Petition for Writ of Certiorari — Industrial National Bank of Rhode Island v. Wingate Corp.

Gu the Supreme Gourt of the Guited States

OcToBER TERM, 1968

No. —

Witu1am B. Camp, CoMPTROLLER OF THE CURRENCY,

PETITIONER :

Vv.

THE WINGATE CORPORATION

PETITION FOR A WRIT_OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIRST CIRCUIT

The Solicitor General, on behalf of William B.

Camp, Comptroller of the Currency, petitions for a

writ of certiorari to review the decision of the United

States Court of Appeals for the First Circuit in this

_ ease.

OPINIONS BELOW

-The opinion of the court of appeals (App. A, pp.

10-21) is not yet reported. The opinion of the

district court (App. C, pp. 23-37) is reported at 288

F, Supp. 49.

JURISDICTION

The judgment of the court of appeals (App. B,

p. 22) was entered on March 27, 1969. The juris-

1 References to “App.” are to the appendices to this petition

anf p ppe pe )

infra. /

(1)

353-029—69——1,,

2

diction of this Court is invoked under 28 U.S.C.

1254(1). | 7 |

QUESTION PRESENTED

Whether, in applying the principle that standing

to complain that a competitor’s activities are pro-

hibited exists only if the plaintiff is a member of

a class intended to be protected by the. statute al-

legedly violated, standing may be rested ‘solely on a

subsidiary policy behind a different statute plainly

oe to’ the defendsdl competitor.

STATUTES INVOLVED

The National Bank Act provides i in geben part:

12 U.S.C. 24—

_ Upon duly making and filing articles of asso-

ciation and an organization certificate a na-

tional banking association shall become, as

from the date of the execution of its organiza-

tion certificate, a body corporate, and as such,

and in the name designated in the organization

certificate, it shall have power—

* * Z % par *

Seventh. To exercise by its board of direc-

tors or duly authorized officers or agents, sub-

ject to law, all such incidental powers as shall

be necessary to carry on the business of

banming; * * *.

Section 4 of the Bank Service Corporation Act of

1962, 12 U.S.C. 1864, provides:

No bank service corporation may engage in

any activity other than the performance of

bank services for banks.

3

STATEMENT

The Wingate Corporation, a company offering data

processing services, brought this action for declara-

tory and injunctive relief against the Industrial Na-

tional Bank of Rhode Island. The complaint ‘alleged

that the bank’s furnishing of data processing serv-

ices, and the ruling of the Comptroller of the Cur-.

rency that such activities are permitted as incidental to

the banking business,’ were ultra vires under the grant:

of incidental powers to national banks in the National

Bank Act, 12 U.S.C. 24 Seventh. The Comptroller and

the City of Providence (which was about to contract for

the bank’s performance of certain data processing serv-

ices) intervened as parties defendant.

The district court dismissed the action for lack of <

standing and Wingate appealed} The Court of Ap-

peals for the First Cireuit accepted the settled prin-

ciple that Wingate would have standing to attack the

lawfulness of a competitor’s activities only if Win-

gate could show a legal right to He free of such com-

petition or that the statute allegedly violated was

intended to protect it or members of its class (App.

A, pp. 12-14). The court also agreed that nothing in

the legislative history. of Section 24 Seventh evi-

* Paragraph 3500 of the Comptroller’s |Manual for National

Banks provides:

“Incidental to its banking services, a national bank may make

available its data processing equipment o perform data proe-

essing services on such equipment for other banks’ and bank

customers.” ;

4

denced any congressional interest in protecting the

competitive interests of businessmen engaged in ac-

tivities that might be ultra vires for national banks

(App. A, pp. 15-16).’ The court went on, however, to

hold that Congress had “indirectly” supplied a “suf-

ficient statutory aid to standing’? (App. A, p. 20)

by passing the Bank Service ‘Corporation Act of

1962, 12 U.S.C. 1861-1865, a century after enactment

of the statute on which Wingate relied on the merits.

The 1962 Act upon which the court of appeals rested

its grant of standing authorizes two or more banks

to form a new “bank service corporation”’ to render,

inter alia, data processing services, but directs that

no such corporation ‘‘may engage in any activity other

than the performance of bank services for banks’’. 12

U.S.C, 1864 (emphasis added). While no bank service

corporation is involved in this lawsuit, the court be-

low concluded that implicit in the act was “a broader

purpose” than appeared from its focus and terms, so

that “the passage’’ of the Act “arguably prohibits

direct entry by [even individual] national banks into

the data processing service business” (App. A, p. 21).

* This position was determinative in that portion of the opin-

ion relating to the case of Arnold Tours, Inc. ¥. Camp, which

was briefed and argued separately, from Wingate but which

was decided in the same opinion. No statutory protection, di-

rect or indirect, was found for the plaintiffs in Arnold Tours,

who were travel agents attacking a ruling by the Comptroller

allowing national banks to provide travel services, Conse-

quently; the court affirmed the dismissal of their action for

lack of standing. The travel agents have filed a petition for a

writ of certiorari raising the question whether mere competi-

tive injury, without more, is a sufficient basis for standing.

Arnold Tours, Inc. ¥. Camp, Nb. 1407, O.T., 1968. The Comptroller

is opposing that petition.

On the basis of this “arguable” result the court found -

that Wingate had standing to sue the Industrial Na-

tional Bank and the Comptroller of the Currency to

challenge their activities as unauthorized by the Na-

tional Bank Act. In so holding, the court expressly noted

(App. A, p. 20, n. 8) that the Court of Appeals for the

- Eighth Cirenit had recently reached precisely the oppo-

site result in Association of Data Processing Service

Organizations, Inc. v. Camp, No. 19218, decided Febru- .

ary 6, 1969, petition for a writ of certiorari pending,

No. 1246, O.T., 1968, The judgment dismissing the suit

was therefore vacated and the case remanded for trial.

This petition and a separate petition for a writ of certio-

rari filed by the national bank (Industrial National

Bank of Rhode Island y. Wingate Corp., No. 1408, O.T.

1968) have followed.

REASONS FOR GRANTING THE WRIT

The decision below is in explicit conflict with the

recent decision of the Eighth Circuit on the identical

question. Moreover, the question involved is impor-

tant and recurring.

1, The First Circuit noted in its opinion (App. A,

p. 20, n. 8) that its decision that the Bank Service

‘ Corporation Act provided a sufficient basis for stand-

ing conflicts with the decision of the Eighth Cireuit in

the ADAPSO case, supra.* That case involved an

action by an association: of data processing compa-

nies and a member of that association to invalidate

* The opinion of the Eighth Circuit in ADAPSO is included

in the appendix to this petition (App. D, pp. 38-50).

~~

the identical ruling of the Comptroller under attack

here. The court there dismissed the plaintiffs’ reliance

upon the Bank Service Corporation Act as “mis-

placed”” (App. D, p. 49, n. 12). A petition for a

writ of certiorari is pending in that case (No. 1246,

O.T., 1968), and because of the conflict between the

cireuits on this important legal question we are filing

contemporaneously herewith a memorandum acqui-

escing in the granting of that petition.

2. The decision below is contrary to the standards

established in this Court’s prior decisions. As the

Court said only last Term, standing has uniformly

been denied—absent some other legal right—when

“the statutory and constitutional requirements that

the plaintiff sought to enforce [against a competitor ]

were in no way concerned with protecting against

competitive injury.”” Hardin v. Kentucky Utilities

Co., 390 U.S. 1, 6. Only “when the particular statu-

tory provision invoked does reflect a legislative pur-

pose to protect a competitive interest, [does] the in-

jured competitor * * * [have] standing to require

compliance with that provision.” Ibid. This same ap-

proach was reflected in Flast v. Cohen, 392 U.S. 83,

where the Court emphasized that the fundamental as-

pect of standing is its focus on the plaintiff’s status,

which must have a definable nexus with the specific

provision allegedly violated. See 392 U.S. at 102 and

generally at 99-103. In that case the taxpayers were -

found to have standing to raise a claim that a partic-

ular spending program violated the First Amend- —

ment only because analysis of the history and pur-

NE Nea os ysl AL a

7

. pose of the First Amendment showed that one of its

principal purposes was to forbid diversion of tax

revenues to the aid of religion.

Both the court below and the Eighth Circuit agreed

on the general ‘principle that a statutory purpose of

protection must be found. They further agreed that

there was no such protective purpose in 12 U.S.0. 24

Seventh, the statute claimed to prohibit, or rather not

to authorize, the provision of data processing services

by national banks. But the court below parted com-

pany with the Eighth Cireuit—and with the principles

established by this Court—in finding ‘‘the sufficient

* statutory aid” in a separate and subsequent statute

that was not even the basis for the plaintiff’s claim

on the merits. The court pointed only to the fact that

the legislative history of the Bank Service Corpora-

tion Act included statements by several legislators in-

dicating that one of the purposes—but by no means

the principal purpose—of restricting the activities of

bank service corporations was the protection of ex-

isting businesses.* Somehow, in the court’s view, these

remarks sustained the standing of the Wingate Cor-

poration to challenge a single national bank’s activi-

ties, authorized by the Comptroller, on the ground that

° Indeed, even Senator Proxmire, who was primarily re-

sponsible for the explicit prohibition against a bank service

corporation’s furnishing services to non-banks, stated that the

traditional legislative policy of confining banks to banking ac-

tivities “has principally been * * * to assure the solvency of

the banks by limiting the activities of banks to safe and rela-

tively liquid investments.” 108 Cong. Rec, 22031 (1962).

