Petition for Writ of Certiorari — Steinbrink v. Independent Insurance Insurance Agents Agents of America (Nos. 92-507, 92-484)

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F” 92-50% | FILED —

SEP 18 1992

Ne. [ OFFICE OF THE CLERK

In the Supreme Court of the Untied States

OCTOBER TERM, 1992

STEPHEN L. STEINBRINK, ACTING COMPTROLLER .

OF THE CURRENCY, ET AL., PETITIONERS

INDEPENDENT INSURANCE AGENTS OF

AMERICA, INC., ET AL.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

KENNETH W. STARR

Solicitor General

STUART M. GERSON

Assistant Attorney General

JOHN G. ROBERTs, JR.

Deputy Solicitor General

CHRISTOPHER J. WRIGHT

Assistant to the Solicitor General

- ROBERT V. ZENER

JACOB M. LEWIS

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 514-2217

i eet el — —_--

QUESTION PRESENTED

Whether 12 U.S.C. 92, which authorizes national

banks “located and doing business” in places of 5,000

or fewer inhabitants to act as the agent for “any

fire, life or other insurance company,” was repealed

in 1918.

(1)

PARTIES TO THE PROCEEDING

The petitioners are Stephen L. Steinbrink, Acting

Comptroller of the Currency (substituted as a party

pursuant to Rule 35.3); the Office of the Comptroller

of the Currency; and the United States.

The respondents are the Independent Insurance

Agents of America, Inc.; the Independent Insurance

Agents of Oregon; the National Association of Cas-

ualty and Surety Agents; the National Association

of Life Underwriters; the National Association of

Professional Insurance Agents; the National Associa-

tion of Surety and Bond Producers; the Oregon As-

sociation of Life Underwriters; and the Oregon Pro-

fessional Insurance Agents, Inc.

By virtue of Rule 12.4, the United States National

Bank of Oregon, an intervenor-defendant below, is

also a party in this Court. We understand that it

plans to file a petition for a writ of certiorari seeking

review of the judgment of the court of appeals.

TABLE OF CONTENTS

Page

EEE SE ELL 1

Jurisdiction |. cases 2

i eousssnuuncocces 2

a ES care 2

Reasons for granting the petition 0.0... aE ia .

EE 22

EES I la

EN ESTEE ES OT cass!) ee

I oo innstiideincnscctoccs Ditiiaddidmiibeeadnssnsnetanees ilieieniiagie 43a

Appendix D EE LSS TS TD 74a

LEE EE

TABLE OF AUTHORITIES

Cases:

American Land Title Ass'n Vv. Clarke, 968 F.2d 150

(1992), petition for cert. pending 8, 9, 10, 15, 25

Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 887 (1984) . 18

Commissioner V. First Security Bank of. Utah,

N.A., 405 U.S. 394 (1972) .......................7, 9, 10, 21

Commissioner Vv. Morris Trust, 367 F.2d 794 (4th

Cir. 1966) . 11, 21

Ewing V. Burnet, 36 US. ql Pet.) 41 (1837) 13-14

First National Bank of Lamarque v. Smith, 610

F.2d 1258 (1980) | 11, 21

INS v. National Center for Immigrants’ Rights,

Tne., 112 8. Ct. 551 (1991) . 13

Independent Bankers Ass'n V. Heimann, 613 F.2d

ys (D.C. Cir. 1979), cert. denied, 449 U.S.

823 (1980) . |, +

Independent Ins. Agents of Am., Inc. Vv. Board of

Govs., 835 F.2d 1452 (D.C. Cir. 1987) ........... 21

(IIT)

Cases—Continued : Page

Owensboro National Bank v. Moore, Civ. Action

No. 91-3 (E.D. Ky. Aug. 4, 1992) ....................... 9

Saron V. Georgia Ass'n of Indep. Ins. Agents, 399

F.2d 1010 (5th Cir. 1968) ........ piensa abana 10

Statutes :

Bank Holding Company Act, 12 U.S.C. 1843(c)

EES SE ae riser ween ee 19

Competitive Equality Banking Act of 1987, Pub.

L. No. 100-86, 2801 (b) (5), 101 Stat. 583 . 18

Federal Reserve Act of 1913, ch. 6, § 13, 38 Stat.

AER | 2, 4, 11, 16, 17

Federal Reserve Act Amendments of 1916, ch.

IN TID coisinscpnisisanccipnincteiiidinsehehiel detiietatereiinac uses 2,4

$9 Stat. 752 ........ ile tas ale eee oe : 4,11

39 Stat. 752-753 _...... ipeaclesiicedaiacaiiabinal aac aaa 12

39 Stat. 753 _........ hone ee

Garn-St Germain Depesitery ‘fastitutions Act of

1982, Pub. L. No. 97-320, § 403(b), 96 Stat.

STERN eee ener OE I PRIS 18

National Bank Act (Act of Feb. 25, 1863), ch. 58,

§ 42, 12 Stat. 677 13

War Finance Corporation Act of 1918, ch. 45, § 20,

40 Stat. 545 2.5

Rev. Stat. § 5202

3 U.S.C. Stat. Ann. § 5202 (T.H. Flood & Co.

STII sso chisselsdacticadinen ateiciiaiead desiteedeepiaeaamaiaeemanmaiaias

9US. Comp. Stat. Ann. $9764 (West 1916)

12 U.S.C. 24 : |

12 U.S.C. 92

28 U.S.C. 1391 (e)

Miscellaneous:

53 Cong. Rec. (1916) :

p. 10,998

p. 11,115

p. 13,069

p. 13,354

8,5, 6, 11, 12, 18, 15, 16, 17. 18

Miscellaneous—Continued:

Federal Res. Bd.:

The Federal Reserve Act As Amended

SEE Seer meer een ee ee Ree

The Federal Reserve Act As Amended

EATS EERO Re ES Be

Financial Institutions Act of 1957: Hearings on

S. 1451 and H.R. 7026 Before the H. Comm. on

Banking and Currency, 85th Cong., 2d Sess.

ASR BS ERTS ate > CPR Se

H.R. Rep. No. 481, 64th Cong., Ist Sess. (1916) .

S. Doc. No. 216, 66th Cong., 2d Sess. (1920) .

S. Doc. No. 412, 64th Cong., Ist Sess. (1917) .

i ESRC a aon Aen enn ea

§ 13, 38 Stat. 263-264... (Ee ar a A

Page

Iu the Supreme Court of the United States

OCTOBER TERM, 1992

No.

STEPHEN L. STEINBRINK, ACTING COMPTROLLER

OF THE CURRENCY, ET AL., PETITIONERS

Vv.

INDEPENDENT INSURANC® AGENTS OF

AMERICA, INC., ET AL.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

The Solicitor General, on behalf of the Acting

Comptroller of the Currency, the Office of the Comp-

troller of the Currency, and the United States, peti-

tions for a writ of certiorari to review the judgment

of the United States Court of Appeals for the District

of Columbia Circuit in this case.

OPINIONS BELOW

The statements filed with the order denying the sug-

gestions for rehearing en bane (App., infra, 34a-

42a) are reported at 965 F.2d 1077. The opinion

of the court of appeals (App., infra, 1la-33a)

is reported at 955 F.2d 731. The opinion of the dis-

trict court (App., infra, 43a-73a) is reported at

736 F. Supp. 1162. The approval letter of the

(1)

Comptroller of the Currency (App., infra, 74a-79a)

is unreported.

JURISDICTION

The judgment of the court of appeals was entered

on February 7, 1992. A petition for rehearing was

denied on May 22, 1992. On August 7, 1992, the

Chief Justice extended the time for filing a petition

for a writ of certiorari to and including September

19, 1992. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

‘STATUTES INVOLVED

Section 13 of the Federal Reserve Act of 1913, ch.

6, 38 Stat. 263; the Federal Reserve Act Amend-

ments of 1916, ch. 461, 39 Stat. 752; and Section 20

of the War Finance Corporation Act of 1918, ch. 45,

40 Stat. 512, are reproduced at App., infra, 80a-94a.

STATEMENT

1. In 1984, the United States National Bank of

Oregon, which is headquartered in Portland, sought

approval from the Comptroller of the Currency to

sell insurance as an agent through a subsidiary lo-

cated in a branch bank in Banks, Oregon, a town of

489 persons. The Comptroller approved the Board’s

application, relying on a provision of federal law

formerly codified at 12 U.S.C. 92 which authorizes a

national bank “located and doing business in any

place the population of which does not exceed five

thousand inhabitants” to act as an agent for “any

fire, life or other insurance company.” The Comp-

troller determined that, under Section 92, the Bank’s

subsidiary could sell a full range of insurance prod-

ucts to existing and potential customers in Oregon

and other States in which the subsidiary is author-

ized to engage in the insurance business. See App.,

infra, 79a.

Respondents—various trade associations represent-

ing insurance agents—challenged the Comptroller’s

decision in the United States District Court for the

District of Columbia. The insurance agents argued

that Section 92 placed geographic restrictions on

sales of insurance by banks in small towns such that

the Bank’s branch in Banks, Oregon, should be lim-

ited to sales of insurance in that community.

The district court first noted that Section 92 no

longer appears in the United States Code.' App.,

infra, 44a-45a n.2. The court assumed, however—on

the basis of the fact that “Congress, other courts, and

the Comptroller have presumed its continuing valid-

ity” —that the statute “exists in proprio vigore.” Ibid.

at 45a. The court went on to conclude that the

Comptroller’s interpretation of Section 92 was “ra-

tional and consistent with the statute” (App., infra,

70a-71la), and accordingly upheld the Comptroller’s

decision authorizing the Bank’s subsidiary “to offer

insurance to customers residing outside Banks, Ore-

gon” (id. at 73a).

2. Concluding that Section 92 had been repealed

in 1918, a divided court of appeals reversed and re-

manded with instructions to enter judgment for the

insurance agents. App., infra, 20a. The court ob-

' Section 92 appeared in the editions of the United States

Code issued in 1926, 1928, 1934, 1940, and 1946. It has not

appeared in any subsequent edition of the United States Code.

In its place, there is a notation by the codifiers that the provi-

sion was omitted in the 1918 amendment of Section 5202 of

the Revised Statutes.

served that it had asked for further briefing on the

issue of Section 92’s continued existence, in response

to which the parties had “agreed that section 92 re-

mains in effect.” App., infra, 4a. Nevertheless, the

court concluded, given that the underlying contro-

versy revolved around the interpretation of a statute

that had been omitted from the United States Code,

that it had a duty to inquire into the statute’s exist-

ence. Id. at 6a.

In performing this inquiry, the court engaged in

a detailed analysis of three laws enacted in 1913,

1916, and 1918, with a particular focus on the quota-

tion marks appearing in the 1916 Act. The court first

examined Section 13 of the Federal Reserve Act,

which had been enacted in 1913. Ch. 6, § 13, 38 Stat.

251, 263-264, reprinted App., infra, 80a-82a. In

the midst of paragraphs setting out the “powers of

federal reserve banks” (the title of Section 13), Con-

gress in 1913 included a paragraph that commenced

“TsJection fifty-two hundred and two of the Revised

Statutes of the United States is hereby amended so as

to read as follows,” and went on to list five types of

liabilities that a national bank may incur in “an

amount exceeding the amount of its capital stock.”

The court next examined the 1916 amendment to

the Federal Reserve Act, which, among other things,

amended Section 13. See ch. 461, 39 Stat 752,

753 (1916), reprinted App., infra, 83a-93a. The

1916 amendment of Section 13 commenced by pro-

viding “[t]hat section thirteen be, and is hereby

amended to read as follows,” followed by a colon and

opening quotation marks. The 1916 amendment went

on to reprint Section 13 as it had been enacted in

1913, with certain changes. Each paragraph began

with opening quotation marks, and no closing quota-

tion marks appeared until the end of the sixth para-

graph, which immediately preceded the paragraph

beginning Section 5202 of the Revised Statutes “is

hereby amended to read as follows.” That latter para-

graph was reprinted in the 1916 amendment without

any change in wording from 1913; however, opening

quotation marks were added after the paragraph’s

introductory phrase. The next paragraph, which pro-

vided for regulation of the discounting of bills of

exchange and acceptances authorized by the Federal

Reserve Act, was amended substantively in 1916, and

opening quotation marks were placed before that para-

graph as well. The following paragraph, which was

new in 1916 and was later codified at 12 U.S.C. 92,

granted national banks in small towns the power to act

as insurance agents. That paragraph (henceforth

“Section 92”) also began with quotation marks. No

closing quotation marks appeared until the end of the

paragraph following Section 92. On account of the

placement of the quotation marks, the court of ap-

peals concluded that, “on its face, the 1916 amend-

ments had the effect. of placing section 92 within

section 5202 of the Revised Statutes.” App., infra,

Ya. That is, the court concluded that the first six

paragraphs (all of the paragraphs up to the first

closing quotation marks), were part of Section 13,

while the next four paragraphs (up to the second

closing quotation marks) were part of Rev. Stat.

$ 5202.

The court then turned to the 1918 War Finance

Corporation Act, ch. 45, § 20, 40 Stat. 512, reprinted

App., infra, 94a. In Section 20 of the 1918 Act,

Congress specified that “Section fifty-two hundred

and two of the Revised Statutes of the United States

is hereby amended so as to read as follows,” and then

listed the five types of liabilities national banks may

incur in excess of their indebtedness as listed by the

Federal Reserve Act of 1913, and added a sixth type:

“Liabilities incurred under the provisions of the War

Finance Corporation Act.” The 1918 Act did not

restate any of the three paragraphs from the 1916

Act that had followed the paragraph of that Act

commencing “[s]ection fifty-two hundred and two

of the Revised Statutes of the United States is hereby

amended so as to read as follows.” Because the War

finance Corporation Act did not set out those three

paragraphs (which included Section 92), the court

concluded that they had been repealed in 1918. App.,

infra, Ya-10a.

The court of appeals acknowledged that “the place-

ment of section 92 in section 5202 of the Revised

Statutes [by the 1916 Act] might well have been a

mistake.” App., infra, 19a. In that connection,

the court noted that when Congress had itself ex-

amined the question in 1958, “an impressive array

of witnesses” had testified that Congress did not in-

tend to place Section 92 in Section 5202 of the Re-

vised Statutes in 1916. App., infra, lla. But the

court dismissed the intentions of the 1916 Congress

as “essentially irrelevant,” on the ground that what

mattered were the actions of the 1918 Congress. App.,

infra, 12a. In that regard, the court found it “fair

to assume” that members of the 1918 Congress “would

have sought out a current text of section 5202 to work

from, and not relied on institutional memories of

what the text was, or should have been.” /bid. Since

two “privately published services” placed Section 92

in Section 5202 of the Revised Statutes (9 USS.

Comp. Stat. Ann. § 9764 (West 1916); 3 U.S. Stat.

Ann. § 5202 (T.H. Flood & Co. 1916)), and (in the

court’s view) the quotation marks in the 1916 Act

confirmed that conclusion, the court ‘“assume[d] the

65th Congress understood section 92 to be part of

section 5202, and that its exclusion from the amended

section 5202 signaled its repeal.” App., infra, 13a.

The court gave no weight to Section 92’s subsequent

treatment by Congress and the administrative agen-

cies charged with administering the federal banking

laws. The court acknowledged that Congress in 1982

had purported to amend Section 92, and that the

Comptroller has continued to treat the provision as

valid, but dismissed their views as “irrelevant” and

“immaterial” to the issue of whether Section 92 had

been repealed in 1918. App., infra, 15a. Similarly,

the court dismissed the various judicial decisions since

Section 92’s omission from the Code that have relied

upon Section 92—including Commissioner vy. First

Security Bank of Utah, N.A., 405 U.S. 394 (1972)—

on the ground that in each of those cases the court

“presumed” that Section 92 remains valid. /d. at

16a.

The court also eschewed the power to “rectify Con-

gress’s apparent error.” App., infra, 14a. It dis-

tinguished numerous cases in which courts had dis-

regarded erroneous statutory punctuation on the

ground that each involved an error that “distorted

the meaning of a statute,” but did not lead to repeal

of the statute. Jbid.

Judge Silberman, dissenting, would have upheld

the Comptroller’s decision as embodying a reasonable

interpretation of Section 92, without reaching the

question of whether the provision remains good law.

Conceding that his position “might be thought coun-

terintuitive” (App., infra, 27a), Judge Silberman

believed that the court had no duty to reach the

issue of the statute’s existence, which appellants had

“carefully, deliberately and thoughtfully waived”

(id. at 5la).

3. The Comptroller and the Bank filed timely peti-

tions for rehearing with suggestions for rehearing

en banc, which were denied. Judge Silberman (this

time joined by two colleagues) again dissented on the

ground that the panel should not have decided

whether Section 92 had been repealed. In addition,

Judge Silberman observed that the government had

made ‘‘a forceful argument that the panel * * * de-

cided the matter incorrectly.” /d. at 40a. He added

that “the panel’s opinion * * * created legal uncer-

tainty concerning the sale of insurance by banks

located and doing business in small towns (which has

been the settled practice for most of this century).”

Id. at 40a-41la.

REASONS FOR GRANTING THE PETITION

Subsequent to the D.C. Circuit’s decision in this

case, the Second Circuit held in American Land Title

Ass’n vy. Clarke, 968 F.2d 150 (1992), petition for

cert. pending, that 12 U.S.C. 92 was not repealed

in 1918. In reaching that conclusion, the Second

Circuit specifically disagreed with the decision in

this case (968 F.2d at 152), and review is war-

ranted by this Court to resolve the express conflict.

Whether Section 92 was repealed is an issue of sub-

* Judge Sentelle, joined by the panel majority, filed a state-

ment concurring in the denial! of rehearing en banc. App.,

infra, 35a-37a. Judge Randolph filed a separate statement

expressing his view that “denials of rehearing en banc are

best followed by silence.” Jd. at 42a.

stantial importance to national banks in small towns,

which for three-quarters of a century have relied upon

that provision to engage in insurance agency activi-

ties. Moreover, as the Second Circuit’s decision in

American Land Title Ass’n v. Clarke and this Court’s

decision in Commissioner v. First Security Bank of

Utah, N.A., 405 U.S. 394 (1972), illustrate, whether

Section 92 is good law may affect how courts resolve

a number of other issues concerning national banks.

Accordingly, this Court should determine whether

Section 92 was repealed.*

A. The D.C. Circuit’s decision conflicts squarely

with the Second Circuit’s decision in American Land

Title Ass’n v. Clarke, in which the court held, “[c¢]on-

trary to the view of the D.C. Circuit,” that the omis-

sion of Section 92 from the 1918 War Finance Cor-

poration Act was “inadvertent” and did not “effect[ ]

a repeal of section 92.” 968 F.2d at 152. Accord

Owensboro National Bank vy. Moore, Civ. Action No.

