Opposition Brief — Steinbrink v. Independent Insurance Insurance Agents Agents of America (Nos. 92-507, 92-484)

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Nos. 92-184, 92-507 { WOV 23 ee

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

UNITED STATES NATIONAL BANK OF OREGON,

‘ Petitioner,

INDEPENDENT INSURANCE AGENTS OF AMERICA, et al.,

Respondents.

STEPHEN L. STEINBRINK,

ACTING COMPTROLLER OF THE CURRENCY, et al.,

. Petitioners,

INDEPENDENT INSURANCE AGENTS OF AMERICA, INC., ef al.,

an Respondents.

On Petitions for a Writ of Certiorari

to the United States Court of Appeals

for the District of Columbia Circuit

——

BRIEF IN OPPOSITION

DONALD B. VERRILLI, JR.*

ANN M. KAPPLER

JENNER & BLOCK

601 Thirteenth Street, N.W.

Twelfth Floor

Washington, D.C. 20005

(202) 639-6000

Attorneys for Respondents

November, 1992 * Counsel of Record

WILSON - Epes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

1. Whether the text of the Federal Reserve Act

Amendments of 1916, ch. 461, 39 Stat. 752, rebuts the

presumption of invalidity created by the omission of Sec-

tion 92 of the National Bank Act from the U.S. Code,

where the punctuation and structure of the 1916 Act

indisputably indicates that Section 92 was repealed by

Section 20 of the War Finance Corporation Act of 1918,

ch. 45, 40 Stat. 512.

2. Whether the Court of Appeals should have addressed

the question of Section 92’s validity; where the parties

disputed whether the court should reach the issue, where

all interested parties were given an opportunity to brief

and argue the issue, and where the underlying dispute

turned on the proper interpretation of Section 92.

TABLE OF CONTENTS

QUESTIONS PRESENTED

TABLE OF AUTHORITIES

STATEMENT OF THE CASE

A. Statutory and Regulatory Framework

B. The Proceedings Below

C. The Proceedings Before the Court of Appeals

REASONS FOR DENYING THE WRITS

CONCLUSION

(iii)

iv

TABLE OF AUTHORITIES

Cases

American Ins. Ass'n v. Clarke, 865 F.2d 278 (D.C.

Cir. 1988) . ee es ee a Ee te

American Land Title Ase’n ' v. - Clarke, 968 F.2d

Page

20

150 (2d Cir. 1992) (petitions pending) 8,9, 10, 12

Arcadia, Ohio v. Ohio Power Co., 111 8.Ct. 415

(1990) ae ee ee Ee I i

Black v. Cutter Laboratories, 351 U. S. 292 (1956) .

Board of Governors v. Dimension Fin. Corp., 474

U.S. 361 (1986) ............

Botany Worsted Mills v. United States, 278 US.

282 (1929)

Brotherhood of R.R. Trainmen v. Baltimore & O. R.

Co., 331 U.S. 519 (1947)... .........

Carducci v. Regan, 714 F.2d 171, “(D. C. Cir.

1983) . |

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

Council, 467 U.S. 837 (1984) .

Commissioner of Internal Revenue v. First Sec.

Bank, 405 U.S. 394 (1972) |

Commissioner of Internal Revenue v. Morris

Trust, 367 F.2d 794 (4th Cir. 1966)

Estate of Sanford v. Commissioner of Internal

Revenue, 308 U.S. 39 (1939)

First Nat'l Bank v. Smith, 610 F.2d 1258 (5th Cir.

1980)

First United Bancshares, Inc., 73 Fed. Res. Bull.

SEITE III 5c. <ssccaaneddtenesinsiicsotaesdaliesindehehencatmniaadioniamadiin

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

Governors, 736 F.2d 468 (8th Cir. 1984)

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

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

Kamen v. Kemper Financial Services, Inc., 111

S.Ct. 1711 (1991)

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

McCormick v. United States, 111 S.Ct. 1807

(1991)

Midland Telecasting v. Midessa Television Co.,

617 F.2d 1141 (5th Cir.), cert. denied, 449 U.S.

SS Rees

5, 24

10

5, 25

5, 23

Vv

TABLE OF AUTHORITIES—Continued

Page

Nashville Milk Co. v. Carnation Co., 355 U.S. 373

BETS ER PS Se BASES et a Ee 13

National R. Passenger Corp. v. National Ass'n of

R. Passengers, 414 U.S. 453 (1974) 0000 9

Owensboro Nat'l Bank v. Moore, No. 91-3 (E.D.

Ky. Aug. 4, 1992) (appeals pending) 12

Reiter v. Sonotone Corp., 442 U.S. 330 (1979) ....... 15

Ross v. Moffitt, 417 U.S. 600 (1974)... 12

Russello v. United States, 464 U.S. 16 (1983) __ 6

Saxon v. Georgia Ass’n of Ind. Ins. Agents, 399

ey MU I cent 9,10

Singleton v. Wulff, 4228 U.S. 106 (1976)... 23

Texas & Pac. Ry. Co. v. Pottorff, 291 U.S. 245

AEE ERI AREER PA ee 9

United States v. Bergh, 352 U.S. 40 (1956) 13

United States v. Riker, 670 F.2d 987 (11th Cir.

1982) ..... iceddessaidbedanaiden iaielshaeediebbadibecadansiaameiitinspanigcanciia 22

United States v. Welden, 377 U.S. 95 (1964) . 13

Vance v. Safeway Stores, 239 F.2d 144 (10th Cir.

1956), rev’d 355 U.S. 389 (1958) z 13

Whitney v. State Tax Comm'n, 309 U. S. 530

SE a TESA AA. Ea ches ED 22

Williams v. Zbaraz, 448 U.S. 358 (1980) . eee 23

Statutes

Act of September 7, 1916, Pub. L. No. 64-270, 39

Stat. 752-53 . . Sendai canara passim

Bank Holding Company Act |

12 U.S.C. § 1843 (c) (8) (ce) (i) 2, 20

12 U.S.C. § 1846... eee 20

Colo. Rev. Stat. § 10-2-211(2) (b) (1991) . 21

Federal Reserve Act of 1913, Pub. L. No. 63-43

813, 38 Stat. 251 | ae 14,15

National Bank Act

Section 92... - wo passim

12 U.S.C. § 24 (Seventh) . 2,11

N.M. Stat. Ann. § 59A-12-10A(2) (1991) 21

Revised Statutes § 5202... 0000... aaa passim

vi

TABLE OF AUTHORITIES—Continued

United States Code

1 U.S.C. § 112.

1 U.S.C. § 204 (a) ... ;

War Finance Compecntion Act, Pub. L. No. 65-121

§ 20, 40 Stat. 506 (1918) ...........000 a.

