# Petition for Writ of Certiorari — At&t Family Federal Credit Union v. First National Bank & Trust Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1993
- **Citation:** 510 U.S. 907

## Text

ny | Bupreme Court, U.s
4 F | eo
92-2010 Jun 211983

IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

AT&T FAMILY FEDERAL CREDIT UNION and
CREDIT UNION NATIONAL ASSOCIATION, INC.,
Petitioners,
v.

First NATIONAL BANK & TRuST Co., et al.,
Respondents.

Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The District Of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

PAUL J. LAMBERT
(Counsel of Record)

TERESA BURKE

BINGHAM, DANA & GOULD

1550 M Street, N.W.

Suite 1200

Washington, D.C. 20005

(202) 822-9320

Attorneys for Petitioners
June 21, 1993

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

QUESTION PRESENTED

Do the plaintiff banks, which assert that they com-
pete with credit unions and which have sued to chal-
lenge the National Credit Union’s interpretation of
the ‘“‘common bond” provision of the Federal Credit
Union Act, Satisfy the “zone of interest” test for
prudential standing even though

a) the D.C. Circuit ruled that banks were not
among the intended beneficiaries of the Act
or of the common bond provision;

b) the D.C. Circuit ruled that the general purpose
of the FCUA was to promote the growth of
credit unions; and

c) Congress did not even arguably intend the
common bond provision to limit competition
between banks and credit unicns?

ii

LIST OF PARTIES
The parties below included the following:

The National Credit Union Administration
(“NCUA”), defendant in the district court and ap-
pellee below, is the agency charged with the admin-
istration and enforcement of the Federal Credit Union
Act.

Lexington State Bank, Predmont State Bank, Ran-
dolph Bank and Trust Company and Bankers Trust
of North Carolina joined the First National Bank and
Trust Company in bringing this action against the
NCUA, as did the American Bankers Association.
These parties were plaintiffs in the district court and
appellants below.

AT&T Family Federal Credit Union (‘Family Fed-
eral’) is a corporation organized and existing under
federal law pursuant to the Federal Credit Union Act.
Its purpose is to promote thrift among its members
and to create a source of credit for productive pur-
poses. Credit Union National Association (‘“‘CUNA’’)
is a trade association consisting of fifty-two credit
union leagues. Its purposes include the representation
of the interests of credit unions with respect to leg-
islative and regulatory matters. Family Federal and
CUNA (collectively the “Credit Unions’) were per-
mitted to intervene as defendants in the district court
and were appellees below. They submitted briefs on
the standing issue presented here in both the district
court and the court of appeals. Neither Family Fed-
eral nor CUNA have any parent companies or sub-
sidiaries.

iil

The North Carolina Alla
cial Institutions fi

appellants in the

ance of Community Finan-
led an amicus brief on behalf of the
proceedings before the Court of

Appeals for the District of Columbia Circuit.

iv

TABLE OF CONTENTS

Page
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TARE GE TATTIITTTED vccccssetnscrsancinsisngrsssnsinsianininns Vv
CI TEI rasrettrsnetnercinenreceecctenareieetieiine 1
SOI sisiisitietnicciniihaisiansinniilldstiinssiiianinounneiiaminens 2
RELEVANT STATUTES AND REGULATIONS ............0.+ 2
EATER CR TUE GR wiccccsencsncnicasivincinaniteinnins 3
BASIS FOR FEDERAL JURISDICTION IN THE COURT OF
ED SCAT pisisinnssencnisidiaiadsieniinidineniies
REASONS FOR GRANTING THE WRIT ...........:sscceeeeeees 6
I. The D.C. Circuit’s Opinion is Contrary to
Supreme Court Precedents ..............c.cceeeeeeee 6
II. The D.C. Circuit’s Opinion Creates a Conflict
Sy GR Ce Cai cciaceececacieectistinesinenscainnsanas 14
III. Important Questions are Raised .................. 16
A. For Litigants Generally ...................sese00 16
es eC CI caeesctacnsetestieenisssancremcerss 16

OE ce has eeeiaedalsactaataamaocrninias 18

TABLE OF AUTHORITIES

Cases: Page
Air Courier Conference v. American Postal Workers

Union, 498 U.S. 517 (1991) veces... 6-7,9-11,14-16
Association of Data Processing Orgs. v. Camp, 397

ee. BO CIID ccsivicsnenibicabiticnnniiciainiae 7-8,11-12,14
Block v. Community Nutrition Inst., 467 U.S. 340

A cian NE EC SATS ie ON 8

(RHE sista ncetvediacnissnbiensimiceetaisdecudusacsc. 8

cece! Sen AE at 5,7-9,11-12,14-16

First Nat’l Bank & Trust Co. v. National Credit
Union Admin., 772 F. Supp. 609 (D.D.C.
NUAD sticshstnvivistiesiiiinssiinsinatiaicainigiiaDicaasiecs. ce. 3-4

First Nat’l Bank & Trust Co. v. National Credit
Union Admin., 988 F.2d 1272 (D.C. Cir.

POP taecapmaasibbliteicoiee ae Ls, 4-5,8,11,13-15
Hardin v. Kentucky Utils. Co., 390 U.S. 1
CRUD Satis cenhanensicicelanshcbdchincsibntiibdtranndiansaieecc. cs... 8

MTD Streit sitaaiasnaiaetab shctitintbaneeaetianiiaxarsipien aed 8
Investment Co. Inst. v. Camp, 401 U.S. 617

PIE Niilalniiassns bitches tise 11-12,14
Lujan v. National Wildlife Federation, 497 U.S.

Pe ND chneiilll etsnsucaibiilisstiddaticnnniansidenaceccc.c., 10
Warth v. Seldin, 422 U.S. 490 SID sthcidéaiarcecceseen 6
Statutes:

Preamble to Federal Credit Union Act
Pub. L. 73-467, 48 Stat. 1217
eeain: ST en OC DN 17

Table of Authorities Continued

Page
Be ees OW seccndcsreannaas iniaiscacesdabieanenenanenaaiies 12
NR cts sacs saeniaphsebhaakenabhencoieans 12
88 ED i. RR eo ee OD 2-3
Se ht nem enr cre Maan 2

SO eh BUND cis cceniaisdiasdsaanseancksnsbenvenssacninnen 6

IN THE

Supreme Court of the Gnited States
OCTOBER TERM, 1992

No. ____

AT&T Fami.y FEDERAL CREDIT UNION and
CREDIT UNION NATIONAL ASSOCIATION, INC.,
Petitioners,
a

FIRST NATIONAL BANK & TRUST Co., et al.,
Respondents.

Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The District Of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

OPINIONS BELOW

1. First Nat’l Bank & Trust Co. v. National Credit
Union Admin., 772 F. Supp. 609 (D.D.C. 1991), see
App. 16a-25a.

2. First Nat’l Bank & Trust Co. v. National Credit
Union Admin., 988 F.2d 1272 (D.C. Cir. 1993), see
App. la-15a.

JURISDICTION

On April 2, 1993, the District of Columbia Circuit
reversed the district court’s dismissal of the plaintiff
banks’ action on the grounds of prudential standing.
Neither the Credit Unions nor the NCUA sought re-
hearing.

This Court has jurisdiction of this matter pursuant
to 28 U.S.C. § 1254(1). Both CUNA and Family Fed-
eral are “‘parties’”’ to this action within the meaning
of § 1254(1), having been granted leave to intervene
in the district court by order entered on April 25,
1991. They joined in, and filed a brief in support of,
NCUA’s motion to dismiss for lack of standing and
briefed the standing issue presented here in the court
of appeals.

RELEVANT STATUTES AND REGULATIONS

The Administrative Procedure Act, 5 U.S.C. § 702,
provides in pertinent part that

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.

The ‘‘common bond” provision of the Federal Credit
Union Act, 12 U.S.C. § 1759, reads, in pertinent part,
as follows:

Federal credit union membership shall be lim-
ited to groups having a common bond of oc-
cupation or association, or to groups within
a weil-defined neighborhood, community or
rural district.

‘

STATEMENT OF THE CASE

Five banks and the American Bankers Association
(collectively, the ‘‘Banks’’) brought this action against
the National Credit Union Administration (“NCUA”)
challenging NCUA’s approval of certain amendments
of the charter of the AT&T Family Federal Credit
Union (“Family Federal”). These amendments ex-
panded Family Federal’s field of membership to in-
clude various additional employee groups to which
credit union services would not otherwise be available.
The Banks claim that these charter amendments vi-
olate the ‘common bond” requirement of the Federal
Credit Union Act, which states that “federal credit
union membership shall be limited to groups having
a common bond of occupation or association. ...”’ 12
U.S.C. § 1759. The Banks seek a declaratory judg-
ment that the charter amendments at issue are null
and void, and an injunction prohibiting the NCUA
from approving similar charter amendments in the
future.

Family Federal and Credit Union National Asso-
ciation (““CUNA”), a trade association consisting of
fifty-two credit union leagues, were permitted to in-

tervene in the case as parties defendant on April 25,
1991.

