No. 08-453
In The Supreme Court of the United States
ANDREW M. CUOMO, IN HIS OFFICIAL CAPACITY AS
ATTORNEY GENERAL FOR THE STATE OF NEW YORK,
Petitioner,
v.
THE CLEARING HOUSE ASSOCIATION, L.L.C. AND
OFFICE OF THE COMPTROLLER OF THE CURRENCY,
Respondents
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SECOND CIRCUIT
BRIEF OF THE CONFERENCE OF STATE BANK
SUPERVISORS AS AMICUS CURIAE
IN SUPPORT OF PETITIONER
J oh n (“B u z”) Gor m a n
C ON F E RE N CE OF S TATE
B AN K S U P E R VIS OR S
1155 C on n ect icu t Ave., N W
5t h F loor
Wa s h in gt on , D.C . 20036
(202) 728-5726
Da vid T. Gold ber g
Cou n sel of R ecord
D ON AH U E & G OL DB E R G , L L P
99 H u d s on S t r eet , 8t h F l.
N ew Yor k , N .Y. 10013
(212) 334-8813
S ea n H . Don a h u e
D ON AH U E & G OL DB E R G , L L P
2000 L S t r eet , N W, S u it e 808
Wa s h in gt on , D.C . 20036
(202) 466-2234
C ou n s el for A m icu s C u r ia e
TABLE OF CONTENTS
Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . iii
Statement of Interest . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction and Summary . . . . . . . . . . . . . . . . . . . 2
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
I. The Authority Asserted In The
Comptroller’s Regulation Has No Place
Under Our Federal Constitution . . . . . . . . . . . . . 8
A. The Incursion On State Sovereignty
Would Raise Serious Constitutional
Questions – Even If it had been
Enacted by Congress . . . . . . . . . . . . . . . . . . 10
B. The Regime Drastically
Alters The State-Federal Balance . . . . . . . . 18
C. The Judicial Safeguards of Federalism
Are Of Greater Importance Where
Agency Action Is Involved . . . . . . . . . . . . . . 25
D. There is No “OCC Exception”
To These Principles . . . . . . . . . . . . . . . . . . . 28
II. No Permissible Construction of The Act
Supports The OCC’s Asserted Power . . . . . . . . 32
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-ii-
TABLE OF AUTHORITIES
CASES
Adams Fruit Co., Inc. v. Barrett,
494 U.S. 638 (1990) . . . . . . . . . . . . . . . . . . . . . . 33
Alden v. Maine,
527 U.S. 706 (1999) . . . . . . . . . . . . . 11, 13, 15, 16
American Trucking Associations, Inc. v. Whitman,
531 U.S. 457 (2001) . . . . . . . . . . . . . . . . . . . . . . 10
Atherton v. F.D.I.C.,
519 U.S. 213 (1997) . . . . . . . . . . . . . . . . . . . 23, 30
Avis v. Bd. of Review,
837 P.2d 584 (Utah Ct. App. 1992) . . . . . . . . . . 14
Barnett Bank of Marion County v. Nelson,
517 U.S. 25 (1996) . . . . . . . . . . . . . . . . . . . . . . . 31
Bates v. Dow Agrosciences LLC,
544 U.S. 431 (2005) . . . . . . . . . . . . . . . . . . . . . . 26
BFP v. Resolution Trust Corp.,
511 U.S. 531 (1994) . . . . . . . . . . . . . . . . . . . . 9, 18
Case of Dalbec,
867 N.E.2d 792 (Mass. App. 2007) . . . . . . . . . . 14
Chevron USA, Inc. v. NRDC, Inc.,
467 U.S. 837 (1984) . . . . . . . . . . . . . . . . . . passim
-iii-
Christensen v. Harris County,
529 U.S. 576 (2000) . . . . . . . . . . . . . . . . . . . . . . 32
Cogar v. Monmouth Toyota,
751 A.2d 599 (N.J. App. 2000) . . . . . . . . . . . . . . 14
Consumer Advocacy Group, Inc.
v. Kintetsu Enterprises,
150 Cal.App.4th 953 (Cal. App. 2007) . . . . . . . . 14
Diamond v. Charles,
476 U.S. 54 (1986) . . . . . . . . . . . . . . . . . . . . . . . 11
Egelhoff v. Egelhoff,
532 U.S. 141 (2001) . . . . . . . . . . . . . . . . . . . 10, 30
Ex Parte Young ,
209 U.S. 123 (1908) . . . . . . . . . . . . . . . . . . . . . . 16
FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120 (2000) . . . . . . . . . . . . . . . . . . . . . . 32
FERC v. Mississippi,
456 U.S. 742 (1982) . . . . . . . . . . . . . . . . . . . . . . 13
First Agr. Nat. Bank of Berkshire County v. State
Tax Commission, 392 U.S. 339 (1968) . . . . 24, 25
First Nat. Bank in Plant City v. Dickinson,
396 U.S. 122 (1969) . . . . . . . . . . . . . . . . . . . . . . . 8
First National Bank in St. Louis v. Missouri,
263 U.S. 640 (1924) . . . . . . . . . . . . . . . . 12, 23, 34
-iv-
Fitzpatrick v. Bitzer,
427 U.S. 445 (1976) . . . . . . . . . . . . . . . . . . . . . . 18
Florida ex rel. Shevin v. Exxon Corp.,
526 F.2d 266 (5th Cir.1976) . . . . . . . . . . . . . . . . 13
General Tel. Co. of the Northwest, Inc. v. EEOC,
446 U.S. 318 (1980) . . . . . . . . . . . . . . . . . . . . . . 15
Gonzales v. Oregon, 546 U.S. 243 (2006) . . . 7, 32, 33
Gregory v. Ashcroft, 501 U.S. 452 (1991) . . . . passim
Guthrie v. Harkness,
199 U.S. 148 (1905) . . . . . . . . . . . . . . . . . . . . . . 35
Hawaii Medical Ass’n v. Hawaii Medical Service
Ass’n, Inc., 148 P.3d 1179 (Haw. 2006) . . . . . . . 14
Heath v. Alabama, 474 U.S. 82 (1985) . . . . . . . . . . 11
Hillsborough County v. Automated Medical
Laboratories, Inc., 471 U.S. 707 (1985) . . . . . . 28
Illinois v. Gates,
462 U.S. 213 (1983) . . . . . . . . . . . . . . . . . . . . . . 28
INS v. Chadha,
462 U.S. 919 (1983) . . . . . . . . . . . . . . . . . . . . . . 26
Johnson v. De Grandy,
512 U.S. 99 (1994) . . . . . . . . . . . . . . . . . . . . . . . 27
-v-
Lewis v. BT Investment Managers, Inc.,
447 U.S. 27 (1980) . . . . . . . . . . . . . . . . . . . . . . . 19
Louisiana Public Serv. Comm’n v. FCC,
476 U.S. 355 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . 27
Massachusetts v. EPA, 549 U.S. 497 (2007) . . . . . 15
McClellan v. Chipman, 164 U.S. 347 (1896) . . . . . 23
McClesky v. Zant, 499 U.S. 467 (1991) . . . . . . . . . 11
McCulloch v. Maryland, 17 U.S. 316 (1819) . . . . . 24
MCI Telecommunications Corp. v. AT&T Co.,
512 U.S. 218 (1994) . . . . . . . . . . . . . . . . . . . . . . 33
Medtronic, Inc v. Lohr, 518 U.S. 470 (1996) . . 15, 27
National Bank v. Kentucky,
76 U.S. 353 (1869) . . . . . . . . . . . . . . . . . . . . 23, 24
National Cable & Telecomm. Ass’n v. Brand X
Internet Services, 545 U.S. 967 (2005) . . . . . . . 26
New York v. United States,
505 U.S. 144 (1992) . . . . . . . . . . . . . . . . . 9, 11, 17
Olstad v. Microsoft Corp.,
700 N.W.2d 139 (Wis. 2005) . . . . . . . . . . . . . . . 14
Osborn v. Bank of the United States,
22 U.S. 738 (1824) . . . . . . . . . . . . . . . . . . . . . . . 24
-vi-
Perdue v. Crocker National Bank,
702 P.2d 503 (Cal. 1985) . . . . . . . . . . . . . . . . . . 30
Porter v. Warner Holding Co.,
328 U.S. 395 (1946) . . . . . . . . . . . . . . . . . . . . . . 15
Printz v. United States, 521 U.S. 898 (1997) . passim
Puerto Rico Aqueduct & Sewer Auth. v.
Metcalf & Eddy, Inc., 506 U.S. 139 (1993) . . . . 11
Rice v. Santa Fe Elevator Corp.,
331 U.S. 218 (1947) . . . . . . . . . . . . . . . . . . . 10, 26
Roberts v. United States Jaycees,
468 U.S. 609 (1984) . . . . . . . . . . . . . . . . . . . . . . 19
Saenz v. Roe, 526 U.S. 489 (1999) . . . . . . . . . . . . . 17
Sheehy v. Big Flats Community Day,
73 N.Y.2d 629 (1989) . . . . . . . . . . . . . . . . . . . . . 14
Solid Waste Agency v.
United States Army
Corps of Eng’rs, 531 U.S. 159 (2001) . . . . passim
State v. Irving Oil Corp.,
955 A.2d 1098 (Vt. 2008) . . . . . . . . . . . . . . . . . . 14
Tarble’s Case, 80 U.S. 397 (1872) . . . . . . . . . . . . . . 12
Tiffany v. Nat’l Bank of Mo.,
85 U.S. 409 (1887) . . . . . . . . . . . . . . . . . . . . . . . 24
-vii-
Trustees of Dartmouth College v. Woodward,
17 U.S. 518 (1819) . . . . . . . . . . . . . . . . . . . . . . . 34
Tumey v. Ohio, 273 U.S. 510 (1927) . . . . . . . . . . . . 29
U.S. Term Limits, Inc. v. Thornton,
514 U.S. 779 (1995) . . . . . . . . . . . . . . . . . . . . 8, 17
United States v. Bass,
404 U.S. 336 (1971) . . . . . . . . . . . . . . . . . . passim
United States v. Lopez,
514 U.S. 549 (1995) . . . . . . . . . . . . . 10, 11, 22, 27
United States v. State Board of Equalization,
639 F.2d 458 (9th Cir. 1980) . . . . . . . . . . . . . . . 24
Wachovia Bank, N.A. v. Burke,
414 F.3d 305 (2d Cir. 2005) . . . . . . . . . . . . . 11, 16
Wainwright v. Sykes, 433 U.S. 72 (1977) . . . . . . . . 27
Watson v. Philip Morris Companies, Inc.,
127 S. Ct. 2301 (2007) . . . . . . . . . . . . . . . . . . . . 25
Watters v. Wachovia Bank N.A.,
127 S. Ct. 1559 (2007) . . . . . . . . . . . . . . . . . . . . 28
Will v. Michigan Dept. of State Police,
491 U.S. 58 (1989) . . . . . . . . . . . . . . . . . . . . . . . 18
Younger v. Harris, 401 U.S. 37 (1971) . . . . . . . . . . 13
-viii-
LAWS
U.S. Const., art. I, § 7 . . . . . . . . . . . . . . . . . . . . . . . 26
U.S. Const., art. I, § 8, cl. 4 . . . . . . . . . . . . . . . . . . . 18
U.S. Const. art. VI, § 2 . . . . . . . . . . . . . . . . 16, 27, 28
U.S. Const. amend. XIV . . . . . . . . . . . . . . . . . . . . . 18
5 U.S.C. § 3331 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12 U.S.C. § 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12 U.S.C. § 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12 U.S.C. § 93a . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
12 U.S.C. § 221, et seq. . . . . . . . . . . . . . . . . . . . . . . 24
12 U.S.C. § 484 . . . . . . . . . . . . . . . . . . . . . . . . passim
12 U.S.C. § 548 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12 U.S.C. § 1818 . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
18 U.S.C. § 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18 U.S.C. § 1166 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
28 U.S.C. § 1442 . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Pub. L. No. 110-289 § 1502 (2008) . . . . . . . . . . . . . . 9
-ix-
N.Y. Const., art. XIII, § 1 . . . . . . . . . . . . . . . . . . . . 12
Regulations
12 C.F.R. § 7.400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
12 C.F.R. § 7.4009 . . . . . . . . . . . . . . . . . . . . . . . . . . 31
69 Fed. Reg. 1899 (Jan. 13, 2004) . . . . . . . 21, 31, 35
Other Authorities
FRIEDMAN & SCHWARTZ , A MONETARY HISTORY
OF THE UNITED STATES 1867-1960 (1974) . . . . . 24
TRIBE , AMERICAN CONSTITUTIONAL LAW (2d ed.
