Cuomo v. Clearing House Ass'n, L. L.C.

• Decision Date: 29 June 2009
• Docket Number: No. 08–453.,08–453.
• Citation: 174 L.Ed.2d 464,129 S.Ct. 2710,557 U.S. 519
• Parties: Andrew M. CUOMO, Attorney General of New York, Petitioner, v. THE CLEARING HOUSE ASSOCIATION, L.L.C., et al.
• Court: U.S. Supreme Court

557 U.S. 519

129 S.Ct. 2710

174 L.Ed.2d 464

Andrew M. CUOMO, Attorney General of New York, Petitioner

v.THE CLEARING HOUSE ASSOCIATION, L.L.C., et al.

No. 08–453.

Supreme Court of the United States

Argued April 28, 2009.

Decided June 29, 2009.

Barbara D. Underwood, New York, NY, for petitioner.

Malcolm L. Stewart, Washington, DC, for respondent Office of Comptroller of the Currency.

Seth P. Waxman, Washington, DC, for respondent The Clearing House Association, L.L.C.

Andrew M. Cuomo, Attorney General of the State of New York, Barbara D. Underwood, Counsel of Record, Solicitor General, Michelle Aronowitz, Deputy Solicitor General, Richard Dearing, Assistant Solicitor General, New York, NY, for petitioner.

Julie L. Williams, First Senior Deputy Comptroller and Chief Counsel, Daniel P. Stipano, Deputy Chief Counsel, Horace G. Sneed, Douglas B. Jordan, Attorneys, Office of the Comptroller of the Currency, Washington, D.C., Elena Kagan, Solicitor General, Counsel of Record, Malcolm L. Stewart, Deputy Solicitor General, Matthew D. Roberts, Assistant to the Solicitor General, Department of Justice, Washington, D.C., for Federal respondent.

H. Rodgin Cohen, Robinson B. Lacy, Michael M. Wiseman, Adam R. Brebner, Sullivan & Cromwell LLP, New York, NY, Seth P. Waxman, Counsel of Record, Edward C. DuMont, Catherine M.A. Carroll, Christopher E. Babbitt, Wilmer Cutler Pickering, Hale and Dorr LLP, Washington, DC, Christopher R. Lipsett, Noah A. Levine, Anne K. Small, Lauren E. Baer, Wilmer Cutler Pickering, Hale and Dorr LLP, New York, NY, for respondent The Clearing House Association L.L.C.

Opinion

Justice SCALIA delivered the opinion of the Court.

In 2005, Eliot Spitzer, Attorney General for the State of New York, sent letters to several national banks making a request “in lieu of subpoena” that they provide certain non-public information about their lending practices. He sought this information to determine whether the banks had violated the State's fair-lending laws. Spitzer's successor in office, Andrew Cuomo, is the petitioner here. Respondents, the federal Office of the Comptroller of the Currency (“Comptroller” or “OCC”) and the Clearing House Association, a banking trade group, brought suit to enjoin the information request, claiming that the Comptroller's regulation promulgated under the National Bank Act prohibits that form of state law enforcement against national banks.

The United States District Court for the Southern District of New York entered an injunction in favor of respondents, prohibiting the attorney general from enforcing state fair-lending laws through demands for records or judicial proceedings. The United States Court of Appeals for the Second Circuit affirmed. 510 F.3d 105 (2007). We granted certiorari. 555 U.S. 1130, 129 S.Ct. 987, 173 L.Ed.2d 171 (2009). The question presented is whether the Comptroller's regulation purporting to pre-empt state law enforcement can be upheld as a reasonable interpretation of the National Bank Act.

I

Section 484(a) of Title 12, U.S.C., a provision of the National Bank Act, 13 Stat. 99, reads as follows:

“No national bank shall be subject to any visitorial powers except as authorized by Federal law, vested in the courts of justice or such as shall be, or have been exercised or directed by Congress or by either House thereof or by any committee of Congress or of either House duly authorized.”

The Comptroller, charged with administering the National Bank Act, adopted, through notice-and-comment rulemaking, the regulation at issue here designed to implement the statutory provision. Its principal provisions read as follows:

Ҥ 7.4000 Visitorial powers.

“(a) General rule . (1) Only the OCC or an authorized representative of the OCC may exercise visitorial powers with respect to national banks, except as provided in paragraph (b) of this section. State officials may not exercise visitorial powers with respect to national banks, such as conducting examinations, inspecting or requiring the production of books or records of national banks, or prosecuting enforcement actions, except in limited circumstances authorized by federal law. However, production of a bank's records (other than non-public OCC information under 12 CFR part 4, subpart C) may be required under normal judicial procedures.

“(2) For purposes of this section, visitorial powers include:

“(i) Examination of a bank;

“(ii) Inspection of a bank's books and records;

“(iii) Regulation and supervision of activities authorized or permitted pursuant to federal banking law; and“(iv) Enforcing compliance with any applicable federal or state laws concerning those activities.” 12 CFR § 7.4000 (2009).

