Whitney National Bank in Jefferson Parish v. Bank of New Orleans & Trust Company/Dissent Douglas

by William O. Douglas

United States Supreme Court

379 U.S. 411

Whitney National Bank in Jefferson Parish  v.  Bank of New Orleans & Trust Company

 Argued: Nov. 12, 1964. --- Decided: Jan 18, 1965

Mr. Justice DOUGLAS, dissenting.

I dissent from the ruling of the Court that the District Court for the District of Columbia has no jurisdiction over this present controversy with the Comptroller of the Currency.

Two federal agencies are involved in this bank acquisition program:

The Federal Reserve Board has jurisdiction under the Bank Holding Company Act of 1956 to grant or deny an application by a holding company of the right to acquire the shares of any bank. 12 U.S.C. § 1842.

The Comptroller of the Currency has jurisdiction under the National Bank Act to license the opening of a banking operation where it appears that the applicant 'is lawfully entitled to commence the business of banking.' 12 U.S.C. § 27.

It is thus apparent that the two administrative proceedings involve different, though related, matters; different, though related, applicants; and different, though related, issues.

The decision of the Board is subject to review in the Court of Appeals as provided in 12 U.S.C. § 1848. But, as stated by the Solicitor General, 'The National Bank Act * * * makes no provision for an administrative hearing or for judicial review, and the Comptroller's decisions are made informally, without an administrative record.' The courts, however, have held that judicial cognizance of a controversy with the Comptroller may be taken and judicial power exercised to keep the Comptroller within statutory bounds. Camden Trust Co. v. Gidney, 112 U.S.App.D.C. 197, 301 F.2d 521; Union Savings Bank v. Saxon, 118 U.S.App.D.C. 296, 298, 335 F.2d 718, 720, and cases cited. That conclusion is consistent with our holding in Columbia Broadcasting System, Inc. v. United States, 316 U.S. 407, 423-424, 62 S.Ct. 1194, 1203, 86 L.Ed. 1563, that, absent a congressional design to bar all judicial review (Switchmen's Union v. National Mediation Board, 320 U.S. 297, 64 S.Ct. 95, 88 L.Ed. 61), injunctive relief is available where administrative remedies are either inapplicable or inadequate. This rule keeps the Comptroller from being a free-wheeling agency dispensing federal favors; and it give some assurance that he will render principled decisions within the rule of law laid down by Congress.

The facts of this case dramatize the importance of the jurisdiction of the District Court. Shortly after the Board's final action in this case, and before review of its action by the Court of Appeals had been sought, Louisiana passed a law (La.Rev.Stat. §§ 6:1001 to 6:1006 (1962 Supp.)) which provides in pertinent part: 'It shall be unlawful * * * for any bank holding company or subsidiary thereof to open for business any bank not now opened for business * * *.' The Bank Holding Company Act, 12 U.S.C. § 1846, specifically reserves to the States a broad power seemingly sufficient to bar bank holding companies or their subsidiaries from extending their domains. ^[1]

In spite of the pending review of the Board's order in the Court of Appeals and in spite of the intervening Louisiana law, the Comptroller on August 9, 1962, advised the District Court in affidavit form:

'Upon consideration of these subsequent developments, and after careful examination of the Louisiana statute, I have concluded that there has occurred no reason to alter the Comptroller's prior determination that a certificate of authority should be issued to Whitney National Bank in Jefferson Parish, pursuant to 12 U.S.C. § 27.

