Arnold Tours, Inc. v. Camp

• Decision Date: 22 February 1972
• Docket Number: Civ. A. No. 67-372-C.
• Citation: 338 F. Supp. 721
• Parties: ARNOLD TOURS, INC., et al. v. William B. CAMP, Comptroller of the Currency, and South Shore National Bank.
• Court: U.S. District Court — District of Massachusetts

338 F. Supp. 721

ARNOLD TOURS, INC., et al. v. William B. CAMP, Comptroller of the Currency, and South Shore National Bank.

Civ. A. No. 67-372-C.

United States District Court, D. Massachusetts.

February 22, 1972.

Timothy J. Murphy and Richard W. Murphy, Boston, Mass., for plaintiffs.

John E. Shockey, Office of the Comptroller of the Currency, Washington, D. C., and Joseph L. Tauro, U. S. Atty., for the Dist. of Mass., for William B. Camp, Comptroller of the Currency.

Elliot V. Grabill and Arthur H. Bloomberg, of Grabill & Ley, Boston, Mass., for The South Shore National Bank.

OPINION

CAFFREY, District Judge.

The plaintiffs in this case are forty-two independent travel agencies doing business in various locations in the Commonwealth of Massachusetts. They ask herein for declaratory and injunctive relief against the Comptroller of the Currency and against The South Shore National Bank. Plaintiffs seek from this court a decision that a ruling by the Comptroller providing that, incidental to their banking services national banks may provide travel services for their customers, violates the powers granted to the Comptroller by the National Bank Act, 12 U.S.C. § 24(Seventh). Plaintiffs allege that the Comptroller exceeded his statutory authority when he issued regulations authorizing national banks to provide travel agency services, and plaintiffs further allege that as a result they have lost substantial business and profits and stand to lose even greater business in the future. For the reasons stated hereinafter, I agree.

This rapidly aging matter has already been subjected to the attention of this court at numerous hearings, has twice been argued and decided by the United States Court of Appeals for this Circuit, and has twice been the subject matter of rulings of the Supreme Court of the United States on the basis of petitions for writs of certiorari which were granted in both instances. See 286 F. Supp. 770, aff'd. 408 F.2d 1147 (1 Cir. 1969), vacated and remanded 397 U.S. 315, 90 S.Ct. 1109, 25 L.Ed.2d 333. See, also, 428 F.2d 359 (1 Cir. 1970), reversed and remanded 400 U.S. 45, 91 S.Ct. 158, 27 L.Ed.2d 179.

The matter is now before this court on cross-motions for summary judgment, which have been extensively briefed by the parties. The narrow issue is, as stated by the Comptroller in a supplementary memorandum in support of his motion for summary judgment:

"whether the Comptroller can reasonably interpret 12 U.S.C. 24(Seventh) to authorize the operation of a travel agency by a national bank as incident to its banking business."

To properly understand the issue, it should be noted that the statute, the proper construction of which is the key to the outcome hereof, states as follows:

"A national banking association shall have the power to exercise by its board of directors ... all such incidental powers as shall be necessary to carry on the business of banking."

In deciding whether the operation of a travel agency business comes within the quoted language from 12 U.S.C. § 24, attention should next be focused on what, specifically, operating a travel agency entails on the part of the South Shore National Bank. The extent and nature of this activity qua travel agency has been described in detail in the Affidavit of Charles F. Heartfield, who served as vice-president in charge of the Travel Department of the South Shore National Bank from about November 1, 1966 to 1970. In pertinent part, the affidavit of Mr. Heartfield describes the travel agency business as follows:

"A travel department is a functioning complete travel service bureau within the confines and control of the bank. It is a department store of travel, staffed by knowledgeable people, trained in the techniques of selling every mode of transportation — air, rail, steamship, U-drive car. It is a staff acquainted with thousands of hotels and resorts, proficient in the intricacies of foreign customs and regulations, health requirements and languages, accustomed with tipping customs, foreign exchange, conversant with foreign representatives and hotel managers, in the history and geography of our own great United States, as well as the rest of the shrinking world, constantly aware of changing tariffs and schedules, well acquainted with over 60 airlines throughout the world, 40 domestic and international railroads, and numerous motorcoach lines, steamship companies, etc. They must be up-to-date in passport, visa and sailing permit information.

"They must be specially trained and experienced in the preparation and planning of itineraries. They must be ready to acquaint the traveler with climate conditions, wardrobe and packing suggestions. They must have unlimited knowledge of foreign car purchases, U-drive-it regulations and costs. They must be ready with shopping suggestions and must be able to advise on travel accident and baggage insurance.

"They must be able to arrange transfers and sightseeing, and must be aware of the proper assessments, head taxes, port taxes and transportation taxes. They must be knowledgeable in what to see and what to do, theatre tickets, ballet, opera, horse shows, yachting events, -and, -at their finger tips, a good travel staff has hundreds of tours, ranging from a weekend in New York to an African safari. A good travel agent's experience and interest lends the proper emphasis to his client's desires. He can put himself in the place of his customer. He must discover the traveler's budget and give him the most for his money — and here the bank's Pay Later Plan will be invaluable.

"The well-trained agent is able to decide whether his client should go by air or sea, or a combination of both, which cruise will please his client the most, which hotel will satisfy his client's taste, whether a motorcoach or a chauffeur-driven sightseeing trip will be the answer to his client's wishes. There are escorted and independent tours. Each has its own advantages. There are basic trips, charters, all-expense trips, and special flights. The agent's knowledge must encompass information on bike rentals in Bermuda to villa rentals on the Riviera to a

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