1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
U.S. GAO, OCC PREEMPTION RULES: OCC
SHOULD FURTHER CLARIFY THE APPLICABILITY
OF STATE CONSUMER PROTECTION LAWS TO
NATIONAL BANKS (2006) . . . . . . . . . . . . . . . . . . . 20
Bar-Gil & Warren, Making Credit Safer,
157 U. PA . L. REV . 1 (2008) . . . . . . . . . . 21, 29, 30
Forrester, Still Mortgaging the American
Dream: Predatory Lending, Preemption,
and Federally Supported Lenders,
74 U. CIN . L. REV . 1303 (2006) . . . . . . . . . . . . . . 20
Quester & Keest, Looking Ahead
After Watters v. Wachovia Bank,
-x-
27 REV . BANKING & FIN . LAW 187 (2008) . . . . . 20
Williams & Bylsma, On the Same Page: Federal
Banking Agency Enforcement of
the FTC Act
to Address Unfair and Deceptive Practices by
Banks, 58 Bus. Law. 1243 (2003) . . . . . . . . . . . 21
Wilmarth, The OCC’s Preemption Rules
Exceed the Agency’s Authority and Present a
Serious Threat to the Dual Banking System and
Consumer Protection, 23 ANN . REV .
BANKING & FIN . L. 225 (2004) . . . . . . . . . . . 29, 31
-xi-
S ta te m e n t o f In te re s t *
Th e Con fer en ce of St a t e Ba n k Su per visor s (CSBS)
is t h e n a t ion a l a ssocia t ion of officia ls r espon sible for
r egu la t in g s t a t e-ch a r t er ed ba n k s a n d ot h e r
st a t e-licen sed fin a n cia l ser vices pr ovider s. Sin ce it s
fou n din g in 1902, CSBS h a s wor ked t o fa cilit a t e
exch a n ge of inform a t ion a n d t ech n ica l exper t ise a m on g
st a t e r egu la t or s, pr om ot e policy developm en t a n d
cooper a t ion on in t er st a t e issu es, im pr ove coor din a t ion
bet ween feder a l a n d St a t e r egu la t or s, a n d en a ble
St a t es a n d t h eir officia ls t o be h ea r d on m a t t er s of
n a t ion a l ba n kin g policy.
At t h e cor e of t h e CSBS m ission is pr eser vin g a n d
st r en gt h en in g t h e Na t ion ’s du a l ba n kin g syst em a n d
t h e policy of com pet it ive equ a lit y it r eflect s. As
Con gr ess a n d t h is Cou r t h a ve r ecogn ized, t h e st a t e
ba n kin g syst em ser ves a n im por t a n t a n d dist in ct ive
r ole a n d h a s a lon g r ecor d of r espon siven ess t o diver se
com m u n it y n eeds a n d of fin a n cia l, r egu la t or y, a n d
con su m er pr ot ect ion in n ova t ion .
St a t e-ch a r t er ed
in st it u t ion s pion eer ed t h e u se of ch eckin g a ccou n t s a n d
developed t h e fir st a u t om a t ed t eller m a ch in es (ATMs)
a n d in t er st a t e elect r on ic fu n ds t r a n sfer syst em s. An d
t h e st a t e ba n kin g syst em led t h e wa y in pr ot ect in g
con su m er s: it or igin a t ed deposit in su r a n ce a n d r eser ve
r equ ir em en t s.
*
Cou n sel of r ecor d for a ll pa r t ies h a ve con sen t ed t o t h e
filin g of t h is br ief. No cou n sel for a pa r t y a u t h or ed t h is br ief
in wh ole or in pa r t , a n d n o per son or en t it y ot h er t h a n
am icu s cu riae, it s m em ber s, or cou n sel m a de a m on et a r y
con t r ibu t ion in t en ded t o fu n d it s pr epa r a t ion or su bm ission .
2
Th is ca se a n d t h e issu es it r a ises a r e of u t m ost
im por t a n ce t o CSBS a n d m ission . Alt h ou gh CSBS a n d
it s m em bers h a ve wor ked con st r u ct ively wit h feder a l
r egu la t or s, in clu din g t h e Office of t h e Com pt r oller of
Cu r r en cy (OCC) on r egu la t or y a n d policy m a t t er s,
CSBS h a s expr essed deep con cer n a bou t in cr ea sin gly
a ggr essive effor t s by t h e OCC t o, a m on g ot h er t h in gs,
deploy it s r egu la t or y power s t o sh elt er n a t ion a l ba n ks
fr om con su m er pr ot ect ion a n d fa ir len din g obliga t ion s.
In r u lem a kin g com m en t s on t h e r egu la t ion a t issu e
h er e, CSBS u r ged t h e Com pt r oller t o ch a n ge cou r se,
expla in in g t h a t t h e r egu la t ion wou ld exceed h is la wfu l
a u t h or it y a n d t h r ea t en t h e ba n kin g du a l syst em , a n d
expr essed con cer n t h a t it wou ld h a ve a dver se
con sequ en ces for con su m ers a n d h om eown er s, t h eir
com m u n it ies, t h e fin a n cia l syst em , a n d t h e br oa der
econ om y. Th ose sa m e con sider a t ion s bea r on t h is
Cou r t ’s r eview, a n d CSBS su bm it s t h is br ief in t h e
h ope t h e Cou r t will keep t h e OCC wit h in pr oper ,
la wfu l bou n ds.
In tro d u c tio n An d S u m m a ry
Th e decision below a ffir m ed a ju dgm en t , issu ed a t
t h e beh est of a feder a l officia l, per m a n en t ly en join in g
“[t ]h e At t or n ey Gen er a l for t h e St a t e of New Yor k, a n d
a ll t h ose a ct in g u n der h is dir ect ion or in con cer t wit h
h im * * * fr om [in ter alia] * * * in st it u t in g a ct ion s in
t h e cou r t s of ju st ice a ga in st n a t ion a l ba n ks t o en for ce
st a t e fa ir len din g la ws.” 396 F . Su pp. 2d 383, 407-408.
Th a t ju dgm en t wa s n ot gr ou n ded on a con clu sion
t h a t C on g r e s s h a d d i s p l a ce d N e w Yor k
a n t idiscr im in a t ion la w, eit h er gen er a lly or a s a pplied
t o feder a lly-ch a r t er ed ba n ks, or t h a t Con gr ess h a d
a u t h or ized t h e feder a l a gen cy do so. On t h e con t r a r y,
3
it is con ceded by a ll t h a t t h e la ws a t issu e a r e in effect
a n d en for cea ble a ga in st n a t ion a l ba n ks. Nor , for t h a t
m a t t er , wa s t h er e a n y fin din g t h a t exclu sive feder a l
en for cem en t wa s m a n da t ed. Th e Com pt r oller a gr eed
t h a t pr iva t e pa r t ies cou ld en for ce t h ese sa m e la ws
a ga in st n a t ion a l ba n ks. See 510 F .3d a t 120 n .9.
Ra t h er , t h e ju dgm en t r est ed exclu sively on a 2004
OCC r egu la t ion , see 12 C.F .R. § 7.400, a n d on cou r t s’
gen er a l obliga t ion t o a ccept perm issible a n d r ea son a ble
a gen cy in t er pr et a t ion s. See Ch evron U S A, In c. v.
N R DC, In c., 467 U.S. 837 (1984). Specifica lly, t h e
r egu la t ion in t er pr et ed t h e Na t ion a l Ba n k Act
proh ibit ion on “visit a t ion ” of federa lly-cha rt ered ba nks,
12 U.S.C. § 484(a ), t o m ea n t h a t va lid, n on -pr eem pt ed
fa ir len din g, con su m er pr ot ect ion a n d ot h er la ws of t h e
50 St a t es cou ld be en for ced by t h e OCC a n d by pr iva t e
pa r t ies – bu t n ot by t h ose h oldin g office u n der t h e
St a t es t h a t en a ct ed t h em .
Toget h er , t h e r egim e a n n ou n ced by t h e OCC a n d
t h e decision s su st a in in g it r epr esen t a st a r t lin g
exa m ple of wh a t is n ot m ea n t t o occu r u n der ou r
feder a l syst em . Wer e t h e Cou r t t o su st a in t h e
r egu la t ion , power t o en for ce va lid, dem ocr a t ica llyen a ct ed st a t e la ws con cer n in g m a t t er s of su r pa ssin g
loca l in t er est will h a ve pa ssed fr om t h e officia ls vest ed
by t h e St a t es wit h en for cem en t r espon sibilit y – wh o
h a ve t h e en er gy, exper t ise, a n d r esou r ces t o en for ce
loca l la ws – t o a feder a l officia l wh ose pr im a r y
r espon sibilit ies a r e fa r r em oved fr om t h e con su m er
pr ot ect ion field; wh o is even m or e in su la t ed fr om
polit ica l a ccou n t a bilit y t h a n ot h er E xecu t ive Br a n ch
officia ls; wh ose power s a r e oft en exer cised
con fiden t ia lly. New Yor k’s (a n d ever y ot h er St a t e’s)
r ole in execu t in g it s own la ws is r edu ced t o t h a t of a
4
feder a l su pplica n t , a n d N ew Yor k cit izen s dissa t isfied
wit h t h e en for cem en t of t h eir la ws will h a ve sca n t
m ea n s of a ssign in g r espon sibilit y, let a lon e a ct in g on
t h eir views.
Th e r egim e is, if a n yt h in g, wor se in pr a ct ica l r ea lit y
t h a n fr om t h e per spect ive of polit ica l t h eor y. Wh er ea s
h u n dr eds of officia ls wit h exper t ise a t t h e st a t e level
st a n d r ea dy t o en for ce com plia n ce wit h con su m er
pr ot ect ion a n d a n t idiscr im in a t ion la ws, t h er e a r e n ow
on ly a h a n dfu l of feder a l em ployees. Th e feder a l
a gen cy depen ds on t h e r egu la t ed ba n ks, n ot Con gr ess,
for a lm ost it s en t ir e bu dget ; it s a u t h or it y over t h em
depen ds on t h eir volu n t a r y ch oice; a n d it h a s u sed –
a n d u n a pologet ica lly defen ded – it s cla im ed power t o
displa ce st a t e la ws a s a wea pon in com pet it ion a ga in st
ot h er ch a r t er in g a u t h or it ies for ba n ks’ a llegia n ce.
Th e st a t e la ws in volved in clu de m a n y en a ct ed in
r espon se t o egr egiou s a ct s of fin a n cia l pr eda t ion a n d
com m er cia l discr im in a t ion t h a t h a d rea ch ed cr isis
levels in t h e St a t es t h a t pa ssed t h em – beh a vior t h a t
h a s sin ce pla yed a sign ifica n t pa r t in plu n gin g t h e
n a t ion a l econ om y in t o it s pr esen t , dir e con dit ion .
Th e cou r t of a ppea ls decision su st a in in g t h a t
a sser t ed a u t h or it y is st a r t lin g in it s own r igh t . In
t r ea t in g t h e r egu la t ion a s a t ypica l exer cise in ga pfillin g, t h e pa n el m a jor it y den ied t h a t specia l r u les
gr ou n ded in st a t e sover eign t y a n d sa fegu a r din g t h e
st a t e-feder a l ba la n ce wer e even im plicated by t h e
Com pt r oller ’s a ssign in g t o h im self New Yor k St a t e’s
(a n d ever y ot h er ’s) power t o con t rol t h e en for cem en t of
it s own la ws. Th e decision t r ea t ed t h e a u t h or it y
a sser t ed a s if it wer e a “lesser ” in ciden t of t h e
“gr ea t er ,” con st it u t ion a lly or t h odox on e t o pr eem pt
st a t e la w, a n d seem ed t o r ega r d t h e fa ct t h a t t h e
5
displa cem en t wa s effect ed by r egu la t ion r a t h er t h a n
st a t u t e a s gr ou n ds for less vigila n t ju dicia l r eview.
Th e cou r t t h en pr on ou n ced t h e r egu la t ion va lid, on t h e
gr ou n d t h e st a t u t or y la n gu a ge wa s “a m bigu ou s” a n d
Con gr ess h a d n ot clea r ly pr eclu ded t h e Com pt r oller ’s
a sser t ion .
Th e m a jor it y below m isunder st ood t h e Con st it u t ion
a n d t h is Cou r t ’s pr eceden t s. H a d Con gr ess legisla t ed
t h e r egim e ju st descr ibed, it wou ld r a ise ser iou s
con st it u t ion a l con cer n s. Th e Con st it u t ion gr a n t s t h e
feder a l gover n m en t br oa d power s, bu t it r equ ir es t h ey
be exer cised in a m a n n er t h a t r espect s St a t e
sover eign t y; a st a t u t e t h a t pla ced in t h e h a n ds of a
feder a l a dm in ist r a t or decision s a s t o wh en a n d h ow
im por t a n t (n on -pr eem pt ed) st a t e la ws wou ld be
en for ced wou ld t r a n sgr ess ba sic pr in ciples of ou r
feder a l syst em .
Mor eover , a cou r t pr esen t ed a cla im t h a t a feder a l
st a t u t e sa n ct ion ed su ch a r egim e wou ld st r a in t o seek
a less t r ou blin g con st r u ct ion a n d, a t t h e ver y lea st ,
r equ ir e t h e pa r t y a dva n cin g t h a t pecu lia r
in t er pr et a t ion t o iden t ify a clea r in dica t ion t h a t
Con gr ess h a d con sider ed a n d a ffir m a t ively int en ded so
dr a m a t ic a ch a n ge in t h e feder a l-st a t e ba la n ce.