91-3 (E.D. Ky. Aug. 4, 1992), slip op. 15-16. In

concluding that Section 92 remains in existence, the

Second Circuit emphasized that “no mention of the

insurance powers of national banks exists in the leg-

’ We do not seek review to determine whether the D.C.

Circuit erred by reaching the issue of Section 92’s existence

when the parties agreed that it had not been repealed. What-

ever the merits of that dispute, it is not a jurisdictional ques-

tion, so this Court would not be required to decide whether

the court of appeals should have reached the issue if certiorari

is granted. Since the uncertainty created by the court’s hold-

ing that Section 92 was repealed would not be removed by the

reversal of that judgment on the basis that the court should

not have reached the issue, in our view this Court should

focus exclusively in this case on whether Section 92 was

repealed.

islative history” of the 1918 War Finance Corpora-

tion Act, and observed that “if it actually was Con-

vress’ intent to effect such a permanent change to an

unrelated area of law,” it would “expect some clue

to this intent to appear somewhere in the legislative

history.” 968 F.2d at 154. Moreover, “it would be

wholly incongruous,” the court stated, “for Congress

to repeal a provision regarding the totally unrelated

matter of insurance agency powers in an emergency

measure directed at winning the war,” and it was

“highly unlikely” that Congress’s intent to encourage

national banks to support the operations of the War

Finance Corporation “would just happen to coincide

with an intent to repeal provisions regarding na-

tional banks’ insurance agency powers.” bid.

Apart from the express conflict with American

Land Title, the decision below is also in tension with

those decisions, among them this Court’s decision in

Commissioner vy. First Security Bank of Utah, where

the assumption that Section 92 exists influenced the

decision. See 405 U.S. at 401-405.‘ See also Saxon

v. Georgia Ass'n of Indep. Ins. Agents, 399 F.2d 1010,

1012-1016 (5th Cir. 1968) (relying on Section 92 to

*In Commissioner v. First Security Bank of Utah, the

Court noted that ‘[t]he revisers of the United States Code

have omitted [Section 92] from recent editions of the Code,”

but added that “the Comptroller of the Currency considers

§ 92 to be effective.” 405 U.S. at 401 n.12. The Court then

relied on Section 92 in concluding that income from the sale

of insurance could not be attributed to banks in places with

more than 5,000 inhabitants, since Section 92 impliedly bars

such banks from engaging in the insurance business. The

Court concluded that “fairness requires the tax to fall on the

party that actually receives the premiums rather than on the

party that cannot.” 405 U.S. at 405.

conclude that national banks cannot sell broad forms

of insurance as agent); Commissioner v. Morris

Trust, 367 F.2d 794, 795 n.3 (4th Cir. 1966) (noting

Comptroller’s views that Section 92 had not been

repealed). In First National Bank of Lamarque v.

Smith, 610 F.2d 1258, 1262 n.6 (1980), the Fifth

Circuit stated that “further discussion of the issue

fof Section 92’s existence] seems moot.” The D.C.

Cireuit’s decision in this case makes the issue a live

controversy on which the courts are divided.

B. The decision below is also in error, although we

reach that conclusion by a different route from that

taken by the Second Circuit. In our view, analysis of

the text of the 1916 Act, as opposed to its punctua-

tion, shows that Section 92 was not placed in Section

5202 of the Revised Statutes in 1916. Thus, Section

92 was not affected at all—much less repealed—when

Rev. Stat. § 5202 was amended in 1918.

1. As the court below correctly discerned, analysis

of the quotation marks in isolation suggests that in

1916 Section 92 and its companion paragraphs were

to be placed in Rev. Stat. § 5202. However, the text of

the 1916 Act suggests a different structure. The para-

graph preceding Section 92 in the 1916 Act refers to

the Federal Reserve Board’s authority to regulate

the “discount and rediscount and the purchase and

sale by any Federal reserve bank,” of, among other

things, “acceptances authorized by this Act.” 39

Stat. 753 (emphasis added). The reference to “this

Act” must mean the Federal Reserve Act, not Rev.

Stat. § 5202, since the discount and rediscount author-

ity was granted by the second and third paragraphs

of Section 13 of the Federal Reserve Act, and not by

Rev. Stat. § 5202. See 39 Stat. 752; 38 Stat. 263-264.

By referring to “this Act,” the paragraph preceding

Section 92 follows the same usage as the second and

sixth paragraph preceding Rev. Stat. § 5202 in the

1916 Act, and those paragraphs were indisputably

part of the Federal Reserve Act rather than Rev.

Stat. $5202. See 39 Stat. 752-753. Thus, the use of

the term “this Act” suggests that, despite the place-

ment of the quotation marks, the 1916 Act did not

place the paragraph preceding Section 92 in Rev. Stat.

$ 5202.°

The text of the paragraph beginning Rev. Stat.

$ 5202 is “amended so as to read as follows” also sup-

ports the conclusion that it was only that paragraph

that related to Rev. Stat. § 5202 because that para-

graph refers to the “Federal reserve Act” rather than

this Act.” See 39 Stat. 753. The reference to the Fed-

eral Reserve Act by its full title is not surprising, since

a reader of Rev. Stat. $ 5202 would otherwise have no

way of knowing to which Act the provision referred.

The usage makes the inference to be drawn from the

term “this Act” in the paragraph preceding Section

92 even stronger, since it suggests that Congress in

1916 distinguished between statutory provisions tha:

were not to be placed in the Federal Reserve Act (and

thus would have to refer to that Act by its full title)

and provisions that remained part of the Federal Re-

* The paragraph preceding Section 92 (which provided for

regulation of the discounting of bills of exchange and accept-

ances authorized by the Federal Reserve Act) had been en-

acted in 1913 and was amended substantively in 1916: in

both 1913 and 1916, it followed the paragraph amending

Rev. Stat. § 5202. Since the 1913 Act contained no quotation

marks, it was entirely clear at that time that the paragraph

was part of the Federal Reserve Act, not Rev. Stat. § 5202,

Under the court of appeals’ analysis, however. the quotation

marks moved that paragraph from Section 13 to Rev. Stat.

§ 5202 in 1916, and it was then repealed in 1918 along with

Section 92 and the paragraph following Section 92.

serve Act, which could intelligibly refer to the Fed-

eral Reserve Act as “this Act.” *

In short, the text of the paragraph preceding Sec-

tion 92 shows that it was not placed in Rev. Stat.

$5202. If the paragraph preceding Section 92 was

not placed in Rev. Stat. § 5202, then there is no rea-

son to think that any of the paragraphs that followed

it, including the paragraph later codified as Section

92, were placed in Rev. Stat. § 5202.’

2. As a general matter, there is no reason to

assume that the quotation marks should override the

structure assumed by a statute’s text. As this Court

long ago recognized, “[p]unctuation is the most falli-

ble standard by which to interpret a writing.” Ewing

®* The insurance agents have suggested that the reference

to “this Act” in the paragraph preceding Section 92 could be

read to refer to “Federal reserve Act” in the paragraph relat-

ing to Rev. Stat. § 5202. But the paragraph preceding Section

92 should have said “that Act” if it was to be placed in Rev.

Stat. § 5202 and the reference was intended to mean “Federal

reserve Act.”

7 The title of the 1916 Act, which “can aid in resolving an

ambiguity in the legislation’s text” (INS v. National Center

for Immiaqrants’ Rights, Inc., 112 8. Ct. 551, 556 (1991) (cita-

tions omitted)), is inconsistent with the conclusion that the

1916 Act amended Rev. Stat. § 5202 by adding Section 92 and

its companion paragraphs. That title, “An Act To amend

certain sections of the Act entitled ‘Federal Reserve Act,’ ap-

proved December twenty-third, nineteen hundred and thir-

teen,” nowhere suggests that the statute was adding matter

to Rev. Stat. § 5202. The substance of the 1916 amendments

also indicates that Section 92 was not placed in Rev. Stat.

§ 5202. Section 5202, originally enacted in 1863 as part of the

National Bank Act (see Act of Feb. 25, 1863, ch. 58, § 42,

12 Stat. 677), had always dealt with limits on the indebted-

ness of national banks. By contrast, Section 92 had nothing

to do with limits on indebtedness. Nor do Section 92’s com-

panion paragraphs.

v. Burnet, 36 U.S. (11 Pet.) 41, 54 (1837). In this

case, moreover, there is strong evidence that Congress

did not intend the quotation marks in the 1916 Act

to have any interpretive effect. Indeed, it appears

that the statute’s drafters did not intend to employ

quotation marks at all.

The committee bill, which contained Section 92’s

companion paragraphs but not Section 92 (which was

added by amendment), used quotation marks, but in-

consistently.” During the debates, after Section 92 was

added, Senator Brandegee drew attention to the com-

mittee’s use of quotation marks, and asked Senator

Owen, the Chairman of the Committee on Banking and

Currency, whether he thought that “the amended sec-

tions ought to be left in quotation marks, so that they

will appear in that way in the Federal reserve act?” 53

Cong. Ree. 11,155 (1916). Owen agreed that although

quotation marks had been used in the committee re-

port, he did “not think they should be used”: in-

stead, he thought that they “should be omitted.” /bid.

Brandegee thereupon suggested “that in the reprint

to be made of the bill the quotation marks be omitted,”

to which Owen replied: “I accept that amendment.”

Ibid. The amendment was then adopted by the Sen-

ate without objection. Jhbid.

*In the committee bill, opening quotation marks appeared

after the provision stating that Section 13 was “amended to

read as follows,” and closing quotation marks did not appear

until after the puragraph regarding the regulation of dis-

counting of bills of exchange and acceptances authorized by

the Federal Reserve Act (the paragraph preceeding Section

92 in the bill as enacted). H.R. Rep. No. 481, 64th Cong.,

Ist Sess. 1-3 (1916) ; 53 Cong. Rec. 10,998 (1916). The final

paragraph, concerning foreign acceptances (which was

printed in italics in the committee bill because it was to be

added to existing law), had no quotation marks at all. /bid.

It is difficult to know precisely at what point, and

by whom, the quotation marks were reinserted.’

What is clear is that the Act’s drafters did not intend

for the quotation marks to have any significance in

interpreting the statute. There is thus no reason to

conclude that the quotation marks should control over

the evidence in the text of the 1916 Act that Section

92 was not placed in Rev. Stat. § 5202.

3. If Section 92 was not placed in Rev. Stat. § 5202,

then there is no basis for an argument that it was re-

pealed in 1918 by Section 20 of the War Finance Cor-

poration Act. The 1918 Act amended Rev. Stat. § 5202

to provide for a sixth type of indebtedness that a na-

tional bank could assume in excess of the amount of its

capital steck: “[]]iabilities incurred under the provi-

sions of the War Finance Corporation Act.” There is

no evidence that Congress affirmatively intended to

repeal Section 92 and its companion paragraphs in

1918. To the contrary, as the Second Circuit em-

phasized, Congress said not a word about deleting

those provisions. 968 F.2d at 154.

In this case, the D.C. Circuit acknowledged that

deleting Section 92 was “‘unrelated” to the 1918 Act's

* Materials obtained from the National Archives indicate

that before publication in the Congressional Record, the Sen-

ate Conference Report did not contain any quotation marks,

and although the House Conference Report had such marks

inserted by hand, they do not conform to the marks as they

appear in the enrolled Act. The Senate and House Conference

Reports, as they were printed in the Congressional Record,

do contain the quotation marks as they appear in the Statutes

at Large. 53 Cong. Rec. 13,069 (1916) (Senate Conf. Rep.) ;

53 Cong. Rec. 13,354 (1916) (House Conf. Rep.). The en-

rolled Act, which has been examined in the National Archives,

also ecentains the quotation marks as they appear in the

Statutes at Large.

war financing goals, but assumed that the 1918 Con-

gress understood Section 92 to be part of Rev. Stat.

$5202 because of the “facially unambiguous lan-

guage” of the 1916 Act and the fact that two “pri-

vately published services” placed Section 92 in Rev.

Stat. § 5202. App., infra, 13a, citing 9 U.S. Comp.

Stat. Ann. $9764 (West 1916); 3 U.S. Stat. Ann.

§ 5202 (T.H. Flood & Co. 1916). However, as shown

above, the 1916 Act does not unambiguously show

Section 92 to be part of Rev. Stat. § 5202. Indeed, in-

sofar as resort is made to the text of the Act rather

than its punctuation, the Act places Section 92 in

Section 13 of the Federal Reserve Act. And it should

be beyond dispute that the views of the editors of pri-

vately published services are not controlling.

Moreover, if it is “fair to assume” (as the D.C.

Circuit did) that in drafting the 1918 Act interested

members of Congress “would have sought out a cur-

rent text of section 5202 to work from” apart from

the Statutes at Large (App., infra, 12a), it seems

unlikely that the drafters would have turned to pri-

vate services. The most easily accessible compilation

of the federal banking laws would have been that

prepared by the Comptroller and published by the

Senate Committee on Banking and Currency. That

compilation showed Section 92 and its companion pro-

visions as part of Rev. Stat. § 5202 and as part of

Section 13 of the Federal Reserve Act. S. Doc. No.

412, 64th Cong., Ist Sess. 83-84 (1917) (Rev. Stat.

§ 5202); id. at 136-137 (Section 13). A compilation

of the Federal Reserve Act prepared by the Federal

Reserve Board in 1917 also placed Section 92 and its

companion paragraphs in Section 13 of the Federal

Reserve Act, although it reproduced the confusing

punctuation of the Statutes At Large. Federal Res.

Bd., The Federal Reserve Act As Amended 30 (1917).

Thus, even if the drafters of the 1918 Act had not

looked at the language of the 1916 Act, they might

reasonably have assumed on the basis of the compila-

tions that Section 92 would continue in existence how-

ever Rev. Stat. $5202 was amended. Indeed, the

post-1918 compilations of the Senate Committee and

the Federal Reserve Board continued to show Section

92 as part of Section 13 of the Federal Reserve Act.

S. Doc. No. 216, 66th Cong., 2d Sess. 146 (1920).

Accord Federal Res. Bd., The Federal Reserve Act As

Amended 30 (1919).”°

4. Thus, neither the agencies charged with admin-

istering the banking laws nor the congressional com-

mittees that oversaw their administration thought

that Section 92 had been repealed in 1918. Moreover,

the original compilers of the U.S. Code agreed with

that conclusion and placed Section 92 in the initial

Code in 1926 and in all subsequent versions until

1952.

1° The 1918 Act may be interpreted as supplying closing

quotation marks that were missing in the 1916 Act. That is,

there would be no basis for arguing that Section 92 was

repealed in 1918 if closing quotation marks had appeared in

the 1916 amendments following the paragraph beginning

Rev. Stat. § 5202 is “amended so as to read as follows” and

ending by providing that a national bank may assume in-

debtedness in excess of the value of its capital stock in con-

nection, fifth, with “[l]liabilities incurred under the provisions

of the Federal reserve Act.” See App., infra, 86a. The 1918

Act added a sixth provision to Rev. Stat. § 5202 (authorizing

excess indebtedness in connection with liabilities assumed

under the 1918 Act), and it ended with closing quotation

marks. If that sixth provision, including its closing quotation

marks, is inserted after the fifth provision in the 1916 Act,

it is clear that Section 92 and its companion paragraphs were

not part of Rev. Stat. § 5202.

While the codifiers changed their view of the effect

of the 1918 amendment (34 years after the amend-

ment), neither Congress nor the Comptroller have

changed their views. To the contrary, Congress has

twice in recent years enacted legislation which has

assumed Section 92’s existence. See Garn-St Ger-

main Depository Institutions Act of 1982, Pub. L.

No. 97-320, § 403(b), 1510-1511 (amending “[t]he

Act of September 7, 1916 (12 U.S.C. 92; 39 Stat.

753)” by “striking out” Section 92 authorization of

real estate loan brokerage activity); Competitive

Equality Banking Act of 1987, Pub. L. No. 100-86,

§$ 201(b) (5), 101 Stat. 583 (imposing a one-year

moratorium on the expansion of national bank in-

surance agency activities “pursuant to the Act of

September 7, 1916 (12 U.S.C. 92)”). The Comp-

troller, who is charged with implementing and _in-

terpreting Section 92, has consistently taken the

position that the section was not part of Rev. Stat.

$5202 and was not repealed in 1918. See, e.g., Fi-

nancial Institutions Act of 1957: Hearings on S.

1451 and H.R. 7026 before the H. Comm. on Banking

and Currency, 85th Cong., 2d Sess. 1036 (1958)

(letter from Comptroller Gidney to House Banking

Chairman Spence).

While an administrative agency cannot revive a re-

pealed statute, the texts of the relevant statutes in

this case, fairly read, do not support the conclusion

that Section 92 was repealed. At the least, there is

ambiguity. The Comptroller’s permissible construc-

tion of the 1916 and 1918 Acts, which follows the text

rather than the punctuation, should therefore control.

See generally Chevron U.S.A. Inc. vy. Natural Re-

sources Defense Council, Inc., 467 U.S. 837, 843

(1984).

C. The court of appeals’ error—and the conflict

between its decision and that of the Second Circuit

in American Land Title—is also of sufficient impor-

tance to warrant plenary review by this Court. Na-

tional banks located and doing business in small towns

have for three-quarters of a century relied on the

Comptroller’s view that Section 92 is in effect and

permits them to sell a broad range of insurance prod-

ucts.'' The decision of the D.C. Circuit (where venue

against the Comptroller is always proper, see 28

U.S.C. 1391(e)) does violence to the settled expecta-

tions of those banks that currently sell insurance un-

der Section 92 and other banks that may rely on that

authority in the future.”

11 The Office of the Comptroller, which has continued to

update the information available to it regarding the insur-

ance activities of national banks, estimates that at the present

time between 90 and 100 national banks engage in a general

insurance agency business. The American Bankers Associa-

tion and the Oregon Bankers Association estimated before

the court of appeals that some 160 national banks exercised

their authority under Section 92 to sell insurance products.

Supp. Br. of Amici Curiae in Support of Petition for Rehear-

ing at 1. (The government similarly advised the court of

appeals in its rehearing petition (at footnote 1) that “[a]l-

though efforts to ascertain how many national banks are

currently acting as agents for insurance companies are on-

going, preliminary results put the number at well over 100.’’)

Whatever the exact figure, it is clear that a significant num-

ber of national banks currently engage in activities authorized

by Section 92.

12—n their opposition to rehearing, the insurance agents

argued (at pp. 5-6) that the issue of Section 92’s existence

is of limited importance because a parallel provision of the

Bank Holding Company Act, 12 U.S.C. 1843(c) (8) (C) (i),

permits bank holding companies to sell insurance through

In addition, the issue of Section 92’s existence has

ramiiications that extend beyond the question of

whether small town national banks may engage in a

general insurance agency business, because courts

have regularly looked to Section 92 in resolving other

banking issues. For example, the ultimate issue in

American Land Title is whether national banks lo-

cated in places with more than 5,000 inhabitants may

sell title insurance pursuant to their authority to

exercise ‘all such incidental powers as shall be neces-

sary to carry on the business of banking.” 12 U.S.C.

