# Opposition Brief — Fleet Bank, National Ass'n v. Burke

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1604%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1999
- **Citation:** 527 U.S. 1004

## Text

“Supreme our, Ug
riLin=
MAY 14 1999

No. 98-1661
CLERK

me cromea.

In The
Supreme Court Of The United States
October Term, 1998
+

FLEET BANK, NATIONAL ASSOCIATION,
Petitioner.
Vv.

THE HONORABLE JOHN P. BURKE, BANKING
COMMISSIONER OF THE STATE OF CONNECTICUT
AND CONNECTICUT DEPARTMENT OF BANKING,
A STATE AGENCY,

Respondents.

+
ON PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
4
OPPOSITION TO PETITION FOR WRIT OF
CERTIORARI
¢
* RICHARD BLUMENTHAL
ATTORNEY GENERAL

GREGORY T. D’AURIA
Assistant Attorney General
Office of the Attorney General
55 Elm Street, P.O. Box 120
Hartford, CT 06141-0120

(860) 808-5020

service by

E PRINTING DERYVICES 166

CALL 806.842.0008

TABLE OF CONTENTS

SPAM NET CAPER MEED foc cc eked ticasicvecsssccecss i
RAMEE SIE AU ERBOPMEE IS se sicciccecvccectccescce il
COUNTERSTATEMENT OF THE CASE ......... 2
REASONS FOR DENYING THE WRIT ........... 4

I. THIS IS NOT AN APPROPRIATE
CASE IN WHICH TO REACH THE
ISSUES THE PETITIONER
PRESENTS. NT, pS OOD Ria ae ey

Il. THE COURT OF APPEALS
CORRECTLY CONCLUDED THAT
THE DISTRICT COURT LACKED
JURISDICTION OVER THIS
fy; 8, Sea : Baie ee 7

CREE aOR ns Can caun Ca ecus kesnskeekowun lieu 18

(i)

TABLE OF AUTHORITIES

Statutes:

UM SMR oe cc foo teks ee ..... passim
wean O 18e? Ss; sek. sates par i Me
28 U.S.C. § 1441 ....... | anevada ene e 3 12
ASE. SOS ter 3) as a Rea Pee are +
29U.S.C.§ 185 ... Ph ER FE pte Re ERR 14
SS | CREST RETA ner eae ORE: Came 14
i,” EEE SAE ee gaa enema a |.
Conn. Gen. Stat. § 36a-156 ............... .... passim
Conn. Gen. Stat. § 4-176 ...... rate cus waktes 16
Cases:

Aetna Life Insurance Company v.

Haworth, 300 U.S. 227 (1937 Napevin ria oe ee
American Well Works Co. v. Layne &
Bowler Co., 241 U.S. 257 (1916) ... Para gae

Arcudi v. Stone & Webster

Engineering, Corp., 463 US.

PRC eG Re ee Gesu: 14
Avco Corp. v. International Ass'n of

Machinists, 390 U.S. 557(1968) ............... . 14
Caterpillar Inc. v. Williams, 482 U.S

386 (1986) ..... MEDS Snes © Ree aT

City of Chicago v. International

College of Surgeons, 522 U.S
O72 2s We ana Magne aes PRS cute ce ote a

Union v. Penn Square Bank, 879
F.2d 754 (10th Cir. 1989)

Exxon Corp v. Department of
Revenue of Wisconsin, 447 U.S
207 (1980)

Ex Parte Young, 209 U.S. 123 (1908)

First National Bank of Omaha v
Marquette National Bank, 636
F.2d 195 (8th Cir. 1980), cert.
denied, 450 U.S. 1042 (1981)

Franchise Tax Bd. v. Constructior

Laborers Vacation Trust, 463
U.S.1 (1983)

Franchise Tax Board v. Construction
Laborers Vacation Trust, 463
cP.0e BROOD oe ree

Louisville & Nashville R.R. v.
Mottley, 211 U.S. 149 (1908)

Merrell Dow Pharmaceuticals, Inc. v
Thompson, 478 U.S. 804 (1986)

Metropolitan Life Ins. Co. v. Taylor,
481 U.S. 58 (1987)

NOPSI v. Council of New Orleans,
491 U.S. 350 (1989)

Oklahoma Tax Comm'n vy. Graham,
489 U.S. 838 (1989)

Oneida Indian Nation v. County of
Oneida, 414 U.S. 661 (1974)

Pennhurst State School & Hospital v.
Halderman, 465 U.S. 89 (1984)

14, 15

. passim

10

Public Service Commission of Utah v.

Wycoff Co., 344 U.S. 237 (1952) ..........

Shaw v. Delta Air Lines, Inc., 463
OS Sse |

Skelly Oil Co. v. Phillips Petroleum
Co., 339 U.S. 667 (1950)

Smith v. Kansas City Title & Trust
Co., 255 U.S. 180 (1921)

Steffel v. Thompson, 415 U.S. 452
24 5. Tienes

Stone & Webster Engineering Corp.

