Memorandum — Association of Data Processing Service Organizations, Inc. v. Camp

| Ju the Supreme Gout of the Wited States

OctToBER TERM, 1968

No. 1246

' Association oF Data Proczsstna SERVICE ORGANIZA-

TIONS, INC., AND Data Sye#iems, INC., PETITIONERS

Vv.

| Wuiiam B. Camp, CoMPTROLLER OF THE CURRENCY,

' anp AMERICAN NATIONAL BANK anD Trust COMPANY

| ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

MEMORANDUM FOR THE COMPTROLLER OF THE CURRENCY

The respondent Comptroller of the Currency does

not oppose the granting of certiorari limited to the

following question :

Whether, in applying the principle that

standing to complain that a competitor’s activ-

ities are prohibited exists only if the plaintiff

is a member of a class intended to be protected

by the statute allegedly violated, standing may

be rested solely on a subsidiary policy behind a

different statute plainly inapplicable to the de-

fendant competitor.

The foregoing question is identical to that pre-

_ sented by th Comptroller’s petition for a writ of cer-

; (1)

858-031— 49

2

tiorari in Camp v. The Wingate Corporation, which

is being filed contemporaneously herewith to seek re-

view of a decision of the Court of Appeals for the

First Circuit that is in explicit conflict with the de-

cision below.”

STATEMENT

This is an action for declaratory and injunctive re-

lief against the Comptroller of the Currency and the

American National Bank and Trust Company. Peti-

tioners, an association of data processing service

companies and a member of the association, seek to

invalidate a ruling by the Comptroller under 12 U.S.C.

24 Seventh, that, incidental to their banking services,

national banks may make data processing services

available to other banks or bank customers.

The district court dismissed the action for lack

of standing (Pet. App. 13-22), and the Court of Ap-

peals for the Eighth Circuit affirmed (Pet. App. 23-

33). After an exhaustive analysis of the decisions of

The Comptroller's petition and the petition that has been

filed in Jndustrial National Bank of Rhode Island v. The Win

gate Corp., No. 1408, O.T., 1968, both seek review of the First Cir-

cuit’s decision in The Wingate Corporation v. Industrial National

Bank (No. 7186, decided March 27, 1969). The same opinion

also decided another case, Arnold Tours, Inc. v. Camp (No.

7192), in favor of the Comptroller's position, and a petition for

a writ of certiorari has been filed by the plaintiffs, Arnold

Tours Inc., et al. vy. Camp, et al., No. 1407, O.T., 1968. The

Comptroller is contemporaneously herewith filing a brief in op-

position to that petition, which raises the question of the stand-

ing of a national bank’s competitor to challenge the bank’s ac-

tivities as ultra vires in the absence of any statutory protective

purpose whatever. The First Circuit’s opinion is set forth at Pet.

App. 36-46.

—

this Court and of the various courts of appeals, the

eourt below concluded that a competitor may challenge

allegedly ‘‘illegal” competition only when he can show

(1) that he has a legal right to be free from com-

petition by reason of a governmental charter; (2) that

specific legislation authorizes him as an “aggrieved

person” to sue in the public interest; or (3) that he

is a member of a class given express statutory protec-

tion against the competition. Since none of these situa-

tions was found to be present here, the court held that

petitioners lack standing to attack the bank’s activities

as beyond the scope of the powers given national

banks in the National Bank Act, 12 U.S.C. 24 Seventh.

Petitioner’s reliance upon a claimed protective purpose

in the Bank Service Corporation Act of 1962, 12 U.S.C.

1861-1865, was held to have been “misplaced,’’ since that

Act was not alleged to have been violated (Pet. App. 32,

n. 12).