4

th CA Rene he a on 6 a AD BEER, a an Dab e MRSAL BR PAL Ae 3. ae Ge et i Ee oe oe

8

they exceed the powers granted a: hundred years ear-

lier in the National Bank Act. The Fifth Circuit sim-

ilarly strained to find some legislatively protected in-

_ terest supporting the plaintiff’s standing in Saxon v.

Georgia Ass’n of Independent Insurance Agents, 399

F. 2d 1010 (C.A. 5). Such rulings seem plainly incon-

sistent with this Court’s insistence in Hardin, supra,

that ‘“‘the particular statutory provision invoked”

must reflect an intent to protect the plaintiff’s inter-

ests. 390 U.S. at 6 (emphasis added).

3. The implications of the issue on which the First

and Eighth circuits have diverged are important. The

logie of the decision below would give competitors of

national banks standing to attack their authority to per-

form individually for non-bank customers any activity

that they might have performed for themselves by the

establishment of a bank service corporation, including |

all “clerical, bookkeeping, accounting, statistical, or

similar functions” (12 U.S.C. 1861(b)). Indeed, since

Section 4 of the Bank Service Corporation Act, 12

U.S.C. 1964, provides that “[n]o bank service corpo-

ration may engage in any activity other than the per-

formance of bank services for banks” (emphasis add-

ed), the approach taken by the court below might even

give standing to a competitor to attack any service by

a national bank for a non-bank customer as not a

proper ‘‘bank service.” It would strain beyond reason

the intent of a Congress preoccupied with other issues

to say that the 1962 Act in fact granted such a sweep-

9

ing mandate for other businesses to use litigation un-

der the National Bank Act as a weapon in their com-

petition with the incidental services of the banks.

Even if the scope of the issue is limited to the stand-

ing of data processing companies to attack the activ-

ities of national banks, the question is still an impor-

tant and recurring one, to which there should be a

uniform answer. In 1967, 82 percent of banks with

$50-100 million in assets offered computer services to

customers. For banks with over $500 million in assets °

the figure was 98 percent. Banks in every state offer

computer services ; unless and until this Court acts, these

activities will be subject to attack in the First, Circuit ' P

and jurisdictions that may follow. its: ‘approagh, and i

immune to challenge in the Eighth Circuit and other

circuits that may accept its position.

CONCLUSION

This petition for a writ of certiorari should be

- granted.

Respectfully submitted.

Erwin N. Griswo.p,

Solicitor General.

Wi1am D. RucKELsHaAvs,

Assistant Attorney General.

Puiuip A, Lacovara,

Assistant to the Solicitor General.

ALAN 8. RosENTHAL,

STEPHEN R. FEtson,

Attorneys.

JUNE 1969.

*

353-029—69-——-2

bly ata re Wh BROS 0 OED

APPENDIX A

United States Court of Appeals for the First Circuit

No. 7192.

ARNOLD Tours, INC., ET AL., PLAINTIFFS, APPELLANTS,

Vv.

Wiiuram B. Camp Er AL., DEFENDANTS, APPELLEES.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR

THE DISTRICT OF MASSACHUSETTS

and

No. 7186.

THE WINGATE CORPORATION, PLAINTIFF, APPELLANT,

v.

.

INDUSTRIAL NATIONAL BANK ET AL., DEFENDANTS,

APPELLEES.

APPEAL FROM THE UNITED STATES DISTRICT COURT ode

THE DISTRICT OF RHODE ISLAND

Before Aldrich, Chief Judge, Woodbury,* Senior

Circuit Judge, and Coffin, Circuit Judge.

March 27, 1969.

Aldrich, Chief Judge. These are two actions by

parties engaged in certain business pursuits to re-

strain competition from national banks which, sup-

ported by rulings of the Comptroller of the Currency,

*Sitting by designation.

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11

thave entered their fields. Plaintiffs seek, basically, to

attack these rulings. In both cases the district courts

held that they were without standing to do so, and

dismissed the complaints on motions of the defend-

ants. Plaintiffs appeal.

THE TRAVEL AGENCY BUSINESS

We consider first the action brought by Arnold

Tours, Inc. and some forty other independent travel

agencies in Massachusetts, allegedly on behalf of

others similarly situated as well as themselves, against

the Comptroller and the South Shore National Bank.

The bank, in reliance upon a ruling by defendant

Comptroller’s predecessor,’ is engaging not merely

in the financial aspects of travel, but “full” travel

service, or a complete travel agéncy business. To quote

from what is said to be the bank’s own announcement,

its employees are prepared to arrange for bicycles in

Bermuda, villas on the Riviera, and houseboats in

Kashmir. The Comptroller argues at length that this

is traditional and legitimate bank activity. We do not,

however, consider this matter except to say that plain-

tiffs present enough of an issue so that the question

of standing is properly before us. We also note that

no question of reviewability of the Comptroller’s rul-

ings has been raised. See generally, Saferstein, Non-

147475. National banks acting as travel agents.

“Incident to those powers vested in them under 12 U.S.C. 24,

national banks may provide travel services for their customers

and receive compensation therefor. Such services may include

the sale of trip insurance and the rental of automobiles as

agent» for a local rental service. In connection, therewith, na-

tional banks may advertise, develop, and extend such travel

services for the purpose of attracting customers to the bank.

See 97376.”

SNA Rete en Que is Sit AlN 2G

12

reviewability: A Functional Analysis of “Committed

to Agency Discretion,” 82 Harv. L. Rev. 367, 383 &

n. 60 (1968). Our sole question is the correctness of

defendants’ contention, which we will paraphrase as

saying that what the bank chooses to,do is, both lit-

erally and figuratively, none of plaintiffs’ business.

It has long been settled that an ordinary competitor

has no standing to complain of a party’s lack of legal

authority to engage in his business, in a suit against

the competitor, the government, or both. Railroad. Co.

_v. Ellerman, 1881, 105 U.S. 166; Alabama Power Co.

Vv. Ickes, 1938, 302 U.S. 464; Tennessee Power Co. Vv.

TVA, 1989, 306 U:S. 118. Despite numerous excep-

tions, this principle has withstood erosion not only

betalies of the traditional rationale behind standing

doctrines generally, see Flast v. Cohen, 1968, 392 U.S.

83, 91-101, but because of the policy encouraging

free and open competition—a policy that favors com- -

petition in the market place, not in the courts. The

exceptions, where standing is recognized, are as well

established as the principle itself. The first is for

complaints of “illegal” competition, by which is usu-

ally meant competition that is unlawful as to ‘plaif-

tiff apart from considerations of corporate power 0

authority. See- Alabama Power Co. v. Ickes, supra a

479; Central Louisiana Elec. Co. v. REA, W.D.La.,

1964, 236 F. Supp. 271, 277, rev’d, 5 Cir., 354 F. 2d

859, cert. denied 385 U.S. 815; but ef, oe Cily

Power & Light Co. v. McKay, D. C.Cir., 1955, 225 F.

2d 924, cert. dented 350 U.S. 884. Plaintiffs do not

suggest that the Comptroller has sanctioned, or that

‘the bank has undertaken, any unfair, conspiratorial,

. or criminal methods of competition, or that there has

_been any violation of the antitrust laws. The- second

exception is where it is claimed that some “legal

“AR

13

right” has been injured, by which is meant, in its

nonconclusory sense, that plaintiff has an independent

property right, or a right to be free from the partic-

ular kind of competition he is challenging. Such a

right is attached to or arises out of an exclusive fran-

chise, on the one hand, or a restricted license or the

hike, on the other. Frost v. Corporation Commission,

1929, 278 U.S. 515; ef. Whitney National Bank v.

- Bank of New Orleans, D.C.Cir., 1963, 323°F. 2d 290,

299-300, rev’d on other grounds, 379 U.S. 411. Plain-

tiffs fit in no such category.

The final general exception is where the plaintiff

can show: the. existence of a “‘statutory aid to stand-

ing’’ for a class of persons which includes himself.

This statutory aid may take the form of a ‘judicial

review” provision of the particular administrator in

question for “parties aggrieved,” ‘“fadversely af-

fected,”’ or thé like..In such a case, FCC v. Sanders

Bros. Radio Station, 1940, 309 U.S. 470, would pre-

sumably provide standing for legitimate competitors.

See generally, Jaffe, Judicial Control of Administra-

tive Actions, 513-31. There is, however, no such pro-

vision as to the Comptroller of the Currency. An al-

ternative statutory aid may be found if there is an

indication of Congressional intent, explicit or implicit,

in the relevant substantive’ acts to grant protection

to the competitive interests of a class of businesses

which includes the plaintiff. Thus in Hardin v. Ken-

tucky Utilities Co., 1968, 390 U.S. 1, the Supreme

Court found that a competing private utility company

had standing to challenge the expansion of ‘T'VA into

new areas in alleged violation of the area limitations

of section 15d(a) of. the Tennessee Valley Authority

Act, 16 U.S.C. § 831n-4(a). The Court said, ‘‘[O]ne

of the primary purposes of the area limitations in

aie Binal SUE Ue

14

§ 15d of the Act was to protect private utilities from

TVA competition. ... Since respondent is thus in

he ¢lass which § 15d is designed to protect, it has

standing. . . .”? 390 U.S. at 6-7. :

The only possible statutory aid to the standing of

travel agents in national hanking legislation exists in

12: U.S.C. § 24(7). This section states that national

sq banks may “exercise ... all such incidental. powers

ae shall be necessary to carry on the business of

banking,” and then lists numerous powers explicitly

granted. It has long been settled in suits over private

contracts that the enumeration of such powers is an

effective and strong prohibition of all activities not

enumerated and not incidental to banking. See First

National Bank v. National Exchange Bank, 1875, 92

U.S. 122, 128; National Bank v. Matthews, 1878, 98

U.S. 621, 625; Logan County National Bank vy. Town-

send, 1891, 139 U.S. 67, 73. But even-assuming that

national banks are prohibited by section 24(7) from

entering into the business of procuring travel arrange-

ments, this is not sufficient to provide a statutory aid

to standing. The prohibition must be ‘demonstrably

intended to protect the competitive interests of other

members of the prohibited business. See the concur-

ring opinion of Judge Fhornberry in Saron v. Georgia

Ass’n. of Independent Ins. Agents, 1968, 5 Cir., 399

F. 2d 1010, 1019; Association of Data Processing Serv.

Organizations v. Camp, D.Minn., 1968, 279 F. Supp.

