# Amicus Curiae Brief — Bank of America National Trust & Savings Ass'n v. Marques

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_1684%3A3

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1998
- **Citation:** 525 U.S. 822

## Text

AOR ERTS HRR Ree Ret mn
. Supreme Court, U.S.
FILED

No. 97-1997 JUL 2 7 1996

“UFFILE UF THE CLERK

IN THE

Supreme Court of the Gnited States
OCTOBER TERM, 1997

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,

Petitioner,
Vv.

VIRGINIA M. MARQUES,
Respondent.

On Petition for Writ of Certiorari
to the California Court of Appeal
First Appellate District

BRIEF OF THE AMICI CURIAE
AMERICAN BANKERS ASSOCIATION AND
CALIFORNIA BANKERS ASSOCIATION
IN SUPPORT OF PETITIONER

CHRISTOPHER E. CHENOWETH JOHN J. GILL II

CALIFORNIA BANKERS Counsel of Record
ASSOCIATION MICHAEL F. CROTTY

201 Mission Street AMERICAN BANKERS

Suite 2400 ASSOCIATION

San Francisco, CA 94105 1120 Connecticut Ave., NW

(415) 284-6999 Washington, D.C. 20036

(202) 663-5026

July 27, 1998 Attorneys for Amici Curiae

PRESS OF BYRON S. ADAMS # WASHINGTON, D.C. # 1-800-347-8208

i
QUESTION PRESENTED

Whether the National Bank Act, which provides that
National Banks may dismiss any of their officers at
pleasure, preempts the California Fair Employment and
Housing Act which, as applied here, provides that they may
not.

il

TABLE OF CONTENTS

Page

QUESTION PRESENTED .............2:cceseeeeeeeeeeeeeeeeeeeeeees i
TABLE OF AUTHORITIES...............cccsecscsescccenessensens iil
INTEREST OF THE AMICI CURIAE.................-::-seeee 1
REASONS FOR GRANTING THE WRIT ..............-....06 3
The Conflict Among the Courts ...............:cseeeeeeeeeeeees 3
The Importance of the Issue ..............s2:sseeeeeeeeeeeeerees 6
COPS AISI io. svisncccctnescescnesensisicersteaninecemsieeenest 10

lil

TABLE OF AUTHORITIES
Page
CASES:
Aalgaard v. Merchants National Bank, 224 Cal.

App. 3d 674 (1990), cert. denied, 502 U.S. 901

| TICES GaSe VRB Re ease ie rte ie a NN | snide 5
Ana Leon T. v. Federal Reserve Bank of Chicago,

823 F.2d 928 (6th Cir.), cert. denied, 484 U.S.

a, SME ESTES SSS SG IR Re ee aca 3
Astoria Federal Savings & Loan Association v.

PN, PE Hie, ME CRIED oso viirscccievavecis cesses... 7
Aimerion Vv. FDIC, 117 §. Ct. 666 (1997) ............6..0.......... 6
Barnett Bank v. Nelson, 116 S. Ct. 1103 a sadiiccc cask. 5
Busic v. United States , 446 U.S. 398 RRSP rete Orr 7
Citizens State Bank v. Libertelli, 215 N.J. Super.

ioe, oes A.20 Oo) (NJ. Soper. 1987) ......................... 3
Clifford T. MacEvoy Co. v. United States, 322 U.S.

PENS SIRGE SRE OEP ee ee Ree Disks denhieneinie 7
Confer v. Federal Home Loan Bank, 271 Ill. App.

3d 1061, 649 N.E.2d 476 (Ill. App. 1995) ..................... 4

County of Yakima v. Confederated Tribes and Banks
of Yakima Indian Nation, 502 U.S. 251 (1992)................ 7

iv

Crawford Fitting Co. v. J.T. Gibbons, Inc.,
BRD UES. GET ERG) vans ivessciansesdescscsvsnanisbcasceenenenystan i

Fourco Glass Co. v. Transmirra Products Corp.,
BOSS TTS FEF CII sina viva vc scn cd ccesswtees tedeiviaiesvpndannenas 7

