Arnold Tours, Inc. v. Camp, 7192

• Citation: 408 F.2d 1147
• Decision Date: 27 March 1969
• Docket Number: 7186.,No. 7192,7192
• Parties: ARNOLD TOURS, INC., et al., Plaintiffs, Appellants, v. William B. CAMP et al., Defendants, Appellees. The WINGATE CORPORATION, Plaintiff, Appellant, v. INDUSTRIAL NATIONAL BANK et al., Defendants, Appellant,
• Court: U.S. Court of Appeals — First Circuit

408 F.2d 1147 (1969)

ARNOLD TOURS, INC., et al., Plaintiffs, Appellants, v. William B. CAMP et al., Defendants, Appellees.

The WINGATE CORPORATION, Plaintiff, Appellant, v. INDUSTRIAL NATIONAL BANK et al., Defendants, Appellant,

Nos. 7192, 7186.

United States Court of Appeals First Circuit.

March 27, 1969.

No. 7192:

Richard J. Murphy, Tewksbury, Mass., with whom Timothy J. Murphy, Boston, Mass., was on brief, for appellants.

Alan S. Rosenthal, Attorney, Department of Justice, with whom Edwin L. Weisl, Jr., Asst. Atty. Gen., Paul F. Markham, U. S. Atty., and Leonard Schaitman, Attorney, Department of Justice, were on brief, for William B. Camp, Comptroller of the Currency, appellee.

Elliott V. Grabill, Boston, Mass., with whom Arthur H. Bloomberg and Grabill, Ley & Butterworth, Boston, Mass, were on brief, for South Shore National Bank, appellee.

No. 7186:

Edward J. Regan, Providence, R. I., with whom Eustace T. Pliakas and Graham, Reid, Ewing & Stapleton, Providence, R. I., were on brief, for appellant.

Matthew W. Goring, Providence, R. I., with whom Edward M. Watson, Providence, R. I., Robert W. Meserve, John B. Newhall, Gordon L. Doerfer, Boston, Mass., Hinckley, Allen, Salisbury & Parsons, Providence, R.I., and Nutter, McClennen & Fish, Boston, Mass., were on brief, for Industrial National Bank of Rhode Island, appellee.

Alan S. Rosenthal, Attorney, Department of Justice, with whom Edwin L. Weisl, Jr., Asst. Atty. Gen., Edward P. Gallogly, U. S. Atty., and Stephen R. Felson, Attorney, Department of Justice, were on brief, for William B. Camp, Comptroller of the Currency, appellee.

Robert J. McOsker, City Solicitor, and Vincent J. Piccirilli, Asst. City Solicitor, on brief for City of Providence, appellee.

Matthew Hale, Washington, D. C., on brief for The American Bankers Association, amicus curiae.

Before ALDRICH, Chief Judge, WOODBURY,^* Senior Circuit Judge, and COFFIN, Circuit Judge.

ALDRICH, Chief Judge.

These are two actions by parties engaged in certain business pursuits to restrain competition from national banks which, supported by rulings of the Comptroller of the Currency, have entered their fields. Plaintiffs seek, basically, to attack these rulings. In both cases the district courts held that they were without standing to do so, and dismissed the complaints on motions of the defendants. Plaintiffs appeal.

THE TRAVEL AGENCY BUSINESS

We consider first the action brought by Arnold Tours, Inc. and some forty other independent travel agencies in Massachusetts, allegedly on behalf of others similarly situated as well as themselves, against the Comptroller and the South Shore National Bank. The bank, in reliance upon a ruling by defendant Comptroller's predecessor,¹ is engaging not merely in the financial aspects of travel, but "full" travel service, or a complete travel agency business. To quote from what is said to be the bank's own announcement, its employees are prepared to arrange for bicycles in Bermuda, villas on the Riviera, and houseboats in Kashmir. The Comptroller argues at length that this is traditional and legitimate bank activity. We do not, however, consider this matter except to say that plaintiffs present enough of an issue so that the question of standing is properly before us. We also note that no question of reviewability of the Comptroller's rulings has been raised. See generally, Saferstein, Nonreviewability: A Functional Analysis of "Committed to Agency Discretion," 82 Harv.L.Rev. 367, 383 & n. 60 (1968). Our sole question is the correctness of defendants' contention, which we will paraphrase as saying that what the bank chooses to do is, both literally and figuratively, none of plaintiffs' business.