Bu t t h e r egim e u ph eld h er e is n ot cla im ed t o der ive
fr om a con gr ession a l ju dgm en t , let a lon e a pla in ly
expr essed on e. Ra t h er , it r est s on a n a dm in ist r a t ive
regu lation pu r por t in g t o r ein t er pr et a llegedly
a m bigu ou s la n gu a ge. Alt h ou gh t h e pr oper r u le for
su ch ca ses m a y defy sou n d-bit e dist illa t ion , t h e logic of
t h is Cou r t ’s pr eceden t s – a n d t h e pr in ciples of
feder a lism a n d sepa r a t ion of power s on wh ich t h ey r est
– r equ ire m ore sea r ch in g r eview of a sser t ion s of
r egu la t or y pr eem pt ion , in clu din g OCC a sser t ion s
6
con cer n in g t h e pr eem pt ive r ea ch of t h e Na t ion a l Ba n k
Act . A lega l r egim e t h a t r elies on t h e st r u ct u r e a n d
pr ocesses of con gression al la wm a kin g a s t h e pr im e
sa fegu a r d for St a t es’in t er est s ca nnot per m it a n a gen cy
sh or t cu t .
Alt h ou gh it is especia lly im por t a n t t h a t t h e Cou r t
vin dica t e ba sic feder a lism pr in ciples h er e, t h e
r egu la t ion it self is so ext r em e a n d ir r a t ion a l t h a t it
wou ld n ot su r vive defer en t ia l Chevron r eview. Lea vin g
a side t h e im pla u sibilit y of Con gr ess’s con fer r in g t h e
ext r a or din a r y a u t h or it y a sser t ed in t h e obscu r e a n d
in dir ect wa y OCC pr oposes, t h e cla im t h a t t h e
r egu la t ion r est s on a per m issible r ea din g of a m bigu ou s
st a t u t or y t ext fa ils by it s own t er m s. Not h in g in
Con gr ess’s la n gu a ge h in t s a t t h e en for cem en t
pr eem pt ion “in t er pr et a t ion ” OCC im poses. On t h e
cont ra ry, bot h t he ordina ry, long-set t led u n der st a n din g
of “visit a t ion ” a n d a ven er a ble decision of t h is Cou r t
for eclose t h e n ot ion t h a t § 484(a ) cr ea t es a cla ss of
st a t e la ws t h a t a r e va lid a n d n on -pr eem pt ed – bu t
n on et h eless u n en for cea ble by t h e st a t es t h em selves.
In deed, t h e r egu la t ion wou ld fa il even m in im a l
r ea son a blen ess r eview: a s t h e m a jor it y opin ion below
r ecogn ized, OCC’s r u lem a kin g focu sed en t ir ely on
defen din g t h e a gen cy’s pow er t o in t er pr et t h e pr ovision
in t h e fa sh ion cla im ed, wit h ou t a n y effor t t o expla in
wh y Con gr ess wou ld h a ve a u t h or ized t h e st r a n ge
en for cem en t r egim e – or even wh y th e OCC believed it
a dva n t a geou s.
In fa ct , even t h e sh ibbolet h s of
“u n ifor m la w” a n d “u n it a r y r egu la t ion ” t h e
Com pt r oller r elia bly in vokes in a sser t in g pr eem pt ive
power pr ovide n o sh elt er for t h e wor st -of-bot h -wor lds
en for cem en t r egim e t h e r egula t ion a n n ou n ces, in
wh ich a u t h or it y t o en for ce a St a t e’s la ws is wielded by
7
pr iva t e pa r t ies a n d feder a l ba n k r egu la t or s – i.e.,
everyon e bu t t h e officia ls t h e St a t e vest ed wit h la w
en for cem en t r espon sibilit y.
ARGU MEN T
As we expla in below (a n d pet it ion er s dem on st r a t e
com pr eh en sively), t h e visit a t ion pr oh ibit ion cou ld n ot
be given t h e m ea n in g t h e Com pt r oller seeks t o im pose,
even u n der t h e for givin g Ch evron st a n da r d, a n d
n ot h in g m or e n eed be decided t o r ever se t h e ju dgm en t
a n d set a side t h e r egu la t ion . As in Gon zales v. Oregon ,
546 U.S. 243 (2006), n o especia lly st r in gen t st a n da r d
of r eview is r equ ir ed t o r eject “t h e n ot ion t h a t Con gr ess
wou ld u se su ch a n obscu r e gr a n t of a u t h or it y t o
r egu la t e a r ea s t r a dit ion a lly su per vised by t h e St a t es’
police power .” Id . a t 274.
Bu t t o a ckn owledge t h a t clea r st a t em en t ru les a r e
n ot n eeded is n ot t o den y t h eir im por t a n ce. Th e lower
cou r t s’ t r ea t m en t of t h is ca se a s a r ou t in e ch a llen ge t o
or din a r y a dm in ist r a t ive ga p-fillin g – a n d fa ilu r e t o
per ceive t h a t t h e feder a lism -r espect in g r u les of
con st r u ct ion even wer e im plicated – a r e a s st a r t lin g a s
t h e u n der lyin g cla im of E xecu t ive power su st a in ed.
In deed, t h e decision below fit s in t o a br oa der pa t t er n
of in cr ea sin gly im pla u sible a n d a ggr essive a sser t ion s
of OCC power t o displa ce st a t e la w (or la w
en for cem en t ) a n d of in cr ea sin gly per m issive ju dicia l
r eview.
Th is Cou r t m u st m a ke clea r t h a t pr in ciples of
feder a lism – a n d r u les r equ ir in g ju dicia l en for cem en t
of t h em – a r e pla in ly a n d dir ect ly a pplica ble in t h ese
ca ses a n d t h a t ju dicia l in t er ven t ion is especially n eeded
wh en t h e depa r t u r e fr om t h e Con st it u t ion ’s a lloca t ion
8
of a u t h or it y em a n a t es fr om a n E xecu t ive Br a n ch
a gen cy, n ot Con gr ess.
I. Th e Au th o rit y As s e rte d In Th e Co m p tro lle r’s
Re g u la tio n Ha s N o P la c e U n d e r Ou r F e d e ra l
Co n s titu tio n
Th e “gr ea t in n ova t ion ” of ou r con st it u t ion a l design
– t h a t “‘ou r cit izen s wou ld h a ve t wo polit ica l ca pa cit ies,
on e st a t e a n d on e feder a l,’” – is it self a “pr ot ect ion [] *
* * of liber t y,” Prin tz v. Un ited S tates, 521 U.S. 898,
920 (1997) (qu ot in g U.S . T erm L im its, In c. v. T h orn ton ,
514 U.S. 779, 838 (1995) (Ken n edy, J , con cu r r in g). Th e
con st it u t ion a l design “a ssu r es a decen t r a lized
gover n m en t t h a t will be m or e sen sit ive t o t h e diver se
n eeds of a h et er ogen ou s societ y; it in cr ea ses
oppor t u n it y for cit izen in volvem en t in dem ocr a t ic
pr ocesses; it a llows for m or e in n ova t ion a n d
exper im en t a t ion in gover n m en t ; a n d it m a kes
gover n m en t m or e r espon sive by pu t t in g t h e St a t es in
com pet it ion for a m obile cit izen r y.” Gregory v.
Ash croft, 501 U.S. 452, 457 (1991).
Th e du a l ba n kin g syst em exh ibit s t h ese vir t u es.
Although t h ose wh o fir st en a ct ed t h e Na t ion a l Ba n king
Act in 1863 expect ed t h a t st a t e-ch a r t er ed in st it u t ion s
wou ld wit h er a wa y
– a n d im posed pu n it ive,
discr im in a t or y t a xes t o h a st en t h e job, st a t e ba n kin g
wit h st ood t h is a ssa u lt , a n d in t h e t wen t iet h cen t u r y,
Con gr ess ca m e t o r ecogn ize t h a t t h e Na t ion wa s bet t er
ser ved by a syst em t h a t pr eser ved t h e ben efit s of
exper im en t a t ion a n d polit ica l a ccou n t a bilit y; wa s
r espon sive t o diverse com m unit y n eeds a n d va lu es; a n d
pr ovided a sa fegu a r d a ga in st u n ch ecked, cen t r a lized
a u t h or it y. Ma jor feder a l st a t u t es r eflect con gr ession a l
com m it m en t t o t h e policy of “com pet it ive equ a lit y,”
First N at. B an k in Plan t City v. Dick in son , 396 U.S.
9
122, 133, (1969) (descr ibin g policy a s “fir m ly em bedded
in t h e st a t u t es gover n in g t h e n a t ion a l ba n kin g
syst em ”), a s do r ecen t ly en a ct ed fin a n cia l r efor m
pr oposa ls, see P u b. L. N o. 110-289 § 1502 (2008)
(en cou r a gin g “t h e St a t es, t h r ou gh t h e Con fer en ce of
St a t e Ba n k Su per visor s * * *
t o est a blish a
N a t ion wide Mor t ga ge Licen sin g Syst em a n d
Regist r y”).
Bu t feder a lism is n ot t h e la w becau se of it s ben efit s,
bu t r a t h er beca u se t h e Con st it u t ion is bin din g, a n d it
r ecogn izes St a t e sover eign t y. Accor din gly, wh en
st r u ct u r a l sa fegu a r ds in t en ded t o pr ot ect t h e St a t es
a n d in h ibit u n con st it u t ion a l la wm a kin g do fa il, t h e
feder a l ju dicia r y h a s a n im por t a n t , in depen den t
obliga t ion t o en for ce t h e Con st it u t ion . See N ew Y ork
v. Un ited S tates, 505 U.S. 144, 157 (1992) (“Ou r t a sk
wou ld be t h e sa m e even if on e cou ld pr ove t h a t
feder a lism secu r ed n o a dva n t a ges t o a n yon e”).
As pa r t of t h is r espon sibilit y, t h is Cou r t h a s
a r t icu la t ed a ser ies of dist in ct , bu t over la ppin g r u les
for in t er pr et in g “[f]eder a l st a t u t es im pin gin g u pon
im por t a n t st a t e in t er est s,” B FP v. R esolu tion T ru st
Corp., 511 U.S. 531, 544 (1994). F ir st , la ws sh ou ld be
con st r u ed so a s t o “a void sign ifica n t con st it u t ion a l a n d
feder a lism qu est ion s,” S olid Waste Agen cy v. Un ited
S tates Arm y Corps of E n g’rs, 531 U.S. 159, 160-61
(2001) (S WAN CC). Secon d, t h e pa r t y a dvoca t in g a n
in t er pr et a t ion t h a t wou ld dist u r b t h e feder a l ba la n ce
m u st poin t t o a clea r st a t em en t est a blish in g t h a t
Con gr ess “h a [d] in fa ct fa ced” t h e feder a lism
con sequ en ces, Un ited S tates v. B ass, 404 U.S. 336, 349
(1971), a n d in t en ded t h em . Cou r t s m u st likewise
a pply a gen er a l pr esu m pt ion t h a t Con gr ess does n ot
in t en d t o pr eem pt st a t e la w, u n less t h a t pu r pose is
10
“clea r a n d m a n ifest ,” R ice v. S an ta Fe E levator Corp.,
331 U.S. 218, 230 (1947); Un ited S tates v. L opez, 514
U.S. 549, 578 (1995) (Ken n edy, J ., con cu r r in g)
(descr ibin g pr eem pt ion doct r in e a s exa m ple of “t h is
Cou r t ’s * * * pa r t icipa t [ion ] in m a in t a in in g t h e feder a l
ba la n ce”); E gelh off v. E gelh off, 532 U.S. 141, 160
(2001) (Br eyer , J ., dissen t in g).
Mor eover , a s t h e volu m e a n d sweep of E xecu t ive
Bra n ch la wm a kin g h a s gr own , see Am erican T ru ck in g
Association s, In c. v. Wh itm an , 531 U.S. 457 (2001), t h e
Cou r t h a s r ecogn ized t h a t t h ese feder a lism -r ein for cin g
r u les m u st be a pplied wit h “h eigh t en ed” vigila n ce
wh en a u t h or it y for t h e ba la n ce-disr u pt in g r esu lt is
cla im ed t o der ive fr om a r egu la t ion , r a t h er t h a n a n Act
of Con gr ess. See S WAN CC, 531 U.S. a t 172-73.
Th e Secon d Cir cu it m a jor it y did n ot a n a lyze t h ese
pr in ciples in dept h – a ckn owledgin g t h em on ly lon g
en ou gh t o con clu de t h a t t h ey posed n o ba r r ier t o
a pplica t ion of Ch evron defer en ce. Th a t con clu sion
r eflect s a dr a st ic u n der est im a t ion of t h e sign ifica n t
feder a lism qu est ion s pr esent ed. Th er e is n o su ggest ion
in t h e m a jor it y opin ion t h a t Con gr ess con sider ed, let
a lon e a ffir m a t ively in t en ded or expr essly dir ect ed, t h e
en for cem en t r egim e OCC seeks t o est a blish .
