Ghiglieri v. Sun World Nat. Ass'n

• Decision Date: 22 July 1997
• Docket Number: 96-50948,Nos. 96-50847,s. 96-50847
• Citation: 117 F.3d 309
• Parties: Catherine A. GHIGLIERI, in her official capacity as Texas Banking Commissioner, Plaintiff-Appellee, v. SUN WORLD NATIONAL ASSOCIATION, El Paso, Texas, et al., Defendants, Sun World National Association, El Paso, Texas; Eugene A. Ludwig, in his official capacity as United States Comptroller of the Currency, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 309

117 F.3d 309

Catherine A. GHIGLIERI, in her official capacity as Texas

Banking Commissioner, Plaintiff-Appellee, v. SUN WORLD NATIONAL ASSOCIATION, El Paso, Texas, et al., Defendants,

Sun World National Association, El Paso, Texas; Eugene A.

Ludwig, in his official capacity as United States

Comptroller of the Currency,

Defendants-Appellants.

Nos. 96-50847, 96-50948.

United States Court of Appeals, Fifth Circuit.

July 22, 1997.

D'Ann A. Johnson, Texas Department of Banking, David Calvin Mattax, Austin, TX, for Plaintiff-Appellee.

Rosa M. Koppel, Angela Yuen Yuk Ting, Larry J. Stein, Comptroller of the Currency, Washington, DC, for Eugene A. Ludwig.

E. Edward Bruce, Covington & Bureing, Washington, DC, Jeffrey S. Alley, El Paso TX, for Sun World National Association, El Paso, Texas.

Elizabeth A. Glenn, Asst. Atty. Gen., Santa Fe, NM, for Financial Institutions Division of the New Mexico Regulation & Licensing Department.

Appeals from the United States District Court for the Western District of Texas.

Before JOLLY, DUHE, and EMILIO M. GARZA, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

The Comptroller of the Currency (the "Comptroller") allowed Sun World, National Association ("Sun World") to relocate its main banking office across a state line from Texas to New Mexico. Notwithstanding that Sun World's principal office would now be in New Mexico, the Comptroller further allowed Sun World to maintain its pre-existing branches in Texas, and to establish a new branch in Texas. The Texas Banking Commissioner (the "Commissioner") had other notions and persuaded the district court to enjoin both Sun World and the Comptroller. Sun World and the Comptroller appeal, seeking to have the Comptroller's decision to allow Sun World to operate in both New Mexico and Texas reinstated. The appeal presents a question of statutory interpretation and because the Comptroller's interpretation of the statute he administers is reasonable, we defer to it. We grant the relief requested, vacate the judgment of the district court, and remand for entry of judgment in favor of the Comptroller.

I

A

Sun World is a national banking association that had its main office in El Paso, Texas. In addition to its main office, Sun World operated two branch banks in El Paso.

Sun World decided to move its main office from El Paso, Texas, to Santa Teresa, New Mexico, a distance of less than five miles. To achieve this end, Sun World submitted two applications to the Comptroller in 1996. The first application sought approval to move the main office from Texas to New Mexico and to maintain the pre-existing branches in Texas. The second application sought authorization to establish a new branch at the location of the former main office in Texas. The Commissioner objected to both applications. The Comptroller subsequently approved both applications, and Sun World operated in both states until enjoined by the district court.

B

The Commissioner filed this action in the district court ¹ seeking to have the decision of the Comptroller set aside, to have Sun World enjoined from conducting interstate banking operations and to have the Comptroller enjoined from approving any further applications of this type.

All parties filed motions for summary judgment. The district court heard arguments on the motions and granted the Commissioner's motion. The court rejected the Commissioner's argument that Sun World could not relocate its main office across a state line. The court, however, held that Sun World could not retain its Texas branches following relocation to New Mexico and that, consequently, neither could Sun World establish a new branch at the site of its former main office in Texas. Sun World and the Comptroller appeal.

