# Opposition Brief — Northeast Bancorp, Inc. v. Board of Governors, FRS > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0388%3A09 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1985 - **Citation:** 472 U.S. 159 ## Text Office - Supreme Court, U.S. FILED ‘) NOV 8 1984 No. 84-363 ee on CLERK Iu the Supreme Court of the United States OCTOBER TERM, 1984 NORTHEAST BANCORP, INC., ET AL., PETITIONERS v. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, ET AL. & ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT BRIEF FOR THE FEDERAL RESPONDENT IN OPPOSITION Rex E. LEE Solicitor General RICHARD K. WILLARD Acting Assistant Attorney General ANTHONY J. STEINMEYER MICHAEL KIMMEL Attorneys Department of Justice Washington, D.C. 20530 (202) 633-2217 es ao. ae 7 QUESTIONS PRESENTED 1. Whether Section 3(d) of the Bank Holding Company Act (12 U.S.C. 1842(d)) authorizes a state to permit the acquisition of banks within its borders only by bank holding companies located in certain regions in the United States. 2. Whether such geographically restrictive state banking statutes, enacted under the authority of Section 3(d) of the Bank Holding Company Act, vio- late the Commerce Clause or Compact Clause of the Constitution. (I) TABLE OF CONTENTS Page I ii ctiniensessthincniesiteernsitiesbcibdibabainiidiineiecniaidieiid 1 SUTIIIIIIIIIEN ~ alinsioseschassisdeniteciemapintemnhibeieainsinaimantlindanscatieagitbeniien SEIT itepihsicernceepernescninitgieepniepaiininieniiibesaisiineniiciaisalinditanninteaiat 2 ES TE en ee ea UI 17 TABLE OF AUTHORITIES Cases: Board o v. Investment Company In- (ED tie, $50. OR, eae et ee ee ae 11 Chevron Oil Co. v. Huson, 404 U.S. 97 _....... 13 City of Philadelphia v. New Jersey, 487 U.S. 617, Conference of State Bank Supervisors v. Conover, 715 F.2d 604, cert. denied, No. 83-594, (Apr. 2, 1984) Great Atlantic & Pacific Tea Co. v. C U.S. 366 Harrison v. PPG Industries, Inc.,; 446 U.S. 578.... 10 Iowa Independent Bankers v. Board of Governors, 511 F.2d 1288, cert. denied, 423 U.S. 875........ 6-7, 10, 15 Lewis v. BT Investment Managers, Inc., 447 U.S. 27 ao G tee New England Power Co. v. New Hampshire, 455 ERE RIS RSs UE 5 SES IE Oe a 8-9 New Hampshire v. Maine, 426 U.S. 363 _.............. 1l Prudential Ins. Co. v. Benjamin, 328 U.S. 408........ 5,9 Securities Industry Ass’n v. Board of Governors, No. 83-614 (June 28, 1984) 00 7,11 South-Central Timber Dev., Inc. v. Wunnicke, No. Spas (ae Ge ee) 8, 9, 10 Southern Pacific Co. v. Arizona, 325 U.S. 761........ 10 Sporhase v. Nebraska, 458 U.S. 941 8 United States v. Lorenzetti, No. 83-838 (May 29, ) RES TC oe stdin tidiledlanida 16 U.S. Steel Corp. v. Multistate Tax Comm’n, 434 U.S. 452 ii. rn (mI) IV Cases—Continued: Page Virginia v. Tennessee, 148 U.S. 503 .................---.. 11 Western & Southern Life Ins. Co. v. Board of Equalization, 451 U.S. 648 -....... sseceeeeDy 9, 11 Constitution and statutes: U.S. Const. Art. I: § 8, Cl.3 (Commerce Clause) .................. 3, 4,5, 10, 14 § 10, Cl. 3 (Compact Clause) 3, 4, 10, 14 Bank Holding Company Act, 12 U.S.C. 1841 ef. seq.: § 3(a), 12 U.S.C. 1842(a) ro 8 § 3(c), 12 U.S.C. 1842(c) ......... Ridiscctisslinncisillicicaliis 4. ETO fe! een passim 1983 Conn. Acts 83-411 (Reg. Sess.) —.................... 2 Ill. Ann. Stat. ch. 17 (Smith-Hurd 1981) : IRIs este Suuinaien sat 14 § 2710 14 -Iowa Code Ann. § 524.1805 (West Supp. 1984) ... 14 Mass. Ann. Laws ch. 167A, § 2 (Law. Co-op. 1977 5 3 RADII 2 N.Y. Banking Law § 142-b (McKinney Supp. 1983) - 14 R.I. Pub. Laws S.0661 (1983) RS A IO 3 S.D. Codified Laws Ann. § 51-16-40 (Supp. 1984).. 14 Miscellaneous: 102 Cong. Res. (1956) : pp. 6856-6863 6 pp. 6857-6858 _................ 10 p. 6858 6 iia: ST san tiatrsresetiniirperiineminniiamseliiehinniiuailinntcls 6 p. 6860 6, 9, 10 NG nee eae | 6 p. 6862 » 6, 10 ¥30 Cong. Rec. H10005 (daily ed. Sept. 24, 1984) .. 15 H.R. 2481, 98th Cong., Ist Sess. (1983) -.............. 15 S. 2851, 98th Cong., 2d Sess. (1984) —.....0.02222.. 15 Iu the Supreme Court of the United States OCTOBER TERM, 1984 No. 84-363 NORTHEAST BANCORP, INC., ET AL., PETITIONERS Vv. