United States National Bank of Oregon v. Independent Insurance Agents of America, Inc Ludwig v. Independent Insurance Agents of America, Inc

• Decision Date: 07 June 1993
• Docket Number: 92-507,Nos. 92-484,s. 92-484
• Parties: UNITED STATES NATIONAL BANK OF OREGON, Petitioner, v. INDEPENDENT INSURANCE AGENTS OF AMERICA, INC., et al. Eugene R. LUDWIG, Comptroller of the Currency, et al., Petitioners, v. INDEPENDENT INSURANCE AGENTS OF AMERICA, INC., et al
• Court: U.S. Supreme Court

508 U.S. 439

113 S.Ct. 2173

124 L.Ed.2d 402

UNITED STATES NATIONAL BANK OF OREGON, Petitioner,

v INDEPENDENT INSURANCE AGENTS OF AMERICA, INC., et al.

Eugene R. LUDWIG, Comptroller of the Currency, et

al., Petitioners,

v. INDEPENDENT INSURANCE AGENTS OF AMERICA, INC., et al.

Nos. 92-484, 92-507.

Argued April 19, 1993.

Decided June 7, 1993.

Syllabus ^*

The Act of Sept. 7, 1916, 39 Stat. 753 (1916 Act), among other things, authorized any national bank doing business in a community with a population not exceeding 5,000 to act as the agent for any insurance company. Although early editions of the United States Code included this provision as section 92 of title 12 (section 92), the 1952 Code and subsequent editions omitted section 92 with a note indicating that Congress had repealed it in 1918. Nevertheless, interpreting section 92 to permit banks located in small communities to sell insurance outside those communities, petitioner Comptroller of the Currency ruled in 1986 that petitioner national bank could sell insurance through its branch in a small Oregon town to customers nationwide. Respondents, various trade organizations representing insurance agents, brought this suit challenging the Comptroller's decision as inconsistent with section 92's terms. The District Court disagreed with that assertion and granted summary judgment for petitioners, noting that section 92 apparently was inadvertently repealed in 1918, but expressing the view that the provision exists "in proprio vigore." Respondents did not challenge section 92's validity in the District Court or the Court of Appeals, despite the latter court's invitation to do so at oral argument. Only after that court ordered supplemental briefing on the issue did respondents even urge the court to resolve the question, while still taking no position on the merits. In reversing and remanding with instructions to enter judgment for respondents, the Court of Appeals found first that, though the parties had not on their own questioned section 92's validity, the court had a duty to do so, and, second, that the relevant statutes, traditionally construed, demonstrated that section 92 was repealed in 1918.

Held:

1. The Court of Appeals had discretion to consider the validity of section 92, and under the circumstances did not abuse it. There is no doubt that the court had before it an Article III case or controversy involving section 92's status. Though the parties did not lock horns over that issue, they did clash over whether the Comptroller properly relied on section 92 as authority for his ruling. A court properly presented with an issue is not limited to the particular legal theories advanced by the parties, but retains the independent power to identify and apply the proper construction of governing law, Kamen v. Kemper Financial Services, Inc., 500 U.S. ----, ----, 111 S.Ct. 1711, 1718, 114 L.Ed.2d 152 even where that construction is that a law does not govern because it is not in force, cf. Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 405, 5 L.Ed. 257 (Marshall, C.J.). Nor did prudence oblige the court below to treat the unasserted argument that section 92 had been repealed as having been waived, since a court may consider an issue antecedent to and ultimately dispositive of the dispute before it, even if the parties fail to identify and brief the issue. Arcadia v. Ohio Power Co., 498 U.S. 73, 77, 111 S.Ct. 415, 418, 112 L.Ed.2d 374. The court was asked to construe a statutory provision that the Code's keepers had suggested was no longer in force, on appeal from a District Court justifying its reliance on the law by the logic that, despite its "inadverten[t] repea[l]," section 92 remained in effect of its own force. After giving the parties ample opportunity to address the issue, the court acted without any impropriety in refusing to accept what in effect was a stipulation on the question of law as to section 92's validity. Pp. ____.