BES £090) hess

Taylor v. Anderson, 234 U.S. 74
(1914)

United Mine Workers of America v
Gibbs, 383 U.S. 715 (1966)

Verlinden, B.V. v. Central Bank of
Nigeria, 461 U.S. 480 (1983)

Rules:

F.R.C.P. 8(a)(1)

Other Authorities:

13 C. Wright, A. Miller & M. Kane,
Federal Practice & Procedure §
or

, 16

a,

Taylor v. Anderson, 234 U.S. 74
(1914)

51 U.Chi. L.Rev. 634 (1984)

Comment, "Federal Preemption,

Removal Jurisdiction and the
Well-Pleaded Complaint Rule,"

8

IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1998
FLEET BANK, NATIONAL ASSOCIATION.
Petitioners

THE HONORABLE JOHN P. BURKE, BANKING
COMMISSIONER OF THE STATE OF CONNECTICUT
AND CONNECTICUT DEPARTMENT OF BANKING, A

STATE AGENCY
Respondents

ON PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
SECOND CIRCUIT
OPPOSITION TO PETITION FOR WRIT OF
CERTIORARI

COUNTERSTATEMENT OF THE CASE

This action represents a national bank's attempt to
avoid a state court or administrative determination of
whether Connecticut's Banking Commissioner has correctly
interepreted Connecticut law to prohibit the assessment of
ATM surcharge fees. In this first strike federal action, the
bank attempted to manufacture federal jurisdiction by posit-
ing both its state defense and a federal preemption defense
to anticipated state action, bringing about exactly the result
that a number of this Court's federalism doctrines counsel
against: a federal court constructing an important state law
that no state court had previously construed. This ruling
would not bind a state court, nor could it be enforced
against a state official such as the Banking Commissioner.
In fact, presently ongoing litigation between these same par-
ties in state court will dispositively determine the state law
question, underscoring that the Court of Appeals correctly
determined that federal question jurisdiction does not lie in
this context.

The petitioner's central argument at every stage of
this litigation has been that Connecticut law does not pro-
hibit ATM surcharges. In this critical respect the peti-
tioner's Statement of the Case is misleading. Nothing in the
record whatsoever supports the petitioner's characterization
of its argument that Conn. Gen. Stat. § 36a-156 does not
prohibit ATM surcharge fees as a "supplemental claim."
(Petition at 4) To the contrary, this quite clearly was the pe-
titioner's principal argument, leading the Court of Appeals
to describe the action accurately "primarily an attempt to
have a federal court construe a state regulatory statute."
(/d., A3)

The petitioner filed a one count complaint in District

Court alleging "a justiciable controversy . . . over whether
the defendants have correctly interpreted the Connecticut

ATM statutes and, if so, whether these statutes are pre-
empted by federal banking law." (Petitioner's App. A81)
The petitioner's first Prayer For Relief requests a declaration
that "the Connecticut ATM statutes do not prohibit Fleet
from exercising the power to charge fees to non-depositor
customers using its ATMs." (/d). The petitioner pleaded ju-
risdiction solely under 28 U.S.C. § 1331, and never once al-
ieged, or even suggested, that it was pursuing a separate,
supplemental "claim" under 28 U.S.C. § 1367. (See id. A78)

Finally, after fending off the respondents’ argument
that the Court should abstain under the Pul/man doctrine in
favor of a state court determination of this state law issue,
(Id. AS1-AS7) the petitioner sought a plaintiff's summary
judgment exclusively on the state law issue: “Connecticut
law does not prohibit Fleet from exercising the power to
charge fees to non-depositior customers for the use of its
ATMs." (/d. A89)

Also, although the petitioner correctly states that the
action it filed immediately after the Court of Appeals’ deci-
sion in this case “omits any claim under state law" (Petition
at 5), to be complete it should be noted that that suit does
not admit the meaning and application of state law, as the
Court of Appeals’ had indicated was necessary to confer ju-
risdiction upon a federal court. (Petitioner's App. A23) The
parties are still at issue over the construction of the state
law that the petitioner claims: 1) does not prohibit ATM
surcharge fees, and 2) is preempted by federal law. This
dispute has most recently manifested itself in the Commis-
sioner's state law action against the petitioner and two other
national banks, seeking to prevent the imposition of ATM
fees. (App. A2) Thus far, the petitioner has not agreed that
Conn. Gen. Stat. § 36a-156 in fact prohibits such fees

REASONS FOR DENYING THE WRIT

The petitioner has failed to identify any legal issue
that cries out for this Court to determine. This is especially |
true in light of the ongoing litigation between the parties,
which is presently continuing in no fewer than four forums.

Rather, the petitioner asks this Court to satisfy its academic
curiosity on a matter that does not truly arise in this case |
and does not otherwise warrant this Court's attention. |

I. THIS IS NOT AN APPROPRIATE CASE IN
WHICH TO REACH THE ISSUES THE
PETITIONER PRESENTS.

Apart from the fact that the petitioner's argument in
support of certiorari itself lacks merit, which is addressed in
Part Il, infra, at least two reasons make it imprudent for this
Court to accept this case to address the question presented.

First, as the petitioner candidly admits, the parties’
dispute over ATM surcharge fees is ongoing in both the
state and federal courts. On the same day that the Court of
Appeals entered judgment in this case, the petitioner (along
with one other national bank) sued the Commissioner (a re-
spondent to this petition) once again in District Court pray-
ing for a very similar injunction. (Compare Petitioner's App.
A82 with A110) The national banks thereafter enlisted the
support of the Office of the Comptroller of the Currency
("OCC"), which intervened as a plaintiff in the action and
also moved for injunctive relief.