Gunter v. Hutcheson, 674 F.2d 862 (11th Cir.),
cert. denied, 459 U.S. 826, rehearing denied,
459 U.S. 1059 (1982) ......cccccccccsccsrorsccccscsecevecescevecenes G

Kispert v. Federal Home Loan Bank, 778 F. Supp.
950 (S.D. Ohi0, 1991) ............cceseereeeeeeeeeneeecesereeeeees 4

Mackey v. Pioneere National Bank, 867 F.2d 520
(Sth Cir. 1989) .......ccccscccssccssscvesesccsesecssoeseusgessossesees 8

Mardula v. Rancho Dominguez Bank, 43 Cal.
App.4th 790 (Cal.App. 1996), cert. denied,

A97-%. Cl. FES CP vtiisisiitri eis erirernasciiinse 3,4
Moodie v. Federal Reserve Bank of New York,

831 F. Supp. 333 (S.D. N.Y. 1993) .........seceeeseeseeeseeeees 3
Morton v. Mancari, 417 U.S. 535 (1974) .........c:eeeeeeseeeees 7

Osei-Bonsu v. Federal Home Loan Bank of New York,
726 F. Supp. 95 (S.D. N.Y. 1989).........:cseeeeeeeeeeeeeeeeees 4

Westervelt v. Mohrenstecher, 76 F. 118 (8th Cir.

V

White v. Federal Reserve Bank, 660 N.E. 2d 493

GP POG. FPG ciniiiveeri aici swt 3
STATUTES:
heh CEA. Be GED CRD ccs csiccvievecasidevivasdaducens passim
Bh Nisei Meas: BF OW LEP uiilaahes bn ici vecsnbanwideinsdoamebedinns iis 3
Bae hice as See CRs i cd icnesdpuisarecacsniiaseen Aine 3
Ee Shitihire BD EAD siictevackdscinievaiesiaxseeitemeaae acne 9
bile Eee RANE OEE oi yanks’ iavarvacdesasasisseacminebariaee 9
Ae Aes FEE Nessie ne 7
Ee Sars, FI sks tsiore ecko aves necassi ee, 5
as S.. & MD i was vas saavnexsasdadcrdesaasabwieeaueeas 5

Ba EF ahs CPE ived cascode ee 7

IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1997

No. 97-1997

BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,

Petitioner,
V.
VIRGINIA M. MARQUES,

Respondent.

On Petition for Writ of Certiorari to the
California Court of Appeal
First Appellate District

BRIEF OF THE AMICI CURIAE
AMERICAN BANKERS ASSOCIATION and
CALIFORNIA BANKERS ASSOCIATION
IN SUPPORT OF PETITIONER'

' No counsel for any party had any role in authoring this
brief and no person other than amici curiae made any
monetary contribution to its preparation or submission.

The American Bankers Association and California
Bankers Association hereby respectfully submit this brief as
amici curiae in support of the Petitioner in accordance with
the provisions of Rule 37.2 of the Supreme Court Rules.
Both parties have consented to the filing of this brief, and
their written consents are filed herewith.

INTEREST OF THE AMICI CURIAE

The American Bankers Association and California
Bankers Association are, respectively, the principal trade
associations for the lending industry nationwide and in the
State of California. As representatives for that industry,
the associations have a vital interest in this case. This case
calls into question the supremacy of provisions of the
National Bank Act (under which national banks have
operated for well over a century) over contrary state law.
If the California Court of Appeal is correct in denying
preemptive effect to Section 24 (Fifth) of the National Bank
Act, then national banks, nationwide, can be subjected to
varied and conflicting obligations with respect to the most
critical of their employment decisions, and, most
particularly, having those critical decisions second-guessed
by state or even municipal authorities in each jurisdiction in
which they operate. State and municipal "fair employment"
officials, of course, have a different agenda than the safe
and sound operation of the national banking system. That
agenda is not denigrated here. But Congress has long since
vested plenary authority elsewhere to regulate the activities
of national banks, leaving no room for supplementation or
displacement by local authorities. Consequently, the case
raises issues that are of considerable concern to the banking
industry at large, and we respectfully submit this brief in
order to address those concerns.