Wash. Rev. Code § 30.08.140(1) (1990)... al

Miscellaneous

2 Fed. Reg. Bull. (Feb. 1,1916) —_

53 Cong. Rec. $11001 (daily ed. July 14, 1916). ro

American Banker, Jan. 20, 1987 .

Consolidation of Bank Examining and Super-

visory 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. (1965)

Financial Institutions Act of 1957, Hearings Be-

fore the Comm. on Banking and Currency,

House of Representatives, on S. 1451 and H.R.

7206, 85th Cong., 2d Sess. (1958) 0...

“The National Bank Act as Amended, the Federal

Reserve Act, and Other Laws Relating to Na-

tional Banks,” S. Doc. No. 412, 64th Cong., Ist

Sess. (1917)

The Proxmire Financial Modernization Act of

1988, reprinted in 134 Cong. Rec. $3541 (daily

ed. March 31, 1988) . .

Third Annual Report of the Federal Reserve

Board (1917)

Thompson Bank Directory (Jan.-June 1992)

Webster’s Ninth New Collegiate Dictionary (ed.

RE ies aa PS,

Page

13

5, 13

18

17, 18

16

18

16

19

14

IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

No. 92-484

UNITED STATES NATIONAL BANK OF OREGON,

. Petitioner,

INDEPENDENT INSURANCE AGENTS OF AMERICA, et al.,

Respondents.

No. 92-507

STEPHEN L. STEINBRINK,

ACTING COMPTROLLER OF THE CURRENCY, et al.,

. Petitioners,

INDEPENDENT INSURANCE AGENTS OF AMERICA, INC., et al.,

= re a Respondents.

On Petitions for a Writ of Certiorari

to the United States Court of Appeals

for the District of Columbia Circuit

BRIEF IN OPPOSITION

This brief is submitted by respondents Independent In-

surance Agents of America, Inc., Independent Insurance

Agents of Oregon, National Association of Life Under-

writers, National Association of Professional Insurance

Agents, National Association of Surety and Bond Pro-

ducers, Oregon Association of Life Underwriters, and

Oregon Professional Insurance Agents, Inc., in opposition

2

to the petitions for writ of certiorari filed by the Acting

Comptroller of the Currency (“Comptroller”), the Office

of the Comptroller of the Currency, and the United States

in Case No, 92-507, and by the United States National

Bank of Oregon ‘“Oregon- National Bank” or the

“Bank’’) in Case No, 92-484.'

STATEMENT OF THE CASE

The Petitions for Certiorari in this case present narrow

questions involving application of well-settled principles

of federal law. The impact of the decision below is mini-

mal, at most, and this Court’s plenary review would not

offer any meaningful instruction or direction to lower

federal courts. Accordingly, no reason exists for review

by this Court.

A. Statutory and Regulatory Framework

To protect the integrity of the banking system, prevent

unfair competition, and safeguard the public, national

banks and federally-registered bank holding companies

are generally prohibited from engaging in the business

of insurance. Section 24 of the National Bank Act

(“NBA”), 12 U.S.C. §24(Seventh!, which sets forth

the powers of national banks, has been consistently inter-

preted as strictly limiting the permissible insurance ac-

tivities of national banks. The Bank Holding Company

Act (“BHCA”) similarly prohibits the general sale of insur-

ance by bank holding companies. 12 U.S.C. § 18431¢) (8)

In 1916, at the behest of then-Comptroller John Skelton

Williams, Congress enacted a narrow exception to provide

1 Pursuant to this Court’s Rule 29.1, Respondents state that they

have no publicly traded parent companies or subsidiaries.

2 Section 1843 prohibits bank holding companies from engaging

in business not closely related to banking, and subsection (¢)(8)

makes clear that “it is not closely related to banking or managing

or controlling banks for a bank holding company to provide insur-

ance as a principal or broker” except in limited circumstances.

3

a modicum of financial assistance to “country bank[s].”

The exception was codified as Section 92 of the NBA, and

provided that a national bank “located and doing business

in any place ‘%« population of which does not exceed five

thousand inhabitants... may... act as the agent for

any fire, life or other insurance company.” As Comp-

troller Williams explained in urging adoption of Section

92, “many banks located in small country communities”

had experienced financial difficulties. 53 Cong. Ree.

$11001 (‘daily ed. July 14, 1916). Empowering such

country banks to sel! insurance would assist these “small

national banks” by “provid{ing] them with additional

sources of revenue,” and would thereby ensure that in-

habitants of sparsely populated areas had access to bank-

ing services. /d.

Comptroller Williams went on to make clear, however,

that the authority to sell insurance would be “limited to

banks in small communities.” /d. He also made clear

that country banks should be permitted to sell insurance

only in their local communities, for then their insurance

activities would not be “likely to assume such proportions

as to distract the officers of the bank from the principal

business of banking.” /d. He warned that it would be

unwise policy to confer a broader power “generally upon

banks in the large cities’’ to sell insurance, and that “it

would be unfortunate if any movement should be made in

the direction of placing the banks of the country in the

category of department stores” offering a variety of bank-

ing and nonbanking products. /d.

B. The Proceedings Below

Oregon National Bank is a national banking associa-

tion with its principal place of business in Portland,

Oregon. It is anything but a “country bank.” In 1990, it

was the forty-fourth largest bank in the nation. Its par-

ent bank holding company, U.S. Bancorp, had assets of

more than $7.0 billion in 1986. American Banker, Jan.

20, 1987 at 30.

4

In 1984, the Bank proposed to establish a wholly owned,

de novo subsidiary for the purpose of offering a full range

of insurance products from an office located in a com-

munity with a population of less than 5,000. But the

Bank did not propose to restrict insurance sales to the

environs of that small town. To the contrary, it sought

approval for a nationwide insurance business.

In August, 1986, the Comptroller approved Oregon

National Bank’s proposal. The Comptroller concluded

that, pursuant to Section 92, “a national bank or its

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

lation may sell insurance to existing and potential cus-

tomers located anywhere.” (OCC Pet. App. 75a) (em-

phasis added). Respondents challenged the Comptroller's

ruling, arguing that Section 92 could not be read to em-

power a national bank to sell insurance outside the smal!

town in which its office was located.’

