406 F.2d 837 (8th Cir. 1969), 19218, Association of Data Processing Service Organizations, Inc. v. Camp

Docket Nº:19218.
Citation:406 F.2d 837
Party Name:ASSOCIATION OF DATA PROCESSING SERVICE ORGANIZATIONS, INC., and Data Systems, Inc., Appellants, v. William B. CAMP, Comptroller of the Currency of the United States, andAmerican National Bank and Trust Company, Appellees.
Case Date:February 06, 1969
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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406 F.2d 837 (8th Cir. 1969)

ASSOCIATION OF DATA PROCESSING SERVICE ORGANIZATIONS, INC., and Data Systems, Inc., Appellants,

v.

William B. CAMP, Comptroller of the Currency of the United States, andAmerican National Bank and Trust Company, Appellees.

No. 19218.

United States Court of Appeals, Eighth Circuit.

February 6, 1969

Page 838

Bert M. Gross, of Shanedling, Phillips, Gross & Aaron, Minneapolis, Minn., and Milton R. Wessel, of Kaye, Scholer, Fierman, Hays & Handler, New York City, for appellants; Felix M. Phillips, of Shanedling, Phillips, Gross & Aaron, Minneapolis, Minn., was on the brief and reply brief with Bert M. Gross, Minneapolis, Minn.

Stephen R. Felson, Atty., Dept. of Justice, Washington, D.C., for appellee Camp; Edwin L. Weisl, Jr., Asst. Atty. Gen., Dept. of Justice, Alan S. Rosenthal, Atty., Dept. of Justice, and Patrick J. Foley, U.S. Atty., Minneapolis, Minn., were on the brief and supplemental brief and appendix for appellee Camp with Stephen R. Felson.

Fallon Kelly, of Kelly, Segell & Fallon, St. Paul, Minn., for appellee American National Bank and Trust Company, and filed brief.

Matthew Hale, Gen. Counsel Washington, D.C., filed brief for The American Bankers Association as amicus curiae.

Before VOGEL, LAY and BRIGHT, Circuit Judges.

LAY, Circuit Judge.

Plaintiffs appeal from an order dismissing their complaint against the Comptroller of the Currency of the United States and the Minnesota domiciled American National Bank and Trust Company. One of the plaintiffs is Association of Data Processing Service Organizations, an incorporated association of data service organizations domiciled in Pennsylvania whose members perform data processing services throughout the United States. It is hereinafter referred to as ADAPSO. The other plaintiff, Data Systems, Inc., is a Minnesota corporation engaged in the data processing business, with its principal place of business in Minneapolis. The complaint seeks equitable relief against the defendants and a 'determination of the powers granted national banking associations under (the National Bank) Act as set forth in 12 U.S.Code § 24.' It is alleged that by administrative rule the Comptroller of the Currency has authorized national banks to perform data processing services for bank customers in violation of 12 U.S.C. § 24 which gives national banks only 'incidental powers as shall be necessary to carry on the business of banking.' Plaintiffs allege that as a result of the unauthorized action ADAPSO members are threatened with the loss of a substantial part of the data processing market. 1 It is alleged that American National now performs data processing services for two companies with whom Data Systems had 'negotiated' as prospective customers.

Jurisdiction is asserted by reason of an alleged federal question arising under the banking laws of the United States. 12 U.S.C. §§ 21 et seq. The trial court dismissed plaintiffs' complaint for lack of jurisdictional standing. We affirm.

The question of standing serves as a test of federal jurisdiction. Standing is the constitutional prerequisite related to whether a justiciable 'case or controversy' exists. Involved is an examination to determine whether the plaintiffs have a personal stake legally sufficient 'to assure that concrete adverseness' which avoids merely abstract determinations. Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968). See also Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937). Justiciability, although not always related to standing, becomes definitively attached when we consider whether the legal relationships of parties are such that they are aligned with adverse legal interests.

Plaintiffs assert standing in that they have been and will continue to be economically injured by illegal competition

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of the national banks. Whether a litigant has standing to challenge competitive injury has been the subject of extended litigation and discussion. Doctrinal rules have developed a maze of conceptualistic abstractions and theories which at times are viewed and applied as being indistinguishable one from another. See Baker, Watts & Co. v. Saxon, 261 F.Supp. 247 (D.D.C.1966), aff'd sub nom., Port of N.Y. Authority v. Baker, Watts & Co., 129 U.S.App.D.C. 173, 392 F.2d 497 (1968); Saxon v. Georgia Ass'n of Ind. Ins. Agents, Inc., 399 F.2d 1010, 1019 (5 Cir. 1968) (concurring opinion). 2

