Petition for a Writ of Certiorari — Association of Data Processing Service Organizations, Inc. v. Camp

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In The APR 10 1969

Supreme Court of the United Stptosn +. sins

OcrToser TERM, 1969

vo toms SS

ASSOCIATION OF DATA PROCESSING SERVICE OR-

GANIZATIONS, 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.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

MILTON R. WESSEL

425 Park Avenue

New York, New York 10022

Counsel of Record for Petitioners

Bert M. Gross and Feri M. PHILLIPS

909 Farmers & Mechanics Bank Bldg.

Minneapolis, Minnesota 55402

Counsel for Petitioners

st Brief Printing Co., 322 S. Fourth St., Minneapolis 55415 338-5078

TABLE OF CONTENTS

Page

Citations to Opinions Below 1

Jurisdiction 2

Question Presented 2

Statutes Involved 2

Statement of Case 2

Reasons for Granting the Writ. 4

COnclUSiON — ...........-.-.--sce-eceeecceeeeceeeeeeeeceseennneneennseetteneteecenenecs 11

Appendix A—Opinion of District Court ........................- 13

B—Opinion of Court of Appeals.................... 23

C—Judgment of Court of Appeals.................-.- 34

ec cis cicsinienacinciiminecpnnrnaisinatentniensoncinares 35

E—Opinion of Court of Appeals for the First

Circuit in Wingate Corp. v. Ind. Nat.

Bank, No. 7186, March 27, 1969................ 36

TABLE OF AUTHORITIES

Cases: Page

American President Lines vy. Federal Maritime Board,

112 F.Supp. 346, 348-49 (D.D.C. 1953)... 10

Arnold Tours, Inc. v. Camp, No. 7192, Ist Cir., March 27,

an passin nak tbacrinahcod Mishitehich peasseblaek ods ateheatedsbelniesibialinawinia aca 6,7

Baker, Watts & Co. vy. viene 4 261 F. ies 247 (D.D.C,

PRR RNIN are in capt COP ORTON PER EIS hil 9

Flast v. Cohen, 392 U.S. 83 (1968) 00... BM

Frothingham y. Mellon, 262 U.S. 447 (1923)... I

Investment Co, Institute vy. Camp, 274 F. Supp. 624

SS OI inc «is a cen sidceenlecteadirotagtiomnheidsaan ae 6,7

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

BF NER IE 0 OTB vas ison sacadtrsinscincadhsaniceivbararaccremineauee 10

Saxon v. Georgia Ass’n of Ind. Ins. Agents, Inc., 399

Be EO tien eeicsacencticseaccamnisicestwaSicnstonaes 5, 6,7, 11

Tennessee Power Co. v. TVA, 306 U.S. 118 apes as 8, 9, 10

PIRES eS SALE ERP Vy AUTOR 4, 6,11

Statutes: Page

I II les oxida helicases nteynkdlcnasi-ovsiranva pips nessa Se a

I a aa saci hacesdbasrdemeninteindidiedesoasicscdeeensaec anes ?

12 U.S.C. §§ 1861-1865 ....... ie SAPS SERINE a

12 U.S.C. §1864 ......... Heted aaah as aah curceebianscnbenuhedbarnasoiuitoeta re

I NN oa ad asin cline suoibaltaioiabaccni 4

Secondary Authorities:

Comptroller of the Currency, Manual (Oct. 15, 1966

ee OR lig sicnacinioesiitnmcepteeecosneneticnansaamghatines 3

Kenneth Culp Davis, Standing: Taxpayers and Others,

35 Chi. L. Rev. 601 (1968) ...... vijuisasiaanichicabeadbecceaets aan

Note, Diversification by National aie: 3 21 Stan. L.

Rey. 650 (1969)... ies kcaaba eiieaaighasin econ aselalededecn: 8, 10

In The

Supreme Court of the Bnited States

OcroBER TERM, 1969

| eee i

ASSOCIATION OF DATA PROCESSING SERVICE OR-

GANIZATIONS, 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.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Petitioners pray that a writ of certiorari issue to review

the judgment of the United States Court of Appeals for the

Eighth Circuit, entered in the above-entitled case on Febru-

ary 6, 1969.

CITATIONS TO OPINIONS BELOW

The opinion of the District Court, printed in Appendix 4

hereto, infra, pp. 13-22, is reported in 279 F.Supp. 675. The

opinion of the Court of Appeals is presently unreported and

is printed in Appendix B hereto, infra, pp. 23-33.

JURISDICTION

The judgment of the Court of Appeals was entered on Feb.

ruary 6, 1969 (R. 12 and Appendix C) The jurisdiction of

this Court is invoked under 28 U.S.C. $1254. The jurisdic.

tion of the District Court was invoked by reason of a federa|

question arising under the National Bank Act, 12 Ug¢

§§ 21, et seq.

QUESTION PRESENTED FOR REVIEW

Whether independent data processing service organizg.

tions, whose sole business is to provide data processing sery.

ices for the general business public, have standing to assert

a claim that national banks are illegally offering competing

data processing services.

STATUTES INVOLVED

The statutory provisions involved are portions of the Bank

Service Corporation Act, 76 Stat. 1132, 12 U.S.C. 1861-1865

(Supp. V, 1964), National Bank Act, 12 U.S.C. §24, and the

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

printed in Appendix D hereto, infra, p. 35.

STATEMENT OF THE CASE

As petitioners’ complaint was dismissed by the District

Court on motion before trial and before any information was

obtained by any party in pre-trial discovery proceedings,

this statement of the case is necessarily limited to the plead-

ings on file (R. 1-11).

Petitioners are the Association of Data Processing Serv-

ice Organizations, Inc. (referred to as “ADAPSO”), and an

individual member of that Association (referred to as “Data

Systems”). The members of ADAPSO are engaged in the

business of performing data processing services for the gen-

eral business community. For some time, the respondent

_—

American National Bank and Trust Company of St. Paul,

Minnesota, @ national bank (referred to as “American

Bank”), has been similarly engaged in the business of per-

forming data processing services for the general business

community. In fact, respondent American Bank, at the time

petitioners began their action, was performing or preparing

to perform such services for the Minnesota State Capitol

Credit Union, with whom petitioner Data Systems had con-

tracted to perform such services, and for Carlen Industries,

Inc., with whom Data Systems had been negotiating regard-

ing such services. Petitioners brought this action to have

American Bank’s data processing activities of this nature

declared unlawful, to have them enjoined, and for damages

resulting from these illegal activities.