Echoing a point made by Respondents in their sum-

mary judgment briefs, the district court noted that

Section 92 “no longer appears in the United States Code,”

and concluded that the statutory provision ‘apparently

was inadvertently repealed in 1918." (OCC Pet. App. 44a

n.2.' Despite this conclusion, the court “assume!d] that

the statute exists in proprio vigore.” Id, The district

court went on to determine, citing Chevron U.S.A., Ine.

v. Natural Resources Defense Council, 467 U.S. 857

(1984), that Congress did not specifically intend to pre-

clude the nationwide sale of insurance from any bank

office lecated in a town of fewer than 5,000 inhabitants,

and that the Comptroller’s action should therefore be

affirmed because it was not inconsistent with the purposes

of Sect'on 92.

C. Proceedings Before the Court of Appeals

After briefing and oral argument on the issue, the

majority of a pane! of the D.C. Circuit reversed, con-

8’ The Oregon National Bank intervened as a defendant.

5

cluding that Section 92 “has been repealed” and “has

ceased to exist.” (OCC Pet. App. 19a.)* In reaching its

conclusion, the Court of Appeals carefully examined the

text of the relevant statutory provisions, including punc-

tuation, as well as relevant legislative history.

The Court of Appeals first addressed the issue whether

it should decide Section 92’s validity. The court observed

that it is well-recognized that courts must sometimes go

beyond the specific legal theories advanced by the par-

ties. (OCC Pet. App. 5a, citing, Kamen v. Kemper Fi-

nancial Services, Inc., 111 S. Ct. 1711, 1718 (1991)

‘“court is not limited to the particular legal theories ad-

vanced by the parties, but rather retains the independent

power to identify and apply the proper construction of

governing law”); Arcadia, Ohio v. Ohio Power Co., 111

S. Ct. 415 (1990); Estote of Sanford v. Commissioner

of Internal Revenue, 308 U.S. 39, 51 (1939)). Observ-

ing that Section 92’s omission from the U.S. Code gives

rise to a statutory presumption of invalidity, 1 U.S.C.

S$ 204(a), the court concluded that it “not only [had] the

right to inquire into its validity, [it had] the duty to

do so.” (OCC Pet. App. 6a.)

The Court of Appeals carefully examined the text of

the Statutes at Large to determine whether they rebut

the statutory presumption of Section 92’s repeal. From

the Petitioners’ view, the question before the court was

* The Court's ruling could not have been a surprise to the parties

or the banking and insurance industries. Prior to oral argu-

ment, the Court of Apneals ordered the parties to be prepared

to address Section 92's continued existence. There was extensive

questioning on the issue during argument on March 1, 1991. There-

after, in August 1991, the court ordered the parties to submit

post-argument briefs addressing two questions: (1) whether

the court should address the question of Section 92’s validity; and

(2) whether Section 92 continues to exist. Although the Comp-

troller argued, in response, that the Court should not reach the

issue, Respendents maintained that the Court must resolve the

question of Section 92’s validity. All these proceedings were

public.

6

whether Congress had made Section 92 a part of Section

13 of the Federal Reserve Act or whether it became part

of Section 5202 of the Revised Statutes. Examining the

text, including the punctuation, of Pub. L. No. 64-270,

39 Stat. 752, 753 (1916) (the “1916 Act’), the Court of

Appeals concluded that, “on its face, the 1916 [Act] had

the effect of placing section 92 within section 5202 of the

Revised Statutes.” (OCC Pet. App. 9a)

The court then turned to the War Finance Corporation

Act of 1918, Pub. L. No. 65-121, § 20, 40 Stat. 506, 512

(1918) (the “1918 Act”). The language of the 1918

Act, which states that it amends R.S. 5202 “to read as

follows,” omits the paragraph now known as Section 92,

The court explained that “{u]nder traditional rules of

statutory construction, the meaning of Section 92’s omis-

sion is plain; the material omitted on reenactment is

deemed repealed.” (OCC Pet. App. 9a (citing cases) )

After noting that post-1918 views regarding whether

Section 92 had been repealed were not unanimous, the

Court of Appeals focussed on evidence as to what Con-

gress understood it was doing in recodifying R.S. 5202

in the 1918 Act. The court noted that three extant

sources as to current law at the time reported that, as a

result of the 1916 Act, Section 92 was part of R.S. 5202,

and therefore informed the 1918 Congress that Section

92’s exclusion from the amended R.S. 5202 in the 1918

Act would signal its repeal. (OCC Pet. App. 18a) Ree-

ognizing that the purpose of the 1918 Act was to assist

the financing of the war effort, the court observed that

“there is no inherent contradiction between the deletion

of section 92 and [that purpose].” (Jd. 14a)

The court ruled that subsequent treatment of Section

92 by Congress did not determine whether the 1918 Con-

gress ha’ repealed the provision. (/d. 15a, citing Russello

v. United States, 464 U.S. 16, 26 (1983) (“[I]t is well

settled that the views of a subsequent Congress form a

hazardous basis for inferring the intent of an earlier

one.”)) Further, the court concluded, “[{f]ederal agen-

7

cies have no authority to reinstate a statute that Con-

gress has repealed.” And no prior court had found that

Section 92 remains valid; at most, they had merely pre-

sumed that it does. (OCC Pet. App. 15a-18a)

Finally, the Court of Appeals declined the invitation

to rewrite history:

It is one thing for a court to bend statutory language

to make it achieve a clearly stated congressional pur-

pose; it is quite another for a court to reinstate a law

that, intentionally or unintentionally, Congress has

stricken from the statute books. If the deletion of

section 92 was a mistake, it is one for Congress to

correct, not the courts.

(Id. 19a-20a)*

Judge Silberman, dissenting, did not take issue with

the majority’s conclusion that Section 92 had been re-

pealed. Instead, he disagreed with the court’s decision to

reach the issue, concluding that Respondents’ failure to

challenge Section 92’s validity was the end of the matter.

Judge Silberman did not assert that the court was with-

out power to address the issue, but rather that it should

have refrained from doing so as matter of “judicial re-

straint.” (/d. at 32a) Although representatives from the

insurance and banking industries, as well as the govern-

ment, had participated in the case as parties or amici

and the court had repeatedly raised the question of Sec-

tion 92’s validity prior to issuing its decision,’ Judge

5 Quoting the court’s opinion out of context, the Solicitor Gen-

eral suggests that the Court of Appeals concluded that Congress

had, in fact, made a mistake when it repealed Section 92. See OCC

Pet. 7, citing App. 14a. The court drew no such conclusion. To

the contrary, it found that it “must conclude that Congress intended

the consequences of its actions.” (OCC Pet. App. 19a)

*The American Bankers Association, a trade association which

purports to represent “both national and state-chartered banks lo-

cated in each of the fifty states and the District of Columbia,”

participated in the appeal as amicus curiae. Brief of the American

&

Silberman inexplicably seemed concerned that interested

parties “had no opportunity to make their views known

to the court.” (/d. 33a).