), aff'd, 8 Cir. 2/6/69, F.2d ~- , We, too (see

8th Cir. opinion in Camp, n.10), cannot accept the

simplistic suggestion by the majority in Georgia Ass’n,

399 F. 2d at 1016, that as soon as it appears that the

competitive activities were unlawfully carried out the

plaintiffs have standing.

mF

eabiS RA

15

The plaintiffs have not pointed to, nor have we in -

our research discovered, any, evidence that Congress

_ in delimiting the scope of banking activity in the ultra

vires section, quoted supra, was concerned, in 1863

and 1864 when the national banks were formed,’ with

competitors in the businesses impliedly prohibited,

much less in any particularity with travel agents Gf

they then existed). Rather, the limitations) were for

the purpose of insuring the stability, liquidity, and

safety of the banks. See National Bank vj Matthews,

supra at 626; Davis, Banking Regulation Today: A

“Banker’s View, 31 Law & Contemp. Problems 639

(1966). See also Million, The Debate of ‘the National .

Bank Act of 1863, 2 J. of Pol. Econ. 241 (1894). No

doubt Congress has continuously, from 1864 to the

present, been “very careful” (see infrd) in restricting

the activities of banks; and no doubt Congress has

been, as we shall see,in the second portion of this

opinion, specifically concerned with: certain potential

competitors of the banks. But as Senator Proxmire

pointed out while offering an amendment to banking

legislation * specifically designed to protect particular

competitors, the thrust of the close regulation of banks

is for purposes of stability: “We are very careful in

the regulation of banks. This has principally been

done to assure the solvency of the banks by limiting

the activities of banks to safe and relatively liquid

investments.” -108 Cong. Rec. 22031 (1962). See also

8.Rep. No. 2105, 87th Cong., 2d Sess. (1962) (Supple-

° National Bank Act of 1863, ch. 58, 12 Stat. 665: National

Bank Act of 1864, ch. 106, 13 Stat. 99. °

* This legislation will form the. basis of our holding in the

second half of this opinion.

4

—— _

16

mental Views of. Senators Proxmire. Douglas, and

Neuberger) in 2 U.S. Code Cong. & Admin. News,

1962, at 3887. While at some point Congressional con-

cern with a sufficient quantity of specific competitors

of banks might indicate a Congressional intent that

section 24(7) should now be read as a measure not

only to protect investors but also to protect all poten-

tial members of prohibited activities, such a point has

not been reached. More proof of Congressional solici- -

tude is required before this court or any court should

/ convert an economic struggle into a legal one.

The plaintiffs have suggested however, that the

_ general rule denying competitors standing is no

~ st valid, or has undergone substantial change.

irst, they argue that section 10(a) of the Admin-

istrative Procedure Act, 5 U.S.C. § 702 provides

standing for any persons claiming to be “adversely

affected in fact.” This contention seems derived from

the interpretation of section 10(a) urged by Professor

Davis in his Administrative Law Treatise, § 22.02,

and presumably adopted in American President Lines

v. FMB, D.D.C., 1953, 112 F. Supp. 346.‘ We, how-

ever, choose to side with Professor Jaffe’ and the

majority of the courts* in, holding that the passage

of the APA was not intended to alter to such a dras-

tie extent previous law on the question of standing.

*See alto Baker, Watts & Co. v. Saxon. D.D.C., 1966, 261

F.’ Supp. 247. :

* Jaffe, Judicial Control of Administrative Action 528-30. See

also Note, Competitors’ Standing To Challenge Administrative

Action Under the APA, 104 U.Pa.L.Rev. 843 (1956).

*See Saxon v. Georgia Ass'n of Independent Ins, Agents,

supra, at 1019 n.l; REA v. Northern States Power Co., 8 Cir,

1967, 373 F. 2d 686, 692-93 & nn. 9-10, cert. denied 387 U.S.

945; Kansas City Power d& Light Co. v. McKay, supra.

a

a ae - ee ee oe

17

Moreover, we should add that we have serious reserva-

tions whether a test of “adversely affected in fact”

would provide a simpler means of deciding the issue

of standing. We do not pause for such analysis in

the present case, but if, as has been suggested, sim-

plicity and ease of determination is a reason for pre-

ferring the new interpretation, we do not find it.’

The plaintiffs alternatively urge that~ Flast y.

Cohen, supra, indicates a major shift in the judicial

attitude toward the general doctrine of ‘standing;

and that while it is not directly in point, this decision

indicates that the relevant test for determining stand-

ing in this situation is whether the parties are suffi-

ciently adverse to bring into focus the issues raised.

See also the concurrence of Judge Thornberry in

Saxon v. Georgia Ass’n of I ndependent Ins. Agents,

supra, Our, first respon$e to plaintiffs’ contention

is that Flast v. Cohen was not intended to have any

major reshaping effect outside the area of standing

determinations under Article TIT for taxpayer suits

challenging the constitutionality of a federal taxing

and spending statute. Such an approach to standing

as used in Flast—one focusing solely upon an assess-

ment of the degree of adversity and clarity of the

particular case—if applied to questions of adminis-

trative law standing would disturb the entire judicial

relationship to the administrative as presently under-

stood by Congress. Congress now. knows that if it

* Indeed, one of the bases for the rule against competitors’

suits might well be the difficulty of determining whether mere

increased competition is an injury in fact, particularly where

a new and largely undeveloped market is involved. Cf.

World Airways, Ine. vy. Northeast Airlines, Ine, 1 Cir., 1966, .

358 F. 2d 691.

.

853-029—69—_3

— -

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; _ it ae Si Ci, SO

.

ee etl oe pital

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18

wishes a particular class of plaintiffs to have, or not

to have, standing to seek review of agency rulings,

it may make, or not make, the types of legislative

provisions discussed earlier in this opinion, and that

is an end io the matter. Under plaintiffs’ proffered

approach, the courts would have the last word on

standing, based upon their view of the justiciability

of: the particular circumstances pleaded. When the

conflict is one of constitutional dimensions, such an

approach may be necessary. In purely administrative

matters we think otherwise.

Our second answer is thateven if we were to as-

sume that Flast v. Cohen was intended to affect other

areas, we do not read that case to require all ad-

ministrative standing determinations to be made solely

upon an assessment of the degree of adversity and

clarity, Rather, Flast was concerned with reevaluat-

ing the standards for determining adversity and

clarity in.a situation where the relevant standing

doctrine was adjudged to rest entirely upon such

considerations. Flast is inapplicable when the stand-

ing doctrine in question rests upon a basis largely

indepedent of the concerns for adversity and clarity—

namely, the limited role of the judiciary in regulating

legitimate competition.

In sum, we find no acceptable basis for standing for

the travel agents.

DATA PROCESSING

Turning to the second action involving the Comp-

troller, here plaintiff, Wingate Corporation, which

performs certain data processing services for hire,

brings suit to enjoin the defendant, Industrial Na- -

— Bank of Rhode Island, from performing data

10)

processing services for the City of Providence, as

sanctioned by a general ruling of the Comptroller.

While Wingate, like Arnold, complains that the bank

is violating section 24(7) of 12 U.S.C. by providing

such services to bank customers, its claim to standing

is aided by the presence of specific Congressional leg-

islation dealing with banks and computer servicing.

In 1962 Congress, after some debate, enacted the Bank

Service Corporation Act, 76 Stat. 1132, which allowed

small banks to combine to form a separate corpora-

tion which could own data processing equipment. The

primary purpose of this legislation was to allow small

banks to compete more effectively with the larger

banks, which had sufficient capital and business to buy

their own electrie data processing equipment. How-

ever, in order to prevent such corporations being used

as a subterfuge for entering into the nonbanking busi-

ness of data processing, and to protect the interests

of certified public accounting firms, Congress pro-.

vided in section 4 of that Act, 12 U.S.C. § 1864, ‘“‘No

bank service corporation may engage in any activity

other than the performance of bank services for

banks.’’ The legislative history is clear. The prohibi-

tion originated in an amendment proposed by the Na-

“tional Society of Public Accountants, which objected

to the original version of the bill that would have al-

lowed hank service corporations to solicit outside busi-

ness to some extent. The Accountants feared injury

to their growing business of hookkeeping with the aid

> -of computers. The final provision was an obvious re-

_Sponse, See 108 Cong. Rec. 16499, 22031 (1962) ; Hear-

ings on Mise. Bank Bills Before the Comm. on Bank-

ing & Currency of the United States Senate, 87th

Cong., 2d Sess., at 79-80 (1962). -

:

>

OT ee ee ee i EO eh Nag BEE SIG Bldg ey eet ee ne ee <=

20

We conclude that the present plaintiff is within

the class of persons intended to be protected by sec-

tion 4 of the 1962 legislation, and the only question is

whether standing exists to complain not of competi-

tion from bank service corporations, but from na-

tional banks directly. We conclude in the affirmative.