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT BRIEF FOR THE FEDERAL RESPONDENT IN OPPOSITION OPINIONS BELOW The opinion of the court of appeals (Pet. App. A21-A33) is reported at 740 F.2d 203. The three orders of the Federal Reserve Board at issue in this case (Pet. App. A34-A71, A72-A78 and A79-A87) are reported at 70 Fed: Res. Bull. 374, 353 and 524. JURISDICTION The judgment of the court of appeals was entered on August 1, 1984. The petition for a writ of certi- orari was filed on September 6, 1984. The jurisdic- tion of this Court is invoked under 28 U.S.C. 1254 (1). (1) 2 STATEMENT 1. Section 3(d) of the Bank Holding Company Act (BHCA) (12 U.S.C. 1842(d) (the “Douglas Amendment’) ) generally bars a bank holding com- pany that has its principal place of business in one state from acquiring a bank located in another state. But such interstate transactions are permissible un- der the Douglas Amendment when “the acquisition of * * * a State bank by an out-of-State bank holding company is specifically authorized by the statute laws of the State in which such bank is located, by lan- guage to that effect and not merely by implication.” In late 1982 the Massachusetts legislature enacted a statute (the “Massachusetts Act”) that permits the acquisition of Massachusetts banks by out-of-state bank holding companies.’ The statute contains a sig- nificant limitation, however: it authorizes such in- terstate acquisitions only if the acquiring bank hold- ing company is located in another New England state (that is, in Connecticut, Maine, Rhode Island, Ver- mont or New Hampshire).? On June 8, 1983, Con- necticut enacted a similar statute (the “Connecticut Act’’),° which authorizes the acquisition of Connecti- cut banks by holding companies based in the other 1 The Massachusetts Act (Mass. Ann. Laws ch. 167A, § 2) (Law. Co-op. 1977 & Supp. 1984))is reprinted at Pet. App. A101-A102. 2 The statute also contains a reciprocity provision: it per- mits the acquisition of Massachusetts banks by out-of-state holding companies only when the home state of the acquiring company grants reciprocal acquisition rights to Massachusetts bank holding companies. The Connecticut Act (1983 Conn. Acts 83-411 (Reg. Sess.) ) is reprinted at Pet. App. A97-A100. five New England states.* Since the enactment of the Connecticut Act, statutes authorizing regional inter- state banking have been enacted in seven states; sim- ilar statutes have been’ proposed in at least five other states. See page 12, infra. 2. Following the enactment of the Massachusetts and Connecticut Acts, three sets of Massachusetts and Connecticut bank holding companies agreed to merge.® These companies then applied to the Federal Reserve Board for approval of the transactions, as required by the BHCA. See 12 U.S.C. 1842(a). The applications were opposed by the petitioners in this case, New York and Connecticut bank holding com- panies and a Connecticut bank,* which argued that the Massachusetts and Connecticut Acts authorizing the acquisitions violate the Commerce (Art. I, § 8, Cl. 3) and Compact (Art. I, §10, Cl. 3) Clauses of the Constitution. The Board nevertheless approved the applications (Pet. App. AS4-A71, A72-A78, A79-A86). It read * Rhode Island enacted a similar provision (1983 R.I. Pub. Laws 8.0661) in May 1983, although the regional restriction in the Rhode Island act expires on July 1, 1986 (see Pet. App. A103-A106). 5 Respondent Bank of New England Corporation, a Massa- chusetts bank holding company, agreed to merge with respon- dent CBT Corporation, a Connecticut bank holding company ; respondent Hartford National Corporation, another Connecti- cut bank holding company, agreed to acquire Arltru Bancorpo- ration, Inc., a Massachusetts bank holding company; and re- spondent Bank of Boston Corporation, a Massachusetts bank holding company, agreed to acquire Colonial Bancorp, Inc., a Connecticut bank holding company (Pet. App. A22). * Separate applications were presented to the Board con- cerning each of the proposed New England transactions. On appeal, the court of appeals consolidated the challenges to the three applications (Pet. App. A26-A27). 4 the Massachusetts and Connecticut Acts as falling within the literal terms of the Douglas Amendment by “meet[ing] the requirement of express authoriza- tion for interstate bank acquisitions imposed by sec- tion 3(d) of the Bank Holding Company Act” (Pet. App. A37). The Board then concluded that “there is no clear and unequivocal basis for a determination” that the Acts are inconsistent with the Commerce or Compact Clauses (Pet. App. A37, A74-A75, A83).’ The court of appeals upheld the Board’s orders. The court of appeals reasoned that the Massachusetts and Connecticut Acts “specifically authorize acquisi- tions” of in-state banks by out-of-state holding com- panies and therefore are supported by the Douglas Amendment (Pet. App. A29). This conclusion dis- posed of petitioners’ Commerce Clause argument, the court continued, because “Congress may authorize the states to enact statutes which may interfere with interstate commerce” (Pet. App. A380), and “by en- acting the Douglas Amendment, Congress authorized Massachusetts and Connecticut to enact the statutes challenged here” (Pet. App. A81). The court found the state Acts consistent with the Compact Clause because the New England banking arrangement does not “encroach upon or interfere with the just suprem- acy of the United States” (Pet. App. A32).° 7 The Board also found that the acquisitions met the tradi- tional competitive, financial and managerial standards set out in Section 3(c) of the BHCA (12 U.S.C. 1842(c)). See Pet. App. A41-A48, A75-A78, A80-A86. These determinations are not challenged here. 8 The court of appeals also rejected a challenge to the Mas- sachusetts and Connecticut Acts based on the Equal Protection Clause (Pet. App. A32-A83). That challenge is not repeated here. 5 ARGUMENT 1. Several propositions that control the analysis of this case seem clear. In the absence of congressional authorization, there is little doubt that state restric- tions on interstate banking such as the ones in this case would run afoul of the Commerce Clause. See generally Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 36 (1980) ; City of Philadelphia v. New Jersey, 487 U.S. 617, 624 (1978); Great Atlantic & Pacific Tea Co. v. Cottrell, 424 U.S. 366, 370-371 (1976). Conversely, Congress plainly may authorize the states to regulate interstate commerce in ways that otherwise would be inconsistent with the Clause. See generally Western & Southern Life Ins. Co. v. Board of Equalization, 451 U.S. 648, 652-653 (1981) ; Prudential Ins, Co. v. Benjamin, 328 U.S. 408, 427- 432 (1946). Finally, agreements between the states violate the Compact Clause only if they impinge upon an interest of the federal government. See U.S. Steel Corp. v. Multistate Tax Comm’n, 434 U.S. 452, 467 (1978). Thus the principal question in this case is whether Congress in the Douglas Amendment author- ized the states to enter into regional banking arrange- ments. a. While the issue is not entirely free from doubt, we believe that the court of appeals correctly an- swered this question in the affirmative. Petitioners maintain that the Douglas Amendment should not be read to authorize state enactments that “discriminate against or unduly burden interstate commerce” (Pet. 19 & n.24). But as both the Board and the court of appeals noted, the Massachusetts and Connecticut Acts appear to fall within the literal terms of the Douglas Amendment (Pet. App. A29, A37). The state Acts at issue here plainly are “statute laws” 6 that “specifically authoriz[e]” the acquisition of “a State bank by an out-of-State bank holding company.” 12 U.S.C. 1842(d). And the state Acts undoubtedly were intended to authorize the transactions chal- lenged in this case. The sparse legislative history of the Douglas Amendment does not directly address the question whether Congress intended to authorize the creation of regional banking arrangements, and therefore does little to illuminate the meaning of the statutory lan- guage. “ongressional attention during the debate on the Amendment * was focused on the provision’s crea- tion of barriers to interstate banking (see 102 Cong. Rec. 6862 (1956) (remarks of Sen. Morse); id. at 6861 (remarks of Sen. Bricker); id. at 6860 (re- marks of Sen. Douglas) ); there was little attention given to the scope of the power granted states to overcome those barriers. The relevant discussion therefore consists in large part of conclusory state- ments by Senator Douglas to the effect that his Amendment would “permit out-of-State holding com- panies to acquire banks in other States only to the degree that State laws expressly permit them” (id. at 6858), would “prevent bank holding companies from expanding across State lines, unless the States give them explicit permission to do so” (id. at 6859), or would leave room for the exercise of “State policy” in the banking field (id. at 6860). But there was no congressional discussion of the specific types of ac- tion that the states might or might not take under the Douglas Amendment.” See lowa Independent ® Because the Amendment was adopted on the Senate floor (see 102 Cong. Rec. 6856-6863 (1956) ) there is no committee report to explain the Amendment’s meaning. 10 Petitioners cite congressional statements urging that the BHCA be applied in a nondiscriminatory way (Pet. 18 n.22). 7 Bankers v. Board of Governors, 511 F.2d 1288, 1296 (D.C. Cir.), cert. denied, 423 U.S. 875 (1975).