Petitioners also sought declaratory and injunctive relief

against the respondent Comptroller of the Currency (the

“Comptroller”), a8 he had purported to authorize such ac-

tivities in his 1966 ruling, which stated as follows:

“Incidental to its banking services, a national bank may

make available its data processing equipment or per-

form data processing services on such equipment for

other banks and bank customers.” Comptroller's Man-

wal (October 15, 1966 ed.), par. 3500.

Petitioners have alleged, and for purposes of this petition

these allegations must be accepted, that these activities by

the American Bank and the above ruling by the Comptroller

are illegal under the National Bank Act, United States Code,

Title 12, Chapter 2, and that if these activities are continued

under the umbrella of this ruling they will cause substantial

and irreparable harm to petitioners.

Prior to trial, respondents moved to dismiss the complaint

on the grounds that petitioners lacked standing to maintain

this action. The District Court granted the motion, and the

Court of Appeals affirmed the judgment of dismissal.

REASONS FOR GRANTING THE WRIT

1. The decision of the Court of Appeals in the presen

case directly and irreconcilably conflicts with the decision

of the Court of Appeals for the First Circuit in Wingate

Corp. v. Ind. Nat. Bank, No. 7186, decided March 27, 1969,

attached hereto as Appendix E (p. 36, infra).

In the Wingate Corp. case, the First Circuit reversed the

District Court decision (286 F.Supp. 770, D.Mass. 1968)

that had held the plaintiff to be without standing. It was the

District Court decision in Wingate Corp. which the Eighth

Circuit cited as being in “direct accord” with its decision jn

the present case (App. B, p. 28, infra). That District Court

decision has now been reversed by the First Circuit, creating

the conflict with the Eighth Circuit.

The two cases are indistinguishable. In each, the plain-

tiff is a corporation involved in performing data processing

services. In each, the defendants include a national bank and

the Comptroller of the Currency. In each, the suit was to

enjoin the national bank from performing data processing

services for outside customers pursuant to authorization by

the Comptroller. In each, the District Court dismissed the

complaint before trial on the grounds of lack of standing.

But the Eighth Circuit has affirmed its lower court action,

while the First Cirenit has reversed the decision of its Dis-

trict Court.

Not only are the two decisions diametrically opposed, but

the two opinions set forth explicitly the divergent thinking

that led to the contrary results. The First Circnit Court

writes cogently and at length in support of its conclusion

that statutory aid to standing is found in the Bank Service

Corporation Act, 76 Stat. 1132, 12 U.S.C. 1864 (App. E, pp.

44-46, infra). By contrast, although petitioners argued at

length in their brief before the Eighth Circuit that the Bank

Service Corporation Act gave them standing, that Court of

_ —

Appeals rejected the argument in a footnote (App. B, fn. 12,

infra, p- 32).

The reasoning of the First Circuit appears far more per-

suasive than the summary rejection of petitioners’ position

py the Eighth Circuit. Be that as it may, this square conflict,

ee an issue that is obviously of widespread importance, can-

not be allowed to stand. It is not possible for the national

panking system to function satisfactorily while this conflict

remains unresolved.

» The decision of the Court of Appeals in the present

case is also directly in conflict with the decision of the Court

of Appeals for the Fifth Circuit in Saron v. Georgia Ass'n

of Ind. Ins. Agents, Inc., 399 F.2d 1010 (1968).

The Insurance Agents case is indistinguishable in princi-

pal from the present action. The plaintiffs were an associa-

tion of independent insurance agents and individual mem-

hers of the association. The defendants were a national bank

and the Comptroller of the Currency. The action was to en-

join the national bank from engaging in the insurance busi-

ness in cities of over 5,000 population and to invalidate the

Comptroller’s ruling which had authorized such activity.

Defendants raised the question of plaintiffs’ standing to

maintain the action, and the Court of Appeals held, contrary

to the decision in the present case, that plaintiffs did have

standing :

“We find no fault with appellants’ argument that the

plaintiffs in the court below, who are licensed, profes-

sional insurance agents, have no legal right to be free

from lawful competition by other licensed agents who

are lawfully and properly empowered to engage in the

insurance business, but they do have a legal right to

be protected from unlawful competition by national

banks.” (399 F.2d at 1016.)

The court below recognized the conflict between its deci-

sion and that of the Fifth Circuit in the Insurance Agents

case, although its consideration of the latter case was one

ugain limited to a footnote. (App. B, fn. 10, infra, p, 30,)

It is apparent from a review of the two cases that if the

present petitioners had brought their action within the juris

diction of the Fifth Circuit they would have prevailed upon

the question of standing. It is a basic responsibility of the

Supreme Court to eliminate such conflicts among the Courts

of Appeals.

3. The question presented is of major importance, inyoly.

ing unsettled questions regarding the federal law of stand.

ing affecting a large class of potential litigants besides the

immediate parties. The issue is whether competitors of ng.

tional banks have standing to challenge allegedly illegal ae.

tion by these banks and by the Comptroller of the Currency.

In recent years, national banks have invaded varions fields

of business activity not previously thought of as being en-

compassed within the business of banking. For example,

banks have entered the data processing business (the pres.

ent case and the Wingate Corp. case), the insurance business

(the Insurance Agents case), the travel agency business

(Arnold Tours, Inc. v. Camp, No. 7192, 1st Cir., Mareh 27,

1969), the business of dealing in revenue bonds (Baker,

Watts & Co. v. Saron, 261 F.Supp. 247 (D.D.C. 1966), aff'd

sub. nom. Port of New York Authority v. Baker, Watts & Co.,

392 F.2d 497 (D.C. Cir. 1968)), and the investment fund

business (Investment Co. Institute v. Camp, 274 F.Supp. v24

(D.D.C. 1967)). In all of these cases, the questioned activi-

ties have been approved by the Comptroller of the Currency,

the federal official responsible for supervising and controlling

national bank activities. As the Comptroller has shown no

inclination to restrict national banks from entering these

fields, it has fallen to competitors in each area to bring the

question of the legality of such bank activities to the courts.

In each instance, the question of standing has been raised by

—

the defendant bank and the Comptroller. In three cases

(Baker, Watts—revenue bonds; Investment Co. Institute—

investment funds; Georgia Insurance Agents—insurance )

the courts have held that a competitor has standing. In

Arnold Tours (travel agency ) the court held a competitor

to be without standing. In the data processing field, as

noted before, the courts have disagreed.

