ASSOCIATION OF DATA PROCESSING SERVICE ORGAN., INC. v. Camp

• Decision Date: 09 January 1968
• Docket Number: No. 3-67 Civ. 165.,3-67 Civ. 165.
• Citation: 279 F. Supp. 675
• Parties: ASSOCIATION OF DATA PROCESSING SERVICE ORGANIZATIONS, INC., and Data Systems, Inc., Plaintiffs, v. William B. CAMP, Comptroller of the Currency of the United States and American National Bank and Trust Co., Defendants.
• Court: U.S. District Court — District of Minnesota

279 F. Supp. 675

ASSOCIATION OF DATA PROCESSING SERVICE ORGANIZATIONS, INC., and Data Systems, Inc., Plaintiffs, v. William B. CAMP, Comptroller of the Currency of the United States and American National Bank and Trust Co., Defendants.

No. 3-67 Civ. 165.

United States District Court D. Minnesota, Third Division.

January 9, 1968.

Shanedling, Phillips, Gross & Aaron, by Bert M. Gross and Felix M. Phillips, Minneapolis, Minn., appeared for plaintiffs.

Patrick J. Foley, U. S. Atty., by Stanley H. Green and C. Westbrook Murphy, Department of Justice, Washington, D. C., appeared for defendant Comptroller William B. Camp.

Kelly, Segell & Fallon, by Fallon Kelly and Hyam Segell, St. Paul, Minn., appeared for defendant American National Bank & Trust Company.

Matthew Hale, Washington, D. C., appeared amicus curiae for American Bankers Association.

NEVILLE, District Judge.

This matter comes before the court on motions by both defendants for an order of dismissal, grounded upon the alleged lack of standing in the plaintiffs to maintain the present action. Plaintiffs' complaint seeks a declaratory judgment, an injunction and compensatory damages, all on the theory that the marketing of data processing¹ to the public by defendant American National Bank is illegal and contrary to law. The complaint further avers that certain actions of the defendant Comptroller in approving the marketing of data processing services by national banks is "arbitrary, capricious, an abuse of discretion, in excess of statutory authority and illegal." The plaintiffs in essence seek a determination that the performing for a fee of data processing services by national banks for the public generally, or what were referred to on oral argument as "outsiders", is not within the scope of the powers and authority granted national banks under the National Bank Act as set forth in 12 U.S.C. § 24. The pertinent provisions of this statute read as follows:

"§ 24. Corporate powers of associations.

Upon duly making and filing articles of association and an organization certificate a national banking association shall become, as from the date of the execution of its organization certificate, a body corporate, and as such, and in the name designated in the organization certificate, it shall have power—

* * * * * *

Seventh. To exercise by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; * * *." (Emphasis added)

The allegation in the complaint as to the defendant Comptroller's administrative ruling is in general terms as follows:

"7. The defendant COMPTROLLER has by ruling and other administrative action authorized defendant AMERICAN BANK and other national banks to perform the data processing services hereinafter described."²

The plaintiff Association of Data Processing Service Organizations, Inc., ("ADAPSO") is an incorporated association of data processing service organizations located throughout the United States whose members are engaged in the business of providing such type of service to the business community. Plaintiff Data Systems, Inc. is a Minnesota corporation with offices in Minneapolis, Minnesota, engaged in the business of marketing and performing data processing service for the general business community, and is a member of ADAPSO.

The alleged injury to these plaintiffs resulting from the actions of the defendants is claimed to be solely an economic injury arising from what is contended to be illegal competition.³

The plaintiffs assert that they have standing to challenge the action of the Comptroller by virtue of Section 10 of the Administrative Procedure Act, 5 U.S.C. § 701 et seq. The pertinent section of this Act, § 702, provides that:

"A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. * * *"

Since there are no specific provisions in the National Bank Act providing for a review of the Comptroller's rulings or conferring standing to maintain such actions as the instant case, it would appear that if the plaintiffs are to have what is called statutory standing at all, such must be grounded upon the above-quoted portion of the Administrative Procedure Act. The Eighth Circuit Court of Appeals however has adhered strongly to the view that the Administrative Procedure Act did not by its passage create any legal rights which did not otherwise exist and has cited numerous authorities in support thereof. Rural Electrification Admin. v. Northern States Power Co., 373 F.2d 686, 692 (8th Cir. 1967). Quoted particularly in this case is Duba v. Schuetzle, 303 F.2d 570, 574 (8th Cir. 1962), to the effect that:

"It has also been judicially determined that the Administrative Procedure Act was not designed to and in fact has not changed the basic principle that one must have suffered a legal wrong in order to have standing to challenge programs administered by governmental agencies. Citing many cases"

The result is that in determining whether or not plaintiffs have standing this case must be considered without there being in existence any statutory right to judicial review. That is to say, the National Bank Act does not have within itself any provisions for court review, such for instance as the Internal Revenue Code or the Interstate Commerce Act, and it is clear that the Administrative Procedure Act does not and did not append such in effect to this Act so as to create a specific provision for judicial review.

