Association of Banks in Insurance v. Duryee
| Decision Date | 02 August 2000 |
| Docket Number | No. 99-3917,99-3917 |
| Citation | 270 F.3d 397 |
| Parties | (6th Cir. 2001) Association of Banks in Insurance, Inc.; American Bankers Association Insurance Association; Ohio Bankers Association; Huntington National Bank, Plaintiffs-Appellees, v. Harold T. Duryee, Superintendent of Ohio Department of Insurance, Defendant, Independent Insurance Agents of Ohio, Inc.; Ohio Association of Life Underwriters; Ohio Association of Professional Insurance Agents, Inc.; Ohio Land Title Association; Independent Insurance Agents of America, Inc.; National Association of Life Underwriters; National Association of Professional Insurance Agents, Inc., Intervenors/Defendants-Appellants. Argued: |
| Court | U.S. Court of Appeals — Sixth Circuit |
Appeal from the United States District Court for the Southern District of Ohio at Columbus. [Copyrighted Material Omitted] Kathleen M. Trafford, PORTER, WRIGHT, MORRIS & ARTHUR, Columbus, Ohio, for Plaintiffs-Appellees.
Scott A. Sinder, John J. Manning, COLLIER, SHANNON, RILL & SCOTT, Washington, D.C., for Intervenors-Appellants.
Yvette Rivera, OFFICE OF THE COMPTROLLER OF THE CURRENCY, Washington, D.C., for Amicus Curiae.
Before: SUHRHEINRICH and DAUGHTREY, Circuit Judges; COLLIER, District Judge. *
This action involves the right of a national bank, under § 13 of the Federal Reserve Act, 12 U.S.C. § 92, to act as an insurance agent in towns with a population of 5,000 or less. The plaintiffs, a national bank and several organizations whose memberships include national banks, filed suit against the Ohio Superintendent of Insurance seeking: (1) a declaratory judgment that certain Ohio licensing provisions as applied to national banks are preempted by 12 U.S.C. § 92; and (2) a permanent injunction preventing enforcement of these provisions against national banks to the extent that they are preempted. Specifically at issue is the viability of Ohio's "principal purpose test," as well as various statutory licensing requirements. Faced with cross-motions for summary judgment, the district court granted summary judgment in favor of the plaintiffs, providing them with the requested declaratory and injunctive relief.
Subsequent to the filing of the action, a number of insurance trade organizations intervened as defendants. They now appeal the district court's decision. However, because the state superintendent of insurance, the original party-defendant, has not appealed, apparently acquiescing in the order of non-enforcement of the state statutes in question, the plaintiffs challenge the standing of the intervenors before this court. For the reasons set out below, we conclude that the intervenors do indeed have standing to bring this appeal but, nevertheless, we affirm the judgment of the district court on the merits. Because of legislation enacted after judgment was entered, however, the case must be remanded for further proceedings.
This challenge to the Ohio insurance licensing laws began when the Association of Banks in Insurance, Inc., the American Bankers Association Insurance Association, the Ohio Bankers Association, and the Huntington National Bank filed suit against Harold T. Duryee in his official capacity as head of the Ohio Department of Insurance. 1 Shortly thereafter, the Independent Insurance Agents of Ohio, Inc., the Ohio Association of Life Underwriters, the Ohio Association of Professional Insurance Agents, Inc., the Ohio Land Title Association, the Independent Insurance Agents of America, Inc., the National Association of Life Underwriters, and the National Association of Professional Insurance Agents, Inc., intervened as defendants in the suit. The intervenor-defendants are all insurance trade associations that represent independent insurance agents. They joined suit to protect their constituents' economic interests, which they claimed would be threatened if national banks were allowed to sell insurance without having to comply fully with Ohio's insurance laws.