On August 9, 1991, the district court dismissed the
banks’ action on the grounds that the banks lacked
prudential standing to challenge the NCUA actions
at issue. First Nat’ Bank & Trust Co. v. National
Credit Union Admin., 772 F. Supp. 609 (D.D.Cc. 1991),
See App. 16a. The Court utilized a two-part test for
determining whether the plaintiff banks were within
the “zone of interest’’ of the common bond provision

of the Federal Credit Union Act. First, the Court
determined that banks were not “intended benefici-

: ”

aries” of the common bond provision:

[T]he Act was passed to establish a place for
credit unions within the country’s financial
market, and specifically not to protect the
competitive interest of banks ... Nor was
the common bond requirement included in the
Act to protect banks. Instead, it was de-
signed to ensure that credit unions remain
responsive to those they were designed to
serve.

772 F. Supp. at 612, App. 22a.

Second, the district court applied a “suitable chal-
lenger’’ standard that the D.C. Circuit had articulated
in several other cases. The D.C. Circuit’s “suitable
challenger’ test permits plaintiffs who are not in-
tended beneficiaries of the statute in question to sue
if their interests merely ‘“‘coincide’’ systematically with
the interests which Congress did intend to protect
and if their suits will not frustrate the purposes of
the statute. Using the test, the district court found
that banks were not suitable challengers to agency
decisions about the common bond provision, because

[T]he interests of banks will rarely, if ever,
coincide with those of credit unions, the in-
terest which Congress did intend to pro-
ae

772 F. Supp. at 612, App. 28a.

The D.C. Circuit reversed. First Nat’l Bank & Trust
Co. v. National Credit Union Admin., 988 F.2d 1272
(D.C. Cir. 1993), See App. la. The Circuit agreed with

‘aia

5

the district court that “Congress did not, in 1934
[when the common bond provision was enacted as
part of the Federal Credit Union Act], intend to shield
banks from competition from credit unions.” 988 F.2d
at 1275, App. 7a. To the contrary, it found this notion
anomalous because Congress’ “general purpose was
to encourage the proliferation of credit unions, which
were expected to provide service to those would-be
customers that banks disdained.” 988 F.2d at 1275,
App. 7a. The common bond provision was the “‘ce-
ment that united credit union members in a cooper-
ative venture and was, therefore, thought important
to credit unions’ continued success.” Jd. at 1276, App.
7a.

The D.C. Circuit then went on to consider what it
described as the “more subtle” question whether
banks could be considered “suitable challengers” to
enforce the common bond provision. 988 F.2d at 1276,
App. 8a. It concluded that the interests of banks were
sufficiently congruent with the interests protected by
the common bond provision for the court to allow the
suit. The Circuit stated that Branch Bank & Trust
Co. v. National Credit Union Admin., 786 F.2d 621
(4th Cir. 1986), cert. denied, 479 U.S. 1063 (1987),
an identical case where the Fourth Circuit ruled that
banks lacked Standing, had been “emptie[d] of its per-
Suasiveness” by Clarke v. Securities Industry Assn.,
479 U.S. 388 (1987) with its “explication of the suit-
able challenger route to Standing... .” 988 F.2d at
1277, n.3, App. 10a, n.3.

BASIS FOR FEDERAL JURISDICTION
IN THE COURT OF FIRST INSTANCE

Original jurisdiction was vested in the District Court
pursuant to 28 U.S.C. § 1331 (federal question juris-
diction). For purposes of the Credit Unions’ motion
to dismiss only, the Credit Unions have not challenged
the Banks’ claims that the Article III jurisdictional
requirements are met.!

REASONS FOR GRANTING THE WRIT

This Court should grant the credit unions’ petition
and review the District of Columbia Circuit’s opinion
on writ of certiorari because the opinion conflicts with
applicable Supreme Court precedents and creates a
conflict in the circuits, and because important ques-
tions are raised.

I. The D.C. Circuit’s Opinion Is Contrary to Supreme
Court Precedents

Certiorari should be granted, first, because the D.C.
Circuit has reached a result that extends the test for
prudential ‘‘zone of interest’’ standing beyond the lim-
its set by applicable Supreme Court precedents.? The

‘For purposes of ruling on a motion to dismiss for lack of
standing, the Court must take all material allegations of the
complaint as true and construe the complaint in favor of the
complaining party. Warth v. Seldin, 422 U.S. 490, 501 (1975).

2 The ‘‘zone of interest’’ standard is the second element of a
two-part test for standing. A plaintiff suing under the Admin-
istrative Procedure Act, 5 U.S.C. § 702, must show, first, that
it has suffered injury in fact and thus has been adversely af-
fected or aggrieved by agency action. Then, a plaintiff must
establish that it is within the zone of interest to be protected
by the relevant statute. See Air Courier Conference v. American
Postal Workers Union, 498 U.S. 517, 523 (1991).

a

7

D.C. Circuit agreed with the district court that Con-
gress did not intend the FCUA to protect the inter-
ests of banks like the plaintiffs. However, without
even mentioning Air Courier Conference v. American,
Postal Workers’ Union, 498 U.S. 917 (1991), which
denied standing because intent to benefit the
plaintiffs’ interests had not been established, it never-
theless held that the banks met the “zone of interest’
test and had standing to sue. It relied upon what it
considered to be an alternative route to standing
which it traced to a footnote in Clarke v. Securities
Indus. Assn., 479 U.S. 388 (1987). The D.C. Circuit
held that it was enough for standing if the banks’
interests were sufficiently congruent with those of the
intended beneficiaries that they were not more likely
to frustrate than to further the objectives of the Fed-
eral Credit Union Act.

This alternative approach to standing is inconsistent
with the zone of interest test because it substitutes
a functional standard for the intent standard estab-
lished in prior Supreme Court case law. Under the
zone of interest test, congressional intent to protect
interests including those of the potential plaintiff is
the critical determining factor for prudential standing.
Standing is permitted where “the interest sought to
be protected by the complainant is arguably within
the zone of interests to be protected or regulated by
the statute or constitutional guarantee in question.’’
Association of Data Processing Orgs. v. Camp, 397
U.S. 150, 153 (1970). The phrase “to be protected”’
establishes that congressional intent to protect is at
the core of the zone of interest approach.

*The prior cases cited by the Court in Data Processing as

According to the D.C. Circuit, footnote 12 in the
Clarke decision, 479 U.S. at 397, established an al-
ternative zone of interest analysis that obviates the
need to show congressional intent to protect. See First
Nat’l Bank and Trust Co. v. National Credit Union
Admin., 988 F.2d 1272, 1279 (D.C. Cir. 1993). The
pertinent part of the Clarke footnote states:

However, the concern that the plaintiff be
‘reliable’ carries over to the ‘zone of interest’
inquiry, which seeks to exclude those
plaintiffs whose suits are more likely to frus-
trate than to further statutory objectives.‘

Clarke, 479 U.S. at 397, n.12.

“closely analogous” also demonstrate that congressional intent
with respect to interests to be protected is conclusive. See Chi-
cago v. Atchison, T&S.F.R. Co., 357 U.S. 77, 83-84 (1958) and
Hardin V. Kentucky Utils. Co., 390 U.S. 1 (1968). As the Data
Processing court recognized, both of these cases held that
plaintiffs had standing to sue where the statutory provision at
issue was designed to protect their interests. See Data Process-
ing, 397 U.S. at 154-5 (In Atchison, an “existing entrepreneur
had standing to challenge the legality of the entrance of a new-
comer into the business, because the established business was
allegedly protected by a valid city ordinance,” while Hardin
involved ‘‘a section of the TVA Act designed primarily to protect
... private utilities against TVA competition”). Similarly, in
Block v. Community Nutrition Inst., 467 U.S. 340 (1984), the
Supreme Court stated that the essential inquiry is whether Con-
gress “‘intended for [a particular] class [of plaintiffs] to be relied
upon to challenge agency disregard of the law.”’ Jd. at 347.

‘Citing the same footnote in Hazardous Waste Treatment
Council v. Thomas (“HWTC IV”), 885 F.2d 918 (D.C. Cir. 1989),
the D.C. Circuit described suitable challengers as “‘parties whose
interests, while not in any specific or obvious sense among those
Congress intended to protect, coincide with the protected inter-
ests.”” Id. at 922.

ee

The Credit Unions assert that the D.C. Circuit has
misread and misapplied Clarke. In footnote 12, the
Clarke Court was only describing the purpose of the
zone of interest test; it was not creating a new route
to standing. Indeed, Clarke itself expresses the pri-
macy of congressional intent: “[A]t bottom the re-
viewability question turns on congressional intent, and
all indicators helpful in discerning that intent must
be weighed.” Clarke at 400.

It is apparent from the D.C. Circuit’s language that
under its approach, it is possible for a party to be
granted standing where it is seeking to advance in-
terests that Congress never intended to protect. In
effect, it permits a court to substitute its judgment
for that of Congress in deciding which suits are to
be allowed. This is directly inconsistent with the prin-
ciple at the heart of the zone of interest test.