'Accordingly, if the preliminary injunction entered herein is vacated, and if Whitney National Bank in Jefferson Parish so requests, inasmuch as upon a careful examination of the facts within my knowledge it appears that such association is lawfully entitled to commence the business of banking, it is my present intention to issue such certificate.' ^[2]

This threat makes a mockery of the Solicitor General's assurance that the parties have a full and adequate remedy in the Court of Appeals review of the Board's order and of his position that the present suit is designed as a collateral attack on the review of that order. For without the injunction issued by the District Court the Comptroller candidly states that the new branch bank would be in business, flouting the new Louisiana law, whose prototype we have already sustained. ^[3]

The ruling of the Court that the District Court had no jurisdiction in this case promises serious consequences. It means there may be an hiatus during which the Comptroller can take the law into his own hands without restraint from anyone. The Court looks to the Court of Appeals to give protection during that hiatus. In this case the Board of Governors of the Federal Reserve System approved the holding company application on May 3, 1962. The action in the District Court was filed on June 9, 1962. But judicial review of the Board's action by the Court of Appeals was not sought until June 30, 1962.

If respondents had accelerated their review of the Board's action, they still would not have had any protection against the Comptroller for he was not a party to the action in the Court of Appeals; and as the record shows if he had been freed from the restraint of the District Court, his alliance with Whitney Jefferson would have resulted in a flouting of the law.

Whitney-Jefferson, moreover, was not a party in the Fifth Circuit proceeding. Nor will either the applicant 'branch bank' or the holding company normally be a party to the appeal in the Court of Appeals. The statute providing for judicial review of a Board order at the instance of the 'party aggrieved' does not make them parties. 12 U.S.C. § 1848. The governing rule of the Court of Appeals for the Fifth Circuit says that the 'agency, board, commission or officer concerned shall be named as respondent'; but it is nowhere provided that those who were successful before the board or agency shall also be made respondents. Rule 39, 28 U.S.C.A. As it happens, Whitney Holding Corporation seems to have intervened in the appeal to support the Board. But this is a fortuitous circumstance. After today's decision it will no doubt occur to those whom find themselves in Whitney's position that possibly they may, with the help of the Comptroller, be able to open their doors for business in defiance of state law simply by staying out of the review proceeding in the Court of Appeals and keeping their holding company master out of it also. Perhaps, as the Court suggests, the Court of Appeals will always be able to find the means to prevent such an eventuality by resort to 28 U.S.C. § 1651; perhaps it will not. But there can be no doubt that maintenance of the jurisdiction of the District Court is essential both for keeping the dual jurisdiction of the Board and of the Comptroller from a collision course and for keeping the Comptroller within bounds of the law.

I also dissent from remitting the constitutionality of the Louisiana Act to the Federal Reserve Board and thus giving administrative 'expertise' new and surprising dimensions.

Heretofore we have remitted causes to federal agencies where 'issues of fact not within the conventional experience of judges' are raised or where the case requires 'the exercise of administrative discretion.' Far East Conference v. United States, 342 U.S. 570, 574, 72 S.Ct. 492, 494, 96 L.Ed. 576. Here the facts are known and the bare, bald question of the constitutionality of Louisiana's law is tendered. It is presented in this action in the District Court; the Comptroller threatens to flout that law; yet if it is a valid law, the new bank is not 'lawfully entitled to commence the business of banking' within the meaning of the National Bank Act, 12 U.S.C. § 27. I would decide that issue here and now.

Notes

1. Section 7 of the Act reads as follows:
2. The Comptroller and the applicant bank, Whitney-Jefferson, made a speedy accommodation as shown in Whitney-Jefferson's brief in this Court:
3. See Braeburn Securities Corp. v. Smith, 15 Ill.2d 55, 153 N.E.2d 806, where a state statute forbade holding-company shareholders from acquiring stock of national banks. We dismissed the appeal 'for want of a substantial federal question.' 359 U.S. 311, 79 S.Ct. 876, 3 L.Ed.2d 831. Accord: Trans-Nebraska Co., 49 Fed.Res.Bull. 633, 638 (1963). That decision was in line with federal policy of making state law the standard when it comes to certain kinds of branch banking. See United States v. Philadelphia National Bank, 374 U.S. 321, 328, 83 S.Ct. 1715, 1722, 10 L.Ed.2d 915.