Central Nat. Bank v. Rainbolt, s. 81-2262
| Decision Date | 09 November 1983 |
| Docket Number | Nos. 81-2262,82-1227,s. 81-2262 |
| Parties | 1983-2 Trade Cases 65,709 CENTRAL NATIONAL BANK, Poteau, Oklahoma, a National Bank, F.L. Holton, in his official and individual capacities, and Tommy Miller, in his official and individual capacities, Plaintiffs- Appellants, v. H.E. RAINBOLT, an individual, Neal H. Sims, an individual, Ronald A. Sims, an individual, Charles D. Saviers, co-trustee of the C.B. Saviers Testamentary Trust, and Boyd M. Saviers, co-trustee of the C.B. Saviers Testamentary Trust, Defendants-Appellees. CENTRAL NATIONAL BANK, Poteau, Oklahoma, a National Bank, F.L. Holton, in his official and individual capacities, Plaintiffs-Appellants, v. H.E. RAINBOLT, an individual, Neal H. Sims, an individual, Ronald A. Sims, an individual, Charles D. Saviers, co-trustee of the C.B. Saviers Testamentary Trust, and Boyd M. Saviers, co-trustee of the C.B. Saviers Testamentary Trust, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Richard F. Campbell, III of Fellers, Snider, Blankenship, Bailey & Tippens, Oklahoma City, Okl. (James D. Fellers and John Joseph Snider of Fellers, Snider, Blankenship, Bailey & Tippens, Oklahoma City, Okl. and James E. Hamilton of Hamilton & Warren, Poteau, Okl., with him on brief), for plaintiffs-appellants.
Robert D. Nelon of Andrews, Davis, Legg, Bixler, Milsten & Murrah, Oklahoma City, Okl., for defendants-appellees.
Before SETH, Chief Judge, McWILLIAMS, Circuit Judge, and KERR, District Judge *.
This is a consolidated appeal from the trial court's order denying the plaintiffs' motion for a preliminary injunction and granting the defendants' motion for summary judgment. The suit arises from the attempt of the plaintiffs Central National Bank (CNB) and the Chairman of its Board of Directors, Mr. Holton, to block the takeover of CNB by the defendant, Mr. Rainbolt.
Mr. Rainbolt attempted to purchase shares of CNB held by certain of the Bank's minority shareholders. Under the terms of the purchase agreement he agreed to acquire 52,800 shares of CNB, representing 52.8% of its outstanding stock. Some of the stock that he agreed to purchase was encumbered by a Right of Refusal Agreement. That agreement provided that if a shareholder received an offer to buy all or part of his encumbered stock, that prior to accepting he had to extend the offer "upon the same terms and conditions and for the same price" to the trustee for the shareholders of the encumbered CNB stock.
In compliance with the terms of the Right of Refusal Agreement, the shareholders notified the trustee of Mr. Rainbolt's offer. The trustee elected to purchase some but not all of the encumbered stock and none of the unencumbered stock. Mr. Rainbolt claims that the trustee's election to purchase only part of the shares was not "upon the same terms and conditions" as his offer because his offer contained the condition that he acquire all 52,800 shares. The selling shareholders declined to tender their shares to the trustee. It is not disputed that at the time of the filing of this suit, Mr. Rainbolt had gained effective control of the Bank by virtue of his stock purchase agreement.
CNB and Mr. Holton brought this suit alleging that Mr. Rainbolt's offer violated the Change in Bank Control Act, the Bank Holding Company Act and various provisions of the Clayton Act. Appended to the federal claims was a state claim that the minority shareholders wishing to sell to Mr. Rainbolt were acting in contravention of the Right of Refusal Agreements. A similar suit on the Right of Refusal Agreements was brought in Oklahoma state court.
The trial court dismissed all of the plaintiffs' federal claims on jurisdictional grounds and determined that the trustee's election to purchase some of the encumbered shares was not "upon the same terms and conditions" as Mr. Rainbolt's offer. It therefore granted Mr. Rainbolt's motion for summary judgment and denied the plaintiffs' motion for injunctive relief.
On appeal, the plaintiffs' first contention is that Mr. Rainbolt violated the Change in Bank Control Act, 12 U.S.C. Sec. 1817. The provisions of that Act dictate that the acquisition of a national bank requires an express and prior non-disapproval by the Comptroller of the Currency. Mr. Rainbolt did not obtain the Comptroller's non-disapproval prior to obtaining control of the Bank; however, the Comptroller did issue a non-disapproval letter after Mr. Rainbolt acquired control.
The trial court held that the plaintiffs' claim under Sec. 1817 was mooted by the issuance of the Comptroller's letter. While we expressly reserve any decision as to whether there is a private right of action under Sec. 1817, we affirm the trial court's ruling. The plaintiffs' complaint alleges that Mr. Rainbolt's acquisition constitutes a violation of the law which could injure them or subject them to liability under federal statute. The Comptroller's letter obviated the possibility that he would declare Mr. Rainbolt to be in violation of Sec. 1817(j). The potential for liability under Sec. 1817(j) no longer being extant, the trial court properly declared the claim moot. Insofar as the plaintiffs seek review or airing of the Comptroller's decision to issue the letter, we note that the plaintiffs did not seek that relief in their complaint, and we decline to examine it here.
The plaintiffs also argue that the acquisition of CNB by Mr. Rainbolt was in fact an indirect acquisition by Thunderbird Bancshares, Inc., a bank holding company in which Mr. Rainbolt owns a controlling interest. The plaintiffs allege that such acquisitions violate the Bank Holding Company Act, 12 U.S.C. Secs. 1841-1850, which limits to five percent the voting shares of any national bank which may be controlled by a bank holding company.
The trial court dismissed this claim for lack of jurisdiction citing our decision in American Bank of Tulsa v. Smith, 503 F.2d 784 (10th Cir.). In that case, we held that a federal district court has no jurisdiction to determine the merits of an alleged violation of the Bank Holding Company Act. The Act vests exclusive jurisdiction of such cases with the Federal Reserve Board. Whitney National Bank v. Bank of New Orleans and Trust Co., 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386.
The plaintiffs argue that the trial court should have stayed the Comptroller of the Currency's decision regarding the proposed acquisition of CNB, and then directed the parties to submit the Bank Holding Company Act issue to the Board. See American Bank of Tulsa v. Smith, 503 F.2d 784 (10th Cir.). This relief was not sought in the plaintiffs' amended complaint, and consequently that issue was not before the trial court. We decline to consider the issue so raised on appeal. The trial court properly dismissed the plaintiffs' claim regarding the Bank Holding Company Act.
The plaintiffs' third claim is that Mr. Rainbolt's acquisition of CNB was anticompetitive and in violation of sections 7 and 16 of the Clayton Act, 15 U.S.C. Secs. 18, 26. The trial court dismissed this claim for lack of standing.
In Reibert v. Atlantic Richfield Co., 471 F.2d 727, 731 (10th Cir.), we stated a standing test for antitrust cases:
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