Burke v. Fleet National Bank

• Decision Date: 20 December 1999
• Docket Number: (SC 16157)
• Citation: 252 Conn. 1,742 A.2d 293
• Parties: JOHN P. BURKE, COMMISSIONER OF BANKING, ET AL. v. FLEET NATIONAL BANK ET AL.
• Court: Connecticut Supreme Court

252 Conn. 1

742 A.2d 293

JOHN P. BURKE, COMMISSIONER OF BANKING, ET AL. v. FLEET NATIONAL BANK ET AL.

(SC 16157)

Supreme Court of Connecticut.

Argued September 29, 1999.

Officially released December 20, 1999¹.

Borden, Berdon, Norcott, Katz, Palmer, Callahan and Lavery, Js. Richard Blumenthal, attorney general, with whom were Gregory T. D'Auria and William J. Prensky, assistant attorneys general, for the appellants (plaintiffs).

Daniel L. FitzMaurice and Donald E. Frechette, with whom were James S. Rollins and Michael Shea, for the appellees (defendants).

Victoria L. Veltri filed a brief for Greater Hartford Legal Assistance as amicus curiae.

Ronald W. Zdrojeski, Cynthia L. Amara, pro hac vice, and Loretta Smith, pro hac vice, filed a brief for the New England Legal Foundation as amicus curiae.

Opinion

BORDEN, J.

The sole issue in this reservation is whether General Statutes § 36a-156² prohibits a bank³ from charging a convenience fee to a nondepositor who uses that bank's automated teller machine (ATM). We answer the reservation in the negative.

The stipulation reveals the following facts. The plaintiffs are John P. Burke, the banking commissioner of the state of Connecticut (commissioner), and the state of Connecticut. The defendants, Fleet National Bank (Fleet), First Union National Bank (First Union), and BankBoston, N.A. (BankBoston), are national banks that have established and operate ATMs in Connecticut. An ATM is defined under Connecticut law as "a stationary or mobile unattended device, including a satellite device but excluding a point of sale terminal, at which banking transactions, including, but not limited to, deposits, withdrawals, advances, payments or transfers, may be conducted...." General Statutes § 36a-2 (3). A point of sale terminal is defined as "a device located in a commercial establishment at which sales transactions can be charged directly to the buyer's deposit, loan or credit account, but at which deposit transactions cannot be conducted...." General Statutes § 36a-2 (45).

In addition to servicing its own depositors, an establishing bank⁴ may, through its participation in an ATM network, process transactions for nondepositors who hold ATM cards issued by other banks, also called card-issuing banks, which are members of the ATM network. There are three types of charges associated with transactions processed through an ATM network. First, an interchange fee is a fee that an establishing bank receives from another member bank in the network, whose depositor uses the establishing bank's ATM. Second, the ATM depositor fee"is a fee charged by a bank to its own depositor for use of an ATM operated by either the depositor's bank or another bank. Third, the ATM nondepositor fee, also commonly referred to as a convenience fee or surcharge, is a fee charged by an establishing bank to a nondepositor who uses that bank's ATM. At issue in this appeal is the permissibility under state law of imposing the ATM nondepositor fee.⁵

The issue raised by this appeal originated with an interpretive letter issued by the commissioner in September, 1995, which declared that § 36a-156 implicitly prohibits ATM nondepositor fees. In January, 1997, Fleet brought an action against the commissioner and the state banking department in the United States District Court for the District of Connecticut, claiming that § 36a-156 does not prohibit ATM nondepositor fees, or, in the alternative, that federal law preempts any such prohibition. The District Court granted summary judgment for Fleet, holding that § 36a-156 does not prohibit ATM nondepositor fees. Fleet Bank, National Assn. v. Burke, 23 F. Sup. 2d 196, 203 (D. Conn. 1998). On appeal from that judgment, however, the United States Court of Appeals for the Second Circuit held that the District Court lacked subject matter jurisdiction. Fleet Bank, National Assn. v. Burke, 160 F.3d 883, 893 (2d Cir. 1998), cert. denied, 527 U.S. 1004, 119 S. Ct. 2340, 144 L. Ed. 2d 237 (1999). Accordingly, the Second Circuit vacated the judgment and directed that the action be dismissed. Id. Fleet and First Union immediately brought separate actions against the commissioner, which since have been consolidated in the United States District Court for the District of Connecticut, claiming various violations of 42 U.S.C. § 1983. See First Union National Bank v. Burke, United States District Court, Docket No. 3:98CV2171 (JBA) (D. Conn. April 7, 1999). Thereafter, the commissioner, invoking General Statutes §§ 36a-50⁶ and 36a-52,⁷ issued a temporary ex parte order and notice of hearing, claiming that Fleet, First Union and BankBoston were in violation of § 36a-156 by imposing ATM nondepositor fees, and ordering those banks to cease and desist from that practice. The banks requested a hearing in accordance with § 36a-50. The hearing was postponed while the District Court considered requests for a preliminary injunction filed by the banks and the United States Office of the Comptroller of the Currency (Comptroller), during which time the banks agreed not to impose ATM nondepositor fees. The commissioner did not proceed with the hearing with respect to BankBoston.

