Appendix — Association of Data Processing Service Organizations, Inc. v. Camp
Supreme Court brief1970
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TABLE OF CONTENTS
Docket Entries.
Complaint
Answer of Defendant American National Bank and
Trust Company
Answer of Defendant William B. Camp, Comptroller of
the Currency of the United States
Motion of Defendant William B. Camp, Comptroller of
the Currency, to Dismiss the Action
Notice of Motion
Motion of Defendant American National Bank and
Trust Company to Dismiss.
Opinion of District Court
Notice of Appeal by Plaintiffs
Opinion of United States Court of Appeals for the
Eighth Circuit
Judgment of United States Court of Appeals for the
Eighth Circuit
Order
Page
Date
DOCKET ENTRIES
Proceedings
6-15-67 Filed Complaint.
7- 5
9-26
10- 4
10- 6
10- 9
10-10
Issued Summons.
Filed Summons returned served June 16, 20 and
22 - 1967.
Filed Answer, with certificate of service by mail on
8-14-67. (Deft. Camp only.)
Filed Answer of defendant American National
Bank and Trust Company, with aff. of service
by mail on 8-16-67.
Filed motion of defendant American National
Bank and Trust Company for dismissal of this
action, with aff. of service by mail on 9-22-67.
Not noticed for hearing at any given time.
Filed notice of motion returnable 10-10-67 at St.
Paul, on motion of the defendant, William B.
Camp, etc., for dismissal of this action; memo-
randum in support thereof, and cert. of service
by mail on 9-25-67, are attached.
Filed notice of motion returnable at St. Paul, Oct.
10, 1967, on motion of The American Bankers
Association for leave to appear and file a brief
amicus curiae. Three affidavits of service, per-
sonal, on 9-29-67, are attached.
Filed reporter’s transcript of prooceedings had 9-
25-67. (Sutfin, reporter)
Filed plaintiffs’ memorandum in opposition to de-
fendants’ motion to dismiss.
Filed appearance of Matthew Hale, General Coun-
sel for The American Bankers Association, 815
Conn. Ave. N.W., Washington, D.C.
Entered record of hearing on the following mo.
tions:
(a) Mo. by American Bankers Assn. for leaye
to appear and file brief in amicus curige
—granted without opposition to any of
the parties.
(b) Mo. by Wm. B. Camp, etc., for dismiggaj
—argued, taken under advisement.
(c) Mo. by American Nat. Bk. & Trust (po,
for dismissal—argued, taken under aj.
visement.
Mr. Kelley to submit reply to plaintiff's brief
in two weeks.
Entered order admitting C. Westbrook Murphy to
practice for the purpose of this trial, on motion
of Stanley H. Green, Asst. U. 8. Attorney.
Entered order admitting Matthew Hale to prac.
tice for the purpose of this action, on motion of
Mr. Fallon Kelly.
10-19 Filed Reporter’s Transcript of Proceedings of 10-
10-67. (Sutfin, reporter)
1- 9-68 Filed and entered Order granting defendants’ mo-
tions for dismissal of plaintiffs’ Complaint and
for entry of judgment. Memorandum attached
thereto. (Neville - J.)
Filed and entered judgment of dismissal.
Mailed notice to counsel.
1-16 Filed reporter’s certified notes of motion heard 10-
10-67. (Sutfin - Rptr.)
1-17-68 Filed plaintiffs’ notice of appeal from the order of
dismissal entered herein Jan. 9, 1968.
Filed Bond on Appeal.
Mailed copy of notice of appeal to Patrick J.
Foley, U. 8. Attorney, 596 U. 8. Courthouse, 110
wn
3
S$. 4th St., Minneapolis, Minn., to Carl Eardley,
Acting Asst. Attorney General, Department of
Justice, Washington, D. C., to Richard 8. Beatty,
Associate Chief Counsel, Office of the Comp-
troller of the Currency, Washington, D. C., to
Kelly, Segell and Fallon, 500 Minnesota Bldg.,
St. Paul, Minn., and to Matthew Hale, The
American Bankers Association, 815 Connecticut
Ave. N. W., Washington, D. C.
1-25 Filed Appellants’ Designation of Record on Ap-
peal with aff. of service by mail 1-24-68.
16 Mailed c/copy of docket entries and Notice of Ap-
peal to Robert ©. Tucker, Clerk, U. 8. Court of
Appeals, St. Louis, Mo. 63101 (air mail).
UNITED £&TATES DISTRICT COURT
DISTRICT OF MINNESOTA
THIRD DIVISION
Civil No. 3-67-165
ASSOCIATION OF DATA PROCESSING SERVICE op.
GANIZATIONS, INC., and DATA SYSTEMS, INC,
Plaintiffs,
vs.
WILLIAM B. CAMP, COMPTROLLER OF THE Cvr.
RENCY OF THE UNITED STATES, and AMERICAX
NATIONAL BANK AND TRUST COMPANY,
Defendants,
COMPLAINT
1. Plaintiff Association of Data Processing Service Or-
ganizations, Inc. (hereinafter referred to as “ADAPSO”), is
an incorporated association of data processing service organi-
zations whose members are engaged in the business of per-
forming data processing services for the business community
throughout the United States. ADAPSO is incorporated un-
der the laws of the State of Pennsylvania and has its prin-
cipal place of business in Abington, Pennsylvania.
2. Plaintiff Data Systems, Inc. (hereinafter referred to
as “DATA SYSTEMS”), is a business corporation duly in-
corporated under and doing business pursuant to the laws
of the State of Minnesota, is a member of ADAPSO, has its
principal place of business in Minneapolis, Minnesota, and
is engaged in the business of marketing and performing data
processing services for the general business community.
_—
5
3, Defendant William B. Camp (hereinafter referred to
as the “COMPTROLLER” ), is the Comptroller of the Cur-
rency of the United States, and is a duly constituted officer
of the Executive Branch of the Government of the United
States, maintaining his official residence in the District of
Columbia. His office is an “agency” of said Government
within the meaning of Title 5 of the United States Code.
4. Defendant American National Bank and Trust Com-
pany (hereinafter referred to as “AMERICAN BANK”), is
a national banking association organized and established
pursuant to the National Banking Act (Chapter 2, Title 12,
United States Code), and has its principal place of business
at St. Paul, Minnesota.
5. This action arises under the National Banking Act
(United States Code, Title 12, Chapter 2) and involves an
interpretation and application of said Act, and a determina-
tion of the powers granted national banking associations un-
der that Act as set forth in 12 U.S. Code §24.
§. This action is a proceeding for declaratory judgment
and for an injunction pursuant to 28 U.S. Code Sections
9991 and 2202, and for damages. This court has jurisdiction
of the controversy which is the subject matter of this action
pursuant to 28 U.S. Code Sections 1331(a) and 1391(3) and
12 U.S. Code Section 94. The amount in controversy exceeds
the sum of $10,000.00, exclusive of interest and costs. Action
against the COMPTROLLER is also brought under Section
10 of the Administrative Procedure Act, 5 U.S. Code Section
701 ff. (1966) (formerly 5 U.S. Code Section 1009), the De-
claratory Judgments Act, 28 U.S. Code Sections 2201 and
2202, and Sections 1331 and 1361 of the Judicial Code, Title
28 U.S. Code, to set aside the COMPTROLLER’S action in
approving the marketing of data processing services by na-
tional banks as arbitrary, capricious, an abuse of discretion
and otherwise not in accordance with law, and to enjoin the
ne
Ty
COMPTROLLER from issuing any purported ruling permit.
ting such activities by AMERICAN BANK or any other ng.
tional banking assoc‘ation.
7. The defendant COMPTROLLER has by ruling anq
other administrative action authorized defendant AMERI.
CAN BANK and other national banks to perform the data
processing services hereinafter described.
8. The defendants COMPTROLLER and AMERICAy
BANK may exercise only those powe:s granted to them, re.
spectively, by the National Banking Act and defendant
COMPTROLLER cannot, pursuant to his administrative
authority, lawfully issue rulings authorizing a national bank
to act beyond its statutory powers.
9. Pursuant to 12 U.S. Code Section 24, a national bank
has only such incidental powers as shall be necessary to
carry on the business of banking. Although the use and own-
ership of data processing equipment by a national bank may
be incidental to the carrying on of its banking business in
furtherance of the express powers granted by Congress with
respect thereto, the making of such equipment available to
others or the performance of data processing services for its
customers, is non-banking business, not within the statutory
6
grant of powers, and unlawful.