When Congress so explicitly provides protection

for a particular business against competition from a

regulated national entity—even though indirectly by

regulating a subsidiary—standing exists at least to

entertain complaints by that business concerning its

competitive relationship to the national entity. See-

tion 4 had a broader purpose than regulating only

the service corporations. It was also a response to

the fears, expressed by a few senators, that without

such a prohibition, the bill would have enabled ‘‘banks

to engage in a nonbanking activity,” S.Rep._ No.

2105, supra (Supplemental views of Senators Prox-

mire, Douglas, and Neuberger), and ¢hus constitute

‘fa serious exception to the accepted public policy

which strictly limits banks tod banking.’’ (Supple-

mental views of Senators Muskie and Clark). We

think Congress has provided the sufficient statutory

aid to standing even though the competition may not

be the precise kind Cangress legislated against.‘

Indeed, there is a plausible argument that the Bank

Service Corporation Act, read in conjunction with 12

U.S.C. § 24(7), does.in fact impliedly prohibit na-

tional banks from direetly entering into the data proc-

essing service business. If the section four prohibi-

4

® But cf. Association of Data Processing Serv. Organizations

v. Camp, 8 Cir., 1969, F.2d“ ,n.12, which stated that

the reliance of similar plaintiffs upon the Act for standing was

“misplaced.”

“=

~ -

21 | [

tion could be avoided by a small national bank, mem-

ber of a group owning a service corporation, soliciting

its own data processing customers to be serviced by

the subsidiary via the bank, the prohibition would be

largely illusory. And if a small bank could not directly

solicit such customers, it would follow that the large

banks, owning their own equipment, could not, or the

equalizing effect of the Bank Service Corporation Act

would be lost. To be considered in opposition to such ”

an argument is the Comptroller’s ruling interpreting

the section,’ and the phenomenon of ‘the one-bank

holding company, that is not covered by the Bank

Holding Company Act of 1956, 12 U.S.C. §¢ 1841-49,

which requires only multi-bank holding companies to

divest themselves of all nonbanking interests. We

leave the resolution of this conflict to future determi-

nation. For the purposes of the issue of standing, we

need decide only that the passage of the Bank Service

Corporation Act arguably, prohibits direct entry by

national banks into the data processing service

business. | .

_ ‘In case No. 7192 the judgment of the District Court

ts affirmed. 3

In case No. 7186 the judgment of the District Court

is vacated and the case remanded for further proceed-

ings not inconsistent herewith.

spate 2

*Comptroller’s Ruling § 7399 provides in part that:

“. . . such corporations may only perform bank services for

banks. Bank services, however, as defined in the Act, would

include any service which a bank would ordinarily perform for.

a customer. Accordingly, if a bank undertakes to handle the

payroll accounts or the accounts receivable of a customer, a

bank service corporation may perform for the bank the service

necessary to enable the bank to fulfill its undertaking.”

RAD A a ARAN Sale! ol ret ears

APPENDIX B

United States Court of Appeals for the First Cirguit

| No. 7186.

THE WINGATE CORPORATION, PLAINTIFF, APPELLANT,

v.

IxpusrriaL Nationa Bank or RHODE ISLAND, ET AL.,

DEFENDANTS, . APPELLEES.

JUDGMENT

Entered March 27, [969

This cause came on to be heard on appeal from the

United States District Court for the District of

Rhode Island, and was argued by counsel.

Upon consideration whereof, It is now here ordered,

adjudged and decreed as follows: The judgment of

the District Court is vacated and the case is remanded

to that Court for further proceedings not inconsistent

with the opinon filed today.

By the Court:

(S) Rocer A. StTINCHFIELD,

Clerk.

[cc. Messrs., Regno, Rosenthal and Goring. ]

e

99

Ohh Chee 1

‘ APPENDIX (.

District Court of the United States For the District

of Rhode Island

Civil Action No. 3847

THe WINGATE Corporation, PLAINTIFF,

v.

InpustrRiaAL NATIONAL BANK ET AL., DEFENDANTS.

OPINION.

a

July 25, 1968

Day, Chief Judge. In this action the plaintiff seeks

a declaratory judgment, injunctive relief and com-

pensatory damages on the ground that the marketing

of electronic data processing services by the defendant

Industrial National Bank of Rhode Island is illegal,

_ contrary to law and constitutes illegal competition

with the plaintiff and others engaged in the business

of furnishing such data processing services to the pub-

lic at large.

This action was originally instituted against said

Industrial National Bank of Rhode Island. Upon the

filing of its complaint, the plaintiff sought an ex parte

restraining order enjoining said defendant from ex-

‘ecuting a contemplated contract with the City of

Providence, a municipal corporation, under the terms

of which the.defendant, its agents and servants would |

perform certain data processing services for said City .

of Providence. This relief was denied “by me.

(23)

24

Subsequently William B. Camp, Comptroller of the

Currency of the United States, and said City of Prov-

idence were granted leave to intervene as parties de-

fendant. Thereafter plaintiff filed an amended com-

plaint against said three defendants.

In said amended complaint plaintiff alleges that

it, a corporation organized under the laws of. the

State of Rhode Island, and doing business as the

Wingate Computing Center, is engaged in the busi-

ness of marketing and performing data processing

services for the general business community; that

the defendant Industrial National Bank of Rhode

Island is a national banking association organized

and established under the National Bank Act with

its principal place of business in the City of Provi-

dence, in the State of Rhode Island; that this action

arises under the National Bank Act and involves*an

interpretation and application of said Act and a fre-

termination of the powers granted to national bank-

ing associations under the provisions of said Act as

set forth in Title 12 U.S.C. § 24; that the defendant

Comptroller of the Currency has by administrative

ruling authorized the defendant Industrial National -

Bank of Rhode Island and other national banks to

perform data processing services for the public at

large; that said Comptroller of the Currency and said

defendant bank may exercise only those powers

granted to them, respectively, by said National Bank

Act; that under the provisions of Title 12 U.S.C. § 24,

paragraph Seventh, a national banking association

has power:

“to exercise by its board of directors or duly

authorized officers or agents, subject to law, all

such incidental pewers as shall be necessary to

carry on the business of banking; .. .”’

4

>

and that in no section of said National Bank Act is

a national banking association authorized to engage

in any other business activities which are not neces-

sary to carry on the business of banking, and more

specifically, that there is no provision in said Aet

authorizing a national banking association to engage

in the business of offering and performing data

processing services on equipment owned by it for the

publie at large. = a

Plaintiff further alleges that the ruling’ .by said

Comptroller of the Currency authorizing national

banking associations to engage in the marketing of

data processing services is, therefore, ‘‘in violation of

the National Bank Act, beyond . statutory authority,

arbitrary, capricious, an abuse of discretion and not

in accordance with law”; that the defendant bank is

engaged in the business of performing data protess-.

ing services for the publie at large not necessary to

carry on the business of banking, which said activities

are beyond the grant of powers to national banking

associations and are unlawful and constitute illegal

competition with the plaintiff and other persons sim-

ilarly engaged in the business of furnishing data

processing services for the public at large; that on

October 2, 1967, said defendant bank entered into a

contract with said City of Providence for the per-

'The present form of this ruling, set forth in Par. 3500 in

Comptroller’s Manual For National Banks (1966 Ed.) is:

“3500. Utilization of data

processing equipment

tncidental to its banking services, a national bank may make

available its data processing equipment or perform data

processing services on such equipment for other banks and

bank customers,”

453-029-694

26

formance of such data processing services then being

performed by its employees, and, further, that it is -

advised that the defendant bank did commence to

perform such services on or about October 1, 1967:

and that said activities of the defendant bank in per- |

forming and holding itself out as willing to perform

data processing services for the City of Providence

and the public at large are illegal, not a part of, inci-

dental to or necessary to carrying on the business of »

banking, and are beyond the powers granted _ to

national banks under said: Act; that by performing

said illegal data processing services and by holding

-tiself out as willing and able to perform such services

_ the defendant bank has caused, and unless restrained

and enjoined, will cause substantial and irreparable

harm to the plaintiff and to other persons engaged in

the business of furnishing data processing services to

the public at large by depriving them of customers

for whom data processing services would be rendered

and from whom compensation would be received, and —

that it has suffered injury and damage and is con-

tinuing to suffer injury and damage by the unlawful

authorization of the defendant Comptroller of the

Currency and said illegal activities of the defendant

bank.

In its answer the defendant, Industrial National

Bank of Rhode Island, admits that it has in the past

and is presently offering incidental to -its banking

services to make available, and is performing data

processing services for its eustomers and for other

banks, but denies that it has offered in the past or

presently is offering to perform data processing serv-

ices for the public at large, not incidental to its bank-

ing services. It. also admits that it has entered into

a contract for the performance of certain data proc-

bok SSW aS ESD,

27

“ essing services for the City of Providence, one of its

customers, and denies that the performance by if of

such services for said City of Providence and other

bank customers would be illegal or beyond its statu-

tory powers.

The City of Providence in its answer admits the

execution by it of said contract with said Industrial

National Bank of Rhode Island for the performance -

by it of the data processing services described therein, ©

and likewise denies that the performance thereof by

the latter would be illegal or beyond its statutory

powers. . 3

This matter is now before me upon the motion of

each of the defendants to dismiss this action upon

the grounds that the plaintiff lacks standing to main-

tain this action and that this Court lacks jurisdiction

over the subject matter thereof. |

Plaintiff contends that it has standing to challenge

the validity of said ruling by the Comptroller of the

Currency under the provisions of Section 10 of the

Administrative Procedure Act, 5 U.S.C. § 702, which

provides as follows:

‘Rights of Review.

A person suffering legal wrong because of

agency action, or adversely affected or ag-

grieved by agency action within the meaning

of a relevant statute is entitled to judicial

review thereof.’