On April 7, 1999, the District Court granted the
OCC's motion for a preliminary injunction, although on
grounds narrower than either the OCC or the banks had :
hoped. (See id. Al163-A164) To this point, the Commis-
sioner alone has appealed to the Court of Appeals for the

NE MME CN ee EMER TT

Second Circuit, although the appeal period has not elapsed
as of this date.

Since the District Court's ruling specifically held that
the Banking Commissioner could enforce Connecticut's ban
on ATM surcharges in state court, the Commissioner also
brought a state court action against the national banks seek-
ing a definitive determination of the meaning of the state
law. (App. A2) Although that suit is in its infancy, there are
now at least three forums in which the parties may have
their respective rights determined and settled (the Second
Circuit, District Court and State Court). Thus, accepting
the instant case for review might very likely turn out to be
an imprudent use of the Court's and the parties' time and re-
sources on an issue that, by the petitioner's own representa-
tion, arises often. (Petition at 12 to 17) Indeed, by
accepting this case for review, this Court may well interfere
with an orderly resolution of the issues that are now
squarely before the Connecticut court.

Second, the respondents are obliged to point out
that this case is not the case the petitioner describes it to be.
See Sup. Ct. Rule 15.2. As discussed above, the petitioner
has never invoked, either at the District Court or Circuit
Court level, the federal court's "supplemental jurisdction" in
support of what it now claims to be a state law "claim" --
the meaning of Conn. Gen. Stat. § 36a-156(a). This sup-
posed state "claim" was not a separate count in the peti-
tioner's complaint. The petitioner did not, as it was obliged
to do under F.R.C.P. 8(a)(1), specifically allege 28 U.S.C. §
1367 as a jurisdictional basis in its complaint. (See Peti-
tioner's App. A78) Nor did the petitioner ever previously
defend the District Court's jurisdiction to opine exclusively
on the meaning of a state statute by citing either to § 1367,
to United Mine Workers of America v. Gibbs, 383 U.S. 715

(1966), or to any of the discretionary factors that

ee as

supplemental jurisdiction permits the District Court to
evaluate.” Merrell Dow Pharmaceuticals, Inc. _ v.
Thompson, 478 U.S. 804, 809 n.6 (1986) ("Jurisdiction may
not be sustained on a theory that the plaintiff has not
advanced.").

Thus, even if the issue the petitioner presents were
worthy of this Court's consideration, it does not truly arise
in this case.” The petitioner's claim that the judgment below
conflicts with 28 U.S.C. § 1367 or with any of this Court's
decisions under it is entirely manufactured.”

Of course, the reason the petitioner has never before articulated
the claim as one of "supplemental jurisdiction" is very simply
because its complaint does not raise a supplemental state law
"claim," any more than it raises a federal claim. Rather, as the
Court of Appeals correctly recognized, the petitioner's federal
declaratory action raises what would be its two defenses to a state
proceeding brought against it: first, "its state law defense that
section 36a-156 does not prohibit the surcharge fee but also, if the
state law defense failed, its federal law defense of preemption."
(Petitioner's App., A7) Thus, the state law claim "is not entirely
distinct from the federal preemption claim. Instead, in reality it
presents an independent issue preliminary to the federal claim."
(/d. A20)

The petitioner further seeks to raise belatedly an argument that its
action is truly an action under 42 U.S.C. § 1983. (Petition at 25
n.19) As the petitioner admits, however, its complaint contains
no such allegation and it never pursued its claim as such -- and
with good reason because it is improbable that its complaint could
state a cause of action for a violation of § 1983. Compare First
National Bank of Omaha y. Marquette National Bank, 636 F.2d
195, 198 (8th Cir. 1980), cert. denied, 450 U.S. 1042 (1981)
(claimed violation of National Bank Act does not give rise to §
1983 action). At any rate, it is the better practice for this Court to
decline to review cases recastas a litigant now wishes that it had
presented the matter in the courts below.

In City of Chicago v. International College of Surgeons, 522 U.S.
156 (1997), unlike this case, there was an independent basis for
federal question jurisdiction, which then permitted the federal
court to adjudicate a properly submitted supplemental claim. That

:
;
,
;
|
i
'
;
’
'
'

Il. THE COURT OF APPEALS CORRECTLY
CONCLUDED THAT THE DISTRICT COURT
LACKED JURISDICTION OVER’ THIS
ACTION.

The Court of Appeals was undoubtedly right in de-
termining that no federal court subject matter jurisdiction
existed in this case. The petitioner's claim against the re-
spondent does nothing more than raise its defenses to an an-
ticipated state enforcement action, and therefore does not
"arise under" federal law as this Court has consistently con-
strued and applied that phrase. 28 U.S.C. § 1331.* The
Court of Appeals’ decision is consistent with this Court's
well-established jurisdictional precedents, which are de-
signed in part to avoid placing federal courts in the ackward
position of deciding important issues of state law.

That the Court of Appeals was correct that the Dis-
trict Court lacked jurisdiction is best illustrated by looking
to the judgment that the petitioner sought to defend on ap-
peal and would urge this Court to reinstate. That judgment
represents a federal court adjudication of a purely state law
issue: whether Connecticut law prohibits banks from charg-
ing ATM fees. A federal court is not the final arbitrer of
state law, and therefore this federal ruling on state law
would not bind a state court. See Exxon Corp v. Depart-
ment of Revenue of Wisconsin, 447 U.S. 207, 226 n9
(1980). In fact, the only Connecticut court to pass on the
issue has held the other way. Fleet Bank, N.A. v. Burke, 45
Conn. Sup. 566, = A.2d____‘ (1998). Further, the Elev-
enth Amendment prevents a federal court from granting in-
junctive relief against a state official on the basis of state

case does not conflict with this case.