2. Section 92 was not repealed in 1918. Despite its omission from the Code, section 92 must remain on the books if the Statutes at Large, which provides "the legal evidence of laws" under 1 U.S.C. § 112, so dictates. Viewed in isolation, the deployment of certain quotation marks in the 1916 Act appears to support the argument, adopted by the Court of Appeals and pressed by respondents, that the Act places section 92 in Rev.Stat. § 5202, and that section 92 was subsequently repealed when the War Finance Corporation Act, ch. 45, 40 Stat. 506 (1918 Act), eliminated the relevant portion of § 5202. An examination of the structure, language, and subject matter of the relevant statutes, however, provides overwhelming evidence that, despite the placement of the quotation marks in question, the 1916 Act placed section 92 not in Rev.Stat. § 5202, but in § 13 of the Federal Reserve Act. Since the 1918 Act did not touch § 13, it did not affect, much less repeal, section 92. It would appear that the misplacement of the quotation marks in the 1916 Act was a simple scrivener's error by someone unfamiliar with the law's object and design. Courts should disregard punctuation, or repunctuate, if necessary to render the true meaning of a statute. Hammock v. Loan and Trust Co., 105 U.S. 77, 84-85, 26 L.Ed. 1111. Pp. ____.

293 U.S.App.D.C. 403, 955 F.2d 731 (CADC 1992), reversed and remanded.

SOUTER, J., delivered the opinion for a unanimous Court.

Christopher J. Wright, Washington, DC, argued for petitioners.

Ann Mary Kappler, Washington, DC, argued for respondents.

Justice SOUTER delivered the opinion of the Court.

The Comptroller of the Currency recently relied on a statutory provision enacted in 1916 to permit national banks located in small communities to sell insurance to customers outside those communities. These cases present the unlikely question whether Congress repealed that provision in 1918. We hold that no repeal occurred.

I

Almost 80 years ago, Congress authorized any national bank "doing business in any place the population of which does not exceed five thousand inhabitants . . . [to] act as the agent for any fire, life, or other insurance company." Act of Sept. 7, 1916, 39 Stat. 753. In the first compilation of the United States Code, this provision appeared as section 92 of title 12. See 12 U.S.C. § 92 (1926 ed.); see also United States Code editions of 1934, 1940, and 1946. The 1952 edition of the Code, however, omitted the insurance provision, with a note indicating that Congress had repealed it in 1918.¹ See 12 U.S.C. § 92 (1952 ed.) (note). Though the provision has also been left out of the subsequent editions of the United States Code, including the current one (each containing in substance the same note that appeared in 1952, see United States Code editions of 1958, 1964, 1970, 1976, 1982, and 1988), the parties refer to it as "section 92," and so will we.

Despite the absence of section 92 from the Code, Congress has assumed that it remains in force, on one occasion actually amending it. See Garn-St Germain Depository Institutions Act of 1982, § 403(b), 96 Stat. 1511; see also Competitive Equality Banking Act of 1987, § 201(b)(5), 101 Stat. 583 (imposing a 1-year moratorium on section 92 activities). The regulators concerned with the provision's subject, the Comptroller of the Currency and the Federal Reserve Board, have likewise acted on the understanding that section 92 remains the law, see Brief for Federal Petitioners in No. 92-507, pp. 31-32; Brief for Petitioner in No. 92-484, pp. 26-28, and indeed it was a ruling by the Comptroller relying on section 92 that precipitated these cases.²

The ruling came on a request by United States National Bank of Oregon, a national bank with its principal place of business in Portland, Oregon, to sell insurance through its branch in Banks, Oregon (population: 489), to customers nationwide. The Comptroller approved the request in 1986, interpreting section 92 to permit national bank branches located in communities with populations not exceeding 5,000 to sell insurance to customers not only inside but also outside those communities. See App. to Pet. for Cert. in No. 92-507, pp. 74a-79a. The Bank is the petitioner in the first of the cases we decide today; the Comptroller of the Currency, the Office of the Comptroller of the Currency, and the United States are the petitioners in the other.

Respondents in both cases are various trade organizations representing insurance agents. They challenged the Comptroller's decision in the United States District Court for the District of Columbia, claiming the Comptroller's ruling to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" under the Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(A). Respondents argued, among other things, that the ruling was inconsistent with section 92, which respondents maintained permits national banks located in small communities to sell insurance only to customers in those communities. The District Court disagreed and granted summary judgment for the federal parties and the Bank, a defendant-intervenor, on the ground that the Comptroller's interpretation was "rational and consistent with [section 92]." National Assn. of Life Underwriters v. Clarke, 736 F.Supp. 1162, 1173 (DC 1990) (internal quotation marks and citation omitted). The District Court thought it "worth noting that this section no longer appears in the United States Code" as it "apparently was inadvertently repealed" in 1918; but because Congress, the Comptroller, and other courts have presumed its continuing validity, the court was content to assume that the provision exists "in proprio vigore," meaning, we take it, of its own force. Id., at 1163, n. 2.

Respondents had not asked the District Court to rule that section 92 no longer existed, and they took the same tack before the Court of Appeals for the District of Columbia Circuit, merely noting in their opening brief that section 92 may have...