STATE CHARTERED BANKS IN WASH. v. Peoples Nat. Bank of Wash.

• Decision Date: 01 June 1966
• Docket Number: No. 6338.,6338.
• Citation: 291 F. Supp. 180
• Parties: STATE CHARTERED BANKS IN WASHINGTON, a corporation, et al., Plaintiffs, v. PEOPLES NATIONAL BANK OF WASHINGTON, a national banking association, Defendant, Jack C. Hood, Supervisor of Banking, State of Washington, Plaintiff-Intervenor, James J. Saxon, Comptroller of the Currency of the United States, Defendant-Intervenor.
• Court: U.S. District Court — Western District of Washington

291 F. Supp. 180

STATE CHARTERED BANKS IN WASHINGTON, a corporation, et al., Plaintiffs, v. PEOPLES NATIONAL BANK OF WASHINGTON, a national banking association, Defendant Jack C. Hood, Supervisor of Banking, State of Washington, Plaintiff-Intervenor James J. Saxon, Comptroller of the Currency of the United States, Defendant-Intervenor.

No. 6338.

United States District Court W. D. Washington, N. D.

February 28, 1966.

As Amended June 1, 1966.

COPYRIGHT MATERIAL OMITTED

Alfred J. Schweppe, Mary Ellen Krug, Reiter, Doolittle & Krug, Seattle, Wash., for plaintiffs.

MacBride & Sax, Thomas H. MacBride, Ward L. Sax, Kenneth G. Burrows, Seattle, Wash., for defendants.

John J. O'Connell, Atty. Gen. of State of Washington, Herbert Gelman, Asst. Atty. Gen., Tacoma, Wash., for intervenor Hood.

Nicholas Katzenbach, U. S. Atty. Gen., William N. Goodwin, U. S. Atty., Stanley H. Barer, Asst. U. S. Atty., Seattle, Wash., for intervenor Saxon.

LINDBERG, Chief Judge.

The plaintiffs, State Chartered Banks in Washington, a Washington corporation, and its member banks chartered by the State of Washington, filed this action on December 16, 1964 against the defendant, Peoples National Bank of Washington, a national banking association. Plaintiffs seek injunctive relief and a judgment declaring that it would be unlawful for the defendant to receive deposits, cash checks or lend money at a building then under construction in the City of Renton, Washington or at any other place in said city other than the defendant's presently-established branch at 222 Williams Street in Renton, except by taking over or acquiring an existing bank or national banking association or branch bank presently operating in Renton, as provided in RCW 30.04.280 and 30.40.020.

Plaintiffs allege that the action arises under the National Bank Act, 12 U.S.C. § 21 et seq, and particularly under § 36 thereof, and that jurisdiction vests in this court by virtue of 28 U.S.C. §§ 1331 and 2201, the matter in controversy exceeding (exclusive of interest and costs) the sum of $10,000.

On December 21, 1964, Honorable John C. Bowen, a judge of this court, after hearing and making findings and conclusions of law, decided the matter in controversy exceeded the sum of $10,000, the court had jurisdiction, and plaintiffs were entitled to an injunction pendente lite as sought. On the same day a preliminary injunction was entered and a bond by plaintiff association and its surety in the penal sum of $20,000 (required as a condition of the issuance of the injunction) was filed and approved under the direction of the court.

Following the issuance of the temporary injunction Ray D. Carrell, Supervisor of Banking, Division of Banking, Department of General Administration of the State of Washington, and later his successor, Jack Hood, was given leave to intervene and file a complaint as plaintiff-intervenor, pursuant to Rule 24(b) of the Federal Rules of Civil Procedure, and thereafter James J. Saxon, Comptroller of the Currency of the United States, was also granted leave to intervene and file an answer to the complaint in intervention under the same subsection of the rule.

Upon completion of discovery and other pretrial procedures an agreed pretrial order was submitted and plaintiffs, together with plaintiff-intervenor, moved for summary judgment, contending that there was no genuine issue as to any material fact; and that under a correct interpretation of 12 U.S.C.A. § 36(c), considered in the light of the applicable provisions of the state statutes, i. e. RCW 30.40.020 and 30.04.280, the proposed drive-in facility to be operated at 818 Second Avenue in the City of Renton would be an additional branch of the defendant, Peoples National Bank, which could not be lawfully authorized or operated.