A. Th e In c u rs io n On S ta te S o v e re ig n ty Wo u ld
Ra is e S e rio u s Co n s titu tio n a l Qu e s tio n s –
Ev e n If it h a d be e n En a c te d by Co n g re s s
Th e m a jor it y below a ppea r s t o h a ve t r ea t ed t h e
S WAN CC pr in ciple a s spea kin g on ly t o ca ses wh er e t h e
con st it u t ion a l qu est ion in volves “‘t h e ou t er lim it s of
[on e of] Con gr ess’ power [s],’” 510 F .3d a t 114 (qu ot in g
531 U.S. a t 172); id . (n ot in g t h a t n a t ion a l ba n k
r egu la t ion “h a s been ‘su bst a n t ia lly occu pied by feder a l
11
a u t h or it y for a n ext en ded per iod of t im e’”) (qu ot in g
Wach ovia B an k , N .A. v. B u rk e, 414 F .3d 305, 314 (2d
Cir . 2005)). To be su r e, t h e pa r t icu la r con st it u t ion a l
dou bt s r a ised in S WAN CC in volved t h e bou n da r y
bet ween t h e legisla t ive ju r isdict ion con fer r ed on
Con gr ess by t h e Com m er ce Cla u se a n d t h a t wh ich t h e
Ten t h Am en dm en t r eser ves t o t h e St a t es. See L opez,
514 U.S. a t 553.
Bu t dist in ct fr om it s con cer n for St a t es’ r egu la t or y
dom a in , t h e Con st it u t ion r equ ir es t h a t feder a l la w
“t r ea t t h e St a t es in a m an n er con sist en t wit h t h eir
st a t u s a s r esidu a r y sover eign s,” Ald en v. M ain e, 527
U.S. 706, 748 (1999) (em ph a sis a dded). See N ew Y ork ,
505 U.S. a t 187 (“Mu ch of t h e Con st it u t ion is
con cer n ed wit h set t in g for t h t h e for m of ou r
gover n m en t , a n d t h e cou r t s h a ve t r a dit ion a lly
in va lida t ed m ea su r es devia t in g fr om t h a t for m ”); cf.
Pu erto R ico Aqu ed u ct & S ew er Au th . v. M etcalf &
E d d y, In c., 506 U.S. 139, 146 (1993).
Th e power a sser t ed by t h e Com pt r oller wor ks a
pla in a n d dir ect in fr in gem en t on St a t e sover eign t y.
St a t es’ a u t h or it y t o en for ce t h eir la ws “der ive[s] fr om
sepa r a t e a n d in depen den t sou r ces of power * * *
or igin a lly belon gin g t o t h em befor e a dm ission t o t h e
Un ion a n d pr eser ved t o t h em by t h e Ten t h
Am en dm en t .” H eath v. Alabam a, 474 U.S. 82, 89
(1985); a ccord Diam on d v. Ch arles, 476 U.S. 54, 65
(1986) (descr ibin g “t h e power t o cr ea t e a n d en for ce a
lega l code, bot h civil a n d cr im in a l” a s “on e of t h e
qu in t essen t ia l fu n ct ion s of a St a t e”) (cit a t ion a n d
in t er n a l qu ot a t ion m a rks om it t ed).
Nor m a y t h ese st a t em en t s be r ea d a s m er ely
st a t in g t h e t r u ism t h a t en for cem en t is n eeded t o m a ke
la w-m a kin g power s m ea n in gfu l, see M cClesk y v. Z an t,
12
499 U.S. 467, 491 (1991) (“t h e power of a St a t e t o pa ss
la ws m ea n s lit t le if t h e St a t e ca n n ot en for ce t h em ”).
On t h e con t r a r y, it is clea r t h a t a St a t e’s power over
en for cem en t of it s own la w is a sign ifica n t a n d
in depen den t com pon en t of it s sover eign st a t u s. In
First N ation al B an k in S t. L ou is v. M issou ri, 263 U.S.
640 (1924) – a decision of sin gu la r per t in en ce h er e, see
p. 34, in fra – t h e Cou r t specifica lly r ecogn ized t h a t
wh en “t h e sa n ct ion beh in d [a la w] is t h a t of t h e st a t e
a n d n ot t h a t of t h e n a t ion a l gover n m en t , t h e power of
en for cem en t m u st r est wit h t h e for m er a n d n ot wit h
t h e la t t er .” Id . a t 660.
In deed, t h is Cou r t ’s cla ssic descr ipt ion of t h e
Con st it u t ion ’s syst em of du a l sover eign t y r ea ds like a
bill of pa r t icu la r s a ga in st t h e OCC r egu la t ion h er e:
In t h eir la ws, a n d m ode of en for cem en t , n eit h er
[or der of gover n m en t ] is r espon sible t o t h e ot h er .
H ow t h eir r espect ive la ws sh a ll be en a ct ed; h ow
t h ey sh a ll be ca r r ied in t o execu t ion ; a n d in wh a t
t r ibu n a ls, or by wh a t officer s; a n d h ow m u ch
discr et ion , or wh et h er a n y a t a ll sh a ll be vest ed in
t h eir officer s – a r e m a t t er s su bject t o t h eir own
con t rol, a n d in t h e r egu la t ion of wh ich n eit h er ca n
in t er fer e wit h t h e ot h er .
T arble’s Case, 80 U.S. 397, 407 (1872).
Th e effect of t h e OCC Regu la t ion is t o con ver t t h e
St a t es fr om en for cer s of t h eir own la ws t o feder a l
pet it ion er s, wh o m u st depen d on t h e feder a l r egu la t or
t o t a ke a ct ion . It r ea ssign s t h e en for cem en t of New
Yor k la w (a n d ever y ot h er St a t e’s) fr om t h ose swor n ,
a n d polit ica lly bou n d, t o en for ce it , t o feder a l officia ls
for wh om com plia n ce wit h st a t e la w is likely t o be, a t
best , a secon da r y con cer n . Com pa r e N.Y. Con st ., a r t .
13
XIII, § 1 (oa t h t o pr ot ect st a t e con st it u t ion ) wit h 5
U.S.C. § 3331 (oa t h t o pr ot ect feder a l Con st it u t ion ); 12
U.S.C. § 3.
A r egim e t h a t t u rn s t h e St a t es in t o su pplica n t s,
depen den t on a feder a l a gen cy for en for cem en t of t h eir
own la ws, is n o m or e t oler a ble u n der t h e Con st it u t ion
t h a n on e t h a t t r ea t s t h em a s “m er e depa r t m en t s of t h e
Na t ion a l Gover n m en t .” FE R C v. M ississippi, 456 U.S.
742, 795 (1982) (O’Con n or , J ., con cu r r in g in t h e
ju dgm en t in pa r t a n d dissen t in g in pa r t ). “An essen t ia l
a t t r ibu t e of t h e St a t es’ r et a in ed sover eign t y [is] t h a t
t h ey r em a in in depen den t a n d a u t on om ou s wit h in t h eir
pr oper sph er e of a u t h or it y,” Prin tz, 521 U.S. a t 928.
As t h ese decision s r ecogn ize, t h e power s den ied
u n der t h e OCC Regu la t ion – t o decide h ow a n d a ga in st
wh om it s la ws will be en for ced – a r e ea ch pa r t of “h ow
a St a t e defin es it self a s a sover eign .” Gregory, 501
U.S. a t 461. See Ald en , 527 U.S. a t 751 (“If t h e
pr in ciple of r epr esen t a t ive gover n m en t is t o be
pr eser ved t o t h e St a t es, t h e ba la n ce bet ween
com pet in g in t er est s m u st be r ea ch ed a ft er deliber a t ion
by t h e polit ica l pr ocess est a blish ed by t h e cit izen s of
t h e St a t e”); Florid a ex rel. S h evin v. E xxon Corp., 526
F .2d 266, 268 (5t h Cir .1976) (“Th e office of [St a t e]
a t t or n ey gen er a l is older t h a n t h e Un it ed St a t es * * *
[H ]e t ypica lly m a y exer cise a ll su ch a u t h or it y a s t h e
pu blic in t er est r equ ir es. An d t h e a t t or n ey gen er a l h a s
wide discr et ion in m a kin g t h e det er m in a t ion a s t o t h e
pu blic in t er est ”); id . n .6 (n ot in g n ea r ly u n iver sa l
pr a ct ice of m a kin g office elect ive); Y ou n ger v. H arris,
401 U.S. 37, 45 (1971) (“Or din a r ily, t h er e sh ou ld be n o
in t er fer en ce wit h [st a t e pr osecu t or s]; pr im a r ily, t h ey
a r e ch a r ged wit h t h e du t y of pr osecu t in g offen der s
14
a ga in st t h e la ws of t h e st a t e, a n d m u st decide wh en
a n d h ow t h is is t o be don e”) (cit a t ion om it t ed).
A St a t e “h a s bot h t h e r igh t a n d t h e a u t h or it y t o
select t h e m et h ods t o be u sed in effect u a t in g it s goa ls.”
S h eeh y v. B ig Flats Com m u n ity Day, 73 N.Y.2d 629,
634-35 (1989). It s decision s a s t o h ow t o en for ce it s la w
– in clu din g t h e r ole t o pr ovide pr iva t e en for cem en t ,
H aw aii M ed ical Ass’n v. H aw aii M ed ical S ervice Ass’n ,
In c., 148 P .3d 1179, 1211 (H a w. 2006); t h e ext en t of
gover n m en t a l con t r ol of lit iga t ion , Con su m er Ad vocacy
Grou p, In c. v. Kin tetsu E n terprises, 150 Ca l.App.4t h
953, 963 (Ca l. App. 2007); t h e a m ou n t of pu blic
r esou r ces devot ed t o en for cem en t , Olstad v. M icrosoft
Corp., 700 N.W.2d 139, 153 (Wisc. 2005); t h e
dist r ibu t ion of decision a l a u t h or it y bet ween
a dm in ist r a t ive a n d ju dicia l for a , Case of Dalbec, 867
N.E .2d 792, 797 (Ma ss. App. 2007); t h e a m ou n t of
sa n ct ion s, S tate v. Irvin g Oil Corp., 955 A.2d 1098,
1107 (Vt . 2008); t h e a pplica ble lim it a t ion s per iod, Avis
v. B d . of R eview , 837 P .2d 584 (Ut a h Ct . App. 1992),
a n d lia bilit y for a t t or n ey’s fees, Cogar v. M on m ou th
T oyota, 751 A.2d 599, 607 (N.J . App. 2000) – a r e ea ch
vit a l a spect s of self-gover n m en t .
In deed, t h e OCC’s r egim e is a ll t h e m or e st r a n ge
a n d t r ou blin g beca u se it den ies power t o en for ce la w
on ly t o officer s pr im a r ily vest ed wit h t h a t a u t h or it y –
a n d dir ect ly a ccou n t a ble on t h a t ba sis t o t h e St a t e’s
cit izen s. N ew Yor k’s a n d ot h er St a t es’ decision s t o
pr ovide a pr iva t e r igh t of a ct ion a r e u n a ffect ed. See
510 F .3d a t 120 n .9 (“t h e pa r t ies do n ot dispu t e t h a t
pr iva t e pa r t ies wou ld r em a in fr ee u n der t h e OCC’s
r egu la t ion t o br in g in dividu a l or , wh er e a ppr opr ia t e,
cla ss a ct ion s a ga in st n a t ion a l ba n ks t o en for ce
15
com plia n ce wit h n on -pr eem pt ed st a t e la ws, r ega r dless
of t h e su bject m a t t er su ch la ws con cer n ”).
Th is en for cem en t r egim e, of cou r se is n ot t h e on e
New Yor k (or a n y St a t e) ch ose; gover n m en t
en for cem en t is oft en n ecessa r y t o m a ke a r igh t
pr a ct ica lly effect ive, see, e.g., Gen eral T el. Co. of th e
N orth w est, In c. v. E E OC, 446 U.S. 318, 326 (1980). It
a m ou n t s t o a com plet e in ver sion of or din a r y r u les,
which r ega r d pr iva t e lit iga n t s a s dist in ct ly less r elia ble
exposit or s of t h e pu blic in t er est t h a n gover n m en t
officia ls. See M ed tron ic, In c. v. L oh r, 518 U.S. 470,
504 (1996) (Br eyer , J ., con cu r r in g) (pr eem pt ion of st a t e
a gen cy r egu la t ion , bu t n ot st a t e la w t or t su it s, “wou ld
gr a n t gr ea t er power * * * t o a sin gle st a t e ju r y t h a n t o
st a t e officia ls a ct in g t h r ou gh st a t e a dm in ist r a t ive or
legisla t ive la w-m a kin g pr ocesses”); cf. Porter v. Warn er
H old in g Co., 328 U.S. 395, 397 (1946). As Ald en
expla in ed, wit h r espect t o su it s by t h e Un it ed St a t es,
“[a ] su it wh ich is com m en ced a n d pr osecu t ed * * * in
t h e n a m e of t h e [gover n m en t ] by t h ose wh o a r e
en t r u st ed wit h t h e con st it u t ion a l du t y t o [en for ce t h e
la w]* * * differ s in kin d fr om th e su it of a n in dividu a l
* * * * Su it s br ou gh t by t h e [gover n m en t ] it self r equ ir e
t h e exer cise of polit ica l r espon sibilit y,” 527 U.S. a t 755.
See a lso M assach u setts v. E PA, 549 U.S. 497, 518
(2007) (“It is of con sider a ble r eleva n ce t h a t t h e pa r t y
seekin g r eview h er e is a sover eign St a t e a n d n ot * * *
a pr iva t e in dividu a l”).