Congress has granted the federal district courts jurisdiction over
"all civil actions arising under the Constitution, laws, or treaties

of the United States." 28 U.S.C. § 1331 (emphasis supplied).

law. Pennhurst State School & Hospital v. Halderman, 465
U.S. 89, 121 (1984). Thus, the District Court's declaratory
judgment in this case would be unenforceable against the
defendant Commissioner of Banking. See id. at 106 ("[I]t is
difficult to think of a greater intrusion of state sovereignty
than when a federal court instructs state officials on how to
conform their conduct to state law.").

That the Court of Appeals was clearly correct is ex-
plained doctrinally by this Court's explications of the "well
pleaded complaint rule." Principles of federalism and com-
ity similar to those described in the above paragraph mani-
fest themselves in this doctrine, by which this Court
measures whether a case “arises under" federal law for pur-
poses of 28 U.S.C. § 1331. The "well-pleaded complaint
rule" represents "the basic principle marking the boundaries
of the federal question jurisdiction of the federal district
courts." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58,
63 (1987).

"It is long settled law that a cause of action arises
under federal law only when the plaintiff's well-pleaded
complaint raises issues of federal law." Id. (emphasis sup-
plied). The "mere presence of a federal issue in a state
cause of action does not automatically confer federal-
question jurisdiction." Merrell Dow Pharmaceuticals Inc. v.
Thompson, 478 U.S. 804, 813 (1986). Rather, the
well-pleaded complaint rule confines the search for a basis
of federal question jurisdiction to "what necessarily appears
in the plaintiffs statement of his own claim in the bill or
declaration, unaided by anything alleged in anticipation or
avoidance of defenses which it is thought the defendant may
interpose." Taylor v. Anderson, 234 U.S. 74, 75-76 (1914)

————————————

(emphasis supplied); see also Oklahoma Tax Comm'n v.

Graham, 489 U.S. 838, 840-41 (1989).

Specifically, the "well-pleaded complaint rule" pre-
cludes federal jurisdiction if a federal question is merely as-
serted or anticipated as a defense to a state law claim.
Louisville & Nashville Railroad Co. v. Mottley, 211 U.S
149, 152 (1908). "A defense that raises a federal question is
inadequate to confer federal jurisdiction." Merrell Dow
Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 808
(1986).

Several policies underlie and support the well-
pleaded complaint rule. This Court has "consistently em-
phasized that, in exploring the outer reaches of § 1331, de-
terminations about federal jurisdiction require sensitive
judgments about congressional intent, judicial power, and
the federal system." Id. at 810. The Court's articulated
"need for prudence and restraint in the jurisdictional in-
quiry"; id; includes considerations of comity counseling
against "seizing litigations from state courts merely because
one, normally a defendant, goes to federal court to begin his

This Court has noted that the vast majority of cases brought under
the general federal question jurisdiction of the federal courts
include "those in which federal law creates the cause of action" or
"where the vindication of a right under state law necessarily
turned on some construction of federal law." Merrell Dow
Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 808 (1986).
(emphasis supplied) See American Well Works Co. v. Layne &
Bowler Co., 241 U.S. 257, 260 (1916); Smith v. Kansas City Title
& Trust Co., 255 U.S. 180 (1921). The petitioner does not argue
that this case falls within either category.

5

Inexplicably, the petitioner devotes a separate section of its
Petition to criticizing the Court of Appeals’ discussion of such
"prudential" concerns. (Petition at 22-24) These concerns,
however, so clearly underpin the well-pleaded complaint rule and
help define its contours that not to articulate and consider them
might likely have lead the Court below to err.

10

federal defense before the state court begins the case under
state law." Franchise Tax Board v. Construction Laborers
Vacation Trust, 463 US. 1, 16 n.14 & 21 n.22 (1983);
Public Service Commission of Utah v. Wycoff Co., 344
U.S. 237, 248 (1952). Similarly informing the federal judi-
ciary's prudence is the desire of federal courts to avoid hav-
ing to decide doubtful questions of state law in order to
avoid federal constitutional questions. Skelly. Oil Co. v.
Phillips Petroleum Co., 339 U.S. 667, 673 (1950). These
policies would be totally undermined if, in a case like the
present one, a potential federal defense, or response to a
federal defense, could confer jurisdiction on a federal court,
especially where, as here, that federal defense would never
arise should the state claims not succeed. Comment, "Fed-
eral “reemption, Removal Jurisdiction, and the Well-
Pleaded Complaint Rule," 51 U.Chi. L.Rev. 634, 636-39
(1984).