Plaintiffs sued for declaratory and injunctive relief under 42 U.S.C. § 1983 and 28 U.S.C. § 2201. They sought a ruling that 12 U.S.C. § 92 2 preempts certain Ohio insurance licensing provisions under the Supremacy Clause of the United States Constitution, U.S. Const. Art VI, cl. 2. They also sought an injunction to prevent Duryee from enforcing these provisions against national banks to the extent that the provisions were preempted by federal law. Specifically, the plaintiffs argued that § 92 preempts both Ohio's principal purpose test as codified in O.R.C. §§ 3905.02(B), 3905.03(A)(5), 3905.04, 3905.18(C) and (D), and the provisions of O.R.C. §§ 3905.02(E)(1) and (2), 3905.18(G)(1) and (2), and 3905.18(C), to the extent that they condition a national bank's exercise of its § 92 powers on the bank's qualifying to do business in Ohio under the general corporation law, remaining in good standing with the Ohio secretary of state, and organizing for the purpose of acting as an insurance agent. 3
In conjunction with the plaintiffs' motion for summary judgment, the United States Office of the Comptroller of the Currency submitted a brief as amicus curiae, urging the district court to find that the challenged Ohio provisions were preempted because they prevent or impair the ability of national banks to exercise their § 92 powers to sell insurance. Defendant Duryee and the intervenor-defendants filed cross-motions for summary judgment. All of the parties agreed that the issues presented in this case were primarily questions of law and that there were no genuine issues of material fact.
Subsequently, the district court entered summary judgment for the plaintiffs, granting a declaratory judgment and permanently enjoining the superintendent from enforcing the challenged Ohio provisions against national banks located and doing business in towns with 5,000 or fewer inhabitants. The intervenor-defendants now appeal the district court's decision.
As a preliminary matter the plaintiffs argue that the intervenor-defendants lack standing to appeal, on the ground that they do not claim to have been injured by the district court's decision. This question is complicated by the fact that, having declined to appeal the judgment of the district court, the Ohio Superintendent of Insurance apparently does not intend to enforce the provisions of the statute at issue here and instead, we assume, will invoke the alternate provisions of O.R.C. § 1703.03.1. See infra.
Permission to intervene in a district court action does not automatically confer standing to appeal. See Diamond v. Charles, 476 U.S. 54 (1986). When considering whether the intervenor-defendants have standing to appeal, our focus is on the injury caused by the judgment rather than the injury caused by the underlying facts. See 15A Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure: § 3902 (2d ed. 1992). "Although the determination of an injury may not always be simple, standing to appeal is recognized if the appellant can show an adverse effect of the judgment, and denied if no adverse effect can be shown." Id.
In this case, regardless of the decision of the Ohio Superintendent of Insurance not to appeal in his own name, the judgment of the district court has the effect of easing restrictions on the entry of national banks into the Ohio insurance arena. Consequently, as potential competitors of those banks, the intervenor-defendants face the threat of economic injury should the Ohio statutory provisions not be enforced. Such threatened injury is sufficient to confer appellate standing on the intervenor-defendants and allows them to challenge the merits of the district court's decision. See, e.g., Kelley v. Selin, 42 F.3d 1501, 1508 (6th Cir. 1995).
As the district court noted in its extensive and well-reasoned opinion:
National banks are brought into existence under federal legislation, and are instruments of the federal government which are subject to the paramount authority of the United States. M. Nahas Co., Inc. v. First National Bank of Hot Springs, 930 F.2d 608, 610 (8th Cir. 1991). Thus, it is well established that any state law limiting the operation of national banks is preempted by federal law and invalid under the Supremacy Clause if the state law "expressly conflicts with the laws of the United States, and either frustrates the purpose of national legislation or impairs the efficiency of [national banks] to discharge the duties, for the performance of which they were created." Davis v. Elmira Savings Bank, 161 U.S. 275 (1896). Congress may confer power on the states to regulate national banks or may retain that power. Independent Comm. Bankers Ass'n of South Dakota, Inc. v. Board of Governors of Federal Reserve System, 820 F.2d 428, 436 (D.C. Cir. 1987). The question is one of congressional intent, that is, did Congress, in enacting the federal law, intend to exercise its constitutionally delegated authority to set aside the laws of the state? California Fed. Sav. & Loan Ass'n v. Guerra, 479 U.S. 272, 280-281 (1987). Absent explicit pre-emption language, courts must consider whether the federal statute's "structure and purpose," or nonspecific statutory language, nonetheless reveal a clear, but implicit, pre-emptive intent. Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977).
The Supremacy Clause "invalidates state laws that 'interfere with, or are contrary to,' federal law." Hillsborough County, Fla. v. Automated Medical Labs., Inc., 471 U.S. 707, 712 (1985) ). Federal law may pre-empt state law where it is in "irreconcilable conflict" with state law. Rice v. Norman Williams Co., 458 U.S. 654, 659 (1982). This may occur where compliance with both statutes is an impossibility. Florida...
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