Nor is t h e Secon d Cir cu it m a jor it y’s r ela t ed
a ssu m pt ion – t h a t divest in g St a t es of en for cem en t
power sh ou ld be t r ea t ed a s a “lesser ” in t r u sion t h a n
t h e “gr ea t er ” power t o pr eem pt t h eir la ws en t ir ely –
con st it u t ion a lly va lid. See 510 F .3d a t 120 (descr ibin g
16
r egu la t ion a s “pr eser v[in g] st a t e sover eign t y by * * *
n ot pr eem pt in g st a t e la ws”).
To begin , t h e pr em ise t h a t t h e su pposedly “gr ea t er
power ” is even a va ila ble h er e is m ist a ken : t h e st a t e
la ws in issu e a r e on es even th e Com ptroller h a s
a ckn owledged Con gr ess did n ot in t en d t o pr eem pt .
An d it wa s a ser iou s m ist a ke t o u se decision s
su st a in in g OCC’s a sser t ion s of a dm in ist r a t ive
pr eem pt ion a s t h e st a n da r d a ga in st wh ich t o m ea su r e
ot h er , ost en sibly lesser in cu r sion s on St a t es’ power s.
See id . a t 113 (discu ssin g Wach ovia v. B u rk e).
Mor eover , u n like in t h e pr eem pt ion ca ses m ost
dir ect ly pr ovided for u n der t h e Con st it u t ion , t h e
feder a l power h er e is dir ect ed on ly a ga in st St a t es (a n d
t h ose h oldin g office u n der t h em ). See Ald en , 527 U.S.
a t 714 (n ot in g “t h e fou n din g gen er a t ion ’s r eject ion of
‘t h e con cept of a cen t r a l gover n m en t t h a t wou ld a ct
u pon a n d t h r ou gh t h e St a t es * * * ’”) (qu ot in g Prin tz,
521 U.S. a t 919). 1
In deed, t h is Cou r t in N ew Y ork r eject ed a
fu n da m en t a lly sim ila r “gr ea t er -power -in clu des-t h elesser ” a r gu m en t – i.e., t h a t a r egim e t h a t pr eser ved
som e r ole for t h e St a t e wa s in h er en t ly less offen sive t o
t h e Ten t h Am en dm en t t h a n wou ld on e wh er e Con gr ess
a ct ed pr eem pt ively. In t h e la t t er ca se, t h e Cou r t
expla in ed, “it is t h e F eder a l Gover n m en t t h a t m a kes
t h e decision in fu ll view of t h e pu blic, a n d it will be
1
To be su r e, feder a l pr eem pt ion is som et im es effected
t h r ou gh su it s en join in g a t t or n eys gen er a l, see E x Parte
Y ou n g, 209 U.S. 123 (1908), bu t su ch su it s a r e a n in ciden t
of t h e con clu sion t h a t t h e st a t e law is, by oper a t ion of t h e
Su pr em a cy Cla u se, void. See Prin tz, 521 U.S. a t 914.
17
feder a l officia ls t h a t su ffer t h e con sequ en ces if t h e
decision t u r n s ou t t o be det r im en t a l or u n popu la r ,” 505
U.S. a t 168.
Th e Com pt r oller ’s r egim e h a s t h e sa m e dem er it ,
den yin g t h e people of New Yor k t h e power t o h old t h ose
en for cin g t h eir la ws a ccou n t a ble. “Th e Con st it u t ion *
* * con t em pla t es t h a t a St a t e’s gover n m en t will
r epr esen t a n d r em a in a ccou n t a ble t o it s own cit izen s.”
Prin tz, 521 U.S. a t 920. H er e, a s in N ew Y ork ,
“[a ]ccou n t a bilit y is dim in ish ed wh en * * * elect ed st a t e
officia ls ca n n ot [m a ke la w en for cem en t decision s] in
a ccor da n ce wit h t h e views of t h e loca l elect or a t e in
m a t t er s n ot pr e-em pt ed by feder a l r egu la t ion ,” 505
U.S. a t 169.
Su ch a feder a l in t er posit ion bet ween t h e st a t e
cit izen r y a n d t h ose t h ey select t o en for ce t h eir la ws is
fu n da m en t a lly in con sist en t wit h t h e pr in ciple of “‘t wo
or der s of gover n m en t , ea ch wit h it s own dir ect
r ela t ion sh ip, it s own pr ivit y, it s own set of m u t u a l
r igh t s a n d obliga t ion s t o t h e people wh o su st a in it a n d
a r e gover n ed by it .’” S aen z v. R oe, 526 U.S. 489, 504,
n .17 (1999) (qu ot in g U.S . T erm L im its, 514 U.S. a t 838
(Ken n edy, J ., con cu r r in g)). F in a lly, a lt h ou gh , t h is
Cou r t h a s m a de clea r t h a t “it is t h e ver y prin ciple of
sepa r a t e st a t e sover eign t y” t h a t m a t t er s m ost , Prin tz,
521 U.S. a t 933, t h is r egim e wou ld fa r e poor ly on a n y
ba la n cin g t est : h u n dr eds, if n ot t h ou sa n ds, of va lid
la ws en a ct ed a t t h e st a t e level, for t h e dir ect pr ot ect ion
of st a t e cit izen s a ga in st wr on gfu l beh a vior , m a y n o
lon ger be en for ced t h er e.
18
B . Th e R e g im e Dra s t ic a lly Alt e rs Th e S t at e F e d e ra l B a la n c e
Con st it u t ion a l qu est ion s a side, t h is Cou r t ’s
pr eceden t s pla ce a h ea vy bu r den on st a t u t or y
in t er pr et a t ion s like OCC’s, r equ ir in g t h eir pr opon en t s
iden t ify a clea r st a t em en t , en a blin g a cou r t t o be
“a bsolu t ely cer t a in ” t h a t Con gr ess in t en ded t h e
r egim e. See Gregory, 501 a t 464; B ass, 404 U.S. a t
349; a ccor d Will v. M ich igan Dept. of S tate Police, 491
U.S. 58, 65 (1989).
Th e m a jor it y below r efu sed t o a pply t h a t r u le, on
t h e gr ou n d t h a t “t h e exer cise of ‘t r a dit ion a l’ st a t e
power in t h e con t ext of n a t ion a l ba n kin g r egu la t ion is
a lr ea dy su bst a n t ia lly qu a lified,” 510 F .3d a t 114, a n d
t h a t “Con gr ess h a s a lr ea dy expr essed it s in t en t t o lim it
t h e r ole of t h e st a t es in r egu la t in g n a t ion a l ba n ks,” id .
Bu t t h ese a r e n on -sequ it u r s. F ir st , t h e B ass Cou r t
did n ot con fin e t h e pr in ciple t o in t er pr et a t ion s t h a t
wou ld depa r t from som e pla t on ic “t r a dit ion a l ba la n ce;”
it r ecogn ized “sign ifica n t [] ch a n ge[s]” in t h e “feder a l
ba la n ce” a s “t r a dit ion a lly sen sit ive,” 404 U.S. a t 359.
In deed, t h e decision s wit h wh ich t h e clea r st a t em en t
r u le is a ssocia t ed a r ose in a r ea s wh er e t h e feder a l
pr esen ce wa s a lr ea dy su bst a n t ia l: Con gr ess (in deed
t h e Con st it u t ion ) h a d “expr essed it s in t en t t o lim it t h e
r ole of t h e st a t es” in Gregory, wh ich in volved a n
em ploym en t discr im in a t ion st a t u t e specifica lly
dir ect ed a t t h e St a t es – a n d a r gu a bly en a ct ed pu r su a n t
t o § 5 of t h e F ou r t een t h Am en dm en t , see Fitzpatrick v.
B itzer, 427 U.S. 445, 455 (1976), a n d B FP, 511 U.S. a t
544 & n .8, in volved a st a t u t e pa ssed pu r su a n t t o t h e
power t o “est a blish * * * u n ifor m La ws on t h e su bject
of Ba n kr u pt cies,” U.S. Con st ., a r t . I, § 8, cl. 4.
19
Th e ch a n ge t o t h e exist in g ba la n ce sa n ct ion ed by
t h e cou r t s below – wh a t t h e m a jor it y descr ibed a s
“a ccr et in g a gr ea t dea l of r egu la t or y a u t h or it y t o [a
feder a l officia l] a t t h e expen se of t h e st a t es,” 510 F .3d
119 – su r ely r a t es a s “sign ifica n t .” Th e power t o
en for ce st a t e la ws is n ot on e t r a dit ion a lly exer cised by
t h e feder a l gover n m en t , a n d wh ile Con gr ess n ot
in fr equ en t ly in cor por a t es st a t e la w stan d ard s in t o
feder a l la ws (a n d h a s, on occa sion , dir ect ed feder a l
a u t h or it ies t o en for ce st a t e la w, see, e.g., Prin tz, 521
U.S. a t 911), exa m ples of exclu sive feder a l en for cem en t
of st a t e la ws a r e va n ish in gly few.2 Cf. id . a t 928 (“It is
n o m or e com pa t ible wit h [St a t e] in depen den ce a n d
a u t on om y t h a t t h eir officer s be ‘dr a goon ed’ * * * in t o
a dm in ist er in g feder a l la w, t h a n it wou ld be com pa t ible
wit h t h e in depen den ce a n d a u t on om y of t h e Un it ed
St a t es t h a t it s officer s be im pr essed in t o ser vice for t h e
execu t ion of st a t e la ws”) (cit a t ion om it t ed).
Th e la ws a ffect ed by t h e r egu la t ion a r e on es a t t h e
u n qu est ion ed cor e of St a t es’ police power s. See L ew is
v. B T In vestm en t M an agers, In c., 447 U.S. 27, 38
(1980) (“bot h a s a m a t t er of h ist or y a n d a s a m a t t er of
pr esen t com m er cia l r ea lit y, ba n kin g a n d r ela t ed
fin a n cia l a ct ivit ies a r e of pr ofou n d loca l con cer n ”);
R oberts v. Un ited S tates J aycees, 468 U.S. 609, 624
2
Th e Assim ila t ive Cr im es Act , 18 U.S.C. § 13, cover s
territory over wh ich t h e feder a l gover n m en t exer cises police
power s – a n d pu n ish m en t is t r ea t ed a s feder a l. An d u n lik e
h er e, exclu sion of st a t e pr osecu t or s is n ot a ccom pa n ied by
in clu sion of pr iva t e en for cem en t . Lik ewise, 18 U.S.C. §
1166(d), is r oot ed in In dia n Tr ibes’ st a t u s a s qu a sisover eign s – a st a t u s even t h e OCC h a s n ot yet cla im ed for
it s n a t ion a l ba n k con st it u en cy.
20
(1984) (n ot in g t h a t St a t e’s civil r igh t s la w pr e-da t ed
t h e Civil Righ t s Act of 1875 “a n d pr ot ect [ed] t h e St a t e’s
cit izen r y fr om a n u m ber of ser iou s socia l a n d per son a l
h a r m s”). In deed, wh ile t h ese m a t t er s h a ve lon g been
a su bject of legisla t ive a ct ivit y a t t h e st a t e level, m a n y
of t h e specific m ea su r es wh ose en for cem en t wou ld be
im m edia t ely a ffect ed wer e r ecen t en a ct m en t s,
t a r get in g da n ger ou s n ew a bu ses – t h a t wer e pr odu cin g
ca la m it ou s effect s a t t h e com m u n it y level. See
F or r est er , S till Mortgagin g th e Am erican Dream :
Pred atory L en d in g, Preem ption , an d Fed erally
S u pported L en d ers, 74 U. CIN . L. REV . 1303, 1319-22
(2006).
In con cr et e t er m s, t h e n a t u r e a n d scope of t h e
power sh ift t h e r egu la t ion pu r por t s t o effect cou ld on ly
be ca lled dr a m a t ic. By a st r oke of t h e Com pt r oller ’s
pen , r espon sibilit y t o en for ce m u lt iple ca t egor ies of
la ws of ea ch of 50 St a t es h a s been den ied t o t h e
officia ls wh o a r e m ost fa m ilia r wit h t h eir m ea n in g a n d
oper a t ion a n d wit h t h e loca l con dit ion s t h ey a ddr ess –
a n d wh o wou ld, bu t for t h e OCC’s a ct ion , a ct
a t t en t ively t o t h e pr efer en ces of t h e en a ct in g
legisla t u r es a n d t h e cit izen s wh o pu t t h em in office.
Mor eover , t h e a gen cy t h a t h a s over t a ken t h is
r espon sibilit y is a ba n kin g r egu la t or t h a t wou ld be a
dou bt fu l ch oice for pr im a r y en for cer of con su m er
pr ot ect ion a n d a n t idiscr im in a t ion la ws, let a lon e t h e
diver se la ws of fift y St a t es. Despit e t h e OCC’s
a sser t ion in t h e r u lem a kin g of a “beli[ef]” t h a t it “h a s
t h e r esou r ces t o en for ce a pplica ble la ws,” 69 F ed. Reg.
a t 1915, it does n ot h a ve pr ocedu r es for exa m in in g
com plia n ce wit h st a t e la w, see U.S. G.A.O., OCC
P R E E M P TI O N R U LE S : OCC S H O U L D F U R TH E R C LAR I F Y
T H E AP P LI C AB I LI TY O F S TATE C O N S U M E R P R O TE C TI O N
21
L AW S TO N AT I O N AL B AN K S 22-23 (2006); t h e
r espon sibilit ies descr ibed wou ld devolve t o sm a ll
n u m ber s of OCC em ployees; r em edies in OCC
pr oceedin gs a r e n ot coext en sive wit h r elief a va ila ble in
cou r t s, see 12 U.S.C. § 1818(b); a n d m a n y of OCC’s
a ct ion s a r e con fiden t ia l. See Qu est er & Keest , L ook in g
Ah ead After Watters v. Wach ovia B an k , 27 R E V .