Petitioners sought rehearing, or rehearing en bane,

raising the same issues and arguments they repeat here.

The full court received briefing on both of the questions

presented to this Court. No member of the Court of Ap-

peals voted to reconsider the majority’s conclusion that

Section 92 had been repealed. Judge Silberman, joined

by two other judges, voted to reconsider only whether

the court should have reached the question-—an issue raised

(both at the en bane stage and in this Court) by the

Bank, but not by the Comptroller. Three judges wrote

separately to disagree with Judge Silberman.

REASONS FOR DENYING THE WRITS

The Solicitor General, on behalf of the Comptroller,

seeks review of the D.C. Circuit’s holding that Section

92 has been repealed. The Oregon National Bank adds

a second issue: whether the Court of Appeals should

have considered the validity of Section 92. The Solici-

tor General expressly urges this Court not to address this

second issue. OCC Pet. 9 n.8. No reason exists for

granting certiorari on either question.

l.a. There is no meaningful conflict between the Cir-

cuits on the issue of Section 92’s continued existence. In

American Land Title Ass’n v. Clarke, 968 F.2d 150 (2d

Cir. 1992) (“ALTA”) (petitions pending), the Second

Circuit unanimously held that national banks are not

empowered by the NBA to act as agents for insurance

companies in the sale of title insurance. The court ruled

Bankers Association and Oregon Bankers Association as Amici

Curiae at 3 (filed Feb. 7, 1991). See also supra nA.

7 Judge Randolph also wrote separately to express his view that

“denials of rehearing en bane are best followed by silence. They

should not serve as the occasion for an exchange of advisory opin-

ions, overtures to the Supreme Court, orepress releases.” (OCC

Pet. App. 42a)

i)

that Section 92 iimits national banks’ “incidental pow-

ers” under Section 24(Seventh) of the NBA. Without

having received briefing or hearing argument on the

issue, the Second Circuit, as a preliminary point, sua

sponte concluded that Section 92 had not been repealed.

That conclusion, however, was dicta: the court need not

have resolved the issue of Section 92’s continued exis-

tence in order to conclude that national banks lack the

power to act as agents for title insurance companies.

As the Fifth Circuit has recognized, prior to enact-

ment of Section 92, “no national bank possessed any

power to act as insurance agents.” Saxon v. Georgia

Ass’n of Ind. Ins, Agents, 399 F.2d 1010, 1016 (5th Cir.

1968) (enfphasis in original). By its explicit addition to

national banks’ powers, Section 92 constituted the sole

source of authority for national banks to engage in

insurance-agency activities." Section 92 was thought

necessary precisely for the reason that, as was univers-

ally understood, national banks otherwise had neither the

express nor incidental power to sell insurance. See, e.g.,

53 Cong. Ree. 511001 (daily ed. July 14, 1916) (“|NJa-

tional banks are not given either expressly or by neces-

sary implication the power to act as agents for insur-

ance companies.”’).” Section 92 thus reflects Congress’

understanding that insurance powers were beyond the

* See Rotany Worsted Mills v. United States, 278 U.S. 282, 289

(1929) (“When a statute limits a thing to be done in a particular

mode, it includes the negative of any other mode.”): National R.

Passenger Corp. v. National Ass'n of R. Passengers, 414 U.S. 453,

458 (1974) (same); Midland Telecasting v. Midessa Television Co.,

617 F.2d 1141, 1145 n.7 (Sth Cir.) (“The existence of a specific

[statutory] exemption covering certain acts is evidence that Con-

yress did not intend to grant immunity to other acts not covered

by the explicit exemptions.”), cert. denied, 449 U.S. 954 (1986).

* This view conformed with the opinion of the Board of Governors

of the Federal Reserve, which held in 1915 that national banks had

no authority, express or implied, to engage in insurance agency

activities. The Board ruled that “lalny such extension of the

powers of national banks must be left to the consideration of Con-

gress.” 2 Fed. Reg. Bull. 75, 74 (Feb. 1, 1916) (emphasis added).

10

powers conveyed by the other provisions of the NBA.

See Texas & Pac. Ry. Co. v. Pottorff, 291 U.S. 245, 258

& n.13 (1934) (amendment to NBA to provide limited

power to pledge assets to secure deposits “indicates that

Congress believed that the original act had not granted

general power to pledge assets to secure deposits”). The

Second Circuit expressly embraced this understanding of

the NBA. ALTA, 968 F.2d at 155. .

Section 92 is thus the only statutory enactment that has

ever addressed the insurance agency powers of national

banks. The effect of Congress’ repeal of Section 92 is

thus plain: there is no longer any authority for na-

tional banks to sell insurance. The repeal of Section 92

reinforces Congress’ intention to deprive national banks

of even the limited authority to sell insurance in small

towns that it briefly permitted from 1916 to 1918. Con-

gress thus reinstated the law as it existed prior to Sec-

tion 92’s enactment: ‘no national bank possesse|s| any

power to act as insurance agents.” Saxon, 399 F.2d at

1016 (emphasis in original).

This background demonstrates why the Second Cir-

cuit’s view is dicta. Whether or not Section 92 now ex-

ists, its enactment in 1916 demonstrates that national

banks do not possess any general power to sell insurance,

including title insurance. For that reason, there was no

necessity for the Second Circuit to decide whether Section

92 had been repealed. And, for this same reason, but

contrary to the Comptroller’s assertion, the issue of Sec-

tion 92’s existence does not have “ramifications” for the

ALTA decision (OCC Pet. 20): even if this Court were

to grant review and determine that the Second Circuit

incorrectly ruled on Section 92’s continued existence, that

determination would not alter the outcome in ALTA. See

Black v. Cutter Laboratories, 351 U.S. 292, 297-98 (1956)

(“This Court . .. reviews judgments, not statements in

opinions.” ).

The lack of any meaningful conflict is demonstrated by

the fact that. the Second Circuit’s dicta and the D.C. Cir-

1]

cuit’s ruling below do not create conflicting obligations

or rights for any entity. The D.C. Circuit held that Sec-

tion 92 no longer exists. Because the Comptroller had

cited no other authority for its challenged ruling, the

Court of Appeals concluded that the agency’s ruling was

not in accordance with law. (OCC Pet. App. 20a) That is,

the D.C. Circuit held that the Comptroller cannot invoke

Section 92 as a source of authority to permit national

banks to sell insurance from “small towns.” By contrast,

the ALTA decision presents and addresses only the nar-

row issue of national banks’ authority to sell title insur-

ance without regard to their geographic location. The

Second Circuit held that the Comptroller cannot invoke

Section 24(Seventh) as a source of authority to permit

national banks to sell title insurance from offices that are

not located in small towns. The ALTA court did not give

any instruction as to the use or application of Section 92.