3

REASONS FOR GRANTING THE WRIT
The Conflict Among the Courts

In relevant part, Section 24 (Fifth) of the National
Bank Act (12 U.S.C. § 24 (Fifth) (1998)) grants to national
banks the apparently unqualified right to "dismiss [their]
officers or any of them at pleasure." Federal Reserve
Banks similarly have a "dismiss at pleasure" right granted
to them by federal statute, 12 U.S.C. § 341 (1998), as do
Federal Home Loan Banks, 12 U.S.C. § 1432 (1998). In
the latter two cases, the right extends to all employees; in
the case of national banks, it is limited to officers of the
bank such as the Respondent here, a former vice-president
of Bank of America, a national bank. Notwithstanding the
difference in scope of the three statutes on a matter not
relevant to this case, the courts have regularly and, in our
view, correctly construed the "dismissal at pleasure"
language of the three (and, in fact, comparable state
banking laws as well) in pari materia. See, e.g., Mardula
v. Rancho Dominguez Bank, 43 Cal.App.4th 790, 793
(Cal.App. 1996), cert. denied, 117 S. Ct. 1106 (1997):
Citizens State Bank v. Libertelli, 215 N.J.Super. 190, 521
A.2d 867 (N.J. Super. 1987).

In Ana Leon T. v. Federal Reserve Bank of Chicago,
823 F.2d 928 (6th Cir.), cert. denied, 484 U.S. 945
(1987), the Sixth Circuit held that a Michigan state law
prohibition against racial discrimination in employment was
preempted by the comparable provision of the Federal
Reserve Act, but in Moodie v. Federal Reserve Bank of
New York, 831 F.Supp. 333 (S.D. N.Y. 1993), a federal
district court reached the opposite conclusion construing the
same federal law. So did a state court in Ohio in White v.
Federal Reserve Bank, 660 N.E. 2d 493 (Ohio App. 1995).

In Kispert v. Federal Home Loan Bank, 778 F. Supp. 950
(S.D. Ohio, 1991), a federal district court within the Sixth
Circuit applied the reasoning of Ana Leon T. to find that
the dismissal at pleasure provisions governing Federal
Home Loan Banks preempted contrary state law. So did
the Southern District of New York in Osei-Bonsu v.
Federal Home Loan Bank of New York, 726 F. Supp 95
(S.D.N.Y. 1989), a decision whose reasoning was not
followed by the same district court four years later in
Moodie.”

The decision of the court below continues and
exacerbates the conflict among the courts. Marques holds
that state discrimination claims are not preempted by the
National Bank Act in the face of even California state court
precedents that hold the contrary. In Mardulla, for
example, the California Court of Appeal wrote that

section 24, and similar provisions...bar
covered offices and employees from claiming
that their discharge constituted...violation of
state antidiscrimination statutes...
[Cited] cases implement a forceful public
policy that a nationally chartered bank must
be free to remove and replace officers at
will.

Mardulla v. Rancho Dominguez Bank, supra., 43
Cal.App.4th at 793-794.

* See also Confer v. Federal Home Loan Bank, 271 Ill. App.
3d 1061, 649 N.E. 2d 476, 479 (Ill. App. 1995) holding that
a state law “retaliatory discharge" claim was preempted by
the Home Loan Bank law and opining, in dicta, that a state
age discrimination claim would have been preempted, too.

Similarly, in Aalgaard v. Merchants National Bank,
224 Cal.App.3d 674, 692 (1990), cert. denied, 502 U.S.
901 (1991), the court wrote that permitting state law
discrimination claims "would frustrate the full effectiveness
of federal law by diminishing the full power of the board to
dismiss its officers for the benefit of national banks."

It is difficult, if not impossible, to reconcile either
of those conclusions with the outcome of Marques in the
case below. The court below attempts to distinguish away
its Aalgaard precedent on the grounds that Merchants
National Bank was a little national bank and Bank of
America is a big one. Pet. App. at 4a-5a. (Federal equal
employment opportunity laws, but not California state laws,
exempt small employers from coverage. See 29 U.S.C. §
630(b); 42 U.S.C. § 2000e(b)). But there is no basis for
such a distinction in the National Bank Act or in
preemption doctrine generally. State second-guessing of
national bank officer employment decisions either
"frustrates the full effectiveness of federal law" or it does
not. It either "diminish[es] the full power of the board to
dismiss its officers" or it does not. It either "prevent[s] or
significantly interfere[s] with the national bank's exercise
of its powers"’ or it does not. If applicability of state anti-
discrimination laws to national banks does have any of
these effects, the state laws are clearly preempted; if the
state laws do not have any such effect, then they are not
preempted, without regard, either way, for the size of the
bank in question. Yet the California courts reach
conflicting decisions based upon this _ irrelevant
consideration.