10. The defendant COMPTROLLER’S authorization to
national banks permitting them to engage in the marketing
of data processing services is therefore in violation of the
National Banking Act, beyond statutory authority, arbi-
trary, capricious, an abuse of discretion and not in accord-
ance with law.
11. As a result of defendant COMPTROLLER’S action,
the marketing of data processing services by national banks
has been growing rapidly, and is anticipated to grow even
more rapidly in the future. Because of the enormous finan-
cial power of national banks and their banking relationships
—
with existing and potential customers for such services, the
marketing of such services by national banks threatens ulti-
mately to exclude all ADAPSO members and other inde-
pendent service organizations from all or a very substantial
part of the market for the sale of data processing services.
12. Defendant AMERICAN BANK, since on or before
February 20, 1967, has been and is presently offering to per-
form and is engaged in the business of performing data proc-
essing services for the general business community.
13. On or about February 20, 1967, the defendant AMER-
ICAN BANK entered into an agreement with the State Cap-
itol Credit Union of St. Paul, Minnesota, whereby AMERI-
CAN BANK agreed to perform certain data processing serv-
ices required by said Credit Union, and since that time
AMERICAN BANK has performed or has prepared to per-
form such services for said Credit Union.
14. Prior to February 20, 1967, plaintiff DATA SYS-
TEMS had entered into negotiations with the aforesaid Cred-
it Union to provide data processing services for said Credit
Union. On or about December 19, 1966, DATA SYSTEMS
agreed with said Credit Union to perform certain data prec-
essing services. Because of the actions of AMERICAN
BANK as above set forth, DATA SYSTEMS has been de-
prived of the right and opportunity to perform said services
and to be compensated therefor.
15. On or about April 15, 1967, AMERICAN BANK en-
tered into an agreement with Carlen Industries, Inc., of
Minneapolis, Minnesota, whereby AMERICAN BANK
agreed to perform certain data processing services required
by said company and since that time AMERICAN BANK
has performed or has prepared to perform such services for
said company.
16. Prior to April 15, 1967, DATA SYSTEMS had en-
tered into negotiations with Carlen Industries, Inc., to pro-
8
vide data processing services for said company. Because of
the actions of defendant AMFR’CAN BANK, as hereinbe.
fore set forth, DATA SYSTEMS has been deprived of the
right and opportunity to perform said services and to be
compensated therefor.
17. The foregoing activities of defendant AMERICAY
BANK in performing, and in holding itself out as willing to
perform, data processing services for the above-mentioned
companies and for the general business community are jlle.
gal, not part of or incidental to the business of banking and
beyond the powers granted to national banks under the Na.
tional Banking Act.
18. By performing said illegal data processing services,
and by holding itself out as willing and able to perform such
services, AMERICAN BANK has caused and unless en.
joined will continue to cause substantial and irreparable
harm to DATA SYSTEM’S business and to the business of
other members of ADAPSO, by depriving them of customers
for whom data processing services would be rendered and
from whom compensation would be received.
19. Plaintiffs have suffered serious injury and damage
and are continuing to suffer such injury and damage by the
unlawful authorization of iefendant COMPTROLLER and
by the illegal activities of defendant AMERICAN BANK as
aforesaid.
WHEREFORE, plaintiffs demand judgment as follows:
(a) Declaring that defendant COMPTROLLER’S ruling
and other administrative action authorizing national banks
to perform or make available data processing services for
their customers is arbitrary, capricious, an abuse of discre
tion, in excess of statutory authority and illegal;
(b) Enjoining defendant COMPTROLLER from pro-
mulgating any rule or policy that national banks have the
power to engage in the marketing or performance of data
—
9
processing service business for their customers or for the gen-
eral business community ;
(c) Enjoining defendant AMERICAN BANK from per-
forming, or holding itself out as willing and able to perform,
data processing services for its customers or for the general
business community ;
(d) Awarding to plaintiff DATA SYSTEMS and against
defendant AMERICAN BANK, damages in the amount of
not less than $100,000.00; and
(e) For such other relief as the Court may deem just and
proper.
SHANEDLING, PHILLIPS, Gross & AARON
By /s/ Bert M. Gross and FELIX M. PHILLIPS
Attorneys for Plaintiffs
909 Farmers & Mechanics Bank Building
Minneapolis, Minnesota 55402
(Filed in the United States District Court, District of
Minnesota, Third Division, on 6-15-67.)
ANSWER OF DEFENDANT AMERICAN NATIONAL
BANK AND TRUST COMPANY
Defendant, American National Bank and Trust Company,
for its answer to the complaint of the plaintiffs herein:
First DEFENSE
i.
Admits all the allegations contained in Paragraphs 3, 4,
13 and 15 of the Complaint.
II.
Alleges that it does not have sufficient information to form
a belief as to the truth of the allegations contained in Para-
a
—=y
graphs 1 and 2 of the Complaint and puts the plaintiffs to the
strict proof thereof.
10
III.
Alleges that it does not have sufficient information to fory
a belief as to the truth of the allegations contained in Papa.
graphs 14 and 16 of the Complaint and therefore denies th.
same and puts the plaintiffs to the strict proof thereof.
IV.
Alleges that the allegations contained in Paragraph 7 of
the Complaint are so indefinite, uncertain, and incomplete
that it does not have sufficient information to form a belief
as to the truth of said allegations and therefore denies the
same and puts the plaintiffs to the strict proof thereof: fur.
ther answering, this defendant specificaily alleges that de.
fendant Comptroller has from time to time issued rulines
and promulgated administrative action relating to the
authority of national banks, including this defendant, to
conduct their business, and that all of the actions of defend.
ant American National Bank and Trust Company have been
and are compatible therewith.
|
Admits that a national bank cannot act in a manner other
than as authorized by federal law as alleged in substance in
Paragraph 8 of the Complaint, but denies all other allegi-
tions contained in Paragraph 8 of the Complaint.
VI.
This defendant states that the allegations contained in
Paragraph 9 of the Complaint are conclusions of law not re-
quiring answer; however, to the extent that answers may be
deemed to be required, defendant denies the allegations con-
tained therein.
VII.
Except as hereinbefore admitted, qualified, or otherwise al-
leged, this defendant denies each and every allegation, matter
11
and thing in said Complaint contained and more specifically
as contained in Paragraphs 5, 6, 10, 11, 12, 17, 18 and 19.
SECOND DEFENSE
Plaintiffs lack standing to bring this action.
THIRD DEFENSE
The Complaint fails to state a claim upon which relief can
be granted.
FouRTH DEFENSE
The Court lacks jurisdiction over the subject matter of
this action.
WuerErorE, defendant, American National Bank and
Trust Company, prays that the plaintiffs’ Complaint be dis-
missed, that it have its costs and disbursements herein, and
that the Court grant such other and further relief as to it
may seem just and proper.
/s/ FALLON KBLLEY
/s/ HYAM SEGELL
Attorneys for Defendant American
National Bank and Trust Company
500 Minnesota Building
St. Paul, Minnesota 55101
Of Counsel :
KELLEY, SEGELL AND FALLON
(Filed in the United States District Court, District of
Minnesota, Third Division, on 8-17-67.)
12
ANSWER
Defendant William B. Camp, Comptroller of the Currency
of the United States, by his undersigned attorneys, in answer
to the complaint herein, admits, denies and alleges as fo).
lows:
1. Defendant is without knowledge or information suff.
cient to form a belief as to the truth of the allegations con.
tained in Paragraph 1 of the complaint.
2. Defendant is without knowledge or information sufj-
cient to form a belief as to the truth of the allegations cox.
tained in Paragraph 2 of the complaint. ,
3. Defendant admits the allegations contained in Para.
graph 3 of the complaint.
4. Defendant admits the allegations contained in Para-
graph 4 of the complaint.
5. Defendant denies the allegations contained in Para.
graph 5 of the complaint.
6. Defendant denies the allegations contained in Para-
graph 6 of the complaint except that he admits that this is a
proceeding for declaratory judgment, injunction and dan-
ages.
7. Defendant states that the allegations contained in
Paragraph 7 of the complaint are too vague and imprecise to
be answered and that he is therefore without knowledge or
information sufficient to form a belief as to the truth there.
of.