™ In short, nothing in the legislative history estab- lishes that the unqualified language of the Douglas Amendment does not mean what it says. In these circumstances, the Court should defer to the Board, which rejected petitioners’ suggestion that the bank acquisitions challenged in this case were plainly out- side the contemplation of Congress when it enacted the Douglas Amendment (see Pet. App. A41, A67). See Securities Industry Ass’n v. Board of Governors, No. 83-614 (June 28, 1984), slip op. 8. b. Petitioners also contend that the Douglas Amendment should not be read to validate the Mas- sachusetts and Connecticut Acts because, under this Court’s holdings, “an Act of Congress should not be construed to abrogate the limitations imposed on states by the Commerce Clause unless the federal law But these statements were not directed to the Douglas Amend- ment; the cited remarks were made 10 months before the Amendment was proposed and concerned exceptions to the regulatory aspects of the bill. 11 This Court’s only discussion of the Douglas Amendment is equally brief. In Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 47 (1980) (emphasis in original), the Court noted that “[t]he only authority granted to the States [in the Amendment] is the authority to create exceptions to th[e] general prohibition [on interstate banking], that is, to permit expansion of banking across state lines where it otherwise would be federally prohibited.” These comments were made in response to a claim that the Amendment validated state re- strictions on the non-banking activities of out-of-state bank holding companies. See ibid. It is impossible to draw from this discussion, as do petitioners, the proposition that the Amend- ment does not permit states to “form regional alliances” in the banking field (Pet. 15-16). 8 unmistakably authorizes the state conduct at issue” (Pet. 18). The Douglas Amendment fails to provide such authorization, petitioners assert, because it does not declare “that states were authorized to discrimi- nate among their sister states” (Pet. 15). Given the unusual nature of the challenged arrangements in this case—which explicitly create combinations of states that seemingly were designed for the purpose of excluding other states (see Pet. 4-5 & n.6)—this argument is entitled to serious consideration.” Again, however, on balance we believe that peti- tioners’ contention fails to carry the day. It is of course true that, as this Court has noted, “for a state regulation to be removed from the reach of the dormant Commerce Clause, congressional in- tent must be unmistakably clear.” South-Central Timber Dev., Inc. v. Wunnicke, No. 82-1608 (May 22, 1984), slip op. 9. But the decisions in which the Court has applied this doctrine have little bearing here. Those decisions came in cases where states sought to find federal authorization for restrictive state conduct by looking to federal policy in analogous areas (e.g., South-Central Timber, slip op. 6-10)” or by pointing to “standard nonpre-emption clause[s]” in federal enactments (e.g., Sporhase v. Nebraska, 458 U.S. 941, 959-960 (1982); New England Power Co. v. New Hampshire, 455 U.S. 3381, 342-343 12 Thus we note that the New England states could have prevented their banks from being dominated by large out- of-state bank holding companies (see Pet. 4-5 & n.6) by using methods that “discriminated” less overtly against other states qua states—for example, by preventing in-state acquisitions by bank holding companies over a certain size. 13 In South-Central Timber, Alaska tried to justify restric- tions on the sale of timber from state lands by pointing to sim- — 9 (1982)). In such cases the Court has declined to “rewrite [congressional] legislation based on mere speculation as to what Congress ‘probably had in mind.’” Id. at 343 (citation omitted). Taking this tack assures that Congress “affirmatively contem- plate[d] otherwise invalid state legislation” when it took the action said to authorize such state activity. South-Central Timber, slip op. 9. Here, however, despite the sparse legislative his- tory, there is no doubt that the state enactments at issue fall within the literal language of the Douglas Amendment. And while Congress did not address in detail the nature of the authorized activity, it real- ized that it was allowing the states to involve them- selves in the regulation of interstate commerce and that the language of the Douglas Amendment did not expressly restrict the nature of that regulation. See 102 Cong. Rec. 6860 (1956) (remarks of Sen. Doug- las); ibid. (remarks of Sen. Bennett). Cf. BT In- vestment Managers, 447 U.S. at 47.