B AN K I N G & F I N . L. 187, 235-36 (2008) (n ot in g OCC
websit e in for m in g con su m er s t h a t , by la w, “t h e OCC
ca n n ot r elea se a n y in for m a t ion r ela t in g t o a n y
su per visor y a ct ion s or r ega r din g wh et h er a viola t ion of
la w or r egu la t ion occu r r ed in con n ect ion wit h you r
com pla in t ”). Th u s, even if OCC viewed en for cem en t of
t h ese la ws a s a gen u in e pr ior it y, bu t see in fra, t h e
a gen cy’s power s, r esou r ces, a n d exper t ise a r e n ot a
m in im a lly pla u sible su bst it u t e for t h e r egim e it seeks
t o displa ce. See, e.g., Ba r -Gil & Wa r r en , M ak in g
Cred it S afer, 157 U. P A . L. R E V . 1, 92 (2008)
(con t r a st in g t h ou sa n ds of con su m er en for cem en t
a ct ion s a t st a t e level wit h a h a n dfu l by t h e OCC,
n ot in g t h a t OCC’s la r ge en for cem en t a ct ion s wer e
begu n by st a t e a u t h or it ies, over OCC object ion s).3
A n ecessa r y im plica t ion of t h e Secon d Cir cu it ’s
r eject ion of t h e clea r st a t em en t r u le is t h a t t h e
disr u pt ion of t h e feder a l-st a t e ba la n ce h er e is less
sign ifica n t (or less sen sit ive) t h a n t h e on e pr esen t ed t o
3
In deed, OCC’s own cou n sel h a s a ck n owledged t h a t
“m or e t h a n t wen t y-five yea r s” ela psed bet ween t h e a gen cy’s
r ecogn it ion t h a t it h a d “a u t h or it y t o en for ce t h e F TC Act ”
a n d it s fir st effor t t o do so. See Willia m s & Bylsm a , On th e
S am e Page: Fed eral B an k in g Agen cy E n forcem en t of th e
FT C Act to A d d ress Un fair an d Deceptive Practices by
B an k s, 58 B U S . L AW . 1243, 1244 (2003).
22
t h e Cou r t in B ass. Bu t n ot on ly did B ass cit e t h e
pot en t ia lly “su bst a n t ia l ext en sion of feder a l police
r esou r ces,” 404 U.S. a t 350, t h e gover n m en t ’s
in t er pr et a t ion wou ld en t a il, a s a r ea son for skept icism
(a con sider a t ion t h a t weigh s m u ch h ea vier h er e), bu t
t h e in t er pr et a t ion r eject ed in B ass wou ld h a ve wor ked
n o ca t egor ica l sh ift . It wou ld n ot h a ve den ied t h e
St a t es power t o con t in u e pr osecut ing t h e a ct ivit y u n der
t h eir la ws -- a n d t h e feder a l power con t em pla t ed wou ld
h a ve been en t ir ely fa m ilia r : a Un it ed St a t es At t or n ey’s
office en for cin g feder a l cr im in a l la w befor e feder a l
cou r t s.
A closer a n a logy t o t h e fa ct s pr esen t ed h er e wou ld
be if t h e gover n m en t in B ass h a d u r ged t h e st a t u t e be
con st r u ed t o m a ke feder a l officia ls t h e on ly pr osecu t in g
a u t h or it y for cou n t les s st a t e la w offen s es ;
a dm in ist r a t ive t r ibu n a ls t h e for u m for decidin g t h ose
ca ses; a n d pla ced en for cem en t r espon sibilit y in t h e
h a n ds of a n a gen cy wit h m in im a l en for cem en t
r esou r ces a n d m odest exper ien ce in t he crim in a l ju st ice
field.
H ypot h et ica ls a side, it wou ld be difficu lt t o
m a in t a in t h a t t h e a ct u a l B ass ca se a ddr essed a m or e
sign ifica n t or sen sit ive sh ift in t h e feder a l-st a t e
ba la n ce t h a n t h e on e dispu t ed h er e.
Wit h ou t
qu est ion in g t h e gen u in en ess of t h e in cipien t t h r ea t
per ceived by t h e B ass Cou r t , see L opez, 514 U.S a t 615
(Sou t er , J ., dissen t in g) (“Not ever y epoch a l ca se h a s
com e in epoch a l t r a ppin gs”), it is sign ifica n t t h a t n o
St a t e a sked t h e B ass Cou r t t o a dopt t h e n a r r ow
con st r u ct ion – wh er ea s 46 St a t es pa r t icipa t ed in t h is
ca se a t t h e cou r t of a ppea ls level, u r gin g in va lida t ion
of t h e r egu la t ion .
23
F in a lly, t h e Secon d Cir cu it m a jor it y’s view su ggest s
a n in a ccu r a t e u n der st a n din g of t h e “h ist or ic ba la n ce”
in “t h e field of r egu la t ion of n a t ion a l ba n ks.” F ir st ,
t h er e is n o su ggest ion t h a t Con gr ess ch ose t o lim it
st a t e regu lation in th is a r ea – t h e n on -pr eem pt ed la ws
con t in u e t o a pply t o n a t ion a l ba n ks (n or did t h e
m a jor it y below con clu de t h a t Con gr ess in t en ded t o
displa ce st a t e en for cem en t – sa yin g on ly t h a t it h a d
n ot pr eclu ded t h e OCC fr om decidin g t o, see in fra).
F a r fr om t h e field pr eem pt ion r egim e su ggest ed by
t h e Secon d Cir cu it , t h is Cou r t lon g a go descr ibed t h e
r eleva n t la n dsca pe “t o con t a in a r u le a n d a n
except ion -‘t h e r u le bein g t h e oper a t ion of gen er a l st a t e
la ws u pon t h e dea lin gs a n d con t r a ct s of n a t ion a l
ba n ks,” M cClellan v. Ch ipm an , 164 U.S. 347, 357
(1896). See N ation al B an k v. Ken tu ck y, 76 U.S. 353,
362 (1869) (“n a t ion a l ba n ks a r e su bject t o t h e la ws of
t h e St a t e”).
In deed, t h er e is a lon g h ist or y of ba n ks’ a sser t in g
br oa d feder a l im m u n it ies – a n d cou r t s’ declin in g t o
oblige. Com pa r e 510 F .3d a t 114 (descr ibin g ba n ks a s
“cr ea t u r es of feder a l st a t u t e, * * * su bject fir st a n d
for em ost t o feder a l la w”) wit h Ath erton , 519 U.S. a t
222-23 (“To poin t t o a feder a l ch a r t er by it self sh ows n o
con flict , t h r ea t , or n eed for ‘feder a l com m on la w’”); S t.
L ou is, 263 U.S. a t 643 (cou n sel’s a r gu m en t Con gr ess
h a d “occu pied t h e en t ir e field” of n a t ion a l ba n k
r egu la t ion ); a ccor d M cClellan , 164 U.S. a t 358
(r eject in g preem pt ion a rgu m en t , obser vin g t h a t “in t h e
br oa dest sen se, an y lim it a t ion by a St a t e on t h e
m a kin g of con t r a ct s is a r est r a in t u pon t h e power of a
n a t ion a l ba n k”) (em ph a sis a dded).
An d wh ile ba n ks a n d t h e OCC fr equ en t ly poin t t o
ea r ly decision s u n der t h e Na t ion a l Ba n k Act – a n d
24
even t o t h e Ma r sh a ll Cou r t ’s decision s in M cCu lloch v.
M arylan d , 17 U.S. 316 (1819) a n d Osborn v. B an k of
th e Un ited S tates, 22 U.S. 738 (1824), a s h a vin g fixed
t h e ba la n ce, t h ose ca ses focu sed on st a t e la ws’
pot en t ia l t o “in ca pa cit a t e[] t h e ba n ks fr om disch a r gin g
t h eir d u ties to th e govern m en t,” Ken tu ck y, 76 U.S. a t
362, a n d su ch cla im s wer e “r a dica lly ch a n ged” by t h e
1913 pa ssa ge of t h e F eder a l Reser ve Act , 38 St a t . 251,
see 12 U.S.C. § 221 et seq., wh ich , “est a blish ed t h e
F eder a l Reser ve Syst em a s t h e sole m on et a r y a n d
fisca l a gen t s of t h e Un it ed St a t es,” First Agr. N at.
B an k of B erk sh ire Cou n ty v. S tate T ax Com m ’n , 392
U.S. 339, 356 (1968) (Ma r sh a ll, J ., dissen t in g) a n d
“gr ea t ly r edu ced t h e im por t a n ce of t h e dist in ct ion
bet ween n a t ion a l a n d n on n a t ion a l ba n ks,” F R I E D M AN
& S CH WART Z , A M O N E T AR Y H I S TO R Y O F TH E U N I TE D
S T AT E S 1867-1960 a t 196 (1974). 4
Wh er ea s, u n der t h e or igin a l NBA, n a t ion a l ba n ks
wer e r ecogn ized t o be “Na t ion a l fa vor it es” beca u se
“[t ]h ey wer e est a blish ed for t h e pu r pose, in pa r t , of
pr ovidin g a cu r r en cy for t h e wh ole cou n t r y, a n d in pa r t
t o cr ea t e a m a r ket for t h e loa n s of t h e Gen er a l
gover n m en t ,” T iffan y v. N at’l B an k of M o., 85 U.S. 409,
4
Th e m a jor it y in First Agricu ltu ral B an k fou n d it
“u n n ecessa r y t o r ea ch * * * wh et h er t oda y n a t ion a l ba n k s
s h ou l d b e con s i d e r e d n on t a x a b l e a s fe d e r a l
in st r u m en t a lit ies,” con clu din g t h a t 12 U.S.C. § 548, wh ich
a llowed t a xa t ion in specific a r ea s, im pliedly pr eclu ded ot h er
t a xa t ion .
Id . a t 345.
Sh or t ly t h er ea ft er , Con gr ess
a m en ded t h e pr ovision , su bject in g n a t ion a l ba n k s t a xa t ion
t o t h e sa m e ext en t a s t h ose ch a r t er ed by t h e St a t e. See
Un ited S tates v. S tate B oard of E qu alization , 639 F .2d 458,
461 (9t h Cir . 1980).
25
413 (1887), a m oder n -da y n a t ion a l ba n k “is a pr iva t ely
own ed cor por a t ion exist in g for t h e pr iva t e pr ofit of it s
sh a r eh older s. It per for m s n o sign ifica n t feder a l
gover n m en t a l fu n ct ion t h a t is n ot perform ed equ a lly by
st a t e-ch a r t er ed ba n ks,” First Agr. B an k , 392 U.S. a t
354-55 (Ma r sh a ll, J ., dissen t in g). Cf. Watson v. Ph ilip
M orris Com pan ies, In c., 127 S. Ct . 2301, 2307-09
(2007) (pr iva t e pa r t y com plyin g wit h feder a l officia l’s
or der does n ot “a ct [] u n der ” t h e officer , for pu r poses of
r em ova l st a t u t e, 28 U.S.C. § 1442(a )(1)).
C.
Th e J u d ic ia l S a fe g u a rd s o f F e d e ra lis m Are
Of Gre a te r Im p o rta n c e Wh e re Ag e n c y
Ac tio n Is In v o lv e d
Alt h ou gh t h is Cou r t h a s explicit ly r ecogn ized t h a t
t h e ca n on s of con st r u ct ion r equ ir in g clea r st a t em en t s
h a ve “h eigh t en ed” for ce in t h e con t ext of
a dm in ist r a t ive a ct ion , S WAN CC, 531 U.S. a t 172-73,
t h e decision below a n d ot h er s h a ve r eject ed a sim ila r
a ppr oa ch in “or din a r y” pr eem pt ion ca ses a n d h a ve
in st ea d a pplied a d e facto “Ch evron except ion ” t o
gen er a l r u les for a n a lyzin g a sser t ion s of feder a l
pr eem pt ion , a ccor din g br oa d defer en ce t o feder a l
a gen cy r u les pu r por t in g t o decla r e St a t e la ws
pr eem pt ed on “fr u st r a t ion of pu r pose” gr ou n ds or
a dva n cin g a ggr essive in t er pr et a t ion s of expr ess
pr eem pt ion cla u ses – a n d a ccept in g wit h a n u n cr it ica l
eye a sser t ion s of con gr ession a l a u t h or iza t ion of
r egu la t ion s wit h su bst a n t ia l St a t e-la w displa cin g
effect .