8. Defendant states that the allegations contained in
Paragraph 8 of the complaint are conclusions of law not re-
quiring answer; however, to the extent that answers may be
deemed to be required defendant denies the allegations con-
tained therein except that he admits that a national bank
cannot act in a manner other than as authorized by federal
law.
—
13
9, Defendant states that the allegations contained in
Paragraph 9 of the complaint are conclusions of law not re-
quiring answer ; however, to the extent that answers may be
deemed to be required defendant denies the allegations con-
tained therein.
10. Defendant denies the allegations contained in Para-
graph 10 of the complaint.
11. Defendant denies the allegations contained in Para-
graph 11 of the complaint.
12. Defendant denies the allegations contained in Para-
graph 12 of the complaint.
13. Defendant is without knowledge or information suffi-
cient to form a belief as to the truth of the allegations con-
tained in Paragraph 13 of the complaint.
14. Defendant is without knowledge or information suffi-
cient to form a belief as to the truth of the allegations con-
tained in Paragraph 14 of the complaint.
15. Defendant is without knowledge or information suffi-
cient to form a belief as to the truth of the allegations con-
tained in Paragraph 15 of the complaint.
16. Defendant is without knowledge or information suffi-
cient to form a belief as to the truth of the allegations con-
tained in Paragraph 16 of the complaint.
17. Defendant denies the allegations contained in Para-
graph 17 of the complaint.
18. Defendant denies the allegations contained in Para-
graph 18 of the complaint.
19. Defendant denies the allegations contained in Para-
graph 19 of the complaint.
Defendant denies each and every allegation of the com-
plaint not herein above admitted, qualified or denied.
—
14
SECOND DEFENSE
Plaintiffs lack standing to bring this action.
THIRD DEFENSE
The complaint fails to state a claim upon which relief egy
be granted.
FourRTH DEFENSE
The Court lacks jurisdiction over the subject matter of
this action.
WHEREFORE, Defendant, the Comptroller of the Currency
of the United States, having fully answered prays that the
complaint be dismissed with costs and that the Court grant
such other relief as to it may seem just and proper.
Respectfully submitted,
/8/ CARL EARDLEY
Acting Assistant Attorney General
By /s/ STANLEY H. GREEN
Assistant United States Attorney
PATRICK J. FOLEY
United States Attorney
(s/ HARLAND IF. LEATHERS
(s/ C. WESTBROOK MURPHY
Attorneys
Department of Justice Attorneys for
Defendant William B. Camp
Comptroller of the Currency
Of Counsel:
/s/ RicHarp 8. BEAtTtTy
Associate Chief Counsel
/s/ RicHARD DOERSCH
Attorney
Office of the Comptroller of the Currency
(Filed in the United States District Court, District of
Minnesota, Third Division, on 8-15-67.)
15
yoTION OF THE DEFENDANT, WILLIAM B. CAMP,
COMPTROLLER OF THE CURRENCY, TO DISMISS
THE ACTION
Defendant, William B. Camp, Comptroller of the Currency
of the United States, by his undersigned attorneys moves the
Court to dismiss this action upon the grounds that plaintiffs
jack standing to maintain this action and that the Court
lacks jurisdiction over the subject matter. In support of this
motion the Court is respectfully referred to plaintiffs’ com-
plaint, and to the memorandum in support of this motion
which is filed herewith.
Respectfully submitted,
CARL EARDLEY
Acting Assistant Attorney General
Patrick J. FOLEY
United States Attorney
By: /s/ PATRICK J. FOLEY
Assistant United States Attorney
HARLAND F’, LEATHERS
/s/ C. WESTBROOK MuRPHY
Attorneys,
Department of J ustice, Attorneys for
Defendant William B. Camp,
Comptroller of the Currency
Of Counsel :
/s/ Ricuarp 8. BBATTY
Associate Chief Counsel
/s/ Ricuarp DomRrscH
Attorney
Office of the Comptroller of the Currency
16
NOTICE OF MOTION
To: Shanedling, Phillips, Gross & Aaron, 909 Farmers &
Mechanics Bldg., Minneapolis, Minnesota 55402.
PLEASE TAKE NOTICE that William B. Camp, Comptroller
of the Currency of the United States, and American Nationa]
Bank and Trust Company, defendants above named, will
bring the above motion on for hearing before this Court at
the Federal Courthouse, St. Paul, Minnesota, on October 10,
1967, at 10:00 A.M. of that day, or as soon thereafter as coun.
sel can be heard.
/s/ Patrick J. FOLBY
United States Attorney
Attorney for Defendant
William B. Camp, Comptroller of the
Currency of the United States
596 U. 8. Courthouse
Minneapolis, Minnesota 55401
(Filed in the United States District Court, District of
Minnesota, Third Division, on 9-26-67.)
17
MOTION TO DISMISS
Defendant, American National Bank and Trust Company,
by its attorneys, moves the Court to dismiss this action upon
the grounds that the plaintiffs lack standing to maintain
said action, and that the Court lacks jurisdiction over the
subject matter. Said motion will be based upon all the files,
records and proceedings herein and upon arguments to be ad-
duced at a hearing thereon.
Dated: September 22, 1967.
FALLON KBLLY
HyYAM SEGELL
Attorneys for Defendant American
National Bank and Trust Company
500 Minnesota Building
St. Paul, Minnesota 55101
Of Counsel :
KELLY, SEGELL AND FALLON
(Filed in the United States District Court, District of
Minnesota, Third Division, on 9-25-67.)
18
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
THIRD DIVISION
ASSOCIATION OF DATA PROCESSING SERVICE op.
GANIZATIONS, INC., and DATA SYSTEMS, INC
Plaintiffs,
7
vs.
WILLIAM B. CAMP, COMPTROLLER OF THE Ctr.
RENCY OF THE UNITED STATES, and AMERICAY
NATIONAL BANK AND TRUST COMPANY,
Defendants,
ORDER
The above-entitled matter came duly on for hearing be-
fore the undersigned, a judge of this court, at St. Paul, Min-
nesota on the 10th day of October, 1967 on the motions of
both defendants for a dismissal of plaintiffs’ complaint on
the grounds of lack of standing in plaintiffs to maintain the
present action. Patrick J. Foley, United States Attorney, by
Stanley H. Green, Esq. and C, Westbrook Murphy, Esq. of
the Department of Justice, Washington, D. C., appeared for
defendant Comptroller William B. Camp; Kelly, Segell and
Fallon by Fallon Kelly and Hyam Segell, Esqs. appeared for
defendant American National Bank & Trust Company; and
Matthew Hale, Esq., appeared amicus curiae for the Ameri-
can Bankers Association; all in support of said motions.
Shanedling, Phillips, Gross & Aaron by Bert M. Gross and
Felix M. Phillips, Esqs., appeared for plaintiffs in opposi-
tion thereto.
The court has examined the pleadings, heard the argu-
ments of counsel and examined and read the various briefs
19
submitted, and on the basis thereof and on all the files, rec-
ords and proceedings herein,
Ir Is ORDERED that defendants’ motions for dismissal of
plaintiffs’ complaint be, and the same hereby are granted and
plaintiffs’ complaint is hereby dismissed.
Let judgment be entered accordingly.
Dated: January 8, 1968.
/s/ PHILIP NEVILLE
United States District Judge
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
THIRD DIVISION
ASSOCIATION OF DATA PROCESSING SERVICE OR-
GANIZATIONS, INC., and DATA SYSTEMS, INC.,
Plaintiffs,
v8.
WILLIAM B. CAMP, COMPTROLLER OF THE CUR-
RENCY OF THE UNITED STATES, and AMERICAN
NATIONAL BANK AND TRUST COMPANY,
Defendants.
[OPINION]
Shanedling, Phillips, Gross & Aaron by Bert M. Gross and
Felix M. Phillips, Esqs., appeared for plaintiffs.
Patrick J. Foley, United States Attorney, by Stanley H.
Green, Esq., and C. Westbrook Murphy, Esq., of the Depart-
ment of Justice, Washington, D. C., appeared for defend-
ant Comptroller William B. Camp.
20
Kelly, Segell and Fallon by Fallon Kelly and Hyam Segel),
Esqs., appeared for defendant American National Bank &
Trust Company.
Matthew Hale, Esq., Washington, D. C., petitioned for
leave to appear and file a brief amicus curiae on behalf of
and as general counsel for The American Bankers Associa.
tion, which petition the court granted.
NEVILLE, District Judge.