Thus, neither the Comptroller, the Bank, nor any other

entity is subject to conflicting directives from or accorded

different rights by the two courts.

Moreover, the Second Circuit and D.C. Circuit actually

agree on the one issue Petitioners contend controls:

whether Section 92 was placed in Section 5202 of the Re-

vised Statutes in 1916 ‘in which case it was repealed in

1918) or whether it was placed in Section 13 of the Fed-

eral Reserve Act. (OCC Pet. 11, Bank Pet. 11)" The

D.C. Circuit, as noted, held that Section 92 was part of R.S.

5202 and therefore was repealed by the 1918 Act. The

Second Circuit also concluded that “Congr ss enacted

Section 92 as part of Section 5202 of the Revised Stat-

utes.” (Bank Pet. at 18 n.24, citing ALTA, 968 F.2d at

151) The two Circuits thus agree on the controlling ques-

tion presented to this Court by Petitioners.

The Second Circuit went on to conclude, contrary to

the view of all of the parties here, that the 1916 version

™ According to Petitioners, if Section 92 was not part of R.S.

5202, there was no repeal in the 1918 Act. Jd.

12

of Section 5202 somehow survived its amendment and

recodification in 1918. The fact that even the Petitioners

cannot support such erroneous dicta merely underscores

the conclusion that the Second Circuit’s review of Section

92 is an aberrant departure from settled legal principles

that lacks any concrete effect."

b. Without any meaningful conflict, Petitioners resort

to asking this Court to sit as a court of error and correct

what they view to be the D.C. Circuit’s erroneous deci-

sion. Not only have they miscast the role of this Court,

see Ross v. Moffitt, 417 U.S. 600, 616-17 (1974), but

this case does not warrant this Court’s attention: the

legal issues presented are arcane and the case does not

have any significant impact on the banking or insurance

industry. Moreover, Petitioners’ arguments lack merit.

The text of the relevant Statutes at Large—including its

punctuation—demonstrates that the 1918 Congress re-

pealed Section 92. Nothing in the legislative history

negates this conclusion, and subsequent actions have not

revived the dead statute.

As noted above, the Petitioners expressly disavow the

Second Cireuit’s reasoning in ALTA. (OCC Pet. 11;

Bank Pet. 18 n.24) Instead, they fashion a new argu-

ment for Section 92’s existence—an argument that no

judge has accepted, and that did not persuade the D.C.

Circuit, sitting en bane, of the need ever to give the

panel's decision a second look.

Petitioners do not contest the Court of Appeals’ deter-

mination that Section 92’s absence from the U.S. Code

creates a presumption that the statutory provision no

11 Petitioners note that a district court in Kentucky has adopted

the Second Circuit's dicta. See Owensboro Nat'l Bank v. Moore,

No. 91-3 (E.D. Ky. Aug. 4, 1992) (appeals pending). But that case

is no cause for granting review here. The question of Section 92's

validity is one of the issues raised on appeal and the Sixth Circuit

may agree with the D.C. Circuit's holding in this case. If any-

thing, the existence of the Sixth Circuit litigation is an additional

reason why action of this Court is not now required.

13

longer exists. See United States v. Bergh, 352 U.S. 40,

47 (1956) (‘exclusion of statutory provision from Code

is evidence of repeal). Congress itself has directed that

the U.S. Code “establishe[s] prima facie the laws of the

United States.” 1 U.S.C. 204(a). Nor do Petitioners

argue that the court incorrectly looked to the Statutes

at Large to determine whether they contradict the U.S.

Code."* Rather, they contend that the court misconstrued

the evidence to be gleaned from the Statutes at Large.

This is not the proper time or place to argue fully the

merits of the case, but several of Petitioners’ arguments

warrant response.

First, as the Solicitor General concedes, the punctua-

tion of the Statutes at Large unambiguously indicates

that Section 92 was part of R.S. 5202 and was repealed

in 1918." (OCC Pet. 11) Nevertheless, Petitioners argue

that the punctuation of the Statutes at Large should be

ignored in favor of what they believe to be the contrary

import of the “text” of the 1916 Act. But the text will

not bear the strained reading Petitioners would force

upon it. In fact, the text is consistent with the reading

necessarily drawn from the punctuation.

Second, Petitioners make much of the fact that the

paragraph preceding Section 92 in the 1916 Act relates

to “acceptances authorized by this Act,” 39 Stat. 753

(emphasis added), asserting that it must mean the Fed-

eral Reserve Act and not R.S. 5202. This construction,

according to Petitioners, suggests that the 1916 Act placed

the paragraph preceding Section 92 (and therefore Sec-

2 Congress has stipulated that “[t}/he United States Statutes at

Large shall be legal evidence of laws .. . in all the courts of the

United States.” 1 U.S.C. § 112. See United States v. Welden, 377

U.S. 95, 98 n.4 (1964).

The Court of Appeals’ analysis of the punctuation and the

statutory phrase “amended to read as follows” in the 1918 Act is

precisely the same as the analysis employed by this Court in Nash-

ville Milk Co. v. Carnation Co., 355 U.S. 373, 376 (1958). Compare

Vance v. Safeway Stores, 239 F.2d 144, 146 (10th Cir. 1956), rev'd

355 U.S. 389 (1958) (relying on Nashville Milk).

14

tion 92 itself) in the Federal Reserve Act and not in

R.S. 5202. They seek support for this conclusion in the

paragraph that clearly pertains to R.S. 5202 (indeed,

restates R.S. 5202 as it existed at the time), which cross-

references the “Federal Reserve Act.” According to Pe-

titioners, this cross-reference means that this first para-

graph alone was meant to be in R.S. 5202, whereas the

following paragraphs ‘including Section 92) were meant

to be part of Section 13. (See OCC Pet. 11-13; Bank Pet.

11-13)

But that first paragraph’s explicit identification of the

Federal Reserve Act explains why Congress could use the

phrase “this Act” in the next paragraph to refer to the

Act just named—i.e., the Federal Reserve Act. Because

the “Federal Reserve Act” was mentioned in the first

paragraph, the use of the phrase “this Act” in the next

paragraph could serve simply as an antecedent reference.

