Nuesse v. Camp

• Citation: 385 F.2d 694
• Decision Date: 04 October 1967
• Docket Number: No. 20529.,20529.
• Parties: William E. NUESSE, Commissioner of Banks, State of Wisconsin, Appellant, v. William CAMP, Comptroller of the Currency et al., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

385 F.2d 694 (1967)

William E. NUESSE, Commissioner of Banks, State of Wisconsin, Appellant, v. William CAMP, Comptroller of the Currency et al., Appellees.

No. 20529.

United States Court of Appeals District of Columbia Circuit.

Argued March 17, 1967.

Decided October 4, 1967.

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Mr. Max O. Truitt, Jr., Washington, D. C., for appellant.

Mr. Norman Knopf, Atty., Dept. of Justice, of the bar of the Court of Appeals of New York, pro hac vice by special leave of court, with whom Messrs. David G. Bress, U. S. Atty., and David L. Rose, Atty., Dept. of Justice, were on the brief, for appellee Camp. Miss Kathryn H. Baldwin, Atty., Dept. of Justice, also entered an appearance for appellee Camp.

Mr. William E. Rollow, Washington, D. C., entered an appearance for appellee Kenosha Nat. Bank.

Before BAZELON, Chief Judge, LEVENTHAL and ROBINSON, Circuit Judges.

LEVENTHAL, Circuit Judge:

In January of 1966, the American State Bank (American), a bank chartered by the State of Wisconsin, filed a complaint for declaratory and injunctive relief against the United States Comptroller of the Currency, alleging that the Comptroller was about to issue a certificate of approval of the application of the Kenosha National Bank for permission to open a branch in the vicinity of American's office. The gist of the complaint is that the source of the Comptroller's authority, the National Bank Act, 12 U.S.C. § 36(c) (1964), sanctions branching of national banks only "if such establishment and operation are at the time expressly authorized to state banks, by the law of the State in question," and that under Wis.Stat.Ann. § 221.04(1) (f) (1963), Wisconsin state banks are generally forbidden to branch.

The unopposed motion of the Kenosha National Bank (Kenosha) for leave to intervene as party defendant was granted in May of 1966. On July 18, 1966, appellant William E. Nuesse, as Commissioner of Banks of the State of Wisconsin (Commissioner), moved for leave to intervene under Rules 24(a) and (b), FED.R. CIV.P. as additional party plaintiff asserting that by virtue of Wis.Stat.Ann., §§ 220.02(3) and (4) (1963) he is charged with enforcing all state laws relating to banking, that plaintiff American was relying on a state statute under his jurisdiction, and that American's representation of his interest might be inadequate.

The Comptroller and Kenosha opposed intervention on the ground that the only issue of statutory construction properly involved related to the interpretation of federal laws. The contention is that § 36(h) of the National Bank Act, 12 U.S.C. § 36(h), defines "state banks" — for purposes of permitting national banks equal opportunity to branch under § 36(c) — as including "trust companies, savings banks, or other such corporations or institutions carrying on the banking business under the authority of State laws." (Emphasis added.) The laws of Wisconsin regulating savings and loan associations, administered by an official other than the appellant Commissioner, do permit savings and loan institutions to branch. See WIS.STAT.ANN. § 215.13 (39) (Supp.1966). The Comptroller takes the view that for purposes of the National Bank Act a Wisconsin savings and loan institution is a "state bank" authorized by state law to branch. The District Court shared the opinion that only the construction of a federal statute is at issue, and relying on Judge Kent's opinion in Merchants & Miners Bank v. Saxon,¹ denied the motion to intervene. We think intervention should have been allowed as of right, and accordingly we reverse.² Alternatively, we think denial of permissive intervention was reversible error.

1. INTERVENTION AS OF RIGHT UNDER RULE 24(a)

As amended effective July 1, 1966, Rule 24(a) of the Federal Rules of Civil Procedure permits intervention as of right —

when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant\'s interest is adequately represented by existing parties.

We think appellant made sufficient showing of each of the three necessary requirements: (i) an interest in the transaction, (ii) which the applicant may be impeded in protecting because of the action, (iii) that is not adequately represented by others.