In Air Courier, decided several years after Clarke,
this Court again stressed that congressional intent to
protect is the touchstone for determining whether
plaintiffs meet the zone of interest test. It stated,
“We must inquire, then, as to Congress’ intent in
enacting the PES in order to determine whether
postal workers were meant to be within the zone of
interests protected by those statutes.” 498 U.S. at
524 (emphasis added). There, the Court reversed a
decision of the D.C. Circuit that had upheld standing.
The action had been brought by unions representing
postal workers. They challenged Postal Service reg-
ulations that had the effect of reducing revenues. The
Unions asserted that they would be injured by the
regulations because reduced revenues would lead to
the loss of jobs.

10

The D.C. Circuit’s rationale in allowing standing in
Air Courier was that there was a plausible relation-
ship between the revenue protective provisions of the
relevant postal statutes and the plaintiffs’ interests
in preventing the loss of jobs. The Supreme Court,
however, said that the D.C. Circuit’s view was ‘“‘mis-
taken,’”’ and that this was not enough to confer stand-
ing because it conflated injury in fact with the zone
of interest test. 498 U.S. at 524. The former looks
at the effect of regulatory activity, while the latter
looks at congressional intent.’ Thus, in its analysis,
the Supreme Court focused single-mindedly on
whether Congress intended to protect the plaintiff
postal workers. It did not indulge any presumption
in favor of standing.®

It is true that in some cases Congress has not
expressed its intent in an explicit way. In those cir-
cumstances, the role of the court is to seek to infer
congressional intent from the language of the statute,

5 The court illustrated this point by referring to the “‘Lujan
hypothetical,’’ which showed how “‘injury in fact does not nec-
essarily mean one is within the zone of interests to be protected
by a given statute.” Air Courier, 498 U.S. at 524. In Lwan v.
National Wildlife Federation, 497 U.S. 871 (1990), this Court
posited the failure of an agency to comply with a statutory
provision requiring its hearings to be transcribed. This would
have an adverse effect on a transcribing company. Although the
company would be affected by the agency’s action, it would not
be entitled to sue because the provision had not been “enacted
to protect [its] interests.”” Air Courier, 498 U.S. at 524, citing
Lujan, 497 U.S. at 883.

® The D.C. Circuit did not address Air Courier in its opinion
although the Credit Unions had relied upon it to support their
argument that the plaintiff banks were required to show Con-
gress’ intent to benefit their interests.

|

11

its overall purposes, and its legislative history. How-
ever, inferring congressional intent is far removed
from the D.C. Circuit’s approach, where the decision
to grant standing is based on an assessment of
whether the litigants have interests congruent with
the class Congress actually intended to protect and
whether the plaintiffs are more likely to frustrate or
advance the statutory objectives.

In the present case, as in Air Courier, the D.C.
Circuit failed to focus on the intent of the statute
under review and it reached a result inconsistent with
Supreme Court precedents. It interpreted Clarke, as
well as Data Processing and Investment Co. Inst. v.
Camp (“ICI’’), 401 U.S. 617 (1971), prior “competitor
Standing”’ cases, as Supporting the conclusion

[T]hat a plaintiff who has a competitive in-
terest in confining a regulated industry within
certain congressionally imposed limitations
may sue to prevent the alleged loosening of
those restrictions, even uf the plaintiff's in-
terest 1s not precisely the one that Congress
sought to protect.

988 F.2d at 1277, App. 9a-10a (emphasis added).

This conclusion ignores congressional intent entirely
and represents an extension of Data Processing, ICI
and Clarke. Each of these cases, unlike the present
one, arose under statutes that reflected clear congres-
sional intent to limit the competitive reach of the
regulated entities. It was for that reason that, in
each, the Court correctly held that the plaintiffs’ com-
petitive interests at least arguably were within the
zone of interest Congress intended to protect.

12

Clarke involved Sections 81 and 36(c) of the Na-
tional Bank Act (12 U.S.C. §§ 81, 36). Section 81
explicitly “limits the general business” of a national
bank to its headquarters and any branches permitted
by 36(c); 36(c) allows branching only in a bank’s home
state and only to the extent permitted under state
law. 479 U.S. at 391. The Court in Clarke concluded
that Congress arguably had legislated against the
competition being challenged by the plaintiff brokers,
and that there was reason to infer that Congress
intended the plaintiffs’ class to be relied upon to chal-
lenge agency action. 479 U.S. at 403.

In Data Processing, the statute at issue (Section 4
of the Bank Service Corporation Act) stated, ‘‘ ‘No
bank service corporation may engage in any activity
other than the performance of bank services for
banks.’ ”’ 397 U.S. at 155. Similarly, JCJ interpreted
the Glass-Steagall Act, where the relevant statutory
language stated that a national bank ‘“‘shall not un-
derwrite any issue of securities or stock’’ and shall
not purchase ‘‘for its own account ... any shares of
stock of any corporation ....” 401 U.S. at 634. In
ICI, the Court stated that in the case before it as
well as in Data Processing, Congress had arguably
legislated against the competition that the plaintiffs
sought to challenge. 401 U.S. at 620.

In short, in the prior competitor standing cases,
the Supreme Court has inferred a congressional intent
to permit competitors to sue based upon the conclu-
sion that Congress arguably had legislated against the
competition being challenged by the competitors, and
has held that the zone of interest test was satisfied
as a result.

13

The present case is different. There is no basis to
infer an intent to permit bank competitors to sue
because it is clear that Congress was not even ar-
guably legislating against competition. The general
purposes of the FCUA and the Specific purpose of
the common bond provision support this conclusion.

The D.C. Circuit recognized that the general pur-
pose of the FCUA was to encourage the growth of
credit unions and it said that it was “‘anomalous’’ to
believe that it was intended to shield banks from
credit union competition. 988 F.2d at 1275, App. 7a.
It observed that it wasn’t until credit unions became
successful that bankers began to see the common bond
provision as a potential limitation on credit union ex-
pansion. Id. at 1276, App. 8a. Similarly, the Court of
Appeals for the Fourth Circuit in Branch Bank &
Trust Co. v. National Credit Union Admin., 786 F.2d
621 (4th Cir. 1986), cert. denied, 479 U.S. 1063 (1987),
ruled that the federal credit union system was estab-
lished as an alternative to an unacceptable credit
structure that included banks. It said that the general
purpose of the FCUA Suggested not that Congress
desired to protect banks, but rather that Congress
deliberately sacrificed the competitive interests of
banks to the goal of making credit more available to
people of limited financial means. 786 F.2d at 626.

Neither is there anything in the common bond pro-
vision itself suggesting an intent to protect or benefit
banks. While the effect of the common bond provision
may be to limit competition if the banks’ interpre-
tation of it were adopted, this clearly was not its

14

fore, thought important to credit unions’ continued
success.”’ 988 F.2d at 1276, App. 7a. The Fourth Cir-
cuit expressed a similar view in Branch Bank:

There is no evidence from any source cited
to this court that Congress also intended by
this provision to protect the competitive in-
terests of banks. Given the specific rationale
for the common bond requirement, we will
not attribute to it a meaning that is at cross
purposes with the general goals of the stat-
ute. If the NCUA were seen to violate the
common bond requirement to the detriment
of union members, they would possess stand-
ing to sue. The banks, by virtue of the stat-
ute, simply do not occupy a similar position.

786 F.2d at 626.

In sum, neither the general purpose of the FCUA
nor the specific purpose of the common bond provi-
sion supports an inference that Congress arguably
legislated against the competition now being chal-
lenged by the banks or that it otherwise intended
that banks’ interests be within the zone of interests
to be protected. Indeed, as the Fourth Circuit stated,
the most reasonable inference is directly to the con-
trary. If the D.C. Circuit had adhered faithfully to
Data Processing, ICI, Clarke and Air Courier, it
would have affirmed rather than reversed the district
court.

II. The D.C. Circuit’s Opinion Creates A Conflict In
The Circuits

The second reason why certiorari should be granted
is to resolve the conflict between the results reached
by the D.C. Circuit in this case and by the Fourth

15

Circuit in Branch Bank. As stated above, Branch
Bank and this case are identical] in all relevant re-
spects except the outcome.

The D.C. Circuit chose not to follow Branch Bank
although it agreed with its conclusions concerning the
overall purposes of the Act generally and of the com-
mon bond provision in particular. It also agreed with
the Fourth Circuit that banks were not intended be-
neficiaries of the Act. However, it stated that it be-
lieved that the “subsequent explication of the suitable
challenger route to standing in Clarke,” 988 F.2d at
1277, n.3, App. 10a, n.3, provided an alternative basis
for standing that the Fourth Circuit had not consid-
ered.

For the reasons discussed above, the Credit Unions
assert that the D.C. Circuit has misinterpreted Clarke,
created a new basis for standing where none was
intended, and extended the reach of the prior com-
petitor standing cases. Thus, Clarke did not “expli-
catje] ... the suitable challenger route to standing.’
The D.C. Circuit incorrectly distinguished Branch
Bank from the instant case on this basis, and there
is therefore a split in the circuits.