Such divergent treatment of the threshold question of

standing in turn creates major uncertainties as to the sub-

stantive question of the rights of national banks to engage

in these particular business activities. It is noteworthy that

in each case cited earlier where the court has found stand-

ing and thus reached the substantive question, the bank ac-

tivity and Comptroller’s ruling have been held illegal.

4. The question here presented, although of major signi-

ficance in relation to the field of banking, has, in addition,

far broader implications extending throughout the entire

area of federal jurisdiction. The wider issue involves prob-

lems of the extent to which a competitive interest supports

standing to litigate questions of alleged illegal government

action adversely affecting that competitive interest.

At present, federal law relating to this aspect of standing

has not been resolved in a satisfactory manner.

“Probably the largest category of cases that would be

affected by interpreting the APA to confer standing on

persons adversely affected would be the miscellaneous

holdings that a competitive interest is not a basis for

standing. Of the cases on this question during the past

five years, perhaps about three-quarters uphold stand-

ing and only about a quarter deny standing. If the de-

cisions are based on a rational principle explaining

why a competitive interest sometimes supports stand-

ing and sometimes not, then changing the result in the

quarter of the cases denying standing might be unde-

sirable. Does the case law rest on some rational prin-

ciple?

“The answer is no, except to the extent that map

cases do uphold standing when a statute indicates ay

intent to protect a competitive interest. In absence of

such legislative intent, the results are largely fortyj.

tous, as I shall try to demonstrate.” Kenneth Culp

Davis, Standing: Taxpayers and Others, 35 Chi, |,

Rev. 601, 625 (1968).

Certainly, it is undesirable that the outcome of litigation

in this area (or in any, for that matter) should depend op

“fortuitous” circumstances. One of the primary responsi.

bilities of the Supreme Court should be to establish guide.

lines for lower federal courts in the area of federal juris.

diction. This case represents an important and urgent oppor.

tunity to establish such guidelines.

Another commentator has reached the same conclusion as

Professor Davis regarding the question involved in this case:

“Clearly this area of the law is unsettled. The narrow

‘legal wrong’ rule of Tennessee Electric is still cited as

authoritative in nonstatutory standing cases, but some

courts have avoided the rule by stretching the statutes

to find a congressional intent to protect the plaintiff

from competition. The result, as the banking cases j)-

lustrate, is that similar cases produce opposite results

in different courts. There probably will be no reconcilia-

tion of the divergent views in these cases until the Su-

preme Court has directly considered the continued va-

lidity of the Tennessee Electric doctrine and has decid-

ed the effect of the Administrative Procedure Act on

the class of persons entitled to judicial review of admin-

istrative action.” Note, Diversification by National

Banks, 21 Stan. L. Rev. 650, 669 (1969).

The Note quoted above refers to certain subsidiary issnes

involved in the major question presented. The continued

validity or applicability of Tennessee Power Co. v. TVA, 3%

U.S. 118 (1938), in the law of standing must be considered.

This Court in Flast v. Cohen, 392 U.S. 83 (1968), recently

found it desirable to reconsider and partially overrule the

earlier doctrine of Frothingham v. Mellon, 262 U.S. 447

—_—

(1923), regarding the standing of federal taxpayers to sue

gs taxpayers. Similarly, it is appropriate after thirty years

to consider the extent to which the doctrine of the Tennessee

Power case should continue to be viable.

Reexamination of Tennessee Power is especially appro-

priate in view of the approach taken in that case to the ques-

tion of standing a8 contrasted with the approach recently

adopted by this Court in Flast v. Cohen. In Tennessee Pow-

er, the Court took the conceptualistic, and perhaps circular,

approach that a plaintiff's standing depends on the invasion

of “legal rights” (306 U.S. 137). The Flast opinion, to the

contrary, approaches the problem of standing in terms of

realistic, factual considerations :

“The ‘gist of the question of standing’ is whether the par-

ty seeking relief has ‘alleged such @ personal stake in

the outeome of the controversy 28 to assure that con-

crete adverseness which sharpens the presentation of

issues upon which the court so largely depends for il-

jumination of difficult constitutional questions.’ ” (88

§.Ct. 1952.)

* * * *

“Thus, in terms of Article III limitations on federal

court jurisdiction, the question of standing is related

only to whether the dispute sought to be adjudicated

will be presented in an adversary context and in a form

historically viewed as capable of judicial resolution.”

(88 §.Ct. 1953.)

+ * * * *

“There remains, however, the problem of determining

the circumstances under which a federal taxpayer will

be deemed to have the personal stake and interest that

imparts the necessary concrete adverseness to such liti-

gation so that standing can be conferred on the tax-

payer qua taxpayer consistent with the constitutional

limitations of Article ITI.” (88 8.Ct. 1953.)

This Court should now re-examine the question of the

standing of a competitor in terms of the realistic, factual ap-

proach utilized in Flast rather than in terms of the concep-

tualistic, doctrinaire “legal rights” approach utilized jp

Tennessee Power.

5. The present case aiso directly poses the important and

unresolved question whether the common law of Standing

has been changed by the judicial review provisions of the

Administrative Procedure Act, 5 U.S.C. §702 (Supp. Il,

1967), which states that:

“A person suffering legal wrong because of agency a¢.

tion, or adversely affected or aggrieved by agency action

within the meaning of a relevant statute, is entitled to

judicial review thereof.”

The Supreme Court has never determined whether this

statutory language has enlarged the previous common law

restrictions in the law of standing. Lower federal courts

have disagreed on the question. Davis, Standing: Taxpayers

and Others, 35 Chi. L. Rev. 601, 619-23 (1968); Note, Di.

versification by National Banks, 21 Stan. L. Rev. 650, 665-

66 (1969). The instant case presents this issue in sharp

focus and for this reason, aside from the others discussed

previously, the present case should be reviewed. (This par-

ticular point was not argued in the court below as the Eighth

Circuit has consistently held that the Administrative Proce-

dure Act did not enlarge the scope of the prior law of stand-

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

F.2d 686, 692 (1967). Other courts have held to the con-

trary, e.g., American President Lines v. Federal Maritime

Board, 112 F. Supp. 346, 348-49 (D.D.C. 1953) ).