II

A

Resolution of this appeal requires us to examine the provisions of and the interplay between two sections of a federal statute. ² Section 30 effectively provides that Sun World can change the location of its main office to any location within thirty miles of El Paso upon the approval of the Comptroller and two-thirds of its shareholders. (One paragraph of the section relates specifically to the retention of branches after an interstate move, but is irrelevant to our case because it is applicable only to moves occurring after May 31, 1997.) Section 36 sets forth the requirements for the establishment of new branch banks. (Two paragraphs of § 36, which provide specific guidelines for the retention of branch banks upon relocation of a main branch across state lines, are also effective only with respect to banks relocating after May 31, 1997, and therefore inapplicable to this case.)

The Comptroller determined that under § 30 Sun World could relocate its main branch to New Mexico. The Comptroller further determined that because the move occurred before June 1, 1997, Sun World could retain its existing branches in Texas. The Comptroller then decided that § 36 authorized Sun World to create a new branch at the site of the former main office. The district court disagreed. It held that, although Sun World could move its main office to New Mexico under § 30(b), ³ it could not continue to operate the branches remaining in Texas. This conclusion--that Sun World could exist only in New Mexico--necessarily led to the holding that a new branch could not be established in Texas because such branching was not permitted under New Mexico banking law. We now turn to the task of resolving the questions of statutory interpretation posed by this appeal.

B

(1)

In this action, the Commissioner challenges the Comptroller's decision pursuant to the Administrative Procedures Act; we therefore review the decision of the Comptroller de novo to determine whether it was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); see Louisiana Envtl. Soc'y v. Dole, 707 F.2d 116, 119 (5th Cir.1983).

The Supreme Court has set out the analysis to be applied in reviewing an agency's interpretation of the statute it administers. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 841-43, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984). Chevron 's analysis applies to the case before us because the Comptroller is charged with the administration of the banking laws at issue. Smiley v. Citibank (South Dakota), N.A., --- U.S. ----, ----, 116 S.Ct. 1730, 1732, 135 L.Ed.2d 25 (1996). The Supreme Court instructed as follows:

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

Chevron at 842-43, 104 S.Ct. at 2781-82. In reaching a determination whether Congress has spoken directly on an issue, courts are free to consider both the plain language and meaning of the statute and any pertinent legislative history. Doyle v. Shalala, 62 F.3d 740, 745 (5th Cir.1995). The court should use traditional tools of statutory construction, and if the court can discern that Congress intended to address the precise question, then that intention must be given effect. Chevron at 843 n. 9, 104 S.Ct. at 2781 n. 9. If, however, the statute is silent on the precise issue then the agency's interpretation should be given "controlling weight." See NationsBank of North Carolina, N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 255-59, 115 S.Ct. 810, 813-14, 130 L.Ed.2d 740 (1995). In such a case, the issue before the court "is not whether [the agency's interpretation] represents the best interpretation of the statute, but whether it represents a reasonable one." ⁴ Smiley, at ----, 116 S.Ct. at 1735.

We now apply these principles of construction to the statutes before us today.

(2)

(a)

First, we address whether, upon relocation of its main office to New Mexico, Sun World was permitted to retain its pre-existing branches in Texas. We initially look to the statute. The authority for the relocation of Sun World's main office from El Paso to Santa Teresa is § 30(b). The only relevant restrictions imposed by that section are that the new site be within thirty miles of the original site, that the bank obtain the approval of the shareholders holding at least two-thirds of its stock and that a certificate of approval issue from the Comptroller.

Thus, the Comptroller argues that because there is no statutory language requiring divestiture of existing branches upon relocation of the main office the statute is clear on this issue. He argues that the absence of any such requirement indicates that Congress did not intend to affect the retention of branch banks upon relocation of the bank's main office. The Commissioner counters that the operation of branches--in all situations--is governed solely by § 36, and argues that there is no authority found in § 36 that would allow Sun World to retain its pre-existing branches upon relocation.

Neither party persuades us that Congress has clearly spoken to the precise issue before us today. Indeed it is plain, we think, that the statute is silent on this point. It is obvious that § 30 does not speak to the question of retention of branches after relocation. Although § 36 addresses branch banking, it fails completely to speak to the retention of branches upon relocation of the bank's main office. Section 36(a) speaks only to retention of branches owned in 1927, 36(b) speaks only to the retention of branches upon...