Finally, this Court has eschewed an interpretation of
§ 1331 that would increase the volume of federal court liti-
gation. Skelly Oil Co. v. Phillips Petroleum Co., 339 US.
667, 673 (1950). This policy is consistent with this Court's
articulated understanding of its "limited jurisdiction" under §
133] Merrell Dow Pharmaceuticals Inc. v. Thompson,
478 U.S. 804, 808 (1986) (federal question jurisdiction long
construed as a more limited grant of power than Art. III);
Franchise Tax Bd. v. Construction Laborers Vacation Trust,
463 U.S.1, 9-10 (1983) (well-pleaded complaint rule "limits
the number of cases .. . that may be initiated in or removed
to federal district court, thereby avoiding . . . a number of
potentially serious federal-state conflicts."); Verlinden, B.V.
v. Central Bank of Nigeria, 461 U.S. 480, 494 (1983)
(§ 1331, although broadly phrased, has been continuously
construed and limited).

i
;
i

1]

These policies and their application to this case and
others do not, as the petitioner suggests, deny a litgant a
proper forum for adjudicating its federal claim, nor ulti-
mately deny it a federal forum. "[S]tate courts have the sol-
emn responsibility, equally with the federal courts, to guard,
enforce, and protect every right granted or secured by the
Constitution of the United States ... ." Steffel v.
Thompson, 415 U.S. 452, 460-61 (1974). Thus, state
courts are perfectly capable of adjudicating any federal
claim the petitioner might have, and more capable than the
federal courts of adjudicating the state claims or defenses of
either party.

Further, "the absence of original jurisdiction does
not mean that there is no federal forum in which a pre-
emption defense may be heard. If the state courts reject a
claim of federal preemption, that decision may ultimately be
reviewed on appeal by this Court." Franchise Tax Board vy.
Construction Laborers Vacation Trust, 463 U.S. 1, 12
(1983). See also Caterpillar Inc. v. Williams, 482 U.S. 386,
393 (1986) (preemption arguments were not properly the
basis for a removal petition and must be addressed in the
first instance by the state court). That the petitioner would
prefer an original federal forum, which, contrary to its un-
derstanding, it has no "right" to, does not mean that Con-
gress has provided one.

The Court has applied the rule symmetrically in
various procedural contexts. Under, the well-pleaded com-
plaint rule, a case does not "arise under" federal law when a
litigant with a state law claim sues under state law and raises
the defendant's federal defense in its own complaint;
Louisville & Nashville R.R. v. Mottley, 211 U.S. 149,

150-51 (1908); when that same litigant seeks a federal de-

claratory judgment that the defendant's federal defense is in-
sufficient; Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S.

12

667, 670 (1950); when the target of the state law claim
seeks to remove a state lawsuit to federal court pursuant to
28 U.S.C. § 1441” based upon its federal defense; Franchise
Tax Board v. Construction Laborers Vacation Trust, 463
U.S. 1, 12 (1983) (fidelity to Skelly's spirit leads to
extension to state declaratory judgment action defendant
seeks to remove); or when the target of the state law claim
acts preemptively to establish the validity of its federal
defense by a federal declaratory judgment action. Public
Service Commission of Utah v. Wycoff Co., 344 U.S. 237,
248 (1952). The instant case falls under the Wycoff rubric:
a preemptive federal action to declare invalid, and enjoin if
necessary, a state statute on federal grounds.” The Court of

28 U.S.C. § 1441(a): “Except as otherwise expressly provided by
Act of Congress, any civil action brought in a State court of which
the district courts of the United States have original jurisdiction,
may be removed by the defendant or the defendants, to the district
court of the United States for the district and division embracing
the place where such action is pending.”

"{AJs in many actions for declaratory judgment, the realistic
position of the parties is reversed. The plaintiff is seeking to
establish a defense against a cause of action which the declaratory
defendant may assert." Public Sei:vice Commission of Utah v.
Wycoff Co., 344 U.S. 237, 248 (1952). The operation of the
Federal Declaratory Judgment Act, 28 U.S.C. § 2201(a), "is
procedural only." Aetna Life Insurance Company v. Haworth,
300 U.S. 227, 240 (1937). By the Act, "Congress enlarged the
range of remedies available in the federal courts but did not
extend their jurisdiction." Skelly Oil Co. v. Phillips Petroleum
Co., 339 U.S. 667, 671 (1950). To permit a declaratory plaintiff
to invoke federal jurisdiction to assert a federal defense, would
improperly augment the otherwise limited federal jurisdiction. Id.
at 673-74. Thus, if federal jurisdiction would be lacking but for
the availability of the federal declaratory judgment procedure, and
a federal claim only arises as a defense to a state action, federal
jurisdiction is barred. Id. at 672.

As this Court has stated:

Where the complaint in an action for declaratory

13

Appeals' essential holding in this case is thus consistent with
well-established precedent of this Court.

These permutations of the well-pleaded complaint
rule apply equally to the defense of federal preemption.
"Federal pre-emption is ordinarily a federal defense to the
plaintiff's suit. As a defense, it does not appear on the face
of a well-pleaded complaint . " Metropolitan Life Ins.
Co. v. Taylor, 481 U.S. 58, 63-64 (1987); see also
Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1986) ("[I]t
is now settled law that a case may not be removed to federal
court on the basis of a federal defense, including the defense
of pre-emption, even if the defense is anticipated in the
plaintiffs complaint, and even if both parties concede that
the federal defense is the only question truly at issue.");
Franchise Tax Board v. Construction Laborers Vacation
Trust, 463 U.S. 1, 14 (1983) (same). Thus, even if the par-
ties were to ignore the state law question the petitioner's
complaint posits, they could not confer jurisdiction upon the
federal courts.