In addition, the D.C. Circuit was wrong in criticiz-
ing the Fourth Circuit’s exclusive focus on the issue
whether Congress intended that banks interests be
protected under the FCUA. As stated above, this
analysis is at the core of the zone of interests test.
Indeed, the Fourth Circuit followed exactly the same
approach that the Supreme Court utilized when it
reversed the D.C. Circuit in Air Courier. Both fo-
cused exclusively on whether Congress intended to
protect the interests of the plaintiffs who brought the
action.

16

III. Important Questions Are Raised

This petition raises special and important questions
for litigants generally and for credit unions in par-
ticular.

A. For Litigants Generally

Whether ‘‘zone of interest’ standing exists is a
consideration in many challenges to agency and other
governmental action. Even if it is not clear that the
D.C. Circuit misconstrued applicable Supreme Court
precedents, it is apparent that substantial confusion
exists with respect to the nature of the zone of in-
terest test and that the law on this important issue
requires clarification.

The D.C. Circuit has adopted an alternative test
for zone of interest standing which it calls the “‘suit-
able challenger’’ route to standing. It eliminates a
plaintiff's need to show any congressional intent to
protect its interests. The D.C. Circuit bases this ap-
proach on the Supreme Court’s decision in Clarke. It
has continued to utilize this approach notwithstanding
the fact that subsequently, in Air Courer, the
Supreme Court ruled that plaintiffs did not have
standing to sue absent a showing of congressional
intent to protect their interests. Addressing this ap-
parent conflict would assist other litigants and other
courts.

B. For Credit Unions

The issues raised are particularly important to
credit unions and their members.

In passing the Federal Credit Union Act in 1934
in the midst of the Great Depression, Congress was
seeking to ‘‘make more available to people of small

17

means credit for provident purposes.” Preamble to
Federal Credit Union Act. Pub. L. 73-467, 48 Stat.
1217 (1934). Credit unions have continued to serve
these goals, providing access to credit and a means
of saving for millions of Americans.

The decision of the District of Columbia Circuit is
likely to have a major impact on the ability of credit
unions to continue to provide services to their mem-
bers. If this decision is allowed to stand, banks will
be permitted to challenge every amendment to every
credit union’s charter, since all charter amendments
must comply with the common bond provision. In fact,
within six weeks of the issuance of the D.C. Circuit’s
opinion, a group of banks filed suit against the NCUA
in federal district court in Michigan, alleging that the
charter amendments of a local credit union were void
for failure to comply with the common bond provision.
The resulting increase in the burdens on both credit
unions and the NCUA is likely to be substantial.

Moreover, this decision will affect credit unions re-
gardless of where they are located, since NCUA ap-
provals can always be challenged in the District of
Columbia Circuit. For these reasons, this decision,
although it expresses the law of only one circuit, will
affect the interests of credit unions nationwide.

18

CONCLUSION

For the reasons stated above, the Credit Unions
submit that this case is a compelling one for Supreme
Court review. The Credit Unions respectfully request
that this Court grant their petition and review the
decision in this case on writ of certiorari.

Respectfully submitted,

PAUL J. LAMBERT
(Counsel of Record)

TERESA BURKE

BINGHAM, DANA & GOULD

1550 M Street, N.W.

Suite 1200

Washington, D.C. 20005

Attorneys for Petitioners
June 21, 1993

la

APPENDIX A

UNITED STATES COURT OF APPEALS
DISTRICT OF COLUMBIA CIRCUIT

Nos. 91-5262, 91-5336

FIRST NATIONAL BANK AND TRUST COMPANY, et al.,
Appellants,

v.
NATIONAL CREDIT UNION ADMINISTRATION, et al.

FIRST NATIONAL BANK AND TRUST COMPANY, et al.,
Lexington State Bank,
Appellants,

v.
NATIONAL CREDIT UNION ADMINISTRATION

Argued Nov. 16, 1992
Decided April 2, 1993

*_ ses *& &

Michael S. Helfer, with whom William J. Kolasky, Jr.,
John J. Gill, and Michael F. Crotty, were on the brief, for
appellants.

Jonathan R. Siegel, Atty., Dept. of Justice, with whom
Stuart M. Gerson, Asst. Atty. Gen., Jay P. Stephens, U.S.
Atty., and Douglas N. Letter, Atty., Dept. of Justice, were
on the brief, for appellees.

Edward C. Winslow and William C. Scott were on the
brief, for amicus curiae North Carolina Alliance of Com-
munity Financial Institutions.

2a

Before: WALD, SILBERMAN, and D.H. GINSBURG, Cir-
cuit Judges.

Opinion for the Court filed by Circuit Judge SILBER-
MAN.

Concurring opinion filed by Circuit Judge WALD.
SILBERMAN, Circuit Judge:

Appellants, four North Carolina banks and the American
Banking Association, challenged the National Credit Union
Administration’s (NCUA) approval of several recent appli-
cations by AT & T Family Federal Credit Union (AT &
T Family) to expand its membership. According to
appellants, the NCUA’s decisions violated the requirement
of the Federal Credit Union Act (FCUA) that membership
in federal credit unions be limited to “groups having a
common bond of occupation or association.” 12 U.S.C.
§ 1759. The banks complain that, by allowing AT & T
Family improperly to extend its membership and thereby
its number of potential borrowing customers, the NCUA
has made the credit union a formidable competitor. The
district court applied the ‘‘zone of interests” tests for pru-
dential standing and determined that appellants lacked
standing to sue. Although we agree with the district court
that the appellants were not intended beneficiaries of the
FCUA, we think that they are suitable challengers because
the statute arguably prohibits the competition of which
they complain. This case thus falls within the rationale of
Clarke v. Securities Industry Association, 479 U.S. 388,
107 S.Ct. 750, 93 L.Ed.2d 757 (1987), and Investment Com-
pany Institute v. Camp, 401 U.S. 617, 91 S.Ct. 1091, 28
L.Ed.2d 367 (1971). We reverse and remand to the district
court.

i.

Passed in 1934 in the midst of the Great Depression,
the FCUA, 12 U.S.C. §§ 1751-1795k (1988), was designed

3a

to improve access to credit for people of ‘small means.”
S.REP. No. 555, 73d Cong., 2d Sess. 1 (934). For many
working Americans, credit at reasonable rates had essen-
tially disappeared in the years following the stock market
crash. Lacking the security necessary to obtain loans from
banks, working Americans turned to loan sharks who typ-
ically charged usurious interest rates, which was thought
to reduce the overall purchasing power of American con-
sumers. See 78 Conc.REc. 12,223 (1934). Congress saw
the solution to this problem in a system of federal credit
unions that would provide credit at reasonable rates and
thus would help spur economic recovery. See id. at 7260,
12,223-25.

To ensure that credit unions fulfilled their purpose of
meeting members’ credit needs, Congress restricted credit
unions’ management and business activities. For example,
a federal credit union is owned and controlled by its mem-
bers, see 12 U.S.C. §§ 1757-1761, and it can make loans
only to members or to other credit unions, see id. § 1757(5).
Congress expected that such measures guaranteeing dem-
ocratic self-government would infuse the credit union with
a spirit of cooperative self-help and ensure that the credit
union would remain responsive to its members’ needs.

A related provision of the FCUA, the common bond re-
quirement, is at the heart of this case. Section 109 of the
Act restricts membership in federal credit unions to
“groups having a common bond of occupation or associ-
ation.” 12 U.S.C. § 1759. For much of the Act’s history,
the NCUA interpreted this provision to require all members
of a credit union to share the same bond. In the 1980s,
however, the NCUA issued a series of Interpretive Ruling
and Policy Statements (IRPS) construing the statute to
allow a number of different groups, each having its own
bond, to form a credit union, even though no overall com-
mon bond united the different groups. See 47 Fed.Reg.
26,808 (1982) (IRPS 82-3); 48 Fed.Reg. 22,899 (1983); 49
Fed.Reg. 46,536 (1984) (IRPS 84-1); 54 Fed.Reg. 31,165

4a

(1989) (IRPS 89-1). The NCUA’s most recent interpretation,
IRPS 89-1, made clear that a credit union could comprise

a “combination of distinct, definable occupational and/or
associational groups.” 54 Fed.Reg. 31,165, 31,170 (1989).

Appellants challenged several decisions in which the
NCUA applied IRPS 89-1 to approve applications by AT &
T Family to expand its field of membership. Until recently,
AT & T Family’s membership consisted primarily of em-
ployees of AT & T Technologies, Inc., AT & T Network
Systems, and Bell Telephone Labs. In late 1989 and 1990,
AT & T Family filed eight applications to extend its mem-
bership to include groups of employees from other com-
panies such as the American Tobacco Company, Western
Auto Supply Company, and WGHP-TV, to name but a few.
In all, the NCUA approved the extension of AT & T Fam-
ily’s membership to 16 new employee groups. Appellants
claimed before the agency and in the district court that
IRPS 89-1, ignored the statutory language by allowing
groups lacking any common bond between them to join
together in a credit union. The banks contended that by
allowing AT & T Family to expand to 71,000 members in
violation of the statute, the NCUA has allowed the credit
union, which is exempt from state and federal income
taxes, see 12 U.S.C. § 1768, to become a formidable com-
petitor to banks.