It has long been settled that an ordinary competitor has no standing to complain of a party's lack of legal authority to engage in his business, in a suit against the competitor, the government, or both. Railroad Co. v. Ellerman, 1881, 105 U.S. 166, 26 L.Ed. 1015; Alabama Power Co. v. Ickes, 1938, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374; Tennessee Power Co. v. TVA, 1939, 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543. Despite numerous exceptions, this principle has withstood erosion not only because of the traditional rationale behind standing doctrines generally, see Flast v. Cohen, 1968, 392 U.S. 83, 91-101, 88 S.Ct. 1942, 20 L.Ed.2d 947, but because of the policy encouraging free and open competition — a policy that favors competition in the market place, not in the courts. The exceptions, where standing is recognized, are as well established as the principle itself. The first is for complaints of "illegal" competition, by which is usually meant competition that is unlawful as to plaintiff apart from considerations of corporate power of authority. See Alabama Power Co. v. Ickes, supra at 479, 58 S.Ct. 300; Central Louisiana Elec. Co. v. REA, W.D.La., 1964, 236 F.Supp. 271, 277, rev'd, 5 Cir., 354 F.2d 859, cert. denied 385 U.S. 815, 87 S.Ct. 34, 17 L.Ed. 2d 54; but cf. Kansas City Power & Light Co. v. McKay, 1955, 96 U.S.App. D.C. 273, 225 F.2d 924, cert. denied 350 U.S. 884, 76 S.Ct. 137, 100 L.Ed. 780. Plaintiffs do not suggest that the Comptroller has sanctioned, or that the bank has undertaken, any unfair, conspiratorial, or criminal methods of competition, or that there has been any violation of the antitrust laws. The second exception is where it is claimed that some "legal right" has been injured, by which is meant, in its nonconclusory sense, that plaintiff has an independent property right, or a right to be free from the particular kind of competition he is challenging. Such a right is attached to or arises out of an exclusive franchise, on the one hand, or a restricted license or the like, on the other. Frost v. Corporation Commission, 1929, 278 U.S. 515, 49 S.Ct. 235, 73 L.Ed. 483; cf. Whitney National Bank in Jefferson Parish v. Bank of New Orleans, 1963, 116 U.S.App. D.C. 285, 323 F.2d 290, 299-300, rev'd on other grounds, 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386. Plaintiffs fit in no such category.

The final general exception is where the plaintiff can show the existence of a "statutory aid to standing" for a class of persons which includes himself. This statutory aid may take the form of a "judicial review" provision of the particular administrator in question for "parties aggrieved," "adversely affected," or the like. In such a case, FCC v. Sanders Bros. Radio Station, 1940, 309 U.S. 470, 60 S.Ct. 693, 84 L.Ed. 869, 1037, would presumably provide standing for legitimate competitors. See generally, Jaffe, Judicial Control of Administrative Actions, 513-531. There is, however, no such provision as to the Comptroller of the Currency. An alternative statutory aid may be found if there is an indication of Congressional intent, explicit or implicit, in the relevant substantive acts to grant protection to the competitive interests of a class of businesses which includes the plaintiff. Thus in Hardin v. Kentucky Utilities Co., 1968, 390 U.S. 1, 88 S.Ct. 651, 19 L.Ed.2d 787, the Supreme Court found that a competing private utility company had standing to challenge the expansion of TVA into new areas in alleged violation of the area limitations of section 15d(a) of the Tennessee Valley Authority Act, 16 U.S.C. § 831n-4(a). The Court said, "One of the primary purposes of the area limitations in § 15d of the Act was to protect private utilities from TVA competition. * * * Since respondent is thus in the class which § 15d is designed to protect, it has standing * * *." 390 U.S. at 6-7, 88 S.Ct. at 655.

The only possible statutory aid to the standing of travel agents in national banking legislation exists in 12 U.S.C. § 24(7). This section states that national banks may "exercise * * * all such incidental powers as shall be necessary to carry on the business of banking," and then lists numerous powers explicitly granted. It has long been settled in suits over private contracts that the enumeration of such powers is an effective and strong prohibition of all activities not enumerated and not incidental to banking. See First National Bank of Charlotte v. National Exchange Bank, 1875, 92 U.S. 122, 128, 23 L.Ed. 679; National Bank v. Matthews, 1878, 98 U.S. 621, 625, 25 L. Ed. 188; Logan County National Bank v. Townsend, 1891, 139 U.S. 67, 73, 11 S.Ct. 496, 35 L.Ed. 107. But even assuming that national banks are prohibited by section 24(7) from entering into the business of procuring travel arrangements, this is not sufficient to provide a statutory aid to standing. The prohibition must be demonstrably intended to protect the competitive interests of other members of the prohibited business. See the concurring opinion of Judge Thornberry in Saxon v. Georgia Ass'n. of Independent Ins. Agents, 1968, 5 Cir., 399 F.2d 1010, 1019; Association of Data Processing Serv. Organizations v. Camp, D.Minn., 1968, 279 F.Supp. 675, aff'd, 8 Cir. 1969, 406 F.2d 837. We, too, (see 8th Cir. opinion in Camp, n. 10), cannot accept the simplistic suggestion by the majority in Georgia Ass'n, 399 F.2d at 1016, that as soon as it appears that the competitive activities were unlawfully carried out the plaintiffs have standing.

The plaintiffs have not pointed to, nor have we in our research discovered, any evidence that Congress in delimiting the scope of banking activity in the ultra vires section, quoted supra, was concerned, in 1863 and 1864 when the national banks were formed,² with competitors in the businesses impliedly prohibited, much less in any particularity with travel agents (if they then existed). Rather, the limitations were for the purpose of insuring the stability, liquidity, and safety of the banks. See National Bank v. Matthews, supra, at 626; Davis, Banking Regulation Today: A Banker's View, 31 Law & Contemp. Problems 639 (1966). See also Million, The Debate of the National Bank Act of 1863, 2 J. of Pol.Econ. 251 (1894). No doubt Congress has continuously, from 1864...