There would be no confusion in the text as it appeared in

R.S. 5202: “this Act” refers to the previously identified

Federal Reserve Act, just as Petitioners contend it must."

There is, of course, another possible explanation Peti-

tioners ignore. The phrase “this Act” in the paragraph

preceding Section 92 may refer to nothing other than the

1916 Act itself.’ If that was Congress’ intent, then the

reference to “this Act” has no relevance to where the

paragraph was meant to be inserted. Wherever it was

inserted—in R.S. 5202 or the Federal Reserve Act or any

14 The Solicitor General wrongly argues that Congress would have

to use the phrase “that Act” to refer to the previcusly mentioned

Federal Reserve Act. OCC Pet. 13 n.6. In fact, the word “this”

would correctly refer to the prior reference. “This” means “the

.. thing, or idea . . . that has just been mentioned.” Webster's

Ninth New Collegiate Dictionary 1227 (ed. 1988). That the Solicitor

General's argument turns on the difference between “this” and

“that” highlights the paucity of Petitioners’ contention that the

text rebuts the presumption of Section 92’s repeal.

'‘* The paragraph preceding Section 92 refers to “acceptances

authorized by this Act.” The 1916 Act revised the acceptances

authorized pursuant to the Federal Reserve Act of 1913, Pub. L.

No. 63-43 § 13, 38 Stat. 2561 (“1913 Act”).

15 :

other statute—“this Act” would simply refer back to the

1916 Act, Pub. L. No. 64-270. It would still accomplish

the same referentional significance Petitioners contend it

must.

Third, Petitioners’ reading of the text does violence

to the express statutory language. In the 1916 Act, Con-

gress stated, in no uncertain terms, that “Section [5202]

of the Revised Statutes of the United States is hereby

amended to read as follows.” Yet, according to Petition-

ers, Congress simply restated R.S. 5202 as it existed

pursuant to the 1913 Act. See OCC Pet. 13 n.7 (arguing

that the title “nowhere suggests that the [1916 Act] was

adding matter to Rev. Stat. £5202"). That reading,

which requires that the express instruction given by Con-

gress (that R.S. 5202 is “amended”’) be entirely ignored,

violates the most fundamental tenets of statutory con-

struction. E.y., Reiter v. Sonotone Corp., 442 U.S. 230,

339 (1979). The text demonstrates that the 1916 Con-

gress did amend R.S. 5202, in part, by adding Section

92.

Fourth, the structure of the 1916 Act—-which Peti-

tioners ignore—further supports the conclusion that Con-

gress made Section 92 part of R.S. 5202. There are

several introductory sentences within the 1916 Act that

unquestionably were not intended to become positive law.

Instead, they act as signposts, explaining where the 1916

amendments are to be inserted in previously-existing law.

As they appear in text, these introductory phrases are as

follows (numbering is added} :

(1) At the end of section eleven insert a new clause

as follows:

(2) That section thirteen be, and is hereby, amended

to read as follows: ...

“That the heading of [statute] fails to refer to all the matters

which the framers of that section wrote into text is not an unusual

fact.” Brotherhood of R.R. Trainmen v. Baltimore & O.R. Co., 331

U.S. 519, 528 (1947). The title cannot override “the detailed pro-

visions of the text.” /d.

16

(3) Section fifty-two hundred and two of the Revised

Statutes of the United States is hereby amended

so as to read as follows:

(4) That subsection (e) of section fourteen, be, and

is hereby, amended to read as follows:

The language of Section 92 comes after (3), addressing

amendments to R.S. 5202, and precedes (4), the next

introductory phrase.

In sum, the text, even without quotation marks, demon-

strates that Section 92 was enacted as part of R.S. 5202.

The quotation marks, as they appear in the Statutes at

Large, simply clarify the meaning of these introductory

phrases."?

ce. Contrary to Petitioners’ suggestions, the Court of

Appeals was the first court to address the issue of Sec-

tion 92’s existence. See Bank Pet. 9. Courts—including

this Court—have, at most, noted Section 92’s absence

17 At the time Congress enacted the 1918 Act, every extant sourc:

for current statute law that has been identified included Section 92

in Section 5202 of the Revised Statutes. Petitioners note that the

court overlooked one source of current banking law that presumably

was available to Congress in 1918—the Comptroller compilation

entitled “The National Bank Act as Amended, the Federal Reserve

Act, and Other Laws Relating to National Banks,”’ published by the

Senate Committee on Banking and Currency. The Comptroller com-

pilation twice set forth the text of Section 92. First, the text was

unequivocally placed in Section 5202. S. Doc. No. 412, 64th Conyg.,

lst Sess. 83-84 (1917). Second, the compilation reproduced the

language of the 1916 Act, containing both Section 12 and Section

5202. Id. at 136-37. Thus, no matter which section of the compila-

tion a congressional representative consulted, he or she would have

seen Section 92 as part of R.S. 5202. And any ambiguity about the

placement of Section 92 in the second reference would be settled

by the precision of the first reference.

Petitioners incorrectly contend that the Federal Reserve Board -

1917 compilation of banking statutes set forth Section 92 as part

of the Federal Reserve Act. The Third Annual Report of the

Federal Reserve Board simply restated the 1916 Act, including

quotation marks, as it appears in the Statutes at Large. Therefore.

like the text of the Statutes at Large, it places Section 92 within

R.S. 5202.

17

from the U.S. Code, but simply “assumed” its existence,

avoiding resolution of the issue. Commissioner of Inter-

nal Revenue v. First Sec. Bank, 405 U.S. 394, 401-02 &

n.12 (1972); First Nat’l Bank v. Smith, 610 F.2d 1258,

1261 & n.6 (5th Cir. 1980); Commissioner of Internal

Revenue v. Morris Trust, 367 F.2d 794, 795 n.8B (4th

Cir, 1966). Other courts appear to have implicitly as-

sumed it exists. E.g., Independent Ins. Agents of Am.,

Ine. v. Board of Governors, 736 F.2d 468, 467-77 (8th

Cir. 1984); Independent Ins. Agents of Am., Ine. v.

Board of Governors, 835 F.2d 1452, 1456 n.8 (D.C. Cir.

1987). Petitioners do not assert that any of these courts

would have decided the cases before them differently had

they not made this assumption. Indeed, as the Court of

Appeals correctly determined, the Court’s decision in Com-

missioner v. First Sec. Bank, “did not depend on the

statute’s continued validity” (OCC Pet. App. 16a), and

“la| determination of the validity of section 92 was not

necessary to its decision.” (Jd. 18a) Thus, the D.C.