24 (Seventh). The Second Circuit held that Section

92, by authorizing insurance agency activities only

by those national banks located and doing business in

places of with 5,000 or fewer inhabitants, impliedly

bars national banks located and doing business in

larger places from engaging in the title insurance

agency business. 968 F.2d at 157."

subsidiaries in towns with 5,000 or fewer inhabitants. But

a bank would not have to form a holding company to sell

insurance if Section 92 remains on the books.

8 It is the Comptroller’s position, supported by Independent

Bankers Ass'n V. Heimann, 613 F.2d 1164 (D.C. Cir. 1979),

cert. denied, 449 U.S. 823 (1980), among other cases, that

Section 92 does not constitute a limitation on activities (such

as the sale of title insurance) that fall within the incidental

powers of national banks, and thus that the Second Circuit’s

judgment in American Land Title—although not its conclu-

sion that Section 92 exists—is in error. On September 4,

1992, Justice Thomas granted the Solicitor General’s request

for an additional 30 days to consider whether to file a petition

for a writ of certiorari to review the American Land Title

decision. The Solicitor General has since determined that

the government will file a petition for a writ of certiorari in

that related case. On September 17, 1992, the Chase Man-

Similarly, in Commissioner v. First Security Bank

of Utah, this Court overturned a determination by

the Commisioner of Internal Revenue attributing to

certain banks in large cities income derived from the

sale of insurance policies received by affiliates. On

the basis of the assumption that Section 92 bars such

banks “from receiving insurance-related income”

(405 U.S. at 402), the Court concluded “that fairness

requires the tax to fall on the party that actually re-

ceives the premiums rather than on the party that

cannot” (id. at 405). See also id. at 414 n.1 (de-

scribing Section 92 as “the dispositive factor’ in

the Court’s analysis) (Marshall, J., dissenting) ;

id. at 419 (noting “the Court’s repetitive emphasis

on the missing § 92”) (Blackmun, J., dissenting). A

number of courts of appeals have likewise drawn key

inferences from the fact of Section 92’s existence. See,

e.g., Independent Ins. Agents of Am., Inc. v. Board

of Govs., 835 F.2d 1452, 1456 n.8 (D.C. Cir. 1987) ;

Independent Bankers Ass’n vy. Heimann, 613 F.2d

1164, 1170 (D.C. Cir. 1979), cert. denied, 449 U.S.

823 (1980); Commissioner v. Morris Trust, 367

F.2d 794, 795 n.3 (4th Cir. 1966); First National

Bank of Lamarque Vv. Smith, 610 F.2d 1258, 1261 n.6

(5th Cir. 1980). :

In light of the conflict in the circuits and the re-

curring nature of the question presented, this Court

should decide whether Section 92 was repealed in

1918.

hattan Bank, N.A., the intervenor-defendant in American

Land Title, filed its own petition for a writ of certiorari seek-

ing review of the Second Circuit’s decision. See The Chase

Manhattan Bank, N.A. Vv. American Land Title Ass'n, peti-

tion for cert. pending.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

STUART M. GERSON

- Assistant Attorney General

JOHN G. ROBERTs, JR.

Deputy Solicitor General

CHRISTOPHER J. WRIGHT

Assistant to the Solicitor General

ROBERT V. ZENER

JACOB M. LEwIs 2

Attorneys

SEPTEMBER 1992

APPENDIX A

UNITED STATES COURT OF APPEALS

DISTRICT OF COLUMBIA CIRCUIT

Nos. 90-5209, 90-5214

INDEPENDENT INSURANCE AGENTS OF AMERICA, INC.,

ET AL., APPELLANTS

ROBERT L. CLARKE,

Comptroller of the Currency, ET AL.

NATIONAL ASSOCIATION OF LIFE UNDERWRITERS,

ET AL. APPELLANTS

Vv.

RoBERT L. CLARKE, ET AL.

Argued March 1, 1991

Decided Feb. 7, 1992

As Amended Feb. 25, 1992

Before SILBERMAN, BUCKLEY and HENDER-

SON, Circuit Judges.

(la)

Opinion for the court filed by Circuit Judge

BUCKLEY.

Dissenting opinion filed by Circuit Judge SILBER-

MAN.

BUCKLEY, Circuit Judge:

Appellants challenge a ruling by the Comptroller

of the Currency that would permit any national bank,

or its branch, located in a community of not more

than five thousand inhabitants to sell insurance to

customers outside that community. The Comptroller

based his ruling on section 92 of the National Bank

Act. As we find sua sponte that that section has been

repealed, and as the Comptroller cites no alternative

authority for his ruling, we reverse.

I. BACKGROUND

Section 92 was enacted in 1916 as an amendment

to section 5202 of the Revised Statutes of the United

States. It provided, in relevant part, that any na-

tional bank

located and doing business in any place the popu-

lation of which does not exceed five thousand in-

habitants ... may, under such rules and regula-

tions as may be prescribed by the Comptroller of

the Currency, act as the agent for any .. . insur-

ance company authorized by the authorities of

the State in which said bank is located to do

business in said State.

39 Stat. 750, 753 (1916). This provision was codified

as section 92 of Title 12 of the United States Code.

Although section 92 was omitted from section 5202

when the latter was revised and reenacted in 1918,

and although the section has been omitted from re-

cent editions of the United States Code, the Comp-

troller has continued to treat it as valid. See, e.g.,

12 C.F.R. § 7.7100 (1991).

The appellant trade associations, which represent

insurance agents and underwriters, challenge a ruling

by the Comptroller that is based on section 92. The

ruling holds that under that statute, “a national bank

or-its branch which is located in a place of 5,000 or

under population may sell insurance to existing and

potential customers located anywhere.” Letter from

Judith A. Walter, Senior Deputy Comptroller for

National Operations, to Mr. T. Dalrymple (Aug. 18,

1986), reprinted in Joint Appendix at 65. Appellants

assert that section 92 places a geographical limit on

such sales; and they brought this action to have the

ruling set aside under the APA as “arbitrary, capri-

cious, an abuse of discretion, or otherwise not in ac-

cordance with law,” 5 U.S.C. § 706(2)(A) (1988),

as a national bank is not permitted to engage in any

activity that is not specifically authorized by law.

See 12 U.S.C. § 24 (1988).

The district court granted the Comptroller’s motion

for summary judgment based on its finding that his

interpretation of section 92 was “rational and con-

sistent with the statute.” National Ass’n of Life

Underwriters v. Clarke, 736 F.Supp. 1162, 1173

(D.D.C.1990) (internal quotation marks omitted).

Although the court noted “that [section 92] no longer

appears in the United States Code,” it stated that it

would “assume that the statute exists in proprio

vigore” because “Congress, other courts, and the Comp-

troller have presumed its continuing validity.” Jd. at

11463 n. 2 (citations omitted). The court cited no

other source of authority for the Comptroller’s ruling;

nor does the Comptroller claim any.

After the parties had submitted their appellate

briefs, we asked them to address two questions: First,

should this court decide the validity of section 92 in

the absence of a challenge to that validity by any of

the parties? Second, was section 92 in fact valid?

In response to the first question, appellants took the

position that this court was required to consider the

validity of section 92 as it “would be without consti-

tutional authority or power to render [a decision on

the merits] if Section 92 [did] not exist.” Supple-

mental Brief for Appellants at 3. The Comptroller,

on the other hand, argued that it would be inappro-

priate for the court to address the issue: It had not

been raised by the parties; and, in any event, “the

legal issue identified by the Court [did] not go to

its jurisdiction, but rather to the merits of plaintiffs’

claims.” Supplemental Brief for Federal Appellees

at 5.

In responding to our second question, the parties

agreed that section 92 remains in effect. They argue

that Congress did not intend to repeal section 92. Its

technical deletion, they claim, was the result of mis-

placed quotation marks and therefore should be ig-

nored; moreover, as section 92 was unrelated to the

purposes of the 1918 revision of section 5202, an in;

tention to repeal it should not be imputed to Congress.

Finally, the parties claim that subsequent action by

Congress, the Comptroller, and the federal courts

(including the Supreme Court) confirms that section

92 remains in effect.

For the reasons set forth below, we conclude that

we must decide whether section 92 continues to have

the force of law; and because we find it does not, we

reverse.

II. Discussion

A. Should the court decide section 92’s validity?

The role of the judicial branch is a limited one.

The premise of our adversarial system is that

appellate courts do not sit as self-directed boards

of legal inquiry and research, but essentially as

arbiters of legal questions presented and argued

by the parties before them.

Carducci v. Regan, 714 F.2d 171, 177 (D.C.Cir.1983)

(Scalia, J.). On occasion, however, a court will find

it necessary to go beyond the specific legal theories

advanced by the parties. In Arcadia, Ohio v. Ohio

Power Co., U.S. ——, 111 S.Ct. 415, 112 L.Ed.2d

374 (1990), for example, the parties agreed that the

case depended on the proper application of section 318

of the Federal Power Act. The Supreme Court con-

cluded, however, that the challenged orders did not

fall within the scope of that section, and it disposed

of the case on another basis. Jd. at 111 S.Ct. 418.

See also Kamen v. Kemper Financial Services, Inc.,

U.S. , 111 S.Ct. 1711, 1718, 114 L.Ed.2d

152 (1991) (“court is not limited to the particular

legal theories advanced by the parties, but rather re-

tains the independent power to identify and apply the

proper construction of governing law’’). Moreover,

federal courts “are not bound to accept, as control-

ling, stipulations as to questions of law.” Estate of

Sanford v. Commissioner of Internal Revenue, 308

U.S. 39, 51, 60 S.Ct. 51, 59, 84 L.Ed. 20 (1939):

see also Sebold v. Sebold, 444 F.2d 864, 870 n. 8

(D.C.Cir.1971) (“Since this is a question of law, .. .

the agreement of counsel is not binding on this

court.”). The Supreme Court has also held that a

court must take judicial notice of a state law that

is invalid, stating that ‘on general principles, the

question as to the existence of a law is a judicial one,

and must be so regarded by the courts of the United

States.” Town of South Ottarrt-r Perlcins, 94 US.

260, 268, 24 L.Ed. 154 (1876).

We believe that this is one of those occasions where

a court may properly dispose of a case on a basis not

advanced by the parties. Here, the legal question we

are asked to decide is the geographical reach of sec-

tion 92. We are on notice, however, that the section

no longer appears in the United States Code. That

fact gives rise to a statutory presumption that the

law invoked by the parties is invalid, see 1 U.S.C.

§ 204(a) (1988), a presumption that the parties have

been given ample opportunity to rebut. Because this

controversy hangs on the interpretation of a statute

that is presumed not to exist, we not only have the

right to inquire into its validity, we have the duty

to do so.

B. Is section 92 valid?

Section 204(a) of Title 1 of the United States

Code states:

The matter set forth in the edition of the Code

of Laws of the United States current at any time

shall . . . establish prima facie the laws of the

United States, general and permanent in their

nature.

Therefore, in order to determine whether section 92

is valid, we first consult the Code. On inspecting 12

U.S.C. £ 92 (1988), we find the following:

$92. Omitted

Codification

The provisions of this section, which authorized

national banking associations in any place where

the population did not exceed 5,000 to act as an

insurance agent or real estate broker, were added

to R.S. $ 5202 by act Sept. 7, 1916, were omitted

in the amendment of R.S. $ 5202 by act Apr. 5,

1918, and therefore this section was omitted from

the Code. Pub.L. 97-320, Oct. 15, 1982, pur-

ported to amend the Act of September 7, 1916

by deleting [two provisions]. R.S. § 5202, as

amended, was set out as section 82 of this title

prior to repeal by Pub.L. 97-320.

12 U.S.C. $92 (1988) (citations omitted). In sum,

the codifiers treat section 92 as having been repealed

in 1918.

Because we must look to the Code for prima facie

evidence of federal law, its omission creates a pre-

sumption that section 92 does not exist. Still, other

evidence may rebut that presumption; “ ‘the very

meaning of “prima facie” is that the Code cannot

prevail over the Statutes at Large when the two are

inconsistent.’” United States v. Welden, 377 U.S.

95, 98 n. 4, 84 S.Ct. 1082, 1085 n. 4, 12 L.Ed.2d 152

(1964) (quoting Stephan v. United States, 319 U.S.

423, 426, 63 S.Ct. 1135, 1136, 87 L.Ed. 1490 (1943)

(per curiam)). We must therefore examine the text

of the Statutes at Large to see whether they rebut the

presumption that section 92 has been repealed.

1. The Statutes at Large

The critical statutes are section 13 of the Federal

Reserve Act of 1913, Pub.L. No. 63-43, $ 13, 38 Stat.

251, 263-64 (1913) (“1913 Act”), the 1916 amend-

ments to that Act, Pub.L. No. 64-270, 39 Stat. 752,

753 (1916) (“1916 amendments”), and section 20

of the War Finance Corporation Act of 1918, Pub.L.

No. 65-121, $ 20, 40 Stat. 506, 512 (1918) (“1918

Act”). The relevant provisions of these statutes wil:

be found in appendices A, B, and C to this opinion.

As will be seen in Appendix A, section 5202 of the

Revised Statutes of the United States, as amended by

the 1913 Act, is to be found in the text of section 15

of that Act. The question raised by the parties is

whether Congress, in 1916, intended to make the new

section 92 a part of section 5202. The critical lan-

guage in the 1916 amendments reads as follows:

Section fifty-two hundred and two of the Re-

vised Statutes of the United States is hereby

amended so as to read as follows: “No national

banking association shall at any time be indebted,

or in any way liable, to an amount exceeding.

~ « * * *

“That in addition to the powers now vested by

law in national banking associations . . . located

and doing business in any place the population

of which does not exceed five thousand inhabit-

ants ... may, under such rules and regulations

as may be prescribed by the Comptroller of the —

\ 'rrency, act as the agent for any fire, life, or

otuer insurance company .. . by soliciting and

selling insurance and collecting premiums on

policies issued by such company. . .. And pro-

vided further, That the bank shall not guarantee

the truth of any stetement made by an assured

in filing his application for insurance.

“Any member bank may accept drafts or bills

of exchange drawn upon it.... Provided further,

That no member bank shall accept such drafts or

bills in an amount exceeding at any time the

aggregate of one-half of its paid-up and unim-

paired capital and surplus.”

The middle paragraph above would later be codified

as 12 U.S.C. § 92. Thus, on its face, the 1916 amend-

ments had the effect of placing section 92 within sec-

tion 5202 of the Revised Statutes.

Two years later, Congress enacted the 1918 Act.

Section 20 of that Act reads in part as follows:

Sec. 20. Section fifty-two hundred and two of

the Revised Statutes of the United States is

hereby amended so as to read as follows:

“Sec. 5202. No national banking association

shall at any time .. . except on account of de-

mands of the nature following:

“First. Notes of circulation.

* ~ * * *

“Sixth. Liabilities incurred under the

provisions of the War Finance Corporation

Act.”

Section 20, in short, sets forth between opening and

closing quotation marks what appears as the entire

text of the revised section 5202; and as a glance at

Appendix C will contirm, the language of section 92

is not to be found in section 5202 as amended.

Under traditional rules of statutory construction,

the meaning of section 92’s omission is plain; material

omitted on reenactment is deemed repealed. See, e.g.,

10a

Keppel v. Tiffin Savings Bank, 197 U.S. 356, 373, 25

S.Ct. 443, 449, 49 L.Ed. 790 (1905) (“[1]t cannot in

reason be said that the omission . . . gives rise to the

implication that it was the intention of Congress to

reenact it.””); 1A N. Singer, Sutherland Statutory

Construction § 23.12, at 355 (4th rev. ed. 1985)

(‘When the amendatory act purports to set out the

original act or section as amended ... all matter that

is omitted in the act or section which the amendment

purports to set out as amended, is considered re-

pealed.”’) (footnotes omitted). Thus the language and

punctuation of the Statutes at Large, traditionally

construed, support the codifier’s conclusion that sec-

tion 92 was repealed by the 1918 Act.

2. Did Congress Intend to Repeal Section 92?

The parties do not dispute the fact that section 92

cannot survive a literal reading of the 1916 and 1918

statutes. They argue, instead, that the section re-

mains valid because Congress did not intend to repeal

it. They make their statutory argument in two

stages: First, they contend that the apparent deletion

was the result of misplaced quotation marks in the

1916 amendments that had the effect of placing sec-

tion 92 within section 5202 of the Revised Statutes

instead of making it part of section 13 of the Federal

Reserve Act. They then reason that as section 5202

as amended was not intended to include section 92,

its omission from the subsequent revision of section

5202 should not effect a repeal.

They assert, specifically, that a quotation mark

should not have appeared at the end of the paragraph

marked [1] in Appendix B, and that the quotation

mark now appearing after the first colon in para-

lla

graph [2] should have been placed at the beginning

of that paragraph. Had section 20 been so punctuated,

they say, it would be clear that section 5202 itself had

not been amended to include the textually unrelated

paragraphs marked [3], [4] (section 92), and [5].

Because a change of these quotation marks would

make for greater textual consistency in the 1916

amendments, the parties argue that a mistake was

made in the printing of the bill, and they cite cases in

which courts have adjusted the punctuation of stat-

utes in order to make sense of them. They conclude

that the 1918 Act’s revision of section 5202 did not

delete section 92 because the latter could not properly

be considered part of the former.

In support of their view of the 1916 amendments

and their interaction with the 1918 Act, the parties

direct our attention to a letter and memoranda sub-

mitted to the House Banking Committee in 1958 that

also conclude that the inclusion of section 92 in sec-

tion 5202 of the Revised Statutes was inadvertent,

and that section 92 was therefore never repealed.

See Financial Institutions Act of 1957: Hearings on

S. 1451 and H.R. 7626 Before the Comm. on Banking

and Currency of the House of Representatives, 85th

Cong., 2d Sess. 1035, 1036 (1958) (“1958 Hear-

ings”) (letter from Comptroller asserting that Con-

gress misplaced quotation marks and that section 92

“remain[s] in full force’); id. at 1036-40 (memo-

randum from Federal Reserve Board reaching same

conclusion); id. at 1063-65 (Library of Congress’s

Legislative Reference Service reaching same conclu-

sion); ‘d. at 1065-71 (general counsel of Banking

Committee reaching same conclusion ).