This Court has recognized a narrow exception to the
well-pleaded complaint doctrine, however, for those cases

judgment seeks in essence to assert a defense to an
impending or threatened state court action, it is the
character of the threatened action, and not of the de-
fense, which will determine whether there is federal-
jurisdiction in the district court. If the cause of ac-
tion, which the declaratory defendant threatens to as-
sert, does not itself involve a claim under federal
law, it is doubtful if a federal court may entertain an
action for declaratory judgment establishing a de-
fense to that claim. This is dubious even though the
declaratory complaint sets forth a claim of federal
right, if that right is in reality in the nature of a de-
fense to a threatened cause of action.

Public Service Commission of Utah v. Wycoff Co., 344 U.S. 237,

248 (1952).

14

in which Congress has "so completely pre-empt[ed] a par-
ticular area that any civil complaint raising this select group
of claims is necessarily federal in character." Metropolitan
Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987). In such
areas, the Court has held that the preemptive force of fed-
eral law is "so powerful as to displace entirely any state
cause of action." Id. at 64. The petitioner has not sought
to fit itself within this exception.”

Rather, the petitioner hangs its federal jurisdictional
hat upon a footnote in this Court's decision in Shaw v. Delta
Air Lines, Inc., 463 U.S. 85, 96 n.14 (1983). In Shaw the
plaintiffs sought a federal declaratory judgment that the
New York Human Rights Law was preempted by ERISA
The Court saw no jurisdictional problem because:

It is beyond dispute that federal courts have
jurisdiction over suits to enjoin state officials
from interfering with federal rights. See Ex
Parte Young, 209 U.S. 123 (1908). A

To date, the Court has recognized only three areas that are
“completely preempted." See 13 C. Wright, A. Miller & M.
Kane, Federal Practice & Procedure § 3522 (2d ed. 1998 Supp.)
First is the "unique preemptive force of ERISA," 29 U.S.C. §§
1001, et seq. Id. at pp. 65-66; see Stone & Webster Engineering
Corp. v. Ilsley, 690 F.2d 323, 328 (2d Cir. 1982), aff'd sub. nom.
Arcudi v. Stone & Webster Engineering, Corp., 463 U.S. 1220
(1983). Second is the Labor Management Relations Act, 29
U.S.C. § 185, et seq) See Franchise Tax Board v. Construction
Laborers Vacation Trust, 463 U.S. 1, 23-24 (1983); Avco Corp. v
International Ass'n of Machinists, 390 U.S. 557 (1968). Finally,
there are certain tribal claims that are “necessarily federal in
character.” See Oneida Indian Nation vy. County of Oneida, 414
U.S. 661 (1974). Obviously, none of these three areas of the law
is involved in the petitioner's suit; and in our dual system of
banking, federal banking law plainly does not "completely"
displace state banking law. Compare Downriver Community
Federal Credit Union vy. Penn Square Bank, 879 F.2d 754, 758-59
(10th Cir. 1989)

|
a gee de

15

plaintiff who seeks injunctive relief from
state regulation, on the ground that such
regulation is pre-empted by a federal statute
which, by virtue of the Supremacy Clause of
the Constitution, must prevail, thus presents
a federal question which the federal courts
have jurisdiction under 28 U.S.C. § 1331 to
resolve. .. . This Court, of course, fre-
quently has resolved pre-emption disputes in
a similar jurisdictional posture.

Id. (case cites omitted)

Citing Ex Parte Young, the first sentence of this
footnote stands for the unremarkable proposition that the
Eleventh Amendment does not deprive the federal courts of
jurisdiction over a "suit against State officials... . if the suit
seeks to force them to conform their conduct to federal
law." 1 J. Nowak & R. Rotunda, Treatise on Constitutional
Law (2d ed. 1992) § 2.12, p. 151; see Ex Parte Young, 209
U.S. 123, 160-62 (1908). This well-recognized exception
to a State's Eleventh Amendment immunity from federal suit
does not itself create federal jurisdiction, however, and the
federal plaintiff must therefore otherwise be properly in
federal court."” The second and third sentences, in context

A claimed violation of 42 U.S.C. § 1983 would be an example of a
proper jurisdictional basis since in such an instance "federal law
creates the cause of action." Merrell Dow Pharmaceuticals, Inc. v.
Thompson, 478 U.S. 804, 808 (1986). See Steffel v. Thompson,
415 U.S. 452 (1974). In Ex Parte Young, decided before this
Court's "arising under" jurisprudence had developed, the federal
plaintiffs alleged constitutional violations that would fall within §
1983 (due process and equal protection). Similarly, a number of
the circuit court cases cited in support of a purported circuit split
(Petition at 12-15) had a jurisdictional basis under § 1983. As
noted above, the petitioner did not plead this as a § 1983 action,
and it has no cognizable right under that statute.

Additionally, the Court should not be misled into believing that

16

and in light of this Court later precedents, simply means
only that where a claim of "complete preemption" is made
out, a federal plaintiff may be said to assert a claim "arising
under" federal law. See Metropolitan Life Ins. Co. v. Tay-
lor, 481 U.S. 58, 63-64 (1987); Caterpillar Inc. v. Williams,
482 U.S. 386, 393 (1986).