In construing a substantially similar provision in

the Administrative Procedure Act, prior to its amend-

ment in 1966, the Court of Appeals for the District of

Columbia Circuit in Pennsylvania Railroad Company

v. Dillon, 1964, 335 F. 2d 292, cert. denied sub nom

American Hawaiian S.S. Co. v. Dillon, 1964, 379

U.S. 945, held at pages 294, 295:

28

**... « Under this statute appellants have stand-

ing to challenge agency action which they allege

' either causes them a ‘legal wrong’ or advexsely

affects or aggrieves them ‘within the meaning

of any relevant statute’.

***Legal wrong’, as we have only recently

noted, is the invasion of a legally protected

right. See Gonzalez v. Freeman, supra, 117 U.S.

App. D.C. at — n.6, 334 F. 2d at 576 n.6. Thus,

in order to make out a claim of ‘legal wrong’

under Administrative Procedure Act § 10(a),

~

appellants must assert some legally protected

right to be free of the competition provided by

the two vessels whose documentation they are

challenging. This court has very recently spoken

on this aspect of standing. When ‘Congress has

not given them any such standing by express or

implied provision of statute ... mere eco-

nomic competition made possible by govern-

mental action (even if allegedly illegal) does

not give standing in the courts to sue to restrain

such action. Tennessee Electric Power Co. v.

Tennessee~Valley Authority, 306 U.S. 118, 59

S.Ct. 366, 83 L.Ed. 543 (1939) ; Alabama Power

Co. v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82

L.Ed. 374 (1938); Kansas City Power & Light

Co. v. McKay, 96 U.S. App. D.C. 273, 225 F. 2d

924, cert. denied, 350 U.S. 884, 76 S.Ct. 137, 100

L.Ed. 780 (1955).’ Texas State AFL-CIO v.

Kennedy, 117 U.S. App. D.C. 343, 345, 330 F.

2d 217, 219 (1964). For purposes of standing in

this case, the sufficiency of appellants’ allega-

tions of ‘legal wrong’ thus depend upon con-

gressional intent to bestow upon them a legal

right to protection from such competition.

' “Sumilarly, appellants’*allegations that they

are ‘adversely affected or aggrieved . . . within

_ the meaning of any relevant statute’ depend for

their adequacy as to standing upon the congres-

sional purpose underlying the relevant sections

29

of the Merchant Marine Act of 1920, as

gmnenGed.....' *

To the same effect see: Rural Electrification Ad-

ministration y. Northern States Power Company,

1967, 8 Cir., 373 F. 2d 686; Rura lectrification Ad-

ministration v, Central Louisiana ‘Electric Company,

1966, 5 Cir., 354 F. 2d 859; Braude v. Wirtz, 1965, 9

. Cir., 350 F. 2d 702; Troutman v. Shriver, 1967, D.C.

| Pla., 273 F. Supp. 415. |

In the recent case of Hardin v. Kentucky Utilities

Co., 1968, 390 U.S. 1, the Supreme Court in passing

upon the standing of Kentucky Utilities Company to

. Maintain said action, said at page 5:

-“Before discussing the merits, we shall briefly

consider petitioners’ contention that the Ken-

tucky Utilities Company lacks standing to chal-

lenge the legality of T'V.A’s activities. We agree

with both the courts below that this contention

is without merit. This Court has, it is true,

repeatedly held that the economi¢ injury which

results from lawful competitién cannot, in and

of itself, confer standing on the injured busi-

ness to question the legality of any aspect of its

competitor’s operations..Railroad Co. v. Eller-

man, 105 U.S. 166 (1882); Alabama Power Co.

v. Ickes, 302 U.S. 464 (1938) ; Tennessee Power

Co. v. TVA, 306 U.S. 118 (1939); Perkins v.

Lukens Stéel Co., 310 U.S. 113 (1940). But

competitive injury provided no basis for stand-

ing in the above cases simply because the stat-

utory and constitutional requirements that» the

plaintiff sought to enforce were in no way con-

cerned with protecting against competitive in-

jury. In contrast, it has been the rule at least -

since the Chicago Junction Case, 264 U.S. 258

(1924), that when the particular statutory pro-

vision invoked does reflect a legislative purpose

30 ‘ft

to protect a competitive interest, the injured_

- competitor has standing to reqtire compliance

with that provision. See Alton R. Co. v. United

States, 315 U.S. 15, 19 (1942) ; Chicago v. Atch-

ison, T. & S.F. R. Co., 357 U.S. 77, 83 (1958).

_ “Petitioners concede, as of course they must,

_ that one of the primary purposes of the area

‘limitations in § 15d of the Act was to protect

private utilities from TVA competition... .

Since respondent is thus in the class which

§15d is designed to protect, it has standing

under familiar judicial principles to bring this

suit, see Stark v. Wickard, 321 U.S. 288, 309

(1944); ef. United States v. L.C.C., 337 U.S.

426, 433-434 (1949), and no explicit statutory

provision is necessary to confer standing.”’

In my opinion the cases relied upon by the plain-

tiff to support its claim of standing to maintain this

action and to entitle it to the relief it seeks herein

are clearly distinguishable from the instant case.

In National Bank of Detroit v. Wayne Oakland

Bank, 1958, 6 Cir., 252 F. 2d 537, the plaintiff state

bank was held to have standing to maintain an action -

. to enjoin the establishment of a branch bank by the

defendant, National Bank of Detroit, on the ground

that it wgs—protected against the competition of such

a proposed branch bank by the provisions of 12

U.S.C. §36(¢) which incorporated by reference the

statute law of the State of Michigan and under the

circumstances existing the establishment of the pro-

posed branch was prohibited by the statute law of

Michigan. In holding that the plaintiff had standing

to maintain its suit, the Court of Appeals held at

page 544:

-*As to the standing of The Wayne Oakland

Bank to maintain its suit, it was faced with

invasion of property rights and injury from

a competition which was prohibited by the fed-

eral statutes subjecting national banks to the

same rules of law as cover state banks... .”

Suburban Trust Company v. National Bank of

Westfield, 1962, D.C. N.J., 211 F. Supp. 694, is like-

wise a branch bank case. The plaintiff was held, to

have standing to maintain a suit to enjoin compe-

tition by a branch bank of the defendant national

banking association under the provisions of 12 U.S.C.

§ 36(c). Title 12 U.S.C. § 36(c) permits a national

banking association, with the approval of the Comp- -

troller of the Currency, to establish and operate new

branches—‘‘(2) at any point within the State in which

said association is situated, if such establishment and

operation are at the time authorized to State banks

by the statute law of the State in question by lan-

guage specifically granting such authority affirma-

tively and not merely by implication or recognition,

and subject to the restrictions as to location imposed

by the law of the State on State banks.” Suburban

sought to enjoin the establishment and operation of

said branch bank in a location in which state banks

by New Jersey law (N.J. S.A. 17:9A-18) were pro-

hibited from establishing and maintaining branches.

The courts held that plaintiff had standing to sue by

virtue of the provisions of 12 U.S.C. § 36(e).

Commercial State Bank of Roseville et al. v. Gid- °

ney, 1959, D.C. D.C., 174 F. Supp. 770, aff’d 278 F.

2d 871, is likewise a branch bank case. The plaintiffs,

Michigan state banks, sought’ a preliminary injunc-

tion to restrain the Comptroller of the Currency

from issuing a certificate authorizing a national bank

to open a branch office in Michigan. The court found

that branch banking (banking operations at other

than the principal office) by national banks is regu-

L

’

\

32

\

lated by state law under the provisions of 12 U.S.C.

§ 36(¢), and’ that the plaintiffs had standing to sue

as they-sought to enjoin unlawful competition, i.e.,

competition prohibited by the statutes of the State

of Michigan and enacted for their protection.

Similarly, Whitney National Bank v. Bark of

New Orleans and Trust Company, 1963, D.C. Cir.,

323 F. 2d 290, is a branch bank ease. The Court of

_ Appeals held that the plaintiff state bank had stand-

ing to sue to enjoin the establishment of a branch

bank by Whitney National Bank which was prohib-

ited under the provisions of 12 U.S.C. §36(c). >

In Webster Groves Trust Company v. Saxon, 1966,

8 Cir., 370 F. 2d 381, also relied upon by the plaintiff,

the Court of Appeals held that competing banks as

interested parties had standing to object to illegal

- competition but concluded that the Competroller of

the Currency was under no duty to hold a formal

hearing on an application for a charter for a new na-

tional bank.

Inm.Baker, Watts & Co. v. Saxon, 1966, D.C. D.C.,

261 F. Supp. 247, the plaintiffs sought to enjoin the

Comptroller, of the Currency from authorizing na-

tional banks to underwrite and deal in certian secu-

rities. The gravemen of-their complaint was that they

would then be subjected to illegal competition to their

detriment. In holding that the plaintiffs had standing

to maintain said suit, the court held that the Glass-

Steagall Act, 12 U.S.C. § 378, prohibited such activi-—

‘ties by national banks.

In Georgia Association of Independent Insurance

Agents, Inc. v. Saxon, 1966, D.C. Ga., 260 F. Supp.

802, the plaintiffs were independent insurance agents

and organizations which represented the collective in-

terests of independent insurance agents. They sought

oo

tf 33

a declaratory judgment and ‘an injunction |against

allegedly illegal acts by the defendant Comptroller of

_the Currency. In that case the defendant had author-

ized national banks in places with a. population which

exceeded five thousand inhabitants to act as insurance

agents in writing insurance which was incidental to

banking transactions, although Section 92 of Title 12

of the United States Code permitted national banks

to act as insurance agents in places whose population

did not exceed five thousand inhabitants. Plaintiffs

alleged that the defendant was without authority to

make said -ruling which was in violation of Title 12

“U.S.C. § 92, and that as the result of said ruling, na-

tional banks were able to compete illegally with the

plaintiffs.

