First Nat. Bank of Omaha v. Marquette Nat. Bank

• Decision Date: 12 December 1979
• Docket Number: No. 4-79 Civ. 94.,4-79 Civ. 94.
• Citation: 482 F. Supp. 514
• Parties: FIRST NATIONAL BANK OF OMAHA, a national banking association, and First of Omaha Service Corporation, a Nebraska corporation, Plaintiffs, v. The MARQUETTE NATIONAL BANK OF MINNEAPOLIS, a national banking association, and St. Paul Fire and Marine Insurance Company, a Minnesota corporation, Defendants.
• Court: U.S. District Court — District of Minnesota

482 F. Supp. 514

FIRST NATIONAL BANK OF OMAHA, a national banking association, and First of Omaha Service Corporation, a Nebraska corporation, Plaintiffs, v. The MARQUETTE NATIONAL BANK OF MINNEAPOLIS, a national banking association, and St. Paul Fire and Marine Insurance Company, a Minnesota corporation, Defendants.

No. 4-79 Civ. 94.

United States District Court, D. Minnesota, Fourth Division.

December 12, 1979.

Mackall, Crounse & Moore by Clay R. Moore, Minneapolis, Minn., and Swarr, May, Smith & Andersen by William E. Morrow, Jr., and Donald J. Buresh, Omaha, Neb., for plaintiffs.

Levitt, Palmer, Bowen, Bearmon & Rotman by J. Patrick McDavitt, Minneapolis, Minn., for defendants.

MEMORANDUM ORDER

ALSOP, District Judge.

This matter comes before the court upon the motion of the defendants to dismiss the First, Second, Third, Fourth and Fifth Claims for Relief, to the extent that these claims are based upon lobbying and litigation activities, for failure to state a claim upon which relief can be granted (Fed.R. Civ.P. 12(b)(6)) or in the alternative for partial summary judgment (Fed.R.Civ.P. 56) on these claims. Briefs were submitted by both parties and oral argument was heard on August 3, 1979.

BACKGROUND

The present suit is an outgrowth of prior litigation in which the roles of the litigants were the reverse of the above caption. See The Marquette National Bank of Minneapolis, et al. v. First of Omaha Service Corporation, Minn., 262 N.W.2d 358 (1977), cert. granted, 436 U.S. 916, 98 S.Ct. 2261, 56 L.Ed.2d 757 (1978), aff'd., 439 U.S. 299, 99 S.Ct. 540, 58 L.Ed.2d 534 (1978).

Plaintiff First National Bank of Omaha ("First National") is a national bank with its charter address in Omaha, Nebraska. It operates a bank credit card program ("Omaha BankAmericard/VISA program") in various states, including the State of Minnesota, with the assistance of its wholly owned subsidiary, Plaintiff First of Omaha Service Corporation ("Service Corporation"). Defendant The Marquette National Bank of Minneapolis ("Marquette") is a national bank with its charter address in Minneapolis, Minnesota, which, until 1978, also operated a bank credit card program ("Marquette's BankAmericard/VISA program") in the State of Minnesota.

In the latter part of 1975, plaintiffs began a systematic effort in the State of Minnesota to enroll residents, merchants and banks in the Omaha BankAmericard/VISA program. At that time, Marquette had a virtual monopoly in the bank credit card business in Minnesota. It was the only card issuing bank in that state and over 80% of the credit cards issued to Minnesotans were issued by Marquette.

The interest rate structure of the program solicited by plaintiffs was 18 percent per year on the first $999.99 and 12 percent per year on amounts of $1,000.00 and over. At that time, Marquette's interest rate structure on its BankAmericard/VISA program was a flat 12 percent per year. Marquette also charged a membership fee of $10.00 per year, while First National's program required no annual membership fee.

In April, 1976, the Minnesota Legislature enacted the Bank Credit Card Act which established a 12 percent per annum maximum interest rate for bank credit card programs. This statute applied to any national bank doing business in Minnesota and provided injunctive relief for any bank operating in compliance with the statute when injured competitively by another bank which was violating the statute. It is undisputed that Marquette engaged in lobbying activities in connection with the passage of the Bank Credit Card Act.

In May, 1976, Marquette commenced an injunction suit against First National alleging that the latter was operating its bank card program without conforming to the interest rate limitations established by the Bank Credit Card Act. Shortly thereafter, the injunction suit was removed to this court by First National. Marquette subsequently filed a voluntary dismissal of the complaint as to First National, and this court then remanded the suit to state court for lack of subject matter jurisdiction.