Cireuit’s ruling has no implications for this Court’s pre-

vious ruling.

Moreover, Petitioners overstate the concurrence with

their position. See Bank Pet. 9. The actions of subse-

quent Congresses have suggested that they were of mixed

views—or ambivalent—as to whether Section 92 was re-

pealed in 1918. Consistent with the Court of Appeals’

analysis, Congressman Patman, a member (and future

Chairman) of the House Banking Committee, argued in

1957 that Section 92 had been repealed."* This prompted

submissions to the Committee from the Comptroller, gen-

eral counsel of the Committee, and the Library of Con-

gress’ Legislative Reference Service.” After receiving

these views, however, the House Committee offered no

'* Financial Institutions Act of 1957, Hearings Before the Comm.

on Banking and Currency, House of Reprearntatives, on S. 1451 and

H.R. 7206, 85th Cong., 2d Sess. 989-90, 1060-63 (1958).

' Jd. at 1036-40, 1063-71.

18

judgment on Section 92’s validity.” Seven years later,

the staff of a House Banking subcommittee reached the

conclusion that “Section 92 is non-existent.” *" In 1988,

the Senate passed a bill amending the NBA and including

a new section that would have duplicated Section 92 with

more explicit limitations. But the bill made no reference

to Section 92 or provision for its amendment, replace-

ment or repeal, thus suggesting the view that Section 92

was not in effect.”

Of course, these later Congresses could not reinstate a

statute repealed by a prior Congress without positively

enacting it into law. As Judge Sentelle correctly ob-

served :

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 congressional enactment

and presentment to the President of the United

States. ...

OCC Pet. App. 37a (concurring in denial of rehearing

en banc). No post-1918 Congress reenacted Section 92.

d. The Court of Appeals’ decision does not present an

issue of such substantial practical importance to the

nation’s banking or insurance industry to warrant this

Court’s review. Its real practical impact will be felt by

few, if any, national banks and, even then, most such

banks will have an easily available alternative means

through which to sell insurance in small towns.

* See id. at 1090, 1199.

2! Consolidation of Bank Eramining 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).

22 The Proxmire Financial Modernization Act of 1988, Section

513B, reprinted in 134 Cong. Rec. S3541 (daily ed. March 21, 1988).

19

First, relatively few national banks could actually be

affected by the court’s decision. No one has offered a

firm number of the national banks selling general insur-

ance pursuant to Section 92. What numbers have been

proffered have been decreasing dramatically. The Amer-

ican Bankers Association (“ABA”) represented before

the Court of Appeals that there were some 160 national

banks; and the Comptroller estimated that there were

179 earlier this year. See OCC Pet. 19 n.11; Bank Pet.

10. Now, the Comptroller maintains that the number is

between 90 and 100. OCC Pet. 19 n.11. None of these

numbers has been substantiated. Even taking the un-

supported figures at face value, the percentage of na-

tional banks using Section 92 js extremely smal]—

between 2.6 and 4.1 percent.*° According to the ABA,

they operate in only sixteen States.** And there has

never been any allegation, let alone showing, that insur-

ance represents a significant source of income for any of

these banks.

Second, a great majority of the few potentially af-

fected national banks have an easy alternative at hand:

indeed, some may not be relying on Section 92 for their

insurance-agency activities at all, Many national banks—

including the Oregon National Bank and the three na-

tional bank plaintiffs in Owensboro—are owned by bank

holding companies and the remaining have the power to

form a bank holding company.** A bank holding com-

** See Thompson Bank Directory 15 (Jan.-June 1992) (“umber of

national banks in United States is 3.888). Thompson Financial

Publishing is the official numbering agent for the Amevican Bankers

Association.

*# Appellants’ Opposition to Appellees’ Petitions for Rehearing

and Suggestions for Rehearing En Bane, Exhibit 1 (filed April 20,

1992).

* Thompson Bank Directory 15, 154 (8.288 of 12,447 banks are

part of holding company structures). Every State has resident

bank holding companies. id.

20

pany is enpowered to operate a nonbanking subsidiary

that sells insurance in a small town with a population

not exceeding 5,000, so long as state law concurs. 12

U.S.C. §§ 1843(c) (8) (C) (i), 1846. According to the

ABA’s own figures, most, if not all, of the national banks

that are purportedly using Section 92 are located in

States where the small-town provision of the BHCA can

be used.2* The Comptroller while noting that Respond-

ents made this point in successfully opposing en bane re-

hearing, does not disagree that the BHCA is an easily

accessible alternative source of small-town insurance-

agency activity for national banks, including a our

rently selling general insurance. OCC Pet. 19 n.12.

Third, the Bank’s—but notably not the Solicitor Gen-

eral’s—reliance on state “parity” or “wild card” statutes

is inappropriate. Bank Pet. 10. These statutory provi-

sions may demonstrate nothing more than a desire to en-

sure that state banks have competitive equality with na-

tional banks, in which case the disappearance of Section

26 There is a difference between the BHCA small-town provision

and Section 92 as interpreted by the Comptroller. The BHCA

permits the sale of insurance only to customers located in small

town and its environs. See First United Bancshares, Inc., 73 Fed.

Res. Bull. 162 (1987). Section 92, on the other hand, has been

interpreted by the Comptroller to allow the sale of insurance to

customers loeated anywhere. It is this disparity that triggered the

instant litigation. It is significant to note, however, that no evidence

has been presented in this case that any bank other than Oregon

National Bank is engaged in geographically widespread sales

through use of Section 92.

27 Even without the BHCA, these banks are not left without some

prospect of alternative federal source of insurance-agency author-

ity. For example, the Comptroller has interpreted Section 24(Sev-

enth) of the NBA to permit national banks to insure the issuance

of municipal bonds on the grounds that the activity is functionally

“within the business of banking.” E.g., American Ins. Ass'n v.

Clarke, 865 F.2d 278 (D.C. Cir. 1988). In addition, the Comptroller

has permitted national banks to enter into other arrangements with

insurance agencies, such as leasing bank lobby space. The permissi-

bility of such rulings is, of course, not before this Court.

21

92 would not infringe upon any state goal. In any event,

it is within the easy power of state legislatures, or per-

haps even state regulators, to create their own small-

town exemption if they wish to ensure continuation of

such activity by their state-chartered banks. Indeed, a

number of States have done just that.