In denying the defendant’s motion to dismiss for

want of standing, the’ Court held at page 803:

“Tn Tennessee Power Company, supra, and -

.~ in Alabama. Power Co. v. Ickes, 302 U.S. 464,

58 S.Ct. 300,82 L.Ed. 374 (1937), the plaintiffs.

alleged that they. were suffering economic loss’

- from government-created competition. In. both

cases the Supreme Court held that such econom-

ic loss alone did not confer standing on the

aspiring plaintiffs. It is important to note that

such competition was authorized by Congress

and was based upon statutory grounds. ‘

‘*In the instant case, the competition com- °

plained of is not explicitly authorized by stat-

ute, but rather is impliedly prohibited by the

congressional grant of the power to act as in-

surance agent in cities of 5,000 or less pop.

tion. Title 12 U.S.C.A. § 92. a

And, further, the Court at page 804 stated :

“Thus, the Court is of the opinion that the

defendant’ s attack on the plaintiffs’ standing 1 is

’

See OES POC Pe ee OUP eee Ase) 5) Vile SA lS akan a

ee eee

34

_ without merit. Title 12 U.S.C.A. § 92 has the

effect of protecting insurance agents from cer-

tain competition. Surely, the plaintiffs have the

‘right to their day in court to show that protec-

tion afforded them by 12 U.S.C.A. § 92 had ‘been

violated.”’

Investment# Company Institute et al. v. Cant, 1967,

D.C. D.C., 274 F. Supp. 624, was a suit by an as-

sociation “whidh’ represented open-end investment

companies, inyestment advisors and principal under-

writers, and by some of its members for an injunc-

tion to restrain the Comptroller of the Currency from

authorizing national banks to collectively invest funds

tendered to them as managing agents solely for in-

vestment purposes. Plaintiffs alleged that such activi-

ties by national banks would constitute illegal eompeti-

tion to their detriment.. In holding that the plaintiffs

had standing to sue, the Court said at Page 636:

wd’ . The statutes under wihe h the regula-

tion in issue was promulgated, were enac ted to

establish a clear Congressional policy which

sought to separate national commercial bank-

ing from the securities business. The primary

intent of Congress was to segregate these fune-

tions and to allow separate entities to engage in

these business areas. This clarity of purpose is

garnered not only from the Congressional hear-

ings reports of the Glass-Steagall Act, but also

from he exactitude with whieh Congress has

delineated the areas of common interest in ee

financial structure. This strong general policy

against the invasion of either field of endeavor

by either entity is sufficient to postulate an in-

terest upon whith standing to challenge the

regulation may be premised, ef. American

. Trucking Ass’ns, Ine. v. United States, 364-U.S.

1, 80 S. Ct. 1570, 4 L.id. 2d 1527 (1960).

“Therefore, by implication, the plaintiffs here

have a right to complain of the competition

which is being condoned under the Regulation.

This competition is illegal in the sense that _

Congress has indicated its policy of separating

the two financial institutions and this Regula-

tion allows in an indirect manner a joinder of

these interests. The plaintiffs were the recip-

ients by implication of Congressional protec-

tion.”’

In eranting the plaintiffs’ motion for summary

judgment on the merits, the‘Court held at Page 648:

“In view of the statements and conclusions

made above, this court holds that the provisions

of Regulation 9 which allow commingling of .

managing agency accounts do not comply with

the statutory provision of the Glass-Steagall

Act are, therefore, illegal. The promulgation of

these specific provisions allowing a ‘commin-

gling of managing agency accounts is also be-

yond the power of the Comptroller under Sec-.

tion 92a(a) of Title 12, and it is ordered to be

set aside.”

In support of its claim that the performance by the

defendant bank of data processing services on its

equipment for bank customers constitutes illegal com-

petition with it and others who are similarly engaged

in performing such services for the public at large, the

plaintiff relies upon the provisions of 12 U.S.C. § 24

(par. Seventh), the provisions of the; Bank Service

Corporations Act, 12 U.S.C. §§ 1861-1865, and the

congressional purpose that may be obtained from the

legislative histoyy.of that Act.

12 U.S.C. § 24 (par. Seventh) provides that a na-

tional bank shall have the powers: :

36

“To exercise by its board‘of directors or duly

” authorized officers or agents, subject to law, all

such incidental powers as shall be necessary to

car¥y on the business of banking;.. .”

Said Bank Service Corporations Act ee izes two

or more banks subject to Federal supervision ta in-

vest limited funds in a bank service corporation for

the purpose of providing bank services only for banks.

Said Act defines bank services as:

“‘services such as check and deposit sorting and

posting, computation and posting of anterest

and other credits and charges, preparation and

iene of checks, statements, notices, and sim-

ilar items of any other clerical, bookkeeping, ac-

‘counting, statistical, or similar athens per-

formed for a bank.”

In my opinion the plaintiff has failed to establish

that the provisions of paragraph Seventh of 12 U.S.C.

§ 24, which appeared in identical form in the National

‘Bank Act of 1864, reflect a congressional purpose to

protect the plaintiff from the competition which it

seeks to enjoin in this action.”

Similarly, I find that there has been no showing

by the plaintiff that said Bank Service Corporations

Act reflects a congresional purpose to protect the

plaintiff and others engaged in performing data proc-

essing services for phe public from the competition

arising from the’ performance by national banks on

their equipment of data processing services for other

banks and their bank customers as a part of the busi- °

ness of banking and incidental thereto. Since said Act

_is by its express terms limited to Bank Service Cor-

porations and their activities, it cannot be properly

construced to apply to the activities of national banks

generally.

Finding, as I a that neither sinchegripi Seventh

of 12 U.S.C, § 24 nor said Bank Service Corporations —

Act reflects a legislative purpose to protect the plain-

tiff against the competition of which it’ complains,, it.-..

follows that the plaintiff Jacks-standing to maintain

this action and this Court lacks jurisdiction over the

_ subject matter thereof.

* \ The defendants’ motions to dismiss are granted.

Chief J udge.

. es * pe x: Pec meg SRT TET Ree, SMITE eh a

5 hai hh Race iS <P A Wis aE eal Si iets ills an abait ¥

: *

Lee

APPEN DIX ‘D

. United States Court. of Appeals -for the Eighth

Circuit

No. 19,218

‘

ASSOCIATION OF Data Processinc Service OrGANiza-

TIONS, INc., AND Data Systems, INC., APPELLANTS,

v.

° & ; |

-WiwiaM B. Camp, ComMprrocier or THE CURRENCY

9

OF THE UNITED States, aNv AMERICAN NATIONAL

, Bank anp Trust CoMPANY, APPELLEES.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR

THE DISTRICT OF yMINNESOTA

[February 6, 1969.]

Before Vogel, Lay and Bright, Circuit Judges.

Laf, Cireuit J udge.

Plaintiffs appeal from an order dismissing their

complaint against the Comptroller of the Currency of

the United States-and the Minnesota domiciled Amer-

ican National Bank and Trust Company. One of the

plaintiffs is Assoéiation of Data Processing Service

Organizations, an incorporated association of data ~

service organizations domiciled in Pennsylvania whose

members perform data processing services through-

out the United States. It is hereinafter referred to.as

ADAPSO. The other plaintiff, Data Systems, Inc.,

is a Minnesota, corporatiorengaged , in the data proc-

essing business, with its principal place of business

(38)

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39

in Minneapolis. The complaint seeks equitable relief

against the defendants and a ‘‘determination of the

powers granted national banking associations under

[the National Banking] Act as set forth in 12 U.S.

Code § 24.’’ It is alleged that by administrative rule

the Comptroller of the Currency has authorized na-

tional banks to perform data processing services for

bank customers in violation of 12 U.S.C. § 24 which

gives national banks only “incidental powers as shall

be necessary to carry on the business of banking.’

Plaintiffs allege that as a result ofthe unauthorized

action ADAPSO members are threatened with the loss

of a substantial part of the data processing market.’

It is alleged that American National now. performs

data processing services for two companies with whom

Data Systems had ‘‘negotiated’’ as prospective. cus-

tomers.

Jurisdiction is asserted by reason of an alleged fed-

eral question arising under the banking laws of the

United States. 12 U.S.C. §§ 21 et’seq. The trial court

dismissed plaintiffs’ ¢omplaint for. lack of jurisdie-

tional standing. We affirm. j

The question of standing serves as a test of federal

jurisdiction. Standing is the constitutional prerequi-

site related to whether a justiciable ‘‘case or contro-

versy”’ exists. Involved is an examination to deter-

mine whether the plaintiffs have a personal stake

legally sufficient “to assure that concrete adverseness”

Which avoids merely abstract determinations. Flast v.

Cohen, 392 U.S. 83 (1968). See also Aetna Life Ins. |

1 We need not decide whether ADAPSO as an association

can property allege “loss of competition” on behalf of its. mem-

bers when it is not engaged in the data processing business it-

self. See discussion Jaffe, Judicial Controt of Administrative

Action 542-43 (1965).

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40

Co. v. Haworth, 300 U.S. 227 (1937). Justiciability,

. although not always related to standing, becomes defi-

nitively attached when we consider whether the legal

relationships of parties are such that they are aligned

with adverse legal interests.

Plaintiffs asseré standing in that oa have been

and will continue to be economically injured by illegal

competition of the national banks. Whether a litigant

has standing to challenge competitive injury has been

the subject of extended litigation and discussion. Doc-

trinal rules have developed a maze of conceptualistic

abstractions and theories which at times are viewed

and applied as being indistinguishable one from an-

other. See Baker, Watts & Co. v. Saxon, 261 F.Supp.