> Barnett Bank v. Nelson, 116 S. Ct. 1103, 1109 (1996).

Clearly, therefore, state and federal appellate courts,
and state and federal trial courts have taken irreconcilable
positions on the question whether the National Bank Act
officer employment provisions and comparable provisions
applicable to Federal Reserve Banks and Federal Home
Loan Banks preempt state antidiscrimination laws. Those
conflicts among the courts have arisen over the course of
at least a decade of litigation and will continue to plague
the bench and the bar in the absence of a definitive
resolution of the issue by this Court.

The Importance of the Issue

The court below concluded that, despite the plain
language of Section 24 (Fifth), "under federal law, a
national bank may no longer exercise the power to dismiss
at pleasure an officer who can show her termination was
discriminatory." Pet. App. at 9a. That being the case, the
court goes on, “once that power is diminished by
Congress's determination to outlaw discriminatory
terminations, it is hard to see how the public trust rationale
mandates ‘a national standard for the dismissal of bank
officers'" Jd. at 8a. The court below, likewise too lightly,
also dismisses an expressed concern for the need of
uniform national standards in the governance of national
banks: "To invoke the concept of ‘uniformity,’ however, is
not to prove its need." /d. At 7a. (quoting Atherton v.
FDIC, 117 S. Ct. 666, 671 (1997)).

The decision of the court below is based upon a
fundamentally flawed premise. It assumes that the federal
equal employment opportunity laws apply to national bank
officer employment decisions. If that is so, the court
reasons, then state fair employment laws to the same effect
as the federal laws are not inconsistent with federal law

considered as a whole, and are not preempted. But it is not
at all clear that Title VII and the Age Discrimination in
Employment Act ("ADEA") do apply in this context.
Certainly, national banks have and claim no exemption
from these statutes with respect to their employment of
non-officer personnel. But officers are different. They are
made so by Section 24 (Fifth) of the National Bank Act, a
section of the law that was left unaltered by the Congress
when it enacted ADEA and Title VII and thereafter.

ADEA and Title VII are laws of general
applicability. They govern the activities of "employers."
29 U.S.C. § 623; 42 U.S.C. § 2000e-2. Section 24 (Fifth),
on the other hand, is of quite limited and specific
applicability. By its own terms, it governs the employment
practices of one discrete and identified class of employer,
and even then, only those employment practices that pertain
to the banks’ officers. It is a most common rule of
statutory construction, endorsed over and over again by this
Court’, that a specific statute is deemed to control over a
general one where the two would otherwise be in conflict.

Moreover, this Court regularly holds that "repeals
by implication will not be recognized, insofar as two
statutes are capable of co-existence, ‘absent a clearly
expressed congressional intent to the contrary.'" Astoria
Federal Savings & Loan Association v. Solimino, 501 U.S.
104, 109 (1991) (citing Morton v. Mancari, 417 U.S. 535,
551 (1974)). See also County of Yakima v. Confederated

* See, e.g., Crawford Fitting Co. v. J.T. Gibbons, Inc., 482
U.S. 437, 445 (1987); Busic v. United States, 446 U.S. 398,
406 (1980), Fourco Glass Co. v. Transmirra Products
Corp., 353 U.S. 222, 228-229 (1957), Clifford F. MacEvoy
Co. v. United States, 322 U.S. 102, 107 (1944).

8

Tribes and Bands of Yakima Indian Nation, 502 U.S. 251,
262 (1992). And yet to hold that the federal equal
employment opportunity laws govern national bank officer
employment decisions necessarily assumes that a portion of
the National Bank Act has been repealed by implication.
Nothing in the text of the equal employment opportunity
laws or the legislative history surrounding the enactment of
those laws evidences any intent of Congress to do so or
even any indication that Congress considered the matter at
all, one way or the other.