To read the Shaw footnote otherwise would upset
the intended symmetry of the well-pleaded complaint rule.
Whether a state suit may be removed to federal court is
tested by whether the state plaintiff could have begun the
action originally in federal court. Franchise Tax Board v.
Construction Laborers Vacation Trust, 463 U.S. 1, 19
(1983). The respondents clearly could not have brought a
action in federal court seeking a declaration that federal law
does not preempt the state law. Skelly Oil Co. v. Phillips
Petroleum Co., 339 U.S. 667, 670 (1950). Thus, the peti-
tioner cannot manufacture federal question jurisdiction
merely by switching the parties around. Public Service
Commission of Utah v. Wycoff Co., 344 U.S. 237, 248
(1952).

Also, to adopt the petitioner's position would be to
elevate preemption to the highest plane among federal de-
fenses, including constitutional defenses. Although no other
federal defense would suffice to support a removal petition

the petitioner faced the "Hobson's choice," as the plaintiff did in
Ex Parte Young., of violating the law as a test case or
continuously violating the law and exposing itself to penalties.
(See Petition at 24) As the record clearly reflects, the petitioner in
September, 1995, asked the Commissioner for his opinion on
whether Conn. Gen. Stat. § 36a-156 prohibited ATM charges.
(Petitioner's App. A97) Under state law, the petitioner could have
asked the Commissioner to reduce this opinion to a declaratory
ruling, which the petitioner could then have appealed to state
court. Conn. Gen. Stat. § 4-176. (App. A6) Eschewing any of the
available state processes, the petitioner instead waited until
January, 1997, to bring this federal action.

ee ae ON MM TC MrT n OTR r em |

17

or a declaratory judgment, the petitioner's view is that any
claim of federal preemption does suffice to bring it within
28 U.S.C. § 1331. This is inconsistent with this Court's nu-
merous holdings in other contexts that, to the contrary, at
best a claim of federal preemption is on the same plane as
any other constitutional defense. Swift & Co. v. Wickham,
382 U.S. 111, 120 (1965) (preemption claim did not re-
quire convening of three-judge district court); NOPSI v.
Council of New Orleans, 491 U.S. 350, 365 (1989) (For
Younger abstention purposes, "[t]here is no greater federal
interest in enforcing the supremacy of federal statutes than
in enforcing the supremacy of explicit constitutional
guarantees").

Thus, the Court of Appeals properly described the
petitioner's theory as "an ill-advised use of federal question
jurisdiction," inappropriately opening the federal courts to
preemption claims that should be first litigated in state court
because "[i]n almost every area in which state law regulates
private conduct, some federal statute can arguably be in-
voked . . . to provide the basis for a preemption claim."
(Petitioner's App. A20-A21).

18

CONCLUSION

For all of these reasons, the Court should deny the
petition for a writ of certiorari.

Respectfully submitted,

RESPONDENTS
*RICHARD BLUMENTHAL
ATTORNEY GENERAL

Gregory T. D'Auria
William J. Prensky
Assistant Attorney General
55 Elm Street

P.O. Box 120

Hartford, CT 06141-0120
Tel. No. (860)-808-5020

*Counsel of Record

No. 98-1661

In The
Supreme Court Of The United States

October Term, 1998
. ae

FLEET BANK, NATIONAL ASSOCIATION,
Petitioner,
v.

THE HONORABLE JOHN P. BURKE, BANKING
COMMISSIONER OF THE STATE OF CONNECTICUT
AND CONNECTICUT DEPARTMENT OF BANKING,
A STATE AGENCY,

Respondents.
¢

ON PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

Earet + :
APPENDIX
a ees >

Al

APPENDIX TABLE OF CONTENTS

John P. Burke, Banking Commissioner of the

State of Connecticut, et al. v. Fleet National

Bank; et al, Verified Complaint

Conn. Gen. Stat. § 4-176

A2

RET. MAY 4, 1999 : CV990588717-S
JOHN P. BURKE, BANKING : SUPERIOR COURT
COMMISSIONER OF THE STATE : JUDICIAL DISTRICT
OF CONNECTICUT, and THE : OF HARTFORD

STATE OF CONNECTICUT
¥.
FLEET NATIONAL BANK

FIRST UNION NATIONAL BANK ;
and BANKBOSTON, N.A. : APRIL 16, 1999

VERIFIED COMPLAINT

1. This suit is brought by John P. Burke, Banking
Commissioner of the State of Connecticut, under the
authority of Conn. Gen. Stat. § 36a-50(b) to enforce the
provisions of Conn. Gen. Stat. § 36a-156 governing the op-
eration of automated teller machines ("ATMs") in the State
of Connecticut.

2. The defendant, Fleet Bank, National Association
("Fleet"), is a national bank doing business in the state of
Connecticut.

3. The defendant, First Union National Bank ("First
Union"), is a national bank doing business in the state of
Connecticut.

