Bishop v. Federal Intermediate Credit Bank of Wichita

• Citation: 908 F.2d 658
• Decision Date: 17 July 1990
• Docket Number: No. 88-1787,88-1787
• Parties: , 116 Lab.Cas. P 56,351, 5 Indiv.Empl.Rts.Cas. 870 Troy O. BISHOP, Plaintiff-Appellant, v. FEDERAL INTERMEDIATE CREDIT BANK OF WICHITA; and B.L. Hauenstein, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 658

908 F.2d 658

59 USLW 2073, 116 Lab.Cas. P 56,351,

5 Indiv.Empl.Rts.Cas. 870

Troy O. BISHOP, Plaintiff-Appellant, v. FEDERAL INTERMEDIATE CREDIT BANK OF WICHITA; and B.L.

Hauenstein, Defendants-Appellees.

No. 88-1787.

United States Court of Appeals, Tenth Circuit.

July 17, 1990.

Submitted on the briefs: ^*

Ben A. Goff & Mary Ellen Lee of Ben A. Goff, P.C., Oklahoma City, Okl., for plaintiff-appellant.

D. Kent Meyers & Denise Cotter Villani of Crowe & Dunlevy, Oklahoma City, Okl., for defendants-appellees.

Before TACHA, BALDOCK, and BRORBY, Circuit Judges.

TACHA, Circuit Judge.

Plaintiff Troy Bishop commenced this action April 12, 1985, alleging that defendants Federal Intermediate Credit Bank of Wichita ("FICB") and its president, B.L. Hauenstein, had wrongfully discharged him from his position as president of the Chandler Production Credit Association ("Chandler") in violation of Oklahoma law and the first amendment of the United States Constitution. Bishop appeals from three district court orders: (1) an order, filed September 12, 1986, granting defendants partial summary judgment and dismissing plaintiff's state wrongful discharge claims as preempted by the Farm Credit Act; (2) an order, filed November 9, 1987, denying plaintiff's motion to reconsider the dismissal of the wrongful discharge claims; and (3) an order, filed April 13, 1988, granting defendants judgment on the pleadings on plaintiff's first amendment claims. We affirm in part and reverse in part.

I.

In the September 12 order, the district court ruled that Bishop's wrongful discharge tort claim under Oklahoma law was preempted by the Farm Credit Act ("FCA"), 12 U.S.C. Secs. 2001-2279aa. The district court ruled that Congress had intended to fully occupy the farm credit field, including the regulation of employer/employee relations in farm credit agencies.

We review the September 12 order granting defendants partial summary judgment de novo, viewing the record in the light most favorable to the party opposing the motion. See Ewing v. Amoco Oil Co., 823 F.2d 1432, 1437 (10th Cir.1987). Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

"[W]e start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947). Nevertheless, preemption may be found "when the federal legislation is 'sufficiently comprehensive to make reasonable the inference that Congress "left no room" for supplementary state regulation.' " International Paper Co. v. Ouellette, 479 U.S. 481, 491, 107 S.Ct. 805, 811, 93 L.Ed.2d 883 (1987) (quoting Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985) and Santa Fe, 331 U.S. at 230, 67 S.Ct. at 1152). A state law is also invalid to the extent that it "actually conflicts with a ... federal statute," Ray v. Atlantic Richfield Co., 435 U.S. 151, 158, 98 S.Ct. 988, 994, 55 L.Ed.2d 179 (1978), or when the state law " 'stands as an obstacle to the accomplishment and execution of the full purposes of Congress,' " Hillsborough County, 471 U.S. at 713, 105 S.Ct. at 2375 (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941)). See also Ouellette, 479 U.S. at 492, 107 S.Ct. at 811. We turn to consider whether: (1) Congress has fully occupied the field; or (2) a state wrongful discharge action blocks execution of the congressional purpose.

A.