Th ese br oa d ext en sion s of Ch evron defer en ce a r e
n eit h er logica l n or r econ cila ble wit h t h is Cou r t ’s
pr eceden t . To a llow St a t e la w t o be displa ced ba sed on
silen ce or a m bigu it y in a feder a l st a t u t e, Ch evron , 467
U.S. a t 843, is a t odds wit h t h e r u le t h a t displa cem en t
26
r equ ir es a sh owin g of “clea r a n d m a n ifest ”
con gr ession a l in t en t , R ice, 331 U.S. a t 230, ju st a s t h e
dir ect ive t h a t cou r t s a ccept a gen cy con st ru ct ion s t h a t
“differ [] fr om wh a t t h e cou r t believes is t h e best
s t a t u t or y in t er pr et a t ion ,” N at ion al Cable &
T elecom m unications Ass’n v. B ran d X In tern et S ervices,
545 U.S. 967, 980 (2005), is n ot r ea dily squ a r ed wit h
t h e r u le t h a t cou r t s m u st r ea d a m bigu ou s pr eem pt ion
cla u ses in a wa y “t h a t disfa vor s pr e-em pt ion ,” B ates v.
Dow Agroscien ces L L C, 544 U.S. 431, 449 (2005).
A r u le m or e a ccept in g of cla im s of a dm in ist r a t ive
t h a n st a t u t or y pr eem pt ion is ir r econ cila ble wit h ba sic
con st it u t ion a l n or m s. Su ch a r u le wou ld eva de t h e
ver y “polit ica l pr ocess” t h a t m oder n con st it u t ion a l la w
r elies on t o pr ot ect St a t es’ in t er est s. See Gregory, 501
U.S. a t 464; IN S v. Ch ad h a, 462 U.S. 919, 953 (1983)
(d i s cu s s i n g b i ca m e r a l i s m a n d p r e s e n t m e n t
r equ ir em en t s, U .S. Con st ., a r t . I, § 7, for exer cise of
legisla t ive power ). St a t es a r e n ot r epr esen t ed in
E xecu t ive Br a n ch a gen cies, a n d r egu la t ion s do n ot
r equ ir e con cu r r en ce of t wo br a n ch es. Nor m a y t h e
Cou r t ’s a ckn owledgm en t t h a t “t h e st a t e-displa cin g
weigh t of feder a l la w” sh ou ld n ot be given t o “m er e
con gr ession a l am bigu ity,” Gregory, 501 U.S. a t 464
(qu ot in g L. T R I B E , AM E R I C AN C O N STI TU TIO N AL L AW §
6.25, p. 480 (2d ed. 1988)), fa ir ly be lim it ed t o a
n a r r ower cla ss of especia lly sen sit ive st a t u t es; by it s
t er m s, t h e st a t em en t descr ibes “or din a r y” pr eem pt ion ,
a n d Gregory it self descr ibes it s pla in st a t em en t r u le a s
r oot ed in pr eem pt ion ca se la w. See id . a t 460-61
(cit in g, in ter alia, R ice, 331 U.S. a t 230).
Mor eover , t h e pr em ises u n der lyin g t h e Ch evron
doct r in e, t h a t a gen cies h a ve gr ea t er exper t ise a n d
dem ocr a t ic a ccou n t a bilit y t h a n do cou r t s – h a ve less
27
for ce in pr eem pt ion ca ses. P r eem pt ion is, a ft er a ll, a
con st it u t ion a l qu est ion , U.S. Con st . a r t . VI, § 2, a n d
a gen cy exper t ise in st a t u t es t h ey a dm in ist er is n ot
m a t ch ed by sen sit ivit y t o policies a n d pu r poses ser ved
by St a t e la w. Th u s, wh ile exa m ples a bou n d of cou r t s’
u n der t a kin g t o con ser ve St a t e la w a n d r eject in g
over br oa d pr eem pt ion a sser t ion s, a gen cies a r e m or e
likely t o t a ke a m a xim a list a ppr oa ch , see in fra. An d t o
t h e ext en t Ch evron defer en ce r est s on a pr esu m pt ion
t h a t silen ce or a m bigu it y or din a r ily is in t en ded t o be a
delega t ion , t h a t pr em ise is em pir ica lly m or e
qu est ion a ble a n d lega lly m or e pr oblem a t ic wh er e
displa cem en t of st a t e la w is con cer n ed. St a t es look t o
feder a l cou rts r a t h er t h a n feder a l a gen cies for a fa ir
h ea r in g – a n d t o m a in t a in ba la n ce. See L opez, 514
U.S.
F in a lly, a lega l r egim e t h a t m a kes Con gr ess t h e
“t ryou t on t h e r oa d” a n d a gen cy r u lem a kin g t h e “m a in
even t ,” see Wain w righ t v. S yk es, 433 U.S. 72, 90
(1977), for pr eem pt ion qu est ion s – t h ereby r elievin g
pa r t ies seekin g pr eem pt ion of t h e “obliga t ion t o pu ll,
h a u l, a n d t r a de,” J oh n son v. De Gran d y, 512 U.S. 99,
1020 (1994), in t h e legisla t ive a r en a – m a kes it
especia lly likely t h a t t he con st it u t ion a lly-cont empla t ed
deliber a t ion will n ot occu r .
Th is does n ot m ea n t h a t a dm in ist r a t ive r egu la t ion s
m a y n ever be given pr eem pt ive effect . Bu t “[t ]h e
pu r pose of Con gr ess” sh ou ld r em a in “t h e ‘u lt im a t e
t ou ch st on e’ in every pr e-em pt ion ca se.” M ed tron ic, 518
U.S. a t 485 (em ph a sis a dded) (cit a t ion om it t ed). See
L ou isian a Pu blic S erv. Com m ’n v. FCC, 476 U.S. 355,
369 (1986)) (“[t ]h e cr it ica l qu est ion in a n y pr e-em pt ion
a n a lysis is a lwa ys wh et h er Con gr ess in t en ded t h a t
feder a l r egu la t ion su per sede st a t e la w”). An d t h er e is,
28
for a pr eem pt ion pu r poses, “a va st a n d obviou s
differ en ce bet ween r u les a u t h or izin g or r egu la t in g
con du ct a n d r u les gra nt ing im m u n it y fr om r egu la t ion .”
Watters v. Wach ovia B an k , 127 S. Ct . 1559, 1583
(2007) (St even s., J , dissen t in g). P r a ct ica l r ea lit ies
a side, it is a lon g con st it u t ion a l lea p fr om t r ea t in g a
va lid r egu la t ion a s a “la w” for pu r poses of t h e
Su pr em a cy Cla u se, H illsborou gh Cou n ty v. Au tom ated
M ed ical L aboratories, In c., 471 U.S. 707, 713 (1985) –
a n d t h er efor e en join in g in con sist en t st a t e la ws – t o
givin g bin din g effect t o a n a gen cy’s br oa d a sser t ion s
a bou t a st a t e la w’s ca pa cit y t o im pa ir t h e “pu r poses” of
a feder a l st a t u t e. Wh olesa le decla r a t ion s of feder a l
exclu sivit y a r e u n likely t o r est on a n y pa r t icu la r ized
exer cise of a gen cy exper t ise, a n d h igh ly likely t o r eflect
a gen cies’polit ica l r em ot en ess fr om , or even h ost ilit y t o,
st a t e in t er est s.
D . Th e re is N o “OCC Ex c e p t io n ” To Th e s e
P rin c ip le s
Rea son s for close ju dicia l r eview a pply wit h fu ll
for ce wh er e t h e OCC is con cer n ed. Th er e ca n be n o
expect a t ion t h a t , in r esolvin g con flict in g cla im s of
St a t e a n d feder a l power , t h e Com pt r oller m a y be r elied
on t o “h old t h e ba la n ce t r u e,” Illin ois v. Gates, 462 U.S.
213, 241 (1983). E ven lea vin g a side n on a ccou n t a bilit y
t o t h e cit izen s of t h e a ffect ed St a t es, see su pra, t h e
Com pt r oller is less fed erally a ccou n t a ble t h a n m ost
E xecu t ive B r a n ch officia ls : t h e P r e sid e n t ’s
a ppoin t m en t a n d r em ova l power s a r e con st r a in ed, 12
U.S.C. § 2; t h e Secr et a r y of Tr ea su r y is for bidden fr om
“dela y[in g] or pr even t [in g] t h e * * * pr om u lga t ion of
a n y r egu la t ion by t h e Com pt r oller ,” id . § 1; a n d, qu it e
u n u su a lly, t h e a gen cy does n ot depen d on
29
con gr ession a l a ppr opr ia t ion for it s oper a t ion s. Ba r -Gil
& Wa r r en , su pra, a t 93.
In st ea d, t h e Office’s bu dget is fu n ded a lm ost
en t ir ely by a ssessm en t s a ga in st t h e pa r t ies it
r egu la t es. Id . (“[A]ssessm en t s com pr ise 95% of t h e
OCC’s bu dget ”).
An d m or e u n u su a lly st ill, it s
ju r isdict ion over t h ese in st it u t ion s is a m a t t er of
volit ion on th eir pa r t . Th u s, in 2004-2005, in t h e
im m edia t e wa ke of t h e r egu la t ion a t issu e h er e,
“ch a r t er con ver sion s of t h r ee la r ge [in st it u t ion s] * * *
r esu lt ed in t h e t r a n sfer of $1 t r illion of ba n kin g a sset s
in t o t h e OCC’s ju r isdict ion * * * a n d r a ised a ssessm en t
r even u es by 15%,” id . a t 93 & n .300. Cf. T u m ey v.
Oh io, 273 U.S. 510 (1927). F in a lly, t h e Office
h ist or ica lly h a s don e lit t le t o sepa r a t e it s r oles a s
decider of pr eem pt ion qu est ion s a n d pa r t icipa n t in t h e
com pet it ion for fin a n cia l in st it u t ion s’ a llegia n ce. See,
e.g., Speech by Com pt r oller J oh n D. H a wke, J r . (F eb.
12, 2002) (descr ibin g pr eem pt ion a s “a sign ifica n t
ben efit of t h e n a t ion a l [ba n k] ch a r t er – a ben efit t h a t
t h e OCC h a s fou gh t h a r d over t h e yea r s t o pr eser ve”),
qu ot ed in Wilm a r t h , T h e OCC’s Preem ption R u les
E xceed th e Agen cy’s Au th ority an d Presen t a S eriou s
T h reat to th e Du al B an k in g S ystem an d Con su m er
Protection , 23 AN N . R E V . B AN K I N G & F I N . L. 225, 274
(2004). 5
As t his ca se a t t est s, OCC h a s in cr ea sin gly esch ewed
preem pt ion doct rin es t ha t wou ld depen d on con sider in g
5
St a t e ch a r t er in g a u t h or it ies do n ot com pet e on t h is
ba sis: t h ey ca n n ot pr eem pt st a t e la ws, a n d t h ey sh a r e
over sigh t a u t h or it y wit h t h e F DIC a n d t h e F eder a l Reser ve
a n d a r e su bject t o t h e en for cem en t a u t h or it y of St a t e
At t or n eys Gen er a l.
30
(or dem on st ra t in g in cou r t ) t ha t a pa r t icu la r st a t e la w
(or en for cem en t of st a t e la w) im poses a n actu al,
su bst a n t ia l bu r den on a con gr ession a l object ive or a n
a ct u a l con flict wit h a n a gen cy r egu la t ion on t h e sa m e
su bject ; it h a s gr a vit a t ed in st ea d t owa r d cla im s t h a t
an y st a t e r egu la t ion is a n im per m issible con dit ion on
or im pa ir m en t of con gr ession a lly-con fer r ed power s, or ,
a s h er e, a n in va sion of som e br oa dly-defin ed exclu sive
ju r isdict ion – wit h ou t a n y cla im t h a t t h e Com pt r oller
h a s r egu la t ed in t h e field or in t en ds t o (or even h a s
a ffirm a t ively concluded t h a t r egu la t ion is u n desira ble).
See 510 F .3d a t 118-119 (n ot in g t h a t in st ea d of
“a r t icu la t [in g som e] r a t ion a l con n ect ion bet ween * * *
fa ct s fou n d a n d t h e ch oices m a de,” “t h e OCC does n ot
a ppea r t o h a ve fou n d a n y fa ct s a t a ll,” a n d r elied
“a lm ost en t ir ely [on ] t h e a gen cy’s in t er pr et a t ion of ca se
la w, legisla t ive h ist or y, a n d st a t u t or y t ext ”) (cit a t ion
om it t ed); Perd u e v. Crock er N ation al B an k , 702 P .2d
503, 525 (Ca l. 1985) (r efu sin g t o “pr esu m e, wit h ou t
eviden ce, t h a t pr oh ibit in g a n a t ion a l ba n k fr om set t in g
u n r ea son a ble pr ices or en for cin g a n u n con scion a ble
con t r a ct will r en der t h a t ba n k less efficien t , less
com pet it ive or less a ble t o fu lfill it s fu n ct ion in a
n a t ion a l ba n kin g syst em ”).
Un like feder a l cou r t s, wh ich a r e obliged t o (a n d do)
s e a r ch for a lt e r n a t ive s t h a t w ou ld a llow
a ccom plish m en t of feder a l object ives wh ile m in im izin g
displa cem en t of st a t e la w, t h e OCC ha s t r ea t ed
a sser t ion s of n a t ion a l “u n ifor m it y” a n d “u n it a r y
r egu la t ion ” a s u n a n swer a ble – even in ca ses, like t h is
on e, wh er e t h ey a r e n ot even logica lly r eleva n t , see
in fra. See Ba r -Gil & Wa r r en , su pra, a t 92; Ath erton ,
519 U.S. a t 220 (“To in voke t h e con cept of ‘u n ifor m it y,’
h owever , is n ot t o pr ove it s n eed”). Com pa r e E gelh off,
31
532 U.S. a t 160 (Br eyer , J ., dissen t in g) (descr ibin g
cou r t s a s “a pply[in g] pr e-em pt ion a n a lysis wit h ca r e,
st a t u t e by st a t u t e, lin e by lin e, in or der t o det er m in e
h ow best t o r econ cile a feder a l st a t u t e's la n gu a ge a n d
pu r pose wit h feder a lism ’s n eed t o pr eser ve st a t e
a u t on om y”).