This matter comes before the court on motions by both
defendants for an order of dismissal, grounded upon the al-
leged lack of standing in the plaintiffs to maintain the pres.
ent action. Plaintiffs’ complaint seeks a declaratory judg.
ment, an injunction and compensatory damages, all on the
theory that the marketing of data processing’ to the public
by defendant American National Bank is illegal and con-
trary to law. The complaint further avers that certain ac-
tions of the defendant Comptroller in approving the market-
ing of data processing services by national banks is “arbi-
trary, capricious, an abuse of discretion, in excess of statu-
tory authority and illegal.” The plaintiffs in essence seek a
determination that the performing for a fee of data process-
ing services by national banks for the public generally, or
what were referred to on oral argument as “outsiders,” is not
within the scope of the powers and authority granted nation-
al banks under the National Bank Act as set forth in 12
U.S.C. §24. The pertinent provisions of this statute read as
follows:
“$24. Corporate powers of associations.
Upon duly making and filing articles of association
and an organization certificate a national banking asso-
1As brought out in the oral arguments, data processing utilizes electronic de-
vices, including what are commonly known as computers, to compile and cal-
culate statistical information and is employed by businesses in the computa-
tion and preparation of payrolls, tax returns, monthly statements, bills and in
other ways.
21
ciation shall become, as from the date of the execution
of its organizaton certficate, a body corporate, and as
such, and in the name designated in the organization
certificate, it shall have power—
Seventh. To exercise by its board of directors or duly
authorized officers or agents, subject to law, all such in-
cidental powers as shall be necessary to carry on tie
business of banking; . . .” (Emphasis added.)
The allegation in the complaint as to the defendant Comp-
troller’s administrative ruling is in general terms as follows:
“7, The defendant CoMPTROLLER has by ruling and
other administrative action authorized defendant AMERI-
can BANK and other national banks to perform the data
processing services hereinafter described.” *
The plaintiff Association of Data Processing Service Or-
ganizations, Inc. (“ADAPSO”), is an incorporated associa-
tion of data processing service organizations located through-
out the United States whose members are engaged in the busi-
ness of providing such type of service to the business com-
munity. Plaintiff Data Systems, Inc. is a Minnesota corpo-
ration with offices in Minneapolis, Minnesota, engaged in the
business of marketing and performing data processing serv-
ice for the general business community, and is a member of
ADAPSO.
2It appears from the brief submitted by the Comptroller that his position with
respect to the furnishing of electronic data processing services by national
banks was published as an interpretive ruling in the March 1964 supplement
to the Comptroller's Manual for National Banks, paragraph 3500 of which
reads as follows:
“A national bank may make available for the use of others processing
equipment acquired for the primary purpose of performing service inci-
dental to banking.”
A later modification of this same paragraph, adhered to by the present Comp-
troller, appears in the Comptroller's Manual (October 15, 1966 ed.) in the
following language:
“Incidental to its banking services, a national bank may make available
its data processing equipment or perform data processing services on such
equipment for other banks and bank customers.”
29
at
The alleged injury to these plaintiffs resulting from the
actions of the defendants is claimed to be solely an economic
injury arising from what is contended to be illegal compe i-
tion.*
The plaintiffs assert that they have standing to challenge
the action of the Comptroller by virtue of Section 10 of the
Administrative Procedure Act, 5 U.S.C. §701, et seq. The
pertinent section of this Act, §702, provides that:
“A person suffering legal wrong because of agency ac.
tion, or adversely affected or aggrieved by agency ac.
tion within the meaning of a relevant statute, is entitled
to judicial review thereof. . . .”
Since there are no specific provisions in the National Bank
Act providing for a review of the Comptroller’s rulings or
conferring standing to maintain such actions as the instant
case, it would appear that if the plaintiffs are to have what
is called statutory standing at all, such must be grounded
upon the above-quoted portion of the Administrative Proce-
dure Act. The Eighth Circuit Court of Appeals, however,
has adhered strongly to the view that the Administrative Pro-
cedure Act did not by its passage create any legal rights
which did not otherwise exist and has cited numerons author-
3Paragraph 11 of the complaint of plaintiffs charges:
“As a result of defendant Comptroller’s action, the marketing of data
processing services by national banks has been growing rapidly, and is
anticipated to grow even more rapidly in the future. Because of the enor-
mous financial power of national banks and their banking relationships
with existing and potential customers for such services, the marketing of
such services by national banks threatens ultimately to exclude all
ADAPSO members and other independent service organizations from all
or a very substantial part of the market for the sale of data processing
services.”
The complaint goes on to allege that the plaintiff Data Systems had entered
into negotiations in Minnesota with two particular potential customers to
provide data processing service. It is stated that the defendant American
National Bank and Trust Company subsequently made agreements with the
same two potential customers for the performing of data processing service,
thus depriving Data Systems of the right and opportunity to perform such
service and to be compensated therefor.
la a ae
—
23
ities in support thereof. Rural Electrification Admin. v.
Northern States Power Co., 373 F.2d 686, 692 (8th Cir.
1967). Quoted particularly in this case is Dube v. Schuetzle,
303 F.2d 570, 574 (8th Cir. 1962), to the effect that:
“It has also been judicially determined that the Ad-
ministrative Procedure Act was not designed to and in
fact has not changed the basic principle that one must
have suffered a legal wrong in order to have standing to
challenge programs administered by governmental
agencies. (Citing many cases. )”
The result is that in determining whether or not plaintiffs
have standing this case must be considered without there
being in existence any statutory right to judicial review.
That is to say, the National Bank Act does not have within
itself any provisions for court review, such for instance as
the Internal Revenue Code or the Interstate Commerce Act,
and it is clear that the Administrative Procedure Act does
not and did not append such in effect to this Act so as to
create a specific provision for judicial review.
There is a long and well established line of judicial author-
ity holding that plaintiffs whose only injury is loss due to
competition lack standing to maintain legal action to redress
their economic injury. These decisions hold that mere com-
petitive injury even though resulting from governmental ac-
tion does not give standing to a person so injured to seek re-
lief in the courts. Alabama. Power Co. v. Ickes, 302 U.S. 464,
58 S.Ct. 300, 82 L.Ed. 374 (1938); Tennessee Power Co. rv.
T.V.A., 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543 (1939) ;
Perkins v. Lukens Steel Co., 310 U.S. 113, 60 S.Ct. 869, 84
L.Ed. 1108 (1940); Kansas City Power & Light Company
r. McKay, 225 F.2d 924 (D.C. Cir. 1955), cert. denied 350
U.S. 884, 76 S.Ct. 137, 100 L.Ed. 780 (1955); Teras State
AFL-CIO v. Kennedy, 330 F.2d 217 (D.C. Cir. 1964) ; Ben-
son v. Schofield, 236 F.2d 719 (D.C. Cir. 1956), cert. denied
859 U.S. 976: United Milk Producers of New Jersey v. Ben-
Ee
24
son, 225 F.2d 527 (D.C. Cir. 1955); Pennsylvania Railroad
Co. v. Dillon, 335 F.2d 292 (D.C. Cir. 1964); Rural Elec.
trification Admin. v. Central Louisiana Elec. Co., 354 P24
859 (Sth Cir. 1966).
So in Tennessee Power Co. v. T.V.A., 306 U.S. 118, 59 8.Ct,
366, 83 L.Ed. 543 (1939), the court laid down the rule that
one threatened with injury by governmental action may not
contest such in the courts “unless the right invaded is a legal
right—one of property, one arising out of contract, one pro-
tected against tortious invasion, or one founded on a statute
which confers a privilege.”
Plaintiffs in the case at bar have not lost nor had threat-
ened any property interest (loss due to competition clearly
not qualifying as such under the above cases); they do not
allege any contract breach nor tortious action and it is clear
as above set forth that neither the National Bank Act nor the
Administrative Procedure Act are statutes confering any
specific privilege on plaintiffs. Plaintiffs do not have any
governmentally granted license or franchise which is im-
paired by defendants’ actions.
