Harris v. Board of Governors of Federal Reserve System

• Decision Date: 25 July 1991
• Docket Number: Nos. 90-3824,91-1048,s. 90-3824
• Citation: 938 F.2d 720
• Parties: William C. HARRIS, Commissioner of Banks and Trust Companies of the State of Illinois, Plaintiff-Appellee, v. BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM and Federal Reserve Bank of Chicago, Defendants, and House Committee on Banking, Finance and Urban Affairs, Intervening Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 720

938 F.2d 720

William C. HARRIS, Commissioner of Banks and Trust Companies

of the State of Illinois, Plaintiff-Appellee, v. BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM and Federal

Reserve Bank of Chicago, Defendants,

and

House Committee on Banking, Finance and Urban Affairs,

Intervening Defendant-Appellant.

Nos. 90-3824, 91-1048.

United States Court of Appeals, Seventh Circuit.

Argued May 10, 1991.

Decided July 25, 1991.

Rosalyn B. Kaplan, Roger Flahaven, Asst. Attys. Gen., Chicago, Ill., Nancy K. Needles, Asst. U.S. Atty. Civ. Div., Appellate Section, Chicago, Ill., Howard S. Scher, Dept. of Justice, Civ. Div., Appellate Section, Washington, D.C., for plaintiff-appellee and defendants-appellees.

Thomas K. McQueen, Jenner & Block, Chicago, Steven R. Ross, Charles Tiefer, Janina Jaruzelski, U.S. House of Representatives, Washington, D.C., for defendant-appellant.

Before BAUER, Chief Judge, and POSNER and RIPPLE, Circuit Judges.

POSNER, Circuit Judge.

Last fall, the House Banking Committee began an investigation of Banca Nazionale del Lavoro, a foreign bank that has a branch in Atlanta. The Committee suspected the Atlanta branch of having furtively and without proper authorization lent billions of dollars to Iraq. The 101st Congress adjourned sine die on October 28, but the Committee continued its investigation and in November and December issued subpoenas to the Federal Reserve Board, seeking among other things reports of examinations of the bank that had been conducted by the Illinois Banking Commissioner. The Board has an agreement with the Illinois Commissioner to keep the reports that he submits to it confidential. Shortly after the first subpoena was served, the Commissioner filed suit in federal district court in Chicago, seeking an injunction that would both forbid the Board to turn over any of his documents to the House Committee and direct the Board to return the documents to him. On December 28, the district judge, finding that the subpoenas were invalid because issued after the expiration of the 101st Congress, granted the injunction. 751 F.Supp. 1323 (N.D.Ill.1991).

The documents were promptly returned to the Commissioner at his office in Illinois, where they remain. The House Committee, having been allowed to intervene in the district court proceeding because (in the judge's words) it "had asserted a legitimate legislative interest in the documents" that was sufficient to justify intervention under Rule 24, filed a notice of appeal and asked us to accelerate the briefing and argument of the appeal, which we did. The Committee has not attempted to subpoena the documents from the Illinois Banking Commissioner, though at argument the Commissioner's counsel told us the Commissioner would be "delighted" to receive such a subpoena and happy to comply with it provided that suitable arrangements were made for keeping the confidential portions of the documents confidential. Instead of so proceeding, the House Banking Committee has, since the convening of the new Congress in January, reissued the subpoenas to the Federal Reserve Board, though with what purpose is obscure since the Board no longer has the documents.

The case became moot when, following the issuance of the injunction, the Federal Reserve Board returned the documents to the Illinois Banking Commissioner. Mootness can kill a lawsuit at any stage. Steffel v. Thompson, 415 U.S. 452, 459 n. 10, 94 S.Ct. 1209, 1216 n. 10, 39 L.Ed.2d 505 (1974). It kills it at the appellate stage if, as a result of developments since the judgment in the trial court, the relief sought by the appellant would, if granted, confer no tangible benefit on him, as in Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 2334, 45 L.Ed.2d 272 (1975), and North Carolina v. Rice, 404 U.S. 244, 246, 92 S.Ct. 402, 404, 30 L.Ed.2d 413 (1971) (per curiam). All that the appellant in this case, the House Banking Committee, is asking us to do is to dissolve the injunction granted by the district judge. If we do, nothing will change. The documents that the Committee sought by subpoenaing the Federal Reserve Board will still be in Illinois, in the hands of the Illinois Banking Commissioner, not in Washington, in the hands of the Federal Reserve Board. Dissolving the injunction will reinstate the subpoenas against the Board (uselessly, since the Committee has issued fresh subpoenas), but the Board cannot produce documents that it does not possess.