This is an impressive array of witnesses, but the

verdict is not unanimous. Committee member (and

l2a

future chairman) Wright Patman was of the view

that section 92 did not exist. /d. at 1062 (section 92

“was repealed in 1918”). Seven years later, the staff

of a House Banking subcommittee, after examining

the response of the Comptroller to a series of ques-

tions, would conclude that

[w]hether or not the Congress . . . [intended] to

perpetuate 12 U.S.C. 92, cannot be ascertained.

In any event, however, its intentions would not

suffice to overcome the effect of the deletion of

§ 92 by the inclusion of § 20 in the Act of 1918.

... Section 92 is non-existent.

Consolidation of Bank Examining and Supervisory

Functions 1965: Hearings on H.R. 107 and H.R.

6885 before the Comm. on Banking and Currency of

the House of Representatives, Subcomm. on Bank

Supervision and Insurance, 89th Cong., Ist Sess. 3,

391 (1965) (“1965 Hearings”’).

It seems to us that the subcommittee staff had its

eyes on the right question; namely, on the effect of

the 1918 Act. Whatever the intentions of the 64th

Congress in 1916, they aye essentially irrelevant to

the task at hand. What we are called upon to deter-

mine are the consequences of the action taken by the

65th Congress when, two years later, it voted the

1918 Act into law. Section 20 of that Act, which

amended section 5202, originated as a floor amend-

ment that was adopted without debate. See 1965

Hearings at 391. It seems fair to assume that in

drafting section 20 and in voting to enact it, the

author and interested members of the House and Sen-

ate would have sought out a current text of section

5202 to work from, and not relied on institutional

memories of what the text was, or should have been.

13a

At that time, there were only three sources to which

they could turn for up-to-date information: the Stat-

utes ot Large, which reproduced section 5202’s fa-

cially unambiguous language, or either of two pri-

vately published services. Each of these services re-

ported that as a result of the 1916 amendments, sec-

tion 5202 of the Revised Statutes contained the

provisions to be found in the paragraphs marked [2]

through [5] of Appendix B. See 9 U.S.Comp.Stat.

Ann. § 9764 (West 1916) and 3 U.S.Stat.Ann. § 5202

(T.H. Flood & Co. 1916). Absent concrete evidence

to the contrary, we must assume that the 65th Con-

gress understood section 92 to be part of section 5202,

and that its exclusion from the amended section 5202

signaled its repeal.

The Comptroller argues, however, that as the pur-

pose of the War Finance Corporation Act of 1918 was

to assist the financing of the war effort, a purpose

that had no logical relationship to the insurance activ-

ities of small town banks, the traditional rule gov-

erning provisions omitted in the version of a statute

should not be applied to this case. In support of this

position, the Comptroller cites two cases interpreting

the Clayton Finality Act of 1959, 73 Stat. 243 (1959),

F.T.C. v. Jantzen, Inc., 386 U.S. 228, 87 S.Ct. 998,

-18 L.Ed.2d 11 (1967), and F.7.C. v. Standard Motor

Products, Inc., 371 F.2d 613 (2d Cir.1967), which

conclude that “the rule that amendment ‘to read as

follows’ repeals everything omitted . . . must yield

where [its] application would be inconsistent with

the purposes of the statute.” Standard Motor, 371

F.2d at 617.

The inconsistency found in those two cases was one

where the literal application of a statutory phrase in

the Clayton Finality Act would have frustrated a

l4a

clearly stated purpose of the amendment. Here, how-

ever, there is no inherent contradiction between the

deletion of section 92 and facilitating the financing of

the American war effort. The two are simply unre-

lated, and no one argues that the stated purpose of

the 1918 Act would have been impeded by the section’s

repeal.

The Comptroller refers us to cases indicating that

we have the authority to rectify Congress’s apparent

error: When “a mistake in draftsmanship is obvious,

courts may remedy the mistake,” Symons v. Chrysler

Corp. Loan Guarantee Bd., 670 F.2d 238, 242 (D.C.

Cir.1981); in construing a statute, a court “will dis-

regard the punctuation, or will repunctuate, if that

be necessary, in order to arrive at the natural mean-

ing of the words employed.” United States v. Shreve-

port Grain d& Elevator Co., 287 U.S, 77, 82-83, 58

S.Ct. 42, 43-44, 77 L.Ed. 175 (1932). See also Ham-

mock v. Loan and Trust Co., 105 U.S. 77, 84-85, 26

L.Ed. 1111 (1881) (same). In each of these cases,

the error distorted the meaning of a statute; where

the putative error brings about the repeal of a stat-

ute, however, judicial correction entails a far graver

task—a task that has generally been shouldered by

the legislative branch. See, e.g., Whitney v. State Tax

Comm'n, 309 U.S. 530, 535-37, 60 S.Ct. 635, 637-58,

84 L.Ed. 909 (1940) (New York legislature altered

trust law and inadvertently immunized certain trusts

from taxation; gap corrected by statute); United

States v. Riker, 670 F.2d 987, 988 (11th Cir.1982)

(Congress inadvertently repealed statute prohibiting

possession of drugs aboard American ships at sea;

gap corrected by statute).

lda

3. Subsequent treatment by Congress, the Comp-

troller, and the courts

The parties argue, finally, that the subsequent

treatment of section 92 by legislative, administrative,

and judicial officials requires us to find that the pro-

vision is alive and well. First, they note that Con-

gress in 1982 attempted to delete several provisions

from section 92. See Garn-St. Germain Depository

Institutions Act of 1982, Pub.L. No. 97-320 § 403

(b); 96 Stat. 1469, 1510-11 (1982); see also S.Rep.

No. 536, 97th Cong., 2d Sess. 60 (1982), reprinted in

1982 U.S. Code Cong. & Admin. News 3054, 3114

(section 403(b) is “ a conforming amendment to 12

U.S.C. § 92, which deletes existing reference to the

authority of national banks.”) (emphasis added).

Moreover, at the time the parties filed their supple-

mental briefs, Congress was considering legislation

that, ‘fer alia, would repeal section 92. See H.R. 6,

102nd Cong., Ist Sess. § 432 (1991). The parties

contend that Congress would hardly seek to modify or

repeal a statute that no longer existed.

What Congress may now believe, however, is irrel-

evant. “[I]t is well settled that the views of a subse-

quent Congress form a hazardous basis for inferring

the intent of an earlier one.” Russello v. United

States, 464 U.S. 16, 26, 104 S.Ct. 296, 302, 78 L.E.2d

17 (1983) (internal quotation marks omitted). Sec-

tion 92 was either repealed in 1918 or it was not: and

for those same reasons, it is also immaterial that the

Comproller of the Currency has continued to treat the

section as valid. Federal agencies have no authority

to reinstate a statute that Congress has repealed.

In none of the cases cited by the parties has a court

found that section 92 remains valid; rather, they have

l6a

presumed that it does. See, e.g., Independent Bankers

Ass'n v. Heimann, 613 F.2d 1164, 1170 & nn. 18-20

(D.C.Cir.1979) ; Independent Ins. Agents of America,

Inc. v. Board of Governors of Fed. Reserve System,

736 F.2d 468, 477 (8th Cir.1984); First Nat’l Bank

of Lamarque v. Smith, 610 F.2d 1258, 1261 n.6 (Sth

Cir.1980).

While the Supreme Court made a number of refer-

ences to section 92 in Commissioner v. First Security

Bank of Utah, N.A., 405 U.S. 394, 92 S.Ct. 1085, 31

L.Ed.2d 318 (1972), its decision did not depend on

the statute’s continued vitality. That case concerned

section 482 of the Internal Revenue Act (“IRA”),

which, for tax purposes, allows the Commissioner

to reallocate income among companies that are un-

der common ownership or control. See 26 U.S.C.

$ 482 (1988). Two national banks, presumably lo-

cated in communities having in excess of five thou-

sand inhabitants, referred borrowers electing to pur-

chase credit life insurance to an independent insur-

ance company that, in turn, would reinsure the poli-

cies with an insurance subsidiary of the holding com-

pany that owned the banks. The banks generating the

credit life insurance received no compensation for

their services; in fact, they had been advised by coun-

sel that it would be unlawful for them to receive any

income as a result of their customers’ purchase of the

insurance. 405 U.S. at 397, 92 S.Ct. at 1088. Never-

theless, the Commissioner of Internal Revenue used

his authority under section 482 of the IRA to real-

locate forty percent of the insurance subsidiary’s pre-

mium income to the banks as compensation for orig-

inating the credit. ;

The Supreme Court described the question before it

as “whether there was a shifting or distorting of the

17a

Banks’ true net income resulting from the receipt and

retention by [the insurance subsidiary] of the pre-

miums above described.” Jd. at 400-01, 92 S.Ct. at

1089-90. The Court noted that

the Banks could never have received a share of

these premiums. National banks are authorized

to act as insurance agents when located in places

having a population not exceeding 5,000 inhabi-

tants, 12 U.S.C.A. $ 92.12

Section 92 of the National Bank Act was enacted

in 1916. When the statutes were revised in 1918 and

re-enacted, § 92 was omitted. The revisers of the United

States Code have omitted it from recent editions of the

Code. However, the Comptroller of the Currency con-

siders § 92 to be effective and he still incorporates the

provision in his Regulations, 12 CFR §§ 2.1-2.5 (1971).

Id, at 400 and n. 12, 92 S.Ct. at 1090 & n. 12. The

Court then observed:

Although § 92 does not explicitly prohibit banks

in places with a population of over 5,000 from

acting as insurance agents, courts have held that

it does so by implication.

The Comptroller of the Currency has acquiesced

in this holding, and the Court of Appeals for the

Tenth Circuit expressed its agreement in the

opinion below.

* * * * * «

[The Commissioner] does not contest this find-

ing by the Tax Court or the holding in this re-

spect of the Court of Appeals below. Accordingly,

we assume for purposes of this decision that the

Banks were prohibited from receiving insurance-

related income. .. .

18a

Id. at 401-02, 92 S.Ct. at 1090-91 (emphasis added)

(footnotes omitted).

Based on this assumption, the Court concluded that

because the banks did not in fact receive any pre-

mium income, and because they would have been pre-

cluded from receiving such income whether or not

they were under common control with the insurance

subsidiary, “the premium income received by [the

insurance subsidiary] could not be attributable to the

Banks”: the “Commissioner’s exercise of his § 482

authority was therefore unwarranted.” /d. at 407,

92 S.Ct. at 1093.

While it is true, as Justice Blackmun noted in dis-

sent, that the Court had placed “repetitive emphasis

on the missing § 92,” id. at 419, 92 S.Ct. at 1099, its

reliance was based on an explicit assumption that the

statute prohibited insurance sales by a national bank

located in a community with a population of more

than five thousand. This assumption as to the appli-

cation, we believe, extended to the validity of the sec-

tion. Although the Court had earlier referred to seec-

tion 92 as authorizing national banks to act as insur-

ance agents in places having no more than five thou-

sand inhabitants, id. at 401, 92 S.Ct. at 1090, that

reference was qualified by footnote 12, which called

attention to section 92’s omission from recent editions

of the United States Code.

Thus, the Supreme Court never directly addressed

the question before us today. A determination of the

validity of section 92 was not necessary to its decision

in First Security Bank; and while the footnote ob-

served that the Comptroller still considered the section

to be effective, this does not indicate that the Court

adopted such a view.

19a

III. CONCLUSION

We acknowledge that the parties’ analysis of the

1916 amendments is plausible, and that the placement

of section 92 in section 5202 of the Revised Statutes

might well have been a mistake. Their claim that we

must therefore find section 92 valid, however, runs

up against the stubborn fact that the troublesome

quotation marks are located where they are, not where

the parties argue that the 64th Congress intended

them to be. Like it or not, they are an integral part

of the bill that the President signed into law and that

was enrolled in the Statutes at Large. In adopting

section 20 of the 1918 Act, the 65th Congress amended

section 5202 as it appeared in those Statutes; and

the parties have failed to point to any concrete evi-

dence to the contrary, we must conclude that Congress

intended the consequences of its actions, and that sec-

tion 92 has ceased to exist.

Moreover, even if we were persuaded that its repeal

wes in fact the result of cumulative mistakes by both

Congresses (the misplacement of quotation marks in

1916 and the failure to take corrective action in 1918),

we would still be hesitant to move into the breach.

We recognize that, in order to give effect to a clear

congressional intent, federal courts have assumed a

rather broad responsibility for correcting flaws in the

language and punctuation of federal statutes. There

is a point, however, beyond which a court cannot go

without trespassing on the exclusive prerogatives of

the levislative branch. |

Ve believe we are at that point. It is one thing for

a court to bend statutory language to make it achieve a

clearly stated congressional purpose; it is quite an-

other for a court to reinstate a law that, intentionally

20a

or unintentionally, Congress has stricken from the

statute books. If the deletion of section 92 was a mis-

take, it is one for Congress to correct, not the courts.

As section 24 of the National Bank Act limits a

national bank’s activities to those authorized by law,

and as the Comptroller cites no authority other than

that section for its challenged ruling, we find that rul-

ing not in accordance with law. We therefore reverse

and remand the case to the district court with instruc-

tions to enter judgment for appellants.

So ordered.

2]a

APPENDIX A

Section 13 of Federal Reserve Act of 1913

POWERS OF FEDERAL RESERVE BANKS.

Sec. 13. Any Federal reserve bank may receive... .

* * * * *

Any member bank may accept drafts or bills of

exchange drawn upon it and growing out of

transactions involving the importation or expor-

tation of goods having not more than six months

sight to run; but no bank shall accept such bills

‘o an amount equal at any time in the aggregate

io more than one-haif its paid-up capital stock and

surplus,

Section fifty-two hundred and two of the Re-

vised Statutes of the United States is hereby

amended so as to read as follows: No national

banking association shall at any time be indebted,

or in any way liable, to an amount exceeding the

amount of its capital stock at such time actually

paid in and remaining undiminished by losses or

otherwise, except on account of demands of the

nature following:

First. Notes of circulation.

Second. Moneys deposited with or collected by

the association.

Third. Bills of exchange or drafts drawn

against money actually on deposit to the credit

of the association, or due thereto.

Fourth. Liabilities to the stockholders of the

association for dividends and reserve profits.

22a

Fifth. Liabilities incurred under the provi-

sions of the Federal Reserve Act.

The rediscount by any Federal reserve bank of

any bills receivable and of domestic and foreign

bills of exchange, and of acceptances authorized

by this Act, shall be subject to such restrictions,

limitations, and regulations as may be imposed

by the Federal Reserve Board.

23a

APPENDIX B

1916 Amendments to Federal Reserve Act of 1913

CHAP. 461.—An Act To amend certain sections of

the Act entitled “Federal Reserve Act,” approved De-

cember twenty-third, nineteen hundred and thirteen.

Be it enacted by the Senate and House of Repre-

sentatives of the United States of America in Con-

gress assembled, That the Act entitled “Federal re-

serve Act,” approved December twenty-third, nineteen

hundred and thirteen, be, and is hereby, amended as

follows:

* * * * *

That section thirteen be, and is hereby amended to

read as follows:

+ * * * *

‘‘Any Federal reserve bank may make advances

to its member banks on their promissory notes

[1] for a period not exceeding fifteen days at

rates to be established by such Federal reserve

banks, subject to the review and determination of

the Federal Reserve Board, provided such prom-

issory notes are secured by such notes, drafts,

bills of exchange, or bankers’ acceptances as are

eligible for rediscount or for purchase by Federal

reserve banks under the provisions of this Act, or

by the deposit or pledge of bonds or notes of the

United States.”

Section fifty-two hundred and two of the Re-

vised Statutes of the United States is hereby

[2] amended so as to read as follows: “No na-

tional banking association shall at any time be

indebted, or in any way liable, to an amount ex-

[3]

[4]

24a

ceeding the amount of its capital stock at such

‘ime actually paid in and remaining undiminished

by losses or otherwise, except on account of de-

mands of the nature following:

“First. Notes of circulation.

“Second. Moneys deposited with or collected by

the association.

“Third. Bills of exchange or drafts drawn

against money actually on deposit to the credit

of the association, or due thereto.

“Fourth. Liabilities to the stockholders of the

association for dividends and reserve profits.

“Fifth. Liabilities incurred under the provi-

sions of the Federal Reserve Act.

“The discount and rediseount and the purchase

and sale by any Federal reserve bank of any

bills receivable and of domestic and foreign

bills of exchange, and of acceptances authorized

by this Act, shall be subject to such restrictions,

limitations, and regulations as may be imposed

by the Federal Reserve Board.

“That in addition to the powers now vested by

law in national banking associations organized

under the laws of the United States any such

[$ 92]association located and doing business in

any place the population of which does not exceed

five thousand inhabitants, as shown by the last

preceding decennial census, may, under such

rules anc_regulations as may be prescribed by the

Comptroler of the Currency, act as the acent for

any fire, life, or other insurance company author-

ized by the authorities of the State in which said

bank is located to do business in said State, by

soliciting and selling insurance and collecting

premiums on policies issued by such company;

[>]

25a

... Provided [sic], however, That no such bank

shall in any case guarantee... the payment of

any premium on insurance policies issued through

its agency by its principal: And provided further,

That the bank shall not guarantee the truth of

any statement made by an assured in filing his

application for insurance.

“Any member bank may accept drafts or bills

of exchange drawn upon it... Provided fur-

ther, That no member bank shall accept such

drafts or bills in an amount exceeding at any

time the aggregate of one-half of its paid-up and

unimpaired capital and surplus.”

26a

APPENDIX C

Section 20 of the War Finance

Corporation Act of 1918

Be it enacted by the Senate and House of Repre-

sentatives of the United States of America in Con-

yress assembled,

TITLE L—WAR FINANCE CORPORATION.

* * * * *

Sec. 20. Section fifty-two hundred and two of the

Revised Statutes of the United States is hereby

amended so as to read as follows:

“Sec. 5202. No national banking association shall

at any time be indebted, or in any way liable, to an

amount exceeding the amount of its capital stock at

such time actually paid in and remaining undimin-

ished by losses or otherwise, except on account of de-

mands of the nature following:

“First. Notes of circulation.

“Second. Moneys deposited with or collected by

the association.

‘Third. Bills of exchange or drafts drawn

against money actually on deposit to the credit

of the association, or due thereto.

“Fourth. Liabilities to the stockholders of the

association or dividends and reserve profits.

“Fifth. Liabilities incurred under the provi-

sions of the Federal Reserve Act.”

“Sixth. Liabilities incurred under the provi-

sions of the War Finance Corporation Act.”