No purpose will be served in this opinion by reviewing the
detailed facts of the above cited cases. Their rationale seems
to be this: The United States is a country dedicated to free
enterprise. If A invests his money in a business, a grocery
store for instance,* he cannot complain legally if another man
4In Alabama Power Co. v. Ickes, 302 U.S. 464, 481 (1938), the court said:
“John Doe, let us suppose, is engaged in operating a grocery store,
Richard Roe, desiring to open a rival and competing establishment, seeks
a loan from a manufacturing concern which, under its charter, is without
authority to make the loan. The loan, if made, will be ultra vires. The
state or a stockholder of the corporation, perhaps a creditor in some cir-
cumstances, may, upon that ground, enjoin the loan. But may it be en-
joined at the suit of John Doe, a stranger to the corporation, because the
lawful use of the money will prove injurious to him and this result is
foreseen and expected both by the lender and the borrower, Richard Roe?
Certainly not, unless we are prepared to lay down the general rule that A,
who will suffer damage from the lawful act of B, and who plainly will
have no case against B, may nevertheless invoke judicial aid to restrain a
_
25
B opens next door to him and he, A, loses his investment be-
cause of the competition. Economic injury due to competi-
tion is not an actionable legal wrong. Even assuming that
B did not file proper incorporation papers or income tax re-
turns, or borrowed his money fom someone who lent it to
him ultra vires, or agreed to pay usurious interest for bor-
rowed money, Or obtained his groceries illegally, still A as a
competitor has suffered no judicially cognizable wrong.” The
above reasoning applies where the competitor is the United
States Government, i.e., in the public power field or more
frequently where the government has enhanced competition
by financial aid or grants to a competitor, even though the
government may not have followed to the letter all of the re-
quirements, or may have exceeded the restrictions and pro-
scriptions of the Act of Congress creating or permitting its
action.®
third party, acting without authority, from furnishing means which will
enable B to do what the law permits him to do. Suci a rule would be
opposed to sound reason, as we have already tried to show, and cannot be
accepted.”
“The appellants further argue that . . . they may, by suit, challenge
the constitutionality of the statutory grant of power the exercise of which
results in competition. This is but to say that if the commodity used by a
competitor was not lawfully obtained by it the corporation with which it
competes may render it liable in damages or enjoin it from further com-
petition because of the illegal derivation of that which it sells. If the
thesis were sound, appellants could enjoin a competing corporation or
agency on the ground that its injurious competition is ultra vires, that
there is a defect in the grant of powers to it, or that the means of compe-
tition were acquired by some violation of the Constitution. The contention
is foreclosed by prior decisions that the damage consequent on competi-
tion, otherwise lawful, is in such circumstances damnum absque injuria,
and will not support a cause of action or a right to sue.” Tennessee Power
Co. v. T.V.A., 306 U.S. 118, 139-40 (1939).
a
6 “ | When Congress has not given them any such standing by ex-
press or implied provision of statute ® *® °, mere economic competition
made possible by governmental action (even if allegedly illegal) does not
give standing to sue in the courts to restrain such action. . . . For pur-
poses of standing in this case, the sufficiency of appellants’ allegations of
‘legal wrong’ thus depend upon congressional intent to bestow upon them
a legal right to protection from such competition.” Pennsylvania Railroad
Co. v. Dillon, 335 F.2d 292, 294-95 (D.C. Cir. 1964).
——=
26
A further reason sometimes assigned for denying standing
is that to allow such would permit some citizen or taxpayer
who claimed a “public interest” or who desired to act as a
“private attorney general” to challenge in court every action
of the government.
Less than a year ago the Court of Appeals for the Eighth
Circuit in a lengthy opinion adopted the rationale of the
above cited cases. Rural Electrification Admin. v. Northern
Ntates Power Co., 373 F.2d 686 (8th Cir. 1967), cert denied
387 U.S. 945 (1967), 87 S.Ct. 2079, 18 L.Ed.2d 1332. This
decision binds this court and thus requires a dismissal of
plaintiffs’ complaint.
Of the several cases relied on by plaintiffs, most of them
are distinguishable and not applicable to the case at bar.
Several relate to situations where the federal or state govern-
ments have recognized that a particular field of competition
is subject to regulation and restriction as to the number who
may engage in such business, i.e., where for the benefit of the
public, totally free and unrestrained competition in the bank-
ing field, for instance, is not desirable and should be con-
fined. So, when a plaintiff already has a license or franchise
to engage in such a field of business, the prospective entry of
another into the same field has been held to give plaintiff
standing to demand judicial review. Accordingly standing
has been allowed to challenge the Comptroller’s action in
chartering a new national bank or a new branch of a national
bank. National Bank of Detroit v. Wayne Oakland Bank,
252 F.2d 537 (6th Cir. 1958); Hoosier State Bank of In-
diana v. Saxon, 248 F. Supp. 233 (N.D. Ind. 1965) ; Whitney
Nat’! Bank v. Bank of New Orleans & Trust Co., 323 F.2d
290 (D.C. Cir. 1963); Webster Groves Trust Co. v. Savon,
370 F.2d 381 (8th Cir. 1966). In these cases an existing bank
was the challenger in a field where, for the benefit of the pub-
lic, the number who are allowed in competition is limited. A
grocery store or data processing company failure or bank-
—
ruptey would be unfortunate and cause the proprietors and
owners to lose their investment, but a bank failure would
cause not only loss of the owner’s investment but also loss to
many unwary members of the public who are depositors. For
this reason competition is limited as to the number who can
engage in this business. Thus in the interest of the public
one already in this field has standing to challenge a proposed
new entrant.
In accordance with this same general philosophy is F.C.C.
+, Sanders Bros. Radio Station, 309 U.S. 470, 60 S.Ct. 693, 83
L.Ed. 869 (1940), allowing a competing radio station stand-
ing in the public interest to challenge an order granting a
certificate to a new station.
The case of Georgia Ass’n of Ind. Ins. Agents, Inc. v.
Saron, 260 F. Supp. 802 (N.D. Ga. 1966), involved a section
of the National Bank Act (12 U.S.C. §92) permitting the
sale of insurance by national banks located in towns of 5,000
population or less. Insurance agents were allowed standing
judicially to question the Comptroller’s ruling granting cer-
tain authority to write insurance by national banks in cities
of any size, on the grounds that this statute by clear implica-
tion was intended to protect a class, ie., certain insurance
agents and representatives. Thus standing existed in any
member of this class. There is no such statute protecting
27
data processors.
In this same category is Investment Company Institute v.
Camp, 274 F.Supp. 624 (D.D.C. 1967), where a national
bank instituted a collective investment fund. Plaintiff asso-
ciation sought to restrain the Comptroller from authorizing
such. Plaintiff was held to have standing in view of the
specific wording of the National Bank Act which by its lan-
euage segregated generally national commercial banking
from the securities business, thus creating a protected class.
Cf., National Ass’n of Securities Dealers, Inc. v. Securities
Exchange Commission (Case #20,164, D.C. Cir. decided No-
28
vember 21, 1967), denying standing involving the same bank
in a somewhat differing controversy.
As to Baker, Watts & Co. v. Saron, 261 F.Supp. 247
(D.D.C. 1966), it can only be said that it seems contrary jn
its philosophy and holding to the Eighth Circuit holding in
Rural Electrification Admin. v. Northern States Power Co,
373 F.2d 686 (8th Cir. 1967), cert. denied 387 U.S. 945
(1967), 87 S.Ct. 2079, 18 L.Ed.2d 1332. Perhaps the same
can be said of some of plaintiffs’ other cases. Even those dis.
tinguished hereinabove fundamentally adopt or lean toward
the Baker, Watts, supra, approach and rationale. Webster
Groves Trust Co. v. Saron, 370 F.2d 381 (8th Cir. 1966), as
an Eighth Circuit case, predates Rural Electrification Admin,
v. Northern States Power Co., supra, by slightly more than a
year and though it has language which would seem to sup.
port plaintiffs’ contentions, it was distinguished by the court
itself in the Rural Electrification Admin. v. Northern States
Power Co. case and classified as illustrative of the type of
case where an existing licensee in a regulated competitive
field has standing where it offers to prove detriment to the
public interest by the potential entrance of a new competitor.
Certain other cases are difficult to reconcile. As stated in
Rural Electrification Admin. v. Northern States Power Co.,
373 F.2d 686, 692 (8th Cir. 1967) :
“Although concepts of standing, judicial reviewability
and justiciable controversy are intermingled in the area
of administrative review, our analyses compels reversal
under any or all of these jurisdictional bases. Appellees’
brief well demonstrates isolated statements and cases
dealing with agency review are not all simply recon-
eel, . . ”
There is the view relied on by plaintiffs that actions of gov-
ernment officials ought to be rather freely judicially review-
able; that public officials ought to be subject to some rein by
29
the court.” Davis in his textbook on ADMINISTRATIVE LAW,
Chapter 22, and specifically §22.18 takes particular issue
with the federal cases denying standing and sets forth in the
Chapter numerous reasons therefor.