—

CONCLUSION

Because of the direct conflicts between the decision of the

court below and those of the First Circuit in the Wingate

Corp. case and Fifth Circuit in the Georgia Insurance Agents

case, and because of the importance of the question pre-

sented, both as it affects banking activities specifically and

the federal law of standing in general, the petition for a

writ of certiorari should be granted.

Respectfully submitted,

MILTON R. WESSEL

425 Park Avenue

New York, New York 10022

Counsel of Record for Petitioners

Bert M. Gross and Ferix M. PHILLIPS

909 Farmers & Mechanics Bank Bldg.

Minneapolis, Minnesota 55402

Counsel for Petitioners

APPENDIX A

[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 defendant

Comptroller William B. Camp.

Kelly, Segell and Fallon by Fallon Kelly and Hyam Se-

gell, 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 generai 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-

‘ions 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-

‘As 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.

ing services by national banks for the public generally, or

what were referred to on oral argument as “outsiders,” ig not

within the scope of the powers and authority granted nation.

al banks under the National Bank Act as set forth in 19

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.

ciation shall become, as from the date of the execution

of its organization certificate, 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 the

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 Amenr-

ICAN BANK and other national banks to perform the data

processing services hereinafter described.’”?

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.”

_—

ocessing Service Or-

The plaintiff Association of Data Pincorporated associa-

ganizations, Inc. (‘ADAPSO”), is an ions located through-

tion of data processing service organiza, are engaged in the

out the United States whose memberryice to the business

business of providing such type of S€c, is a Minnesota cor-

community. Plaintiff Data Systems,

Injnnesota, engaged in

poration with offices in M

inneapolis, \ying data processing

the business of marketing and perfornity, and is a member

service for the general business commu :

of ADAPSO. = 3 _ ts resulting from the

The alleged injury to these plaintil,. solely an economic

actions * _ defendants i” claimed to to be illegal competi

injury arising from what is contended

tion.’

The plaintiffs assert that they have standing to challenge

the action of the Comptroller by virtt® of Section 10 of the

Administrative Procedure Act, 5 psc: $701, et 8e4- The

pertinent section of this Act, §702, provides that:

“4 person suffering legal wrong because of agency ac-

tion, or adversely affected or agerieved by agency ac-

—_—_—_

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 aind their banking relationships

with existing and potential customers for such services, the marketing

of such services by national banks threattens ulitmately to exclude all

ADAPSO members and ot

her independent service organizations from all

or a very substantial part of the market ftor the sale of data processing

services.”

The complaint goes on to allege that the plait tiff Data Systems had entered

into negotiations in Minn

; ; —_ - — Palsicular potential customers to

provide data processing service. It is stated that the def Jant American

National Bank and Trust Company subsequen :

: atly made agreements with the

same two potential customers for the perform . £ data ing on

thus depriving Data Systems of the right anes “ é ra — dng = ed

service and to be compensated therefor. id opportunity to perf

tion within the meaning of a relevant statute, is entitleg

to judicial review thereof. . . .”

Since there are no specific provisions in the National Bank

Act providing for a review of the Comptroller’s rulings oy

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

Procedure Act did not by its passage create any legal rights

which did not otherwise exist and has cited numerous author.

ities in support thereof. Rural Electrification Admin, »,

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:

“Tt 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 agen-

cies. (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 8.ct. 300, 82 L.Ed. 374 (1938) ; Tennessee Power Co. v.

T.y.A., 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543 (1939) ;

Perkins v. Lukens Steel Co., 310 U.S. 118, 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

4PFL-CIO v. Kennedy, 330 F.2d 217 (D.C. Cir. 1964); Ben-

con v. Schofield, 236 F.2d 719 (D.C. Cir. 1956), cert. denied

352 U.S. 976; United Milk Producers of New Jersey v. Ben-

son, 225 F.2d 527 (D.C. Cir. 1955) ; Pennsylvania Railroad

(0. v. Dillon, 335 F.2d 292 (D.C. Cir. 1964); Rural Elec-

trification Admin. v. Central Louisiana Elec. Co., 354 F.2d

a9 (5th 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 «ynless 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 conferring 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 B opens next door to him and he, A, loses his investment

because 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 from 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

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

third party, acting without authority, from furnishing means which will

enable B to do what the law permits him to do. Such a rule would be

opposed to sound reason, as we have already tried to show, and cannot be

accepted.”

5 “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).

2D neweencge

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 fnancial 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.°

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 @

“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

States Power Co., 373 F.2d 686 (8th Cir. 1967), cert. denied

397 U.S. 945 (1967), —— > , ---- L.Ed.2d This

decision binds this court and thus requires 4 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-

——_

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, 994-95 (D.C. Cir. 1964).

ing field, for instance, is not desirable and should be cop.

fined. So, when a plaintiff already has a license or franchige

to engage in such @ 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 jy

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. Saron, 248 F. Supp. 233 (N.D. Ind. 1965) ; Whitney

Nat’l Bank v. Bank of New Orleans & Trust Co., 323 F.24

290 (D.C. Cir. 1963); Webster Groves Trust Co. v. Sazon,

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

yrocery store or data processing company failure or bank-

ruptcy 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.

v. Sanders Bros. Radio Station, 309 U.S. 470, 60 S.Ct. 693, 8

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

_ Penance

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

data processors.

In this same category is Investment Company Institute ©.

Camp, 274 F. Supp. 624 (D.D.C. 1967), where a national

pank 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-

guage segregated generally national commercial banking

from the securities business, thus creating a protected class.

(‘f., National Ass'n of Securities Dealers, Inc. v. Securities

Erchange Commission (Case #20,164, D.C. Cir. decided No-

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 in

its philosophy and holding to the Eighth Circuit holding in

Rural Electrification Admin. v. Northern States Power Co.,

973 F.2d 686 (8th Cir. 1967), cert. denied 387 U.S. 945

(1967), ----- ye i: ante Leis W... 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. Saxon, 870 F.2d 381 (8th Cir. 1966), as

an Eighth Circuit case, predates Rural Electrification Ad-

min. v. Northern States Power Co., supra, by slightly more

than a year and though it has language which would seem to

support 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 com.

petitive 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 ip

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 reversa]

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-

ciled... .”

There is the view relied on by plaintiffs that actions of goy.

ernment officials ought to be rather freely judicially review.

able; that public officials ought to be subject to some rein by

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.

In 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.”