27a

SILBERMAN, Circuit Judge, dissenting:

My position might be thought counterintuitive, but

I would decide the case, as did the district court, with-

out reaching the question the majority thinks is a

necessary antecedent: whether section 92 is still good

law. Appellants did not challenge the validity of sec-

tion 92. Indeed, after the court ordered the parties

to address the issue at oral argument and appellees

filed supplemental materials supporting the conclu-

sion that the statute was not repealed, counsel for

appellants forthrightly said:

It would quite obviously be to the appellants’ ad-

vantage if section 92 were no longer in existence,

since there would be no statutory basis for the

Comptroller’s order. We have researched the is-

sue, both earlier and in light of the court’s ques-

tions, and we have carefully reviewed the sub-

mission made by the government. ... Given that

the statutory issue involves a controversy over

the use of punctuation, that Congress obviously

intended to amend the law in 1982, and that the

Supreme Court has in fact described the law as

in effect, while noting its curious history, we have

concluded that we cannot advance a substantial

argument that section 92 no longer exists.

Tobe sure, when five months later the panel, hav-

ing not decided the case, directed the parties to brief

the issue, appellants—no doubt at that point realizing

that their chances for success were dependent upon

indulging the court—did so and partially switched

their position, urging us to decide whether section 92

exists. But in answer to our question “‘whether this

court should decide the validity of 12 U.S.C. § 92 in

the absense of a challenge to its validity,” appellants

could only suggest that the question might be juris-

28a

dictional—that if section 92 actually had been re-

pealed in 1918, the case might be “moot” or perhaps

might “not even arise.” I do not think there is very

much to either argument ' (nor, apparently, does the

majority), but I agree with appellants’ implicit prem-

ise: that unless we determine the validity question to

be jurisdictional, we should not decide it.

My colleagues take a different position. Driven by

the perceived duty to inquire, on their own, into sec-

tion 92’s validity, they decided the issue. With all due

respect, I think the majority is quite wrong in its per-

ception of our judicial obligation. We owe no ab-

stract duty to Congress (or the President) to enforce

or not to enforce laws; all of our power derives from

our constitutional duty to decide cases and controver-

sies. The issue of section 92’s validity was decidedly

not part of the “case or controversy” as it was

brought to the district court or on appeal to us. It is

quite fair to say that we have added it to the case;

we have created a controversy that did not exist. That

1 U.S.C. § 204(a) states that “matter set forth” in

the Code “establish[es] prima facie the laws of the

United States” hardly suggests any independent duty

on the part of the judiciary to inquire whether mat-

' Although the repeal of a statute moots controversies over

the law’s validity, see, e.g., Burke v. Barnes, 479 U.S. 361,

363-64, 107 S.Ct. 734, 736-37, 93 L.Ed.2d 732 (1987), here

the parties agree that section 92 is valid, and they have a con-

tinuing controversy over the Comptroller’s authority to per-

mit national banks to sell insurance nationwide. And the

case obviously arises under federal law for purposes of 28

U.S.C. § 1331, because, inter alia, the parties have stated a

cause of action under the Administrative Procedure Act, 5

U.S.C. §$§ 701-06. See Japan Whaling Ass'n v. American

Cetacean Soc’y, 478 U.S. 221, 230 n. 4, 106 S.Ct. 2860, 2866

n. 4, 92 L.Ed.2d 166 (1986) ; Robbins v. Reagan, 780 F.2d 37,

42 (D.C.Cir.1985) (per curiam).

29a

ters not appearing in the Code, but which the parties

agree continue to be law, remain valid.’

I do not think my view has ever been stated better

than in the passage the majority quotes from Car-

ducci v. Regan, 714 F.2d 171 (D.C.Cir.1983), written

by then-Judge Scalia:

The premise of our adversarial system is that

appellate courts do not sit as self-directed boards

of legal inquiry and research, but essentially as

arbiters of legal questions presented and argued

by the parties before them.

Id. at 177. The majority, however, trumps Judge

Scalia in Carducci with Justice Scalia in Arcadia,

Ohio v. Ohio Power Co., U.S. , 111 8.Ct. 415,

112 L.Ed.2d 374 (1990). There the Supreme Court

decided that a statute, whose exact application was in

dispute, did not even apply to a particular transaction,

see id. 111 S.Ct. at 418, 422, notwithstanding that no

party had even suggested such an argument in the

Supreme Court or the court of appeals. Judge Scalia,

writing for the Court, did not, however, make clear

that the statutory construction adopted by the Court

was not argued by the parties at any stage (Justice

Stevens pointed it out in his concurring opinion, see

id. 111 S.Ct. at 422-23). So, importantly, the Court

never explained or justified what it did. I do not think

that under these circumstances the Court meant to

establish a precedent on the point.” As in the area of

“1 do not think the majority is even correct in using the

term “presumption,” but our “duty” is not affected in any

event.

’ Perhaps because the Court did not wish to set forth a

justifying principle that extended beyond that case. The

30a

standing, I think we should follow only what the

Court says it does, not merely what it does. Cf. Penn-

hurst State School & Hosp. v. Halderman, 465 U.S.

89, 119, 104 S.Ct. 900, 918, 79 L.Ed.2d 67 (1984)

(court addressing a jurisdictional issue is not bound

by prior decisions that passed on the question sub

silentio); Haitian Refugee Center v. Gracey, 809

F.2d 794, 800 (D.C.Cir.1987) (prior decision that

reached merits without discussing standing did not

constitute precedent on standing).

The next year in Kamen v. Kemper Financial Serv-

ices, Ine., USS. , 111 S.Ct. 1711, 114 L.Ed.2d

152 (1991), the Court, relying on Ohio Power, said

that “[w]hen an issue or claim is properly before the

court, the court is not limited to the particular legal

theories advanced by the parties, but rather retains

the independent power to identify and apply the

proper construction of governing law.” Jd. 111 S.Ct.

at 1718. Of course, that statement in a sense begs

the question, because the hard analysis comes in de-

tern ‘ning when an issue or claim is properly before

the court. In Kamen, the petitioner had brought a

shareholder derivative action under the Investment

Company Act of 1940, 15 U.S.C. §$§ 80a-1 to 80a-64,

without making a demand for relief upon the board

of directors, effectively asserting her right to do so

under federal common law. She did not advert to

state law until her reply brief in the court of appeals,

and thus that court, in shaping a federal common law

Supreme Court, I gather, weighs docket management factors

that the lower federal courts do not encounter. If the Court

wants us to adopt a more relaxed stance than | think appro-

priate, this case may well offer a suitable vehicle to so in-

struct us.

3la

rule, refused to consider state law. The Supreme

Court reversed, holding that the court of appeals

could and should look to state law to fashion the con-

tours of the federal law that governed. See Kamen,

111 S.Ct. at 1718. In other words, the petitioner in.

Aamen did assert a right not to make a demand under

federal law, and the case was decided on that basis:

the Supreme Court only thought that the court of ap-

peals should have looked to state law for guidance.

That does not seem to me much different than a court

relying on a case not cited by the parties to support a

contested proposition. And the Court continued: “We

do not mean to suggest that a court of appeals should

not treat an unasserted claim as waived... .” /d.

111 S.Ct. at 1718 n. 5. This is that very case where

the unasserted claim (that Congress repealed section

92 and therefore the Comptroller’s actions under it

were unlawful) was waived; it was, in fact, care-

fully, deliberately, and thoughtfully waived.

The majority’s reliance on Town of South Ottawa

v. Perkins, 94 U.S. 260, 24 L.Ed. 154 (1876), is

equally misplaced, because the issue of the statute’s

validity in that case was raised by the litigants. See

id. 94 U.S. at 262, 266. Similarly, although the “stip-

ulation of law” cases also cited by the majority estab-

lish courts’ power to reach nonjurisdictional issues not

raised by the parties, they do not suggest that it is al-

Ways appropriate for courts to do so,

More in point, it seems to me, is McCormick v.

United States, U.S. , 111 S.Ct. 1807, 114

L.Ed.2d 307 (1991). In that case the Supreme Court

refused to consider an appellant’s argument, made

for the first time in his brief to that Court, that Con-

gress did not intend the anti-extortion Hobbs Act, 18

32a

U.S.C. $1951, to apply te campaign contributions.

See McCormick, 111 S.Ct. at 1814 n. 6. Because he

concluded that the statute did not apply, Justice

Scalia in a concurring opinion said, “I think it well to

bear in mind that the statute may not exist.” /d. at

1820. But he made quite clear that he would not de-

cide the case on that ground. See id. The approach

taken in McCormick accords with other decisions in

which courts have declined to consider nonjurisdic-

tional issues not raised by the parties. See, e.g.,

Spaulding v. University of Washington, 740 F.2d 686,

694 n. 2 (9th Cir.) (declining to decide, in a pre-

Garcia case involving a charge of discrimination

under the Equal Pay Act, 29 U.S.C. § 206(d)(1),

whether the Act might be unenforceable against the

university, a conceded state agency, “[b]ecause the

parties neither raise the issue nor contend that it

affects our jurisdiction”), cert. denied, 469 U.S. 1036,

105 S.Ct. 511, 83 L.Ed.2d 401 (1984).

As acknowledged by the McCormick majority, see

McCormick, 111 S.Ct. at 1814 n. 6, some courts recog-

nize an exception to the general principle of judicial

restraint that I assert. The “plain error” doctrine is

vecasionally applied in the civil as well as the crim-

inal context to decide issues not raised by the parties

where manifest injustice might otherwise result. See,

e.g., Anderson v. Group Hospitalization, Inc., 820

F.2d 465, 469 n. 1 (D.C.Cir.1987) (discussing civil

cases invoking the plain error rule in exceptional cir-

cumstances where error is obvious and grave); see

also Singleton v. Wulff, 428 U.S. 106, 120, 96 S.Ct.

2868, 2877, 49 L.Ed.2d 826 (1976) (appellate court

is justified in resolving issue not raised below if “the

proper resolution is beyond any doubt” or “ ‘injustice

33a

might otherwise result’” (quoting Hormel v. Helver-

ing, 312 U.S. 552, 557, 61 S.Ct. 719, 721, 85 L.Ed.

1057 (1941))). But I think that a venue is hardly

open to us here, since—as appellants pointed out in

their post-argument brief—for over seventy years the

Comptroller, Congress, federal courts, and even the

Supreme Court, see Commissioner of Internal Reve-

nue v. First Security Bank, 405 U.S. 394, 400 n. 12,

92 S.Ct. 1085, 1090 n. 12, 31 L.Ed.2d 318 (1972),

have assumed that the statute remains in effect.’ (It

actually appears in United States Code Service. See

12 U.S.C.S. § 92.) Injustice is more likely to result

from our reaching the issue than from our declining

to do so, because the question of section 92’s validity

affects many entities, including members of the in-

-surance and banking industries who have relied on the

law’s continued existence and who, having no notice

that the question might be decided, had no opportun-

ity to make their views known in this case. I would

therefore affirm the district court on the ground that

the Comptroller’s ruling is a reasonable interpreta-

tion of section 92, and note that we do not decide the

significance of Congress’ actions in 1918.

* See Maj.Op. at 737-39. Although I agree that subsequent

assumptions by the executive, legislative, and judicial branches

cannot establish Congress’ intent in 1918, I do think that such

widespread acceptance of section 92's existence precludes us

from reaching a different conclusion in the absence of a

challenge by one of the parties.

34a

APPENDIX B

UNITED STATES COURT OF APPEALS

DISTRICT OF COLUMBIA CIRCUIT

Nos. 90-5209, 90-5214

INDEPENDENT INSURANCE AGENTS OF

AMERICA, INC., ET AL., APPELLANTS

ROBERT L. CLARKE, Comptroller of the

Currency, ET AL.

NATIONAL ASSOCIATION OF LIFE UNDERWRITERS,

ET AL., APPELLANTS

ROBERT L. CLARKE, ET AL.

May 22, 1992

Before MIKVA, Chief Judge, WALD, HARRY T.

EDWARDS, RUTH BADER GINSBURG, SILBER-

MAN, BUCKLEY, STEPHEN F. WILLIAMS, D.H.

GINSBURG, SENTELLE, HENDERSON, and RAN-

DOLPH, Circuit Judges.

35a

On Appellees’ Suggestions for

Rehearing En Banc

ORDER

PER CURIAM.

Appellees’ Suggestions for Rehearing En Banc have

been circulated to the full Court. The taking of a

vote was requested and responses were received.

Thereafter, a majority of the judges of the Court in

regular active service did not vote in favor of the

suggestions. Upon consideration of the foregoing, it

ORDERED, by the Court en banc, that the sug-

gestions are denied.

SILBERMAN, STEPHEN F. WILLIAMS and

D.H. GINSBURG, Circuit Judges, would grant the

suggestion of appellee United States National Bank

of Oregon, limited to Point II thereof.

Separate statement filed by SENTELLE, Circuit

Judge, concurring in the denial of rehearing en banc,

with whom BUCKLEY and KAREN LeCRAFT

HENDERSON, Circuit Judges, join.

Separate statement filed by SILBERMAN, Circuit

Judge, dissenting from the denial of rehearing en

banc, with whom STEPHEN F. WILLIAMS and

D.H. GINSBURG, Circuit Judges, join.

Separate statement filed by RANDOLPH, Circuit

Judge.

SENTELLE, Circuit Judge, concurring in the de-

nial of rehearing en banc, with whom Circuit Judges

BUCKLEY and KAREN LECRAFT HENDERSON

join:

I write separately expressing concurrence in the

Court’s denial of rehearing en banc to respond briefly

to a theory advanced by our dissenting colleagues.

36a

Our colleagues question the “judicial power” of a

federal court to decide an issue of law concededly

dispositive of the case where parties have not raised

the issue. I think it most apparent that federal courts

do possess this power. The alternative is that the

parties could force a federal court to render an ad-

visory opinion. What the dissenters in effect argue

is that the parties can stipulate to the state of under-

lying law; frame a law suit, assuming that stipula-

tion; and obtain from the court a ruling as to what

the otherwise dispositive law would be if the stipu-

lated case were in fact the law. Indeed, that is pre-

cisely what would have occurred in this case had the

panel not, sua sponte, raised the question of the re-

peal of section 92.

It has long been recognized that we are “free to

ignore” stipulations as to matters of law. NLRB,

Local 6 v. FLRA, 842 F.2d 483, 485 n. 6 (D.C. Cir.

1988); see also Barry v. United States, 865 F.2d

1317, 1326 (D.C.Cir.1989) (“A concession by a party

as to a matter of law, unlike a stipulation of fact,

need not hinder a court from finding the proper lega!

view.”) (Sentelle, J., dissenting on other grounds’.

Thus, by declining to argue that Congress repealed

the section, appellants cannot stipulate into existence

a repealed statute and then compel the Court to com-

pliantly advise the parties what it would do if that

statute existed. “[I]t is quite clear that ‘the oldest

and most consistent thread in the federal law of jus-

ticiability is that federal courts will not give ad-

visory opinions.’” Flast v. Cohen, 392 U.S. 83, 96,

88 S.Ct. 1942, 1950, 20 L.Ed.2d 947 (1968) (quoting

C. WRIGHT, FEDERAL Courts 34 (196°) ).

The soundness of this rule is suggested by the fol-

lowing: If the parties can by stipulation bring into

37a

existence section 92 and have us decide whether the

Comptroller properly exercised his authority under

that statute, what is to prevent the parties from next

asking us whether the delegation of that authority

to the Comptroller was constitutional?

That parties have assumed and the Comptroller has

enforced the repealed statute for over seventy years

seems to me irrelevant to the question. The question

is not how long the parties assumed a certain state

of the law, but whether that state of the law is merely

an assumption. The passage of time, the acquiescence

of the parties, the assumptions of officials, even all

taken together cannot enact a statute. Legislation

only comes into existence through bicameral congres-

sional enactment and presentment to the President of

the United States. U.S. Const. art. I, $1 and § 7,

el, 2&3:1NS v. Chadha, 462 U.S. 919, 946, 103 S.Ct.

2761, 2781, 77 L.Ed.2d 317 (1983). No stipulation

by an executive official purporting to operate under a

statute and a party affected by the official’s actions

can bring that statute into existence, even for pur-

poses of a judicial decision as to its construction.

I agree with the dissent that there are obvious

limits on the power of the Court—I disagree with the

dissent as to what those limits are. I am convinced

that it is within the Court’s power to determine the

existence of a statute essential to the determination

of a case or controversy whether or not the parties

assume or stipulate that the statute does or does not

exist. At bottom, I do not think it within the power

of the Court to render an advisory opinion on the con-

struction of a statute whose existence depends on the

failure of the parties to assert its invalidity.

38a

SILBERMAN, Circuit Judge, dissenting from the

denial of rehearing en banc, with whom Circuit

Judges STEPHEN F. WILLIAMS and D.H. GINS-

BURG join:

We think this case should be reheard en banc, but

the rehearing should be confined to an issue raised

only by appellee United States National Bank of

Oregon: did the court properly reach and decide the

question whether the statutory provision on which the

Comptroller based his regulation, and which has been

enforced for over 70 years, was repealed by Congress

in 1918? As the dissenting opinion points out, the

appellant trade associations, which represent insur-

ance agents and underwriters, deliberately refused to

argue (waived) any claim that Congress did repeal

section 92. Even when the panel ordered supplemen-

tary briefing directed to that issue five months after

argument, the appellants declined to argue that Con-

gress repealed the section. Since the question is not

juriscictienal, we do not see how it can be appropriate

for a federal court, swa sponte, to decide it, and we

fear that the implications of what might be thought

a rather expansive view of federal judicial power

could be profound indeed.

Almost any case brought rests on certain uncon-

tested legal assumptions that may be thought to be

logical antecedents to the issues in dispute. A court

is not free, however, to examine itself any of those

legal assumptions (if non-jurisdictional) just by as-

serting that they are “essential to the determination.”

Concurrence at 2. That would mean that a lawsuit

is framed by a court’s notion of the logical way to

think about a legal problem, and not by the parties’

controversy. A majority of this court rejected that

concept in a statement of Judge Rork joined by

Judges Ginsburg, Scalia, Starr, Silberman, and Buck-

39a

ley concurring in the denial of rehearing en bane in

King v. Palmer, 778 F.2d 878, 883 (D.C.Cir.1986).

The United States, concerned that a panel of this

court had accepted and ratified what the United

States thought might be an improper expansion of

Title VII (to cover a claim for relief “for sex-based

discrimination” by a woman who alleged that she was

denied a promotion in favor of another woman who

had a sexual relationship with their supervisor, id.),

wished time to consider whether to file an amicus

brief supporting rehearing. We denied rehearing be-

cause the District of Columbia, the defendant, had

not challenged the plaintiff's expansive view of Title

VII but rather, assuming coverage, argued that its

conduct did not violate the statute. Judge Bork said:

Rehearing of that issue en bane would be in-

appropriate because no party challenged that

application of Title VII on appeal and the issue

was not briefed or argued to the panel.. . Be-

cause the point was not before the panel on ap-

neal there is no occasion to address the issue

en hane.