By its clear text, this regulation prohibits the States from “prosecuting enforcement actions” except in “limited circumstances authorized by federal law.”

Under the familiar Chevron framework, we defer to an agency's reasonable interpretation of a statute it is charged with administering. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). There is necessarily some ambiguity as to the meaning of the statutory term “visitorial powers,” especially since we are working in an era when the prerogative writs—through which visitorial powers were traditionally enforced—are not in vogue. The Comptroller can give authoritative meaning to the statute within the bounds of that uncertainty. But the presence of some uncertainty does not expand Chevron deference to cover virtually any interpretation of the National Bank Act. We can discern the outer limits of the term “visitorial powers” even through the clouded lens of history. They do not include, as the Comptroller's expansive regulation would provide, ordinary enforcement of the law. Evidence from the time of the statute's enactment, a long line of our own cases, and application of normal principles of construction to the National Bank Act make that clear.

A

Historically, the sovereign's right of visitation over corporations paralleled the right of the church to supervise its institutions and the right of the founder of a charitable institution “to see that [his] property [was] rightly employed,” 1 W. Blackstone, Commentaries on the Laws of England 469 (1765). By extension of this principle, “[t]he king [was] by law the visitor of all civil corporations,” ibid. A visitor could inspect and control the visited institution at will.

When the National Bank Act was enacted in 1864, “visitation” was accordingly understood as “[t]he act of examining into the affairs of a corporation” by “the government itself.” 2 J. Bouvier, A Law Dictionary 790 (15th ed. 1883). Lower courts understood “visitation” to mean “the act of a superior or superintending officer, who visits a corporation to examine into its manner of conducting business, and enforce an observance of its laws and regulations.” First Nat. Bank of Youngstown v. Hughes, 6 F. 737, 740 (C.C.N.D.Ohio 1881). A State was the “visitor” of all companies incorporated in the State, simply by virtue of the State's role as sovereign: The “ legislature is the visitor of all corporations founded by it.” Guthrie v. Harkness, 199 U.S. 148, 157, 26 S.Ct. 4, 50 L.Ed. 130 (1905) (internal quotation marks omitted).

This relationship between sovereign and corporation was understood to allow the States to use prerogative writs—such as mandamus and quo warranto —to exercise control “whenever a corporation [wa]s abusing the power given it, or, ... or acting adversely to the public, or creating a nuisance.” H. Wilgus, Private Corporations, in 8 American Law and Procedure § 157, pp. 224–225 (1910). State visitorial commissions were authorized to “exercise a general supervision” over companies in the State. I. Wormser, Private Corporations § 80, pp. 100, 101, in 4 Modern American Law (1921).

B

Our cases have always understood “visitation” as this right to oversee corporate affairs, quite separate from the power to enforce the law. In the famous Dartmouth College case, Justice Story, describing visitation of a charitable corporation, wrote that Dartmouth was “subject to the controlling authority of its legal visitor, who ... may amend and repeal its statutes, remove its officers, correct abuses, and generally superintend the management of [its] trusts,” and who are “liable to no supervision or control.” Trustees of Dartmouth College v. Woodward,

4 Wheat. 518, 676, 681, 4 L.Ed. 629 (1819) (concurring opinion). This power of “genera[l] superintend [ence]” stood in contrast to action by the court of chancery, which acted “not as itself possessing a visitorial power ... but as possessing a general jurisdiction ... to redress grievances, and frauds.” Id ., at 676.¹

In Guthrie, supra, we held that a shareholder acting in his role as a private individual was not exercising a “visitorial power” under the National Bank Act when he petitioned a court to force the production of corporate records, id., at 159, 26 S.Ct. 4.

“[C]ontrol in the courts of justice,” we said, is not visitorial, and we drew a contrast between the nonvisitorial act of “su[ing] in the courts of the State” and the visitorial “supervision of the Comptroller of the Currency,” id., at 159, 157, 26 S.Ct. 4.

In First Nat. Bank in St. Louis v. Missouri, 263 U.S. 640, 44 S.Ct. 213, 68 L.Ed. 486 (1924), we upheld the right of the Attorney General of Missouri to bring suit to enforce a state anti-bank-branching law against a national bank. We said that only the United States may perform visitorial administrative oversight, such as “inquir[ing] by quo warranto whether a national bank is acting in excess of its charter powers.” Id ., at 660, 44 S.Ct. 213. But if a state statute of general applicability is not substantively pre-empted, then “the power of enforcement must rest with the [State] and not with” the National Government, ibid.²

Our most recent decision, Watters v. Wachovia Bank, N.A., 550 U.S. 1, 127 S.Ct. 1559, 167 L.Ed.2d 389 (2007), does not, as the dissent...