The Bank asserts only that the decision below “calls

into question” (Bank Pet. 8) or “creates considerable

uncertainty over the propriety of” banks’ small-town in-

Surance agency activities (Bank Pet. 10). The Solicitor

General contends only that the decision “does violence to

the settled expectations of those banks that currently sell

insurance under Section 92.” OCC Pet. 19. Noticeably

absent from either Petition is an assertion that the deci-

sion will require national banks to cease this insurance

agency activity. Petitioners cannot have it both ways:

either the decision below forces national banks to cease

their sale of general insurance or it has no practical im-

pact.

e. This case presents an extremely unusual question of

Statutory construction. It is highly unlikely that any

court will again face a circumstance in which a statute

has been eliminated from the U.S. Code; the original

Statutory text (including its punctuation) and subsequent

congressional action indicate that the statute was re-

pealed; but it has nonetheless been assumed (at least by

some), without the issue having been decided, that the

Statute continues to exist. It is highly unlikely therefore

that this Court’s exercise in following the trail of quo-

tation marks Petitioners lay and parsing the textual

*E.g., N.M. Stat. Ann. § 59A-12-10A(2)(1991): Wash. Rev.

Code § 30.08.140(10) (1990); Colo. Rev. Stat. § 10-2-211(2)(b)

(1991). This option is particularly attractive in these circumstances

because, by the APA’s reckoning, 105 of the 115 specifically identified

state banks are located in just one State, which could solve this

“problem” on its own. See n.24 supra.

22

nuances of “this” versus “that,” as Petitioners urge,

would offer any meaningful instruction or direction to

other courts.”

If the decision is incorrect and if the decision proves

to have a substantial negative impact on the banking

and or insurance industries in the future, Congress is

free to address the matter. The proper branch of govern-

ment to fill gaps created by repeals-—whether inadvertent

or not—is the legislative branch. See, e.g., Whitney v.

State Tax Comm'n, 309 U.S. 530, 535-37 (1940) ; United

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

gress closed “loophole” created by earlier “inadvertent| |

repeal”). If the deletion of Section 92 was a “mistake,”

it is for Congress—not the courts—to correct. Board of

Governors v. Dimension Fin. Corp., 474 U.S. 361, 364-65

(1986).

2. Petitioner Oregon National Bank stands alone in

asking this Court to review whether the Court of Ap-

peals should have addressed the question of Section 92's

validity. But the Bank has pointed to no decision in

conflict with the opinion below, and none exists. Nor does

this case present any important or unresolved question

of federal law relevant to this issue.

Contrary to the Bank’s contention, the Court of Ap-

peals’ determination of the validity of Section 92 was

anything but “swa sponte.” Bank Pet. 9 n.10. The dis-

trict court noted Section 92’s omission from the U.S.

Code and concluded that the statutery provision “appar-

ently was inadvertently repealed in 1918.” (OCC Pet.

App. 44a n.2) Despite this conclusion, the court “as-

sume/{d] that the statute exists in proprio vigore.” (1d.)

Respondents noted these facts in their opening brief to

2° Even if this Court were to grant review, there is an alternative

ground for affirming the Court of Appeals’ decision. Respondents

argued below that the Comptroller's expansive geographic inter-

pretation of Section 92 was arbitrary and capricious and not in

accordance with law. See supra at 4.

23

the Court of Appeals. Moreover, Respondents specifically

asked the Court to confront the issue of Section 92’s

validity. Petitioners expressly disagreed that the court

should decide this issue. See supra n.4. Consequently,

contrary to the Bank’s assertion, there was a direct dis-

pute as to whether the Court of Appeals should address

the question of Section 92’s validity. Having resolved this

dispute in favor of addressing Section 92’s validity,” it

is difficult to perceive how the court’s decision that Sec-

tion 92 is not valid was “advisory.”

The Bank, like Judge Silberman, relies chiefly on cases

in which courts had declined to resolve issues that had

not been fully briefed or argued. See, e.g., Carducci v.

Regan, 714 F.2d 171, 172 (D.C. Cir. 1983) (“Because it

was not adequately briefed or argued on appeal, we de-

cline to resolve the further issue . . .”); McCormick v.

United States, 111 S. Ct. 1807, 1818 (1991) (Sealia, J.,

concurring) (“While I do not feel justified in adopting

that interpretation without briefing and argument... .”) ;

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

clining to rehear en bane issue that “was not briefed or

argued to the panel’). See also Singleton v. Wulff, 428

U.S. 106, 120-21 (1976) (declining to resolve an issue

where “[the] petitioner has never been heard in any way

on the merits’’) .*"

* At that point, the fact that the parties did not take directly

adversary positions on the substantive issue was irrelevant: federal

courts “are not bound to accept, as controlling, stipulations as to

questions of law.” Estate of Sanford v. Commissioner of Internal

Revenue, 308 U.S. 39, 51 (1939). Accord Kamen v. Kemper Finan-

cial Services, Inc., 111 S.Ct. 1711 (1991).

*! The Bank’s reliance on Williams v. Zharaz, 448 U.S. 258, 267

(1980), is misplaced. In that case, this Court held, unremarkably,

that an action attacking the validity of a state statute did not

permit a federal court to rule on the constitutionality of a federal

statute, although the subject matter of the two statutes was similar.

Here, only one statute—a federal statute—-is in controversy. The

Court of Appeals did not reach out to address any other statutory

provision.

24

But the Court of Appeals had ample opportunity to

receive. and interested parties ample time to submit, legal

briefing on the existence of Section 92. See supra n.4.

By the time the panel issued its opinion, the issue had

been noted by the district court, briefed by the parties,

and discussed at oral argument.* Thus, to the extent

judicial discretion is involved, it has been exercised cor-

rectly to determine whether Section 92 remains in exist-

ence. See Arcadia, Ohio v. Ohio Power Co., 111 S.Ct. 415,

418 (1990). And, as the Bank apparently fails to recog-

nize, the existence of this predicate issue counsels against

plenary review. This Court’s searce resources would be

wasted by taking this case in order to confront a question

of whether a lower court correctly exercised discretion

that it unquestionably possesses.

CONCLUSION

For all the foregoing reasons, the petitions for writ of

certiorari should be denied.

Respectfully submitted,

DONALD B. VERRILLI, JR.*

ANN M. KAPPLER

JENNER & BLOCK

601 Thirteenth Street, N.W.

Twelfth Floor

Washington, D.C. 20005

(202) 639-6000

Attorneys for Respondents

November, 1992 * Counsel of Record

32 Any defect was surely resolved during the proceedings before

the full Court of Appeals. Petitioners filed additional briefs and an

amicus brief was joined by fifteen banking associations represent-

ing bankers across the nation.