247 (D.D.C. 1966),-aff’d sub nom., Port of N.Y. Au-

thority v. Baker, Watts & Co., 392 F. 2d 497 (D.C.

Cir. 1968); Saron v. Georgia Ase’n of Ind. Ins.

Agents, Inc., 399 F.2d 1010, 1019 (5 Cir. 1968) (con-

curring opinion). F

The trial court here has observed that language in .

Rural Elec. Admin. v. Northern States Power Co., 373

-F. 2d 686 (8 Cir. 1967) (denying standing)* and in

Webster Groves Trust Co. v. Saxon, 370 F. 2d 381 (8

| = 1966). (allowing standing)* seems to state diverg-

YY.

“* See also extended discussion in 3 Davis, Administrative Law

208-294 (1958)% Jaffe, Judicial. Control of Administrative Ac-

tion 500-531 (1965): And: more recently Davis, Standing: Tax-

payers and Others, 35 U. Chi. L. Rev. 601 (1968).

* We stated in Northern States, 373 F. 2d 692:

.° “Appellees readily recognize that the interest of the economic

competitor is not sufficient standing to challenge the authority

or discretion of the Administrator’ to make loans.”

4 We stated’in Webster Groves, 370 F. 2d 388:

“[Wijhen-a competitor believes he is being subjected to ille-

- gal competition owing to impropriety by the Comptroller, the

eourts should be open to héar and decide the alleged wrong.”

we

41

ent principles either of which could govern in the

instant case. However, all legal principles must be

qualitatively analyzed within tke context of factual

surroundings. Much of the confusion on standing

seems to arise from the emphasis upon the issues to be

adjudicated or upon the possible merits of the sub-

stantive claim rather than upon an examination of the

status of the complaining plaintiff. Whether or not a

defendant is alleged to be engaged in illegal competi-

tion cannot by itself determine a plaintiff’s standing

to complain. Cf. Chicago v. Atchison, T. & S. F. Ry.,

357 U.S. 77 (1958) and note 8 infra. Chief Justice

Warren has stated, “The fundamental aspect of stand-

ing is that it focuses on the party seeking to get his

conplaint before a federal court and not on the issues

he wishes to have adjudicated.’’ However, he added,

“« * * * it is both appropriate and necessary to look

to the substantive issues for another purpgse, namely,

to determine whether there is a logical nexus between

the status asserted and the claim sought to be ad-

judicated.” Flasé_v. Cohen, 392 U.S. 83, 99, 102

(1968). ,

Whether a party may or may not challenge al-

‘legedly illegal competition by others is best evaluated

by examining the various factual circumstances

within which the courts*have discussed a particular

plaintiff's standing and competitive injury.

Perhaps most well known are the so-called “power

cases,’’ where the threatened economic loss arises from

government-created competition. In these situations

the embryo of the competition by the defendant is

generally found in congressional legislation. But even

though the validity of such legislation is challenged,

or an attack is made on the authority of a govern-

ment agent to loan money, the courts uniformly have

OER BENS Es ER AW AR. EE CSL RLS eng To ee a a eee Wb,

me

denied standing to competitors who otherwise possess

no legal right to be free from competition.’ This »

group of cases is represented by Tennessee Elec.

Power Co.:v. TVA, 306 U.S. 118, 187 (1939), which

early emphasized:

“The appellants invoke the doctrine that one

threatened with direct and Special injury by

the act-of an agent of the’ government which,

but for statutory authority for its performance,

would .be a violation of his legal rights, may

challenge the validity of the statute in a suit

against the agent. The principle is without ap-

plication unless the right invaded is a legal

right,—one of property, one arising out of con-

tract, one protected against tortious invasion,

or one founded on a statute. which confers a

privilege.”

See also Rural Elec. Admin. v. Northern States Power

Co., supra.

: Secondly, in contrast ti the “power’’ cases are sit-

; uations where a plaintiff, possessing a publie grant

| or contract to operate, seeks to prevent a competitor

from entering into an area of regulated and restricted

competition. Representative of these cases is Frost v.

Corporation Comm’n, 278 U.S.%15 (1929). This court

has applied the rationale of Frost to a suit by a state

‘bank against the Comptroller to prevent illegal com-

| petition. Webster Groves Trust Co. v. Saxon, 370 F.

2d°381 (8 Cir. 1966). As observed in Whitney Nat'l

_ 5In addition, even though the attack upon a government

program to loan money is alleged to be illegal, this does not

make the competition itself legally wrong. This is explained

because “the borrower owes him [the plaintiff] no obligation

to refrain from using the proceeds in any lawful way the bor-

rower may choose.” Alabama Power Co. v.. Ickes, 302 U.S.

464, 480 (1938). (Emphasis ours.)

\

43

Bank v. Bank of New Orleans & Trust Co., 323 F.

2d 290 (D.C. Cir. 1963), rev’d on other grounds, 379

U.S. 411 (1965), involved is a property right arising

out of a public charter which bestows a legal interest

on a state bank to complain.°

Closely related but significantly different are those

cases involving areas of competition which because of

public interest find need of public licensing as opposed

to a public grant or contract.’ Here plaintiff-compet-

° The branch banking provisions of the National Banking Act

make the establishment of branch banks subject to. the law of

the states. 12 U.S.C. § 36. A primary purpose in doing so is to

ensure competitive equality between state and national banks.

First Nat'l Bank v. Walker Bank & Trust Co., 385 U.S. 252

(1966). It has accordingly been held that this provision gives

state banks a sufficient legal interest to provide them with stat-

utory standing to challenge the legality of branching by na-

tional banks. See National Bank v. Wayne Oakland Bank, 252

F. 2d 537 (6 Cir. 1958), discussed in Hoosier State Bank vy.

Saxon, 248 F. Supp. 233 (N.D.Ind. 1965). The contrast be-

tween basing a state bank’s standing on a “property right” '

arising out of its charter and standing by reason of its inclu-

‘sion within the class intended to be protected by the National

Banking Act is one without essential difference. Perhaps the

most realistic approach is that the right indigenous to the

charter is protected by the statute.

*The Court stated in FCC v. Sanders Bros. Radio Station,

309 U.S. 470 at 474 (1940) : “A

“In contradistinction to communication by telephone and

telegraph, which the Communications Act recognizes as a com-

mon carrier activity and regulates accordingly in analogy to

the regulation of rail and other carfiers by the Interstate Com-

merce Commission, the Act recognizes that broadcasters are not

- common carriers and are not to be dealt with as such. Thus the

Act recognizes that the field of broadcasting is one of free com-

petition. The sections dealing with broadcasting demonstrate

that Congress has not, in its regulatory scheme, abandoned the

principle of free competition, as it has done in the case of rail-

44 ;

\ _itors are considered to be without a private “legal

right” to protest unauthorized competition but never-

theless find standing by specific legislation as. “ag-

grieved persons” to act in the public interest. See, e.g.,

FCC v. Sanders Bros. Radio Station, 309 U.S. 470

(1940) ; Scripps-Howard Radio, Inc. v. FCC, 316 US...

4 (1942). Cf. Office of Communication of United

) Church of Christ v. FCC, 359 F. 2d 994 (D.C. Cir:

1966). In these cases Congress has patently recog-

nized need for judicial review even though the com-

petitive business controlled is considered free and

otherwise a pene |

c

J

roads, in respect of which regulation involves the suppression

of wasteful practices due to competition, the regulation of

rates and charges, and other measures which are unnecessary

if freé competition is to be permitted.

af “An important element of public interest and convenience

affecting the issue of a license is the ability of the licensee to

render the best. practicable service to the community reached

by his broadcasts. That such ability may be assured the Act

contemplates inquiry by the Commission, inter alia, into an ap-

plicant’s financial qualifications to operate the proposed station.

_ “But the Act does not essay to regulate the business of the

licensee. The Commission is given no supervisory control of the

- programs, of business management or of policy. In short, the

“broadcasting field is open to anyone, provided there be an avail-

_, able frequency over which he can broadcast without interference

to others, if he shows his competency, the adequacy of his

equipment, and financial ability to make good use of the

assigned channel.”

®But ef. Chicago v. Atchison, T. & S.F. Ry., 357 US. 77

(1958). The Supreme Court recognized et of a munici-

pal licensed public transportation system to\intervene and at-

tack the entry of one seeking to compete in ‘an alleged viola-

tion of a city ordinance. The Court made clear that standing

of the intervenor could not be viewed from examination of

the merits as to whether in fact the competition was or was not

illegal. Parmelee, the intervenor, for many years had enjoyed

45

Fourth, there are situations where- competitors, are

given standing to challenge competition which is al-

legedly in violation of a statute, where the statute it-:

self is said to be enacted for the express protection of

the class of competitor complaining. The most recént

example of these cases is found in Hardin v. Kentucky

Util. Co., 390 US. 1 (1968).° Plaintiffs’ reliance on

an arrangement with the railroad to transport passengers be-

tween stations. Parmelee was notified of its termination. A

competitor, Railroad Transfer Service, was subsequently given

this business notwithstanding a city. ordinance that: prohibited

it from doing so without a license from the city. The Court

- found that Parmelee had “a direct and substantial personal in-

terest in the outcome” and allowed standing. The ordinance was

then held unconstitutional as being repugnant to the Interstate

Commerce Act and the intervenor lost.

This case may best be categorizea with those instances where

standing to challenge illegal competition. is implicity found

within a legislative enactment, .be it an existing. ordinance or

statute, valid or not. Cf. Alton R.R. v. United — 315 a Ss.

15, 19 (1942).