/d. (emphasis in original). In other words, the state-

ment treated the panel’s approval of that interpreta-

tion, although phrased as a holding, as limited only

to that case and therefore not binding precedent. The

en bane majority thought that even if it disagreed

with what the concurrence terms the parties’ “stipu-

lation of law,” it would be inapropriate so to hold

hecause the issue was not contested in the case.

With all due respect to our concurring colleagucs,

we think they have the advisory opinion point exactly

backwards. An advisory opinion is “an abstract de-

termination by the Court of the validity of a statute

_ or a decision advising what the law would be on

eee

40a

a hypothetical state of facts.” Nashville, Chatta-

nooga & St. Louis Ry. Co. v. Wallace, 288 U.S. 249,

262, 53 S.Ct. 345, 348, 77 L.Ed. 730 (1933). When

a court issues an opinion on an uncontested, non-

jurisdictional matter of law like the one here, it has

made “an abstract determination . . . of the validity

of a statute” and issued an advisory opinion—al-

though to the world rather than the parties—because

the issue was not part of the case or controversy.’

The government makes a forceful argument that

the panel, having reached the question whether sec-

tion 92 was repealed in 1918, decided the matter in-

correctly. Given the importance of this issue to the

banking and insurance businesses throughout the

country, we would ordinarily be inclined to view the

government’s petition sympathetically. We do not so

regard the government’s petition here, because, having

vigorously argued before the panel that the court

should not reach the “repeal” question, the govern-

ment now quietly drops that argument and urges us

to do that which it originally contended was improper

—reach the repeal issue but decide it, instead, in the

government’s favor.

We full well recognize that the panel’s opinion itself

created legal uncertainty concerning the sale of insur-

ance by banks located and doing business in small

towns (which has been the settled practice for most

of this century), and, therefore, it would be only nat-

1 It seems to us that the phrase “stipulates to a matter of

law” is too general to be useful in consideration of this kind

of problem. We would agree, for instance, that if both par-

ties simply misread a Supreme Court decision in their briefs

we would not be bound to that interpretation. But that is

far removed from a party’s failure to bring an analytically

separate claim that we thought was available. We are not

free to add such a claim to a case.

4la

ural for the Comptroller to wish a speedy judicial ac-

tion to dispel this uncertainty. But we are frankly

disappointed that the government as a whole would

not have thought the question of judicial power—

surely, in the long run—to be more important.

In any event, the Supreme Court may well be in a

better position to deal with both issues. Now that the

insurance industry, disinclined to look a gift horse in

the mouth, is willing to support the panel’s opinion

and argue that Congress did repeal section 92, the

Supreme Court could grant certivrari on that issue

and, in light of its supervisory role over federal

courts, still give guidance on the question that we

think even more significant.

RANDOLPH, Circuit Judge:

It has become customary for members of this court

to issue statements concurring in or dissenting from

denials of rehearing en banc. I doubt the propriety of

this practice. Such statements are rarely confined to

setting forth the author’s reasons for thinking or not

thinking the case important enough to warrant en

bane treatment. Although the statements may take

this form, more often than not they contain expres-

sions of a different sort. Judges commonly use denials

of rehearing ex bane to declare their views on the

merits of the case. Those who were not on the original

panel announce what they would have decided if only

they had been called upon to rule. Judges who were

members of the panel express afterthoughts, or re-

spond to eriticism contained in the en banc statements

of other judges, or explain what the panel “really”

meant. All of this may be good for the soul. But it

rubs against the grain of Article III’s ban on advisory

opinions. The manner in which these en banc “bulle-

tins” are formulated does not simulate the process of

42a

the court when it is actually deciding a case. If re-

curring issues are addressed, en banc statements may

be tantamount to prejudgments. Another common

practice on denials of rehearing en bane is, to my

mind, also inappropriate. It occurs when the judge

steps out of the robe and into the role of an advocate,

urging the Supreme Court to take the case on cer-

tiorari and correct the panel’s judgment.

Many years ago two wise judges found it a “‘dubi-

ous policy” if “any active judge may publish a dissent

from any decision, although he did not participate in

it and the Court has declined to review it en banc

thereafter . . . especially since, if the issue is of real

importance, further opportunities for expression will

assuredly oceur.”” United States v. New York, New

Haven & Hartford R.R., 276 F.2d 525, 553 (2d Cir.)

(statement of Friendly, J., joined by Lumbard, C.J.),

cert. denied, 362 U.S. 961, 80 S.Ct. 877, 4 L.Ed.2d 876

& 964, 80 S.Ct. 877 4 L.Ed.2d 878 (1960).

I fully agree with Judge Friendly and Judge Lum-

bard. In my view, denials of rehearing en bance are

best followed by silence. They should not serve as the

occasion for an exchange of advisory opinions, over-

tures to the Supreme Court, or press releases.

Before: SILBERMAN, BUCKLEY, HENDER-

SON, Circuit Judges.

ORDER

Upon consideration of the petitions for rehearing of

appellees, it is

Ordered, by the Court that the petitions are

denied.

Circuit Judge SILBERMAN would grant the

petition for rehearing of the United States Na-

tional Bank of Oregon.

43a

APPENDIX C

UNITED STATES DISTRICT COURT

DISTRICT OF COLUMBIA

Civ. A. Nos. 86-3042, 86-3045

NATIONAL ASSOCIATION OF LIFE UNDERWRITERS,

ET AL., PLAINTIFFS

Vv.

ROBERT CLARKE, ET AL., DEFENDANTS,

and

UNITED STATES NATIONAL BANK OF OREGON,

DEFENDANT-INTERVENOR

INDEPENDENT INSURANCE AGENTS OF AMERICA,

ET AL., PLAINTIFFS

ROBERT L, CLARKE, ET AL., DEFENDANTS

and

UNITED STATES NATIONAL BANK OF OREGON,

DEFENDANT-INTERVENOR

May 8, 1990

OPINION

JOHN H. PRATT, District Judge.

44a

I. Introduction

The above action is only the latest chapter in the

long running battle for turf on the part of two power-

ful industries, each of which is subject to govern-

mental regulation. In this case, the insurance indus-

try seeks protection from incursions into its claimed

territory by the commercial banking industry. On

behalf of life, health, property, and casualty insurance

agents throughout the United States, various trade as-

sociations brought this consolidated action for declara-

tory and injunctive relief against the Office of the

Comptroller of the Currency (“OCC”), the Comptrol-

_ler himself, and the United States.’ After the com-

plaints were filed, the United States Bank of Oregon

(“USBO”’), a national bank chartered under the Na-

tional Bank Act, 12 U.S.C. §§ 21-216d (1988) (some-

times ““NBA’’), intervened as an additional defend-

ant.

At issue is whether the Comptroller reasonably con-

cluded that section 92 of the NBA, id. § 92,’ author-

‘We hereby grant defendants’ unopposed request that the -

complaint, which alleges nothing against the United States

eo nomine, be summarily dismissed against that party.

“It is worth noting that this section no longer appears

in the United States Code. Enacted by Act of Sept. 7, 1916,

ch. 461, 39 Stat. 753 (1916), it apparently was inadvertently

repealed in 1918. See Act of Apr. 5, 1918, ch. 45, § 20, 40

Stat. 512 (1918). However, since Congress, other courts,

and the Comptroller have presumed its continuing validity,

see, e.g., Commissioner v. First Sec. Bank, 405 U.S. 394, 401

& n. 12, 92 S.Ct. 1085, 1090 & n. 12, 31 L.Ed.2d 318 (1972);

First Nat'l Bank v. Smith, 610 F.2d 1258, 1261 n. 6 (Sth

Cir.1980) ; Saxon v. Georgia Ass'n of Indep. Ins. Agents, 399

F.2d 1010, 1013 (5th Cir.1968); Garn-St. Germain Deposi-

tory Institutions Act of 1982, Pub.L. No. 97-320, 96 Stat.

45a

ized USBO, through a subsidiary bank insurance

agency, to solicit and sell insurance to customers lo-

cated throughout the country. Plaintiffs contend that

the Comptroller’s decision permits USBO and its par-

ent, U.S. Bancorp, a bank holding company regis-

tered under the Bank Holding Company Act of 1956,

id. $$ 1841-1849 (1988) (sometimes “BHCA’”’), to

violate alleged geographic restrictions on insurance

activities contained in both the NBA and the BHCA.*

Id. $§ 92, 1843(¢)(8). There being no dispute as to

any material fact, defendants and USBO moved for

summary judgment or dismissal, and plaintiffs cross-

moved for summary judgment. The issues have been

fully briefed by the parties and the amici curiae.‘

1511 (1982) [hereinafter Garn-St. Germain Act] (purport-

ing to amend §92); 12 C.F.R. §$ 7.7100 (1989), we will

assume that the statute exists in proprio vigore.

* Defendants claim that two plaintiffs, the National Associ-

ation of Life Underwriters (“NALU”) and the Oregon Life

Underwriters Association (““OLUA”), lack standing because

they represent insurance underwriters rather than agents.

From plaintiffs’ uncontested response, however, it is clear

that NALU and OLUA represent insurance agents, not under-

writers. As such, they plainly have standing to proceed. See

Clarke v. Securities Indus. Ass'n, 479 U.S. 388, 403, 107 S.Ct.

750, 759, 93 L.Ed.2d 757 (1987) (“[C]ompetitors who allege

an injury that implicates the policies of the National Bank

Act are very reasonable candidates to seek review of the

Comptroller’s rulings.”).

‘ Plaintiffs have requested leave to file two supplemental

exhibits. Proposed Exhibit 16, the text of a June 10, 1987,

address by Richard V. Fitzgerald, Chief Counsel of the Comp-

troller, is a post hoc commentary on the mental processes

that led to the Comptroller's decision, and thus is not rele-

vant to this case. See Camp v. Pitts, 411 U.S. 138, 142, 93

46a

Il. Background

A. USBO’s “New Activities” Proposal

As a national bank, USBO is subject to the regula-

tory jurisdiction of the Comptroller, the principal ex-

positor of the NBA. See Clarke v. Securities Industry

Association, 479 U.S. 388, 403-04, 107 S.Ct. 750, 759-

60, 93 L.Ed.2d 757 (1987) (citations omitted) ; First

National Bank v. Smith, 610 F.2d 1258, 1264 (5th

Cir.1980); 12 U.S.C. $$ 1-216d; 12 C.F.R. §$§ 1.1,

4.1la-4.-11 (1989). Under OCC regulations, a national

bank wishing to perform “new activities” through a

subsidiary must submit a written proposal to the Dep-

uty Comptroller for the district in which the bank’s

principal office is located. 12 C.F.R. $ 5.34(d) (1) (i).

Upon receiving such a proposal, the Comptroller eval-

uates whether the activities would “exceed those le-

gally permissible for a national bank operating sub-

sidiary.” Jd. $5.34(d)(1) (ii). If the Comptroller

requires more than thirty days for this evaluation, he

may extend the review period, in which case the bank

must await “written notifications” before engaging

in the “new activities.” /d.

U.S. Bancorp, USBO’s parent, is regulated by the

Federal Reserve Board (sometimes the “Board”),

S.Ct. 1241, 1244, 36 L.Ed.2d 106 (1973) (per curiam) (focal

point for judicial review of Comptroller’s decision should

be administrative record already in existence, not some new

record); Environmental Defense Fund v. Costle, 657 F.2d

275, 284 (D.C.Cir.1981) (judicial review of agency action

normally confined to full administrative record before agency

at time decision was made). Accordingly, leave to file this

exhibit is denied. Leave is granted with respect to pro-

posed Exhibit 17, a re-typed version of a previously filed

letter from defendants’ counsel.

47a

which administers the BHCA.’ See Whitney National

Bank v. Bank of New Orleans & Trust Co., 379 U.S.

411, 419, 85 S.Ct. 551, 556-57, 13 L.Ed.2d 386

(1965); Northeast Bancorp, Inc. v. Board of Gover-

nors, 849 F.2d 1499, 1501 (D.C.Cir.1988); 12 U.S.C.

S$ 1841-1849; 12 C.F.R. § 225.1. U.S. Bancorp did

not submit an application to the Board concerning the

proposed “new activities’ of USBO. Consequently,

the Board was never requested to nor did it approve

U.S. Bancorp’s indirect involvement in certain insur-

ance activities.

Pursuant to OCC regulations, USBO, whose prin-

cipal office is in Portland, Oregon, submitted a “new

activities” proposal to the OCC’s Western District on

October 16, 1984. USBO sought to offer, through its

subsidiary U.S. Bank Insurance Agency, Inc. (“Bank

Agency’), “a full range of insurance products” from

a branch office of USBO in the small town of Banks,

Oregon.” Letter from T. Dalrymple to Billy C. Wood

(Oct. 16, 1984). USBO relied on section 92 of the

NBA and a December 1, 1983, opinion letter * to con-

duct the proposed activities. See id.

* Although plaintiffs allege violations of the Bank Holding

Company Act, neither U.S. Bancorp nor the Federal Reserve

Board is a party to this action.

* The 1980 census population of Banks was 489.

*In 1983, USBO contacted the Assistant Commissioner of

the Oregon Department of Commerce concerning the possi-

bility of USBO’s acting as an insurance agent through

branches in small Oregon communities. The Commissioner

requested an opinion from the OCC as to the types of activi-

ties authorized by 12 U.S.C. § 92. Letter from Robert E.

Miller to Joe Pogar, Regional Counsel (Oct. 7, 1983). The

OCC’s resultant opinion letter stated, in pertinent part: “[A}

48a

The primary question raised by the proposal was

whether any geographic restrictions applied to the

solicitation or sale of insurance authorized by section

92 of the NBA. That section provides that any na-

tional bank:

located and doing business in any place the popu-

lation of which does not exceed five thousand in-

habitants, as shown by the last preceding decen-

nial census, may, under such rules and reqgula-

tions as may be prescribed by the Comptroller

..., act as the agent for any fire, life, or other

insurance company authorized . . . to do business

in [the state in which the bank is located], by

soliciting and selling insurance and collecting

premiums on policies issued by such company....

12 U.S.C. $92 (emphasis added). A similar pro-

vision applies to bank holding companies. See id.

§ 1843(c)(8)(C). Section 4(c)(8) of the BHCA

national bank or its office may act as an insurance agent

without geographic restriction to the community [in which]

it is located. However, whether a national bank or its office

may act as an insurance agent on an interstate basis is an

unsettled issue.” Letter from Debra A. Chong, Senior At-

torney, Western District, to Robert E. Miller at 1 (Dec. 1,

1983) [hereinafter Chong Letter].

* As originally enacted in 1916, § 92 also authorized such

national banks to act as brokers or agents “in making or

procuring loans on real estate located within one hundred

miles of the” community. 39 Stat. 753 (1916). This provi-

sion was deleted in 1982, Garn-St. Germain Act, supra note

2, 96 Stat. 1511, because Congress considered it “obsolete and

unjustifiably restrictive.” H.R.Conf.Rep. No. 899, 97th Cong.,

2d Sess. 89 (1982): accord S.Rep. No. 536, 97th Cong., 2d

Sess. 27 (1982) [hereinafter Senate Report], U.S.Code Cong.

& Admin.News 1982, 3054, 3081.

49a

prohibits a bank holding company from engaging in,

or acquiring and retaining “shares of any company”

engaged in, nonbanking activities unless the Board

determines that such activities are “so closely related

to banking . . . as to be a proper incident thereto.” /d.

$ 1843(c)(8); see Independent Insurance Agents of

America, Inc. v. Board of Governors, 835 F.2d 1452,

1454 (D.C.Cir.1987). Subject to a few limited excep-

tions, the BHCA precludes the Board from finding

that the provision of “insurance as a principal, agent,

or broker” is “closely related to banking.” See 12

U.S.C. §$ 1843(¢c)(8). One exception is “any insur-

ance agency activity in a place” with “a population

not exceeding five thousand (as shown by the last pre-

ceding decennial census).” Jd. § 1843(c)(8)(C); see

Independent Insurance Agents, 835 F.2d at 1455 nn.

4-5. This provision was added to the BHCA in 1982,’

and was “intended to conform to” Board regulations

that already permitted such activity,” “as well as the

* Garn-St. Germain Act, supra note 2, 96 Stat. 1536-37.

” Beginning in 1971, the Board determined that certain

types of insurance activities were “so closely related to bank-—

ing” that bank holding companies could engage in them under

the BHCA. “One of these was the sale of any insurance in

a community that had a population not exceeding 5,000.”

Independent Ins. Agents, 835 F.2d at 1454. In 1979, the

Boaré began to limit this exemption to bank holding com-

panies that (1) had their principal place of business in a

small town; and 2) operated another subsidiary serving the

public in the small town in which they wished to sell insur-

ance. See id. In 1986, after passage of the Garn-St. Germain

Act, the Board deleted the principal place of business require-

ment from its new regulations, having determined that it was

not mandated by either the text or the purpose of § 4(c) (8).

12 C.F.R. § 225.25(b) (8) (ii)) (1989): see Independent Ins.

50a

authority in” section 92 of the NBA. Senate Report,

supra note 8, at 38, U.S.Code. Cong. & Admin.News

1982, p. 3092.

Since 1963, over twenty-five years ago, the Comp-

troller has applied section 92 to any branch office “lo-

cated in a community .. . of less than 5,000,” regard-

less of whether the bank’s principal office is located in

a larger community. 12 C.F.R. § 7.7100 (first codi-

fied in 1971)."" Similarly, a Board regulation allows

Agents, 835 F.2d at 1455. The D.C. Circuit recently upheld

the Board’s decision against an attack waged by many of the

same trade associations that are plaintiffs in this case. See

Independent Ins. Agents, 835 F.2d at 1456-57.

'' After 23 years of silence, plaintiffs now assert that this

interpretive ruling is invalid. They claim that Congress could

not have intended to authorize insurance activities outside a

bank’s “headquartered location” because in 1916, when § 92

was enacted, branch banking did not exist. Plaintiffs empha-

size that the McFadden Act, 12 U.S.C. §§ 36, 81, which au-

thorizes national banks to conduct business through branch

offices, was not passed until 1927.

This challenge, even if meritorious, is barred by laches.

Independent Bankers Ass'n of Am. v. Heimann, 627 F.2d 486,

488 (D.C.Cir.1980). Plaintiffs are trade associations “charged

by [their] members with anticipating the impact of govern-

ment rulings” concerning insurance activities by banks. /d.

at 488. As such, their long delay in challenging this ruling is

patently unreasonable. See id. (12 years held unreasonable).

Further, since 1963, some national banks have invested sub-

stantial capital in insurance agency branches “that meet the

ruling’s requirements.” J/d.; see, e.g., Letter from Michael J.

O'Keefe, District Counsel, Midwestern District (June 19.

