in so doing shielded its
residents from the effects of the New Hampshire tax. In striking down
the statute, the Court held that Maine’s tax credit provision could not
cure the constitutional defect in New Hampshire’s statute because
Maine was at liberty, and in fact even encouraged, to retaliate against
New Hampshire by eliminating its credit provision for taxes paid to
that state. /d. at 666-67. Thus, the Court stated that “the constitu-
tionality of one State’s statute affecting non-residents [cannot] depend
upon the present configuration of the statute of another state.” /d. at
668. As this court noted in its previous opinion, “[t]he affirmative

19a

Hughes v. Alexandria Scrap Corp., 426 U.S. 794 (1976)
(payment of bounties by a state in a manner that favors in-
state processors does not violate the commerce clause
when the state does not interfere with the “natural func-
tioning” of interstate market). Thus, any individual in-
eligible for New York SBLI by virtue of Section 268 re-
mains free to do precisely what his New York counterpart
did -- petition his state legislators to create a form of low
cost hight quality industrial life insurance designed to meet
the needs of its wage earners of moderate means. !9

burden of a tax as a condition for working in-state is very different
from the denial of a benefit to out-of-state citizens under Section
268.” Consumers Union v. Albright, 427 F. Supp. at 846 & n.10. One
reason for this distinction is that the former is much more likely to in-
duce retaliation than the latter. See Austin v. New Hampshire, 420
U.S. at 662-63 quoting Travis v. Yale & Towne Mfz. Co., 252 U.S. 60,
82 (1920) (“to prevent [retaliation] was one of the chief ends sought to
be accomplished by the adoption of the constitution”). A second
distinguishing feature is the type of retaliation likely to occur. The
retaliatory action envisioned in Austin involved an unwarranted
burden upon the residents of Maine by causing them to pay income
tax on the same money in two states. The type of retaliation resulting
from Section 268, in contrast, only involves leaving other states free to
enact SBLI for the benefit of individuals with an economic nexus with
those states.

'*Even if excluded nonresidents do not succeed in enacting SBLI
legislation in their states, defendant cogently argues that nonresidents
are not discriminated against by Section 268 because they are still able
to purchase some commercial life insurance policies which are just as
inexpensive and which contain similar terms and conditions as SBLI.
(Stipulation 9944-48). This court’s prior opinion assumed that SBLI
was less expensive than comparable commercial life insurance to avoid
any dispute of a material fact in deciding plaintiffs’ motion for sum-
mary judgment. Consumers Union v. Albright, 427 F. Supp. at 843
n.7. Whatever dispute existed between the parties on this point in the
prior proceedings has been resolved by the above-cited paragraphs of
the stipulation.

_

20a

This brings us to the second noteworthy aspect of
Reeves. The Reeves Court noted that voiding South
Dakota’s “residents only” policy “would interfere
significantly with a State’s ability to structure relations ex-
clusively with its own citizens” and “threaten the future
fashioning of effective and creative programs for solving
local problems”, Reeves, Inc. v. Stake, 48 U.S.LW. at
4749. See also id. at 4748-49 n.10 citing National League
of Cities v. Usery, 426 U.S. 833 (1976). We believe that
comparable considerations of the “role of each State ‘as
guardian and trustee for its people’”, id. at 4748-49, are in-
volved in this case. When Governor Lehman urged the
New York legislature to adopt SBLI, he described it as a
form of “social insurance”, much like New York’s
Workmen’s Compensation Law, Old Age Law, and the
Unemployment Insurance Law, requiring governmental
initiative to provide “a greater degree of economic security
for [o]ur low-paid wage earners” who were disadvantaged
by the industrial life insurance policies then offered. (Joint
App. 143). Notwithstanding the fact that the program did
not require, and in fact expressly prohibited state funding,
the Governor noted that the benefits of the proposed law
would not be limited to the State’s lowest paid wage
earners who were most likely to become policyholders:

To the extent that our lowest paid workers pur-
chase [SBLI], the public relief burden of the
general taxpayer will be proportionally reduced.

(/d. at 144). When SBLI legislation was finally enacted in
1938, Governor Lehman hailed the program as “a great
social experiment” which should be helpful to lower in-
come groups...” (Id. at 146). As the Supreme Court
reiterated in Reeves,:

[t]o stay experimentation in things social and
economic is a grave responsibility. Denial of the

ela

right to experiment may be fraught with serious
consequences to the Nation. It is one of the hap-
py incidents of the federal system that a single
courageous State may, if its citizens choose,
serve as a laboratory; and try novel social and
economic experiments without risk to the rest of
the country.