® The Supreme Court an: :

“This Court has, it is true, repeatedly held that the economic -

injury. which results from lawful competition cannot, in and of

itself, confer standing on the injured business to questa the

legality of any aspect of its competitor’s operations. Railroad

Co. v. Ellerman, 105 U.S. 166. (1882); Alabama Power Co. v.

Ickes, 302 U.S. 464 (1938) ; Tennessee Power Co. v. TVA, 306

US. 118 (1939); Perkins v. Lukens Steel Co., 310 U.S. 118

(1940). But competitive injury provided no basis for standing

in the above cases simply because the statutory and constitu-

tional requirements that, the plaintiff sought to enforce were

in no “way concerned “with protecting against competitive ‘

injury. In contrast, it has been the rule, at’ least since the Chi-

cago Junction Case, 264 U.S. 258 (1924), that when the par-

ticular statutory provision invoked does reflect a legislative pur-

pose to protect a competitive interest, the injured competitor

has standing to require ae ‘with that provision. See

é

46

recent cases against the Comptroller fall within facile

classification of this rule. See, e.g., Baker, Watts & Co.

(D.D.C. 1967) ; Saxon v. Georgia Ass’n of Ind. Ins.

vestment Co. Institute v. Camp, 274 F.Supp. 624, 636

(D.D.C. 1967) ; Saxon v. Georgia Ass’n-of Ind., Ins.

-Agents, Inc., 399 F. 2d 1010 (5 Cir. 1968).”°

Fifth, the last group of ‘‘competition” cases relates

to a plaintiff’s unsuccessful challenge of a competi-

tor’s alleged ultra vires acts affecting plaintiff’s non-

regulated area of commeree. This factual setting is

best. illustrated by Railroad Co. v. Ellerman, 105 U.S.

166 (1882). In that case the plaintiff, who had con-

tracted with the city of New Orleans to collect reve-

nue from users of the city wharves, sought to enjoin

a railroad company from operating wharves in New

Orleans: He alleged this action would constitute

illegal competition because the state statute authoriz-

ing the company to operate wharves was unconstitu-

tional. The principle here furnishes an analogue to

that in pues eases” where the conduct of the

Alton R. Co. v. United States, 315 U.S. 15, 19 (1942); Chicago

v. Atchison, T. &@ S. F. R. Co., 357 U.S. 77, 83 (1958) >

“Petitioners concede, as of course they must, that one of the

primary purposes of the area limitations in §15d of the Act

was to protect private utilities from TVA competition.” Hardin

v. Kentucky Util. Co., 390 U.S. at 5-6., .

do' not share. confidence in the alternative holding in

Sge6n v. Georgia Ass'n of Ind. Ins. Agents, Inc., 399 F. 2d 1010

(5 Cir. 1968), that outside the “statutory aid to standing” plain-

tiffs had “a legal right to protect themselves from unlawful com-

petition.” Id. at 1018. The emphasis that plaintiff’s standing

arises out of the allegation of “unlawful competition” as con- °

trasted to “lawful competitiofi” seemingly relates standing to

the merits of the claim to be adjudicated rather than the status

of a party to complain. For a similar critique, see JudgeThorn-

berry’s concurring opinion 399 F. 2d at 1020 n. 3.

Ae TB tase: ed pad

47

defendant, although alleged to be illegal is neverthe-

less considered “lawful’’ with respect to the plaintiff

because of the total uisence of legal interest found in

_ plaintiff’s status.”

1t'This is explained by Mr. Justice Matthews in Railroad Co. v.

Llierman, 105 U.S. at 173-174: ‘

“The sole remaining question then, is, whether Ellerman, as

assignee of the city, has any legal interest which entitled him to

enjoin the company from using its wharf as a public wharf be-

yond the limits of such use, as defined by that construction of

the joint resolution. If he has such interest, it can only consist

in preventing competition with himself as a wharfinger, which

such more.extensive use of the railroad property would create.

And if the right to assert it exists, it must rest, not upon the

claim that the premises are thus used for purposes to which

they might not be lawfully devoted if owned and used by a

natural person, but on the allegation merely that such usé is

beyond the corporate powers of the company. But if the com-

petition in itself, however, injurious, is not a wrong of which

he could complain against a natural person, being the riparian

proprietor, how does it become so merely. because the author

of it is a corporation acting ultra wires? The damage is at-

tributable to the competition, and to that alone. But the com-

petition is not illegal. It is not unlawful for any one to compete

with the company, although the latter may not be authorized

to engage in the same business. Zhe legal interest which quali-

fies a complainant other than the State itself to sue in such a

case is a pecuniary interest in preventing the defendant from

doing an act where the injury alleged flows from its quality

and character as a breach of some legal or equitable duty. A

stockholder of the company has such an interest in restraining

it within the limits of the enterprise for which it was formed,

because that is to enforce his contract of membership. The

State has a legal interest in preventing the usurpation and

perversion of its franchises, because it is a trustee of its powers

for uses strictly public. In these questions the appellee has no

interest, and he cannot raise them in order, under that cover,

to create and protect a monopoly which the law does not give

him. The only injury of which he can be heard in a judicial.

;

4

eee

Sita . 48

In summary, a plaintiff may challenge alleged

illegal competition when as complainant it pursuds

(1) a legal interest by reason of public charter or

contract, Frost v. Corporation Comm'h, supra, (2) a

legal interest by reason of statutory protection,

Baker, Watts & Co. v. Saxon, supra, or (3) a “public

interest’’ in which Congress has recognized the need

for review of administrative action and plaintiff is

significantly involved to have standing to represent

the public, FCC v. Sanders Bros. Radios Station,

supra. From this analysis, it seems cleat that an-alie-

gation of ‘“‘illegal competition” is not the balancing Ly

determinant of a plaintiff’s standing. The primary

search must rest on whether the plaintiff’s status is

one which enjoys a private interest entitled to protec-

tion or is one which the law recognizes to be of such

legal significance to allow a party to act as a public

representative for a public inter est.

_ In the instant case the facts clearly plac plaintiffs

outside those cases which recognize standing: ‘Plain-

tiffs) are competing in a non-regulatory field of free.

competition. They possess no private legal interest

nor do they plead any legal harm which is recognized

_at law. Their status is not one which places them

within a class designedly protected by statute.” In

tribunal to complain is the invasion of some legal or equitable

right. If he asserts ‘that the competition: of the railroad com-

pany: damages him, the auswer is, that it does not abridge or

impair any such right. If he alleges that the railroad company

is acting beyond the warrant of the law, the answer is, that a

violation of its charter does not of itself injuriously affect any

of his rights. The company is not shown to owe him any sd

which it has not performed.” (Emphasis ours.) __

12The Banking Act has never been construed to give a

private litigant standing to complain concerning wlira vires

\e

49 nc x

direct accord see Wingate Corp.,v. Industrial Nat’l

Bank, 288 F.Supp. 49 (D.R.I. 1968); Arnold Tours,

Inc. v. Camp, 286 F.Supp. 770 (D: Mass. 1968).

Plaintiffs’ argument iS in essence an equitable plea,

that in effect they- have a personal stake to pursue,

even though fot a legal one, but nevertheless \ one

which makes them logical parties to protect the pub-

Se interest from illegal actions of government

agencies. ee

The problem with their plea is many-fold. Congress |

has not seen fit within the National Banking Act to

. recognize ‘any ‘‘aggrieyed person”’’ to assert the pub-

lic’s rights. Congress has not expressed a public con-

cern for protection as found in FCC v. Sanders Bros,

' Radio Station, 309 U.S. 470 (1940), and its progeni--

tors.eWithoyt a legal interest or the status of a recog-

nized ‘‘aggrieved”’ party, the complaint resolves itself

into“an attempt merely to shéw “‘a common concern

for obedience to law.” E. Singer & Sons v. Union

Pac. R.R., 311 U.S. 295, 304 (1940). As pronounced

in Singer, outside statutory consent, the general or

common interest ean find protection only in the stand-

ing granted to public authorities. Unless a relevant

statute provides for a ‘‘party in interest’’ to seek

judicial review or unless a complainant possesses a>

recognized legal interest, he lacks standing to’ be-a

acts of national’ banks relating to executed contracts. See Wa-

tional Bank v. Matthews, 98 U.S. 621 (1878). Although dis-

tinctive policy arguments exist for this rule, nevertheless there

exists no legislative history nor do plaintiffs offer any serious

contention that the National Bank Act was intended to give

these private litigants standing to litigate alleged ultra vires

activities of national -banks. The reliance on the Bank Holding

Company Act of 1966 and the Bank Service Corporation Act

is misplaced. Neither act is applicable here.

van

G

|

50

“private attorney general’? to represent the public

interest. See Kansas City Power & Light Co. V.

McKay, 225 F. 2d 924 (D.C. Cir. 1955); Braude v.

Wirtz, 350 F. 2d 702, 707, 708 (9 Cir. 1965)."°

Mr. Justice Frankfurter best describes judicial ob-

ligation to avoid review when legal standing is not

otherwise involved: :

“The jurisdiction of the federal courts can be

invoked only under circumstances which to the

expert feel of lawyers constitute a ‘case or con-

troversy.’ The scope and consequences of the re-

view with which the judiciary is entrusted over

- executive and legislative action require us to

observe these bounds fastidiously.”’ Joint Anti-

Fascist Refugee Committee v. McGrath, 341

U.S. 123, 150 (1951) (concurring opinion).

J udgmevt affirmed. ’ :

See also our prior discussions concerning the applicability

of the Administrative Procedure Act in Rural Elec. Admin. vy.

Northern States Power Co., 373 F. 2d at 692 n. 9.

— “"

OS GOVERVeraT PRINT. Ws OFFICE, 1969

+ pf

28