The district court granted NCUA’s motion to dismiss for
lack of standing. The court determined that appellants were
not pressing claims ‘‘arguably within the zone of interests’
protected by the FCUA. See First Nat’l Bank & Trust Co.
v. National Credit Union Admin., 772 F.Supp. 609, 611-
13 (D.D.C. 1991). Relying on the language of this court’s
post-Clarke decisions on prudential standing,f see, e.@.,
Hazardous Waste Treatment Council v. Thomas, 885 F.2d
918 (D.C.Cir. 1989) (HWTC IV); Hazardous Waste Treat-
ment Council v. United States Envtl. Protection Agency,
861 F.2d 277 (D.C.Cir. 1988), cert. denied, 490 U.S. 1106,
109 S.Ct. 3157, 104 L.Ed.2d 1020 (1989) (HWTC ID, the

Eo

5a

district court said that “{t]hose not regulated by an agency
have standing only if they are the intended beneficiaries
of the specific statute or are nonetheless ‘suitable chal-
lengers’ to the statute, because their interests coincide
with the interests which Congress did intend to protect.”’
First Nat'l Bank, 772 F.Supp. at 611. The banks were
not intended beneficiaries of the Act, thought the district
court, because “the Act was passed to establish a place
for credit unions within the country’s financial market, and
specifically not to protect the competitive interest of
banks.” Id. at 612; see also Branch Bank & Trust Co. v.
National Credit Union Admin. Bd., 786 F.2d 621 (4th Cir.
1986), cert. denied, 479 U.S. 1068, 107 S.Ct. 948, 93
L.Ed.2d 997 (1987). Under applicable precedent, the dis-
trict court believed that the banks were not suitable chal-
lengers either. Because the banks and the credit union
competed for the same business, any coincidence in their
interests “‘would be at best fortuitous.” First Nat’l Bank,
772 F.Supp. at 612. The banks, according to the district
court, could not rely on the Supreme Court’s cases, see,
e.g., Clarke v. Securities Industry Ass’n, 479 U.S. 388, 107
S.Ct. 750, 93 L.Ed.2d 757 (1987); Investment Co. Inst. v.
Camp, 401 U.S. 617, 91 S.Ct. 1091, 28 L.Ed.2d 367 (1971)
(ICI); Association of Data Processing Serv. Orgs. v. Camp,
397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970), that
granted standing to competitors as suitable challengers
because, unlike the competitors in those cases, the banks
were not suing under an entry-restricting statute. See First
Nat’l Bank, 772 F.Supp. at 613.

II.

It should be noted that no one questions appellants’
Article III standing; that appellants will suffer competitive
or economic injury is not in doubt. The question before us
is whether under the FCUA the banks can claim prudential
standing as well. In other words, are they pursuing an
interest (not just an objective), see HWTC IV, 885 F.2d at

6a

925,! arguably within the zone of interests Congress in-
tended either to regulate or protect, and, thus, are they
among the class of persons entitled to sue to enforce
FCUA’s restrictions? See Clarke, 479 U.S. at 396, 107 S.Ct.
at 755; Data Processing, 397 U.S. at 153, 90 S.Ct. at 829.
This “zone of interests’ test ensures that standing is
granted only to plaintiffs who will not distort congressional
objectives. It excludes those plaintiffs whose “‘interests are
so marginally related to or inconsistent with the purposes
implicit in the statute that it cannot reasonably be assumed
that Congress intended to permit the suit.’ Clarke, 479
U.S. at 399, 107 S.Ct. at 757. Because the banks are not
regulated by the common bond requirement, we must in-
quire whether the banks can be thought to have been
“‘protected’’ by that statutory limitation on the activities
of credit unions. Litigants can qualify as “protected” by
a statute if they are intended beneficiaries of the legis-
lation or are nevertheless what we have termed suitable
challengers, see HWTC IV, 885 F.2d at 923-24; that is, if
their interests are sufficiently congruent with those of the
intended beneficiaries that the litigants are not ‘“‘more
likely to frustrate than to further the statutory objectives.”
Clarke, 479 U.S. at 397 n. 12, 107 S.Ct. at 756 n. 12.

Appellants claim that they qualify both as intended be-
neficiaries and as suitable challengers under the FCUA.
We agree with the district court, however, that Congress
did not, in 1934, intend to shield banks from competition
from credit unions. Indeed, the very notion seems anom-
alous, because Congress’ general purpose was to encourage
the proliferation of credit unions, which were expected to
provide service to those would-be customers that banks
disdain. See 78 Conc.REc. 7259 (1934) (statement of Sen.
Barkley) (‘({BJank[s] ... cannot extend credit to many of

‘In HWTC IV, we emphasized that “‘it is the interests that the
challenger seeks to protect and not the challenge with which we must
be concerned.” HWTC IV, 885 F.2d at 925.

7a

these people, because they do not have the required se-
curity.”’); id. at 12,225 (statement of Rep. Luce) (noting
that credit unions would serve those “who do not use and
cannot use banks ... for small borrowings’’). The common
bond requirement, an existing characteristic of state credit
unions, was designed, in combination with the restriction
that permitted credit unions to loan only to members, to
ensure that credit unions would effectively meet members’
borrowing needs. It would seem, therefore, that Congress
assumed implicitly that a common bond amongst members
would ensure both that those making lending decisions
would know more about applicants and that borrowers
would be more reluctant to default. That is surely why it
was thought that credit unions, unlike banks, could “loan
on character.”’ See id. at 12,223. The common bond was
seen as the cement that united credit union members in
a cooperative venture, and was, therefore, thought impor-
tant to credit unions’ continued success.2

To be sure, as time passed—as credit unions flourished
and competition among consumer lending institutions in-
tensified—bankers began to see the common bond require-
ment as a desirable limitation on credit union expansion.
To that end, in the 1970s bankers, according to appellants,
became active in lobbying Congress to urge the mainte-
nance of the common bond requirement. But that fact,
assuming it is true, hardly serves to illuminate the intent
of the Congress that first enacted the common bond re-
quirement in 1934. And we find no indication that Con-
gress was, at that earlier time, concerned about the
competitive position of banks.

There remains, however, the more subtle question,
whether banks can be thought suitable challengers to en-

* The Senate report on the bill praised credit unions for their record
of successful service during the Depression, a record that contrasted
sharply with a grim history of bank failures, and attributed the success
largely to credit unions’ self-government and attentiveness to members’
needs. See SEN.REP. No. 555, 73d Cong., 2d Sess. 2-4 (1934).

8a

force a requirement designed to benefit the members—
particularly potential borrowers—of credit unions.
Appellants rely on the Supreme Court’s reasoning in ICI
and Clarke, and it seems to us the parallels between those
cases and the present one are striking. In JCI the securities
industry challenged a ruling by the Comptroller of the
Currency that would have permitted banks to slip the
Glass-Steagall leash and enter what was considered a part
of the securities business. See ICI, 401 U.S. at 618-19, 91
S.Ct. at 1092-93. As the Supreme Court later explained
in Clarke, the Glass-Steagall Act, which limited the se-
curities underwriting and investment activities of banks,
was designed to protect bank depositors from risky bank
activities—not to insulate investment bankers, or indeed,
any noncommercial bankers, from competition. See Clarke,
479 U.S. at 398 & n. 18, 107 S.Ct. at 756 & n. 13. Never-
theless, because the investment bankers pursued interests
congruent with those of the intended beneficiaries, they
were permitted to sue in JCI to enforce Glass-Steagall’s
restrictions on banks.

Similarly, in Clarke the ever-vigilant securities industry
was permitted to challenge a Comptroller decision that
authorized a national bank to offer discount brokerage ser-
vices not only at its established branches, but also at lo-
cations both inside and outside the bank’s home state. The
challenge was based on the McFadden Act, which restricts
the interstate branching of national banks. See Clarke, 479
U.S. at 391, 107 S.Ct. at 752. The Act was designed to
establish competitive equality between national and state
banks and thus to protect smaller banks from competition
from out-of-state leviathans, see First Nat’l Bank v. Walker
Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 497,
17 L.Ed.2d 343 (1966), not to protect investment bankers.
Nevertheless, the investment bankers had standing to sue.
The Supreme Court relied on the correlative congressional
objective of preventing national banks from gaining too
much (“monopoly”) control over credit and money through

9a

“unlimited branching.” Clarke, 479 U.S. at 402, 107 S.Ct.
at 758. Given that general congressional purpose, the Court
thought that the securities industry, which was a compet-
itor at least with respect to discount brokerage services,
was a Suitable challenger. In other words, even though
the Congress that passed the McFadden Act was not at
all concerned with the spread of discount brokerage—only
branch-banking—and the securities industry was a com-
petitor with regard to the former, not the latter, it was
nevertheless permitted to challenge the spread of discount
brokerage through the McFadden Act, again because of
the congruence of plaintiffs’ interests with those of the
intended beneficiaries.