After receiving the cease and desist order, Fleet and First Union filed applications for an injunction in the Superior Court pursuant to § 36a-52 (d) to set aside or suspend the enforcement of the order. After a hearing, the trial court, Teller, J., denied the banks' applications for an injunction. Fleet National Bank v. Burke, 45 Conn. Sup. 566, 580, 727 A.2d 823 (1998).

Shortly thereafter, the Comptroller intervened in the consolidated action seeking to restrain the administrative hearing by virtue of a temporary restraining order and a preliminary injunction against the commissioner and the banking department. The District Court granted the Comptroller's request for a preliminary injunction, and prohibited the commissioner from continuing with the pending administrative proceedings against Fleet and First Union until final disposition of the merits of the Comptroller's complaint.⁸First Union National Bank v. Burke, supra, United States District Court, Docket No. 3:98CV2171 (JBA). That decision expressly did not preclude either the Comptroller from initiating its own administrative proceeding pursuant to § 36a-156, or the commissioner from seeking enforcement through the state courts. Id.

The commissioner then brought this action in the Superior Court, pursuant to his authority under § 36a-50 (b), to enforce his interpretation of § 36a-156, as described in his September, 1995 interpretive letter. At the request of all parties, and to expedite the resolution of this litigation, the trial court, Hon. Jerry Wagner, judge trial referee, approved the joint stipulation of facts and reserved the following question for the advice of the Appellate Court pursuant to General Statutes § 52-235⁹ and Practice Book § 73-1:¹⁰ "Does General Statutes § 36a-156 prohibit a bank which has established an automated teller machine from charging a fee to a nondepositor who uses the bank's machine?" We transferred the reservation from the Appellate Court to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-2. We answer the reservation in the negative.

We first address the applicable standard of review. "Ordinarily, this court affords deference to the construction of a statute applied by the administrative agency empowered by law to carry out the statute's purposes.... [A]n agency's factual and discretionary determinations are to be accorded considerable weight by the courts." (Internal quotation marks omitted.) Connecticut Assn. of Not-for-Profit Providers for the Aging v. Dept. of Social Services, 244 Conn. 378, 389, 709 A.2d 1116 (1998); Connecticut Light & Power Co. v. Texas-Ohio Power, Inc., 243 Conn. 635, 642, 708 A.2d 202 (1998); Dept. of Administrative Services v. Employees' Review Board, 226 Conn. 670, 678, 628 A.2d 957 (1993). "Cases that present pure questions of law, however, invoke a broader standard of review than is ordinarily involved in deciding whether, in light of the evidence, the agency has acted unreasonably, arbitrarily, illegally or in abuse of its discretion." (Internal quotation marks omitted.) Connecticut Assn. of Not-for-Profit Providers for the Aging v. Dept. of Social Services, supra, 389; Connecticut Light & Power Co. v. Texas-Ohio Power, Inc., supra, 642; Dept. of Administrative Services v. Employees' Review Board, supra, 678. "Furthermore, when a state agency's determination of a question of law has not previously been subject to judicial scrutiny... the agency is not entitled to special deference." (Internal quotation marks omitted.) Connecticut Assn. of Not-for-Profit Providers for the Aging v. Dept. of Social Services, supra, 389; Connecticut Light & Power Co. v. Texas-Ohio Power, Inc., supra, 642; Dept. of Administrative Services v. Employees' Review Board, supra, 678-79. Whether § 36a-156 implicitly prohibits ATM nondepositor fees had not been subject to judicial consideration prior to the commissioner's interpretive letter,¹¹ and is purely a question of law concerning the interpretation of the relevant statutory provisions. We therefore give no special deference to the commissioner's interpretation of § 36a-156.

The question reserved for this court presents a question of statutory interpretation. "The process of statutory interpretation involves a reasoned search for the intention of the legislature. Frillici v. Westport, 231 Conn. 418, 431, 650 A.2d 557 (1994). In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of this case, including the question of whether the language actually does apply. In seeking to determine that meaning, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to...