Apart from all of the above, the rule in this Circuit seems
clear from the teachings of Rural Electrification Admin. v.
Northern States Power Co., supra. Such binds this court.
A separate order granting defendants’ motions to dismiss
plaintiffs’ complaint has been entered.
7In Whitney Nat'l Bank v. Bank of New Orleans, 379 U.S. 411, 427, 85 S.Ct.
551, 13 L.Ed.2d 286 (1965), the dissenting justice (quoted in Webster
Groves Trust Co. v. Saxon, supra) stated:
“ | absent a congressional design to bar all judicial review .. -
injunctive relief is available where administrative remedies are either in-
applicable or inadequate. This rule keeps the Comptroller from being a
free-wheeling agency dispensing federal favors; and it gives some assur-
ance that he will render principled decisions within the rule of law laid
down by Congress.”
30
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
THIRD DIVISION
NOTICE OF APPEAL BY ASSOCIATION OF DATA
PROCESSING SERVICE ORGANIZATIONS, INC
AND DATA SYSTEMS, INC.
"
Notice is hereby given that Association of Data Process.
ing Service Organizations, Inc., and Data Systems, Inc., here-
with appeals to the United States Court of Appeals for the
Eighth Circuit from the Order entered by Honorable Philip
Neville, United States District Judge, in this action, on
January 9, 1968, and the judgment entered that date pursu-
ant to said Order dismissing Plaintiffs’ Complaint.
ASSOCIATION OF DATA PROCESSING SERVICE
ORGANIZATIONS, INC. AND DATA SyYsrTeMs, Inc.
By SHANEDLING, PHILLIPS, Gross & AARON
Attorneys for Appellants
/s/ Bert M. Gross
Beet M. Gross
SHANEDLING, PHILLIPS, Gross & AARON
909 Farmers & Mechanics Bank Bldg.
Minneapolis, Minnesota
(Filed in the United States District Court, District of
Minnesota, Third Division, on 1-17-68.)
31
(Opinion )
UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
No. 19,218
Association of Data Processing Service Organizations, Inc.,
and Data Systems, Inc.,
Appellants,
vs.
William B. Camp, Comptroller of the Currency of the United
States, and American National Bank and Trust Company,
Appellees.
————
Appeal from the United States District Court for the
District of Minnesota.
[February 6, 1969.]
Before VoceL, Lay and Bricut, Circuit Judges.
Lay, Circuit Judge.
Plaintiffs appeal from an order dismissing their complaint
against the Comptroller of the Currency of the United States
and the Minnesota domiciled American National Bank and
Trust Company. One of the plaintiffs is Association of Data
Processing Service Organizations, an incorporated associa-
tion of data service organizations domiciled in Pennsylvania
whose members perform data processing services throughout
the United States. It is hereinafter referred to as ADAPSO.
The other plaintiff, Data Systems, Inc., is a Minnesota cor-
32
poration engaged in the data processing business, with jtg
principal place of business in Minneapolis. The complaint
seeks equitable relief against the defendants and a “deter.
mination of the powers granted national banking associa.
tions under [the National Bank] Act as set forth in 12 Ug,
Code §24.” It is alleged that by administrative rule the
Comptroller of the Currency has authorized national banks
to perform data processing services for bank customers jn
violation of 12 U.S.C. §24 which gives national banks only
“incidental powers as shall be necessary to carry on the
business of banking.” Plaintiffs allege that as a result of the
unauthorized action ADAPSO members are threatened wit}
the loss of a substantial part of the data processing market.)
It is alleged that American National now performs data
processing services for two companies with whom Data Sys.
tems had “negotiated” as prospective customers.
Jurisdiction is asserted by reason of an alleged federal
question arising under the banking laws of the United States,
12 U.S.C. §§ 21 et seq. The trial court dismissed plaintiffs’
complaint for lack of jurisdictional standing. We affirm.
The question of standing serves as a test of federal juris-
diction. Standing is the constitutional prerequisite related
to whether a justiciable “case or controversy” exists. In-
volved is an examination to determine whether the plaintiffs
have a personal stake legally sufficient “to assure that con-
crete adverseness” which avoids merely abstract determina-
tions. Flast v. Cohen, 392 U.S. 83 (1968). See also Aetna
Life Ins. Co. v. Haworth, 300 U.S. 227 (1937). Justiciabili-
ty, although not always related to standing, becomes defi-
nitely attached when we consider whether the legal relation-
1We need not decide whether ADAPSO as an association can properly allege
“loss of competition” on behalf of its members when it is not engaged in the
data processing business itself. See discussion, Jaffe, Judicial Control of Ad-
ministrative Action 542-43 (1965).
33
ships of parties are such that they are aligned with adverse
legal interests.
Plaintiffs assert standing in that they have been and will
continue to be economically injured by illegal competition
of the national banks. Whether a litigant has standing to
challenge competitive injury has been the subject of extend-
ed litigation and discussion. Doctrinal rules have developed
a maze of conceptualistic abstractions and theories which
at times are viewed and applied as being indistinguishable
one from another. See Baker, Watts & Co. v. Saron, 261
F.Supp. 247 (D.D.C. 1966), aff'd sub nom., Port of N. ze
Authority v. Baker, Watts & Co., 392 F.2d 497 (D.C. Cir.
1968); Saron v. Georgia Ass’n of Ind. Ins. Agents, Inc., 399
F.2d 1010, 1019 (5 Cir. 1968) (concurring opinion ).”
The trial court here has observed that language in Rural
Flee. Admin. ¥. Northern States Power Co., 373 F.2d 686
(8 Cir. 1967) (denying standing)* and in Webster Groves
Trust Co. v. Saxon, 370 F.2d 381 (8 Cir. 1966) (allowing
standing)* seems to state divergent principles, either of
which could govern in the instant case. However, all legal
principles must be qualitatively analyzed within the context
of factual surroundings. Much of the confusion on standing
seems to arise from the emphasis upon the issues to be ad-
judicated or upon the possible merits of the substantive
claim rather than upon an examination of the status of the
ee
2See also extended discussion in 3 Davis, Administrative Law 208-294 (1958);
Jaffe, Judicial Control of Administrative Action 500-531 (1965). And more
recently, Davis, Standing: Taxpayers and Others, 35 U. Chi. L. Rev. 601
(1968).
8We stated in Northern States, 373 F.2d 692:
“Appellees readily recognize that the interest of the economic competitor
is not sufficient standing to challenge the authority or discretion of the
Administrator to make loans.”
4We stated in Webster Groves, 370 F.2d 388:
“(W]hen a competitor believes he is being subjected to illegal competition
owing to impropriety by the Comptroller, the courts should be open to
hear and decide the alleged wrong.”
rs
34
complaining plaintiff. Whether or not a defendant is allegeg
to be engaged in illegal competition cannot by itself deter.
mine a plaintiff’s standing to complain. Cf. Chicago v. Atchi.
son, T. d 8. F. Ry., 357 U.S. 77 (1958), and note 8 infra,
Chief Justice Warren has stated, “The fundamental aspect
of standing is that it focuses on the party seeking to get his
complaint before a federal court and not on the issues he
wishes to have adjudicated.” However, he added, “. . . it
is both appropriate and necessary to look to the substantive
issues for another purpose, namely, to determine whether
there is a logical nexus between the status asserted and the
claim sought to be adjudicated.” Flast v. Cohen, 392 U.8,
83, 99, 102 (1968).
Whether a party may or may not challenge allegedly
illegal competition by others is best evaluated by examining
the various factual circumstances within which the courts
have discussed a particular plaintiff’s standing and com-
petitive injury.