If the House Committee had wanted to prevent the appeal from becoming moot, it should have asked Judge Duff, and, if he refused, us, to stay his order directing the Board to return the documents to Illinois. Fed.R.Civ.P. 62; Fed.R.App.P. 8. The Committee failed to seek such relief. Its briefs in this court talk a lot about "restoring the status quo," meaning the situation that prevailed before the judge issued the injunction and the documents were returned to Illinois, but do not explicitly ask us to order the state to return the documents to the Federal Reserve Board. It's a little much to ask us to infer, from the muddy request that "the injunction ... be vacated, and the district court instructed to restore the status quo ante and to dismiss the complaint," that the Committee wants not only the injunction and the suit dismissed but the Commissioner ordered to return the documents to the Board--especially since in its reply brief the Committee stated that "restoration of the status quo involves no mandatory assistance at all." That looks like a disclaimer of any request for an order that the documents be returned.

Nor has the Committee proposed any legal basis for such an order. As far as we know, the Federal Reserve Board has no authority to require the Illinois Banking Commissioner to submit to it reports that he has made of his examinations of foreign banks. 12 U.S.C. Sec. 3105(b)(1). But maybe the Banking Code is the wrong place to be looking for the legal basis for an order that would keep this case alive. After all, if a defendant who has notice of an injunctive proceeding goes ahead and completes the act sought to be enjoined, the court has inherent power to make him undo it. Porter v. Lee, 328 U.S. 246, 251, 66 S.Ct. 1096, 1099, 90 L.Ed. 1199 (1946); Paris v. Department of Housing & Urban Development, 713 F.2d 1341, 1344-45 (7th Cir.1983). But that is not this case, since in returning the documents to the Illinois Banking Commissioner the Federal Reserve Board was not trying to beat the entry of an injunction. Quite the contrary. It was bowing to Judge Duff's injunction, which had a mandatory ("return the documents to the Illinois Banking Commissioner") as well as a prohibitory ("don't turn them over to the Committee") component. Since the Board was obeying, not defying, the injunction, the House Committee's remedy was to seek a stay of the injunction.

If the Board had turned over the documents to the House Committee before the Illinois Banking Commissioner had obtained his injunction, but with notice that he was seeking one, this case would be like Porter and Paris, or like the cases, illustrated by EPA v. Alyeska Pipeline Service Co., 836 F.2d 443, 445 (9th Cir.1988), in which compliance with a subpoena is held not to moot a challenge to it because the court can order the defendant to return the documents. This is the converse case, in which a judicial order will moot a case unless the defendant obtains a stay, and the defendant fails to do so--in this case, fails even to attempt to do so.

We need not explore the outer boundaries of judicial power to "restore the status quo," whatever exactly that means. Maybe, since the Illinois Banking Commissioner is a party, we could, invoking our power under the All Writs Act, 28 U.S.C. Sec. 1651(a), order it to return the documents to the Federal Reserve Board so that if the injunction is dissolved the House Committee will be able to obtain the documents from the Board by virtue of the subpoenas. Or maybe not, since the Commissioner is, after all, the rightful owner of the documents, and since the House Committee had its chance to prevent this case from becoming moot by asking the district court for a stay and failed without justification or excuse to do so. Whatever our power in the circumstances, the House Committee has not made an intelligible request that we exercise it.

Moreover, the Illinois Banking Commissioner appears to be perfectly willing to turn over the documents to the House Banking Committee upon suitable conditions to preserve their confidentiality. Having promised to preserve their confidentiality, the Committee can obtain the documents it wants without a judicial order, since the injunction that Judge Duff issued does not forbid the Illinois Banking Commissioner to turn over the documents in question to the House Committee. We are naturally reluctant to issue a mandatory injunction against a state official when the party in whose favor the injunction would run has (1) not made a clear request for such relief and (2) can gain his objectives without such relief.

If, then, all that the Committee will be heard to request is a dissolution of Judge's Duff's injunction forbidding the Federal Reserve Board to hand over to the Committee documents that the Board no longer has, the case is thoroughly moot. And it is not a case susceptible of repetition but avoiding review, such as a challenge by a pregnant woman to a statute that forbids her to have an abortion. Roe v. Wade, 410 U.S. 113, 125, 93 S.Ct. 705, 712, 35 L.Ed.2d 147 (1973). The woman's suit will not be resolved before either she has the abortion or it is too late for her to have it, and yet she may find herself in the same position again--pregnant, wanting an abortion, and challenging the statute that forbids her to get it. Without the special doctrine to which we have alluded, her efforts to challenge the statute would have the form and futility of Sisyphus's labors. However, since the...