The Hennepin County District Court then entered a temporary restraining order and later a permanent injunction enjoining the Omaha Service Corporation from operating its program in violation of the Bank Credit Card Act. Marquette was required to post a $10,000 bond as security for the issuance of the temporary restraining order.

The Minnesota Supreme Court rejected an attempt by the Service Corporation to stay the permanent injunction. On November 10, 1977, the Minnesota Supreme Court reversed the permanent injunction in a decision which produced three dissents. However, the Minnesota Supreme Court granted a stay of judgment pending application for a writ of certiorari to the United States Supreme Court on the condition that Marquette post a bond of $10,000 as security.

The United States Supreme Court rendered its final decision in the case on December 18, 1978. It affirmed the Minnesota Supreme Court's decision on the basis that, under 12 U.S.C.A. § 85, First National was authorized to charge the rate of interest permitted under the laws of the State of Nebraska notwithstanding the provisions of the Bank Credit Card Act.

The present suit was commenced on March 1, 1979, in the form of a multicount complaint against Marquette and its surety on the injunction bonds, St. Paul Fire and Marine Insurance Company. In the First, Second, Third, Fourth and Fifth Claims for Relief, plaintiffs assert causes of action under theories of antitrust, civil rights, malicious prosecution, abuse of process and tortious interference with business. Under the Sixth and Seventh Claims for Relief, the Service Corporation seeks recovery from defendants of such damages as may be due and owing pursuant to the two $10,000 bonds filed by Marquette in the injunction suit.

Marquette seeks dismissal or partial summary judgment of the First, Second, Third, Fourth and Fifth Claims for Relief asserted in the complaint, to the extent that such claims are based upon Marquette's lobbying and litigation activities. This motion does not involve the Sixth and Seventh Claims for Relief. Since Marquette has submitted the affidavit of J. Patrick McDavitt and corresponding exhibits attached thereto, the court will treat the present motion as one for summary judgment pursuant to Rule 12(b) of the Fed.R.Civ.P.

When considering a motion for summary judgment, all facts must be viewed in the light most favorable to the party opposing the motion, and that party is entitled to the benefit of all reasonable inferences to be drawn from the facts. Robert Johnson Grain Co. v. Chemical Interchange Co., 541 F.2d 207 (8th Cir. 1976). Also, the right to judgment must be shown with such clarity as to leave no room for controversy and it must appear that the plaintiff would not be entitled to recover under any discernible circumstances. Minnesota Bearing Co. v. White Motor Corp., 470 F.2d 1323 (8th Cir. 1973).

THE ANTITRUST CLAIM

The First Claim for Relief alleges that Marquette violated sections 1 and 2 of the Sherman Act. Plaintiffs allege, among other things, that Marquette was instrumental in drafting and lobbying for passage of the Bank Credit Card Act, and that it did so with the intent to prevent price competition. They further allege that Marquette knew that the Bank Credit Card Act was unconstitutional, and that Marquette's lobbying activities constituted a sham to cover what was nothing more than an attempt to interfere directly with First National's business.

Plaintiffs further claim that Marquette commenced the injunction suit knowing that the Bank Credit Card Act could not be constitutionally applied to the First National and that Marquette continued the injunction suit as a deliberate and malicious sham and scheme, for the sole purpose of preventing effective price competition from First National.

For purposes of the present motion, all of the allegations in the complaint pertaining to the motives and intent behind Marquette's lobbying and litigation activities shall be taken as true. Even assuming these allegations to be true, Marquette nevertheless asserts that it is entitled to judgment as a matter of law as to these activities.

Any claim founded upon alleged wrongful conduct arising out of lobbying or litigation activities faces a threshold conflict with the constitutionally protected rights of petition and assembly. In the context of the antitrust laws, the constitutional immunity flowing from the right of petition was first enunciated by the United States Supreme Court in Eastern Railroad Conference v. Noerr Motor Freight, 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961). In Noerr the court stated that:

The Sherman Act does not prohibit two or more persons from associating together in an attempt to persuade the legislature or the executive to take particular action with respect to a law that would produce a restraint or a monopoly. 365 U.S. at 136, 81 S.Ct. at 529.

In a later case, the United States Supreme Court again applied the antitrust immunity derived from the right of petition in a case involving a successful effort to influence government administrative action. See United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965).

Finally, in California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972), the United States Supreme Court held that the Noerr-Pennington immunity also applied to anticompetitive attempts to influence the judicial branch of government by way of litigation activities.

There is no real question in this case that Marquette's lobbying and litigation activities are generally the type of activities protected from the antitrust laws by the Noerr-Pennington doctrine. The dispute is whether or not First National has stated a cause of action against Marquette under the "sham exception" to the Noerr-Pennington doctrine.

In Noerr, the ...