* Accordingly, there is no reason to believe that the Douglas Amendment is an insufficiently “clear expression of ilar restrictions on the sale of timber from federal lands in the state. The Court concluded that “[t]he fact that state policy * * * appears to be consistent with federal policy—or even that state policy furthers the goals we might believe that Con- gress had in mind—is an insufficient indicium of congressional intent. Congress acted only with respect to federal lands; we cannot infer from that fact that it intended to authorize a similar policy with respect to state lands.” Slip op. 10. 14 Indeed, the Court has read analogous legislation to allow the states to take action that otherwise would violate the Com- merce Clause. See, e.g., Western & Southern, 451 U.S. at 653: Prudential Ins. Co., 328 U.S. at 427-4382. 10 approval by Congress.” South-Central Timber, slip op. 9.° See Harrison v. PPG Industries, Inc., 446 U.S. 578, 592 (1980). c. This conclusion should suffice to dispose of peti- tioners’ Commerce Clause contentions. Congress “ ‘may redefine the distribution of power over inter- state commerce’ by ‘permit[ting] the states to regu- late the commerce in a manner which would otherwise not be permissible.’” South-Central Timber, slip op. 5, quoting Southern Pacific Co. v. Arizona, 325 U.S. 761, 769 (1945).**° And once “Congress ordains that the States may freely regulate an aspect of interstate commerce, any action taken by a State within the scope of the congressional authorization is rendered invulnerable to Commerce Clause challenge.” West- ern & Southern, 451 U.S. at 652-653. Because the Douglas Amendment authorizes the Massachusetts and Connecticut Acts, those statutes are immune from Commerce Clause attack. d. Petitioners’ Compact Clause argument is simi- larly unpersuasive. That Clause invalidates “ ‘agree- 18 The breadth of the statutory language has special signifi- cance in this case. When Congress enacted the Douglas Amendment, it acknowledged that banking historically has been a subject of special concern to states and localities, and it recognized that states always have played a significant role in the regulation of the banking industry. See 102 Cong. Rec. 6857-6858 (remarks of Sen. Douglas) ; id. at 6860 (remarks of Sen. Douglas) ; id. at 6862 (remarks of Sen. Morse). See also lowa Independent Bankers, 511 F.2d at 1296. Given this back- ground, it would be particularly inappropriate here to search for implicit limitations in Congress’s unqualified grant of reg- ulatory authority to the states. 16 We do not understand petitioners to contend that Con- gress lacks the power under the Commerce Clause to authorize the creation of regional banking arrangements. See Pet. 21-22. 11 ments that are “directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States.”’” Multistate Tax Comm’n, 434 U.S. at 471, quoting New Hampshire v. Maine, 426 U.S. 363, 369 (1976), in turn quoting Virginia v. Tennessee, 148 U.S. 503, 519 (1893). Here—even assuming that the New England banking arrangement constitutes a “com- pact” within the meaning of the Clause—the Massa- chusetts and Connecticut Acts are in no way incon- sistent with federal supremacy or “hostile” to “fed- eral concerns.” Multistate Tax Comm’n, 434 U.S. at 488, 489 (White, J., dissenting). To the contrary, the Board has interpreted the Douglas Amendment “as a renunciation of federal interest in regulating the interstate acquisition of banks by bank holding companies” (Pet. App. A52). That interpretation “4s entitled to the greatest deference.’” Securities Industry Ass’n, slip op. 8, quoting Board of Gover- nors v. Investment Company Institute, 450 U.S. 46, 56 (1981). And in the absence of any federal inter- est, a state enactment hardly can threaten federal supremacy. 2. While the decision below is correct, whether the Court should grant certiorari nevertheless is a close question. The issues presented by this case are of considerable practical importance and are likely to be raised in other circuits." Their immediate resolution 17 Litigation on the validity of banking regions is likely to proceed in Circuits other than the Second. As noted above, banking regions are being created around the nation; peti- tioner Citicorp, meanwhile, represents that it “has challenged each interstate bank transaction that has come before the Board under the purported authority of a regionally restric- tive statute” (Pet. 11n.14). 