—

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THB 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 BRIGHT, 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 ADAPS0,

The other plaintiff, Data Systems, Inc., is a Minnesota cor.

poration engaged in the data processing business, with its

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 Us,

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

Comptroller of the Currency has authorized national banks

to perform data processing services for bank customers

in violation of 12 U.S.C. §24 which gives national banks

only “incidental powers as shall be necessary to carry on the

business of banking.” Plaintiffs allege that as a result of the

unauthorized action ADAPSO members are threatened with

the loss of a substantial part of the data processing market,

It is alleged that American National now performs data

processing services for two companies with whom Data 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-

erete adverseness” which avoids merely abstract determina-

tions. Flast v. Cohen, 392 U.S. 83 (1968). See also Aetna

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).

—

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-

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 competi-

tion of the national banks. Whether a litigant has standing

to challenge competitive injury has been the subject of ex-

tended litigation and discussion. Doctrinal rules have de-

yeloped a maze of conceptualistic abstractions and theories

which at times are viewed and applied as being indistin-

guishable one from another. See Baker, Watts & Co. v.

saxon, 261 F.Supp. 247 (D.D.C. 1966), aff'd sub nom., Port

of N. Y. 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

lec, Admin. v. Northern States Power Co., 373 F.2d 686

(8 Cir. 1967) (denying standing)* and in Webster Groves

Trust Co. v. Saxon, 370 F.2d 381 (8 Cir. 1966) (allowing

standing)* seems to state divergent principles, either of

which could govern in the instant case. However, all legal

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).

3We 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.”

principles must be qualitatively analyzed within the cop.

text of factual surroundings. Much of the confusion op

standing seems to arise from the emphasis upon the issues

to be adjudicated or upon the possible merits of the syb

stantive claim rather than upon an examination of the status

of the complaining plaintiff. Whether or not a defendant ig

alleged to be engaged in illegal competition cannot by itgelf

determine a plaintiff's standing to complain. Cf. Chicago pr,

Atchison, T. & S. 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.” Fast v. Cohen, 392 U8.

83, 99, 102 (1968).

Whether a party may or may not challenge alledgedly

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 i8 represented by Tennessee Elec. Power Co. v. TVA,

096 U.S. 118, 137 (1939), which early emphasized :

“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 Comnv’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

illegal competition. Webster Groves Trust Co. v. Saron, 370

F.2d 381 (8 Cir. 1966). As observed in Whitnzy 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.®

SIn 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. )

‘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

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,

and national banks. First Nat'l Bank v. Walker Bank & Trust Co., 385 US,

252 (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 o.

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.

7The Court stated in FCC wv. 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 supervisory 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.”

——

See, €-£:-5 FCC v. Sanders Bros. Radio. 29

(1940) ; a. ase osteo, ) Station, 309 U.S. 470

on 7 - sank ce o eat Fe, Be US. 4

i 9. 0 rr \. P. js

— » of United Church of

Congress has patently recognized nee

me : -, 1966). In these cases

even though the competitive business gene ‘

ed for judicial review

ered free and otherwise unrestricted.® ;

Fourth, there are situations where é controlled is consid:

standing to challenge competition whi

lation of a statute, where the statute 7 competitors are given

acted for the express protection of tyhich is allegedly in vio-

complaining. The most recent exam’ itself is said to be en-

found in Hardin v. Kentucky Util. Cothe class of competitor

mple of these cases is

. 1 (1968).°

sBut cf. Chicago v. Atchison, T. & S. F. Ry., g00., 390 U.S

preme Court recognized standing of a municipal

system to intervene and attack the entry of one :

leged violation of a city ordinance. The Court 357 U.S. 77 (1958). The Su-

the intervenor could not be viewed from exatal licensed public transportation

whether in fact the competition was or was note seeking to compete in an al-

venor, for many years had enjoyed an arrangem4yt made clear that standing of

port passengers between stations. Parmelee Wxamination of the merits as to

A competitor, Railroad Transfer Service, was suhot jJlegal. Parmelee, the inter-

notwithstanding a city ordinance that prohibite, ent with the railroad to trans-

license from the city. The Court found that Pat... notified of its termination.

stantial personal interest in the outcome” and subsequently given this business

nance was then held unconstitutional as being; ed it from doing so without a

Commerce Act and the intervenor lost. Parmelee had “a direct an poe

a padi categorized with thad allowed standing. The ordi-

to challenge illega competition is imp icitly fov.

ment, be it an existing ordinance or statute, va repugnant to the inmate

United States, 315 U.S. 15, 19 (1942). .

those instances where standing

®*The Supreme Court said: found within a legislative enact-

“This Court has, it is true, repeatedly held t! valid or not. Cf. Alton R.R. v.

results from lawful competition cannot, in

on the injured business to question the leg:

petitor’s operations. Railroad Co. v. Elle

Alabama Power Co. v. Ickes, 302 U.S. 464 d that the economic injury which

v. TVA, 306 U.S. 118 (1939); Perkins v. lin and of itself, confer standing

(1940). But competitive injury providedlegality of any aspect of its com-

above cases simply because the statutory Zllerman, 105 US. 166 (1882);

that the plaintiff sought to enforce were i#@4 (1938); Tennessee Power Co.

tecting against competitive injury. In comp, Lukens Steel Co., 310 U.S. 113

led no basis for standing in the

Plaintiffs’ reliance on recent cases against the Comptroller

fall within facile classification of this rule. See, e.g., 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 q

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 princi-

ple 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

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).

“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 US.

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.

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

py 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. Saxon, supra, Or (3)

11 This 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. )

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 ap.

alysis, it seems clear that an allegation of “illegal competi.

tion” is not the balancing determinant of a plaintiff's stand.

ing. The primary search must rest on whether the plaintiffs

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 out.

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

logical parties to protect the public interest from illegal ae-

tions 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.

—

“aggrieved person” to assert the public’s rights. Congress

has not expressed @ public concern for protection as found

in FCC v. Sanders Bros. Radio Station, 309 U.S. 470 (1940),

and its progenitors. Without a legal interest or the status

of a recognized “aggrieved” party, the complaint resolves

itself into an attempt merely to show “a common concern

for obedience to law.” L. Singer & Sons v. Union Pac. R.R.,

911 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.

Unless a relevant statute provides for a “party in interest”

to seek judicial review or unless a complainant possesses a

recognized legal interest, he lacks standing to be a “private

attorney general” to represent the public interest. See Kan-

sas 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) 2°

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 U.S.