Perhaps most well known are the so-called “power cases,”
where the threatened economic loss arises from government-
created competition. In these situations the embryo of the
competition by the defendant is generally found in congres-
sional legislation. But even though the validity of such legis-
lation is challenged, or an attack is made on the authority
of a government agent to loan money, the courts uniformly
have denied standing to competitors who otherwise possess
no legal right to be free from competition.” This group of
cases is represented by Tennessee Elec. Power Co. v. TVA,
306 U.S. 118, 137 (1939), which early emphasized:
5In addition, even though the attack upon a government program to loan
money is alleged to be illegal, this does not make the competition itself legally
wrong. This is explained because “the borrower owes him [the plaintiff] no
obligation to refrain from using the proceeds in any lawful way the borrower
may choose.” Alabama Power Co. v. Ickes, 302 U.S. 464, 480 (1938). (Em-
phasis ours. )
35
“The appellants invoke the doctrine that one threat-
ened with direct and special injury by the act of an
agent of the government which, but for statutory author-
ity for its performance, would be a violation of his legal
rights, may challenge the validity of the statute in a
suit against the agent. The principle is without applica-
tion unless the right invaded is a legal right,—one of
property, one arising out of contract, one protected
against tortious invasion, or one founded on a statute
which confers a privilege.”
see also Rural Elec. Admin. v. Northern States Power Co.,
supra.
Secondly, in contrast to the “power” cases are situations
where a plaintiff, possessing a public grant or contract to
operate, seeks to prevent a competitor from entering into an
area of regulated and restricted competition. Representative
of these cases is Frost v. Corporation Comm’n, 278 U.S. 515
(1929). This court has applied the rationale of Frost to a
suit by a state bank against the Comptroller to prevent ille-
gal competition. Webster Groves Trust Co. v. Savon, 370
F.2d 381 (8 Cir. 1966). As observed in Whitney Nat’l Bank
r. Bank of New Orleans & Trust Co., 323 F.2d 290 (D.C.
Cir, 1963), rev’d on other grounds, 379 U.S. 411 (1965), in-
volved is a property right arising out of a public charter
which bestows a legal! interest on a state bank to complain.®
‘The branch banking provisions of the National Bank Act make the establish-
ment of branch banks subject to the law of the states. 12 U.S.C. §36. A
primary purpose in doing so is to ensure competitive equality between state
and national banks. First Nat’l Bank v. Walker Bank & Trust Co., 385 U.S.
952 (1966). It has accordingly been held that this provision gives state
banks a sufficient legal interest to provide them with statutory standing to
challenge the legality of branching by national banks. See National Bank v.
Wayne Oakland Bank, 252 F.2d 537 (6 Cir. 1958), discussed in Hoosier State
Bank v. Saxon, 248 F.Supp. 233 (N.D. Ind. 1965). The contrast between
basing a state bank’s standing on a “property right” arising out of its charter
and standing by reason of its inclusion within the class intended to be pro-
tected by the National Bank Act is one without essential difference. Perhaps
the most realistic approach is that the right indigenous to the charter is pro-
tected by the statute.
——y
36
Closely related but significantly different are those cages
involving areas of competition which because of public inter.
est find need of public licensing as opposed to a public grant
or contract.’ Here plaintiff-competitors are considered to
be without a private “legal right” to protest unauthorized
competition but nevertheless find standing by specific legis.
lation as “aggrieved persons” to act in the public interest,
See, e.g., FCC v. Sanders Bros. Radio Station, 309 U.S. 470
(1940); Scripps-Howard Radio, Inc. v. FCC, 316 U.S, 4
(1942). Cf. Office of Communication of United Church of
Christ v. FCC, 359 F.2d 994 (D.C. Cir. 1966). In these cases
Congress has patently recognized need for judicial review
7The Court stated in FCC v. Sanders Bros. Radio Station, 309 U.S. 470 at 474
(1940):
“In contradistinction to communication by telephone and telegraph,
which the Communications Act recognizes as a common carrier activity
and regulates accordingly in analogy to the regulation of rail and other
carriers by the Interstate Commerce Commission, the Act recognizes that
broadcasters are not common carriers and are not to be dealt with as such,
Thus the Act recognizes that the field of broadcasting is one of free com-
petition. The sections dealing with broadcasting demonstrate that Con-
gress has not, in its regulatory scheme, abandoned the principle of free
competition, as it has done in the case of railroads, in respect of which
regulation involves the suppression of wasteful practices due to competi-
tion, the regulation of rates and charges, and other measures which are
unnecessary if free competition is to be permitted.
“An important element of public interest and convenience affecting the
issue of a license is the ability of the licensee to render the best practicable
service to the community reached by his broadcasts. That such ability
may be assured the Act contemplates inquiry by the Commission, inter
alia, into an applicant’s financial qualifications to operate the proposed
station.
“But the Act does not essay to regulate the business of the licensee.
The Commission is given no supervisors control of the programs, of busi-
ness management or of policy. In short, the broadcasting field is open to
anyone, provided there be an available frequency over which he can
broadcast without interference to others, if he shows his competency, the
adequacy of his equipment, and financial ability to make good use of the
assigned channel.”
—
37
even though tue competitive business controlled is considered
free and otherwise unrestricted.*
Fourth, there are situations where competitors are given
standing to challenge competition which is allegedly in vio-
lation of a statute, where the statute itself is said to be en-
acted for the express protection of the class of competitor
complaining. The most recent example of these cases is found
in Hardin v. Kentucky Util. Co., 390 U.S. 1 (1968).° Plain-
sBut cf. Chicago v. Atchison, T. & S. F. Ry., 357 U.S. 77 (1958). The Su-
preme Court recognized standing of a municipal licensed public transportation
system to intervene and attack the entry of one seeking to compete in an al-
leged violation of a city ordinance. The Court made clear that standing of
the intervenor could not be viewed from examination of the merits as to
whether in fact the competition was or was not illegal. Parmelee, the inter-
venor, for many years had enjoyed an arrangement with the railroad to trans-
passengers between stations. Parmelee was notified of its termination.
A competitor, Railroad Transfer Service, was subsequently given this business
notwithstanding a city ordinance that prohibited it from doing so without a
license from the city. The Court found that Parmelee had “a direct and sub-
stantial personal interest in the outcome” and allowed standing. The ordi-
nance was then held unconstitutional as being repugnant to the Interstate
Commerce Act and the intervenor lost.
This case may best be categorized with those instances where standing
to challenge illegal competition is implicitly found within a legislative enact-
ment, be it an existing ordinance or statute, valid or not. Cf. Alton R.R. v.
United States, 315 U.S. 15, 19 (1942).
°The Supreme Court said:
“This Court has, it is true, repeatedly held that the economic injury which
results from lawful competition cannot, in and of itself, confer standing
on the injured business to question the legality of any aspect of its com-
petitor’s operations. Railroad Co. v. Ellerman, 105 U.S. 166 (1882);
Alabama Power Co. v. Ickes, 302 U.S. 464 (1938); Tennessee Power Cc.
v. TVA, 306 U.S. 118 (1939); Perkins v. Lukens Steel Co., 310 U.S. 113
(1940), But competitive injury provided no basis for standing in the
above cases simply because the statutory and constitutional requirements
that the plaintiff sought to enforce were in no way concerned with pro-
tecting against competitive injury. In contrast, it has been the rule, at
least since the Chicago Junction Case, 264 U.S. 258 (1924), that when
the particular statutory provision invoked does reflect a legislative purpose
to protect a competitive interest, the injured competitor has standing to
require compliance with that provision. See Alton R. Co. v. United States,
315 U.S. 15, 19 (1942); Chicago v. Atchison, T. & S. F. R. Co., 357
U.S. 77, 83 (1958).
38
tiffs’ reliance on recent cases against the Comptroller fa}
within facile classification of this rule. See, eg., Baker,
Watts & Co. v. Saron, 261 F. Supp. 247, supra, as explained
in Investment Co. Institute v. Camp, 274 F. Supp. 624, 636
(D.D.C. 1967) ; Saron v. Georgia Ass’n of Ind. Ins. Agents,
Inc., 399 F.2d 1010 (5 Cir. 1968).?°
Fifth, the last group of “competition” cases relates to a
plaintiff's unsuccessful challenge of a competitor's alleged
ultra vires acts affecting plaintiff's non-regulated area of
commerce. This factual setting is best illustrated by Rail.
road Co. v. Ellerman, 105 U.S. 166 (1882). In that case the
plaintiff, who had contracted with the city of New Orleans
to collect revenue from users of the city wharves, sought
to enjoin a railroad company from operating wharves in
New Orleans. He alleged this action would constitute illegal
competition because the state statute authorizing the com.
pany to operate wharves was unconstitutional. The prin-
ciple here furnishes an analogue to that in the “power cases”
where the conduct of the defendant, although alleged to be
illegal is nevertheless considered “lawful” with respect to
“Petitioners concede, as of course they must, that one of the primary
purposes of the area limitations in §15d of the Act was to protect private
utilities from TVA competition.” Hardin v. Kentucky Util. Co., 390 U.S.
at 5-6. *
10We do not share confidence in the alternative holding in Saxon v. Georgia
Ass'n of Ind. Ins. Agents, Inc., 399 F.2d 1010 (5 Cir. 1968), that outside
the “statutory aid to standing” plaintiffs had “a legal right to protect them-
selves from unlawful competition.” Id. at 1018. The emphasis that plain-
tiff’s standing arises out of the allegation of “unlawful competition” as con-
trasted to “lawful competition” seemingly relates standing to the merits of
the claim to be adjudicated rather than the status of a party to complain.