A. Commissioner's Interest in the Subject Matter of the Action

An applicant for intervention must have an "interest" in the "transaction" which is the subject of the action. Contending that the Commissioner has no such interest as the Rule requires, the defendants rely on cases rejecting attempts by states and municipalities to intervene in lawsuits by virtue of their status as parens patriae in order to promote the general welfare of some of their citizens. Federal courts have frequently held that this type of concern does not rise to the stature of a definable legal right that constitutes a litigable "interest" in another's lawsuit,³ although the cases are by no means uniform.⁴ We need not wade into the general parens patriae fray, however, for we conclude that in this action the Commissioner has distinct legal rights of his own in his official station, rights more precise and definable than merely derivative interests arising because of his office as superintendent of the state's banking industry.

First we declare that a state banking commissioner does have sufficient standing to bring an action to enjoin the Comptroller from unlawfully authorizing a national bank to open a branch where state law would not permit branching by state banks. We have not previously decided this issue.⁵ While another circuit has indicated that it would not permit a banking commissioner to make this claim, see South Dakota v. National Bank of South Dakota, 219 F.Supp. 842 (D.S.D.1963), aff'd 335 F.2d 444 (8th Cir. 1964), cert. denied 379 U.S. 970, 85 S.Ct. 667, 13 L.Ed.2d 562 (1965), we agree with the later opinion of Chief Judge Tuttle holding the contrary. See Jackson v. First National Bank of Valdosta, 349 F.2d 71 (5th Cir. 1965).

The question is whether the Commissioner has an "interest" in an action brought by the state bank for similar relief. We know of no concise yet comprehensive definition of what constitutes a litigable "interest" for purposes of standing and intervention under Rule 24 (a). One court has recently reverted to the narrow formulation that "interest" means "a specific legal or equitable interest in the chose". Toles v. United States, 371 F.2d 784 (10th Cir. 1967). We think a more instructive approach is to let our construction be guided by the policies behind the "interest" requirement. We know from the recent amendments to the civil rules that in the intervention area the "interest" test is primarily a practical guide to disposing of lawsuits by involving as many apparently concerned persons as is compatible with efficiency and due process. Compare amended Rule 19 ("Joinder of Persons Needed for Just Adjudication"), and Rule 23 ("Class Actions"), and the Advisory Committee Notes, 39 F.R.D. 88-94, 95-107. See also Atlantis Development Corp. v. United States, 379 F.2d 818, at 824 (5th Cir., June 12, 1967).

As we said in Textile Workers Union v. Allendale Co., 96 U.S.App.D.C. 401, 403, 226 F.2d 765, 767 (1955) (en banc), cert. denied sub nom. Allendale Co. v. Mitchell, 351 U.S. 909, 76 S.Ct. 699, 100 L.Ed. 1444 (1956) in permitting intervention: "obviously tailored to fit ordinary civil litigation, these provisions of Rule 24 require other than literal application in atypical cases. Administrative cases, as the present one demonstrates often vary from the norm." We should not be niggardly in gauging the interest of a state administrative officer in the validity of what his federal counterpart has done in an area of overlapping fact and intertwined law. We not only have the greater impetus to intervention that inheres in administrative cases, but in addition the "interest" of the state commissioner is underlined by the circumstance that the regulation of national banking is an area in which Congress, in the exercise of delegated federal power, has for various policy reasons decided to adopt and incorporate state law on issues of common concern. This admixture of national and state policies, attaching national legal force to the state policy, yields the corollary that a state official directly concerned in effectuating the state policy has an "interest" in a legal controversy involving the Comptroller which concerns the nature and protection of the state policy.

These considerations are fortified by the recent declaration that Congress through the National Bank Act "intended to place national and state banks on a basis of `competitive equality' insofar as branch banking was concerned." First Nat'l Bank of Logan v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966). The technique Congress has used to guarantee this competitive equality and identity of opportunity between state and national banks is the adoption of state rules on branching.⁶ In the Walker Bank case, the Supreme Court expressly held that state law controls on all questions of branching by a national bank, not only "when" and "where" a bank may branch, but also by what "method".

In refusing the application for intervention, the District Court accepted the arguments of the Comptroller and the intervening national bank that the only issue involved in the pending action is the construction of the definitional section of the National Bank Act. If section 36(h) is so construed that a branchable Wisconsin savings and loan association is an "institution" "carrying on the banking business," the Comptroller would apparently prevail on the merits. To agree that the ultimate question is the meaning of a federal statute, however,...