We take from these cases the principle that a plaintiff
who has a competitive interest in confining a regulated
industry within certain congressionally imposed limitations
may sue to prevent the alleged loosening of those restric-
tions, even if the plaintiff’s interest is not precisely the
one that Congress sought to protect.* The limitations may
be restrictions on entry—geographic or product line—or
they might be, as in our case, limitations on growth, which
are akin to entry restrictions. Like more classic entry re-
strictions, the common bond requirement, by limiting a
credit union’s customer base, effectively prevents the credit
union from offering its services and competing in a broader
market.

We previously have recognized the particular signifi-
cance of statutory entry restrictions on prudential stand-

* We cannot agree with the pre-Clarke reasoning of Branch Bank &
Trust Co. v. National Credit Union Administration Board, 786 F.2d
621 (4th Cir. 1986), in which the Fourth Circuit focused exclusively on
the question whether banks’ interests were intended to be protected
under the FCUA and concluded that banks do not have standing under
the FCUA, see id. at 626. The subsequent explication of the suitable
challenger route to standing in Clarke empties the Branch Bank decision
of its persuasiveness.

10a

ing. In HWTC II, we distinguished the case before us from
the Supreme Court’s cases granting standing to compet-
itors (Data Processing, ICI, and Clarke), on the grounds
that it did not involve an “‘entry-restricting’’ statute. See
HWTC II, 861 F.2d at 284. Similarly, in Panhandle Pro-
ducers & Royalty Owners Ass’n v. Economic Regulatory
Administration, 822 F.2d 1105 (D.C.Cir. 1987), we noted
that ‘[c]lompetitors have a seemingly unbroken record of
success in securing standing” in cases involving regulatory
systems that “restrict{[] entry into a particular field or
transaction.”’ Jd. at 1109. Indeed, the district court at-
tempted to distinguish this case from JCI and Clarke on
the grounds that the common bond requirement was not
an entry restriction.‘ See First Nat’l Bank, 772 F.Supp.
at 613.

Appellees, sidestepping the entry-restriction cases, rely
primarily on our refinement of prudential standing analysis
in HWTC IV. In that case, an organization of companies
that treated hazardous waste and marketed products de-
rived from processed waste sued to force the EPA to adopt
stricter environmental regulations on other companies so
as to create a greater market for their own services and
products. We held that HWTC’s interests (irrespective of
its particular objectives in the case before us) were not
sufficiently congruent with those of the intended benefi-
ciaries of the statute to make HWTC a suitable challenger.
See HWTC IV, 885 F.2d at 924. The treatment firms’
interest was in selling more services and equipment to the
regulated companies, and therefore the firms would seek
regulations that would increase demand for their product
regardless of the effects on the statute’s intended bene-

‘We have expressed concern in the past about allowing potential
plaintiffs to gain standing through a facile assertion that they are
enforcing entry-restricting legislation (a concern that again highlights
the importance we have implicitly attached to entry restrictions in
standing cases). See HWTC II, 861 F.2d at 284. This, of course, is not
such a case.

lla

ficiaries. We concluded that to have standing under the
statute, HWTC would have to have shown a systematic
alignment of interests with the statute’s beneficiaries, see
id. at 924, a standard that appellees understandably claim
was stricter than our prior characterization of Clarke as
a test requiring “less than a showing of congressional
intent to benefit but more than a marginal relationship to
the statutory purposes.” HWTC II, 861 F.2d at 283.

Our decision did not rest on a conclusion that the eco-
nomic interests of the treatment first were somehow less
deserving than the environmental interests the statute was
designed to foster; nor was it based on a view that the
firms’ economic incentives were inherently less worthy than
the economic objectives of the securities industry plaintiffs
in JCI and Clarke. On the contrary, the economic moti-
vations could be thought analogous. If the watchword of
the treatment firms in HWTC IV was “treatment is good
and more treatment is better,” HWTC IV, 885 F.2d at
925, it might be said that the watchword of all competitors
with regard to their potential rivals must be “regulation
is good and more restrictive regulation is better.” And
one cannot base standing on one’s mere status as an eco-
nomic beneficiary of government regulation of others. In
Lujan v. National Wildlife Federation, 497 U.S. 87 1, 110
S.Ct. 3177, 111 L.Ed.2d 695 (1990), the Supreme Court
said:

(T]he failure of an agency to comply with a statutory
provision requiring “‘on the record” hearings would
assuredly have an adverse effect upon the company
that has the contract to record and transcribe the
agency’s proceedings; but since the provision was ob-
viously enacted to protect the interests of the parties
to the proceedings and not those of the reporters,
that company would not be “adversely affected within
the meaning’”’ of the statute.

Id. at 883, 110 S.Ct. at 3186.

12a

The distinction between HWTC IV and the Supreme
Court’s Lujan hypothetical on the one hand and JCI and
Clarke on the other must be that in JCJ and Clarke the
potentially limitless incentives of competitors were chan-
nelled by the terms of the statute into suits of a limited
nature brought to enforce the statutory demarcation di-
viding the banking and securities industries. The interests
the securities industry plaintiffs sought to protect were
thus less open-ended and more confined than were the
economic interests pursued in HWTC IV, and as a result
there was a reduced danger of distorting congressional
purpose. By contrast, nothing in the statute in HWTC IV
could ensure that there would be any connection at all
between the treatment firms’ interests and the statutory
purpose. “[TJhere is not the slightest reason to think that
treatment firms’ interest in getting more revenue by in-
creasing the demand for their particular treatment services
will serve [the statute’s] purpose of protecting health and
the environment.” HWTC IV, 885 F.2d at 924. There is,
however, a reason to think that a competitor’s interest in
patrolling a statutory picket line will bear some relation
to the congressional purpose, because the entry-like re-
striction itself reflects a congressional judgment that the
constraint on competition is the means to secure the sta-
tutory end. The restriction connects the economic interests
of competitors to the purposes of the statute and yet con-
strains competitors to a limited role in guarding a congres-
sionally drawn boundary. In these circumstances the
plaintiffs can be thought to have interests ‘“‘systematically
aligned” with those the statute is designed to benefit.

The securities industry plaintiffs in JCJ and Clarke were
not seeking to impose new regulations on banks in areas
unrelated to an existing, specific statutory norm simply to
provide a demand for their services or to weaken banks
as competitors.’ We certainly would not accept as a suit-

’ Perhaps it is also relevant—in considering whether a plaintiff has

a

13a

able plaintiff a party who had only a general economic
interest in harming a competitor and who, accordingly,
sought to impose some new, more onerous regulation upon
that competitor. See, e.g., Calwmet Indus., Inc. v. Brock,
807 F.2d 225, 228 (D.C.Cir. 1986). But, when the plaintiff
seeks to enforce a statutory restriction on his competitor—
a restriction the plaintiff enjoys as well as the statutory
beneficiaries—there is a good deal less risk that recogniz-
ing the plaintiff's standing will lead to a misdirection of
a statutory scheme.

Our reasoning in HWTC Suggests that our reaction
might be different if the banks appeared before us, not
asking to patrol the common bond picket line, but seeking
a new regulation that would squeeze the credit unions into
a smaller market or even eliminate them from the market
altogether. It is unnecessary, however, to extend our hold-
ing into a definitive answer to appellants’ hypotheticals;
we concede that the general issue is devilishly complex.
We feel confident, however, that this case is a good deal
closer to the paradigm of JCI and Clarke than it is to
HWTC, and, therefore, we hold that appellants have stand-
ing. The judgment of the district court is reversed and
the case remanded.

WALD, Circuit Judge, concurring:

The panel opinion’s analysis of precedents on “entry-
restricting” statutes quite correctly concludes that, under
circuit case law, as well as under the Supreme Court’s
directives in Clarke v. Securities Industry Association, 479
U.S. 388, 107 S.Ct. 750, 98 L.Ed.2d 757 (1987), and Jn-
vestment Company Institute v. Camp, 401 U.S. 617, 91

prudential standing, if not Article III standing, see Schlesinger v. Re-
servists Comm. to Stop the War, 418 U.S. 208, 227, 94 S.Ct. 2925,
2935, 41 L.Ed.2d 706 (1974)—to ask whether, as the Supreme Court
may well have in JCI, one can be confident that the intended benefi-
ciaries had sufficient incentive and organizational resources to sue. See
HWTC II, 861 F.2d at 284.

l4a

S.Ct. 1091, 28 L.Ed.2d 367 (1971), plaintiff banks have
standing to challenge the NCUA’s interpretation of the
common-bond requirement. I agree with my colleagues
that, where an entry-restricting or analogous statute is
involved, “‘a plaintiff who has a competitive interest in
confining a regulated industry within certain congression-
ally imposed limitations may do so to prevent the alleged
loosening of those restrictions, even if the plaintiffs in-
terest is not precisely the one that Congress sought to
protect.’’ Panel opinion (‘‘Panel op.’’) at 9.