12 by the Court might therefore put to rest significant uncertainties about the future development of the nation’s banking system. In addition, this case pre- sents issues concerning the basic relationship of the states to one another, of the sort that this Court often has addressed. On balance, however, we believe that application of the traditional criteria guiding this Court’s discretionary review should lead to denial of the petition. a. The practical importance of the court of appeals’ decision is manifest: if the decision is allowed to stand (and if it is not modified by legislation) it might well lead to a significant restructuring of the banking industry as other states follow the lead set by the New England states. Florida, Georgia, South Carolina and North Carolina already have enacted legislation creating a southeastern banking region similar to the one established in New England by the Massachusetts and Connecticut Acts. Utah and Ken- tucky also have enacted regionally restrictive bank- ing statutes, and it appears that a number of other states are considering similar legislation (see Pet. 10-11 & n.13). Furthermore, a number of intra- region mergers in both the New England and south- eastern regions already have been announced or pro- posed (see Pet. 11; Pet. App. A245; Br. of Amicus Curiae Chase Manhattan Corp. 6-7 n.4). According to the Board, these trends “suggest that, should the New England interstate banking zone be upheld, a system of regional zones may develop involving major areas of the nation” (Pet. App. A38). These practical considerations suggest that, if the Court believes that it eventually will become neces- sary to address the issues presented here—either because of their importance, or because of the pos- 13 sibility that a conflict among the circuits will de- velop—doing so in this case would be wise. It is rea- sonable to assume that state legislatures and bank holding companies will rely on the validity of the Second Cireuit’s decision; if this Court were to repudiate the court of appeals’ holding in a future case, a large segment of the banking industry may well have invested considerable resources in pursuing constitutionally infirm activity. In such cirecum- stances, an authoritative decision by the Court in advance of this widespread activity would be of sub- stantial public benefit. Furthermore, a ruling con- trary to that of the decision below necessarily either would disturb a number of consummated transactions or, if not made retroactive (see Chevron Oil Co. v. Huson, 404 U.S. 97, 105-109 (1971) ), would leave in place an imbalance in the degree of interstate bank- ing permitted in various states or regions of the country depending upon fortuities such as the timing of the authorizing state legislation, of Board action, and of the consummation of any approved transac- tions.” 18 It is worth noting, however, that petitioners have offered no principle that would allow a court to read into the Douglas Amendment the type of implicit limitation that they contend for here but would not also call into question the validity of other state statutes that authorize only a limited degree of interstate banking. Thus the practical effects of a reversal of the Second Circuit’s decision would be both narrower and broader than petitioners suggest. Such a decision would not increase the flow of interstate commerce; to the contrary, by limiting the ways in which states could avoid the prohibitory language of the Douglas Amendment, a reversal would sig- nificantly curtail the total volume of interstate banking. In particular, a decision in their favor would not permit peti- tioners to consummate their planned mergers with or acquisi- 14 b. Despite the importance of this case to the bank- ing industry, we cannot conclude that further review is warranted at this time. While the issues raised are of practical significance, the question presented involves the meaning of a statute rather than of the Constitution (see Pet. App. A196-A197, A198-A200 (statements of Paul A. Volcker), A201-A204 (state- ment of Emmett J. Rice)). Although petitioners dress their arguments in constitutional clothing, there is no basic disagreement among the parties about the meaning of the Commerce or Compact Clauses; at bottom, this case presents only a rela- tively straightforward question of statutory inter- pretation, of the sort that the Court usually does not decide in the absence of a conflict among the circuits. Here, of course, no such