There is a long and well established line of judicial authority holding that plaintiffs whose only injury is loss due to competition lack standing to maintain legal action to redress their economic injury. These decisions hold that mere competitive injury even though resulting from governmental action does not give standing to a person so injured to seek relief in the courts. Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S. Ct. 300, 82 L.Ed. 374 (1938); Tennessee Electric Power Co. v. T. V. A., 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543 (1939); Perkins v. Lukens Steel Co., 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108 (1940); Kansas City Power & Light Company v. McKay, 96 U.S.App.D.C. 273, 225 F.2d 924 (1955), cert. denied 350 U.S. 884, 76 S.Ct. 137, 100 L.Ed. 780 (1955); Texas State AFL-CIO v. Kennedy, 117 U.S.App.D.C. 343, 330 F.2d 217 (1964); Benson v. Schofield, 98 U.S.App.D.C. 424, 236 F.2d 719 (1956), cert. denied 352 U.S. 976, 77 S.Ct. 363, 1 L.Ed.2d 324; United Milk Producers of New Jersey v. Benson, 96 U.S.App.D.C. 227, 225 F.2d 527 (1955); Pennsylvania Railroad Co. v. Dillon, 118 U.S.App.D.C. 257, 335 F.2d 292 (1964); Rural Electrification Admin. v. Central Louisiana Elec. Co., 354 F.2d 859 (5th Cir. 1966).

So in Tennessee Electric Power Co. v. T. V. A., 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543 (1939), the court laid down the rule that one threatened with injury by governmental action may not contest such in the courts "unless the right invaded is a legal right,—one of property, one arising out of contract, one protected against tortious invasion, or one founded on a statute which confers a privilege."

Plaintiffs in the case at bar have not lost nor had threatened any property interest (loss due to competition clearly not qualifying as such under the above cases); they do not allege any contract breach nor tortious action and it is clear as above set forth that neither the National Bank Act nor the Administrative Procedure Act are statutes conferring any specific privilege on plaintiffs. Plaintiffs do not have any governmentally granted license or franchise which is impaired by defendants' actions.

No purpose will be served in this opinion by reviewing the detailed facts of the above cited cases. Their rationale seems to be this: The United States is a country dedicated to free enterprise. If A invests his money in a business, a grocery store for instance,⁴ he cannot complain legally if another man, B, opens next door to him and he, A, loses his investment because of the competition. Economic injury due to competition is not an actionable legal wrong. Even assuming that B did not file proper incorporation papers or income tax returns, or borrowed his money from someone who lent it to him ultra vires, or agreed to pay usurious interest for borrowed money, or obtained his groceries illegally, still A as a competitor has suffered no judicially cognizable wrong.⁵ The above reasoning applies where the competitor is the United States Government, i. e., in the public power field or more frequently where the government has enhanced competition by financial aid or grants to a competitor, even though the government may not have followed to the letter all of the requirements, or may have exceeded the restrictions and proscriptions of the Act of Congress creating or permitting its action.⁶

A further reason sometimes assigned for denying standing is that to allow such would permit some citizen or taxpayer who claimed a "public interest" or who desired to act as a "private attorney general" to challenge in court every action of the government.

Less than a year ago the Court of Appeals for the Eighth Circuit in a lengthy opinion adopted the rationale of the above cited cases. Rural Electrification Admin. v. Northern States Power Co., 373 F.2d 686 (8th Cir. 1967), cert. denied 387 U.S. 945, 87 S.Ct. 2079, 18 L. Ed.2d 1332 (1967). This decision binds this court and thus requires a dismissal of plaintiffs' complaint.

Of the several cases relied on by plaintiffs, most of them are distinguishable and not applicable to the case at bar. Several relate to situations where the federal or state governments have recognized that a particular field of competition is subject to regulation and restriction as to the number who may engage in such business, e. g., where for the benefit of the public, totally...