I originally—and still—disagree, however, with the “‘suit-
able challenger’ test articulated in Hazardous Waste
Treatment Council v. Thomas, 885 F.2d 918 (1989) (HWTC
IV), which requires a ‘‘systematic coincidence,” 1d. at 924,
or ‘‘systematic alignment,” Panel op. at 10, 12, of interests
between the would-be plaintiffs and the statute’s intended
beneficiaries. As I stated at the time, I find this test
without roots either in Supreme Court law! or in the gen-
eral purposes of standing. See HWTC IV, 885 F.2d at 927-
34 (Wald, C.J., dissenting). I recognize, however, that this
test is nonetheless part of our circuit law. In that context,
I agree with the panel opinion that, when an entry-re-
stricting or analogous statute “reflects a congressional
judgment that the restraint on competition is the means
to assure the statutory end,” Panel op. at 11, and plaintiffs
seek only to “enforce the statutory demarcation,” id., be-
tween the beneficiaries of a licensing scheme and their
competitors, plaintiffs clearly satisfy the goal of the “‘suit-
able challenger” test, 2.e., to ensure that plaintiffs are

‘It should be noted that, while the Supreme Court in Clarke v.
Securities Industry Association, 479 U.S. 388, 107 F.Ct. 750, 93 L.Ed.2d
757 (1988), did determine that the securities industry was a “proper
party’’ to challenge the Comptroller’s decision to permit expanded bank
activities, id. at 403, 107 S.Ct. at 759, it did so under its own “not

.. especially demanding” zone of interest test, id. at 399, 107 S.Ct.
at 757, not under any “‘suitable challenger’ test akin to that laid down
in HWTC IV.

15a

more likely to further than to frustrate the purpose of the
Statute. See HWTC IV, 885 F.2d at 925; see also Clarke
v. Securities Industry Ass’n, 479 U.S. at 397 n. 12, 107

S.Ct. at 756 n. 12 (citing this as purpose of “zone of
interest’’ test).

l6a

APPENDIX B

UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA

Civ. A. No. 90-2948 SSH

FIRST NATIONAL BANK AND TRUST COMPANY,
Piedmont State Bank, Lexington State Bank, Randolph
Bank and Trust Company, Bankers Trust of North
Carolina, and American Bankers Association,

Plaintiffs,
v.
NATIONAL CREDIT UNION ADMINISTRATION,

Defendant,
and

AT & T Family Federal Credit Union and Credit Union
National Association, Inc.,
Defendants-Intervenors.

Aug. 9, 1991

Michael S. Helfer, William J. Kolasky, Jr., Lance W.
Edwards, John J. Gill and Michael F. Crotty, Washington,
D.C., for plaintiffs.

Vaughn Finn and Theodore C. Hirt, Washington, D.C.
for defendant.

Paul Joseph Lambert, Washington, D.C., for defendants-
intervenors.

’

OPINION
STANLEY S. HARRIS, District Judge.

:
>
&

17a

Plaintiffs, five North Carolina banks and the American
Bankers Association, challenge decisions by the National
Credit Union Administration (NCUA) approving amend-
ments to the charter of the AT & T Family Federal Credit
Union (AT & T Family) expanding its field of membership.
They allege that when the NCUA approved the amend-
ments, it acted arbitrarily and capriciously, and violated
the statutory requirement under the Federal Credit Union
Act, 12 U.S.C. §1751 et seg. (FCUA), that there be a
“common bond of occupation or association” among the
members of a federal credit union association. Pursuant
to 5 U.S.C. § 706 and 28 U.S.C. §§ 2201 and 2202, they
ask that various NCUA approvals of applications by AT &
T Family be declared null and void and that defendant be
enjoined from approving similar amendments to AT & T
Family’s charter. Now before the court are defendant’s
motion to dismiss for lack of standing and plaintiffs’ op-
position thereto. For the reasons set forth below,
defendant’s motion is granted, and the case is dismissed.

BACKGROUND

The Federal Credit Union Act was passed in 1934, in
the wake of the Great Depression. After the crash, access
to credit had been virtually eliminated for the great ma-
jority of the working class: most potential borrowers lacked
the security to acquire a loan from a bank, and other
licensed money lenders were able to charge extremely high
interest rates. S.Rep. No. 555, 73d Cong., 2d Sess. 3 (1934);
see also 78 Cong.Rec. 7259 (1934). Without access to credit,
the nation’s lower and middle classes saw their buying
power spiral downward. S.Rep. No. 555 at 3.

The establishment of national credit unions, modelled
after state supported organizations which had thrived
through the economic chaos of the Depression, was seen
as a “happy medium” between the loan shark and the
bank. 78 Cong.Rec. 7259 (1934). Congress expected that
members of credit unions, “with their own money and

18a

under their own management,”’ would be able to solve
their own credit difficulties. S.Rep. No. 555 at 2. It was
hoped that with access to small amounts of funds at rea-
sonable interest rates, national credit unions would return
significant buying power to those otherwise unable to have
it. Jd. at 1. Though state-sponsored credit unions fulfilled
this need in some areas, Congress felt that the nation
would benefit from a federal system because it would be
capable of rapid expansion and would permit the creation
of credit unions in states that did not previously authorize
them. Jd. at 2, 3.

The credit union is distinctive in that it is the members
who own and control the organization. Members purchase
shares in the credit union and exercise control over it,
democratically, irrespective of the number of shares held.
12 U.S.C. §§ 1757(6), 1760 (1988). Loans may be made
only to members of the organization or to other credit
unions. § 1757(5). Each credit union is managed by a board
of directors elected annually by and from the members,
and no member of the board receives any compensation
for these services. § 1761. Supervision and chartering of
credit unions is entrusted to the Board of the National
Credit Union Administration (NCUA), a three-member panel
appointed by the President upon the advice and consent
of the Senate. §§ 1752a, 1754, 1756.

At issue in this case is § 109 of the FCUA, now codified
at 12 U.S.C. § 1759, which provides that members of a
credit union must share ‘“‘a common bond” of occupation,
association, or location. The NCUA has defined a common
bond as:

the sharing of some unifying factor or characteristic
among persons that simultaneously links them to-
gether and distinguishes them from the general public.
This unifying factor must be something more than an
unfocused, generalized agreement on a given topic, or

en

19a

a common belief or philosophy on matters of general
concern.

45 Fed.Reg. 8285 (1980).

In recent years the NCUA has interpreted the common
bond requirement to allow a number of occupational or
associational groups to form a credit union if each group
shares its own common bond. See 12 C.F.R. § 701.1 (1991);
04 Fed.Reg. 31,169 (1989). Plaintiffs challenge decisions
by the NCUA approving applications by AT & T Family
to expand its membership to include employee groups that
have a separate common bond from the AT & T employee
group. Defendant moves to dismiss for lack of standing
to sue under its FCUA, and is joined in that motion by
intervenors AT & T Family and Credit Union National
Association, Inc.

DISCUSSION

The Administrative Procedure Act (APA) grants stand-
ing to anyone “adversely affected by agency action within
the meaning of the relevant statute.” 5 U.S.C. § 702. In
Association of Data Processing Service Organizations v.
Camp, the Supreme Court explained that a party meets
this standard if “the interest sought to be protected by
the complainant is arguably within the zone of interests
to be protected or regulated by the statute ... in ques-

‘In order to bring their claim, plaintiffs must show that they have
both constitutional and prudential standing. See National Federation of
Federal Employees v. Cheney, 883 F.2d 1038, 1041 (D.C.Cir. 1989), cert.
denied, __U.S.___, 110 S.Ct. 3214, 110 L.Ed.2d 662 (1990). To
establish constitutional standing, a plaintiff must allege an injury-in-
fact which is fairly traceable to the conduct complained of and likely
to be redressed by the relief requested. See Allen v. Wright, 468 U.S.
737, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984); Valley Forge Christian
College v. Americans United for Separation of Church and State, 454
U.S. 464,102 S.Ct. 752, 70 L.Ed.2d 700 (1982). Because the court
dismisses the amended complaint for lack of prudential standing, it
need not address the issue of Article III standing.

20a

tion.” 397 U.S. 150, 153, 90 S.Ct. 827, 830, 25 L.Ed.2d
184 (1970). Since Data Processing, the ‘‘zone of interests’’
test has been the standard by which the Court has judged
questions of standing under § 702 of the APA.

The Court clarified what it means for a complainant to
be within the “zone of interests’ of a statute in Clarke
v. Securities Industry Ass’n, 479 U.S. 388, 107 S.Ct. 750,
93 L.Ed.2d 757 (1987). The ultimate inquiry, it asserted,
is centered upon congressional intent. Jd. at 399, 107 S.Ct.
at 757. In view of Congress’s evident intent to make
agency action presumptively reviewable, a plaintiff has
standing only if Congress intended for that particular class
of plaintiffs to be relied upon to challenge agency action
allegedly in disregard of the law. Id. The goal of the test
is to exclude those plaintiffs who are more likely to frus-
trate than to further statutory objectives. Jd. at 397, n.
12, 107 S.Ct. at 756, n. 12. In cases where a party is the
subject of the contested regulation, it is clear that Con-
gress intends for that party to be able to act as a “private
attorney general’’ through bringing a suit to enforce the
statute. Jd. at 399, 107 S.Ct. at 757. But when not the
subject of the statute, a party will be denied review if its
interests are ‘‘so marginally related to or inconsistent with
the purposes implicit in the statute that it cannot reason-
ably be presumed that Congress intended to permit the
suit.” Id. at 399-400, 107 S.Ct. at 757.