4. The defendant, BankBoston, N.A. ("BankBos-
ton"), is a national bank doing business in the state of
Connecticut.

5. Fleet owns and operates ATMs in the state of
Connecticut.

A3

6. First Union owns and operates ATMs in the state
of Connecticut.

7. BankBoston owns and operates ATMs in the
state of Connecticut

8. Fleet has imposed, and on information and belief
intends to impose, fees or surcharges and collect them from
non-depositors who use its ATMs in the state of
Connecticut

9. First Union has imposed, and on information and
belief intends to impose, fees or surcharges and collect them
from non-depositors who use its ATMs in the state of
Connecticut

10. BankBoston has imposed, and on information
and belief intends to impose, fees or surcharges and collect
them from non-depositors who use its ATMs in the state of
Connecticut

11. Conn. Gen Stat. § 36a-156 does not authorize
and thus prohibits the imposition of fees or surcharges on
non-depositors who use an ATM machine in the state of
Connecticut

12. The plaintiff, State of Connecticut and the peo-
ple of the State, have suffered and will continue to suffer
immediate and irreparable harm if such-fees or surcharges
are imposed and collected

HEREOF FAIL NOT, BUT OF THIS WRIT, with
your doings therein, make due service and return according

to law

Dated at Hartford, Connecticut, this 16th day of
April, 1999

PLAINTIFFS

/s/ Richard Blumenthal __
RICHARD BLUMENTHAL
ATTORNEY GENERAL
Juris No. 403804

BY

/s/ William J. Prensky
William J. Prensky
Assistant Attorney General
Juris No. 85294

55 Elm Street

P.O. Box 120

Hartford, CT 06141-0120
Tel. (860) 808-5270

Please enter our appearance for
the plaintiffs in this action

Richard Blumenthal

Attorney General

/s/ William J. Prensky

William J. Prensky
Assistant Attorney General

AS

VERIFICATION

STATE OF CONNECTICUT )
) ss. Hartford, Date: April 16, 1999
COUNTY OF HARTFORD |)

I, John P. Burke, being duly sworn, depose and say:

1. I am the Banking Commissioner of the State of
Connecticut. I am authorized, pursuant to Conn. Gen. Stat.
§§ 36a-1 et seq. to administer the provisions of the Banking
Law of Connecticut.

2. I have read the Verified Complaint and the con-
tents thereof are true to the best of my knowledge, informa-
tion, and belief

3. The sources of my information as to the matters
stated in the Verified Complaint emanate from conversa-
tions between counsel for the Department of Banking and
counsel representing the defendant banks, and records, affi-
davits, and other documents in the possession of the De-
partment of Banking

/s/ John P. Burke
John P. Burke

Subscribed and sworn to before me this 16th day of
April, 1999

/s/ Paul A. Bobruff

Commissioner of the Superior
Court

A6

Conn. Gen. Stat. § 4-176. Declaratory rulings. Peti-
tions. Regulations

(a) Any person may petition an agency, or an agency
may on its own motion initiate a proceeding, for a declara-
tory ruling as to the validity of any regulation, or the appli-
cability to specified circumstances of a provision of the
general statutes, a regulation, or a final decision on a matter
within the jurisdiction of the agency.

(b) Each agency shall adopt regulations, in accor-
dance with the provisions of this chapter, that provide for
(1) the form and content of petitions for declaratory rulings,
(2) the filing procedure for such petitions and (3) the proce-
dural rights of persons with respect to the petitions.

(c) Within thirty days after receipt of a petition for a
declaratory ruling, an agency shall give notice of the petition
to all persons to whom notice is required by any provision
of law and to all persons who have requested notice of de-
claratory ruling petitions on the subject matter of the
petition.

(d) If the agency finds that a timely petition to be-
come a party or to intervene has been filed according to the
regulations adopted under subsection (b) of this section, the
agency: (1) May grant a person status as a party if the
agency finds that the petition states facts demonstrating that
the petitioner's legal rights, duties or privileges shall be spe-
cifically affected by the agency proceeding; and (2) may
grant a person status as an intervenor if the agency finds
that the petition states facts demonstrating that the peti-
tioner's participation is in the interests of justice and will not
impair the orderly conduct of the proceedings. The agency
may define an intervenor's participation in the manner set
forth in subsection (d) of section 4-177a.

A7

(e) Within sixty days after receipt of a petition for a
declaratory ruling, an agency in writing shall: (1) Issue a
ruling declaring the validity of a regulation or the applicabil-
ity of the provision of the general statutes, the regulation, or
the final decision in question to the specified circumstances,
(2) order the matter set for specified proceedings, (3) agree
to issue a declaratory ruling by a specified date, (4) decide
not to issue a declaratory ruling and initiate regulation-
making proceedings, under section 4-168 on the subject, or
(5) decide not to issue a declaratory ruling, stating the rea-
sons for its action

(f) A copy of all rulings issued and any actions taken
under subsection (e) of this section shall be promptly deliv-
ered to the petitioner and other parties personally or by
United States mail, certified or registered, postage prepaid,
return receipt requested

(zg) If the agency conducts a hearing in a proceeding
for a declaratory ruling, the provisions of subsection (b) of
section 4-177c, section 4-178 and section 4-179 shall apply
to the hearing

(h) A declaratory ruling shall be effective when per-
sonally delivered or mailed or on such later date specified by
the agency in the ruling, shall have the same status and bind-
ing effect as an order issued in a contested case and shall be
a final decision for purposes of appeal in accordance with
the provisions of section 4-183. A declaratory ruling shall
contain the names of all parties to the proceeding, the par-
ticular facts on which it is based and the reasons for its
conclusion.

(i) If an agency does not issue a declaratory ruling
within one hundred eighty days after the filing of a petition
therefor, or within such longer period as may be agreed by

A8

the parties, the agency shall be deemed to have decided not
to issue such ruling

(j) The agency shall keep a record of the proceeding

as provided in section 4-177

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1604%3A2. Public record. Not legal advice.