The trial court here has observed that language in Rural Elec. Admin. v. Northern States Power Co., 373 F.2d 686 (8 Cir. 1967) (denying standing) 3 and in Webster Groves Trust Co. v. Saxon, 370 F.2d 381 (8 Cir. 1966) (allowing standing) 4 seems to state divergent principles, either of which could govern in the instant case. However, all legal principles must be qualitatively analyzed within the context of factual surroundings. Much of the confusion on standing seems to arise from the emphasis upon the issues to be adjudicated or upon the possible merits of the substantive claim rather than upon an examination of the status of the complaining plaintiff. Whether or not a defendant is alleged to be engaged in illegal competition cannot by itself determine a plaintiff's standing to complain. Cf. City of Chicago v. Atchison, T. & S.F. Ry., 357 U.S. 77, 78 S.Ct. 1063, 2 L.Ed.2d 1174 (1958) and note 8 infra. Chief Justice Warren has stated, 'The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated.' However, he added, '* * * it is both appropriate and necessary to look to the substantive issues for another purpose, namely, to determine whether there is a logical nexus between the status asserted and the claim sought to be adjudicated.' Flast v. Cohen, 392 U.S. 83, 99, 102, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947(1968).

Whether a party may or may not challenge allegedly illegal competition by others is best evaluated by examining the various factual circumstances within which the courts have discussed a particular plaintiff's standing and competitive injury.

Perhaps most well known are the socalled 'power cases,' where the threatened economic loss arises from governmentcreated competition. In these situations the embryo of the competition by the defendant is generally found in congressional legislation. But even though the validity of such legislation is challenged, or an attack is made on the authority of a government agent to loan money, the courts uniformly have denied standing to competitors who otherwise possess no legal right to be free from competition. 5 This group of cases is represented

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by Tennessee Elec. Power Co. v. TVA, 306 U.S. 118, 137, 59 S.Ct. 366, 369, 83 L.Ed. 543 (1939), which early emphasized:

'The appellants invoke the doctrine that one threatened with direct and special injury by the act of an agent of the government which, but for statutory authority for its performance, would be a violation of his legal rights, may challenge the validity of the statute in a suit against the agent. The principle is without application 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.'

See also Rural Elec. Admin. v. Northern States Power Co., supra.

Secondly, in contrast to the 'power' cases are situations where a plaintiff, possessing a public grant or contract to operate, seeks to prevent a competitor from entering into an area of regulated and restricted competition. Representative of these cases is Frost v. Corporation Comm'n, 278 U.S. 515, 49 S.Ct. 235, 73 L.Ed. 483 (1929). This court has applied the rationale of Frost to a suit by a state bank against the Comptroller to prevent illegal competition. Webster Groves Trust Co. v. Saxon, 370 F.2d 381 (8 Cir. 1966). As observed in Whitney Nat'l Bank in Jefferson Parish v. Bank of New Orleans & Trust Co., 116 U.S.App.D.C. 285, 323 F.2d 290 (1963), rev'd on other grounds, 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386 (1965), involved is a property right arising out of a public charter which bestows a legal interest on a state bank to complain. 6

Closely related but significantly different are those cases involving areas of competition which because of public interest find need of public licensing as opposed to a public grant or contract. 7

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Here plaintiff-competitors are considered to be without a private 'legal right' to protest unauthorized competition but nevertheless find standing by specific legislation as 'aggrieved persons' to act in the public interest. See, e.g., FCC v. Sanders Bros. Radio Station, 309 U.S. 470, 60 S.Ct. 693, 84 L.Ed. 869 (1940); Scripps-Howard Radio, Inc. v. FCC, 316 U.S. 4, 62 S.Ct. 875, 86 L.Ed. 1229 (1942). Cf. Office of Communication of United Church of Christ v. FCC, 123 U.S.App.D.C. 328, 359 F.2d 994 (1966). In these cases Congress has patently recognized need for judicial review even though the competitive business controlled is considered free and otherwise unrestricted. 8

Fourth, there are situations where competitors are given standing to challenge competition which is allegedly in violation of a statute, where the statute itself is said to be enacted for the express protection of the class of competitor complaining. The most recent example of these cases is found in Hardin v. Kentucky Util Co., 390 U.S. 1, 88 S.Ct. 651, 19 L.Ed.2d 787 (1968). 9 Plaintiffs' reliance on recent cases against the Comptroller fall within facile classification of this rule. See, e.g., Baker, Watts & Co. v. Saxon, 261 F.Supp. 247, supra, as explained

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in Investment Co. Institute v. Camp, 274 F.Supp. 624, 636 (D.D.C.1967); Saxon v. Georgia Ass'n of Ind. Ins. Agents, Inc., 399 F.2d 1010 (5 Cir. 1968). 10

Fifth, the last group of...

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