123, 150 (1951) (concurring opinion).

Judgment affirmed.

———

13See also our prior discussions concerning the applicability of the Adminis-

trative Procedure Act in Rural Elec. Admin. 0. Northern States Power Co.,

373 F.2d at 692, n. 9.

APPENDIX C

(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 apppellee 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.

APPENDIX D

5 U.S.C. §702:

“A person suffering legal wrong because of agency action,

or adversely affected or aggrieved by agency action within

the meaning of a relevant statute, is entitled to judicial re-

view thereof.”

12 U.S.C. §24:

“Upon duly making and filing articles of association and

an organization certificate a national banking association

shall become, as from the date of the execution of its organ-

ization certificate, a body corporate, and as such, and in the

name designated in the organization certificate, it shall have

power—

* o * * *

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 the busi-

ness of banking; by discounting and negotiating promissory

notes, drafts, bills of exchange, and other evidences of debt;

by receiving deposits ; by buying and selling exchange, coin,

and bullion; by loaning money on personal security ; and

by obtaining, issuing, and circulating notes according to

the provisions of this chapter. . . .”

12 U.S.C. $1864:

“No bank service corporation may engage in any ac-

tivity other than the performance of bank services for

banks.”

UNITED STATES COURT OF APPEALS

For THE First Circuit

No. 7192

{

ARNOLD TOURS, INC., ET AL.,

Plaintiffs-A ppellants,

vs.

WILLIAM B. CAMP, ET AL.,

Defendants-A ppellees,

Appeal from the United States District Court

For the District of Massachusetts

and

No. 7186

THE WINGATE CORPORATION,

Plaintiff-Appellant,

vs.

INDUSTRIAL NATIONAL BANK, &T AL.,

Defendants-A ppellees,

Appeal from the United States District Court

For the District of Rhode Island

Before ALDRICH, Chief Judge,

Woopsury,* Senior Circuit Judge, and

CorFin, Circuit Judge.

March 27, 1969.

*Sitting by designation.

ApricH, Chief Judge. These are two actions by parties

engaged in certain business pursuits to restrain competition

from national banks which, supported by rulings of the

(omptroller of the Currency, have entered their fields. Plain-

tiffs seek, basically, to attack these rulings. In both cases

the district courts held that they were without standing to

do so, and dismissed the complaints on motions of the de-

fendants. Plaintiffs appeal.

THE TRAVEL AGENCY BUSINESS

We consider first the action brought by Arnold Tours,

Inc. and some forty other independent travel agencies in

Massachusetts, allegedly on behalf of others similarly situ-

ated as well as themselves, against the Comptroller and the

south Shore National Bank. The bank, in reliance upon a

ruling by defendant Comptroller’s predecessor,’ is engaging

not merely in the financial aspects of travel, but “full” travel

service, or a complete travel agency business. To quote from

yhat is said to be the bank’s own announcement, its em-

ployees are prepared to arrange for bicycles in Bermuda,

yiJlas on the Riviera, and houseboats in Kashmir. The Comp-

troller argues at length that this is traditional and legitimate

hank activity. We do not, however, consider this matter ex-

cept to say that plaintiffs present enough of an issue so that

the question of standing is properly before us. We also

note that no question of reviewability of the Comptroller’s

rulings has been raised. See generally, Saferstein, Nonre-

viewability: A Functional Analysis of “Committed to

1“1475, National banks acting as travel agents.

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

may provide travel services for their customers and receive compensation

therefor. Such services may include the sale of trip insurance and the rental

of automobiles as agent for a local rental service. In connection therewith,

national banks may advertise, develov, and extend such travel services for the

purpose of attracting customers to the bank. See {7376.”

Agency Discretion,” 82 Harv. L. Rev. 367, 383 & n. 60 (1968),

Our sole question is the correctness of defendants’ conten.

tion, which we will paraphrase as saying that what the bank

chooses to do is, both literally and figuratively, none of

plaintiffs’ business.

It has long been settled that an ordinary competitor has

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

engage in his business, in a suit against the competitor, the

government, or both. Railroad Co. v. Ellerman, 1881, 10;

U.S. 166; Alabama Power Co. v. Ickes, 1938, 302 U.S. 464:

Tennessee Power Co. v. TVA, 1939, 306 U.S. 118. Despite

numerous exceptions, this principle has withstood erosion not

only because of the traditional rationale behind standing

doctrines generally, see Flast v. Cohen, 1968, 392 U.S. 83.

91-101, but because of the policy encouraging free and open

competition—a policy that favors competition in the market

place, not in the courts. The exceptions, where standing is

recognized, are as well established as the principle itself.

The first is for complaints of “illegal” competition, by which

is usually meant competition that is unlawful as to plaintiff

apart from considerations of corporate power or authority.

See Alabama Power Co. v. Ickes, supra at 479; Central

Louisiana Elec. Co. v. REA, W.1D. La., 1964, 236 F.Supp.

271, 277, rev'd, 5 Cir., 354 F.2d 859, cert. denied 385 U8.

815; but cf. Kansas City Power & Light Co. vr. McKay, D&.

Cir., 1955, 225 F.2d 924, cert. denied 350 U.S. 884. Plaintiffs

do not suggest that the Comptroller has sanctioned, or that

the bank has undertaken, any unfair, conspiratorial, or erim-

inal methods of competition, or that there has been any viola-

tion of the antitrust laws. The second exception is where it

is claimed that some “legal right” has been injured, by which

is meant, in its nonconclusory sense, that plaintiff has an

jindenendent property right, or a right to be free from the

partienlar kind of competition he is challenging. Snch a

—,

right is attached to or arises ont of an exclusive franchise,

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

other. Frost v. Corporation Commission, 1929, 278 U.S. 515;

cf. Whitney National Bink v. Bank of New Orleans, D.C.

Cir, 1963, 323 F.2d 290, 299-300, rev’d on other grounds, 379

US. 411. Plaintiffs fit in no such category.