1986), Ex. 4 to Pls.Mem. [hereinafter O'Keefe Letter]; Let-

ter from David H. Baris, Regional Counsel (Dec. 29, 1978).

Ex. 2 to Pls.Mem. [hereinaften Raris Letter]. Equity will

not protect those who “through Vears of silence halve] cre-

ated an impression of acquiescence that has led others to make

5la

a subsidiary of a bank holding company to engage “in

any insurance agency activity in a place” the popula-

tion of which does not exceed 5,000, provided the sub-

sidiary “has a lending office” there. Jd. § 225.25(a),

(b) (8) (iii).”” It is the Board’s policy, however, that

solicitation and sales must be restricted to that place

“and to other areas of less than 5,000 adjacent to”’ it.

51 Fed. Reg. 36,201, 36,206 (Oct. 9, 1986); see also

First United Bancshares, Inc., 73 Fed.Res. Bull. 162

(1987).

B. The Comptroller’s Approval Letter

The Comptroller notified USBO that review of its

proposal would extend beyond thirty days, and that

USBO could not conduct the proposed insurance ac-

tivities unless the Comptroller communicated in writ-

ing that he had no objection. Letter from Rufus O.

Burns, Jr., District Administrator, Western District,

to T. Dalrymple (Oct. 24, 1984). Almost two years

later, on August 18, 1986, the Comptroller approved

substantial financial commitments.” /ndependent Bankers v.

Heimann, 627 F.2d at 488.

We also note that plaintiffs’ challenge is based on a false

premise. Contrary to their assertion, branch banking was

not unknown in 1916. At the turn of the century, five na-

tional banks and 82 state banks operated a total of 119

branches. Firts Nat'l Bank v. Walker Bank & Trust, 385

U.S. 252, 257, 87 S.Ct. 492, 495, 17 L.Ed.2d 343 (1966) (cita-

tion omitted). By the end of 1923, several years prior to the

enactment of the McFadden Act, 91 national banks and 580

state banks operated a total of 2,054 branches. /d. (citation

omitted).

"The D.C. Circuit recently wpheld this regulation against

an attack waged by many of the same trade associations that

are plaintiffs in this case. See Independent Ins. Agents, 835

F.2d at 1456-57. See supra note 10.

52a

USBO’s proposal and, in so doing, authorized Bank

Agency, the subsidiary of USBO, “‘to sell insurance to

customers residing outside’ Banks, Oregon. See Let-

ter from Judith A. Walter, Senior Deputy Comptrol-

ler for National Operations, to T. Dalrymple at 4

(Aug. 18, 1986) [hereinafter “Approval Letter” or

Letter” ].

The Approval Letter analyzed the text and legis-

lative history of section 92, as well as relevant OCC

rules and policies. Section 92, it found, was silent

concerning the sale of insurance “‘to persons and busi-

nesses located in different states.” /d. at 2-3. The

Letter then explained that the original statute had

included an express geographic restriction (100

miles) applicable to loans on real estate."’ According

to the Letter, this restriction, coupled with the ab-

sence of one on insurance activities, indicated “con-

gressional intent not to limit geographically a bank’s

market area for its insurance products.” /d. at 3

(relying on expressio unius est exclusio alterius).

The Approval Letter next explained that section

92's legislative history—essentially only a 1916 letter

from Comptroller Williams to the Senate Banking and

Currency Committee—did “not directly address [the]

geographic limitations’ at issue. /d. Williams

drafted and recommended the passage of what ulti-

mately became section 92’s insurance provision. See

id.; see also 53 Cong.Rec. 11001 (1916)."' Based on

18 See supra note 8.

'§ Williams recommended that insurance privileges be

granted to national banks located and doing business in

communities of 3,000 or fewer inhabitants. See 53 Cong.Rec.

11001. Prior to passage, Congress changed the operative

figure to 5,000. See id. at 11153.

53a

his comments, the Approval Letter concluded that the

primary purpose of the insurance provision was to

provide additional sources of revenue to national

banks that, due to their location in small towns, “were

having problems deriving a reasonable profit from

their banking business.” Approval Letter at 4 (cita-

tions omitted). .

Allowing sales to customers outside the local popu-

lation would further this purpose, the Letter reasoned,

because the local population’s demand for insurance

might be too smal] “to improve significantly the bank’s

profitability... .’’ /d. In this regard, the Letter em-

phasized that the Comptroller had never imposed any

geographic restrictions on the insurance activities of

small town national banks, and that no re’evant re-

strictions existed under Oregon law. /d. The Letter

did not address the proposal’s legality under the

BHCA.

Based on this analysis, the Approval Letter au-

thorized Bank Agency to “sell insurance . . . to exist-

ing and potential customers regardless of where

[they] are located.” /d. at 5. The only qualification

was that Bank Agency “could not sell insurance...

to customers located in a state where the” under-

writer was not licensed to do business. Jd. Subse-

quently, Bank Agency began offering insurance to

customers in a number of states. The Federal Re-

serve Board has never taken any action regarding

U.S. Bancorp’s indirect involvement in these activi-

ties."”

Plaintiffs assert that the Approval Letter, by au-

thorizing geographically unlimited sales of insurance,

'* The Board clearly has the power to act. See 12 U.S.C.

§$1844(b), (c), (e).

oda

sanctions violations of section 92 of the NBA and

section 4(c)(8) of the BHCA."® They seek to enjoin

the Comptroller to withdraw the Approval Letter and

to refrain from granting similar approval to any

other national bank. While plaintiffs concede that we

lack jurisdiction to adjudicate their BHCA claim,”

they urge us to find that the Comptroller erroneously

approved USBO’s proposal without providing the

Board an opportunity to consider its legality under

the BHCA. We turn first to plaintiffs’ claim under

the NBA.

III. Plaintiffs’ Claim Under the National

Banking Act

A. The Applicable Standard of Review

It is undisputed that the Approval Letter of Au-

gust 18, 1986, is subject to judicial review under the

Administrative Procedure Act, 5 U.S.C. $$ 701-706

(1988). See Camp v. Pitts, 411 U.S. 138, 140, 93

S.Ct. 1241, 1243, 36 L.Ed.2d 106 (1973) (per

curiam); Association of Data Processing Service Or-

ganizations v. Camp, 397 U.S. 150, 156-58, 90 S.Ct.

‘6 Originally, plaintiffs’ wide ranging complaint also alleged

that the Approval Letter violated the McFadden Act’s re-

strictions on “branch banking,” 12 U.S.C. §§ 36, 81. Plaintiffs

dropped this claim after USBO affirmed that Bank Agency

was the only branch engaged in the insurance activities at

issue. See Pls.Mem. at 9 n. 6.

‘7 Pls.Reply Mem. at 18-19. The Board has exclusive juris-

diction in the first instance to determine the merits of a

BHCA challenge, 12 U.S.C. § 1842, with judicial review only

in a court of appeals, id. § 1848. American Ins. Ass’n v.

Clarke, 865 F.2d 278, 288 (D.C.Cir.1988) (citing Whitney

Nat’l Bank, 379 U.S. at 419-23, 85 S.Ct. at 556-59).

5da :

827, 831, 25 L.Ed.2d 184 (1970). However, since no

hearing or formal findings were required for the

Comptroller to pass on USBO’s proposal, his decision

ean be overturned only if it was arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance

with law. Camp v. Pitts, 411 U.S. at 140-42, 93 S.Ct.

at 1243-44 (citing 5 U.S.C. § 706(2)(A)); see Citi-

zens to Preserve Overton Park, Inc v. Volpe, 401 U.S.

402, 413-17, 91 S.Ct. 814, 822-24, 28 L.Ed.2d 136

(1971). Moreover, because we are called upon to re-

view an agency’s interpretation of its governing stat-

ute,"* we are required to apply the landmark test an-

nounced in Chevron U.S.A., Inc. v. Natural Resources

Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81

L.Ed.2d 694 (1984). See Sullivan v. Everhart,

U.S. ——, 110 S.Ct. 960, 964, 108 L.Ed.2d 72

(1990).

Under Chevron, our first inquiry is whether Con-

gress has directly addressed the issue of geographic

restrictions on insurance sales under section 92.

Chevron, 467 U.S. at 842, 104 S.Ct. at 2781. “If the

intent of Congress is clear, that is the end of the mat-

ter; for the court, as well as the agency, must give

effect to the unambiguously expressed intent of Con-

gress.” Jd. 467 U.S. at 842-43, 104 S.Ct. at 2781.

However, “if the statute is silent or ambiguous with

respect to [this] issue,” we must determine whether

the Comptroller’s construction is ‘“‘permissible,” id.

467 U.S. at 843, 104 S.Ct. at 2781, that is, whether

it is “rational and consistent with the statute.” NLRB

18 See Clarke v. Securities Indus. Ass'n, 479 U.S. at 403-04,

107 S.Ct. at 759-60 (citations omitted) ; Investment Co. Inst.

v. Camp, 401 U.S. 617, 626-27, 91 S.Ct. 1091, 1097, 28 L.Ed.2d

367 (1971) (citation omitted).

doa

vu. United Food & Commercial Workers Union, 484

U.S. 112, 123, 108 S.Ct. 413, 420-21, 98 L.Ed.2d 429

(1987). In so doing, we must give “great weight”

to any reasonable interpretation the Comptroller has

adopted. Clarke v. Securities Industry Association,

497 U.S. at 403-04, 107 S.Ct. at 759-60 (citations

omitted); Jnvestment Co. Institute v. Camp, 401

U.S. 617, 626-27, 91 S.Ct. 1091, 1097, 28 L.Ed.2d

367 (1971) (citation omitted); see Securities Indus-

try Association v. Board of Governors, 821 F.2d 810,

813 (D.C.Cir.1987) (citations omitted), cert. denied,

484 U.S. 1005, 108 S.Ct. 697, 98 L.Ed.2d 649 (1988).

B. Chevron Step One

Plaintiffs contend that the Comptroller’s interpre-

tation contradicts the plain meaning of the statute.

According to plaintiffs, section 92 clearly limits in-

surance sales and solicitation to the small community

in which the bank’s selling office is located, in this case

Banks, Oregon. This of course misstates the facts.

We agree with the Comptroller that the statute is

silent on this issue.

As in all cases of statutory interpretation, we begin

by examining the statutory language itself. Jnvest-

ment Co. Inst. v. Conover, 790 F.2d 925, 933 (D.C.

Cir.), cert. denied, 479 U.S. 939, 107 S.Ct. 421, 93

L.Ed.2d 372 (1986); see K Mart Corp. v. Cartier,

Ine., 486 U.S. 281, 291, 108 S.Ct. 1811, 1817, 100

L.Ed.2d 313 (1988) (citation omitted). Section 92

plainly permits Bank Agency, under such regulations

as the Comptroller may prescribe, to solicit and sell

insurance for any insurance company authorized to do

business in Oregon. See 12 U.S.C. § 92. Beyond this,

the statute says little. It does not refer to the market

Bank Agency may serve, much less restrict solicita-

57a

tion or sales to the residents of Banks. See id. This

silence, coupled with the express delegation of rule-

making authority to the Comptroller, suggests that

Congress explicitly “left a gap for the [Comptroller ]

to fill.” Chevron, 467 U.S. at 843, 104 S.Ct. at 2781.

Plaintiffs argue, however, that a geographic restric-

tion is implicit in the statute’s requirement that the

selling office be “located and doing business” in a

small community. 12 U.S.C. $92. Plaintiffs stretch

the text too far. The phrase “located and doing busi-

ness” plainly refers to the location of Bank Agency,

not the customers to whom it may sell. Certainly

USBO may accept deposits or extend credit to custom-

ers located outside Banks. Nowhere else does the

NBA prohibit a national bank from offering its serv-

ices to customers residing outside the community in

which it is located. Indeed, an “affirmative indica-

tion” is required “to justify [a statutory] interpreta-

tion that would permit a national bank to engage in a

business but” prevent the bank from advertising it.

Franklin National Bank v. New York, 347 U.S. 373,

377-78, 74 S.Ct. 550, 553, 98 L.Ed. 767 (1954).

Therefore, if Congress had intended to impose such a

prohibition here, it presumably would have done so

expressly.

Plaintiffs also attempt to read a geographical re-

striction into section 92’s provision that underwriters

whose policies a national bank sells be authorized to

do business in the state in which the bank’s selling

office is located. 12 U.S.C. $92. Again plaintiffs

stretch the text too far. We agree with defendants

that this provision “does not even hint at any restric-

tion on the leeation of customers, much less any re-

quirement that . . . customers reside only in the small

58a

community in which the [selling] office is located.”

USBO’s Reply Mem. at 8. Rather, it seems merely to

reflect Congress’ recognition that insurance is essen-

tially a state-regulated industry. See Dfs. Reply Mem.

at 7-8.

At the risk of laboring the obvious, our first inquiry

under Chevron does not end with the statutory lan-

guage itself. It is helpful to examine “the language

and design of the statute as a whole” for signs of con-

gressional intent on the issue at hand. K Mart Corp.,

486 U.S. at 291, 108 S.Ct. at 1817 (citation omitted).

We are not unmindful of the fact that, as originally

enacted, section 92 also authorized small town na-

tional banks to engage in mortgage activities. 39

Stat. 753 (1916)."" Significantly, Congress expressly

restricted the scope of these activities. A small town

national bank could procure “loans on real estate lo-

cated within one hundred miles of the” bank’s office.

/d. This provision indicates that Congress knew how

to impose geographic restrictions when it wanted to.

It deliberately chose not to with respect to insurance

activities.”

1% See supra note 8.

* Under the maxim expressio unius est exclusio alterius,

if “ ‘Congress includes particular language in one section of

a statute but omits it in another .. ., it is generally presumed

that Congress acts intentionally and purposely in the dis-

parate inclusion or exclusion.’” Russello v. United States,

464 U.S. 16, 23, 104 S.Ct. 296, 300, 78 L.Ed.2d 17 (1983)

(quoting United States v. Wong Kim Bo, 472 F.2d 720, 722

(5th Cir.1972)). While this maxim is subordinate “ ‘to the

doctrine that courts will construe the details of an act in

conformity with its dominating general purpose,’” Herman

& MacLean v. Huddleston, 459 U.S. 375, 387 n. 23, 103 S.Ct.

683, 690, 74 L.Ed.2d 548 (1983) (quoting SEC v. C.M. Joiner

59a

Turning next to the legislative history, we agree

with the Comptroller that this history does not di-

rectly address the issue. The only substantive com-

ments regarding section 92’s insurance provision are

contained in a letter to the Senate Banking and Cur-

rency Committee from Comptroller Williams, who

drafted the provision and recommended its adoption by

Congress. See 53 Cong.Ree. 11001 (1916). Williams

was concerned with the competitive problems faced by

many small national banks and their negative conse-

quences for customers. While small national banks

endowed with “average deposits” and “good manage-

ment” could lend money at legal interest rates and

still return a profit, “many banks,” due to “small de-

posits,” were unable to accomplish this task. /d. As

a result, these banks often charged “excessive and in

some cases grossly usurious” interest rates. /d. Wil-

liams believed the banks needed “additional sources

of revenue” in order to compete more effectively “with

local State banks and trust companies which are some-

times authorized . . . to do a class of business not

strictly that of commercial banking.” Jd. Accord-

ingly, he recommended that national banks “located

in villages and towns” with populations not in excess

of 3,000 *' “be permitted to act as agents for insur-

Leasing Corp., 320 U.S. 344, 350-51, 64 S.Ct. 120, 123, 88

L.Ed. 88 (1943)), there is no conflict between the two in

this case. As discussed immediately infra, the primary pur-

pose of the legislation does not require the imposition of

~ geographic restrictions on insurance sales and solicitation.

21 Congress changed the operative number to 5,000. See

53 Cong.Rec. 11153.

60a

ance companies ... and for the negotiation of loans

on...realestate....”” Id.

Plaintiffs, recognizing Williams’ concern with

small, struggling banks, question its applicability to

USBO, the forty-fourth largest bank in the country.

Clearly, however, the statute makes no distinction be-

tween profitable and unprofitable banks. Cf. United

States v. Naftalin, 441 U.S. 768, 773, 99 S.Ct. 2077,

2081, 60 L.Ed.2d 624 (1979) (“The short answer is

that Congress did not write the statute that way.”).

Moreover, there is no indication that Williams in-

tended to create such a distinction. Although he rec-

ognized that some small town banks were profitable,

see 53 Cong.Ree. 11001, he recommended a provision

that on its face applies to all small town banks, re-

gardless of size or capitalization level. See 12 U.S.C.

$92. Finally, since 1963 the Comptroller has ex-

tended insurance privileges to branch offices, such as

Bank Agency, that meet the statute’s locational re-

quirement. 12 C.F.R. § 7.7100. As we stated earlier,

this interpretive ruling is no longer subject to chal-

lenge.” In light of these factors, we find plaintiffs’

contention completely without merit.

Williams also expressed his views on why his pro-

posal should be limited “to banks in small communi-

ties.” 53 Cong. Rec. 11001. While “the new business”

would help small town banks to become profitable, he

doubted it would “assume such proportions as to dis-

* Willianis believed that the real estate should be located

in the bank’s region of the country, where the bank might

“have some direct knowledge as to [its] value... .” 53 Cong.

Rec. 11001. He recommended no similar limitation on insur-

ance activities.

28 See supra note 11.

6la

tract [bank] officers . . . from the principal business

of banking.” /d. For city banks, however, he thought

the banking business already “‘afford[ed] ample scope

for the energies of trained and expert bankers.” /d.

Williams also predicted that “in many small places”

the market for insurance or mortgages would not

“take up the entire time of an insurance broker,” and

that small town banks therefore would be unlikely

“to trespass upon outside business naturally belonging

to others.” Jd. Apparently, Williams assumed that a

low demand fer insurance in many small towns would

deter insurance agents from soliciting there.

Plaintiffs argue that Williams’ second rationale man-

dates a narrow construction of section 92. It evinces,

they claim, a legislative intent to prohibit banks from

marketing insurance outside the smali towns in which

they are located. Again we disagree. Williams’ state-

ment bears the indicia of a prediction, not a prerequi-

site. See id. (“the bank is not... likely to trespass’’ )

(emphasis added). As such, it i8 an insufficient basis

for reading a geographic restriction into an otherwise

silent statute. Moreover, we are not convinced that

Williams would have written the statute any differ-

ently had he foreseen the societal changes that have

rendered his prediction anachronistic.** As stated

earlier, his primary goal was to provide small town

banks with additional sources of revenue, not to pro-

tect the markets of competing insurance agents. See

id. In the absence of a clearer indication of legisla-

tive intent, we are not free “to redraft” the statute

“in an effort to achieve that which” plaintiffs ‘believe

“* We take judicial notice of the fact that this country is

more densely populated and technologically advanced now

than it was in 1916.