Though the test is not meant to be especially demanding
and there need be no explicit indication of congressional
purpose to permit the suit, there are occasions where the
requisite congressional intent is not present. Jd. The Curt
provided a hypothetical example of such a case in Lujan
v. Natwonal Wildlife Federation, _._U.S.__ , 110 S.Ct.
3177, 3186, 111 L.Ed.2d 695 (1990:

[T]he failure of an agency to comply with a statutory
provision requiring ‘“‘on the record” hearings would
assuredly have an adverse effect upon the company

ee |

2la

that has the contract to record and transcribe the
agency’s proceedings’ but since the provision was ob-
viously enacted to protect the interests of the parties
to the proceedings and not those of the reporters,
that company would not be “adversely affected within
the meaning”’ of the statute.

Such a company certainly would have Article III standing
because it would have suffered an injury-in-fact which is
fairly traceable to the agency action, but it would not meet
the heightened requirement of prudential standing as de-
fined by the APA. It simply is not the type of challenge
which Congress would have imagined when it passed the
Statute. See also Air Courier Conference of America v.
American Postal Workers Union, AFL-CIO, __U.S.
—, 111 S.Ct. 913, 112 L.Ed.2d 1125 (1991) (union rep-
resenting Postal employees does not have standing to chal-
lenge the Postal Service’s suspension of a statute designed
to preserve adequate revenues for the Service.).

The D.C. Circuit has had occasion to clarify this stand-
ard further. Those not regulated by an agency have stand-
ing only if they are the intended beneficiaries of the specific
statute or are nonetheless ‘“‘suitable challengers’ to the
statute because their interests coincide with the interests
which Congress did intend to protect. Hazardous Waste
Treatment Council v. Thomas, 885 F.2d 918, 924 (D.C.Cir.
1989) (HWTC IV). A party is a suitable challenger if its
interests coincide systematically, and not simply fortui-
tously, with the interests of those whom Congress intended
to protect. Id.; Hazardous Waste Treatment Council v.
United States Environmental Protection Agency, 861 F.2d
277, 283 (D.C.Cir. 1988), cert. denied, 490 U.S. 1106, 109
S.Ct. 3157, 104 L.Ed.2d 1020 (1989) (HWTC II).

The legislative history of the FCUA makes it clear that
the Act was passed to establish a place for credit unions
within the country’s financial market, and specifically not
to protect the competitive interest of banks. As noted,

22a

credit unions were seen as a “happy medium’ between
the loan shark and the bank at a time when neither could
satisfy the normal credit needs of the working class. 78
Cong.Rec. 7259 (1934). Further, Congress concluded that
commercial banks were not in a position to make funds
available to those of small means who generally had no
security for loans. Jd. Against this backdrop, it would defy
logic to assume that Congress, in passing the FCUA,
wanted to protect the interest of banks.

Nor was the common bond requirement included in the
Act to protect banks. Instead, it was designed to ensure
that credit unions remain responsive to those they were
designed to serve. A major selling point for the FCUA was
the outstanding record of state credit unions through the
Depression, a record which was attributed to their dem-
ocratic control, honest management, and faithful service
to members. Sen.Rep. No. 555 at 2. It was largely through
its limitation of membership to those with a common bond
that credit unions were thought to fulfill this democratic
ideal. Barany v. Butler, 670 F.2d 726, 734 (7th Cir. 1982);
La Caisse Populaire Ste. Marie v. United States, 563 F.2d
505, 509 (1st Cir. 1977). Such an arrangement was sup-
posed to make credit unions “incapable of exploitation.”
Sen.Rep. No. 555 at 3. For their part, plaintiffs can cite
nothing in the legislative history of the FCUA to buttress
their assertion that the common bond requirement was
designed to protect banks.?

? Plaintiffs point only to a statement made during a hearing regarding
a credit union authorization for the District of Columbia two years
before the FCUA to support their argument. See Plaintiff's Motion of
Points and Authorities in Opposition to Defendant’s Motion to Dismiss
at 12. The speaker mentioned in passing that amendments to the D.C.
bill had been proposed after considering the suggestions of the Bankers’
Association of the District of Columbia. Even if this court were to
accept the legislative history of the D.C. statute as evidence of congres-
sional intent with regard to the federal statute, it is hardly convincing
evidence that Congress was trying to protect the interests of com-

23a

Having shown that Congress did not have in mind the
competitive interests of banks when it enacted the common
bond requirement, it is a short step to conclude that nei-
ther are banks suitable challengers to actions taken under
the authority of the FCUA. As this case shows, the in-
terests of banks will rarely if ever coincide with those of
credit unions, the interest which Congress did intend to
protect, because both compete for the same business. Any
coincidence of interest would be at least fortuitous. Thus,
because they are neither intended beneficiaries nor suitable
challengers, commercial banks are not within the zone of
interests which Congress intended to protect when it
passed the FCUA.

This position is in keeping the D.C. Circuit decisions on
the subject of prudential standing In HWTC IV and HWTC
II, the court found no standing for waste treatment com-
panies which suffered competitive injury and challenged
the regulatory structure for the safe treatment, storage,
and disposal of hazardous wastes. Because those regula-
tions were designed to protect human health and the en-
vironment and not to improve the business opportunities
of waste treatment companies, the court was unwilling to
infer that Congress intended for such companies to be able
to challenge the regulations. HWTC IV, 885 F.2d at 924;
HWTC II, 861 F.2d at 283. Nor did their interests coincide
with the interests Congress intended to protect to the
point at which they could nonetheless be seen as “suitable
challengers” to the regulations. HWTC IV, 885 F.2d at
924; HWTC II, 861 F.2d at 288. In either case, the fact
that firms are benefitted by congressional action, like the
court reporters in Lujan v. National Wildlife Federation
and like the commercial banks in this case, does not mean
that an agency decision with regard to that decision con-

mercial banks when it enacted the common bond requirement. In fact,
the passage cited emphasizes that the primary concern in authorizing
credit unions was that they be successful.

24a

fers standing. Jd.; see also National Federation of Federal
Employees v. Cheney, 883 F.2d 1038 (D.C.Cir. 1989), cert.
denied, __ U.S. __., 110 S.Ct. 3214, 110 L.Ed.2d 662
(1990) (organization of federai employees lacks standing to
contest the Army’s decision to contract out certain services
as violative of statutes designed to coordinate budgeting
procedures and increase efficiency in government opera-
tions.).

The Fourth Circuit reached the same conclusion when
presented with facts virtually identical to these. In Branch
Bank & Trust C. v. National Credit Union Administration,
786 F.2d 621 (4th Cir. 1986), cert. denied, 479 U.S. 1063,
107 S.Ct. 948, 98 L.Ed.2d 997 (1987), the court found no
standing for banks to challenge application of the common
borid requirement:

[T]he general purposes of the Act, rather than indi-
cating a desire to protect banks, instead suggest that
competitive interests of banks were purposely sacri-
ficed by Congress to the interests of facilitating credit
for people of limited personal means. ... [T]he com-
mon bond provision was designed to ensure the coh-
esive operation of credit unions rather than to limit
their reach in an effort to protect banks.

Id. at 626.

Given this specific rationale for the common bond require-
ment, the court was unwilling to attribute to it a meaning
at odds with the general goals of the statute. Jd. This
court shares the Fourth Circuit’s basic conclusion.

Plaintiffs erroneously rely on a string of cases in which
the Supreme Court has found standing where a group or
business has suffered a competitive injury due to agency
action. See Clarke, 479 U.S. 388, 107 S.Ct. 750, 98 L.Ed.2d
757 (1987); Data Processing, 397 U.S. 150, 90 S.Ct. 827,
25 L.Ed.2d 184 (1970); Arnold Tours, Inc. v. Camp, 400
U.S. 45, 91 S.Ct. 158, 27 L.Ed.2d 179 (1970); Investment

25a

Co. Institute v. Camp, 401 U.S. 617, 91 S.Ct. 1091, 28
L.Ed.2d 367 (1971). Contrary to plaintiffs’ assertion, all
of these cases involve statutes directed at restricting entry
into a given field or business. Even in Clarke, where a
trade association representing securities brokers asserted
that a decision to allow two national banks to open a
discount brokerage operation violated anti-branching laws,
the Court found standing because the statute was passed
in part due to congressional fear that national banks might
obtain monopoly control of credit and money if permitted
to branch unrestricted. 479 U.S. at 402, 107 S.Ct. at 758.
Because those plaintiffs’ members competed with banks in
providing discount brokerage services, the Court found that
Congress arguably had legislated against the competition
that plaintiffs sought to challenge. Jd. at 408, 107 S.Ct.
at 759. This intent to restrict entry was what made
plaintiffs “very reasonable candidates to seek review.” Jd.
As noted, Congress had no such intent when it passed the
FCUA.

CONCLUSION

For these reasons, the court finds that plaintiffs lack
prudential standing to challenge the action of the NCUA.
Accordingly, defendant’s motion to dismiss is granted and
the case is dismissed.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1030%3A1. Public record. Not legal advice.