The final general exception is where the plaintiff can show

the existence of a “statutory aid to standing” for a class

of persons which includes himself. This statutory aid may

take the form of a “judicial review” provision of the par-

ticular administrator in question for “parties aggrieved,”

“adversely affected,” or the like. In such a case, FCC v. Sand-

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

ably provide standing for legitimate competitors. See gener-

ally, Jaffe, J udicial Control of Administrative Actions, 513-

31. There is, however, no such provision as to the Comptrol-

ler of the Currency. An alternative statutory aid may be

fonnd if there is an indication of Congressional intent, ex-

plicit or implicit, in the relevant substantive acts to grant

protection to the competitive interests of a class of busi-

nesses Which includes the plaintiff. Thus in Hardin v. Ken-

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

found that a competing private utility company had stand-

ing to challenge the expansion of TVA into new areas in al-

loved violation of the area limitations of section 15d(a) of

the Tennessee Valley Authority Act, 16 U.S.C. §831n-4 (a).

The Court said, “[O]ne of the primary purposes of the area

limitations in $15d of the Act was to protect private utilities

from TVA competition. . . . Since respondent is thus in

the class which §15d is designed to protect, it has standing

... -” 390 U.S. at 6-7.

The only possible statutory aid to the standing of travel

agents in national banking legislation exists in 12 U.S.C.

$94(7). This section states that national banks may “exer-

cise . . . all such incidental powers as shall be nec

to carry on the business of banking,” and then lists numeroys

powers explicitly granted. It has long been settled in gyitg

over private contracts that the enumeration of such powers

is an effective and strong prohibition of all activities po}

enumerated and not incidental to banking. See First Nation.

al Bank v. National Exchange Bank, 1875, 92 U.S. 122, 128;

National Bank v. Matthews, 1878, 98 U.S. 621, 625; Logan

County National Bank v. Townsend, 1891, 139 U.S. 67, 73.

But even assuming that national banks are prohibited py

section 24(7) from entering into the business of procuring

travel arrangements, this is not sufficient to provide a staty.

tory aid to standing. The prohibition must be demonstrably

intended to protect the competitive interests of other mem.

bers of the prohibited business. See the concurring opinion

of Judge Thornberry in Saron v. Georgia Ass’n of Independ.

ent Ins. Agents, 1968, 5 Cir., 399 F.2d 1010, 1019; Associa.

tion of Data Processing Serv. Organizations v. Camp, D.

Minn., 1968, 279 F.Supp. 675, aff'd, 8 Cir. 2/6/69, _... F.2d

le We, too, (see 8th Cir. opinion in Camp, n. 10), cannot

accept the simplistic suggestion by the majority in Georgia

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

competitive activities were unlawfully carried out the plain-

tiffs have standing.

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

research discovered, any evidence that Congress in delimit-

ing the scope of banking activity in the ultra vires section,

quoted supra, was concerned, in 1863 and 1864 when the na-

tional banks were formed,? with competitors in the busi-

nesses impliedly prohibited, much less in any particularity

with travel agents (if they then existed). Rather, the limita-

2National Bank Act of 1863, ch. 58, 12 Stat. 665; National Bank Act of 1864,

ch. 106, 13 Stat. 99.

—

tions were for the purpose of insuring the stability, liquid-

ity, and safety of the banks. See National Bank v. Matthews,

supra at 626; Davis, Banking Regulation Today: A “re

er’s View, 31 Law & Contemp. Problems 639 (1966).

also Million, The Debate of the National Bank Act of on

» J. of Pol. Econ. 251 (1894). No doubt Congress has con-

tinuously, from 1864 to the present, been “very careful” (see

infra) in restricting the activities of banks; and no doubt

Congress has been, as we shall see in the second portion of

this opinion, specifically concerned with certain potential

competitors of the banks. But as Senator Proxmire pointed

out while offering an amendment to banking legislation*®

specifically designed to protect particular competitors, the

thrust of the close regulation of banks is for purposes of sta-

bility: “We are very careful in the regulations of banks.

This has principally been done to assure the solvency of the

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

ly liquid investments.” 108 Cong. Rec. 22031 (1962). See

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

mental views of Senators Proxmire, Douglas, and Neuberg-

er) in 2 U.S. Code Cong. & Admin. News, 1962, at 3887.

While at some point Congressional concern with a sufficient

quantity of specific competitors of banks might indicate a

Congressional intent that section 24(7) should now be read

asa measure not only to protect investors but also to protect

all potential members of prohibited activities, such a point

has not been reached. More proof of Congressional solicitude

is required before this court or any court should convert an

economic struggle into a legal one.

The plaintiffs have suggested, however, that the general

rule denying competitors standing is no longer valid, or

8This legislation will form the basis of our holding in the second half of this

opinion.

has undergone substantial change. First, they argue that

section 10(a) of the Administrative Procedure Act, 5 U.g.¢c

$702 provides standing for any persons claiming to be “aq.

versely affected in fact.” This contention seems derived

from the interpretation of section 10(a) urged by Profesgoy

Davis in his Administrative Law Treatise, §22.02, and pre.

sumably adopted in American President Lines v. FYB,

D.D.C., 1953, 112 F.Supp. 346.4 We, however, choose to side

with Professor Jaffe’ and the majority of the Courts® in hold.

ing that the passage of the APA was not intended to alter

to such a drastic extent previous law on the question of

standing. Moreover, we should add that we have serious

reservations whether a test of “adversely affected in fact”

would provide a simpler means of deciding the issue of stand-

ing. We do not pause for such analysis in the present case,

but if, as has been suggested, simplicity and ease of deter.

mination is a reason for preferring the new interpretation,

we do not find it.’

The plaintiffs alternatively urge that Flast v. Cohen,

supra, indicates a major shift in the judicial attitude toward

the general doctrine of standing; and that while it is not

directly in point, this decision indicates that the relevant

test for determining standing in this situation is whether

4See also Baker, Watts ¢> Co. v. Saxon, D.D.C., 1966, 261 F.Supp. 247.

5Jaffe, Judicial Control of Administrative Action 528-30. See also Note, Com-

petitors’ Standing to Challenge Administrative Action Under the APA, 104

U.Pa.L.Rev. 843 (1956).

6See Saxon v. Georgia Ass’n of Independent Ins. Agents, supra, at 1019, n. 1;

REA v. Northern States Power Co., 8 Cir., 1967, 373 F.2d 686, 692-93, and

nn. 9-10, cert. denied 387 U.S. 945; Kansas City Power & Light Co. wv. Mc-

Kay, supra.

7Indeed, one of the bases for the rule against competitors’ suits might well be

the difficulty of determining whether mere increased competition is an in-

jury in fact, particularly where a new and largely undeveloped market is in-

volved. Cf. World Airways, Inc. v. Northeast Airlines, Inc., 1 Cir., 1966,

358 F.2d 691.

—

the parties are sufficiently adverse to bring into focus the

issues raised. See also the concurrence of Judge Thornberry

in Saron v. Georgia Ass’n of Independent Ins. Agents, supra.