62a

Congress “ha[s] failed to do.” United States v. Locke,

471 U.S. 84, 95, 105 S.Ct. 1785, 1792-93, 85 L.Ed.2d

64 (1985).

C. Chevron Step Two

Because we hold that section 92 is silent with re-

spect to geographic limitations on sales and solicita-

tion, we must defer to any reasonable interpretation

by the Comptroller on that issue. See Chevron, 467

U.S. at 843, 104 S.Ct. at 2781; Clinchfield Coal Co.

v. Federal Mine Safety & Health Commission, 895

F.2d 773 at 779-80 (D.C.Cir. 1990); Securities In-

dustry Association v. Board of Governors, 821 F.2d

at 813; /nvestment Co. Institute v. FDIC, 815 F.2d

1540, 1546 (D.C.Cir.), cert. denied, 484 U.S. 847, 108

S.Ct. 143, 98 L.Ed.2d 99 (1987). As our analysis

under the first prong of Chevron indicates, “the lit-

eral language” of section 92 supports the Comptroller

“and nothing in the legislative history” or the stat-

ute’s purpose “casts doubt on [his] interpretation.”

Northeast Bancorp, 849 F.2d at 1503. According to

plaintiffs, however, there are at least three reasons

why the Approval Letter deserves no deference. First,

they claim, it contravenes the general policy reflected

in the country’s banking laws of separating banking

from commerce. Second, they argue that section 92

and the BHCA’s “small town” insurance activities

provision should be construed together, and that the

latter clearly restricts the geographic scope of solicita-

tion and sales. Third, plaintiffs contend that the

Comptroller’s decision is inconsistent with prior

agency rulings on the same issue.

68a

1. The Policy of Separating Banking From Com-

merce

Plaintiffs maintain that the banking laws of this

country reflect a clear congressional policy to separate

banking from commerce. In the present case, how-

ever, neither the face of the statute nor the legislative

history contradicts the Comptroller. Therefore, even

assuming arguendo that plaintiffs’ statement of gen-

eral policy is correct,” their argument must fail. See

Investment Co. Institute v. FDIC, 815 F.2d at 1549

(citing Chevron, 467 U.S. at 843-44, 104 S.Ct. at

2781-82). “It is not our place to implement congres-

sional policy in ways Congress itself fails to pursue.”

Id. (citing Board of Governors v. Dimension Finan-

cial Corp., 474 U.S. 361, 373-74, 106 S.Ct. 681, 688-

89, 88 L.Ed.2d 691 (1986); TVA v. Hill, 437 U.S.

153, 194-95, 98 S.Ct. 2279, 2301-02, 57 L.Ed.2d 117

(1978) ): see also Chevron, 467 U.S. at 866, 104 S.Ct.

at 2793.

2. The Effect of Section 4(c)(8)(C) of the Bank

Holding Company Act

Plaintiffs next argue that section 4(c)(8)(C) of

the Bank Holding Company Act and section 92 of the

National Bank Act are in pari materia—that is, per-

tain to the same subject—and thus should be con-

strued together. They maintain that section 4(c) (8)

25 It is worth noting that § 92 is not the only “exception”

to this “policy.” For example, Congress has authorized na-

tional banks to deal in securities of certain governmental

entities and to offer investments in the form of commingled

investment retirement accounts. Glass-Steagall Act, § 16, 12

U.S.C. § 24 (Seventh) ; see Investment Co. Inst. v. Conover,

790 F.2d 925.

Oda

(C), the similar “small town” exception applicable to

bank holding companies, “unequivocally limits the

veographic scope” of insurance activities to the small

community in which the bank is located. Pls. Reply

Mem. at 6. Plaintiffs assert that “[t]his parallel pro-

vision,” which was passed in 1982, “sweeps away any

ambicuity in the legislative history of section 92 it-

self.’ /d. at 5. In short, they ask us to find that sec-

tion 92 is governed by the same geographic limitations

they claim are mandated by section 4(c)(8)(C) of

the BHCA. For the reasons that follow, we reject

their interpretation.

Clearly-the language of the two provisions is not

identical. Whereas section 4(c)(8)(C) authorizes

“any insurance agency activity in a place” whose

population does not exceed 5,000, 12 U.S.C. § 1843(c)

(8)(C), section 92 empowers a national bank “lo-

cated and doing business in” such a place to act as a

general insurance agent. Jd. $92. As a general rule,

“{l}anguage in one statute usually sheds little light

upon the meaning of different language in another

statute,” and “[t]he use of the specific in the

[former] cannot fairly be read as imposing a limita-

tion upon the general provision in the [latter].” Rus-

sello v. United States, 464 U.S. 16, 25, 104 S.Ct. 296,

301, 78 L.Ed.2d 17 (1983). Therefore, even if sec-

tion 4(c)(8)(C) plainly restricted solicitation and

sales to a place whose population does not exceed

5,000," there ordinarily would be no justification for

** We question whether the geographic scope of the BHCA’s

“small town” exception is “unequivocally limit{ed].” Pls.

Reply Mem. at 6. Although § 4(c) (8)(C) was “intended to

conform to” existing Board regulations, Senate Report, supra

note 8, at 38, U.S.Code Cong. & Admin. News 1982, p. 3092,

one of which limited “solicitation or sales . . . to the small

reading that restriction into the less specific terms of

section 92.

The canon of /n pari materia is a rather narrow ex-

ception to the general rule that different statutes

should be read differently. In this case, the canon

simply does not apply. The two provisions were en-

acted over sixty-five years apart and deal with two

different types of banking institutions, each subject

to a distinet set of laws and regulations administered

by separate agencies. See Erlenbaugh v. United

States, 409 U.S. 239, 244, 93 S.Ct. 477, 480, 34

L.Ed.2d 446 (1972) (rule’s application makes the

most sense when the statutes are on the same subject

and were enacted by the same Congress at the same

time). In addition, the statutes were not “intended

to serve the same function.” Jd. 409 U.S. at 245, 93

S.Ct. at 481. The BHCA provision is concerned with

activities that are “so closely related to banking...

as to be a proper incident thereto,” 12 U.S.C. § 1843

(c)(8), whereas section 92 was designed to help

small town banks increase their earnings by provid-

ing them with another source of revenue. See 53

Cong. Rec. 11001.

Section 4(c)(8) prohibits a bank holding company

from engaging in, or owning “shares of any com-

pany” engaged in, nonbanking activities unless the

Board determines that such activities are “so closely

town and to other areas of less than 5,000 adjacent to”’ it,

51 Fed.Reg. at 36,206; see First United Bancshares, 73 Fed.

Res.Bull, 162, the Board has subsequently departed from at

least one of these regulations. See Independent Ins. Agents,

835 F.2d 1452 (agreeing with Board that statute did not

compel principal place of business requirement) ; 12 C.F.R.

§ 225.25 (b) (8) (iii) ; see also supra notes 10 & 12 and text

accompanying note 12.

66a

related to banking . . . as to be a proper incident

thereto.” 12 U.S.C. § 1843(c) (8); see Independent

Insurance Agents, 835 F.2d at 1454. With a few ex-

ceptions, the statute precludes the Board from finding

that the sale of ‘insurance as a principal agent, or

broker” is “closely related to banking.” See 12 U.S.C.

$ 1843(c)(8). One exception is “any insurance

agency activity in a place’’ whose population does not

exceed 5,000. Jd. § 1843(¢)(8)(C); see Independent

Insurance Agents, 835 F.2d at 1455 nn. 4-5.

Section 92 addresses a completely unrelated con-

cern: the need to provide small town national banks

with additional sources of revenue. The authority it

confers is in no way tied to whether the insurance

activity is “closely related to banking.” See 12 U.S.C.

$ 92. In fact, section 92 is a specific exception to the

general rule that national banks are limited to “such

incidental powers as shall be necessary to carry on the

business of banking.” Jd. § 24 (Seventh).

Although the BHCA provision was “intended to

conform to,” inter alia, “the authority in” section 92,

Senate Report, supra note 8, at 38, U.S.Code Cong. &

Admin.News 1982, p. 3092, this alone is an insuffi-

cient reason to hold that the two sections are in pari

materia. In light of the countervailing considerations

discussed above, we are confident that the sections

need not be construed together.

Plaintiffs next posit that, in passing the BHCA

provision, Congress assumed that section 92 imposed

geographic restrictions on sales and solicitation. Con-

gress’ understanding is clear, plaintiffs theorize, from

the fact that section 4(c)(8)(C) “unequivocally lim-

its the geographic scope” of insurance activities, Pls.

Reply Mem. at 6, and was “intended to conform to. . .

the authority in” section 92, Senate Report, supra

67a

note 8, at 38, U.S.Code Cong. & Admin.News 1982,

p. 3092. This postulate, even if true, would not alter

the reasonableness of the Comptroller’s interpretation.

Our review in this case centers on congressional

intent in 1916, when section 92 was enacted. Since

nothing in the BHCA itself sheds light on that intent,

plaintiffs cannot rely on the maxim, announced in Red

Lion Broadéasting Co. v. FCC, 395 U.S. 367, 380-81,

89 S.Ct. 1794, 1801, 23 L.Ed.2d 371 (1969), that

“Ts]ubsequent legislation declaring the intent of an

earlier statute is entitled to great weight in statutory

construction.” See Consumer Product Safety Commis-

sion v. GTE Sylvania, Inc., 447 U.S. 102, 116-18 &

n. 13, 100 S.Ct. 2051, 2060-61 & n. 13, 64 L.Ed.2d

766 (1980). The maxim does not apply to “[a] mere

statement in a conference report .. . as to what the

Committee believes an earlier statute meant... .” Id.

447 U.S. at 118 n. 13, 100 S.Ct. at 2061 n. 13; see -

United States v. Southwestern Cable Co., 392 U.S.

157, 170, 88 S.Ct. 1994, 2001, 20 L.Ed.2d 1001

(1968) (one Congress’ views as to construction of

statute adopted many years earlier by another Con-

gress have minimal or no significance) (citations

omitted). Indeed, “subsequent legislative history will

rarely override a reasonable interpretation of a stat-

ute that can be gleaned from its language and legis-

lative history prior to its enactment.” GTE Sylvania,

447 U.S. at 118 n. 13, 100 S.Ct. at 2061 n. 13 (em-

phasis added); cf., e.g., United States v Price, 361

U.S. 304, 313, 80 S.Ct. 326, 331, 4 L.Ed.2d 334

(1960) (“[T]he views of a subsequent Congress form

a hazardous basis for inferring the intent of an ear-

lier one.”) (citation omitted). In this case, where

“the literal language” of section 92 supports the

Comptroller “and nothing in the legislative history”

68a

or the statute’s purpose “casts doubt on [his] inter-

pretation,” Northeast Bancorp, 849 F.2d at 1503, we

see no reason to depart from this principle.

At this juncture, it is worth underscoring that

Congress has charged separate agencies with admin-

istering the BHCA and the NBA. As USBO points

out, nothing in the BHCA or its legislative history

suggests that the Comptroller of the Currency must

cede his interpretive authority over section 92 in favor

of accepting any interpretation of section 4(c) (8)

adopt. USBO’s Reply Mem. at 30-31. If Congress

wishes to avoid inconsistent interpretations of the two

provisions, Congress alone has the power to act. In

the meantime, the agencies are free to implement any

reasonable policy where Congress has left a gap. See

Chevron, 467 U.S. at 866, 104 S.Ct. at 2793. The

Comptroller has done just that. The fact that his

conclusion may be at odds with the Board’s is not our

concern.

3. Prior Comptroller Interpretations

Where an agency’s interpretation of a statutory

provision “ ‘is inconsistent with its prior analysis in

similar situations without any acknowledgement of

the fact, or cogent explanation as to why,’ the ‘result

reached by the agency is impermissible under the sec-

ond prong of Chevron.’” General Motors Corp. v.

National Highway Traffic Safety Administration, 898

F.2d 165 at 174 (D.C.Cir.1990) (quoting King

Broadcasting Co. v. FCC, 860 F.2d 465, 470 (D.C.

Cir.1988)). Plaintiffs assert that the Approval Let-

ter is inconsistent with earlier positions taken by the

Comptroller regarding geographic restrictions under

69a

section 92. We conclude, however, that prior to the

Approval Letter, the Comptroller had never under-

taken a comprehensive analysis of or implemented a

restrictive policy on this issue. Compare National

Black Media Coalition v. FCC, 775 F.2d 342, 355

(D.C.Cir.1985) (“After announcing a_ prospective

rule and applying it faithfully for six years, the Com-

mission, in effect, ignored it here.”). Moreover, even

if the Approval Letter represented a departure from

prior policy, the Comptroller certainly provided a “co-

gent explanation as to why.” King Broadcasting, 860

F.2d at 470. Therefore, plaintiffs’ argument must

fail.

Plaintiffs rely on statements in a few opinion let-

ters, but these do not support their assertion. First,

each statement constituted informal advice or opinion,

not a definitive announcement of policy. Compare

National Black Media Coalition, 775 F.2d at 355

(“After announcing a prospective rule and applying

it faithfully for six years, the Commission, in effect,

ignored it here.’”’). Second, none of the statements

establishes the position plaintiffs urge—that section

92 restricts insurance sales and solicitation to resi-

dents of the community in which the bank’s selling

office is located.”

27 The Comptroller’s views on the geographic area a bank

insurance agency may serve were first requested in mid-1970.

See Letter from Robert Bloom, Chief Counsel, at 1 (July 17,

1970), Ex. 1 to Pls.Mem. fhereinafter Bloom Letter]. At that

time, “[t]he only generalization” the Comptroller could

“safely” make was that § 92 did not authorize a “significantly

greater” “service area for the insurance activity ... than

that of the banking activity of the owner bank.” /d. at 2.

While plaintiffs rely heavily on this statement, they ignore

that the very next year the Comptroller did not object to a

70a

Based on the foregoing analysis, we hold that the

Comptroller’s interpretation, being “rational and con-

bank’s using an official at its main office to solicit business

for its branch insurance agency. See Letter from Thomas G.

DeSnazo, Deputy Comptroller (June 9, 1971). They also

overlook a 1978 “‘no objection” letter issued to a bank that

proposed to sell insurance from its small town agency to

customers of other branches located in larger towns. Baris

Letter, supra note 11. As these and other letters demonstrate,

the Comptroller has never limited insurance sales to the com-

munity in which the selling office is located.

Plaintiffs maintain, however, that the Bloom Letter an-

nounced at least some geographic restriction, and that the

Approval Letter unjustifiably disregarded this policy. We

reject this assertion for three independent reasons. First, we

doubt that the Bloom Letter ever constituted a definitive

policy statement. See O’Keefe Letter, supra note 11, at 2;

Chong Letter, supra note 7, at 1. Second, even if it did, the

Approval Letter did not necessarily depart from it. The

Bloom Letter simply opined that § 92 did not authorize a

“significantly greater” “service area for the insurance ac-

tivity . . . than that of the banking activity of the owner

bank.” Bloom Letter at 2. As we stated earlier, a national

bank is free to offer its services to customers residing out-

side the community in which it is located. See Franklin Nat’l

Bank, 347 U.S. at 377-78, 74 S.Ct. at 553. Therefore, with

today’s advanced mail and wire services and expansive ad-

vertising capabilities, the service area for a bank’s customary

business is potentially worldwide. Plaintiffs have not alleged

that USBO’s banking activity is limited to Banks, Oregon, or

that it does not extend to the states in which Bank Agency

currently offers insurance. Third, the Comptroller certainly

has offered a “cogent explanation as to why” he believes that

no geographic restrictions apply. King Broadcasting, 860 F.2d

at 470. The Approval Letter was over twice as long as the

Bloom Letter, and engaged in a much more in-depth analysis

of the language and purpose of § 92. Therefore, the Comp-

troller’s decision, even if inconsistent with past policy, was

completely justified. See General Motors, 898 F.2d at 174

(citing King Broadcasting, 860 F.2d at 470).

7la

sistent with the statute,”’ must be upheld. NLRB v.

United Food & Commercial Workers, 484 U.S. at

123, 108 S.Ct. at 420-21; see Chevron, 467 U.S. at

843-44, 104 S.Ct. at 2781-82. We turn now to plain-

tiffs’ claim under the BHCA.

IV. Plaintiffs’ Claim Under the Bank Holding Com-

pany Act

An independent issue from the reasonableness of

the Comptroller’s construction of section 92 is whether

the BHCA bars U.S. Bancorp, USBO’s parent, from

“launching nationwide insurance activities” through

Bank Agency, USBO’s subsidiary. Pls. Reply Mem.

at 18. While plaintiffs concede that we lack jurisdic-

tion to decide the merits of this question,” they con-

tend that the Comptroller erred by issuing the Ap-

proval Letter without providing the Board “an oppor-

tunity to consider the legality of the proposed trans-

action.” /d. at 19. Citing Supreme Court dictum that

“exceptional circumstances ... may stay the hand

of the Comptroller,” Whitney National Bank, 379

U.S. at 426 n. 7, 85 S.Ct. at 560 n. 7, plaintiffs argue

that an injunction would be appropriate in this case.

They rely on Independent Bankers Association of

America v. Conover, 603 F.Supp. 948, 958 (D.D.C.

1985), in which the district court held that it was

authorized to determine whether the Comptroller’s

action raised “substantial” questions under the BHCA

and whether an injunction should issue to allow the

Board to resolve those questions.

Courts have been reluctant to find the existence of

“exceptional circumstances” that would warrant such

an injunction. See, e.g., American Insurance Associa-

tion v. Clarke, 865 F.2d 278, 288 (D.C.Cir.1988).

28 Pls.Reply Mem. at 18-19; see supra note 17.

72a

This reluctance is especially justified where an in-

junction would halt the operations of an ongoing

business such as Bank Agency. Cf. Marshall & Ilsley

Corp. v. Heimann, 652 F.2d 685, 701 n. 27 (7th

Cir.1981) (where ultimate relief requested was not 2

mere stay of Comptroller’s proposed action, as in

Whitney, but divestiture of assets acquired almost

four years earlier, stay pending Board review would

be inappropriate), cert. denied, 455 U.S. 981, 102

S.Ct. 1489, 71 L.Ed.2d 691 (1982). Moreover, we

take “‘notice of the obvious fact that the Board has

not taken advantage of its ample opportunity to act

on” USBO’s proposal.” Independent Bankers v. Con-

over, 603 F.Supp. at 958 n. 17. “Although the Whit-

ney test is not time-bound, it appears that the origi-

nal concern was that the Board had ‘not had an

opportunity to determine’ the issue presented.” /d.

(quoting Whitney, 379 U.S. at 4%, 85 S.Ct. at 560)

(emphasis in Jndependent Bankers v. Conover). In

Independent Bankers v. Conover, the Board had taken

no action for ov

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