We disagree with the district court's conclusion that Congress has preempted the entire field of farm credit, including employment relations. While Congress may well have preempted state interest laws and other state policies that would interfere in the financial operations of the farm credit system, see, e.g., Federal Land Bank of St. Louis v. Wilson, 719 F.2d 1367 (8th Cir.1983) (FCA preempts state usury laws), we do not find that Congress has clearly expressed an intent to preempt general state employment law. As the Supreme Court stated in English v. General Electric Co., --- U.S. ----, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990), the "real issue" in determining whether a state wrongful discharge tort claim was preempted by Congress's occupation of the field of nuclear safety was whether the state law would "have some direct and substantial effect on the decisions made by those who build or operate nuclear facilities concerning radiological safety levels." Id. at 2278. While wrongful discharge suits would undoubtedly have some effect on decisions in the farm credit field, we conclude that they do not have the "direct and substantial effect" on decisions granting credit that would justify federal preemption of the state law wrongful discharge claims. Moreover, the Farm Credit Administration itself has ruled that state laws governing employment relations are to be respected. See Farm Credit Administration, Personnel Administration, 12 C.F.R. Sec. 612.2000 (1989) ("[E]ach bank and association is subject to and required to comply with other Federal, state and local laws and regulations related to the employment process.") (emphasis added). We therefore hold that the district court erred in holding that Congress's passage of the FCA preempted the entire field of credit operations to the point of barring state employment law tort claims.

B.

The determination that the Farm Credit Act does not so fully occupy the field as to preclude state employment law torts does not end our inquiry. The state tort action may still conflict with particular aspects of the Farm Credit Act. If this conflict rises to the level of an actual conflict with the federal statute, see Ray, 435 U.S. at 158, 98 S.Ct. at 994, or if the state law " 'stands as an obstacle to the accomplishment and execution of the full purposes of Congress,' " Hillsborough County, 471 U.S. at 713, 105 S.Ct. at 2375 (quoting Hines, 312 U.S. at 67, 61 S.Ct. at 404), the state law claim will be preempted.

FICB contends that recognizing a state wrongful discharge claim interferes with Congress's execution of the farm credit system because FICB is charged with supervising Chandler and needs the power to remove Chandler officers. FICB cites two statutory provisions and one Chandler bylaw that it contends give FICB "unfettered" power to remove Chandler's officers. The first statute is FICB's statutory power to supervise the operations of Chandler. See 12 U.S.C. Sec. 2093 ("Each production credit association shall be a body corporate and, subject to supervision by the Federal intermediate credit bank for the district...."). The second statute is 12 U.S.C. section 2072, which FICB contends impliedly bestows the right to remove Chandler's chief executive officer. See 12 U.S.C. Sec. 2072(15) (repealed) (FICB may "[a]pprove ... the appointment and compensation of the chief executive officer of [the production credit association]"). FICB also claims that Chandler's bylaws grant FICB an express right to remove officers. See Chandler Production Credit Ass'n Bylaws, art. 430 ("The president, vice president, and the chief executive officer may be removed as officers at any time ... by the [Federal Intermediate Credit] Bank."). Bishop contends that the statutory provisions do not grant FICB the power to remove Chandler's officers and that the bylaws provision was illegally imposed on Chandler. We disagree.

The fair import of the statutory language found in sections 2072 and 2093 is that Chandler operates under the supervision of FICB. Moreover, we are convinced that section 2072(15)'s provisions permitting FICB to "[a]pprove ... the appointment" of Chandler's chief executive officer includes the implied power to remove as well. As the Eighth Circuit held in Bailey v. Federal Intermediate Credit Bank, 788 F.2d 498 (8th Cir.), cert. denied, 479 U.S. 915, 107 S.Ct. 317, 93 L.Ed.2d 290 (1986):

To deny the existence of a removal power would give a [production credit association] the ability to emasculate an intermediate credit bank's supervisory powers by making the bank unable to force a [production credit association] to follow bank policies.

Id. at 503. Finally, we find that Congress's repeal of section 2072 and its reenactment in substantially the same form as section 2013, when coupled with new section 2274's express prohibition on removal of production credit association officers by FICB officers, see 12 U.S.C. Sec. 2274 ("[A] bank officer or employee shall not remove any director or officer of any production credit association...."), supports our interpretation that section 2072(15), as originally enacted, gave FICB the power to remove Bishop. We thus agree with FICB that it had the power to remove Bishop.

We disagree, however, with FICB's further contention that its power to remove was unfettered and necessarily overrides the state common law tort of wrongful discharge. The power to remove does not necessarily mean the power to remove for an illegal purpose. The Farm Credit Act is silent on the degree of freedom FICB has from state common law tort doctrines when removing production credit association officers. Because the Act is silent, we will defer to the Farm Credit Administration's determination that FICB is "subject to and required to comply with Federal, state and local laws and regulations related to employment relations," 12 C.F.R. Sec. 612.2000. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984) (courts defer to agency's reasonable interpretation in face of statutory silence). The Eighth Circuit's decision in Bailey is not to the contrary; Bailey merely considered whether an intermediate credit bank had the authority to remove an officer of a...