Our first response to plaintiffs’ contention is that Flast v.

Cohen was not intended to have any major reshaping effect

outside the area of standing determinations under Article

II] for taxpayer suits challenging the constitutionality of a

federal taxing and spending statute. Such an approach to

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

cessment of the degree of adversity and clarity of the par-

ticular case—if applied to questions of administrative law

standing would disturb the entire judicial relationship to

the administrative as presently understood by Congress.

Congress now knows that if it wishes a particular class of

plaintiffs to have, or not to have, standing to seek review of

agency rulings, it may make, or not make, the types of legis-

lative provisions discussed earlier ‘1 this opinion, and that

ic an end to the matter. Under plaintiffs’ proffered approach,

the courts would have the last word on standing, based upon

their view of the justiciability of the particular circum-

stances pleaded. When the conflict is one of constitutional

dimensions, such an approach may be necessary. In purely

administrative matters we think otherwise.

Our second answer is that even if we were to assume that

Flast v. Cohen was intended to affect other areas, we do

not read that case to require all administrative standing de-

terminations to be made solely upon an assessment of the

degree of adversity and clarity. Rather, Flast was con-

cerned with reevaluating the standards for determining ad-

versity and clarity in a situation where the relevant standing

doctrine was adjudged to rest entirely upon such considera-

tions. Flast is inapplicable when the standing doctrine in

question rests upon a basis largely independent of the con-

cerns for adversity and clarity—namely, the limited proj,

of the judiciary in regulating legitimate competition.

In sum, we find -no acceptable basis for standing for the

travel agents.

DATA PROCESSING

Turning to the second action involving the Comptroller,

here plaintiff, Wingate Corporation, which performs ¢er.

tain data processing services for hire, brings suit to enjoin

the defendant, Industrial National Bank of Rhode Island,

from performing data processing services for the City of

Providence, as sanctioned by a general ruling of the Comp.

troller. While Wingate, like Arnold, complains that the bank

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

services to bank customers, its claim to standing is aided

by the presence of specific Congressional legislation dealing

with banks and computer servicing. In 1962 Congress, after

some debate, enacted the Bank Service Corporation Act, 7(

Stat. 1132, which allowed small banks to combine to form a

separate corporation which could own data processing equip-

ment. The primary purpose of this legislation was to allow

small banks to compete more effectively with the larger

banks, which had sufficient capital and business to buy their

own electric data processing equipment. However, in order

to prevent such corporations being used as a subterfuge for

entering into the nonbanking business of data processing, and

to protect the interests of certified public accounting firms,

Congress provided in section 4 of that Act, 12 U.S.C. §1864,

“No bank service corporation may engage in any activity

other than the performance of bank services for banks.” The

legislative history is clear. The prohibition originated in

an amendment proposed by the National Society of Public

Accountants, which objected to the original version of the

bill that would have allowed bank service corporations to

—

solicit outside business to some extent. The Accountants

feared injury to their growing business of bookkeeping with

the aid of computers. The final provision was an obvious re-

sponse. See 108 Cong. Rec. 16499, 22031 (1962); Hearings

on Misc. Bank Bills Before the Comm. on Banking & Cur-

rency of the United States Senate, 87th Cong., 2d Sess., at

79-80 (1962).

We conclude that the present plaintiff is within the class

of persons intended to be protected by section 4 of the 1962

legislation, and the only question is whether standing exists

to complain not of competition from bank service corpo-

rations, but from national banks directly. We conclude in

the affirmative. When Congress so explicitly provides pro-

tection for a particular business against competition from a

regulated national entity—even though indirectly by regulat-

ing @ subsidiary—standing exists at least to entertain com-

plaints by that business concerning its competitive relation-

ship to the national entity. Section 4 had a broader purpose

than regulating only the service corporations. It was also a

response to the fears, expressed by a few senators, that with-

out such a prohibition, the bill would have enabled “banks to

engage in a nonbanking activity,” S.Rep. No. 2105, supra

(Supplemental views of Senators Proxmire, Douglas, and

Neuberger), and thus constitute “a serious exception to the

accepted public policy which strictly limits banks to bank-

ing.” (Supplemental views of Senators Muskie and Clark).

We think Congress has provided the sufficient statutory aid

to standing even though the competition may not be the pre-

cise kind Congress legislated against."

Indeed, there is a plausible argument that the Bank Serv-

ice Corporation Act, read in conjunction with 12 U.S.C.

8But cf. Association of Data Processing Serv. Organizations v. Camp, 8 Cir.,

1969, .... F.2d ...., n. 12, which stated that the reliance of similar plaintiffs

upon the Act for standing was “misplaced.”

§24(7), does in fact impliedly prohibit national banks fro,

directly entering into the data processing service busines,

If the section four prohibition could be avoided by a gmaj

national bank, member of a group owning a service corporg.

tion, soliciting its own data processing customers to be gery.

iced by the subsidiary via the bank, the prohibition would }

largely illusory. And if a small bank could not directly gp.

licit such customers, it would follow that the large banks,

owning their own equipment, could not, or the equalizing ¢.

fect of the Bank Service Corporation Act would be lost. To

be considered in opposition to such an argument is the Comp.

troller’s ruling interpreting the section,’ and the phenome

non of the one-bank holding company, that is not covered by

the Bank Holding Company Act of 1956, 12 U.S.C.§§ 1841.

49, which requires only multi-bank holding companies to di-

vest themselves of all nonbanking interests. We leave the

resolution of this conflict to future determination. For the

purposes of the issue of standing, we need decide only that

the passage of the Bank Service Corporation Act arguably

prohibits direct entry by national banks into the data proe-

essing service business.

In case No. 7192 the judgment of the District Court is

affirmed.

In case No. 7186 the judgment of the District Court is

vacated and the case remanded for further proceedings not

inconsistent herewith.

®Comptroller’s Ruling {7399 provides in part that:

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

services, however, as defined in the Act, would include any service which

a bank would ordinarily perform for a customer. Accordingly, if a bank

undertakes to handle the payroll accounts or the accounts receivable of a

customer, a bank service corporation may perform for the bank the service

necessary to enable the bank to fulfill its undertaking.”

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.