For a similar critique, see Judge Thornberry’s concurring opinion, 399 F.2d
at 1020, n. 3.
39
the plaintiff because of the total absence of legal interest
found in plaintiff's status.”*
In summary, @ plaintiff may challenge alleged illegal com-
petition when as complainant it pursues (1) a legal interest
by reason of public charter or contract, Frost v. Corpora-
tion Comm'n, supra, (2) a legal interest by reason of statu-
tory protection, Baker, Watts & Co. v. Savon, supra, or (3)
1This is explained by Mr. Justice Matthews in Railroad Co. v. Ellerman, 105
US. at 173-174:
“The sole remaining question, then, is whether Ellerman, as assignee
of the city, has any legal interest which entitled him to enjoin the com-
pany from using its wharf as a public wharf beyond the limits of such
use, as defined by that construction of the joint resolution. If he has
such interest, it can only consist in preventing competition with him-
self as a wharfinger, which such more extensive use of the railroad prop-
erty would create. And if the right to assert it exists, it must rest, not
upon the claim that the premises are thus used for purposes to which
they might not be lawfully devoted if owned and used by a natural
person, but on the allegation merely that such use is beyond the cor-
porate powers of the company. But if the competition in itself, however
injurious, is not a wrong of which he could complain against a natural
person, being the riparian proprietor, how does it become so merely
because the author of it is a corporation acting ultra vires? The dam-
age is attributable to the competition, and to that alone. But the compe-
tition is not illegal. It is not unlawful for any one to compete with the
company, although the latter may not be authorized to engage in the
same business. The legal interest which qualifies a complainant other
than the State itself to sue in such a case is a pecuniary interest in pre-
venting the defendant from doing an act where the injury alleged flows
from its quality and character as a breach of some legal or equitable
duty. A stockholder of the company has such an interest in restraining
it within the limits of the enterprise for which it was formed, because
that is to enforce his contract of membership. The State has a legal
interest in preventing the usurpation and perversion of its franchises,
because it is a trustee of its powers for uses strictly public. In these
questions the appellee has no interest, and he cannot raise them in
order, under that cover, to create and protect a monopoly which the
law does not give him. The only injury of which he can be heard in a
judicial tribunal to complain is the invasion of some legal or equitable
right. If he asserts that the competition of the railroad company dam-
ages him, the answer is, that it does not abridge or impair any such
right. If he alleges that the railroad company is acting beyond the war-
rant of the law, the answer is, that a violation of its charter does not
of itself injuriously affect any of his rights. The company is not shown
to owe him any duty which it has not performed.” (Emphasis ours. )
seo ERORRIMN
40
a “public interest” in which Congress has recognized the
need for review of administrative action and plaintiff is sig.
nificantly involved to have standing to represent the Public,
FCC v. Sanders Bros. Radio Station, supra. From this
analysis, it seems clear that an allegation of “illegal competi.
tion” is not the balancing determinant of a plaintiff's stang.
ing. The primary search must rest on whether the plaintiff's
status is one which enjoys a private interest entitled to pro.
tection or is one which the law recognizes to be of such legal
significance to allow a party to act as a public representa.
tive for a public interest.
In the instant case the facts clearly place plaintiffs ont.
side those cases which recognize standing. Plaintiffs are
competing in a non-regulatory field of free competition. They
possess no private legal interest nor do they plead any legal
harm which is recognized at law. Their status is not one
which places them within a class designedly protected by
statute.'? In direct accord see Wingate Corp. v. Industrial
Nat’l Bank, 288 F. Supp. 49 (D.R.I. 1968); Arnold Tours,
Inc. v. Camp, 286 F. Supp. 770 (D. Mass. 1968).
Plaintiffs’ argument is in essence an equitable plea, that
in effect they have a personal stake to pursue, even though
not a legal one, but nevertheless one which makes them logi-
cal parties to protect the public interest from illegal actions
of government agencies.
The problem with their plea is many-fold. Congress has
not seen fit within the National Bank Act to recognize any
12The Bank Act has never been construed to give a private litigant standing
to complain concerning ultra vires acts of national banks relating to execut-
ed contracts. See National Bank v. Matthews, 98 U.S. 621 (1878). Al-
though distinctive policy arguments exist for this rule, nevertheless there
exists no legislative history nor do plaintiffs offer any serious contention that
the National Bank Act was intended to give these private litigants standing
to litigate alleged ultra vires activities of national banks. The reliance on
the Bank Holding Company Act of 1966 and the Bank Service Corporation
Act is misplaced. Neither act is applicable here.
41
daggrieved person” to assert the publie’s rights. Congress
has not expressed a public concern for protection as found
in FCC v. Sanders Bros. Radio Station, 309 U.S. 470 (1940),
and its progenitors. Without a legal intcest or the status
of a recognized “aggrieved” party, the complaint resolves
itself into an attempt merely to show “q common concern
for obedience to law.” L. Singer & Sons v. Union Pac. R.R.,
311 U.S. 295, 304 (1940). As pronounced in Singer, outside
statutory consent, the general or common interest can find
protection only in the standing granted to public authorities.
nless a relevant statute provides for a “party in interest”
to seek judicial review or unless a complainant possesses a
recognized legal interest, he lacks standing to be a “private
attorney general” to represent the public interest. See Kan-
eas City Power & Light Co. v. McKay, 225 F.2d 924 (D.C.
Cir. 1955); Braude v. Wirtz, 350 F.2d 702, 707, 708 (9 Cir.
1965).?*
Mr. Justice Frankfurter best describes judicial obligation
to avoid review when legal standing is not otherwise in-
volved :
“The jurisdiction of the federal courts can be invoked
only under circumstances which to the expert feel of
lawyers constitute a ‘ease or controversy.’ The scope
and consequences of the review with which the judici-
ary is entrusted over executive and legislative action
require us to observe these bounds fastidiously.” Joint
Anti-Fascist Refugee Committee v. McGrath, 341 U8.
123, 150 (1951) ( concurring opinion).
Judgment affirmed.
18See also our prior discussions concerning the applicability of the Adminis-
trative Procedure Act in Rural Elec. Admin. v. Northern States Power Co.,
373 F.2d at 692, n. 9.
(Judgment )
UNITED STATES COURT OF APPEALS
For THE EIGHTH CIRCUIT
No. 19218. September Term, 1969
Association of Data Processing Service Organizations, Ine,
and Data Systems, Inc.,
Appellants,
Vs.
William B. Camp, Comptroller of the Currency of the United
States, and American National Bank and Trust Company,
Appellees,
Appeal from the United States District Court for the
District of Minnesota
This cause came on to be heard on the record from the
United States District Court for the District of Minnesota,
and was argued by counsel.
On Consideration Whereof, it is now here Ordered and
Adjudged by this Court that the judgment of the said Dis-
trict Court, in this cause, be, and the same is hereby, af-
firmed.
February 6, 1969.
Costs taxed in favor of appellee American Natl. Bank &
Trust Co. for printing brief—$98.00.
Costs taxed in favor of appellee Wm. B. Camp, Comptrol-
ler, etc., for printing brief & suppl. brief & Appendix—$32.96.
SUPREME COURT OF THE UNITED STATES
Ocroser TERM, 1968
No. 1246
ASSOCIATION OF DATA PROCESSING SERVICE
ORGANIZATIONS, INC., and DATA SYSTEMS, INC.,
Petitioners,
vs.
WILLIAM B. CAMP, Comptroller of the Currency of the
United States, and AMERICAN NATIONAL BANK
AND TRUST COMPANY,
Respondents.
ORDER
The petition for a writ of certiorari is granted and the
case is placed on the summary calendar.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.