While I concluded that the basic issue for decision would become one of statutory interpretation, I deferred ruling on the motions for summary judgment because of the defendant's contentions that plaintiffs lacked standing to sue and further that the court was without jurisdiction because the matter in controversy did not exceed the sum of $10,000. The defendant insisted that there was a genuine issue of material fact, not only with respect to whether the facility was a branch bank, but more particularly on the preliminary issues of jurisdiction and justiciability. I therefore believed they should have an opportunity to present evidence and argue the case on its merits after trial.

The case having been submitted following trial and extensive argument, the basic issue for decision, assuming standing to sue and jurisdiction, is whether the operation of the proposed facility would constitute a branch of a national banking association under the applicable federal statute. The Comptroller of the Currency of the United States, James J. Saxon, upon inquiry by the defendant bank, undertook a limited investigation of the proposal, approved it and thereby made an administrative determination that the facility would not constitute a branch under the federal statute.

A brief outline of the factual situation, largely undisputed, will be helpful in understanding the court's discussion of the issues.

Peoples National Bank is a national banking association chartered by the federal government and operating under the supervision of the Comptroller of the Currency. It is essentially a commercial bank and has its main office at 1414 Fourth Avenue in the heart of the business district of Seattle.

The Renton branch, established as such in 1934, is the oldest of some thirty-five or more operating branches in the State of Washington.

With a present population of approximately 21,000 people, the City of Renton is situated on the south end of Lake Washington with its northwesterly boundary adjoining a part of Seattle's southeasterly city limits. It is in the midst of a rapidly growing industrial development to the south of Seattle, which includes Boeing Aircraft, Pacific Car and Foundry, and many other growing industries.

Renton has many suburban residents who commute to and from work in Seattle. Also, there are many residents of Seattle and other nearby communities commuting between home and various industrial plants in the vicinity of Renton. Increased traffic in recent years has caused serious congestion in the area of Peoples Renton branch which is located at 222 Williams Street. The block of this location is bounded by Williams Street on the front, Wells Street to the rear, and Second and Third Avenues on either side, all being restricted to one-way traffic. An alley sixteen feet in width bisects the block, running from Second to Third Avenue. To accomodate existing customers, avoid loss of business and to develop new patrons, Peoples acquired, in addition to the limited parking space already provided in the immediate vicinity of the branch, a half block of parking area some 260 feet away, located on Second Avenue, one of the most heavily traveled arterials through Renton. To provide a more convenient service a "drive-in, walk-in" facility was proposed for customers whose only bank business was cashing checks or making deposits or installment payments. This facility would be serviced by two or more tellers and a supervisor as business might require, but all operations would be subject to the branch management at Williams Street and persons desiring additional service would be required to go there.

Accordingly, Peoples notified the Comptroller that it planned an "expansion" of their present facility by the addition of a parking lot teller service. The Comptroller advised that he considered this project as "an extension" of the present facilities rather than a branch; therefore no authorization from his office was necessary. He asked to be kept informed so that the Treasury records would remain current. (Exhibits A-1 and A-2.)

Construction on the project commenced, but as noted above, it was soon interrupted.

STANDING TO SUE

I will consider first the defendant's contention that no plaintiff, including the intervenor Hood, has standing to sue. Lack of standing to sue means there exists no justiciable controversy between the person suing and a defendant. For the judicial power to be exercisable there must be a case or controversy. However, if the person bringing the action suffers no direct injury and has no property or no rights that will be directly affected, there is no case or controversy upon which the federal judicial power depends. Constitution, Article III, section 2; see Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923); Doremus v. Board of Education etc., 342 U.S. 429, 72 S.Ct. 394, 96 L.Ed. 475 (1952).

First, let us look at the plaintiff, State Chartered Banks, together with its members. In determining whether there is any standing for plaintiffs to sue, it will be helpful to apply the standards laid down by Justice Frankfurter in his concurring opinion in Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123 at 151, 71 S.Ct. 624 at 638, 95 L.Ed. 817 (1951), a leading case on the issue of "standing." He there stated:

"Adverse personal interest, even of such an indirect sort as arises from competition, is ordinarily sufficient to meet constitutional standards of justiciability. The courts may therefore by statute be given jurisdiction over claims based on such interests. (Citations.)

"* * * To require a court to intervene in the absence of a statute, however, either on constitutional grounds or in the exercise of inherent equitable powers, something more than adverse personal interest is needed. This additional element is usually defined in terms which assume the answer. It is said that the injury must be `a wrong which directly results in the violation of a legal right.' Alabama Power Co. v. Ickes, 302 U.S. 464, 479, 58 S.Ct. 300, 303, 82 L.Ed. 374. Or that the controversy `must be definite and concrete, touching the legal relations of parties having

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