conflict exists. To the con- trary, the District of Columbia Cireuit—which ap- parently is the only court of appeals other than the Second Circuit that has addressed the nature of the Douglas Amendment’s authorization of state activ- ity—has concluded (in the context of an equal pro- tions of banks in other states (see Pet. 3). Conversely, a hold- ing that the Douglas Amendment does not authorize state- imposed restrictions that otherwise would be violative of the Commerce Clause would open to challenge a range of state laws in addition to the regionally-restrictive ones in this case— for example, laws that permit the acquisition of an in-state bank by an out-of-state holding company only when the home state of the acquiring company grants reciprocal acquisition rights to in-state holding companies (see, e.g., N.Y. Banking Law § 142-b (McKinney Supp. 1983)), or laws that permit the entry of out-of-state holding companies into a state only in certain restricted circumstances (see, e.g., Ill. Ann. Stat. ch. 17, §§ 2510, 2710 (Smith-Hurd 1981); Iowa Code Ann. § 524.1805 (West Supp. 1984) ; S.D. Codified Laws Ann. § 51- 16-40 (Supp. 1984) ). 15 tection challenge) that “the intent of the Douglas Amendment was to assure that the states had suffi- cient power to control the expansion of bank holding companies across state lines so that such expansion would not contravene state policy.” Iowa Independ- ent Bankers, 511 F.2d at 1297. See Conference of State Bank Supervisors v. Conover, 715 F.2d 604, 613 (D.C. Cir. 1983), cert. denied, No, 83-954 (Apr. 2, 1984) (the Douglas Amendment “em- powered states to discriminate among out-of-state bank holding companies when deciding which could enter”). Our conclusion that there is no present rea- son to anticipate the development of a conflict among the circuits is based in substantial part on our con- clusion that the decision below is correct. Finally, there is at least a possibility that the ques- tions presented here will be mooted by legislation. Congress recently has considered proposals relating to regional and interstate banking (see Pet. App. A205-A207 (statement of C.T. Conover) (outlining legislative proposals); H.R. 2431, 98th Cong., 1st Sess. (1983) ). Indeed, on September 13, 1984, the Senate passed a bill (S. 2851, 98th Cong., 2d Sess.) that would have authorized states to enact regional bank acquisition legislation for a period of five years; the House took no action on the provision before Congress adjourned. There is some indication that the issue will be considered again in the next session of Congress (see 130 Cong. Rec. H10005 (daily ed. Sept. 24, 1984) (statement of Rep. St. Germain) ), although congressional action is far from assured. There is little doubt, however, that the issues raised by petitioners are better suited to legislative than to 16 judicial resolution. As noted, these issues are ones solely of statutory interpretation. Indeed, this case is but one aspect of a larger controversy involving the degree to which interstate banking is desirable and the methods that might best be used to increase competition in the banking industry. In deciding this case, however, the Court, unlike Congress, would be unable to address the nuances of those issues; its decision could resolve only the narrow question whether the Douglas Amendment permits states to authorize particular types of interstate banking. And in resolving that question the Court would be limited to ascertaining the intent of Congress in 1956—at the same time that the current Congress is considering more recent developments in the banking industry while grappling anew with the issues pre- sented by interstate banking. See United States v. Lorenzetti, No. 83-838 (May 29, 1984), slip op. 11. These factors lead us to conclude that this case does not meet the usual criteria justifying a grant of cer- tiorari. The case presents a narrow, albeit impor- tant, issue of statutory construction, the issue was correctly resolved by the court of appeals, there is no disagreement among the lower courts, and the matter may well be addressed by new legislation. In these circumstances, review by this Court is not warranted at this time. 17 CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted. REX E. LEE Solicitor General RICHARD K. WILLARD Acting Assistant Attorney General ANTHONY J. STEINMEYER MICHAEL KIMMEL Attorneys NOVEMBER 1984 W ov. 8. covernment printing orrice; 1984 461531 10064 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0388%3A09. Public record. Not legal advice.