Reeves, Inc. v. Stake, 48 U.S.L.W. at 4749 quoting New
State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932)
(Brandeis, J. dissenting). We hold that New York’s “social
experiment” aimed at providing individuals who have an
economic tie with the State with a safe and inexpensive
form of life insurance does not contravene the inter-state
privileges and immunities clause. ?°

Plaintiffs strenuously argue that SBLI cannot be
characterized as a “state resource” or a “benefits program”
simply because New York SBLI neither requires nor can
receive state funding. Plaintiff [sic] Reply Brief at 7-11. We

2°Our analysis of the nature of the right that individuals without an
economic nexus to New York are prohibited from exercising by Sec-
tion 268 makes it unnecessary to subject the challenged statute to the
“peculiar evil” and “substantial relation” tests enunciated in Toomer
and Hicklin, We note in passing, however, that both of these cases in-
volved situations in which states sought to justify the “exclusion” of
nonresidents from a scarce resource (/.e., coastal shrimp and jobs)
when neither the exclusionary classification nor the related aspects of
the state plan served the purported purposes of the statutes. This
situation is dramatically different from the one presented by this ac-
tion in which New York has enacted a social welfare insurance pro-
gram to eliminate abusive practices in a particular industry and has
defined the benefited class to include only individuals with an
economic nexus with the State. “As in any other social or public
benefit program, the benefited class under §268 consists of individuals
who are appropriate objects of New York’s legislative concern, or
those who will receive the “good” the program will provide, rather
than those who are the source of the evil, or whose welfare is the
legitimate concern of another State.” Defendant’s Brief at 19-20 (em-
phasis added).

22a

disagree. The fact that SBLI is able to provide blue-collar
workers with a degree of economic security and reduce
New York’s relief burden without any cost to the State is a
testament to the program rather than a reason for its un-
constitutionality. Moreover, while Sections 261-263 of
New York’s Banking Law authorize savings banks to
establish life insurance departments to conduct “the
business of issuing life insurance”, New York SBLI is
much more than another form of state regulation of the
activities of state chartered savings banks. Cf. Lewis v. BT
Investinent Managers, Inc., 48 U.S.L.W. 4638, 4641 (June
9, 1980). It is a legislatively created alternative to commer-
cial industrial life insurance which was designed to
eradicate certain perceived social evils. See Stipulation 419
citing L. Brandeis, “Savings Bank Life Insurance for
Wage Earners,”, /907 Albany Law Journal 50. As such,
New York’s decision to limit the availability of SBLI to
those who are the most appropriate objects of New York’s
legislative concern does not render Section 268 unconstitu-
tional.

Conclusion

Accordingly, om remand, defendant’s motion for sum-
mary judgment is granted and the Clerk is directed to enter
judgment dismissing the complaint.

So Ordered.

Dated: New York, New York
August 14, 1980. U.S.D.J.

Emm Se F

U.S.D.J.

23a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

CONSUMERS UNION OF
UNITED STATES, INC.
and EDWARD J. GORIN,

Plaintiffs, Civil No.

)
)
)
)
)

Vv. ) 74 CIV 234 (LPG)
)
MURIEL SIEBERT, )
Superintendent of Banks )
of the State of New York )
Defendant. )

NOTICE OF APPEAL

Consumers Union and Edward Gorin hereby give notice
that pursuant to 28 U.S.C. §1253, they will appeal directly
to the United States Supreme Court from the judgments of
the three-judge district court entered August 14, 1980,
granting defendant’s motion for summary judgment oui re-
mand and denying plaintiffs’ motion for reconsideration.

Respectfully submitted,
/S/ MARK A. CYMROT

MARK A. CYMROT
P.O. Box 875
Ben Franklin Station
Washington, D.C. 20044
(202) 724-7203

Attorney for Plaintiffs

24a
CERTIFICATE OF SERVICE

I hereby certify that a copy of the Notice of Appeal was
mailed by first class, postage prepaid, on September 12,
1980, to:

Judith A. Gordon, Esq.
Assistant Attorney General
Two World Trade Center
New York, New York 10047

Henry Mark Holzer, Esq.
Bennett, Avervais & Bertrand
70 Pine Street

New York, New York 10005

/S/ MARK A. CYMROT

MARK A. CYMROT

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0805%3A1. Public record. Not legal advice.