The court below ignored those principles and
dismissed out of hand well over a century of precedent that
has established (not just "invoked") the need, not only for
uniformity in the treatment of national banks, but also for
the safety and soundness of those banks.

The Eighth Circuit, as long ago as 1896, held that
the purpose of Section 24 (Fifth) was to codify -the
“observation and experience...that it is essential to the
safety and prosperity of banking institutions that the active
officers, to whose integrity and discretion the moneys and
property of the bank and its customers are intrusted, should
be subject to immediate removal whenever the suspicion of
faithlessness or negligence attaches to them. High credit is
indispensable to the success and prosperity of a bank."
Westervelt v. Mohrenstecher, 76 F. 118, 122 (8th Cir.
1896). The Ninth Circuit agreed -- 93 years later --
holding that the purpose of Section 24 (Fifth) "was to give
those institutions the greatest latitude possible to hire and
fire their chief operating officers, in order to maintain the
public trust." Mackey v. Pioneer National Bank, 867 F.2d
520, 526 (9th Cir. 1989). Thus, courts have recognized the
overriding importance of vesting broad discretion in bank

boards both before and after enactment of the various
federal and state anti-discrimination statutes.

Nevertheless, the court below belittles those
holdings, saying that “public trust in a large financial
institution such as Bank of America is no longer based
primarily on community confidence in the personal
integrity of its individual officers." Pet. App. at 8a, n. 5.
To the extent that might be true, it supports, rather than
detracts from, the petitioner's contention that federal law
preempts contrary state law in this case. If anything has
replaced "integrity" as a factor in the "public trust" of
banks, it is federal deposit insurance, which was created
during the Depression precisely in order to promote
confidence in the nation's banking system. Gunter v.
Hutcheson, 674 F.2d 862, 870 (11th Cir.), cert. denied,
459 U.S. 826, rehearing denied, 459 U.S. 1059 (1982).
The Federal Deposit Insurance Corporation, an agency of
the United States government, was created to administer a
deposit insurance fund, 12 U.S.C. §§ 1821-1823.
Consequently, there is a distinct interest of the federal
government itself, in addition to the interests of the
customers of banks, in the safety and soundness of the
banks. Prior to the enactment of the Federal Deposit
Insurance Act, Congress saw fit to entrust the "integrity"
of national bank officers to the bank's board of directors.
After creation of Federal deposit insurance, Congress did
not see fit to withdraw that function from banks' boards, at
least in the first instance, but did choose to supplement
board supervision with a grant of authority to the
Comptroller of the Currency (in the case of national banks)
to remove an officer of a national bank who has violated
any law or regulation or who has engaged in unsafe or
unsound practices in connection with the bank. Pub. L. 89-
695, § 202 (1966) (12 U.S.C. § 1818(e)).

10

Thus, the "public trust" in national banks that was
important in the last century has remained important to this
day, though perhaps in part for different reasons. Congress
has elected how it wishes to support and affirm that public
trust through its regulation of national bank officer
employment practices--by a bank's board of directors in the
first instance, and then by supervision of the Comptroller
of the Currency. The statutes leave no room for second-
guessing by state fair employment practices laws that do
not place such safety and soundness concerns in the balance
with the putative concerns of persons the state laws were
designed to serve. The California Court of Appeal's
cavalier disregard of such a critical matter of national and
federal concern should not stand unreviewed and
unchanged.

CONCLUSION

For all of the reasons stated herein and in the bank's
Petition for Writ of Certiorari, we respectfully urge the
Court to grant that Petition.

Respectfully submitted,

CHRISTOPHER CHENOWETH JOHNJ. GILL Ill
CALIFORNIA BANKERS Counsel of Record

ASSOCIATION MICHAEL F. Crotty
201 Mission Street AMERICAN BANKERS
Suite 2400 ASSOCIATION
San Francisco, CA 94105 1120 Connecticut Ave. N.W.
(415) 284-6999 Washington, DC 20036

(202) 663-5026
Attorneys for Amici Curiae

July 27, 1998

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_1684%3A3. Public record. Not legal advice.