3

DISCUSSION

1, As we have noted, the subsequent decision of the

Court of Appeals for the First Cireuit in The Wingate

Corporation v. Industrial National Bank, which is

the subject of our petition for a writ of certiorari being

filed contemporaneously herewith, is in explicit con-

flict with the decision below. The Wingate case in-

volved an identical attack by a data processing

service company against the same ruling by the

Comptroller and similiar activities by a national bank

pursuant to the ruling. The First Circuit agreed with

the court below on the general principle that the plain-

tiff would have standing only if it was the beneficiary

4

of a statutory purpose to protect it against competi-

tion (Pet. App. 38-44). It went on to hold, however,

that one section of the Bank Service Corporation A¢t

of 1962 had apparently been enacted to protect the

plaintiff’s class from competition by bank service com.

panies. While no such company was involved in the

case, the First Circuit considered that the Act algo

“arguably prohibits direct entry by national banks

into the data processing service business” (Pet. App,

46), thus providing a sufficient indication of protection

against competition to grant standing to the plain-

tiff to attack the allegedly unlawful ruling of the

Comptroller. The First Circuit explicitly recognized

that this conclusion conflicted with the decision in the

instant case (Pet. App. 45 n.8).

We believe that the decision below. was correct.

Nevertheless, because of this conflict and because of the

importance of the question (as shown in our petition

in Wingate), it would be appropriate for the Court to

grant certiorari in this case as well as in Wingate.

2. The petition in this case—while stating the ques-

tion presented in terms of the factual situation in-

volved—raises in its argument section broader

issues than are raised in our Wingate petition. We

submit that these broader issues need not be con-

sidered and that the grant of certiorari should be

limited to the question as we have framed it above and

in the Wingate petition.

After pointing out the conflict with the First Cir-

cuit’s decision in Wingate (Pet. 4-5) petitioners go on

to urge as an additional reason for granting certiorari

i)

that the general principles followed below (and in

Wingate) are inconsistent with an alternative hold-

ing by the Court of Appeals for the Fifth Cireuit in

Savon V. Georgia Ass’n of Independent Insurance

Agents, 399 F. 2d 1010. In that case the Fifth Cir-

eit found a statutory purpose to protect the plain-

tiffs, but further commented that the plaintiffs would

also have had standing simply as competitors com-

plaining that the bank’s activities were unlawful.

Petitioners contend that the Court should therefore

decide in this case that standing is established when-

ever a plaintiff is adversely affected in fact by ac-

tivities that he contends are unlawful; in support of

this position they further suggest that the Adminis-

trative Procedure Act’s judicial review position, 5

U.S.C. (Supp. III) 702, has generally expanded the

class of potential plaintiffs.’ Pet. 5-10.

These broader questions are also raised in the pend-

ing petition for a writ of certiorari in Arnold Tours,

Inc., et al. v. Camp, et al., No. 1407, O.T., 1968.’ As

we show in the Comptroller’s opposition to that peti-

tion and in the Comptroller’s petition in Wingate,

there is no reason for the Court to reconsider the

established basic principle, reiterated as recently as

last year in Hardin v. Kentucky Utilities Co., 390

US. 1, that competition without more is insufficient to

establish standing. Both the decision below and the

* Petitioners admit (Pet. 10) that they did not raise the Ad-

ministrative Procedure Act point below.

*See note 1, supra.

6

conflicting decision in Wingate are based upon that

established principle, and they differ only as to the na-

ture of the statutory protection that will suffice to

support standing. And despite the broader alterna.

tive language in the Fifth Circuit’s decision in the

Insurance Agents case, that decision does not de

pend on anything more than the court’s determination

that the requisite statutory protection was present.

CONCLUSION

For the foregoing reasons, the Comptroller of the

Currency does not oppose the grant of a writ of cer-

tiorari limited to the question stated at the beginning

of this memorandum, but does oppose further con-

sideration of the broader questions suggested in the

petition.

Respectfully submitted.

Erwin N. Griswo.b,

Solicitor General.

Wruiam D. RUCKEIsHAUs,

Assistant Attorney General.

ALAN 8. ROSENTHAL,

STEPHEN R. FEISoN,

Attorneys.

JUNE 1969.

©. 8. GOVERNMEHT PRINTING OFFICE: 1969