Th e OCC h a s t a ken a “pr eem pt fir st , a sk qu est ion s
la t er ” a ppr oa ch , offer in g sca n t su ppor t for cr it ica l
em pir ica l a sser t ion s, in clu din g t h a t it “h a s t h e
r esou r ces t o en for ce a pplica ble la ws [a n d] * * * en su r e
t h a t con su m er s a r e a dequ a t ely pr ot ect ed,” 69 F ed. Reg.
a t 1915. In deed, even wh en it h a s pu r por t ed m er ely t o
r est a t e “ju dicia l pr eceden t ,” OCC h a s t a ken a
t en den t iou s a ppr oa ch .
Th u s, wh ile t h is Cou r t ’s
decision in B arn ett B an k of Marion Cou n ty v. N elson ,
517 U.S. 25 (1996), descr ibed pr eem pt ion a s r ea ch in g
st a t e la ws t h a t “forbid , or * * * im pair sign ifican tly,
t h e exer cise of a power t h a t Con gr ess explicit ly
gr a n t ed,” id . a t 33 (em ph a sis su pplied), OCC h a s
om it t ed t h e wor d “sign ifica n t ly,” su bst it u t ed
“a u t h or ized” for “power explicit ly gr a n t ed,” a n d
in dica t ed t h a t a n yt h in g less t h a n “fu ll[] exer cise”
con st it u t es a n a ct ion a ble fr u st ra t ion of con gr ession a l
pu r poses. See 12 C.F .R. § 7.4009(b); Wilm a r t h , su pra
a t 247 & n .81.
Th ese a ct ion s h a ve occu r r ed a t a fa t efu l m om en t .
St a t e gover n m en t s, closer t o t h e people, wer e t h e fir st
t o see – a n d t h en t o exper ien ce – t h e pr eda t or y len din g
a n d for eclosu r e cr ises a n d sou gh t t o en a ct la ws
pu r su a n t t o t h eir h ist or ic power s a n d en for ce t h ese
a ga in st wr on gdoin g fin a n cia l in st it u t ion s, wit h ou t
r ega r d t o t h e iden t it y of t h e ch a r t er in g a u t h or it y. See
Wilm a r t h , su pra a t 253-65. Th e a dver se effect s of t h e
32
OCC’s br u sh in g a side of va st t r a n ch es of st a t e
r egu la t ion a r e n ot m er ely t h eor et ica l.
II. N o P e rm is s ible Co n s tru c tio n o f Th e Ac t
S u p p o rts Th e OCC’s As s e rte d P o w e r
In su st a in in g t h e r egu la t ion , t h e cou r t below
st opped sh or t of sa yin g t h a t t h e r egim e wa s in t en ded
by Con gr ess; r a t h er , t h e pa n el st a t ed t h a t it did n ot
“a gr ee * * * t h a t t h e st a t u t e clea r ly pr eclu des t h e
in t er pr et a t ion t h e OCC h a s a dopt ed,” 510 F .3d a t 117.
In deed, a s t h e m a jor it y opin ion a t t est s, t h e r egu la t ion
cou ld n ot even su r vive a ju n ior ver sion of t h e clea r
st a t em en t r u le: even if it wer e n ot est a blish ed t h a t
Con gress m u st fa ce t h ese issu es, th e agen cy h er e
“a ccr et [ed] a gr ea t dea l of r egu la t or y a u t h or it y t o it self
a t t h e expen se of t h e st a t es,” wit h ou t “h a v[in g] fou n d
a n y fa ct s a t a ll” in a r u lem a kin g t h a t “la cked a n y r ea l
in t ellect u a l r igor or dept h ”– a n d offer ed on ly “cu r sor y
a n a lysis,” 510 F .3d a t 119.
Th e cou r t in st ea d con clu ded t h a t t h is a bsen ce of a
clea r con t r a r y st a t em en t , a lon g wit h “[im ]pr ecis[ion ]”
a s t o t h e “scope of ‘visit or ia l’ power s,” a n d a gr a n t of
gen er a l r u lem a kin g power , 12 U.S.C. § 93a , su fficed t o
en t it le t h e r egu la t ion t o Ch evron defer en ce. Th e cou r t
t h en pr on ou n ced it self sa t isfied t h a t “t h e OCC r ea ch ed
a per m issible a ccom m oda t ion of con flict in g policies.”
510 F .3d a t 120. Th is wa s m isgu ided.
F ir st , a s t h is Cou r t h a s r epea t edly expla in ed, it is
t h e pr esu m ed con gr ession a l delega t ion , n ot ver ba l
a m bigu it y it self, t h a t su pplies a gen cy power , Gon zales,
546 U.S. a t 255, a n d a gen cy a sser t ion s r em a in su bject
t o t est in g for pla u sibilit y. See FDA v. B row n &
William son T obacco Corp., 529 U.S. 120, 160 (2000);
Ch risten sen v. H arris Cou n ty, 529 U.S. 576, 590 n . *
33
(2000) (Sca lia , J ., con cu r r in g in pa r t a n d con cu r r in g in
ju dgm en t ). Th e fa ct t h a t Con gr ess did n ot expr essly
con fir m St a t es’ power t o en for ce t h eir own n on pr eem pt ed la ws is n o delega t ion : “A ‘ga p’ is n ot cr ea t ed
in a st a t u t or y sch em e m er ely beca u se a st a t u t e does
n ot r est a t e [a ] t r u ism ,” Ad am s Fru it Co., In c. v.
B arrett, 494 U.S. 638, 649 (1990). An d t h is ca se is
su r ely on e wh er e com m on sen se, see Gon zales, 546
U.S. a t 274, n o less t h a n con st it u t ion a l pr in ciple,
wa r n s a ga in st t h e a gen cy’s cla im . See id . a t 267 (“t h e
idea t h a t Con gr ess ga ve * * * su ch br oa d a n d u n u su a l
a u t h or it y t h r ou gh a n im plicit delega t ion is n ot
su st a in a ble”).
Th ese con cer n s a side, t h e OCC’s pu r por t ed
r ein t er pr et a t ion of “visit a t ion ” is sim ply n ot a
per m issible on e. Wh a t ever u n cer t a in t y m igh t a t t en d
t h e t er m ’s “precise scope,” 510 F .3d a t 117 (em ph a sis
a dded), t h e t ext of § 484(a ) is u n a m bigu ou s in t h e
r espect r eleva n t h er e: Not h in g in it s la n gu a ge is open
t o t h e in t er pr et a t ion th e OCC sou gh t t o im pose – a s
con t em pla t in g t wo cla sses of st a t e la ws: on e,
con ven t ion a lly pr eem pt ed (e.g., t h ose wh ich wou ld
a u t h orize st a t e exa m in er s t o su per vise n a t ion a l ba n ks)
a n d a secon d, en for cea ble a ga in st ba n ks, bu t on ly by
t h e feder a l gover n m en t (a n d su ch pr iva t e pa r t ies a s a
St a t e h a s a u t h or ized). See M CI T elecom m u n ication s
Corp. v. AT &T Co., 512 U.S. 218, 231 (1994).
On t h e con t r a r y, a lt h ou gh t h e st a t u t or y t er m h a s
lim it ed m oder n r eson a n ce, defin it ion s a n d pr a ct ice
con t em por a n eou s t o t h e NBA’s en a ct m en t m a ke clea r
t h a t “visit a t ion ” r efer s t o t h e a u t h or it y of t h e
ch a r t er in g a u t h or it y (or don or , in t h e ca se of a ch a r it y)
t o a ssu r e t h a t t h e cor por a t ion is st a yin g wit h in t h e
power s gr a n t ed a n d t h e by-la ws est a blish ed for it . See
34
T ru stees of Dartm ou th College v. W ood w ard , 17 U.S.
518, 595, 676 (1819) (equ a t in g ch a r t er a s a con t r a ct
a n d by-la ws a s “it s st a t u t es”). On t h is u n der st a n din g,
t h e ch a r t er in g a u t h or it y h a s exclu sive r espon sibilit y
for exa m in in g t h e cor por a t ion a n d a ssu r in g com plia nce
wit h “it s [t h e cor por a t ion ’s] la ws” – bu t t h a t wou ld n ot
pr eclu de ot h er sover eign s fr om en for cin g th eir
ot h er wise a pplica ble, gen er a l la ws.
Rem a r ka bly, t h e ver y cla im a t issu e h er e wa s
a dva n ced – u n su ccessfu lly – in S t. L ou is. Th er e, t h e
Com pt r oller a r gu ed t h a t , pr eem pt ion a side, t h e
pr edecessor ver sion of t h e “visit or ia l power s”
pr oh ibit ion wa s a n in depen den t ba r t o t h e Missou r i
At t or n ey Gen er a l’s en forcing his St a t e’s a nt i-br a n ch in g
la w a ga in st a n a t ion a l ba n k. See 263 U.S. a t 643
(cou n sel’s a r gu m en t ). Aft er h oldin g t h e la w n ot
pr eem pt ed, t h e Cou r t r eject ed t h e Com pt r oller ’s cla im
in em ph a t ic t er m s. “[T]h a t t h e Un it ed St a t es a lon e
m a y in qu ir e * * * wh et h er a n a t ion a l ba n k is a ct in g in
excess of it s ch a r t er power s,” t h e Cou r t expla in ed, wa s
beside t h e poin t – beca u se:
Wh a t t h e st a t e is seekin g t o do is t o vin dica t e a n d
en for ce it s own la w, a n d t h e u lt im a t e in qu ir y wh ich
it pr opou n ds is wh et h er t h e ba n k is viola t in g t h a t
la w, n ot wh et h er it is com plyin g wit h t h e ch a r t er or
la w of it s cr ea t ion .
Id . a t 660.
Th e OCC’s 2004 “r ein t er pr et a t ion ” r epea t s t h e ver y
sa m e “com plet e m iscon cept ion ,” id ., t h is Cou r t
iden t ified in it s 1924 a r gu m en t . 6
6
Nor does a n y ot h er decision cit ed in t h e OCC’s
r u lem a k in g su ggest t h e cr it ica l a m bigu it y t h e Com pt r oller
35
F in a lly, in pr on ou n cin g t h e r u le “r ea son a ble,” t h e
decision below did n ot a pply t h e “r igor ” it r igh t ly fou n d
la ckin g fr om t h e OCC’s a n a lysis. Not on ly did t h e
cou r t a llow t h e a gen cy t o displa ce St a t es wit h ou t a n y
fa ct u a l fin din g, bu t it u n cr it ica lly a ccept ed gen er ic
policy “in t er est s,” t h a t , wh ile t ypica lly h elpfu l t o OCC
pr eem pt ion cla im s, do n ot in fa ct su ppor t t h is on e.
Th is r egu la t ion d oes n ot in fa ct “pr even t
in con sist en t * * * st a t e r egu la t ion ,” 510 F .3d a t 111 –
it pu r por t s t o r espect , n ot preem pt st a t e la ws – wh ich
a r e, by t h eir n a t u r e, in con sist en t ; a n d, t o t h e ext en t
pr iva t e la wsu it s qu a lify a s “st a t e r egu la t ion ,” it
pr eser ves t h em , a s well. N or , by t h is t oken , does it
a ssu r e t h a t n a t ion a l ba n ks a n swer t o a sin gle
r egu la t or , id . a t 120: u n der t h e r egim e, t h ey will
a n swer t o ju r ies in st a t e cou r t cla ss a ct ion la wsu it s, a s
well a s t h e OCC – ju st n ot st a t e la w en for cem en t
officia ls.
Co n c lu s io n
Th e ju dgm en t of t h e Cou r t of Appea ls sh ou ld be
r ever sed.
Respect fu lly su bm it t ed,
pr ofessed t o r ely on : t h e m ost pla u sible su ppor t OCC
su m m on s t u r n s ou t t o be a n a r t ifa ct of it s own
pa r a ph r a sin g. Gu th rie v. H ark n ess, 199 U.S. 148, 159
(1905) d id n ot equ a t e visit a t ion wit h “en for c[in g]
obser va n ce of th e la ws a n d r egu la t ion s,” 69 F ed. Reg. a t
1899 (em ph a sis a dded) bu t r a t h er “its,” – i.e., th e
corporation ’s – la ws, 199 U.S. a t 159 (em ph a sis a dded)
(cit a t ion om it t ed).
36
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C ON F E RE N CE OF S TATE
B AN K S U P E R VIS OR S
1155 C on n ect icu t Ave., N W
5t h F loor
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D ON AH U E & G OL DB E R G , L L P
99 H u d s on S t r eet , 8t h F l.
N ew Yor k , N .Y. 10013
(212) 334-8813
S ea n H . Don a h u e
D ON AH U E & G OL DB E R G , L L P
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